House of Representatives
Monday, June 23, 1862.
---[the Grand Old Commoner proposes to abrogate the right to convert Greenbacks into 5/20 bonds]

Treasury Note Bill--Again.


Mr. Stevens.  I move that the rules be suspended, and that the House resolve itself into the Committee of the Whole on the state of the Union.  The motion was agreed to.

So the House resolved itself into the Committee of the Whole on the state of the Union, (Mr. Phelps, of Missouri, in the chair,) and resumed the consideration of the bill (H.R. No. 187) to authorize the issue of additional Treasury notes;  the pending question being on the amendment offered by Mr. Spaulding, to strike out, in section one, line eight, the words "not less," and insert:

Provided, That no note, shall be issued for a fractional part of a dollar, and not more than $50,000,000 shall be of less denomination.

Mr. Morill, of Vermont, called for tellers.

Tellers were ordered;  and Mr. Thomas, of Massachusetts, and Mr. Shanks were appointed.

The committee divided;  and the tellers reported --ayes 67, noes 45.

So the amendment was agreed to.

Mr. Stevens.  I move to amend the substitute by striking out from the word "and," in the eighteenth line, to the word "thereof," in line twenty-nine, as follows:

And any holder of said United States notes depositing any sum not less than fifty dollars, or some multiple of fifty dollars, with the Treasurer of the United States, or either of the Assistant Treasurers, shall receive in exchange therefor duplicate certificates of deposit, one of which may be transmitted to the Secretary of the Treasury, who will thereupon issue to the holder an equal amount of bonds of the United States, coupon or registered, as may by said holder be desired, bearing interest at the rate of six per cent. per annum, payable semi-annually, and redeemable at the pleasure of the United States after five years, and payable twenty years from the date thereof.

I will explain the reason why I make this motion.  The provision is not in the draft of this bill as sent to the House in the communication from the Secretary of the Treasury, and I do not very well know how it got into this bill, unless it was copied from the old bill, in which it was.  By this provision, any man holding demand notes and legal tender notes can deposit them at par, and compel the Secretary of the Treasury to issue twenty years bonds at par for them.  It leaves no option.  For some time past, if it had not been for that provision in the former law, the Secretary of the Treasury could have sold these bonds at about five per cent. advance.  They have borne a premium to that extent.  This has, therefore, allowed speculators to take these legal tender notes and demand six per cent. bonds, which were five per cent. in value above the notes.  There was no discretion in the Secretary of the Treasury to refuse it.  By striking this out we should leave it discretionary with the Secretary to exchange the bonds at such price as they are worth, and do not compel him to exchange them at par for a currency which is below the value of the bonds themselves.

Mr. Pomeroy.  If I understand correctly the motion of the chairman of the Committee of Ways and Means, he proposes by his amendment to throw the depreciation of this currency upon the holders of it, upon whom it is forced, by the operation of the legal tender clause, and he does not propose that the Government shall have the magnanimity to give even its own bonds in exchange for its own currency.  That is the effect of it, as I understand.

Now, in the letter of the Secretary of the Treasury, sent to us on the 7th of June, I find this clause:

"It may properly be further observed that since the United States notes are made a legal tender, and maintained nearly at the par of gold by the provision for their conversion into bonds bearing six per cent. interest, payable in coin, it is not easy to see why small notes may not be issued as wisely as large ones.  The notes made a legal tender circulate as money;  and the Government may authenticate, by device and imprint, small notes as well as small coins.  The limit is to be found only in public convenience, which indicates the denominations in notes similar to denominations in gold, leaving the smaller circulation of silver (less valuable than gold) as before."

The Secretary himself assigns as a reason why these notes are maintained nearly at par of coin, the fact of their convertibility into bonds.  I do not know but I may be mistaken, and that I may have misunderstood the gentleman from Pennsylvania.  If I do understand the gentleman, to strike out this provision will throw the loss, whatever it may be, upon the innocent holders and not upon the Government, which is the cause of the depreciation.

Mr. Stevens.  My amendment will give the Secretary the option to sell these bonds for their value or to keep them until he can so sell them.  As the law now stands, he is obliged to sell bonds at five per cent. below their value and take the notes that we issue.  I do not care what is the cause of their keeping at par or nearly so.  I shall not enter into any financial disquisition as to what it is that keeps the bonds very nearly at the value of gold.  I think the Secretary of the Treasury ought to have an opportunity of selling the bonds for just what they will bring without regard to anything else.

Mr. Pomeroy.  Then the effect of this amendment, if adopted, would be to create still another class of Treasury notes.  We have now those that are receivable in dues, and we have authorized still another class convertible into United States stocks;  and now the proposition is to cut loose from gold in every respect, and to issue a currency the first $10,000,000 of which necessitates $50,000,000 more, and that $50,000,000 more necessitates bankruptcy.  If this amendment shall be adopted, there is no hold left to the standard of specie at all, and hereafter the Secretary of the Treasury is to be authorized to exchange for notes which have no standard value because no convertibility into gold, that issue of United States bonds, which are also deprived of all standard value by reason of their very convertibility in a thing that is worthless.  I think we have gone far enough in that direction.

Mr. Thomas, of Massachusetts.  I should like to inquire of the gentleman from Pennsylvania [Mr. Stevens] if this amendment is the recommendation of the Committee of Ways and Means ?

Mr. Stevens.  As I said before, I do not know how this clause got in the bill.

Mr. Thomas, of Massachusetts.  Is this amendment recommended by the committee ?

Mr. Stevens.  The bill which the committee recommended was the bill of the Secretary of the Treasury, which had not that clause in it at all.  How that clause got in in the printing I do not know.  It was not in the bill which was sent us by the Secretary, and which was adopted by the committee.

Mr. Thomas, of Massachusetts.  Does the committee recommend that the clause be stricken out ?

Mr. Stevens.  The committee was in favor of the bill without that clause.

Mr. Roscoe Conkling.  I would like to inquire of the chairman of the Committee of Ways and Means whether it is in accordance with the views and recommendations of the Secretary of the Treasury to strike out this clause of the bill.

Mr. Stevens.  It is;  I have seen the Secretary of the Treasury since I made the motion, and he told me he hoped I would persevere in it.

Mr. Dunn.  I desire to ask the chairman of the Committee of Ways and Means how many classes of Treasury notes we will have in circulation ?

Mr. Stevens.  Well, we have one class out now that are made legal tender, and then the Secretary of the Treasury informs us that there are $56,000,000 of notes that are held up for the purpose of paying dues.  They are of a different class altogether.

Mr. Dunn.  Then we have now Treasury notes that are receivable for customs dues.

Mr. Stevens.  Yes, sir;  there are $56,000,000 out of that class.

Mr. Dunn.  And then we have another class that are made legal tender, and are convertible into six per cent. bonds.  And if this amendment prevails, we shall have still another class also made legal tender, but not convertible into bonds except at such prices as the Secretary of the Treasury may choose to take them at.

Mr. Stevens.  Yes, Sir.

The question was taken on Mr. Stevens's amendment;  and there were-- ayes 25, noes 52;  no quorum voting.

Mr. Stevens.  If there is no objection, I will withdraw my amendment, although it is in accordance with the wishes of the Secretary of the Treasury.

There was no objection;  and the amendment was withdrawn.


---[

In 1824, 32 year old Thaddeus Stevens made the acquaintance of Nicholas Biddle and shortly after that became one of his many attorneys, in the service of the Bank of the United States.  Naturally, the future grand old commoner, radical reconstructionist and greenbacker joined the pro-Bank, anti-Jackson Anti-Mason party.  From 1833 Stevens was the able leader of the Pennsylvania Legislature where he organized Whigs(pro- Bank) and Anti-Masons to vote together.  In 1835 these two parties elected Joseph Ritner as Governor of the State.

The years between 1832 and 1836 were the years of Andrew Jackson's war against the Bank of the United States. Followed by 4 years of agitation against banks and for an Independent Treasury......

The Charter of the Bank of the United States was to expire on March 4, 1836. On January 19, 1836, Thaddeus Stevens reported a bill in the Pennsylvania House of Representatives, "to continue and extend the improvement of the State by railroads and canals". This bill included a section for "other purposes," which "contained the entire draught of a charter for the Bank of the United States, adopting it as a Pennsylvania State bank." Thaddeus pushed the bill through the House with a Midas touch that amazed and impressed even Nicholas Biddle.

Some years later the Whigs and Anti-Masons were voted out of the majority of the Pennsylvania Legislature and in January 1842 a committee opened an investigation into the affairs of this bank, relating to the charge of bribery. This committee ascertained that $479,000 was advanced as bribes by the Biddle bank to obtain the State charter in 1836.....

In 1863 Thaddeus wasn't ignorant of what he was doing when he not only voted for, but didn't even object to the National Currency Bank bill which established a national banking system and national bank currency.

In 1864 section 10 of the Republican platform, upon which Abraham Lincoln, Thaddeus Stevens, William Kelley were re-elected, "Resolved, .... that it is the duty of every loyal state to sustain the credit and promote the use of the National currency."  They were faithful to their pledge and remained loyal to the notes of privately owned National currency Banks.

]





Senate of the United States
Wednesday, July 2nd 1862.
---[Mr. Sherman moves to drive out of circulation State bank paper]

Additional issue of Treasury Notes.


Mr. Fessenden.  I move that the Senate take up the bill (H.R. No. 187) to authorize an additional issue of United States notes, and for other purposes.

The motion was agreed to;  and the Senate, as in Committee of the Whole, proceeded to consider the bill.  It will authorize the Secretary of the Treasury to issue, in addition to the amounts heretofore authorized, on the credit of the United States, $150,000,000 of United States notes, not bearing interest, payable to bearer at the Treasury of the United States, and of such denominations as he may deem expedient;  but no note is to be issued for the fractional part of a dollar, and not more than $50,000,000 be of lower denominations than five dollars.  Such notes are to be receivable in payment of all loans made to the United States, and of all taxes, internal duties, excises, debts, and demands of every kind due to the United States, except duties on imports and interest, and of all claims and demands against the United States, except for interest upon bonds, notes, and certificates of debt or deposit;  and they are also to be lawful money and a legal tender in payment of all debts, public and private, within the United States, except duties on imports and interest, as aforesaid.  Any holder of these United States notes depositing any sum not less than fifty dollars, or some multiple of fifty dollars, with the Treasurer of the United States, or either of the Assistant Treasurers, will receive in exchange therefor duplicate certificates of deposit, one of which may be transmitted to the Secretary of the Treasury, who will thereupon issue to the holder an equal amount of bonds of the United States, coupon or registered, as may by the holder be desired, bearing interest at the rate of six per cent. per annum, payable semi annually, and redeemable at the pleasure of the United States after five years, and payable in twenty years from the date thereof.  And the Secretary of the Treasury may exchange for such notes, on such terms as he shall think most beneficial to the public interest, any bonds of the United States bearing six per cent. interest, and redeemable after five and payable in twenty years, which have been or may be lawfully issued under the provisions of any existing act;  he may reissue the notes so received in exchange;  may receive and cancel any notes heretofore lawfully issued under any act of Congress, and in lieu thereof issue an equal amount in notes such as are authorized by this act;  and may purchase, at rates not exceeding that of the current market, and cost of purchase not exceeding one eighth of one per cent., any bonds or certificates of debt of the United States as he may deem advisable.

The Secretary of the Treasury is also to be authorized, in case he shall think it expedient, to cause the notes to be engraved and printed by contract, or to be engraved, printed, and executed, in such form as he shall prescribe, at the Treasury Department, in Washington, and under his direction;  and he is to be empowered to purchase and provide all the machinery and materials, and to employ such persons and appoint such officers as may be necessary for this purpose.

The limitation upon temporary deposits of United States notes with any Assistant Treasurer or designated depositary authorized by the Secretary of the Treasury to receive such deposits to $50,000,000, is to be repealed;  and the Secretary of the Treasury is authorized to receive such deposits, under such regulations as he may prescribe, to such amount as he may deem expedient, not exceeding $100,000,000, for not less than thirty days, in sums not less than $100, at a rate of interest not exceeding five per cent. per annum;  and any amount so deposited may be withdrawn from deposit, at any time after ten days' notice, on the return of the certificate of deposit.  But United States notes to an amount not less than one third of the aggregate sum of the deposits is at all times to be reserved in the Treasury of the United States, or from issue under this act, for the purpose of securing prompt payment of such deposits on demand.  And certificates of deposit and of indebtedness issued under this or former acts may be received on the same terms as United States notes in payment for bonds redeemable after five and payable in twenty years.

The Secretary of the Treasury may, at any time until otherwise ordered by Congress, and under the restrictions imposed by the "Act to authorize a national loan, and for other purposes," borrow, on the credit of the United States, such part of the sum of $250,000,000 mentioned in that act as may not have been borrowed under its provisions within twelve months from the passage thereof.

Any part of the appropriation of $10,000 for the detection and bringing to trial of persons engaged in counterfeiting the coin of the United States, made by the act entitled "An act making appropriations for the legislative, executive, and judicial expenses of the Government for the year ending 30th June, 1861," approved June 23, 1860, may be applied in detecting and bringing to trial and punishment persons engaged in counterfeiting Treasury notes, bonds, or other securities of the United States, as well as the coin of the United States.  And to carry into effect these sections the sum of $300,000 is to be appropriated.

All the provisions of the act entitled "An act to authorize the issue of United States notes, and for the redemption or funding thereof, and for funding the floating debt of the United States," approved Febrpary 25, 1862, so far as the same can or may the be applied to the provisions of this act, and not inconsistent therewith, are to apply to the notes now to be issued.

The Committee on Finance reported the bill with various amendments.  The first amendment was in section one, line ten, to strike out "fifty," and insert "twenty-five;"  so that the clause will read:

Provided, That no note shall be issued for the fractional part of a dollar, and not more than $25,000,000 shall be of lower denominations than five dollars.

The amendment was agreed to.

The next amendment of the committee was in section three, after line thirteen, to strike out the following proviso:

Provided, however, That United States notes to an amount not less than one third of the aggregate sum of said deposits shall it all times be reserved in the Treasury of the United States, or from issue under this act, for the purpose of securing prompt payment of such deposits on demand.

And to insert in lieu thereof:

And of the amounts of the United States notes authorized by this act not less than $75,000,000 shall be reserved for the purpose of securing prompt payment of such deposits when demanded, and shall be issued and used only when, in the judgment of the Secretary of the Treasury, the same, or any part thereof, may be needed for that purpose.

Mr. Fessenden.  The word "amounts" in the matter proposed to be inserted should be "amount."  I desire that change to be made.

The Presiding Officer.  That modification will be made, if there be no objection.  The question is on the amendment as modified.

The amendment, as modified, was agreed to.

The next amendment was in lines twenty-four and twenty-five, to strike out the words "provided further, that."

The amendment was agreed to.

The next amendment was to insert as an additional section the following:

Sec. 7. And be it further enacted, That the Secretary of the Treasury be, and he is hereby, authorized, under such regulations as he may prescribe, to make any officer or depositary designated to receive and keep any moneys collected under and by virtue of an act entitled "An act to provide internal revenue to support the Government and pay interest on the public debt" a disbursing agent of the Treasury for the payment of all interest due to the citizens of any State where such place of deposit may be established, upon Government securities issued by authority of law.

The amendment was agreed to.

Mr. Fessenden.  The Committee on Finance have directed me to offer another amendment, to insert in section one, line thirty-one, after the word "thereof," the following:

Provided, however, That any notes issued under this act may be paid in coin instead of being received in exchange for certificates of deposit as above specified, at the discretion or the Secretary of the Treasury.

The amendment was agreed to.


Mr. Sherman.  I desire to offer an amendment on which I shall ask n vote of the Senate.  I move to insert as an additional section the following:

And be it further enacted, That there shall be paid annually by each person, corporation, or association, which, under the laws of any State, shall issue notes and bills for circulation as money, the duty of two per cent. of the largest amount of such bills and notes of such person, corporation, or association that shall be outstanding during the quarter part of the year preceding such payment.  Such duties shall be paid quarterly;  the first payment to be on the 1st day of October, 1862;  and shall be ascertained, assessed, and collected in the mode provided by law for the assessment and collection of taxes levied upon corporations;  Provided, That the bills or notes of such person, corporation, or association held by such person, corporation, or association, and not in circulation within the quarter preceding, shall not be included in said amount.

Mr. President, if I can obtain for a short time the attention of the Senate on this important proposition, I shall endeavor to present the reasons for the adoption of this amendment.  In the annual report of the Secretary of the Treasury, he submitted the proposition to Congress to tax the circulation of bank paper, not only with a view to revenue, but with a view of withdrawing from circulation local bank paper.  In justice to him, probably, I ought to have what he says upon the subject read before l proceed to make my remarks.  I will ask the Secretary to read an extract from his annual report of last December.

The Secretary read, as follows:

"The circulation of the banks of the United States, on the 1st day of January, 1861, was computed to be, $202,000,767.  Of this circulation $150,000,000, in round numbers, was in States now loyal, including West Virginia, and $50,000,000 in the rebellious States.  The whole of this circulation constitutes a loan without interest from the people to the banks, costing them nothing except the expense of issue and redemption and the interest on the specie kept on hand for the latter purpose;  and it deserves consideration whether sound policy does not require that the advantages of this loan be transferred, in part at least, from the banks, representing only the interests of the stockholders, to the government, representing the aggregate interests of the whole people.

"It has been well questioned by the most eminent statesmen whether a currency of bank notes, issued by local institutions under State laws, is not, in fact, prohibited by the national Constitution.  Such emissions certainly fall within the spirit, if not within the letter, of the constitutional prohibition of the emission of bills of credit by the States, and of the making by them of anything except gold and silver coin a legal tender in payment of debts.

"However this may be, it is too clear to be reasonably disputed that Congress, under its constitutional powers to lay taxes, to regulate commerce, and to regulate the value of coin, possesses ample authority to control the credit circulation which enters so largely into the transactions of commerce and affects in so many ways the value of coin.

"In the judgment of the Secretary the time has arrived when Congress should exercise this authority.  The value of the existing bank note circulation depends on the laws of thirty-four States and the character of some sixteen hundred private corporations.  It is usually furnished in greatest proportions by institutions of least actual capital.  Circulation, commonly, is in the inverse ratio of solvency.  Well-founded institutions, of large and solid capital, have, in general, comparatively little circulation;  while weak corporations almost invariably seek to sustain themselves by obtaining from the people the largest possible credit in this form.  Under such a system, or rather lack of system, great fluctuations, and heavy losses in discounts and exchanges, are inevitable;  and not unfrequently, through failures of the issuing institutions, considerable portions of the circulation become suddenly worthless in the hands of the people.  The recent experience of several States in the valley of the Mississippi painfully illustrates the justice of these observations;  and enforces by the most cogent practical arguments the duty of protecting commerce and industry against the recurrence of such disorders.

Mr. Sherman.  The proposition to tax the circulation of bank notes is new in the Senate, but is not new among the financial men of the country.  The proposition has been discussed in many of the leading commercial papers.  It has been discussed among bankers and persons whose business it is to deal in money.  It is therefore not a new question.  It has been the frequent subject of conversation in the Committee on Finance.  My own convictions are clear and decided.  I believe the time has arrived when it is an imperative necessity for the Government of the United States to gradually drive out of circulation the local bank paper.  The right to issue paper money is a franchise or property, liable like other property to taxation.  It should bear its full share of the burden of taxation;  and yet it is the only species of property that I know of in this country that now escapes taxation.  The franchise, or the right to issue paper money, is just as much an article of property as a horse or cow, a farm, a distillery, or a railroad;  and yet this franchise, this exclusive right, granted only to a few corporations in this country, is the only property that I know of that is free from all taxation, except the tax upon the income derived from it.  I do not know any element of taxation that is better able to pay.  What is the condition of the banks of this country ?  They issue $150,000,000 of notes which is virtually money.  Every citizen is compelled to take it, not by law, it is true, but by the necessity of business operations.  Upon this a profit is derived to the banks of at least six per cent., or $9,000,000.  There is no corresponding burden thrown upon the banks for this circulation.  If they redeemed this paper in coin at their counters, then, as a matter of course, there would be no propriety in taxing them to this extent, at least.  But they have this exclusive privilege, and they do not comply with the condition upon which they have the right to issue, and that is the condition of redeeming their notes in coin.  It is a valuable privilege to them;  it ill worth to them at least $9,000,000, and for which they pay no consideration whatever, either to the State or to the General Government.  As they do not now comply with the conditions of their charters to redeem their notes in gold and silver, they substantially have a franchise from the people of the United States worth to them $9,000,000 without taking upon themselves any burden whatever.

Mr. Clark.  The Senator will allow me to inquire whether he has well considered what he is saying.

Mr. Sherman.  That is a question I do not want to answer.  It is rather a peculiar question.

Mr. Clark.  The banks of my State do pay to the Legislature, out of which we make up a literary fund to support our shcools in part.  We have not large grants of land in New Hampshire;  but we do from this very source, of which the Senator speaks, get a fund of $60,000 a year for the support of our schools.

Mr. Sherman.  The Senator will find that he does not know as much about it as he thinks.  The tax to which he alludes is a tax on the capital employed in the banks, not upon the circulation.  There is not in the United States, so far as my knowledge goes, a tax upon the circulation of bank paper.  The Senator is mistaken.

Mr. Clark.  No;  I am not mistaken.

Mr. Collamer.  He is right.

Mr. Sherman.  Is there a tax on circulation ?

Mr. Collamer.  We do not call it by that name.

Mr. Sherman.  There is a tax on the capital of the bank.  That is property.  The right to issue bank paper is a franchise, a property, just as distinct as the ownership of the capital, and they are as distinct as any two species of property can be.  The owners of the bank own the capital, and upon that they pay a tax.

Mr. Fessenden.  The Senator is mistaken, for this reason: the banks pay to the State so much for the privilege of banking.  The stockholders pay taxes like everybody else on the stock owned in the banks, and the property pays besides.  It is a special tax for the privilege of circulating notes.

Mr. Sherman.  I do not think there is, in the part of the country in which I reside, a tax of this kind.

Mr. Fessenden.  In all New England there is.

Mr. Sherman.  There may be in New England.  I do not question that.  The Senator says it is a tax on circulation.  My impression is it is a tax on the property invested in the corporations.

Mr. Clark.  Not at all.  Let me inform the Senator it is a distinct tax levied on all banking institutions for the privilege of this circulation.

Mr. Sherman.  How much ?

Mr. Clark.  One half of one per cent.

Mr. Sherman.  Then the Senator, by showing that this franchise is taxed in New England, shows clearly that among the New England people, where the subject of taxation is well understood, it is a proper element of taxation.  If the State can tax this franchise, why shall not the General Government tax it now in its need ?  We are taxing many things we never taxed before;  and why should not this important property be taxed ?  You must remember, sir, that this franchise is worth to the banks of the United States not less than $9,000,000;  that it is a franchise that brings with it no corresponding burdens;  that not one of them redeems --there may be a few cases, but the great body of them do not redeem-- their paper in gold and silver;  they are relieved by the state of affairs from many of the burdens of a hank issue;  they own this important franchise, and that franchise escapes taxation by the General Government, at least.  Now, there are other taxes imposed on other corporations.  Take railroad corporations.  They pay the income tax;  they pay the tax on the interest of their bonds;  they pay all the taxes that are assessed on banks;  and in addition there is a tax imposed on railroads of three per cent. on the receipts from passengers, which is even a higher rate than is proposed by this amendment.  In like manner, insurance and various other companies pay a tax of this kind, besides the tax on their income, and on their property.  But the banking franchise escapes taxation.  I hope Senators will keep in mind that the franchise, the right to issue notes, is a property distinct from the capital employed in the bank.  They may lose their franchise, and yet their capital is preserved.  Each are different elements of taxation.  If a lawyer practices his profession, you tax him on his employment, and yet tax his income.  Here is an exclusive employment from which large profits are derived directly from the, people.  I submit if it does not present a proper subject of taxation which we would not act wisely in entirely ignoring.

I have thus far discussed this proposition simply as a question of taxation of property to be taxed;  but there is another view, much stronger, in my judgment, why this tax should be imposed, and imposed now.  I frankly acknowledge that the chief purpose in levying this tax is to induce the withdrawal from circulation of local bank paper.  Suppose that all the bank paper of the United States were now withdrawn from circulation.  That would not destroy a single item of property.  The capital of all these banks would be intact.  They could make their legitimate profit on their capital.  They could engage just as other banks do in banking business.  They could carry on their business of receiving deposits, of issuing bills of exchange, and all the ordinary functions of banking business, except only this peculiar franchise which is regarded everywhere as a Government franchise --the right to make money.  This would not impair the value of their property.  Indeed, several gentlemen engaged in the business of banking have said to me that if this privilege was denied to all the banks so that they would be put on the same footing with other banks, they had no objection to it, because they could use their capital in ordinary and legitimate banking business without any loss.  They could carry on their operations with and upon the demand notes now furnished by the United States.  Why, sir, the largest banking establishments in this country do not issue notes to any considerable extent;  and many of the ablest men engaged in this business do not desire to issue notes.  Their credit can be made available in a different form.

Suppose the purpose I avow is accomplished: what then is the condition of our currency.  We have then but one kind of paper money --that issued directly by the United States, and based upon the public credit.  It would be of uniform value throughout the United States.  Exchanges between different parts would never exceed the cost of transferring the paper;  a cost very trifling with our excellent system of transportation by express companies.  The amount might be limited by the national Legislature so as to prevent the danger of expansion and contraction.  Such a currency would then be invaluable as a medium in war of borrowing money on the bonds of the United States, and in time of peace of paying the public debts.  All loss from counterfeiting could be carefully guarded against;  broken and depreciated bank paper, defaced and worthless rags, would no longer inflict a severe loss upon those who are compelled by the usages of trade to take it or get nothing.  A national currency based upon all the property of the United States would give security and uniformity to the circulating medium of the country.

---[And if you had accomplished that, you would have been the greatest hero of the United States, ever;  unfortunately, you are lying: you know full well that a new national currency bank system is planned and is in the works, as we speak, your congressional tag-team partner, Samuel Hooper, is working on a currency bank bill, but this session will expire before he can get a vote on it;  so, six months from now you, yourself, will introduce what was essentially Mr. Hooper's bill (more accurately Spaulding's and Chase's bill), in the Senate, and it will pass both Houses and become law on February 25, 1863.  And the result will be what you describe in the paragraph below:  bankers and bank paper competing against government paper and the government itself.
The notes of these new, national, banks will be, of course, tax-free;  just as the 5/20 bonds, which in 1863 will be sold in large number, will be free from taxation]


But if, on the other hand, you continue to issue United States demand notes, without taking measures to retire the bank paper in circulation, you will find that the banks, no longer restrained by the necessity of paying gold and silver, will make your issues the basis of the issue of at least as much more bank paper.  The rivalry for two systems not connected with each other will produce inflation and derangement in all the business relations of the country.  A system of finance like this must in the end produce disaster and ruin.

Experience has fully proven that some form of paper money will be used in all commercial nations.  By adopting the sub-Treasury bill we did not get rid of paper money.  We only got rid of the use of it by the Government.  From the time the sub-Treasury bill was passed until this hour, the amount of paper money has been gradually changing and increasing, although not always uniformly.  It has always existed, and has been the basis of the operations of the business of the country.  Although the United States received only gold and silver coin, yet paper money was the basis of circulation in all the northern States, and I believe in nearly all the States, with the exception of California and perhaps Louisiana, where they have but very little bank paper.

There are radical objections to the present banking system of the United States.  There are one thousand three hundred and ninety-six banks in twenty-nine States and one Territory.  Their systems of banking are as diverse as anything can possibly be.  In some States they are governed by a general banking law;  in others by corporate charters.  In some States they are based upon stock securities;  in some upon the capital stock paid in or secured.  In some States they are regulated by a State bank and branches, and in others each bank is separate and independent from the others.  We have a complex system of bank notes.  It requires an expert to judge of the validity or correctness of a bank note.  Your ordinary bank note reporters and detectors contain an infinite variety of descriptions to tell the value of a bank note, and whether it is counterfeit.  It is a complex system.  The loss by counterfeiting, and the loss by bad notes of various kinds in this country, is estimated by gentlemen who are engaged in the business as nearly equal to the interest, on the whole circulation;  that is, $9,000,000 is lost the people of the United States by counterfeiting, by bad notes, by lost notes, by bank failures, and in various ways.  The people, therefore, are not only compelled to use this money, and substantially give to the banks a profit of the interest on the whole circulation, but in addition to that they lose fully $9,000,000 in the form of defaced notes, counterfeit notes, &c.  At least, that is the estimate made by persons who are familiar with the subject, and I have no doubt it is correctly made.

Then you must remember that every year more or less of these banks break.  There is no stability about them;  there is no common regulator;  there is no system about them.  Why, sir, they are like a regiment without an organization.  They are like a thousand men without colonel or captains.  They have no common bond of organization;  any important event that disturbs the money market of the world makes a greater flutter among them than a shot among a bevy of partridges.  The failure of a single bank in Ohio in 1857, the place of business of whose leading officers was in New York, startled the whole bevy of banks.  It came very near bringing on --yes, it did bring on-- a financial disaster, at a time, too, of general prosperity.  The wisest men could not state any cause of that disaster, except that it grew out of a sudden panic, breaking banks, bankers, merchants, and traders.  There is no system of organization in these banks.  They do not support and sustain each other.  In case of failure or stringency of any kind they rather tend to pull down each other, than to help each other.

I do not think it necessary for me to spend time here to convince Senators that this system of banking is not wise.  The uncertain rate of exchange between the different States grows out of the multitude and diversity of the banks.  The bank paper of States adjoining each other has varied in value as much one year's interest of money.  An intelligent foreigner who desired to travel over this country with the bank paper of the United States, would have to take with him a counterfeit detector and the laws of all the States, in order to tell whether or not he would be safe in taking bank paper.  It seems to me it requires no argument to prove that this system of banking is not a wise one, and ought to be dispensed with.

In times of peace the Government of the United States was not seriously disturbed by this system of paper money, because under the sub-Treasury law all the operations of the General Government were carried on in gold.  The General Government very properly left all local matters and local organizations and local banks to the States;  although it has been the opinion of some of the ablest lawyers in this country that bank bills come within the meaning of bills of credit, and that their issue by a State, or by the authority of a State, or by a corporation under the laws of a State, is prohibited by the Constitution.  I do not choose to discuss that question, because it has been settled and decided by the practice of the country.  I say in times of peace the Government felt no source of embarrassment from this diverse paper money;  but now it does.  The existence of this paper money is the chief embarrassment in managing the finances of the United States.  Every person familiar with the operations of the Treasury knows and feels it.  When you issue your paper money now, as you are compelled to issue it, it becomes the basis of other issues by the banks, and the inflation which you are compelled to give becomes a double inflation, from its consequences on the banks of the United States.  When the Government of the United States issued $150,000,000 of notes, if there had been no depreciated bank paper money in the United States, that $150,000,000 would this moment have been at par with gold;  but the issue by the Government was made the basis of other issues by local banks.  These local banks do not pay their paper in gold and silver.  It was depreciated;  and it is a financial rule that when there are two classes of currency open in the market, the poorer class will always drive out the best.  Every man knows very well, that if he has two notes, and one is a little worse than the other, he will try to pass off the inferior note.  That is the ordinary operation, the guiding motive of self-interest which actuates the conduct of men.  Where there are two classes of notes in circulation, the inferior will always take the place of the superior.

---[That is why six months ago Mr. Vail, the Cashier of the largest bank in the United States, came to Washington and requested that the proposed greenbacks be made legal tender;  that way they can 'bank' on them;  the national currency bank act of February 25, 1863, will stipulate that for every 4 of their notes, these new banks will have to keep 1 greenback in their vaults]

It is difficult, under the operation of our system, for the Secretary of the Treasury to carry on the large operations of the Government necessary to convert notes into bonds.  The notes are now held and hoarded.  The first issue of $60,000,000 of notes were issued with the right of being converted into six per cent. twenty years bonds, and with the privilege of being paid for duties in customs.  They are now far above par, and are hoarded.  They are no longer in circulation.  This is the chief reason given why it is necessary to issue a greater amount.  Why are they hoarded ?  Simply because they have certain privileges and certain advantages which the bank paper of the United States has not.  They are better than the local bank circulation, and therefore are driven out of circulation by being held in the banks;  by being held for conversion into bonds, by being held in such a way that they do not enter into the ordinary circulation of the country, and in their place is issued, in still larger amounts than before, the paper money of the banks.  The consequence is, the Government of the United States is either compelled to receive this bank paper, in violation of the sub-Treasury law, or it is compelled to issue a new emission of paper money, and thus depreciate and break down the whole.

---[So they did both: repealed the Independent Treasury act, and issued more greenbacks
"it was found that the bonds [5/20s] could not be negotiated, and it became necessary to depreciate the notes [greenbacks] in order to create a market for the bonds.  The limit of notes was trebled and the right to convert them taken away."  --stated Mr. Sherman in 1867 in his Report]

The Secretary of the Treasury is just in that position that he has either to ask Congress to suspend the sub-Treasury law, which forbids the receipt by an officer of the Government of other paper money than Treasury notes, or he has to issue more demand notes.  If Congress allows the issue of the paper money provided for in this bill, what is the consequence ?  The banks will take it, and issue other paper money on the basis of it.  Most of their charters require them to keep one third specie in their vaults;  but under the operation of existing laws, instead of that specie they will now keep one third paper money.  Every new issue of Treasury notes is only a bid for a new inflation by the banks, and thus the better money of the United States is hoarded and laid away, and the paper money which is issued on the credit of it is thrown on the country, producing inflation and derangement of our monetary system, and I believe in the end will produce disaster.  Therefore we are now compelled either to suspend the sub-Treasury law, and authorize the Secretary to receive bank bills as money in the sale of bonds, or you must induce its withdrawal and redemption by taxation, and such other measures of legislation as the wisdom of Congress may devise.

Mr. President, I do not wish at this period of the session to dwell on this subject, although there are very many facts and statistics that I should like to present if I had more leisure;  but I know the matter is pressing.  I am sure our national paper money cannot run a rivalry with bank paper;  we must choose between the one and the other.  With my settled convictions I cannot vote for the issue of any more national currency unless it is upon the basis of the retirement of the existing paper money in the country.  If you issue United States Treasury notes, and simply make that the basis of future issues by banks, you will be compelled either to take the local paper money in the Treasury of the United States, or you will be compelled to issue again and again and again.

The consequence is already felt.  Exchange on England is now worth about ten per cent. above the usual premium.  Gold is worth between nine and ten per cent. premium.  Yet the credit of the United States is perfectly good, its bonds being par with gold.

I have no doubt that were it not for the bank circulation the issue of $300,000,000 of Treasury notes would have a healthy and beneficial effect.  The Government might issue that amount, and receive or borrow from the people of the United States, without interest, this large sum of money;  but when you do it upon the present system, you only encourage a like issue by the banks, and thus inflate more and more, decrease the value of the paper by raising the value of gold, and create embarrassment and, I think, disaster.  The operations of the Treasury Department can not be carried on on this double and complex system.

I say, therefore, Mr. President, that whether you view the franchise granted by the States to issue bills simply as a property right, or whether you view it as a national question affecting the national currency of the United States, my proposition is entirely defensible.  If this right to issue paper money is a franchise or property, as it is claimed to be, and as I believe it is, it should be taxed, and it ought to bear a heavy taxation.  If, on the other hand, it is a privilege that ought to be discouraged, one that tends to impede and affect injuriously the public interests, it ought to be controlled by such measures as the wisdom of Congress may devise.  The power to tax is clear;  and I think the expediency of the tax can be easily demonstrated.





Mr. Sherman.  Mr. President, we always receive instruction from the Senator from Vermont [Mr. Collamer], and in much that he has said, I agree.  As to the deposit system on which he comments, I agree with him perfectly.  I believe it is a very bad system, and I thought from the beginning that it was a very absurd mode of financiering.  It was adopted after considerable debate in the Senate.  I believe now it is unwise, and ought to be abandoned.  But there is this about it: under the previous law, various parties have deposited in New York and other cities about fifty million dollars at between four and five per cent.  Now, suppose some sudden event should occur by which these depositors, like all other depositors in a safety fund, should have a panic, and make sudden demands for this money, how shall they be paid ?  There is no provision to pay them.  The Government must pay them in some way, and it has stipulated that it will pay them.  It is a deposit, payable on demand at the end of ten days, and the Government must pay them.  As a matter of course, it is the duty of the Government to do the best it can.  If it cannot pay in gold and silver, it must provide Treasury notes.  Seventy-five millions of the $150,000,000 authorized by this bill are not to be issued at all, except they are called for to pay those deposits.  That is the best feature of the bill.  In this way we provide a mode of paying for those deposits;  but if no bill is passed on the subject, and the Secretary is suddenly called upon to refund this money, he cannot do it.

By the provisions of this bill, as it is now amended, $75,000,000 of the $150,000,000 are not to be issued except in a certain contingency.  That contingency, in my judgment, is not likely to happen, because the depositors themselves are interested against the issue of more Treasury notes;  and rather than recall their deposits, unless they are very much pressed they will not call for the issue of these additional Treasury notes.  But in case the deposits shall be called for, the Secretary should have some means on hand to meet the calls.  That was the view which influenced the committee in recommending this change, and reserving $75,000,000, instead of one third of the whole deposit, or $30,000,000, as the House proposed.

As to what the Senator says about the danger of increasing the amount of Treasury notes, I agree with him.  I see no immediate and pressing necessity for the issue of these additional $150,000,000 of Treasury notes, and therefore I have felt inclined to oppose the bill;  but as I have stated, $75,000,000 are not to be issued unless to meet the deposits, so that the increase provided for by this hill is really only $75,000,000.  Now, it was said to us by the Secretary of the Treasury that $50,000,000 of the old demand notes are hoarded, and are, therefore, not in circulation;  but I have no doubt, and I can assure him that they will come in very soon.  They are receivable in payment of duties.  No specie is received for duties, and these notes will be paid in, from time to time as merchants require them to pay duties, and they will be bought up by banks and speculators and merchants, and be held for the payment of duties.  It may take a year to exhaust them in that way;  but they will come in.

There is another important privilege attached to the old demand notes: they are fundable at any time in twenty years six per cent, bonds;  and a twenty years six per cent. bond is now worth par in specie, or some ten per cent. premium above the legal tender Treasury notes.  I have no doubt that the whole of the old issue of the demand notes will be converted in a very short time, either in the payment of duties or in the long, twenty years bonds.  Having these important privileges, and being for this reason better than the recent issue of Treasury notes, they are withdrawn from circulation, and are not now a part of the actual currency of the country;  so that what the chairman of the Committee on Finance says is true, that, instead of $150,000,000 being now in circulation, we have at most but $90,000,000 in circulation;  and these notes are actually kept out of circulation by the depreciated bank paper of the country;  and every issue you make increases that tendency.

Here comes the point where my friend from Vermont and I separate.  He is in favor of keeping up the local bank paper and not issuing any more United States paper.  Now, suppose that course should be adopted: what would be the result ?  If the course recommended by the Senator from Vermont should be adopted, we should soon be in the same difficulty that we were in three or four months ago, when he opposed the issue of all United States paper money;  that is to say, we should have no money whatever to pay the current demands of the Government.

When the honorable Senator opposed the first issue of legal tender notes, he did not provide any other remedy and if his advice had been followed, the Government, within ten days from that time, would have been unable to pay its current expenses, even your salary, Mr. President, because it had no sources of income;  it was receiving nothing from customs;  the outstanding Treasury notes were being paid in for custom-house duties;  it could not sell its bonds because there was nothing in which it could receive pay but gold and silver, which were out of circulation;  its bonds were then ten per cent. under par.  Under those circumstances, I say, that if the advice of the honorable Senator from Vermont had been adopted a few months ago, when we provided for the first issue of legal tender notes, I do not see how the Secretary of the Treasury could have paid the current expenses even of the civil list.

Mr. Collamer.  The Senator will indulge me in asking him a question.  Does the Senator think that, because the Government cannot get along in any other way, they have a right, notwithstanding the Constitution, to steal ?

Mr. Sherman. No, sir;  I am not in favor of stealing.

Mr. Collamer.  Do the necessities of the Government, however hard or pressing they may be, alter our constitutional power ?  I opposed making the notes a legal tender, because I thought it unconstitutional.

Mr. Sherman.  That still does not answer the difficulty.  I say that if the advice of the honorable Senator, however distinguished, had been followed, the Government would have been left without the means of support.  I do not, therefore, say that the Secretary ought to have stolen money.  The advice of the Senator and of Congress, wisely, in my judgment, was that the Secretary should issue the credit of the Government in the form of Treasury notes.  That was done, and I think wisely done, and I believe there are but few men in the country who do not consider that the necessity justified the experiment.

Now, the only question with us --and there is where I differ from the Senator --is whether the Government should go on issuing paper money in competition with the bank paper of the country.  The Senator seems to think I am hostile to banks.  The fact is that I have always been a bank man, and am now.  I have always been disposed to favor them, and regard them as useful institutions, and I believe now that the banks will be benefitted rather than injured by this system.  Banks ought to represent capital, and capital is injured by the inflation of prices and by the derangement of the currency.  All the banks ought to be owned by men who have money to lend, who have a surplus of money on hand which they desire to lend and put out on interest, and these are the very men whose business is destroyed and deranged by the derangement of the currency.  So far from injuring the banks, I think it will benefit the banks.

Take any bank in the State of Vermont for instance, I am not familiar with their local bank system, but I take it that if the banks of Vermont are authorized to issue paper money, they are authorized to issue it upon capital paid in;  money paid into the bank.  Now, suppose they are compelled to withdraw their circulation, and to use circulation furnished by the United States, is their capital impaired; is their property destroyed;  can they not use that money as other banking operations are carried on;  can they not loan that capital;  can they not make it the basis of the issue of certificates of deposit, of bill of exchange, and of all the various forms of commercial paper ?  Is it absolutely necessary that they should have the legislative franchise to issue paper money upon their capital stock ?  Not at all;  and I have it from some of the lending banking men of the United States, as I stated in the outset, that they will not be injuriously affected by this proposition.  For a time, they no doubt would pay the tax of two per cent., but they would gradually withdraw their circulation;  it would be done slowly as debts were paid in in paper of file United States, in the mode pointed out by the Senator from Vermont;  they would withdraw their circulation rather than pay the tax.  Very many of them perhaps would prefer to pay the tax, because on account of the suspension of specie payments, they are actually getting a profit of six per cent. on their circulation without corresponding burden being thrown upon them.

But the Senator says the banks were compelled to suspend by the United States.  What of it ?  I do not question the loyalty or patriotism of the banks;  on the contrary, I believe the commercial men of the country, the financial men, the bankers of New York and all the leading cities, displayed the greatest amount of patriotism.  They did their duty well;  I never found any fault with them;  but that does not answer the argument.  We are now compelled to legislate for the general good of the whole people of the United States.  We see their interests and their business about to be affected by a paper currency inflated and beyond our control, issued by fourteen hundred banks, not governed by any general system, but governed by a great variety of local laws.  Now if, in the opinion of Congress, it is right and expedient to tax that franchise, they must submit to it.  If they think the tax is excessive and oppressive, they will gradually withdraw their circulation;  and as they withdraw it, it will give place to a better circulation.

So far, then, from being opposed to the local banks, or desiring to injure them, or affect their capital, I say the system I have proposed will be a benefit to them, because it will check the excessive issue of paper money.  The banks will, to avoid this tax, gradually withdraw their circulation.  I think it will work beneficially.  I regard it as simply a contest between two rival systems of paper money which cannot exist together.  You cannot issue three hundred millions of United States paper money, and upon that base the issue of three hundred millions more by the banks.  One or the other must be driven out of existence.  The paper of the banks being a depreciated, inferior paper money, will drive out of circulation the United States notes.  That has been done already, and it will be done;  and the more notes you issue, the more they will issue, and the more the business of the country will be deranged.

Mr. President, if we could accomplish the purpose that I seek to accomplish, the gradual and slow withdrawal of the paper money issued by the local banks, we could then resort to a reasonable amount of demand notes as the necessities of the Government compel us to do.  That amount ought to be fixed by some law, to which the assent of Congress should be given, in such a way that it should not be subject to repeal or modification.  I admit that if the amount of United States demand notes is to be fluctuating, sometimes $100,000,000, sometimes $300,000,000, and to be increased on any special occasion, there will be no end to the whole system of inflation;  but if you would issue, say $300,000,000 of Treasury notes, and let it be understood by all the commercial men of the country that that is the ultimate point, beyond which you will not go, and make that a national currency, I do not believe there is a country in the world that will have a better currency.  The paper money of every other commercial country is founded on the public credit;  this country alone is the exception.  In England the issues of the bank of England amount to about one hundred million dollars, and the amount of Government securities held by the Bank of England is $150,000,000.  So in France, and in every commercial country the bank circulation is based on the national public credit, and it is the only sure basis of bank circulation.  I do not know any better system of paper money in this country than that which may be furnished by the United States demand notes, if the amount is fixed by law beyond a reasonable danger of change or modification.

That money will pass all over the United States.  The only difference between the value of money in California and New York will be the expense of expressing it from California to New York.  The only difference between money in Ohio and New York will be about one third of one per cent., or perhaps less.  There will be no large sums made by exchanges covered up in the form of usury by banks in their loans to the people.  The currency will be uniform, certain, based upon the public credit, a mortgage upon all the property of all the people of the United States.  If you had this form of currency, the effect would be at once beneficial.  As this currency swelled upon the public and became somewhat inflated, it would be converted into bonds, and thus assume the form of a permanent investment for the Government and for the people, and the amount of stocks could be regulated by law.

I have no doubt that if all the paper money of the banks was now driven out of existence and we had only the basis of three hundred million of United States paper money, the bonds of the United States would rise in value at once and be above par;  the difference between gold and paper would disappear.  So long as the people of this country had confidence in the existence of the Government, all the surplus capital of the country would be gradually invested in United States securities, because they are the best in the world;  but so long as the paper money of the United States is to come into competition with the circulation of the banks, or is made the basis of bank issues, tending to disarrange and demoralize and disorganize the currency of the country and the exchanges of the country, we cannot carry on any sound financial system.  Now, the difference between paper money in one part of the country and another is two or three per cent., making a loss at every exchange between the different sections of the country.  It is impossible, I say, to carry on business on this system.

Now, sir, this tax is not going to be oppressive to the banks.  A bank with $100,000 of circulation would pay $2,000;  and why not ?  They draw from the people, by a forced loan, which they do not pay on demand, $6,000, and if they pay $2,000 of that into the Treasury of the United States, it will not be oppressive;  but if the tax should induce them to withdraw their circulation from the ordinary channels of business, so that the United States paper money might take its place, nothing but blessings to the people of this country would result.  No damage would be done to the owner of the bank, because he still has his capital, all that he is entitled to have;  he simply loses for a time the benefit of a franchise, the exercise of which is now injurious to the public credit.  The people of the United States would in this way obtain a sure and stable national currency, which, without change or loss, would always give them a medium of exchange between the East and the West, the North and the South.  There would be no longer any depreciated notes;  no longer any broken banks;  no longer any counterfeit notes, because the notes now issued by the Treasury of the United States are substantially beyond the power of counterfeiting, or, if they are counterfeited, the imposture can be at once detected.  The eye of every business man will be at once impressed with the form and shape and character of all the United States demand notes, and any attempt at counterfeiting would be at once detected by eyes constantly on the watch.  It seems to me that nothing but good can result from this measure;  and if it should accomplish my object, which I boldly and openly declare to be to drive out all the circulation of the local banks, it would be a source of greater benefit and advantage to this country than any measure that has been proposed.  I think the Secretary of the Treasury has acted judiciously and wisely in proposing this measure to Congress.  I have differed from him very often in regard to his propositions, but this, at least, meets my hearty approval.

Mr. Simmons.  I do not exactly understand the drift of the argument of the Senator from Ohio, or rather how he puts the two branches of his argument together.  He thinks that the circulation of Government notes will do away with all difference of exchange, and retire all the notes of the local banks, and he bases this on the idea that the banks now circulate their paper predicated on their holding United States demand notes to redeem it.  That is the way I understand the Senator.  If a man has a $1,000 note of any bank in the West, and there is a great discount on the paper of that bank, or if exchange on New York is very high, what is to prevent the man who has that note, and wants to make a remittance, going to the bank and demanding a United States note for it, and thus have something upon which the Senator says there will he no discount ?

Mr. Sherman.  Every person in business receives a great variety of bank notes;  he cannot assort them all, and he employs a broker to do it at a cost of one per cent.






Senate of the United States
Tuesday, June 24, 1862.

Confiscation of Rebel Property.


The PRESIDENT pro tentpore.  The morning hour having expired, the consideration of this bill is superseded by the special order of the day.  The special order is the bill (H.R. No. 471) to confiscate the property of rebels for the payment of the expenses of the present rebellion, and for other purposes.  The pending question is on the motion of the Senator from New Hampshire, [Mr. Clark,] to strike out all after the enacting clause of the bill, and insert the substance of the bill reported from the select committee of the Senate.  Both these propositions are now before the Sonate, as in Committee of the Whole, for consideration, and both are open to amendment for the purpose of perfecting them before the question shall be taken on substitution, or on striking out and inserting.  Upon this question the Senator from Delaware [Mr. Saulsbury] is entitled to the floor.


Mr. Saulsbury[Willard Saulsbury (1820-1892); studied law, admitted to the bar].  Mr. President, nearly sixty years ago, when Napoleon was at the zenith of his power, M. de Chateaubriand penned these words:

"When, in the silence of abject submission, we hear only the chains of the slave and the voice of the informer;  when all tremble before the tyrant, and it is as dangerous to incur favor as to merit disgrace, the historian appears to be charged with the vengeance of nations.  It is in vain that Nero triumphs.  Tacitus has been born in the empire;  he grows up, unnoticed, near the ashes of Germanicus, and already uncompromising Providence has handed over to an obscure child the glory of the master of the world."

Sir, let the wicked imitators of the cruelties of the bloody Nero, and the oppressions of the haughty emperor, ponder well the utterances of Chateaubriand.  History has not only a voice, she bears a scourge.  Some future Tacitus shall yet do justice to the genius of our free but violated institutions, and transmit, embalmed in merited and everlasting infamy, for the execration of future generations, the names and actions of those who, charged with a nation's weal, have produced a nation's woe.  If, in anticipating to some extent to-day the historian's task, I shall speak plainly, and with somewhat of unwonted feeling, a deep sense of duty to my countrymen will constitute my full justification.

---[You should not insult the memory of Napoleon;  you could only wish he was the dictator of the united States, you wouldn't now be facing a war of extermination, brought upon you by the money power.]

The times are sadly out of joint.  Ruin and destruction lie immediately in our pathway.  The passions, not the judgment of men, control their action.  The fondest hopes of the patriot may in a moment be forever blasted.  Whether even now it is possible to escape final and irretrievable shipwreck is a problem which the wisest are unable to solve.  It is time, high time, that the representatives of the States and of the people should cry aloud and spare not.  It is time that the American people should arouse themselves from the lethargy that enervates and the false security that deludes them.  Born to an inheritance of freedom, they should not passively submit to be slaves.  Unless they mean to shame a noble ancestry, and bequeath a name of infamy to their posterity, they should at once awake to the dangers of the present, and provide against the foreshadowed calamities of the future.  Arbitrary and despotic power, not satisfied with trampling upon every constitutional right of the citizen, has profanely dared to invade the temple of justice, and dragged her minister from her altar.  He who invades the sanctuary of justice and interrupts the due course of its administration proves himself a tyrant capable of any assaults upon the liberties of the people.  That people are madly blind who, witnessing such acts of usurpation, fail to demand with more than baron-like firmness the reaffirmance of the Magna Charta of their liberties.

Under the pretense of suppressing a causeless rebellion, the executive and legislative departments of this Government are, in my opinion, daily engaged in the grossest violations of the fundamental law.  If in times of peace the Constitution is the surest protection of the citizen, in time of civil war it is his only hope of safety.  When skies are clear, when seas are calm, and winds are lulled, the mariner treads with unconcern the deck of his ocean home.  It is only when waves run high and skies are dark and tempests howl, that with unfaltering grasp he trusts the helm to guide him safely through the storm.  Sir, darkness and night have set in around us as a nation.  Would that " the night were far spent and that day was at hand."  But alas! the watchmen can give no signs of promise.  The hope of the most hopeful begins to fail him, and a nation is solemnly inquiring whether it must not cease to be.  Sir, I propose to-day before the tribunal of my countrymen to make solemn and impartial inquisition of blood.  Who are they that have murdered constitutional liberty and destroyed our Federal Union ?  Day after day, since this session has commenced, false teachers have uttered their sayings, and false prophets have prophesied to the people.  Making wide their political phylacteries, they stand in the chief places of the political synagogue that they may be seen and heard of men.

Having deliberately chosen, by the rejection of every honorable and peaceful mode of adjustment, the arbitrament of the sword, they have plunged the country into all the horrors of civil war, and now that the work of their hands is upon them, they shout aloud their devotion to the Union, and evidence their sincerity by attempting the destruction of the liberties of the people.  They even assume to sit in judgment upon the motives and action of those who have independence enough to condemn, and love of country enough to resist, the consummation of their schemes for the permanent severance or destruction of the Federal Union.  With pharisaical coolness they stand in the public places and impiously thank God that they are not as other persons are, or even as those who will not join them in their ruthless war upon the constitution of the country.  Measures grossly and palpably unconstitutional are deliberately presented for adoption, and he who questions their propriety, or refuses his support of them, is, according to their standard of judgment, either indifferent to the country's interests or traitorous in design against them.

It is my purpose, in part, to-day, to strip assumption of its false pretensions, and to expose to public view the real authors and abettors of my country's ruin.  They strut the hour, dressed in a little brief authority, but the great day of judgment is at hand, and fortunate for many of those whose administration of office and power has been characterized by cruelty and injustice, if there shall be found hiding places amid the rocks and mountains in which they may shelter from the popular storm.  From my place in this Council Chamber of the nation I say to my countrymen that it is my deliberate and solemn conviction that either abolitionism or constitutional liberty must forever dieThe two cannot exist together.  Abolitionism has for the time being dissolved the Union.  While it lives and rules, the Union will remain dissolved.  No free people either will or ought to submit to its sway.  It is the prolific mother of all our national woes.  Until it entered our political Eden, we did eat of the pleasant fruits of the tree of liberty and were content.  It came, and with it death.

A little more than seventy years ago, the people of thirteen separate and independent States entered into an agreement, made a compact, formed a union, the terms of which were plainly and distinctly evidenced in writing, which writing they denominated a constitution of government.  By their valor in the field they had forced an acknowledgment not of their collective, but of their separate independence.  They had been separate not united colonies of Great Britain, and although, when the latter attempted to coerce the colony of Massachusetts into obedience to the exercise of arbitrary power, all the others united with her in her defense, and afterwards continued united for purposes of common defense against a common I oppressor until oppression had been overcome and independence achieved, yet none of them at any time or for any purpose yielded up its separate and independent position.

By the first article of the treaty of peace in 1783, Great Britain, distinctly recognizing each of her original thirteen colonies by name, as distinctly acknowledges each to be a free, sovereign, and independent State, and treats with them collectively as such.  As such separate and independent States allegiance was due to each of them from their respective citizens.  Each possessed all the attributes of independent sovereignty, and had full power and right to make treaties and form alliances with any or all other nations of the earth.  In a word, each had the right to do all acts which a free and independent nation might of right do.  For purposes of common convenience and interest they entered as independent States, each with the other, into Articles of Confederation.

In 1787, for the purpose of forming a more perfect union between them, these separate, independent, and sovereign States appointed delegates to a common convention, to consider and agree upon terms of union for purposes common to them all, subject, however, to their separate ratification and approval.  The approval of a majority of all the people of these States could not make the agreement of the delegates a constitution for all or any of them.  It required the separate approval of each separate State to make that agreement its constitution.  When nine States had thus separately ratified this agreement, it became their Constitution, but not the Constitution of those States which had not given it their assent.  The smallest of the States was the last to yield that assent, and until that assent was given, she was to the others as a foreign State.  In the formation of this agreement, contract, compact, or Constitution of Union, the representatives of the several States encountered many and some almost insuperable difficulties.  These were occasioned by supposed differences of State and sectional interests.

Harmony and union could only be secured by concession and compromise.  Representation and taxation were subjects of difference.  The domestic relation of master and slave was another.  These, however, with others, were happily adjusted.  No one was mad enough then to propose emancipation of slaves as a condition of Union.  The representatives from those States now most clamorous for emancipation were the most anxious for the continuance of the slave trade.  To satisfy them, the African slave trade was legalized for a period of twenty years.  To render the master secure in the possession of his slave, it was provided that--

"No person held to service or labor in one State, under the laws thereof, escaping into another, shall, in consequence of any law or regulation therein, be discharged from such service or labor, but shall be delivered up on claim of the party to whom such service or labor may be due."

To compensate for this pledge of security to slave property, it was provided that--

"Representatives and direct taxes shall be apportioned among the several States which may be included within this Union, according to their respective numbers, which shall be determined by adding to the whole number of free persons, including those bound to sexvice for a term of years, and excluding Indians not taxed, three fifths of all other persons."

It was further provided in said Constitution, that "new States may be admitted by the Congress into this Union," and as the States forming the Constitution were in all respects equal, the just, fair, and only inference to be drawn from this provision is that such "new States" were to be admitted on terms of perfect equality with the original States.  The purposes inducing the formation of the Constitution were, as therein stated, "to form a more perfect union, establish justice, insure domestic tranquillity, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity."  The Government thus formed was clothed with ample powers;  but it could exercise no powers not delegated in the instrument creating it, for it was expressly provided that "the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."  The application of these principles to the bill under consideration will hereafter appear.  A Federal, common Government, with delegated and strictly-defined powers, having thus been established, the fondest hope of the patriot was at last realized.  He looked forward in exultant hope and saw in the not distant future a mighty people, with a domain extending from lakes to gulf and from ocean to ocean, attracting by the free spirit of their institutions the wanderer from every clime, and commanding by their justice and power the admiration and respect of the whole civilized world.

For more than thirty years this people were contented, happy, prosperous, free.  They had not listened to the teachings of a false philanthropy, nor yielded to the suggestions of those governed solely by motives of personal ambition.  The fathers lived, and while they lived plighted faith was observed and national honor was maintained.  To carry into effect that compromise of the Constitution without which even Justice Story admits the Constitution could not have been formed, they passed the first fugitive slave act in 1793, which received the approval of the Father of his Country, as President of the United States.  New States were from time to time admitted into the Union, from the time of its formation until 1820, with or without slavery, according to the free choice of their citizens.  Vermont, Kentucky, Tennessee, Ohio, Louisiana, Indiana, Mississippi, Illinois, Alabama, and Maine, were so admitted.  In 1819, the people of Missouri applied for admission into the Union.  Their constitution recognized the relation of master and slave.  It was then that political abolitionism attempted to deprive the people of a State of admission into the Union unless they would surrender the dearest constitutional right of American freemen --the right to form and regulate their domestic institutions in their own way-- and consent to have those institutions formed and regulated by others.

The controversy convulsed the nation, and threatened with destruction the best and freest Government on earth.  To escape that destruction, an ignominious and unconstitutional condition was extorted from the patriots of that day, which has had, in its effects and consequences, much to do in involving us in the unhappy condition in which we are now placed.  This was the first installment of abolitionism towards our country's ruin.  The storm passed by, and abolitionism slept, but was not dead.

From 1838 to 1844 it again disturbed the peace of the country by its repeated appeals to Congress to abolish slavery in the District of Columbia and in the national dock-yards and arsenals.  About the same time it clamored against the admission of Texas into the Union until that people would consent to mold their domestic institutions to suit its vitiated taste.  We acquired our possessions from Mexico, and true to its instincts for political mischief, it convulsed the land and threatened the Government with destruction unless slavery should be by act of Congress excluded therefrom.  The fugitive slave law was amended so as to enable the master to reclaim the possession of the fugitive from service and labor, as was his unquestionable right under the Federal Constitution.  Abolitionism resisted, and by force, the execution of that law, and in many States attempted to nullify, and practically did nullify it, by opposing unconstitutional State legislation denominated personal liberty bills.  In every instance from the foundation of the Government it had been aggressive.  Political parties, yielding to its influence to gain a temporary advantage, were first corrupted and then destroyed by it.

In 1856 a new party arose, many of whose members were honestly opposed to political abolitionism, but her votaries thronged its conventions, made its platforms, and nominated its candidates for office.  Passing by the distinguished men who gave to it their adhesion, they nominated for the first office in the nation apolitical adventurer, and declared a general war upon what they were pleased to term "those twin relics of barbarism, polygamy and slavery."  They emerged from the conflict defeated, but surprised at their almost triumphal success.  Gaining control of almost if not all the State governments in the North and Northwest, they directed their legislation and inflamed the minds of their people against the institution of domestic slavery.  Their representatives thronged the Halls of Federal legislation and clamored for emancipation.  Abolition petitions flooded the country and loaded your tables.  An abolition press debauched the minds of the people, and abolition orators inflamed their passions by reciting to them the horrors of slavery among a distant people.  This fanaticism and wickedness culminated in the attempt by abolition emissaries to invade a slaveholding State, for the purpose of stirring up a servile insurrection, and in murdering, with the assistance of their free negro associates, peaceful citizens in the stillness of a Sabbath's night.  Abolitionism howled in rage at the failure of his hellish scheme, and declared his execution a judicial murder.  Abolitionists followed him to his grave, and a leading saint proclaimed that the gallows upon which he expiated his crimes was by his death rendered as illustrious as the cross upon which the Saviour died.  Thus again, continuously and persistently, has abolitionism been aggressive.

In 1860 the Republican party, in a national convention, composed of men some of whom were not and some of whom were abolitionists, adopted a platform aggressive in its character, in which they, among other things, declared their intention to prohibit the admission of any more slave States into the Union, and also an intention to exclude slavery from the common Territories.  Upon this platform they nominated for President of the United States a man who had previously proclaimed in substance, in allusion to the States composing the Federal Union, "that a house divided against itself cannot stand, that either all the States would become free or all slave, and that the agitation of slavery would continue until the public mind could rest in the assurance that it was in the course of ultimate extinction."  He was elected.  Then it was that the clouds gathered darkness, and the howlings of the coming storm were distinctly heard in the distance.  Wise men, good men, saw those clouds and heard the mutterings of that storm.  The opposing elements of political discord were brought face to face in the Council Chamber of the nation.  The representatives of the South demanded guarantees that their constitutional rights should be respected and observed in the future.  The representatives of the North refused to give them.  A venerable Senator [Mr. Crittenden] who had been almost a cotemporary with the fathers, yet lingered beyond his years among their children.  He offered in his place in the Senate a compromise honorable to all, derogatory to none, guaranteeing rights which had solemnly been decided by the highest and final legal tribunal to exist under the Constitution.  The representatives of the South were willing to accept them.  The people of the North, by their petitions, requested you to accept them.  You refused, and your refusal produced war, deadly war, civil war, remorseless war;  war the end of which the wisest cannot foresee, but which threatens to end only in the overthrow of the nation and the destruction of the liberties of the people.

When I say that your refusal to adopt the Crittenden compromise measures produced war, I do not mean to say that this Government struck the first blow.  I mean to say that you knew, were assured, had reason to believe, and, in my opinion, did believe, that war would result from your refusal;  that you had it in your power by honorable compromise to prevent war, and that you deliberately chose war in preference to averting it by compromise.  A number of the southern States assumed to withdraw from the Union.  They confederated together and established an independent government.  They organized a military force, seized upon the forts and arsenals within their limits, and failing to receive a recognition of their independence by the Executive, in apprehension that a feeble garrison at Fort Sumter might be reinforced, they demanded its surrender.  Being refused, they fired the first gun, and thus precipitated war.  Would that the hand that applied that torch held fell paralyzed and withered to the ground.

Mr. President, this inauguration of civil war might have been averted by the adoption of the Crittenden compromise.  War followed its rejections.  Let the responsibility rest where it properly belongs.  History will record her verdict.  Posterity will judge righteously.  The attack upon Fort Sumter inflamed the passions of the nation.  The President called for seventy-five thousand volunteers,

"They came as the winds come when forests are rended,
They came as the waves come when navies are stranded."

Congress met.  He who would have proposed to avert the further calamities of war, or to have preserved the nation by any other means than war, might expect to be regarded as little better than a traitor.  Men and money were profusely voted.  Armies were marched into the field, and "on to Richmond!" was the cry.  On towards Richmond they went, and the bloody field of Manassas evidenced their defeat.  On the very day succeeding that battle, Congress unanimously passed the following resolution:

"That this war is not waged on their part in any spirit of oppression, nor for any purpose of conquest or subjugation, nor purpose of overthrowing or interfering with the rights or established institutions of those States, but to defend and maintain the supremacy of the Constitution, and to preserve the Union with all the dignity, equality, and rights of the several States unimpaired;  and that as soon as these objects are accomplished the war ought to cease."

The nation took heart again.  Seven hundred thousand volunteers went to the field.  Every border slave State that had not seceded resolved to stand by the old flag and by the Federal Union.  They sent their sons to swell your armies, and their bones whiten ever battle-ground.  Congress met in December.  How have you kept your plighted faith ?  "Let facts be submitted to a candid world."  You have abolished slavery in the District of Columbia without the consent of their owners and against their wishes.  You have thus created a "paradise for free negroes," to which the slaves of loyal masters in Maryland escape by hundreds.  When the owner applies to your courts for redress and they afford it, as they are bound to and as far as they can, you turn your military power against the marshal and prevent the due execution of legal process.  You have made it an offence punishable by dismissal from the service for any officer of the Army to return a fugitive slave to his loyal owner.  You have refused to make it an offense punishable in like manner for such officer to entice or decoy a slave from his loyal owner.  You have through your armies decoyed from the service of their owners, loyal and disloyal, or afforded shelter and protection to them, thousands of slaves within the States.  You are now feeding and clothing thousands of this class of people out of the public Treasury without warrant of law, and are levying taxes upon the white people of the country to enable you to continue the expenditure.  You are now keeping at the public expense in this city a row of houses in which you support, without authority of law, hundreds of this class of people in idleness.  You are paying thousands of negroes as teamsters in your Army at the rate of thirty dollars per month, while your white soldiers are fighting your battles for thirteen dollars per month.

You are arming the slaves of the South and enlisting them in your Navy for the murder of their masters.  You have, as far as this body could do so, repealed the law prohibiting free negroes from carrying the mail.  You have legalized the testimony of a negro against white man, and that of the slave which you have freed as against his master, You have, upon the recommendation of the President, attempted to build up an abolition party in the border slave States by the offer of pecuniary aid which you have neither the ability, constitutional authority, or intention to give.  As if for the purpose of irritating and wounding the sensibilities of those whom you have already grievously wronged, you have chosen this as the most opportune time to establish diplomatic relations with the free negro republics of Hayti and Liberia.  Instead of returning fugitive slaves to their owners, as by law you are bound to do, you have appointed a superintendent over them to prevent their return, and to provide for their comfort out of the taxes levied upon the industry of the country.

Instead of avoiding unnecessary legislation in reference to the causes of sectional difference, you have prohibited the existence of slavery, not only in existing territory but in any which may hereafter be acquired.  Lest the sincerity of your pledge should not otherwise be sufficiently evidenced, the Council Chamber of the nation is converted into a house of wailing over the wrongs inflicted upon the poor unoffending slave.  You have by your bills proposed the emancipation of almost the entire slave population in the States, and the bill now before the Senate is to be amended, if possible, so as to accomplish that object.  But l turn from the recital of these violations of plighted faith to a consideration of the principles involved in the measure now before the Senate.

In order to understand the character of the bill under consideration, the power of Congress to pass it, and the propriety of its passage, we must consider the nature of the conflict in which we are involved.  Loose ideas prevail upon this subject.  Some have denominated the resistance of the confederate States sedition.  The President considers it an insurrection, but it is most generally termed a rebellion.  Sedition is defined to be "a tumult, an insurrection, a popular commotion, an uproar."

"That sunhine brew'd a shower for him,
That wash'd his father's fortunes forth of France,
And heap'd sedition on his crown at home."
"In soothing them, we nourish 'gainst our senate
The cockle of rebellion, insolence, sedition."

The term sedition, therefore, cannot in this instance be properly applied.  An insurrection is a seditious rising, a rebellious commotion.  Like sedition, it is the act of unorganized individuals.  A portion of the people, without the forms of law, may make a sedition or insurrection against the authority of the State;  but States and organized political communities cannot with propriety be said to be seditious or insurrectionary.

"Between the acting of a dreadful thing
And the first motion, all the interim is
Like a phantasma, or a hideous dream;
The genius, and the mortal instruments,
Are then in council;  and the state of man,
Like to a little kingdom, suffers then
The nature of an insurrection."

Insurrections of base people are commonly more furious in their beginnings.  (Bacon's Henry VII.)  Neither is rebellion, in the popular sense, a proper term to describe the resistance of those States to Federal authority.  Rebellion is resistance to lawful authority, but it is always the voluntary act of individuals, and never is applied to the organized action of political communities.  We read and have heard of the whisky insurrection in Pennsylvania, and of Shay's rebellion in Massachusetts, but who ever heard or read of the American insurrection or the French rebellion.  Sir, we are in the midst of a great political revolution or change of government, to which sovereign States, confederated together, not individuals, are parties on one side, and the Government of the United States is party on the other.  This fact is necessary to be observed and remembered that we may have a clear perception of the character of much of our legislation, consummated and proposed.  I shall assume what is conceded, conceded by the Senator from Vermont, [Mr. Collamer,] and also by the Senator from Pennsylvania, [Mr. Cowan,] that the government of the confederate States is a government de facto.  Assuming this, which I think cannot be successfully denied, I propose to consider the question whether, under existing circumstances, all those who yield obedience to the government of the confederate States, by accepting and exercising office under it, or even by bearing arms in its support, can be rightfully regarded and treated as traitors by us.

This is a subject that should be approached with an honest and candid purpose, and its consideration freed as far as possible from all the passions and prejudices of the maddened hour.  We can gain nothing before the great tribunal of the world, that of history, or, eventually, that of our own consciences, by self deception, by the adoption of false premises, or the application of false logic.  I am aware, Mr. President, that the opinions I am about to express do not accord with the notions of many blatant patriots of the present times.  There is not an Army contractor in the land who will not condemn them.  There is not a public plunderer between the two oceans whose patriotism would not be shocked at them.  There is not an abolition Union-slider, from Maine to California, that would not consider them heretical.  But, sir, I speak to men of sense, and not to fools.  I want the ear of honest Union-loving men, whose action in the past, as well as at the present, evidence the sincerity of their attachment to the Union.  I have no message for those who are for a Union without slavery, but opposed to a Union in which slavery exists.  Such miserable traitors deceive nobody by their cry of Union.

I believe that when a revolution is so far completed that a government de facto has become established, when the former Government is so far ousted that after having had a full opportunity it has shown itself unable to afford protection to its adherents in the revolutionary government, the duty of allegiance so far ceases that it would be unjust, and therefore illegal, to punish obedience to the commands of the government de facto as treason towards the Government de jure.  It is a well recognized maxim that allegiance and protection are reciprocal.  If the latter cannot be afforded, the former cannot be required.  It is not, however, every temporary interruption of the one that will even proportionately dissolve the other.  An insurrection or even a mob may for the time being overpower the civil authorities of a country without in any degree affecting the right of the lawful government to the allegiance of its citizens.  But suppose that, after full time has been given to the protecting government to discharge its duty to the citizen, it has been found wholly unable to do so, does the reciprocal duty of allegiance remain in full force and forever ?  When a revolution is fully effected;  when the old government is entirely ousted, and the new one firmly established, can those who yield support to the latter incur thereby the pains and penalties of treason against the former ?  Were those who recognized the government of Cromvell, and who actually took up arms in its defense, even as against the Stuarts themselves, justly liable to the penalty of having their bodies drawn and quartered, their property confiscated, and their widows and orphans beggared, when Charles II afterwards came to the throne ?  Even were such the stern rule of English law, I might ask, is it so here ?  Is it in consonance with the great principles of national justice and reason upon which our maxims of government are founded ?

Monarchists sedulously inculcate the rule that the safety of the Government is paramount to every other consideration.  According to them, it is better that the rights and interests, the life, liberty, and property of thousands of subjects should be sacrificed, than that the stability of the throne should be in the least degree affected.  Passive obedience is the foundation of their whole system of government.  No force of circumstances can justify a transfer of the allegiance of the people from him who rules by divine right.  But with us --salus populi suprema lex est.  Governments, according to our theory, derive all their just powers from the consent of the governed.  There is no divine right in the ruling power.  The Government is the servant of the people, the mere instrument to promote their welfare.  In the Declaration of Independence, life, liberty, and the pursuit of happiness, are declared to be inalienable rights;  and that "to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed;  that whenever any form of government becomes destructive of these ends, it is the right of the people to alter or to abolish it, and to institute a new government, laying its foundations on such principles and organizing its powers in such form as to them shall seem most likely to effect their safety and happiness."  Nor have we been slow in affirming our implicit faith in this declaration of the fathers.  Witness our prompt recognition of the independence of the South American and other republics.  Kossuth, the unsuccessful revolutionist, was the nation's guest.  Founded on principles and aiming at purposes so entirely different, our maxims of government must be expected to be shaped accordingly, and therefore, in many respects, to be wholly at variance with those of other nations.

As an example of this, I refer to the doctrine on the right of expatriation.  It is an established rule, in most other countries, that the allegiance of the subject is perpetual, and can never be thrown off by his own act.  He may have removed his domicil;  he may have abjured his allegiance;  he may have renounced all right to protection from his original sovereign;  he may have united his fortunes and those of his posterity with another Government, and sworn allegiance thereto, but still the obligation imposed by birth remains in force.  If taken to arms against his native country, though in support of that of his adoption, he is regarded as a traitor, and is liable to punishment as such.  Nay, he may be seized by force, and compelled to serve his native sovereign in his fleet and in his armies, and may be treated in all respects as though his original allegiance had never been interrupted, changed, or diminished.  At the cannon's mouth we have denied the exercise of any such right on the part of another nation over any of our adopted citizens.  We are estopped from claiming for ourselves that which we deny to others.  The law of nations, as understood in European monarchies, has therefore been essentially modified by us in this important particular.

The rule I am now considering is closely akin to that just stated, and rests on a similar basis.  In fact, it may be said to have a more firm foundation.  He who leaves his country and abjures his allegiance to his sovereign acts a voluntary part.  He who is forced away from the protection of his native country by the current of events yields to necessity.  Without any act of his own he finds himself subject to a power which he has no means of resisting, and that power, to all appearances, firmly established as one of the nations of the earth.  To persist in allegiance to the Federal Government is to court inevitable destruction.  He yields to the power he cannot resist.  He acknowledges the de facto government.  He swears allegiance to it.  He accepts office under it, as did Hale and Milton under Cromwell, and as did thousands of our ancestors in the days of our own Revolution.  He takes up arms in its defense.  Is he a traitor, is he guilty of treason under any rule of law founded on reason and supported by justice ?  Does a just Government impose such conditions upon the loyalty of its citizens ?  If it is no sufficient cause of war for a foreign Power to acknowledge the independence of a de facto government founded on revolution, can a single individual, who has been driven by necessity to do the same thing, be punished as a felon therefor ?  Could they who accepted office under the Republic, the Consulate, or the Empire of France, they who fought the battles, or who in any other way recognized and endeavored to sustain either of those Governments, be rightfully punished as traitors by the restored Bourbons ?

I do not ask now, although I may show hereafter, what is the European law on this subject;  but what says the American mind, how throbs the American heart in relation to this matter ?  I say nothing of the application of these principles to the conduct of the instigators of revolutions so far as relates to overt acts preceding the establishment of a government de facto.  If such acts amount to treason, the Constitution defines treason, and the laws provide an ample punishment.  I speak only of acts done after the establishment of a government de facto, in obedience to and in compliance with its demands.  Englishmen persisted in calling Washington, Franklin, Adams, and Jefferson rebels and traitors.  Had fortune placed the colonies again under the dominion of the British king, these leaders might have been called upon to have paid the forfeiture of their lives, but there would have stood the solemn assertion before cited from the Declaration of Independence as evidencing the judgment of their cotemporaries that their execution was judicial murder.  But whether such severity would have been in accordance with the dictates of humanity, of good policy, or even the principles of English law, it is not necessary now to consider.

I do not deny that the Draconian law of treason, with which most Governments have thought it expedient to hedge themselves around, would justify such bloody severity;  but I do deny that persons who merely held civil offices, or the rank and file, or even the officers of the army, who, after the colonies had established a de facto government, and showed a probable capability of sustaining it, had given it their support, were guilty even of technical treason, within the meaning of that term, according to either English or American law.  So thought the English Government itself, for no trial for treason was had in its courts, and no estates were confiscated by acts of its Parliament.  Punishment is sometimes meted out from considerations of mere policy, irrespective of any rule of right or wrong;  but such cases are few and of doubtful authority.  In general, no act which is not wrong in itself, and which does not involve moral turpitude, should ever be punished with severity.  At all events, he who is only insisting on what he has reason to believe is his just right, or does that which he honestly thinks is his duty, should never be punished as a felon.  Governments founded on mere force may disregard this rule, but not one which is founded in reason.

Now, we have solemnly promulgated to the world the great truth that the people have a right to revolutionize their Government whenever they find it not calculated to promote the purpose for which it was organized.  They may overturn and overturn and overturn, according to the American idea, until they obtain one such as they desire.  This is not only the doctrine of the political fathers.  It has been declared in more precise and unmistakable terms by the present head of the party which now controls the destinies of this nation.  In a published speech, delivered by him when a member of the House of Representatives in 1848, he says:

"Any people anywhere being inclined, and having the power, have the right to rise up and shake off the existing Government, and form a new one that suits them better.  This is a most valuable, a most sacred right, a right which we hope and believe is to liberate the world.  Nor is the right confined to cases in which the whole people of an existing Government may choose to exercise it.  Any portion of such people that can may revolutionize and make their own of so much of the territory as they inhabit.  More than this, a majority of any portion of such people may revolutionize, putting down a minority intermingled with or near about them who may oppose these movements.  Such minority was precisely the case with the Tories of our Revolution.  It is a quality of revolutions not to go by old lines or old laws, but to break up both, and make new ones."  --Appendix to Congressional Globe for 1847-48, p. 94.

I quote this expression of opinion, because it is, or at least was, the opinion of the present Chief Magistrate, and not because I approve it.  I dissent from it.  It more than justifies the secession of, or revolution in, the confederate States, a justification which I never have and which I do not now accord to them.  It will be observed, however, that the rule here laid down exculpates not only the abettors but the instigators of successful revolutions.  Can a change of external circumstances convert that into a crime which has once been but the exercise of an admitted right ?  When a revolution has once been completely successful, can a subsequent counter-revolution change an act of patriotism into one of felony ?  It is reasonable, therefore, to contend that the principles which have been established in this country lead necessarily to the conclusion that the law of treason, as at one time understood in England and other countries where it has been the offspring of kingcraft, has never been adopted in all its severity here.  It is only necessary to determine how great is the modification we have made in this respect.  Some change has been effected.  How great is that change ?  If it be said that the right of revolution, which we allow only contemplates a revolution that is finally successful and permanent;  and that where such eventual success is not attained the severity of the old rule is still in full force, I inquire what, then, is the change which has been made ?  Wherein does the rule, as thus expounded, differ from that which has been recognized since the origin of civil Governments, even by the most absolute tyrants ?  The practical justification of a successful revolution has never been denied.  It would have been admitted by the Cæsars, the Tudors, or the Bourbons.  If the right of revolution, as understood by us, is merely an exemption from punishment of those whom we could not punish if we would;  if we are to treat all those within our reach just as they would have been treated by the despots of Europe, wherein consists the propriety of all the flourish of trumpets as to the right of revolution ?  How can this be "a most valuable and sacred right --a right which we hope and believe is to liberate the world ?"  Have we made any new discovery ?  Have we recognized any new doctrine, or are we not, rather, in this respect, practically following along in the beaten track that has been undeviatingly trodden by the most arbitrary Governments ever since the flood ?  The bloodiest tyrant never contended for any severer rule than that the unsuccessful rebels should be gibbeted.  Success has always atoned for crimes of this nature.

But such is not a just interpretation of the great American doctrine on which our very existence as a nation is founded.  The right of revolution is not a mere name --a sound without signification.  But there is a substantial difference between us and the monarchies of the Old World in regard to the light in which efforts at revolution are to be regarded.  I claim no exemption from punishment for the wanton disturbers of the public peace.  Violators of law have even less excuse here than in countries where the people have less to do with their enactment.  Superadded to their general duties as citizens are the obligations of good faith to support what they themselves have aided to establish.  A riot, a mob, or even an insurrection, will justly subject all those connected therewith to the punishment provided by law.  A revolution at its commencement may be but an insurrection.  If it has no sufficient foundation in the public mind --if there is no great popular grievance sufficient to give it the necessary support it will fail.  They who engage in it act at their own peril.  They must have sufficient grounds to believe that the causes of public dissatisfaction are sufficient to secure them success before they are justified in aiding such a measure.  If they misjudge they are liable to punishment.  This is the only effectual way to prevent causeless attempts at revolution occasioning frequent bloodshed and general feeling of personal insecurity both of life and property.