S.M. Brice

Financial Catechism

Chapter VI.


Question.  Was not the act of February 3, 1868, which forbid the further destruction of the legal-tender notes an act in behalf of the people and against the interests of the bankers, and if so, does it not show that that body was not actuated by mercenary motives, but acting in the interest of their whole constituency, of whatever calling or profession ?

Answer.  The act of February 3, 1868, was, in its operation an act in behalf of the people ;  for it prevented them from being robbed of $346,000,000, and six per cent. bonds being saddled upon them, adding $18,000,000 annually to the burden of usury, which they were then staggering under—and this to obtain ninety per cent. of currency which had no redeemer provided except these legal-tender notes, which the bankers and their representatives were so anxious to destroy.

The people had been awakened from their lethargy through the suffering they had borne since this ruinous policy was commenced, and demanded of this Congress that it should proceed no further.  As by magic, the two houses of Congress were aroused to a sense of the danger with which the people were threatened, and honorable Senators and Representatives vied with each other in making themselves conspicuous in advocating this great measure for the protection of the people.  Even Senator Sherman, who was known to be the champion of the National Bank Act, and who in his speech in the Senate on the introduction of the bill, declared that the legal-tenders must be withdrawn from circulation the very moment that peace came, now made an able and elaborate argument against their further withdrawal and destruction.

This bill was passed as a salve to apply to the wound already made ;  not to heal, but to palliate ;  not because they regarded the interests of the people as paramount, but they saw that they would bear no more.  Had they been legislating for the people they would not have been satisfied to stop the further exercise of the cause which produced the distress, but would have restored to them that which, by their act, they had been robbed.  This they did not do.  On the 25th of July, 1868, nearly six months after the passage of the former act, the cry from the country for more money still greeted the ears of Congress.  Another plaster must be applied to the wound.  On this date they passed an act authorizing the issue of $25,000,000 more three per cent. certificates to be held by the National Banks as reserves, in order to liberate that amount of legal-tender notes for circulation.  While this act was pretended to be an act for the relief of the people, it was a cunningly devised scheme to load them down with additional usury.

Notwithstanding this pretended effort to relieve the people of the distress produced by the withdrawal and destruction of the legal-tender notes, the reports of the Secretary of the Treasury show, that from July 1, 1868, to July 1, 1869, the currency was contracted in volume $26,466,546.14.

Q.  How could this be, when there was no further retirement of the legal tender notes and an additional issue of $25,000,000 of certificates to liberate the same amount held by the banks as reserves, for circulation ;  did the banks refuse to exchange the legal-tender notes for the certificates, and thus withhold them from circulation ?

A.  No, the bankers were too well versed in the scheme of finance for that.  They knew that if they should seem to resist this demand of the people, it would cause them to be on the alert, and perhaps defeat the next step in their programme, which was of much greater importance to them than this small temporary increase in the amount of currency even had it been real.  But it was not real.  During this period, from July 1, 1868, to July 1, 1869, the Secretary of the Treasury was continually taking up and converting into bonds all that class of treasury notes which were intended for currency and were used as such ;  so that, notwithstanding the apparent increase in the circulation, it was actually diminished to the amount of $26,466,546.14, as before stated.

Q.  You referred to what you call the next step in the bankers’ programme.  What are we to understand by that ?

A.  At the time of the passage of the act of Feb. 3, 1868, there was to be a Presidential election in the ensuing fall.  The party in power was compelled to put on the appearance of protecting the interests of the people in order to secure a further lease of power, and this act was passed for the purpose of inspiring such confidence as to prevent any violent opposition in the pending campaign, even from those who had suffered most from the reckless policy which had been pursued on the finance questions.

The Republican party has the prestige of power, and was responsible to the people for every law that was enacted ;  but when legislating on any question where the contest came between the interests of the money power and the people, the old party lines were obliterated, and both parties vied with each other in becoming the servants of this immaculate gold ring.

The administration of Andrew Johnson had been one of dissatisfaction and discontent, which gave the Democratic party some hope of again obtaining control of the government.  The great point was to find a suitable man for a candidate for President.  General Grant had made himself notorious as the successful general who had led the army of freedom and crushed out the great rebellion.  He had never cast but one vote before the war, and that was for a Democrat.  Many of the Democratic papers suggested his name for the candidate of their party, hoping that his great popularity so soon after the close of the war would be sufficient to lead them to victory, but no decided steps were taken in that direction.  A more secret and potent agency was at work.

There was now nearly fifteen hundred millions of the bonds of the government in the hands of a few individuals, which were payable in lawful money of the United States, known as currency bonds, which had been bought by the holders for about forty cents on the dollar.  The holders did not want them paid, or, if paid, not until they could realize a dollar in coin for each dollar called for in the face of the bond.  We had a large surplus revenue, and the people were clamoring for its application to the liquidation of our debt.  Something must be done to forestall such action.  The managers of the scheme saw at once that it would not be safe for them to risk the success of their plans on the success of the Democratic party.  The war record of General Grant would carry the great mass of the Republicans, and his former Democratic record would be sufficient justification for such Democrats as it was desirable should support him to do so.

General Grant’s name soon appeared in the Republican papers as the probable candidate of that party, and was as promptly dropped from the columns of the Democratic press.

The National Republican Convention met at Chicago, on the the 20th of May,1868, and General Grant was put in nomination for President, and Schuyler Colfax for Vice-President.

The Democrats appeared to be demoralized, but, at last, on July 4, 1868, they met in national convention, in New York, and nominated Horatio Seymour for President, and Francis P. Blair for Vice-President.

It has been rumored, but without sufficient reliable data to establish the fact, that previous to the nomination of General Grant, there was an agreement entered into between certain political leaders of both parties, who were largely interested in the bonds of the government, that in case General Grant’s co-operation with them could be assured, there would be no formidable opposition by the Democratic party.

Whether this statement is true or not, the campaign on the part of the Democrats was a feeble one throughout, while some of the great Democratic papers of the city of New York, where the bond-holding interest chiefly centered, denounced the nomination of Mr. Seymour as an unwise one, on account of his being a weak man, when it was patent to every one at all acquainted with the history of New York politics, that he had been for many years one of the most popular men in the Democratic party of that State.

Whether the charge of bargain and sale between the leaders of the parties is true or not, when the election took place, in November of that year, General Grant was elected by an overwhelming majority.

Congress met in the following December.  This being the last session under the administration of President Johnson, and as he antagonized Congress in much of its work, there was but little important legislation completed until after the 4th of March, when his term expired.  There was, however, a joint resolution introduced in the House by Representative Schenk, and discussed to some extent, before the advent of President Grant’s administration.  This resolution was entitled “An Act to Strengthen the Public Credit.”

Q.  An act to strengthen the public credit !  Who was doubting the credit of the government in 1869, four years after the close of the war ?  Was it the soldiers who had survived the terrible struggle and had been paid for their services in legal-tender notes of the government, at their face value ?

A.  No.

Q.  Was it the farmers who had furnished subsistence for the army, and had accepted the legal-tender notes in return, relying upon the faith of the government that they were lawful money of the United States ?

A.  No.

Q.  Was it the manufacturers, who had clothed the soldiers and furnished the arms and munitions of war for the conflict, and had been paid in legal-tender notes, without discount ?  Was it any, or all of these, who had become doubtful of the credit of the government, and demanded some legislative action to strengthen it.

A.  Don’t start, my friend, it was none of these.  These were all well satisfied with the legal-tender currency, and were anxious to retain it in circulation, having full faith that the credit of the nation, which had carried it through four years of devastating war, would not fail in time of profound peace.

Q.  If this class of our citizens, who had borne the hardships of the war, and exchanged the products of their labor for the notes of the nation, which it had constituted lawful money of the United States, and were still using them as such, did not question the credit of the government, who else could possibly do it ?

A.  It was the bankers, the brokers and the bondholders.  That band of vampires, who preyed upon the government during the war, who crippled the legal-tender notes at their birth that they might be able to obtain extortionate prices for their gold, that inaugurated the national-banking system that they might saddle the people with a bonded debt which they could buy for a trifle, to bank upon, and from which to exact usury from the people.  In short, it was that class who were determined to inaugurate a system of perpetual bondage for the great mass of the people for the benefit of themselves and their children from generation to generation.

Notwithstanding the suffering and bankruptcy caused by the contraction of the currency, the activity, energy and industry of the people, together with our boundless resources, was overcoming every obstacle and furnishing ample evidence that unless something was done to impede its progress the indebtedness of the government would surely be paid within a reasonably short time.  As it was at the option of the government to pay those currency bonds as they fell due in legal-tender notes and stop the usury, the fear of the holders of those bonds was that they would be so paid, and hence their demand for an act to strengthen them—the creditors of the government.  They were government creditors.  If it paid its bonds, which they held, they would cease to be such.  They wished to hold it as a debtor, and demanded such legislation as would enable them to do so.

Q.  What kind of legislation could they demand of Congress that would prevent the government from paying these bonds according to contract, and liberating the people from paying usury upon them ?

A.  The best answer to this question is to allow the act to speak for itself.  Here it is :


Be it enacted by the Senate and House of Representatives of the United States, in Congress assembled :  That in order to remove any doubts as to the purpose of the government to discharge all just obligations to the public creditors, and to settle conflicting questions and interpretations of the law by virtue of which such obligations have been contracted, it is hereby provided and declared that the faith of the United States is solemnly pledged to the payment in coin, or its equivalent, of all the obligations of the United States, except in cases where the law authorizing the issue of such obligations has expressly provided that the same may be paid in lawful money, or other currency than gold and silver.  But none of said interest-bearing obligations not already due shall be redeemed or paid before maturity, unless at such time the United States notes shall be convertible into coin at the option of the holder, or unless at such time bonds of the United States bearing a lower rate of interest than the bonds to be redeemed can be sold at par in coin.  And the United States also solemnly pledges its faith to make provisions at the earliest possible period for the redemption of the United States notes in coin.

Q.  In what way could the passage of this act strengthen the public credit when the bonds which had been sold were principally of that class which were made payable in lawful money, and so specified on their face ;  could this act change the nature of that contract without violating the Constitution of the United States ?

A.  This act made an exception to that class of bonds so far as their payment in coin was concerned, but it pledged the faith of the government that none of them should be paid before maturity, unless United States notes should be convertible into coin at the option of the holder, which was invalidating the contract, and consequently an ex post facto law.  This act was only an entering wedge, a preparatory step toward the consummation of a series of acts which will ever stain our statute books, and show to the unbiased mind of the future historian, the evidence of a plot so dark and damning, that Guy Fauk’s plot to blow up the British Parliament sinks into insignificance beside it.  This act further pledges the faith of the government to redeem the legal-tender notes in coin, which meant no more nor less than withdrawing them from circulation.  There was no lack of faith in the public credit, but there was a lack of faith in the bondholders, in the belief that the representatives of the people could be so basely false to the interests of their constituents, as to be used as tools for the purpose of robbing and plundering them.  It was this faith they desired to have strengthened.  How well they succeeded will be seen in the sequel.

This measure met with strong opposition, and was discussed at length by some of the ablest members of both houses ;  and, strange as it may appear, Senator Sherman, then chairman of the Senate Committee on Finance, delivered an able and elaborate speech in the Senate against the adoption of a measure making these bonds payable in coin, on the 27th of February, 1868.  During this discussion Senator Sherman took the ground that the outstanding legal-tenders were all issued before any of the bonds were sold ;  that it was known to the purchasers that they were lawful money of the United States, and that payment in such money at the option of the government being stipulated on the face of the bonds, the holders, therefore, had no right to expect or claim any thing else.  In the course of his remarks be made use of these forcible and truthful words :

“ I say that equity and justice are amply satisfied if we redeem these bonds at the end of five years in the same kind of money, of the same intrinsic value it bore at the time they were issued.  Gentlemen way reason about this matter, over and over again, and they cannot come to any other conclusion—at least that has been my conclusion after the most careful consideration.  Senators are sometimes in the habit, in order to defeat the argument of an antagonist, of saying that this is repudiation.  Why, sir, every citizen of the United States has conformed his business to the legal-tender clause.  He has collected and paid his debts accordingly.  Every state in the union, without exception, has made its contracts since the legal-tender clause, in currency and paid them in currency.

“ Public as well as private debts, contracted since the legal-tender act, did not rest upon opinion or upon express stipulation in the law, and it is equitable and right that the United States should avail itself of that part of the contract.  * * * * * Just consider it :  seventy-six dollars of gold will buy a five-twenty bond for one hundred dollars, bearing 6 per cent. interest in gold, and that bond cannot be redeemed according to one construction, until the United States are ready, not only to pay this per cent on the one hundred for the use of seventy-six dollars ;  but also to pay one hundred dollars in gold for what now costs seventy-six dollars. * * * * * * I repeat that, if this offer is refused (the offer to refund the five-twenty bonds into bonds bearing a lower rate of usury), I will not hesitate to redeem maturing bonds in the currency in existence when they were purchased.  This conclusion I have arrived at against the earnest arguments of personal and political friends, and against my own personal and pecuniary interests.

“ But, Sir, I saw two years ago, and we all see clearly now, that the existing relations between the public creditor and taxpayer is one by which the former enjoys all the blessings of the government without cost, receives without diminution a higher rate of interest than courts would enforce between citizens, and may demand payment of the principal in gold for paper loaned, while your courts refuse to enforce a special contract of gold for gold.  Such a system cannot endure in a government not entirely despotic, without creating discontent that may endanger the fair and equitable performance of the public engagements.  You cannot disguise your knowledge of this growing discontent.  The unavoidable effect of preaching specie payments, in reducing prices and shrinking values, will increase the discontent.  In that painful process the people will see that the untaxed productive annuities of the bondholders alone will be increased in value, while all other forms of property will be reduced in value.

“ It is not the interest, nor do I think it will be the desire of the public creditors to invite this public discontent.

“ Senators have told us that we must not be influenced by public discontent or clamor.  I agree with them when the discontent is not founded upon substantial equity, but when it is founded upon equity it will make itself felt through you or over you.”

One month after the delivery of this speech in the Senate, Mr. Sherman, in reply to a letter from Mr. Mann, sent him the following letter :

WASHINGTON, March 30, 1868.

“ DEAR SIR :  I was glad to receive your letter.  My personal interests are the same as yours, but, like you, I do not intend to be influenced by them.

“ My construction of the law is the result of careful examination, and I feel quite sure an impartial court would confirm it if the case should be tried before a court.  I send my views as fully stated in my speech.  Your idea that we propose to repudiate or violate a promise when we offer to redeem the principal in legal-tenders is erroneous.  I think the bondholder violates his promise when he refuses to take the same kind of money he paid for the bonds.  If the case is to be tested by law, I am right ;  if it is to be tested by Jay Cook’s advertisements, I am wrong.  I hate repudiation, or anything like it, but we ought not to be deterred from what is right for fear of undeserved epithets.  If, under the law as it stands, the holders of the five-twenties can only be paid in gold, the bondholder can only demand the kind of money that he paid ;  then he is a repudiator and an extortioner to demand money more valuable than that which he gave.

“ Yours truly,

Hon. Oliver P. Morton, in a speech delivered in the United States Senate on the 6th of July, 1868, made use of this emphatic language :

“ When it is asserted that the government is bound to redeem the five-twenties in coin, I say it is in express violation of at least four statutes.”

On the 17th of the same month, Hon. Thaddeus Stevens, in a speech in the lower House, said :  “ I would vote for no such swindle on the tax-payers of the country ;  I would vote for no such speculation in favor of the bondholders and millionaires.”

With such truths so plainly spoken in the halls of Congress, by men of distinguished ability, that body cannot screen itself from intentional wrong behind the gauzy veil of ignorance.  The purpose to rob the people in order to add to the wealth of the bondholders is so plainly marked at every step that it cannot be misunderstood.

One notable thing in this apparently noble plea of Senator Sherman for the rights of the people, is the fact that he had constantly in view his favorite scheme—a funded debt—and this speech was evidently a menace on his part in order to secure a long bond with a lower rate of usury before any of those of which he was speaking became due.

This was the position occupied by the leading members of the Republican party in both houses of Congress, after General Grant was nominated by that party for the presidency.  These speeches were sent out broad-cast all over the country as campaign documents, showing to the people who were their friends, and were used as text-books by the local canvassers and stump orators to convince the people that the Republican party, which had broken the shackles of slavery from the limbs of four millions of bondsmen, and relieved them from the curse of unrequited toil, would be equally true to the interests of the laboring and tax-paying citizens of the United States, and guard them sacredly from aggression and outrage from any source whatever.

The State platforms of both the Republican and Democratic parties throughout the west and south, in 1868, declared either in plain terms or by inference, that the five-twenty bonds were payable in legal-tender currency.

The fourth and fifth sections of the Republican platform of Indiana, for that year, read as follows :

Fourth—“ The public debt made necessary by the rebellion should be honestly paid, and all bonds issued therefor should be paid in legal-tenders, commonly called greenbacks, except where by their expressed terms they provide otherwise, and paid in such quantities as to make the circulation commensurate with the commercial wants of the country, and so as to avoid too great an inflation of currency and the increase in the price of gold.

Fifth—“ The large and rapid contraction of the currency, sanctioned by the vote of the Democratic party in both houses of Congress has had a most injurious effect on the industry, and business of the country, and it is the duty of Congress to provide by law for supplying the deficiency in legal-tender notes, commonly called greenbacks, to the full extent required by the business wants of the country.”

The Republican platform of Ohio for that year was more guarded than that of Indiana in its language, but was equally explicit in its pledges to pay the five-twenty bonds as provided for by the law under which they were issued, as the following resolution will show :

Resolved—“ That the Republican party pledges itself to the faithful payment of the public debt according to the laws under which the five-twenty bonds were issued ;  that said bonds should be paid in the currency which may be a legal-tender when the government shall be prepared to redeem such bonds.”

The Democratic platform provided that :

“ When the obligations of the government do not expressly state upon their face, or the law under which they were issued does not provide for it, they (the five-twenty bonds) ought in right and justice, to be paid in lawful money of the United States.”

It was under such declarations as these that the campaign of 1868 was carried on, and General Grant was elected president.  Soon after his election the animus of the money power presented fresh demonstrations of impending danger.  The subsidized press began at first to hint that there was danger of repudiation, and hinted that it was the intention of the law under which the five-twenty bonds of the government were issued that they should be paid in coin, notwithstanding it was stipulated that they should be paid in lawful money of the United States.

A short time after the election Senator Sherman, who had expressed himself so emphatically—only in the February and March before—of his conviction that these bonds were payable in legal-tender notes, both in law and equity, had, through some mysterious revelation, received new light, and in a speech delivered at Toledo, Ohio, said, that, “ To refuse to pay these bonds in gold would be repudiation and extortion, and would be scoffing at the blessings of the Almighty God.”

He advocated and assisted to procure the passage of that odious act of robbery known as the Credit-Strengthening act of 1869, and pursued the same policy unrelentingly during the remainder of his term as Senator, and through his four years’ term as Secretary of the Treasury.

In March, 1869, when this bill was on its passage in the Senate, after it was found that it would pass over all opposition, Senator Morton made use of this language :

[unfortunately this language was used by Mr. Morton in February when the bill was also passed, but President Johnson did not sign it]
“ And now I propound the question :  Is it either intended by this bill to make a new contract, or is it not ?  If it is intended to make a new contract, I protest against it ;  we should do foul injustice to the government and the people of the United States, after we have sold these bonds on an average of not more than 60 cents on the dollar, now to make a new contract for the benefit of the bondholder.  Sir, it is understood, I believe, that the passage of a bill of this kind would have the effect in Europe, where our financial questions are not understood, to increase the demand, and that will enable the great operators to sell bonds they have on hand at profit.  It is in the shape of a broker’s operation.  It is a bull movement, intended to put up the price of bonds for the interest of parties dealing in them.  This great interest is thundering at the doors of Congress, and has for many months been attempting to drive us into legislation for the purpose of making money for the great operators.  That’s what it means, and nothing less.”

But the fight of these noble patriots for the rights of the people was unavailing.  The money power had possession of both branches of the National Legislature, and had just inaugurated an executive in full sympathy with them.  The bill was passed by the two Houses, and on the 18th day of March, 1869, was approved and signed by President U.S. Grant, as the first official act of his executive career.

Q.  Did the passage of this act raise the price of bonds in the market, as was anticipated ?

A.  Yes.  According to the quotations on July 1, 1868, bonds were worth 70 cents on the dollar.  On July 1, 1869, 73 cents, and on July 1, 1870, they sold for 85 cents on the dollar.

But this was only the first step toward the enhancement of the value of these bonds.  The faith of the nation had been pledged, by its Representatives, to violate the law under which they were issued, and to abrogate the contract under which they were sold.

It was not considered safe to risk the strength of this pledge while both the law and the bonds provided that they might be paid in currency.  Something must be done in order to insure the success of the plan thus commenced, and Senator Sherman’s fertile brain was equal to the occasion.  He proposed, that in order to settle any disputes or litigation on the subject in the future, the bonds already sold should be refunded and made payable in coin.

As a pretext of justification for this movement, it was proposed to issue these bonds at a lower rate of usury than those already sold, and thereby save for the people a large amount of usury.  Accordingly, on the 14th of July, 1870, a bill was passed authorizing the funding of the $1,500,000,000 of currency bonds into bonds payable in the coin of the United States at its then standard value.

These bonds were divided into three classes.  Two hundred millions were to bear usury at 5 per cent., three hundred millions were to bear 4½ per cent., and one thousand millions were to bear 4 per cent.

This act was doubly deceptive in its character.  While it was held to be in the interests of the people, by lightening the burden of taxation, it really increased that burden by making the bonds payable in coin.  It added $500,000,000 to the value of the bonds already sold and in the hands of speculators, and reduced the value of all the products of labor in the same proportion.

Q.  How could the law making the bonds payable in coin reduce the value of the products of labor ?

A.  The currency bonds were approaching very near the time for the government to pay them at its option.  Such payment would necessarily keep the legal-tender notes in circulation and perhaps increase their volume.  While this condition existed all the products of labor was measured in value by the legal-tender standard, but when these became coin bonds it increased the probability of the withdrawal of those notes from circulation, and hence reduced everything to the coin standard.

Q.  Why was it that the people did not protest at the time against this conduct of their representatives ?

A.  There are several reasons :

First.  At the close of the war, in 1865, the country was in the flood-tide of prosperity.  The money put in circulation for the defense of the country had filled every avenue of commerce ;  labor was in demand, and at remunerative prices ;  every one was busily engaged in some paying occupation, and, so long as this condition existed, no one had time to attend to politics except politicians ;  therefore the acts of the people’s representatives were but little heeded or cared for so long as they were not felt.

Second.  The people had come to place such implicit confidence in the Republican party, since, under its auspices, the country had been saved from disruption, that it was thought entirely safe to leave the matter of legislation wholly in the hands of its political leaders.

Third, and last.  But most important of all is the fact that the people had been taught to believe that the science of government was so intricate in its character that only those who had been educated for politicians could, possibly understand it, or have any conception of its nature, and, above all, the subject of national finance was of so deep and mysterious a nature that the ablest financiers, who had spent their whole lives in its study, could not comprehend it, and, therefore, it was useless for the farmer, the manufacturer, the artizan, or any one in the common walks of life to spend any of their time or give themselves any trouble about it ;  the financiers of the nation must manage that.  Raving been thus educated from generation to generation, the fruitage showed itself in the little heed which the people paid to the warning given by the faithful few of their representatives all the way through this contest with the money power from 1861 to 1870.

True, they had been aroused when they discovered that they had been robbed of their currency, and felt the pressure of such robbery, and demanded that it should be stopped ;  but they did not seem to recollect that “Eternal vigilance is the price of liberty,” and relaxed at once into their former apathy as though there was no enemy to contend with in the field.

This kind of education has been a curse to humanity from the earliest dawn of human civilization, and has done more to impede the car of progress than all the active and open hostility to free government which it has ever had to encounter.  It operates like an opiate on the physical system, which lulls to sleep, and prevents sensation to pain, while disease is preying upon its vitality ;  or like chloroform, administered by the burglar, which causes his victim to sleep while he enters his house and despoils him of his goods.

Q.  If it was intended that the five-twenty bonds, which were made payable in lawful money of the United States, should be paid in coin, why was it not so stated in this law and so stipulated in the bond ;  and why did the law make the usury upon those bonds payable in coin ?

A.  The reasons which governed the legislators of that period can only be reached by inference, through the laws which they have left recorded on our statute books.  The first inference to be drawn from the law as enacted, and the bonds issued in accordance therewith, is that the law did not contemplate the coin payment of the principal of these bonds, and the fact that the usury is made payable in coin is strong presumptive proof of this position.

But, as this was a part of the plan for creating a perpetual national debt as a basis for a permanent banking system and aristocracy in the United States, it was doubtless understood and intended by those members who were initiated into their secrets and in sympathy with them, that these bonds should be so managed that they should ultimately be paid in coin.

This being granted, the policy of making them payable in lawful money would leave them open to construction, and this would detract from their market value.  It was in the interest of the money dealers to buy these bonds cheap, and risk securing the necessary legislation after they had secured them.  The question as to what kind of money those bonds should be paid in was raised as early as March, 1864, and in June, 1864, Mr. Brooks offered an amendment in the House of Representatives, providing for making them payable, both principal and usury, in coin ;  which amendment was promptly voted down.

Whether intentional or not, this vote was in the interest of the bond brokers, and against the people ;  for it tended to depreciate the price of bonds, and in an equal ratio enhanced the purchasing power of the broker’s gold.

The question was kept open until March 3, 1865, when Congress shifted the responsibility from their own shoulders to those of the Secretary of the Treasury, by leaving it with him to fund the outstanding bonds in new bonds or treasury notes made payable in coin or other lawful money, at his option ;  and what is very remarkable, the bonds issued under this act were nearly all equally indefinite in their stipulations with regard to what kind of money with which they were to be redeemed, so that the strongest reason for such wording of the law made apparent by the history of the case is, that the policy was dictated by the money power, and in their interest, and Congress being under their control, could not avoid it.

The reason that the usury was made payable in coin is equally obvious as a part of the same plan to rob the people and enrich the brokers.  Here was $1,500,000,000 of bonds to be sold, bearing usury at 5 and 6 per cent., making an average of five and a half per cent. on the whole amount to be paid annually, amounting to$82,500,000.  This made a market for that much gold that must be had for that especial purpose, and put it in the power of those who were operating in coin and bonds to command the market for both, and sell their gold at whatever they demanded and buy the bonds at what they might be pleased to give.

One of the strongest proofs that the bonds were issued in this condition for the purpose of depreciating their value in the market, is found in the fact that Hon. Garret Davis, of Kentucky, introduced a resolution, authorizing public creditors to bring suit in the courts for the adjustment of their claims, which resolution was promptly rejected.

They were not willing to have their action passed upon by the highest judicial tribunal of the government.  With all the advantages already obtained, the money power was not yet satisfied.  The funding bill of 1870, only provided for issuing $200,000,000 of the new bonds at five per cent. usury.  On January 20, 1871, only six months afterward they procured the passage of an act, amending the act of July 14, 1870, so as to make the amount of 5 per cent. bonds provided for in that act, five hundred millions instead of two hundred million dollars, thereby making $15,000,000 of additional usury to be paid annually by the people for the privilege of suffering the robbery which had been perpetrated upon them by the acts of 1869 and 1870.