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An Act to authorize an additional Issue of United States Notes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of the Treasury, in addition to the fifty millions of notes payable on demand of denominations not less than five dollars, heretofore authorized by the acts of July seventeenth and August fifth, eighteen hundred and sixty one, be, and he is hereby, authorized to issue like notes, and for like purposes, to the amount of ten millions of dollars, and said notes shall be deemed part of the loan of two hundred and fifty millions of dollars authorized by said acts.

APPROVED, February 12, 1862.

Wednesday, February 12th, 1862.
In the Senate
Prayer by the Chaplain, Reverend Dr. Sunderland.

Issue of United States Notes.

On motion of Mr. Fessenden, the bill (H.R. No. 240) 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, was considered as in Committee of the Whole.

The Vice President.  The first amendment of the Committee on Finance will be read.

Mr. Fessenden.  Unless all the amendments are to be read through, it would not be important to read that now.  If it is only intended to read them all without taking a vote upon any, it may be well enough.  If not, I propose to make some remarks to the Senate before the reading of the amendments.

The Vice President.  Let the first amendment be read;  and when the question is stated on that, the Senator can submit his remarks.

The Secretary read the first amendment, reported by the committee, to strike out in the third, fourth, and fifth lines of the first section the words, "to meet the necessities of the Treasury of the United States, and to provide a currency receivable for the public dues."

The Vice President.  The question will be on this amendment.

Mr. Fessenden.  It is immaterial, I suppose, what amendment the question is on.  I believe, however, that is merely formal.

I propose, Mr. President, before any question is taken upon anyone of the amendments to make some remarks upon this bill.  They may be very dull and dry, for it is rather a dry subject;  but still it becomes my duty, as the organ of the Committee on Finance, to explain the provisions of the bill.

Before proceeding to do that, however, I wish to say a few words upon another, though perhaps a collateral subject, and that is, the position of Congress in relation to all these bills regarding the currency.  I should not do so, but for the observations that fell from my friend and colleague on the committee from Ohio [Mr. Sherman] the other day, which struck me with some force as coming from him, and a few remarks of a similar nature from the Senator from Massachusetts, [Mr. Wilson,] the chairman of the Committee on Military Affairs, when a bill relating to the Army was under discussion.  The particular remarks made by the honorable Senator from Ohio, to which I allude, are found in his speech upon that subject.  He said:

"I do not blame any one;  but I know that while the Army has been delaying, we too have been delaying.  While I we have sat here, our credit has been impaired.  We have as yet taken no steps to maintain the credit of the Government.  It is idle to say to me that all these measures require time and deliberation.  We have not given them that time and that deliberation;  but we have wasted it on other pursuits;  and therefore, while we complain of others, let us at least take part of the fault ourselves."

These remarks were consequent upon some observations made by the honorable Senator with regard to the Army.  Upon that subject I do not propose to take issue with him;  but I feel bound, connected as I am with these financial measures, to say something with regard to the position of Congress upon them.

I do not agree with the Senator that Congress is in any fault upon this subject.  If there is fault anywhere it arose from what the Senator himself took an active part in and I did not, and that was in procuring the adjournment of Congress substantially over all the holidays in the month of December.  With the exception of that time, I have not been able to see that the time of Congress has been wasted, or, rather, that we are subject to any reproach for a want of proper attention to the position of the country.  Why, sir, we all know — it has been stated here before — that so far as the Senate is concerned we could not get at these bills until they came from the House of Representatives;  and that is a sufficient answer on our part.  So far as the House is concerned, I see no cause for complaint.  My honorable friend must recollect — he has given attention enough to the subject to be aware — that bills providing for the raising of revenue are bills which require very great study and deliberation;  and I feel bound to say for the Committee of Ways and Means of the House of Representatives, that I believe no committee belonging to any body in the world ever devoted time more assiduously and more attentively to their particular duties upon these subjects than has that committee.

The honorable Secretary of the Treasury at the beginning of this session recommended two measures.  He recommended taxation and a bank.  Both these subjects require at this stage of the country, and under existing circumstances, peculiar and long consideration.  The opinion of the country has tended towards what is called indirect taxation, taxation upon different American and other products, and different kinds of property.  Sir, that requires great time.  I have examined it sufficiently to be aware that it is not the labor of a day or a week or a month.  It is substantially new in this country, and it requires much time, much study, and much information to acquire all the knowledge of the various products which would be likely to produce a revenue, and upon which a tax might with propriety be laid.  So, too, with reference to the scheme suggested by the honorable Secretary of the Treasury with regard to a bank.  And yet, notwithstanding all that, a bill of that description has been reported.

With regard to the particular bill now before the Senate, we all know that it was resorted to as a temporary measure, not in the beginning, but in consequence of the necessities of the Treasury, arising from a greater expenditure than the Secretary could have imagined, and arising from the necessary delay with reference to other measures.  Can it be said that a measure like the one now pending before the Senate and the country is a measure of a day or an hour ?  Why, sir, what does it propose ?  It proposes something utterly unknown in this Government from its foundation;  a resort to a measure of doubtful constitutionality, to say the least of it, which has always been denounced as ruinous to the credit of any Government which has recourse to it;  a measure, too, about which opinions in the community are divided as perhaps they never have been divided upon any other subject;  a measure which when it has been tried by other countries, as it often has been, has always proved a disastrous failure.  Sir, it could hardly be expected that a measure of this description, brought into the House of Representatives and the Senate for the first time in the history of the country, involving questions of such infinite importance, not only with reference to to-day, but with reference to the future, to all time, because it is setting a precedent which may be followed, should be taken up and passed at once as we pass appropriation bills.  It needed long, careful, and vigorous discussion.  It has had it in the other branch of Congress.  I have read that discussion from beginning to end.  It has been able and clear upon both sides of the question.  The subject deserved that discussion;  and the House of Representatives would have been faulty if it had suffered a measure of this kind to be passed without its having undergone a discussion which should not only enlighten the House but enlighten the country upon all the aspects of it.  Shall Congress be considered in fault because they have not before acted, or did not act hastily, upon a measure of that description ?  I think not, sir.  The time has been well spent;  and although I regret as much as any man can regret that we have not been able to act more promptly, I see no fault to be imputed anywhere;  not in the other House of Congress, and certainly not in this;  for it has reached this body as soon as it could possibly reach it when you consider the nature of the questions that were to be discussed by the committee to whom it was referred.

I have already said that we have never attempted to resort to such a measure before.  We have had a war with England since our Government was formed;  and if I am rightly informed, at that day the stocks of the Government went down to sixty per cent., and pay was taken for them in such currency as could be received, itself depreciated;  and yet it did not occur as a serious question to the men of that day to put forth, under the Constitution, irredeemable paper made a legal tender for the payment of debts.  To be sure, the country then was poor;  it is now rich comparatively.  The country had not then the resources that we have;  and perhaps it would have had the more excuse for adopting such a course.  I do not urge this as an argument against it at the present time, but only as showing the nature of the measure itself to which it is now proposed to have recourse in order to place the Government in a better position;  especially, sir, when you observe that everybody who has spoken on this question, I believe without an exception — there may have been one or two — but all the opinions that I have heard expressed agree in this: that only with extreme reluctance, only with fear and trembling as to the consequences can we have recourse to a measure like this of making our paper a legal tender in the payment of debts.

I do not propose to discuss that question now;  but I am stating these things merely that Congress may be set right before the country, and that it may not be said, without its being contradicted somewhere, either in the papers of the country or somewhere else, that time has been wasted here when we have been considering measures of such vast importance and involving such very great consequences as these measures necessarily do.

It becomes my duty, sir, to explain the two bills now before the Senate: first, the House bill, as it came to us, and then the Senate bill as it has been reported by the committee.  It will be noticed that the House bill provides for the issue of $150,000,000 of Treasury notes, fixing no specific time for their payment, and therefore making them, perhaps, payable on demand according to legal construction, and making them a legal tender for all debts, public and private, convertible into twenty years stock at six per cent.  This is substantially the first section.

The second section provides for the issue of $500,000,000 of stock at six per cent., to be sold for what is called "lawful money" or notes of the United States.  This is the House bill.  The term "lawful money" is used in a very peculiar relation.  It certainly does not mean notes, because the bill goes on to say "for lawful money of the United States, or for any of the Treasury notes that have been, or may hereafter be issued under any former act of Congress, or for United States notes that may be issued under the provisions of this act."  The remaining sections of the bill are merely put in to guard it against abuses.

The Committee on Finance have reported several very important amendments.  The first amendment, which the Senate will notice is made in the first section, is that the interest on the public debt shall be paid in coin.  The Senate will observe that without this, under the provisions of the House bill, a creditor of the Government holding Government paper, notes, or bonds, would be compelled to take his interest in notes on bonds, as the case might be, when the time for the payment of the interest came round.  He would have no choice.  The tender of a note for the interest that might be due on his bonds, however large or small, would be equivalent in its effect to a tender of coin.  According to our amendment, the Government will be obliged to provide itself with coin for the payment of the interest.  The object of this provision is not only to do justice in this regard, but also to make it raise and support the credit of the Government obligations;  and it will be perceived how very important it is to that end.  The Secretary, by the provision which I have referred to, is obliged to provide himself with coin for that purpose, and he is obliged to do it at whatever sacrifice may be necessary in order to accomplish that purpose.  This certainly will have one effect: it proves the good faith of the Government;  that it means to do all it can;  that it means to spare no effort at whatever cost to give to those who take the Government paper, what they wish to receive, something besides Government paper, and thus running round in a circle of paper, for the interest upon their debts.

---[Oh, how nice and considerate of you, to so look out for the interest of those widows and orphans who will invest their hard-earned and saved greenbacks in 5/20s]

But, sir, it was not enough, perhaps, to show, the good faith of the Government in this particular.  The committee have recommended that we go further, and that we provide a specific fund, in order to accomplish that purpose, and set it aside for that object.  It was proposed in the committee — and it struck me favorably at first — to set aside specifically the public duties, by providing that the duties on imports should be paid in coin;  but on consideration, it was deemed by the committee that that would be hardly fair.  The result would be to make a distinction between different classes of the community;  and to impose a very heavy burden upon those who are engaged in trade, and who would be called upon to pay duties.  If we provide a paper currency, the natural and inevitable effect of it is, that coin increases in price.  The consequence would be, unquestionably, that those obliged to pay duties on imports might be compelled to make a severe sacrifice in order to raise the coin to pay the duties;  and, in the next place, the general effect would be to, in effect, increase the duties provided by our tariff.  Necessarily, if coin appreciates, if it becomes worth more than the ordinary currency, and duties are to be paid in coin, the effect of such a provision would be to increase the duties which are already very high, and in some cases almost prohibitory.  The committee, therefore, thought that, under the circumstances, that would not be wise;  although it will be perceived that, not having done so, the converse of the proposition may be true: that the effect, if we inflate the currency by paper, and allow the duties to be paid in paper, is necessarily to diminish the duties on imports, and thus, perhaps, to lead to a greater importation.

---[Amazing, even Mr. Fessenden is opposed to the "exception clause" !  So how did it get in there ?]

Having rejected this, it became necessary to make some other provision;  and accordingly provision was made, as will be found in the fifth section, by setting aside the amount of duties received, the amount received from the sales of the public lands, and the amount that may be received from the confiscation of the property of rebels, to form a fund.  The Senate will consider whether all these provisions are necessary and wise, to create a fund which shall be devoted, in the first place, to pay the interest upon the coin and on the notes;  and, in the second place, to create a sinking fund, which in the end might be able to pay the whole debt, and would, in a certain course of time.

This, undoubtedly, will be a very sufficient security;  but, sir, the committee have gone further.  In order that the Secretary may be sure, and that the public creditor may feel safe with reference to it, they give to the Secretary the power to sell the bonds of the Government at any time that it may be necessary, at the market price, in order to raise coin.  That can always be done.  The sacrifice may be great or it may not;  it depends upon circumstances;  but at any rate that will bring coin.  These two provisions taken together have the effect necessarily to create an entire confidence in the minds of the purchasers of the public obligations, that the interest will be surely paid at the time it is due, and paid in coin;  and having done that, the result is obvious to the committee, that our securities must necessarily be placed upon a more stable foundation, and be of very much greater value in the market, because what the holder of public securities wants, is to be sure that his interest will be paid, especially if it is on long time.

But, sir, the power to sell the obligations of the Government at the market price is not confined to the interest.  The Senate will observe that it is made general;  that instead of being confined and obliged to sell the obligations of the Government at par, the Secretary of the Treasury is authorized to sell them at any time at the market price;  and instead of being confined to sell them for coin, merely for the purpose of raising money to pay the interest on the public debt, he is permitted to sell any amount at any time that it may be necessary, for what he can get.  This is a bold, strong, measure, and it may strike the Senate with surprise, or, at any rate, it may lead them to deliberate upon the subject.  I will state the reasons which operated upon the minds of the committee in offering this amendment.

In my judgment — and I speak for myself alone in reference to this matter — we begun wrong.  We should have resorted to this measure of authorizing the sale of the obligations of the Government at the market price when we first commenced to borrow at the beginning of this war.  This belief is founded on very obvious principles.  Money in the market is always worth what it will sell for.  It is an article of merchandise like anything else, and the Government has no reason to suppose, unless it can offer much better security, that it should get money at a better rate than anybody else.  That is one reason.  Another reason is that so far as the Government is concerned, unquestionably the price of money depends on various considerations.  It depends, in the first place, upon whether the country is in a state of peace;  what is its condition with regard to wealth;  what is its indebtedness;  what are its expenditures;  and what is the character of the debt.

At the time I speak of, when we first began to borrow at the commencement of the war, the Government credit was high, higher than it has ever been since;  the hopes of our people were high;  the enthusiasm of the people was strong, and the means of the country were ample.  Then, sir, in my judgment, was the time — although I did not think so then;  I confess that I have reversed my opinions upon that subject — when the Government should have gone into the market with its credit, with the enthusiasm and the belief of the people in our cause and our success new and ripe and strong.  We did not do so;  but resorted to another course.  We resorted to the banks;  and in so doing we deprived ourselves of what at this time would have been a comfortable resource in case we had been obliged to call for their aid again.  We crippled them through our action, and now we are driven to a point where they cannot aid us, so far as lending any more is concerned, because the banks of the principal cities have loaned us about all the capital they have.

But the committee thought, in giving this enlarged power to the Secretary at this time, that it was bound — if this legal tender was to be resorted to, especially if the bill of the House as it stood should be adopted by the Senate and should become a law — that an assurance should be given to the country that it was not to be resorted to as a policy;  that it was what it professes to be, but a temporary measure.  The opinions of the Secretary of the Treasury are perfectly well known.  He has declared that, in his judgment it is, and ought to be, but a temporary measure, not to be resorted to as a policy, but simply on this single occasion, because the country is driven to the necessity of resorting to it.  I have not heard anybody express a contrary opinion, or, at least, any man who has spoken on the subject in Congress.  The chairman of the Committee of Ways and Means, in advocating the measure, declared that it was not contemplated, and he did not believe it would be necessary to issue more than the $150,000,000 of Treasury notes made a legal tender provided by this bill.  All the gentlemen who have spoken on the subject, and all pretty much who have written on the subject, except some wild speculators in currency, have declared that as a policy, it would be ruinous to any people;  and it has been defended, as I have stated, simply and solely upon the ground that it is to be a single measure, standing by itself, and not to be repeated.

Well, sir, what assurance of that can we give to the country ?  How can we satisfy the people of this and other countries (because what we do here is watched with very great anxiety and interest) that it is not to be a policy ?  I perceive no other way than by saying in advance, and upon the face of the bill by which we confer the power, that in future, by the authority we now give the Secretary, he may purchase in the market, at any price at which he can get them, the funds necessary to prosecute this war;  that we have abandoned the idea of adhering to the notion of putting our paper in the market at par when it is not entitled to command it.  In this point of view, this matter addressed itself to the approbation of the committee.

Section four of the bill, as reported by the committee, contains a provision to which I will call the attention of the Senate.  It provides for certain deposit certificates.  I will explain that.  It will undoubtedly happen in the course of things, that in the hands of banks and, perhaps, in the hands of individuals, these Treasury notes, being a legal tender, will accumulate.  They will not be willing to convert them at once into bonds;  they may need them for other purposes.  It was therefore desirable that they should have power to deposit them somewhere where they may receive interest for a short period of time.  This provision was very much desired by the banks in all the cities.  It was thought that it would afford them facilities, that it would give greater currency to the notes, that it would enable them to deal with them better;  and therefore we have offered a provision, that for a period of not less than thirty days any person or institution may deposit these Treasury notes in sums of not less than $500 at the sub-Treasury, and receive an interest of five percent.  The argument against this proposition, undoubtedly, is, that it may interfere with the conversion of the notes into bonds;  but it will be remarked that the interest is one per cent. less than on the bonds.  It will be further remarked that the provision is guarded against any very serious effect of this kind, because the interest is at all times subject to the control of the Secretary of the Treasury, and at no time can the aggregate of these deposits exceed $25,000,000.  It is also under the control of the party depositing, for he can draw his deposit at any time;  but can only obtain interest when he deposits for that number of days.  I shall propose an amendment, however, to this clause which will require the depositor to give notice before the amount is withdrawn.

Mr. Doolittle.  Do I understand the honorable Senator to say that if he deposited these notes interest would be suffered to run on, and that could be convertible into stock ?

Mr. Fessenden.  He will have his interest of course, most undoubtedly.  This was merely a measure of relief that was sought by the banks;  and the committee, on the whole, saw no objection to it;  neither did the Secretary of the Treasury;  and therefore the amendment is submitted.  I should have preferred that these twenty years bonds should be redeemable at the pleasure of the Government after five years, and payable in twenty years;  or else, if that could not be done, the proviso authorizing the holders of these bonds to purchase with them seven per cent. stock redeemable in five years should be retained.  I think that something more is necessary;  and I believe that my honorable friend from Rhode Island, [Mr. Simmons] who is a member of the Committee on Finance, intends to move something of that description as an amendment to the bill.  I believe it will be found beneficial.  I shall not stop, however, to argue that at the present time.  I have stated substantially what are the main provisions of the amendments which the committee have reported, and the Senate will perceive that they are of a very important character.  They go to change, in a very considerable degree, the whole policy of this Government up to the present time with regard to the borrowing of money, and put us upon the market.  I have stated the reasons which induced the committee to come to that conclusion.  The Senate will judge for itself whether those reasons are sufficient.

Mr. President, I wish now to say something upon the main question of the bill, which I have avoided touching, except incidentally;  and that is the clause making these notes a legal tender;  for, after all, that is the great question now submitted to the Senate.  The Senate will observe that the committee make no recommendation on that subject, except such as may be inferred from the fact that they report it back.  They report the bill back retaining the clause, and so far an inference might be drawn that the committee were in favor of it.  Under the circumstances of the case in the committee, (of which, perhaps, I may speak with propriety, as the committee, as a whole, had no opinion upon the subject, their opinions being so divided,) I deem myself at liberty, as I should, perhaps, be under any circumstances, if need be, and if my opinions lead me that way, to say what I have to say in opposition to that clause.  I do not propose to do this except incidentally.  I propose rather to state the argument as I understand it on both sides in relation to the matter as briefly as I can, without attempting to go into the argument of the subject myself.

The ground upon which this clause making notes a legal tender is put, I have already stated.  It is put upon the ground of absolute, overwhelming necessity;  that the Government has now arrived at that point when it must have funds, and those funds are not to be obtained from ordinary sources, or from any of the expedients to which we have heretofore had recourse, and therefore this new, anomalous, and remarkable provision must be resorted to in order to enable the Government to pay off the debt that it now owes, and afford circulation which will be available for other purposes.  The question then is, does the necessity exist ?  That is a question which I propose in some degree to discuss, because I admit fully and decidedly that the Government, or the country, rather, is to be sustained in its present undertaking, and that we are bound to obtain the means to effect that object.  If the necessity exists, I have no hesitation upon the subject, and shall have none.  If there is nothing left for us to do but that, and that will effect the object, I am perfectly willing to do that.  The question, however, is whether it is necessary, whether we have arrived at that stage, and whether something can or cannot be done in order to accomplish the object.  Sir, I do not hesitate to say here, that I would advocate the use of the strong arm of the Government to any extent in order to accomplish the purpose in which we are engaged.  I would take the money of any citizen against his will to sustain the Government, if nothing else was left, and bid him wait until the Government could pay him.  It is a contribution which every man is bound to make under certain circumstances.  We can take all the property of any citizen.  That is what is called a forced contribution.  Thank God, we have not arrived at that;  but I am not certain that it would not be a more manly course to meet the matter straight in the face, and if we are to compel a man to part with his property, to do it without affording him what may appear to be security, and yet is not security.  I do not say that it is so;  and yet I am not certain that that would not be the more manly and praiseworthy course to pursue.

Then, sir, as to this question of necessity, I wish to ask gentlemen to consider upon what public credit is founded.  According to my reading and my view of the case, it has but one foundation, and that is, the confidence of the people in the ability and integrity of the Government, and its power and its will to pay.  Public credit has no other foundation that I am aware of than that.  If that is so, then the question arises, what is the ability and what is the integrity of this Government, and what is its will to pay ?  Are they such as of themselves, under proper legislation, to enable the Government to raise means in the ordinary way ?

As to the question of ability, what was our condition when this war broke out ?  Senators have only to look back and consider.  Certainly no Government was in a better condition than we were at that time.  Our debt was a trifle.  This great country owed but about one hundred millions of dollars — nothing; not even worth its consideration for a day.  Its private debt abroad, which had been large, had been for years diminishing, was very much reduced, and the day was very near at hand when, freed from debt, public and private, we should have been in possession of all our great public works owned by ourselves all over our country, ready to have that healthful and beneficial operation which necessarily belongs to them.  That was our condition, so far as credit was concerned.

What sort of a country had we ?  We all know.  One of the best, one of the richest, one of the most favored, in all particulars, on the globe;  having a greater variety of climate, a greater variety of soil, a greater variety of production, every facility for all the arts of life, and all that goes to create wealth, for agriculture, for manufacture, for commerce;  and, above and beyond all, over the greater portion of it, among twenty millions of its people, we had a population inured to labor, and, better than that, loving labor, and considering it an honor and a glory;  and, better still, intelligent, educated, skillful, thinking labor, which is always the most productive.  With a country like that, I think I do not go far in saying that at the period of the commencement of the war there was no Government on the face of the earth whose ability was so great to meet its engagements as our own.

This has become somewhat changed, sir.  But suppose for a single instant that, to a certain degree, this rebellion is to be successful;  suppose that the cotton States, so called, are to be cut off from us;  what have we left ?  We have lost the production of one or two great staples;  we have lost a portion of our population;  but everything else, substantially, we retain.  We retain all that I spoke of as going to make a great, a prosperous, and a glorious people;  and I am not certain that what we might lose in extent of territory and in the production of certain staples, even should this rebellion be successful, we should not gain by greater homogeneousness and singleness of purpose, and by the power which would arise from that singleness of purpose and that homogeneousness, and the loss of what after all must be conceded to be an element of weakness to any nation on the face of the earth, which has proved to be so to us, though in some particulars an element of wealth.  Therefore I say that even under any circumstances we must be entitled to credit for our ability to pay.  Why, sir, we should then have the capital which those who framed the Constitution considered the best capital that a nation could have.  We had nothing else then, and you see what it has produced.  What was that capital ?  Labor; the power and the will to work; and the disposition, the desire, the anxiety, the policy to make that labor more productive by educating it;  under which policy of educating labor and thus increasing the power of production, the country has grown up with such unexampled, unparalleled rapidity.  My own opinion then is that on this question of ability, even if the worst come which can come, after the contest in which we are now engaged has ended, we still remain a great nation, abundantly able to meet any demands that we shall be likely to incur;  and that no person, placing himself in the position of a money-lender, could hesitate to say that we were entitled to all the credit of a great, productive, strong, healthful people.

---[Beautifully said, sir, but you are going down a wrong road:  the money-lenders from whom you would like to borrow on the credit and ability to re-pay of the United States, do not —repeat, do not— have the money you require to finance this war !  So why should this credit-worthy country borrow from bankers that which they do not have ?  Why should these united States take the ir-redeemable paper notes of bankers which are not backed by anything but the credulity of the people, and then pay 6% interest on it ?  Why not issue the credit-worthy notes of the credit-worthy United States and leave the bankers to their own devices ?]

Have we the will to pay, sir ?  I speak of the ability and integrity of the Government.  Has the world confidence in it and in us ?  Ought it to have ?  Sir, the faith of this nation has never been broken up to this period.  We have always kept our faith as a borrower of money.  We have stood before the world as a people to be trusted.  Up to the present time there has been no stain upon us.  We have paid our debts.  Nobody could turn round at any time in our history, from the creation of this Government, and say that we have resorted to miserable shifts and contrivances to avoid our obligations.  We have faithfully kept them all.  Are we not then entitled to credit ?  Having this ability, having always kept our faith, having shown that we not only have the power, but the will to pay up to the present period, have we not laid strong the foundations of public credit, if I am right in supposing what that foundation is ?

Sir, we are contracting a large debt.  At the end of this fiscal year, I suppose it will be, in round numbers, $750,000,000;  and at the end of the succeeding year, if the war should continue, $1,500,000,000;  but in my judgment it will not go beyond the first sum.  I believe that by the end of this year the war will be ended.  All events are tending that way.  Our recent successes go to indicate it.  We have but just begun to show the force we have, and the results are obvious.  But suppose it is not ended in that time, suppose our debt goes up to double that amount, and the war continues for another year, when it must end unquestionably, we shall have a heavy capital of debt, but all that is necessary is to secure the payment of the interest.  A public creditor looks not to the principal.  He looks to his investment.  He wants to know what his interest is to be.  The example of England proves this abundantly.  Nobody supposes that England will ever pay her debt;  nobody has supposed it for years;  and yet her stocks are always sound, and are sought for, even at a very low rate of interest, on account of their security.  They sell in the market at about par, varying very slightly according to circumstances;  and yet nobody expects the principal to be paid.  All therefore we have to calculate upon, all that we have to provide for, is to satisfy the public creditor, either at hone or abroad, that when we put out our obligations for a series of years, he may be certain that the interest will be paid, and the result is equally sure.

---[And you learned this Whig wisdom of perpetual national debt, where ?  Mr. Hooper suggested the same.]

Sir, the policy of this country has been to keep out of debt.  Many men have thought, and, perhaps, not unwisely, that it would be well, or better, if we had a public debt, as it would interest more people in the Government;  but we have gone upon a different system, and wisely in my judgment;  because we have framed a Government to which all who live under it ought to be attached, and on principles that ought to make every one its friend.  It confers such benefits that it has a right to presume that every one is its friend.  We believe that the true doctrine of a republic is strict economy;  that the expenditure of large sums of money is injurious, not so much because the money is spent, but because the using it, and more especially the using it carelessly, tends to sap the foundation of public morals by, in the first place, sapping the foundation of private morals.

One of the answers to all this is, that our ability may be doubted on account of the circumstance I have mentioned, that we are creating a large public debt.  Having suggested what occurs to me with reference to that, I wish to say a word upon another remark that has been made.  Our credit has been somewhat injured, undoubtedly, by the conduct of the war;  and yet, in my judgment, very unreasonably.  I have heard much said here and elsewhere, and I have read much in the newspapers, and I have heard it discussed in the Senate, and read the discussions in the House of Representatives, where criticism has been indulged in, upon the conduct of the war.  Sir, the conduct of the war has not been altogether satisfactory to me.  I could have wished it had been otherwise.  I could have wished for successes in the first instance;  and I felt, perhaps, as keenly as any one, the defeats that we at first suffered;  and perhaps I might have been as bitter in the remarks I made about them;  but, sir, with time and reflection, I have come to a better state of feeling on that subject, and I declare here to-day, as my sincere conviction, that we have not only done all, as a whole, but more than could have been reasonably expected in the same space of time.

Why, sir, look at our condition when this war commenced;  with no army, with no navy, with no means, except our credit, of raising money to meet it;  taken by surprise;  unused to war;  after a long term of peace; unaccustomed entirely to arms;  and disarmed, in point of fact, by the robberies of those who have undertaken to separate from us.  Were victories, under such circumstances, to come in a day ?  Were we at once in an hour, a week, a month, or a few months, to create the military experience which we had lost ?  Were we to create a navy, create an army, and win victories under any and all circumstances ?  The expectation was idle.  Anxious as people might be that it should be so, the expectation was an unreasonable one;  we should rather have anticipated defeat.

I heard a remark made by one of our own generals who was a great man some years ago, that a republic must always be defeated at first, because it would always have to learn.  That was our condition.  Going on with rashness;  laboring under the impression, which it must be conceded we had cultivated, that we were invincible, and could do anything;  impatient from the very nature of our people;  unwilling to await the unfolding of time and the acquirement of experience;  what could have been expected but that we should make many mistakes ?  What could have been expected but that we should carry on the war at a great loss ?  Bound to act instantly and in a day, could we at once have a perfect commissariat ?  Could we at once provide ourselves at reasonable prices and reasonable rates, and save ourselves against all who were disposed to plunder the Government ?  Why, sir, all these things were to be learned by experience.  It was necessary that time should be given for us to acquire that experience.  I sincerely believe that with regard to any government economy is never learned but from the consequences of waste, and victory never follows but as the consequence of defeat.  In defeat we learn to be victorious, and in suffering for want of economy we learn how to practice it;  and that, I believe, we are feeling and seeing the good effects of now.  That principle is being developed to-day.  We have suffered some defeats.  We permitted ourselves to be, in a measure, cast down.  Time has come round.  We have now an Army perfectly organized;  we have a Navy which has proved its power wherever it goes, winning glory for us wherever it appears;  and everything looks as favorable to our cause as the heart of man could desire.

I see no reason for loss of credit, then, arising from the conduct of this war up to this period.  In regard to that, we have been like all other people;  not worse than other people, certainly, but better.  There never was a war, from the beginning of time, into which a nation was plunged, that did not begin with disadvantages, and suffer in consequence of those disadvantages.  Could we expect to be an exception, after the long period of peace in which this country had indulged ?  I think not, sir.  We have not, in my judgment, lost the ground of which I spoke as entitling us to credit, and that is our ability;  and as to our integrity, it stands untouched to-day, and perhaps on the result of to-day may depend the question whether we shall lose that reputation.  The question, after all returns: is this measure absolutely indispensable to procure means ?  If so, as I said before, necessity knows no law.

What are the objections to it ?  I will state them as briefly as I can.  The first is a negative objection.  A measure of this kind certainly cannot increase confidence in the ability or the integrity of the country.  It can make us no better than we are to-day, so far as this foundation of all public credit is concerned.

Next, in my judgment, it is a confession of bankruptcy.  We begin and go out to the country with the declaration that we are unable to pay or borrow, at the present time, and such a confession is not calculated to increase our credit.

Again: say what you will, nobody can deny that it is bad faith.  If it be necessary for the salvation of the Government, all considerations of this kind must yield;  but, to make the best of it, it is bad faith, and encourages bad morality both in public and in private.  Going to the extent that it does, to say that notes thus issued shall be receivable in payment of all private obligations, however contracted, is in its very essence a wrong, for it compels one man to take from his neighbor, in payment of a debt, that which he would not otherwise receive or be obliged to receive, and what is probably not full payment.

Again: it encourages bad morals, because, if the currency falls, (as it is supposed it must;  else why defend it by a legal enactment) what is the result ?  It is, that every man who desires to pay off his debts at a discount, no matter what the circumstances are, is able to avail himself of it against the will of his neighbor, who honestly contracted to receive something better.  My judgment is, that anybody who would avail himself of a position and a power of that kind, thus conferred on him by law, has forgotten the principle of right and wrong between man and man;  for legal enactments cannot make that right between man and man which otherwise would be wrong.  I say, therefore, that another objection which has been stated, and of which the force must be admitted, is that it is bad faith.

Again, sir, necessarily as a result, in my judgment, it must inflict a stain upon the national honor.  We owe debts abroad yet.  Money has been loaned to this country, and to the people of this country, in good faith.  Stocks of our private corporations, stocks of our States and of our cities, are held and owned abroad.  We declare that for the interest on all this debt, and the principal if due, these notes, made a legal tender by act of Congress, at whatever discount they shall stand, shall be receivable.  Payment must be enforced, if at all, in the courts of this country, and the courts of this country are bound to recognize the law that we pass.  That result then, is inevitable;  and I confess, sir, that it touches my pride, when I reflect that, of all people in the world, the people of England can turn around, at the present day and at the present hour, and accuse us of bad faith.  I would make any sacrifices, do anything, to pay our foreign debt, even if our people at home were obliged to suffer, so that it should not be said that by any legislation of ours, that which was due abroad had been lost.  I would stop those mouths, if it were in my power, by any means and at any sacrifice.

Again, sir, it necessarily changes the values of all property.  It is very well known that all over the world gold and silver are recognized as money, as currency;  they are the measure of value.  We change it here.  What is the result ?  Inflation, subsequent depression, all the evils which follow from an inflated currency.  They cannot be avoided;  they are inevitable;  the consequence is admitted.  Although the notes, to be sure, pass precisely at par, gold appreciates, property appreciates — all kinds of property.  I saw in a newspaper the other day a statement, and I believe it has not been contradicted, that the confederates are now just in this position;  their notes, which are made a legal tender there, are piled up in their banks mountain high — as high, at any rate, as the banks — and the people are living on shinplasters, and real estate has appreciated fifty per cent., and, indeed, can hardly be purchased at all.  That is the condition that has followed there.  They are at the end of their course;  we are just at the beginning of ours.

Again, sir, a stronger objection than all that I have, to this proposition — I am stating the objections which everybody must entertain, because I suppose these facts are palpable — is that the loss is to fall most heavily upon the poor.  I believe it never was disputed, it cannot be in the light of experience, that those who are injured most by an inflated currency are the laboring men — the poor.  The large capitalist can bear it;  but there are small capitalists in this country whom it will vastly injure.  When you speak of a capitalist, in the common acceptation of the term, you mean a rich man;  but every man who is free of debt, and earning something, and earning a surplus, is a capitalist;  and the great number of capitalists together make up a great whole, and these are the men who suffer by the disorder of affairs — the poor laborer, in the first place, more than all;  the small capitalist, if I may so call him, next;  the rich capitalist the last of all.  Such is the necessary result and consequence always of a system of this kind.

But the answer to all these things after all — I have stated one side of the proposition — is necessity;  and again I say if the necessity exists so stringently, so be it.  But that, too, is to be examined.  Does the necessity exist to the extent stated ?  Gentlemen say in argument in the other House, and it is argued elsewhere, that the notes will not go without the legal tender.  I have a reply to this.  In the first place, so far as the Government is concerned, they must go;  they must be taken, if issued without the legal tender clause, by the public creditors, and to the whole amount of $150,000,000.  Why must they be so taken ?  Because of the moral force of the situation.  They need it;  they must take the money and suffer the loss, if there is a loss.  But it may be answered, "you are injuring the public creditor;  why should you injure him;  if he is laboring under this moral force, why oblige him by that force to take these notes;  why not relieve him ?"  I reply, "to prevent doing him wrong are you at liberty to wrong all the rest of the world ?  And if he is laboring under this difficulty, and you too, are you therefore justified in making all the difficulties that I have enumerated, if they would follow ?"  Besides, sir, you can remunerate him, but you cannot remunerate the community.  If there is a loss to the public creditor you have the power to make it up to him, but you have not the power, and never would have the power, to relieve the community.  If the objections which I have stated are well founded, you never would have the power to relieve the community by legislation from all the evils that must follow.

What is offered ?  Let us look at it.  What do we now offer ?  Will your legal tender clause make the notes any better ?  Do you imagine that because when you have the difficulties I speak of upon you, you force people to take these notes, they are to be worth the money, and that no injury is to follow ?  Why, sir, what is the consequence ?  Does not property rise ?  Take your soldier over here; you say you are injuring him if you compel him to take a note without its being a legal tender;  but, will not the sutler put as much more on his goods ?  And if the soldier sends the notes to his wife to be passed at a country store for necessaries for his family, what will be the result ?  The goods that are sold are purchased in New York;  the price is put on in New York;  a profit is added in the country;  and thus the soldier loses just as much.  You are not saving anything for anybody.

But, sir, what do we offer without this legal tender clause ?  We are offering notes, notes of a Government such as I have spoken of, with the interest secured beyond a question if the amendments proposed by the Committee on Finance of the Senate are adopted, based on the national faith, and with the power to deposit and receive interest at five per cent, in any sub-Treasury, and the power of the Government to sell its stock at any price, sacrifice it at any price, to meet whatever it may be necessary to meet.  Will notes of this kind stand better when going out upon that credit, if you put upon them the confession upon their face that they are discarded by you and that you know they ought not to be received unless you compel their reception by legal enactment ?  Sir, in my apprehension, by that you would do worse;  you would discredit them yourselves in the beginning.

Mr. President, I beg pardon of the Senate most humbly for having taken up so much of their time upon this matter.  I have consumed more time than I intended;  and I will endeavor to bring my remarks to a close as fast as possible.

What is the argument against this view, and what is the only argument, as I am very much inclined to believe, that does exist ?  It is simply that the banks will not take the notes unless you make them a legal tender, and therefore they will be discredited.  It is then reduced to a contest between the Government and the banks, or between the Government and certain banks;  and the question is whether the banks have the will and the power to prevent it;  whether the notes can be discredited.  Now, sir, I have examined this matter to see and understand what the difficulty was;  and it has been stated by gentlemen to me, and stated to our committee precisely where the trouble lies.  They say it lies in what is called the clearing house system of New York, which is the great center of business.  They have a system there by which balances are settled at a common place, and according to a certain form;  the bank that is not ready to pay its balances at a particular day must borrow a certificate on a pledge of its assets of what is called the loan committee, upon which it must pay seven per cent. interest while it holds it, and that it can use in settling its balances.  There are certain banks in New York, it is said, that will not agree to receive these notes.  Most of them, perhaps, would;  but there are certain banks that would not;  and therefore the result would be this: if, for instance, one bank took $500,000 of these notes, and had them on hand, and they were not received at the clearing house, as they would not be, because some banks refused to receive them, the result must be that they hold them without interest, while they are obliged to pay seven per cent. to borrow the money to meet the same balances elsewhere.  That is a strange position of things, and undoubtedly, while it remains, that might be the operation.

But let us look at it it little further.  I have stated what the character of this paper will be without the legal tender clause.  The objection is founded on the idea that the notes will not be at par, and therefore that, although they will not be worth any more with the legal tender clause, the banks will be compelled to take them.  My belief is, that, under the provisions of this bill as we propose to amend it, the notes will be very nearly at par.  I have the opinions of men on whom I rely that they cannot, with the interest thus secured, fall at any rate more than five per cent. below par, even at first.  Suppose they shall be a little below par, how can they be taken ?  We all know what the business of banks is.  We heard nothing about it before the committee, and yet we understand it.  The banks can receive any deposits they please (and that is their principal business,) payable in the same kind of paper — special deposits;  not exactly special deposits in the sense in which the use the term in New England, but a deposit which is payable when drawn out in precisely the same sort of funds.  That is the principal business of the banks of New York;  and what would be the very great harm of the banks receiving this very paper as a special deposit, to be paid in the same kind of funds to their depositors, especially when they can deposit it themselves in the sub-Treasuries, and receive five per cent. interest on it ?

Suppose the banks still refuse;  although they can receive the notes as a special deposit, what would be the consequence ?  The holders have the privilege of depositing this paper to a certain amount in the sub-Treasury.  I do not believe that the banks, would be willing to see their depositors leave them and deposit the notes in the sub-Treasury and receive five per cent.  Their business is to make money.  It would not be a very profitable kind of business for them to do that, and, in my judgment, they would not do it.  But this is only an opinion of mine.  I am entirely inexperienced in these things, as we all are more or less, and I must say, that after all the study I have tried to give this subject, and in all the advice I have tried to get from experienced men, I have come to the conclusion at last, upon the whole, that owing to the peculiar condition of things in this country for so many years, nobody knows much upon the question of finance — not even those who are most familiar with it;  for, sir, I declare here to-day, that in the whole number of learned financial men that I have consulted, I never have found any two of them who agree;  and therefore it is hardly worth while for us to plead any very remarkable degree of ignorance when nobody is competent to instruct us;  and yet such is the fact.  I can state to you, Mr. President, that on one day I was advised very strongly by a leading financial man, at all events to oppose this legal tender clause;  he exclaimed against it with all the bitterness in the world.  On the very same day, I received a note from a friend of his telling me that we could not get along without it.  I showed it to him, and he expressed his utter surprise.  He went home, and next day telegraphed to me that he had changed his mind, and now thought it was absolutely necessary;  and his friend who wrote to me, wrote again that he had changed his, [laughter] and they were two of the most eminent financial men in the country.  Now, sir, with all this, it is rather a difficult thing for lawyers and farmers and men not accustomed to all these things, like financial gentlemen, to tell precisely what to do;  and I am obliged, after all, to draw upon the very shallow fountain of my own intelligence and my own study to endeavor to come to right conclusions, although I acknowledge myself very much indebted to many gentlemen for the aid they have afforded me, of which, perhaps, I am making a very poor exhibition.

Mr. President, I have some hope, I certainly have some ground of hope, a reasonable ground of hope, that our credit is soon to be very much improved in foreign countries.  I have read letters, and I have had letters read to me within a very few days, stating that our credit was rising in London, and in which the opinion was expressed that though not at this moment, yet in a very short period of time our paper could be negotiated there on favorable terms.  We all know what the rate of interest is there;  and our paper, if acceptable to them, promises an investment which would be sought for with avidity.  I fear that if there is that prospect, the passage of a clause like this would finally destroy it;  and I fear it for the reason, as I stated before, that in my judgment it carries bad faith upon its face.  It may be necessary after all, but that certainly is its character.

Now, sir, to what must we resort to bring up the credit of the country to meet all these things ?  How is our credit to be sustained ?  By a few simple principles and by a few simple processes.  The first of these is taxation.  We are all agreed upon that question;  the people are perhaps better agreed than we are.  Nobody in either House of Congress hesitates to say that we must tax, tax speedily, strongly, vigorously.  We have the ability to meet it.  The people can bear it, and will bear it with cheerfulness and hope.

The next means of sustaining our credit in by practicing good faith with all men, and losing nothing of that which has attended us hitherto since we were a people, and giving no ground upon which any man or any set of men can say that we are not willing, at any time, to make every sacrifice that is necessary to redeem our plighted faith.

The third means is by economy, and I believe we have begun to practice it.  As I said before, I believe we are learning how to practice it, and in what manner we may economize.  When I speak of economy, I do not mean economy as proposed by my honorable friend from Massachusetts, [Mr. WILSON,] by denying to those in the service of the country a reasonable reward, by taxing them beyond all other men;  by saying to those who give all their time and all their labor and even their lives to the defense of the country, that in addition to bearing their share of the burdens which are imposed on all the people alike, they shall make a special contribution beyond all others, and that they shall contribute it in an equal ratio, no matter how it falls — a man receiving a great salary like him who is receiving barely enough to live on — making no distinction.  I do not mean such economy as that, but economizing in the great sources of waste and loss, and not playing this game upon individuals.

Sir, in all this I have not touched the constitutional question.  I have preferred to leave it untouched.  I have preferred even to leave my own mind uninstructed upon that question.  It is my belief that where there is great difference of opinion on a constitutional question, and has been for many years, where there may be and has been an argument on both sides, if the necessity arises, we may well leave that question to be settled by the courts, and not attempt to settle it ourselves.  It is not for me to say whether this is one of those occasions or not;  but undoubtedly the question will be argued;  indeed, I know it will.

Sir, this is a great crisis truly.  Everything depends upon our credit and our ability to meet our wants financially.  I have no doubt myself that we shall be able to meet them;  and I must confess to the leaning of my opinion, that we shall be as well able to meet them without this legal tender clause, as it is called, as with it;  that our paper will be as good and our credit and character much better without it.  Still I maybe wrong, and I wait for conviction.

I have said before that there was nothing to discourage us;  that I believed the country, since the breaking out of this war, never had such good reason for hope as at this day.  There have been times when the people have been almost in despair;  there have been times when perhaps it may be said that but for the cause itself their hearts would have failed them.  I believe that those times are passing by.  We always meet, and must always expect to meet, in a Government like ours especially, difficulties such as attend us now — perhaps not so great, but greater or less — in the course of time.  No nation ever escaped them, and no nation can hope to escape them.  I would not have perfect quiet always, in a republic especially.  It would be a bad sign if it were so.  It is contrary to the very nature of our Government that it should exist.  You never find quiet except under a tyranny.  Only in the dead sea of despotism is there a perfect calm.  It cannot be looked for in the wide ocean of liberty.  Storms arise inevitably, and the waves roll and dash turbulently, but bright skies again cheer us, the agitated waters subside, and their broad bosom is traversed by thousands of tall ships laden richly with hope for the nations of the world.

Mr. Collamer.[Jacob Collamer (January 8, 1791 November 9, 1865) Vermont (R); studied law, admitted to the bar in 1813]  But for the rich feast in which I have participated in listening to the honorable Senator from Maine, I might regret that time has flown so that I am compelled to begin at so late a period of the day what I desire to say.  I am fully prepared, however, to admit that the attention of myself and of others has been well and profitably occupied.  One remark fell from the Senator, which he thought proper to repeat, that could not but attract my attention, because it stands in limine at the entrance of the remarks which I am about to make.  If I understand him, he says that if there is a necessity for the issuing of this paper and making it a legal tender, he is ready to vote for it.  I differ from the Senator begin with.  I do not know how other members of the Senate look upon the obligation of their oath to support the Constitution of the United States.  To me it is an oath registered in Heaven as well as upon earth, and there is no necessity that in my estimation will justify me in the breach of it.  I think those men who are now risking their lives upon the high places of the field to support the Constitution, are not to be treated in this Hall by us with the concession that we are ready, if the necessity calls for it, to break it.  All that our rebel enemies are engaged in is the overthrow of the Constitution, and all that we are contending for is its maintenance and preservation.  Let the necessity be what it may, I cannot disregard the obligation of my oath to support the Constitution;  and it is mainly with a view to ascertain what is the true meaning of the Constitution upon this subject that my remarks are presented, though other things will run parallel with that tending to the same result.

Mr. President, we are now about to plight our public faith for the purpose of obtaining the use, at least for the time being, of large sums of money.  I perfectly agree with the honorable Senator from Maine, that there is but one foundation for our success in an effort to obtain money, and that is plighted public faith.  We may promise this thing; we may agree to-day to issue $150,000,000 of these notes, and make them a legal tender, and promise that the amount shall never exceed that sum;  but we may repeal that to-morrow, if a regard for the obligations of plighted faith will allow us to do so;  we have the power.  If, sir, there be betrayed on the part of Congress any tender footedness;  any, the least, indication that it does not regard contracts honestly made as inviolable;  it will have lost the public confidence and broken the public faith.  If that manifestation be in this form, if it be seen that Congress has broken or assisted men to break their private contracts, will not the world at once say "what confidence can we have in the United States Government that they will not break contracts of their own, when they think they have any interests to do so?"

We pause to inquire first what is proposed to be done;  and that leads to an inquiry into the leading features of this bill.  What are they ?  I need not go over them in detail, but will state briefly the points in it to which I wish to call attention.  In the first place, it provides for the issue of Treasury notes as a circulation;  in the second place, it makes them payable by the Government on all debts due by it;  and in the third place, it makes them a tender on all private debts.

I admit that when the Government borrows money, it must give some evidence of the debt, whether by the name of Treasury notes or by some other name, is immaterial.  The power given in the Constitution to Congress to borrow money on the credit of the Government of course carries with it the power to give a certificate of that debt.  Treasury notes have heretofore been issued in various forms;  but uniformly, on all occasions, those Treasury notes have been receivable, even for debts due from the Government, only at the option of the receiver.  Generally, that has been expressed in the statute itself, that they should be payable any debts due by the Government, to be received at the option of the creditor.  This bill, I understand, makes them payable absolutely without regard to the wishes of the creditor.  This is the first time that has ever been attempted, even in relation to debts due by the Government.  It is not necessary to put into the bill that they shall be received by the Government in payment of debts due to it, though it is well enough to do so.  I should suppose that, according to the common law, no man could refuse to receive his own notes towards payment of a debt due to him.  If I had a debt due to me from a man, I would of course receive in payment a note from me to him which had fallen due.  That is a common-law right.  The Government receives its own paper on debts due to itself.  But the point I am talking of, is the proposition to make this paper payable by coercion and receivable by force by all persons to whom the nation is indebted.  That is entirely a new feature, never before attempted in any extremities of our Government, at any period of its history, since the formation of the present Constitution.

But, sir, the more important feature to which I wish to call attention is that the bill proposes to make these notes a legal tender in payment of private debts between man and man, with which the Government has nothing to do.  Why is this ?  What is the object intended to be effected by making, these notes thus a tender in payment of private debts ?  I have before me a letter addressed by the Secretary of the Treasury, Mr. Chase, to a Representative in the other House, and which was used in that body, from which I wish to read for the purpose of seeing what is the object to be effected, and why it is to be effected.  Speaking of these notes, he says:

"The making them a legal tender might, however, still be avoided, if the willingness manifested by the people generally, by railroad companies, and by many of the banking institutions, to receive and pay them as money in all transactions, were absolutely or practically universal ;  but, unfortunately, there are some persons and some institutions which refuse to receive and pay them, and whose action tends not merely to the unnecessary depreciation of the notes, but to establish discriminations in business against those who, in this matter, give a cordial support to the Government, and in favor of those who do not.  Such discriminations should, if possible, be prevented ;  and the provision making the notes a legal tender, in a great measure at least, prevents it, by putting all citizens, in this respect, on the same level, both of rights and duties."

There is the statement.  This feature of the bill is ingrafted on it for the purpose of making the thing precisely equal, and operating alike on all citizens of the community.  Now, what does the word "tender" mean ?  I do not speak of it as an adjective;  I speak of it as a noun, a substantive.  It means an attempt at payment, an offer of payment of a debt due.  It applies to nothing else.  Here comes a distinction which, it seems to me, has hardly been looked at, in the importance in which I view it, in all the discussions in the House of Representatives, who, under this bill, is compelled to take this paper called money ?  Nobody but those who have debts due them.  Nobody is compelled to take it for his property.  Tender cannot be made to a man to obtain his horse from him.  He has a horse to sell, he has flour to sell, merchandise to sell, work to perform, labor to do;  you cannot make a tender to a man for any of these things.  In all the great general affairs of life, this provision, made, as it is said, to make men equal, can never have any application to them.  It applies to nobody except some man who has been so unfortunate as to incur the public displeasure because he has saved a little money from his industry, and has it in the form of a debt due him.  It is none but such an unfortunate man that can be reached by this provision, and that is called making things equal !  I do not know what opinions other men may have about equality.  I have heard that equality was equity.  If they are convertible terms, I say that is not equality nor equity either.  The number of people who owe debts in every community is very much larger than those who have debts due to them.  To all those people you address yourself by this tender clause, saying, "we engage all of you who owe debts to depreciate this paper as much as you can and get it as cheap as you can, to cheat your creditors with."  That is enlisting a very great aid, I take it, to the currency of this paper.

It is hardly necessary that I should elaborate this point;  but I will here remark, that this was the great seminal principle that occasioned all the trouble in this country in the time of our Revolution and the period succeeding the Revolution up to the time of the formation of the present Constitution, in regard to money matters.  It is that resort was then had on all occasions, whenever there was a public pressure, to some sort of relief laws, or stay laws, or tender laws;  some species of imaginary provision of relief was constantly pursued, and this temporizing policy demoralized the whole community, destroyed all confidence, public and private, and entirely destroyed all credit and all trade.

Here is the same thing now.  I know it is easy to talk about the hard-hearted creditor and the unfortunate poor debtor.  That kind of argument is often addressed to our humanity, and by and by I suppose it will be addressed to our cupidity, if there are more of our constituents that can be releived by making a provision of this kind to pay off their debts cheap and easy.  I suppose it was on account of representatives trying to accommodate their constituents in that way, that the early writers said that the very possession of the power to do a thing of this kind was demoralizing to those who possessed that power.  Cycles in national affairs, in politics, as well as in natural philosophy, return to us;  and I cannot but here feel it my duty somewhat to elaborate this point, and to show that this very idea of credit and relief laws was the beginning of trouble in this country, and that it never ended until the present Constitution was adopted, and the people were relieved ex necessitate from those delusions which they had been accustomed to follow.  On this point I will read from Judge Story on the Constitution:

---[Joseph Story & co. "bound upon future generations laws secured by bribes, and arrogated to the Supreme Court the almighty power of setting aside conflicting legislation, because, indeed, a law was a contract and a contract was a sacred and perpetual right, to be venerated and enforced for all time."]
"The prohibition" [on the States] "to 'emit bills of credit' cannot, perhaps, be more forcibly vindicated than by quoting the glowing language of the Federalist, a language justified by that of almost every cotemporary writer, and attested in its truth by fact, from which the mind involuntarily turns away at once with disgust and indignation.  'This prohibition,' says the Federalist, 'must give pleasure to every citizen in proportion to his love of justice, and his knowledge of the true springs of public prosperity.  The loss which America has sustained since the peace from the pestilent effects of paper money on the necessary confidence between man and man;  on the necessary confidence in the public councils;  on the industry and morals of the people;  and the character of republican government, constitutes an enormous debt against the States, chargeable with this unadvised measure, which must long remain unsatisfied;  or rather an accumulation of guilt which can be expiated no otherwise than by voluntary sacrifice on the altar of justice of the power which has been the instrument of it'."
Story's Commentaries on the Constitution, sec, 1352.

This was said in relation to the States issuing paper, and making it a tender.  Judge Story next pays a little attention to the subject of what is commonly called the Continental money.  He gives the history of this issue, amounting in the whole to $300,000,000, though Congress had stopped at one period, and said it should not exceed $200,000,000.  In the first place, Congress declared that the States should pass laws to make the Continental money a tender for debts.  Almost all the States did so;  but still it would not go;  it continued to depreciate.  Judge Story says of these issues:

"Congress endeavored to give them additional credit by declaring that they ought to be a tender in payment of all public and private debts;  and that a refusal of the tender ought to be an extinguishment of the debt, and recommending the States to pass such tender laws.  They even went further, and thought proper to declare that whoever should refuse to receive this property as gold and silver, should be deemed 'an enemy to the liberties these United States'." —Ibid., sec, 1353.

They at one time made provision for funding it at forty to one, but the notes were never brought in, and from 1775, from the issue of the first notes, to 1779 they ran down — I have seen the scales of deterioration, the different values at different times — until they stood at fourteen hundred for one, and in 1780 they stopped utterly, died in the hands of the person's who possessed them, and no attempt was ever made to redeem them at all.  Judge Story gives the history in a few words:

"The States still continued to fail in complying with the requisitions of Congress to pay taxes;  and Congress, not withstanding their solemn declaration to the contrary, increased the issue of paper money, until it amounted to the enormous sum of upwards of $300,000,000.  The idea was then abandoned of any redemption at par.  In March, 1780, the States were required to bring in the bills at forty for one;  and new bills were then to be issued in lieu of them, bearing an interest of five per cent., redeemable in six years, to be issued on the credit of the individual States and guarantied by the United States.  This new scheme of finance was equally unavailing.  Few of the old bills were brought in, and of course few of the new were issued.  At last the Continental bills became of so little value that they ceased to circulate;  and in the course of the year 1780 they quietly died in the hands of their possessors.  Thus were redeemed the solemn pledges of the national Government !  Thus was a paper currency, which was declared to be equal to gold and silver, suffered to perish in the hands of persons compelled to take it;  and the very enormity of the wrong made the ground of an abandonment of every attempt to redress it !" —Ibid., sec. 1353.

"But the history of paper money, without any adequate funds pledged to redeem it, and resting merely on pledge of the national faith has been in all ages and in all nations the same.  It has constantly become more and more depreciated;  and, in some instances, has ceased from this cause to have any circulation whatsoever, whether issued by the irresistible edict of a despot or by the more alluring older of a republican Congress.  There is an abundance of illustrative facts scattered over the history of those of the American colonies who ventured upon the pernicious scheme of raising money to supply the public wants during their subjection to the British crown, and in the several States, from the Declaration of Independence down to the present time." —Ibid., 1355.

I will read another extract from Judge Story, to show the state of affairs in this country and the state of political parties in the country immediately before the adoption of the United States Constitution:

"In this state of things the embarrassments of the country in its financial concerns, the general pecuniary distress among the people from the exhausting operations of the war, the total prostration of commerce, and the languishing unthriftiness of agriculture, gave new impulses to the already marked political divisions in the legislative councils.  Efforts were made on one side to relieve the pressure of the public calamities by a resort to the issue of paper money, to tender laws, and installment and other laws, having for their object the postponement of the payment of private debts, and a diminution of the public taxes.  On the other side, public as well as private creditors became alarmed from the increased dangers to property, and the increased facility of perpetrating frauds to the destruction of all private faith and credit.  And they insisted strenuously upon the establishment of a Government, and system of laws, which should preserve the public faith, and redeem the country from that ruin which always follows upon the violation of the principles of justice, and the moral obligation of contracts.  'At length,' we are told, 'two great parties were formed in every State which were distinctly marked, and which pursued distinct objects with systematic arrangement.  The one struggled with unabated zeal for the exact observance of public and private engagements.  The distresses of individuals were, they thought, to be alleviated by industry and frugality, and not by a relaxation of the laws, or by a sacrifice of the rights of others.  They were consequently uniform friends of a regular administration of justice, and of a vigorous coarse of taxation, which would enable the State to comply with its engagements.  By a natural association of ideas, they were also, with very few exceptions, in favor of enlarging the powers of the Federal Government, and of enabling it to protect the dignity and character of the nation abroad, and its interests at home.  The other party marked out for itself a more indulgent course.  They were uniformly in favor of relaxing the administration of justice, of affording facilities for the payment of debts, or of suspending their collection, and of remitting taxes'." —Ibid., 486.

There were the two great parties of the nation;  and out of that condition of things grew the form of the United States Constitution, which was then calculated and supposed to be not only well-intended but actually to provide for putting an entire end to all these delusions about a temporizing policy.  This was the view with which the Constitution was formed.  Now, it is proposed to try the old experiment again.  These notes are to be put in circulation at a discount, as everybody knows;  and the very form of the bill concedes it.  The bill not only provides for the issuing of notes, but provides that they shall be a tender in payment of debts.  If they are to be at par, and are to be kept at par, what occasion is there for the tender clause ?  It is utterly useless.  It goes upon the ground, and it includes the implication that they are not to be at par.  The bill, as it came from the House of Representatives, in order to give currency to these notes, provided that men should have a right, when they had a quantity of them, to fund them in Government bonds, having twenty years to run, with interest payable in what ?  In these very notes that they had put in.  It was saying to them, "if you will only take these notes, you may fund them in a bond, and take your pay in the notes again."  What a financial juggle is that !  That is the form in which it came to us from the other House;  but an amendment, reported by our committee and adopted by the Senate, provides that the interest, at least, shall be payable in money.  When I use that term, some gentlemen may say that it includes these notes, because we declare that these notes are money;  and they think that that declaration makes them money.  We know that of old there was a set of men in the world called alchemists, one of whose projects was, to discover what they called the philosopher's stone, which would transmute everything into gold;  but I believe they never went so far as to suppose that they could make gold out of anything but the baser metals.  We propose to make it out of paper, without a particle of metal in the composition.

No, Mr. President;  this is aiding and assisting men who happen to owe debts to pay those debts at par with a depreciated paper, at the cost and expense of the creditor.  That is it, disguise it as much as you please.  I call that impairing the obligation of contracts.  I have seen a tittle syllabus of an argument, made in the House of Delegates of Virginia, by Mr. Madison, when they, before the adoption of the Constitution, were about to make a tender law.  It is in his forthcoming papers, about to be published.  He said it was the same thing as it would be in case a man had agreed to make deeds for a certain quantity of land;  a law should then be made that he should deed but half of it.  He said it was as clearly a destruction of the obligation of a contract as that would be.  So with this.

You do this in the very bill with which you go before the community, and ask for credit upon your plighted public, faith.  What is the public faith ?  On what does it rest ?  It is that the Government appreciates the inviolability of contracts.  In this very bill you make provision to enable a man, so far as the amount of the discount goes, to discharge his debt for a less sum than he agreed to pay.  You put it in this very bill, and you do not oblige any one else in the community to receive the paper at all.  Everybody else can do as he pleases about taking it for his property.  You make it a law binding only on choses in action, and no way reaching choses in possession.  Therefore you make it for that purpose;  a purpose which, upon the face of it, is to destroy the obligation of contracts, and therefore you do not hold contracts inviolable.  Is it possible that you can expect to obtain the confidence of the community and the world with such language and such provisions in the very same bill in which you appeal for credit ?  If it must come to this, I should hope there would be the little decency of keeping it out of this bill, and putting it in a separate measure.

From the extracts which I have read, I deduce the conclusion, first, that such paper, put out without provision for its payment, and undertaken to be coerced upon the community by tender clauses, always, and in all countries, here and elsewhere, not only deteriorates, but I think I may safely say that such paper hut out upon such terms and conditions in the history of the world never was paid, and I shall hereafter endeavor to show why in all probability it never will be.  My honest opinion is that the Constitution never intended to invest Congress with any such power.  On this point I will suggest, first, that if this power was given to Congress it would be perfectly and utterly useless, except for purposes of injustice.  Suppose there were no debts;  suppose all debts were obliterated, and we were now about to raise money to start in our important national concerns, wanting credit, and we had said, in order to get along, that Congress shall have power to make the paper issued by the United States a tender;  and suppose Congress directed an issue of paper and declared that it should be a tender: I ask whether anybody on earth could by that act be compelled to take it ?  Would not that tender clause be brutum fulmen ?  I am going now on the supposition that nobody now has anything due to him.  Then, of course, there is nobody to whom you can make a tender.  As to taking it for his property, a man is under no obligation to do that.  Then a power of that kind given to Congress in the Constitution would be simply and utterly useless;  it could have no practical effect.  Then, suppose we have debts: what does it do ?  Would you invest Congress with the power in such a case ?  It is good for nothing under heaven but to enable people to cheat;  Congress gets nothing by it.  You put out your paper;  it deteriorates;  it is at a discount.  A man sells his property for whatever price he pleases;  and if he knows that he is to get this paper in payment, he will put on an artificial price to make up for its deterioration;  and then he can tender the paper to his creditor in payment of a debt at its par value, though that creditor may thereby lose twenty-five per cent, of his debt.  The obligation of the contract is impaired just that amount by the act of the Government.  If that is the only practical use that can be made of a power in Congress to make paper a tender, it seems to me that it does not commend itself very much, nor do I think anybody will be very ready to believe that the convention framed the Constitution on purpose to give this useless power just to enable some men to cheat their creditors.  It would require a great deal more than silence to convince me that the convention actually intended to vest such a power as that in Congress for such an unjust purpose;  and it can be used for no other purpose.  The creditor loses his twenty-five per cent., and that does not go into the Treasury.

Again: before examining what the convention actually did, I will present one other consideration.  It will be seen from the extracts I have read, that, when they were about to form the Constitution, the people had suffered, had been demoralized mainly by two things: first, by the Continental money which Congress had issued;  and second, by paper which the States had issued after the war, and made a tender themselves, and made relief laws about.  These were the two things from which the people had suffered.  We all know that they wrote in the Constitution that no State should emit bills of credit, make anything but gold or silver coin a tend or in payment of debts, or impair the obligation of contracts.  Now, I would ask were the evils, the troubles, and the disasters of the people allowing to the States doing that ?  Had not the people suffered to the amount of $300,000,000 by paper issued by the old Congress of the Confederation ?  Yes.  Then what they were complaining of was not merely that the States corrupted their people by such laws.

I would ask any man looking at it in that clear light of history, to say whether he believes that a convention would get together in that state of things and make a deliberate provision, in order to guard against the consequences and corruptions which had followed such a course of conduct, that no State should thus debauch its people, but that Congress might debauch the whole nation whenever it pleased.  Can any man in his senses believe that anything of that kind was or could have been intended ?  Yet that is the talk now, and that is the power which, it is said, is forbidden to the States and may be exercised by Congress.

I come next to inquire what the convention I actually did.  I know that the extract which I am now about to read has been read over and over again, but still it has not been read by me, and for the symmetry and consistency of my argument I must be indulged in reading it.  The various provisions of the Constitution had been agreed to, and it had passed through the hands of the committee of revision, when the debate which I shall read took place.  In that draft, among the powers of Congress was the power to levy and collect taxes, duties, imposts, and excises, as it now is, and the further provision that Congress should have power to borrow money on the credit of the United States, and to emit bills of credit.  Having already ingrafted in the Constitution that the States should have no power to emit bills of credit, or to make anything but gold and silver a tender, or to impair the obligation of contracts, they went on to talk further about this provision that was in the draft before them:

"Mr. Gouverneur Morris moved to strike out 'and emit bills on the credit of the United States.'  If the United States had credit, such bills would be unnecessary;  if they had not, unjust and useless.

"Mr. Butler seconds the motion.

"Mr. Madison.  Will it not be sufficient to prohibit the making them a tender ?  This will remove the temptation to emit them with unjust views;  and promissory notes, in that shape, may in some emergencies be best.

"Mr. Gouverneur Morris.  Striking out the words will leave room for notes of a responsible minister, which will do all the good without the mischief.  The moneyed interest will oppose the plan of Government if paper emissions be not prohibited.

"Mr. Gorham was for striking out without inserting any prohibition.  If the words stand, they may suggest and lead to the measure.

"Mr. Mason had doubts on the subject.  Congress, he thought, would not have the power unless it were expressed.  Though he had a mortal hatred to paper money, yet, as he could not foresee all emergencies, he was unwilling to tie the hands of the Legislature.  He observed that the late war could not have been carried on had such a prohibition existed.

"Mr. Gorham.  The power, as far as it will be necessary or safe, is involved in that of borrowing.  That is to say, Congress having the power to borrow money, could give a certificate on evidence of the debt.

"Mr. Mercer was a friend to paper money, though in the present state and temper of America, he should neither propose nor approve of such a measure.  He was consequently opposed to a prohibition of it altogether.  It will slump suspicion on the Government to deny it a discretion upon this point.  It was impolitic, also, to excite the opposition of all those who were friends to paper money.  The people of property would be sure to be on the side of the plan, and it was impolitic to purchase their further attachment with the loss of the opposite class of citizens.

"Mr. Ellsworth thought this a favorable moment to shut and bar the door against paper money."

Its issue by the States was already provided against.

"The mischiefs of the various experiments which had been made were now fresh in the public mind and had excited the disgust of all the respectable part of America.  By withholding the power from the new Government, more friends of influence would be gained to it than by almost anything else.  Paper money can in no case be necessary.  Give the Government credit, and other resources will offer.  The power may do harm, never good.

"Mr. Randolph, notwithstanding his antipathy to paper money, could not agree to strike out the words, as he could not foresee all the occasions that might arise.

"Mr. WILSON.  It will have a most salutary influence on the credit of the United States;  to remove the possibility of paper money.  This expedient can never succeed while its mischiefs are remembered;  and, as long as it can be resorted to, it will be a bar to other resources."

I suppose that now the mischiefs are forgotten, and hence the attempt is made.

"Mr. Butler remarked that paper was a legal tender in no country in Europe.  He was urgent for disarming the Government of such a power.

"Mr. Mason was still adverse to tying the hands of the legislature altogether.  If there was no example in Europe, as just remarked, it might be observed, on the other side, that there was none in which the Government was restrained on this head.

"Mr. Read thought the words, if not struck out, would be as alarming as the mark of the beast in Revelation.

"Mr. Langdon had rather reject the whole plan, than retain the three words 'and emit bills'." —Elliot's Debates, vol. 5, p.p. 434, 435.

The vote was then taken, and it stood nine States for striking out and two against.  The great evil to be guarded against was emitting bills of credit and making them a legal tender.  To the vote on this question, Mr. Madison appends the following note:

"The vote in the affirmative by Virginia was occasioned by the acquiescence of Mr. Madison, who became satisfied that striking out the words would not disable the Government from the use of public notes, as far as they could be safe and proper;  and would only cut off the pretext for a paper currency, and particularly for making the bills a tender either for public or private debts."

Such, sir, is my view of the Constitution;  and I would further say that all the men to whom we have been accustomed to look, especially those of that period, always entertained the opinion that the Government of the United States could have nothing else a tender but coin.  The Constitution gives Congress power "to coin money" and "regulate the value thereof."  That is the constitutional currency;  and such was the practical construction of the Constitution from that day;  the construction of the patriarchs who made it, and understood the evils that were endured, and the remedies that were intended to be applied.  While they lived, there never was such a thing thought of as attempting to make evidences of the debt of the United States a legal tender, let their form be what they might.  The time bas come, however, when perhaps the memory of those things has passed passed away, and now it is attempted.

Mr. President, where is the power to do this derived from ?  It is said to be an incidental power, falling within that provision of the Constitution giving Congress authority to make all the laws which are necessary and proper to carry into effect the granted powers.  When gentlemen desire to get some latitude and elbow room for action, I know that they are generally exceedingly desirous to get a thing into that category.  If you can only get the power in to that incidental clause, you have plenty of elasticity.  It has so much India-rubber substance in it that you can take just as much elbow room as you want.  There is, therefore, in those who desire to magnify their office and their power, a very strong inclination to resort to this clause.

It is said to be incidental to a great variety of powers.  It is said that Congress has power to raise and support armies, ergo the incidental power to raise money in this form or any other form for the purpose of supporting armies !  So it is said that the Government has power to pay its debts, ergo we may raise money in this way !  The most general pack-horse for this incidental power, however, has been the authority given to Congress by the Constitution to regulate commerce, and this power is said to be derived from that.  I have heard some considerable latitude of argument about that.  At one time I thought Mr. Webster went quite far enough in the discussion of 1836 on that subject, when he said that inasmuch as Congress had power to coin money and fix its value, and money was the instrument of commerce, they might therefore regulate bank notes and see to it that the people were always furnished with such a species of currency as was in their estimation equal to money.  That was pretty latitudinarian;  but yet he always insisted that Congress had no power to make anything a tender but gold and silver coin, the value of which was fixed and prescribed by Congress.  But, sir, what is the power of Congress to regulate commerce ?  The Constitution says that Congress may "regulate commerce with foreign nations, and among the several States, and with the Indian tribes."  Here is a bill authorizing the issue of Treasury notes and making them a tender in payment of debts.  I want to know what that has to do with trade between the States ?  To my mind that, if it is doing anything, is regulating trade between me and my neighbor in the same State, not regulating trade, between separate States, and not regulating foreign trade.  It is merely regulating a shaving trade between debtor and creditor.  The bill proposes to make these notes a tender to pass as the representative of value in trade between man and man.  Under this clause of the Constitution, it might be proposed to adopt some measure for a commercial agency or commercial functionary;  but if you make paper a tender, as I have before remarked, nobody will be bound to take it in exchange for property.  Then it cannot be a measure of regulating commerce.  It will not regulate it at all.

But, I have another idea in relation to all this business of incidental power.  What is this measure ?  A bill to raise money to enable the Treasury to get along.  There never can be such a thing as an incidental power in Congress to do a thing where there is an express grant of power for the purpose.  If the power is expressly granted, that power only is to be exercised within its own limitations.  You cannot abandon that express provision and hunt out for yourself some more convenient mode of getting latitudinarian authority by laying it under an incidental power.  This is a money measure, nothing more, nothing less.  Congress is expressly clothed by the Constitution with the power to raise money.  The Constitution provides that "Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States;"  and that Congress shall have power "to borrow money on the credit of the United States."  There is an express power granted to Congress to raise money;  and it is further to be observed that the Constitution not only gives the power to raise it, but regulates the manner of raising it.  There are two modes;  one is the levying of taxes in some form under the various generic heads used in the clause, "taxes, duties, imposts, and excises," and the other is the borrowing of money.  Most certainly the making of these notes a tender upon debts is not levying taxes, duties, imposts or excises.  Then what is it, for it is a money measure ?  It is in substance borrowing money.  I have always supposed that wherever there was a borrower, there was a lender, and I have supposed that both acted voluntarily, one in lending and the other in borrowing, and some inducement is always held out to the lender.  If I can put my own price on my property that I have to sell, and put an artificial price on it when I know that I am going to be paid in this paper, and I then take the paper voluntarily, you may say, perhaps, that that is loaning my money.  But suppose I am authorized by the bill and I do take the $500 of paper which I get for my property, and go over to my colleague, Mr. Foot, to whom I owe money, and tender him the $500 of paper that cost me $300, and pay off his $500 debt with it, I should like to ask some man who is intimately acquainted with the idioms of our language if Mr. FOOT has loaned his money ?  Do you call that borrowing money of Mr. Foot ?  There cannot be a greater perversion of terms.

The Senator from Maine spoke of forced loans, and I perfectly agree with him, only I wish to be more distinct and positive about it than be was.  This operation is not anything like as honest or honorable as a forced loan.  If I go for the Government to my colleague and say to him "I understand you have $1,000 deposited in bank; the Government are in absolute want, and we will have it;  you understand we must have it;  we shall take it, and here is our certificate for the amount;  if we are ever able, we will pay you."  There is some kind of decency in that kind of robbery.  But suppose, instead of that, the Government furnishes me with some of this paper money;  I get it at a discount, and I go and pay it over to Mr. FOOT upon my debt due to him, and cheat him out of $300;  nobody on the face of the earth is ever bound to pay him anything.  I should like to know which is the more decent, which is the more just, which is the more honest of these two ?  If you can make a thing worse than absolute, direct robbery, I think you have got it about bad enough in this tender clause.

Now, Mr. President, leaving the subject of the constitutionality of this proceeding, about which I have said all that I desire, I wish to call attention to a few other features of the case.  The bill concedes that the Government of the United States has not credit enough to make these notes go.  It starts off with the concession that we are in such a state of bankruptcy that we cannot, get the notes to go on our credit, but we must get an indorser.  That is a common thing in trade, and I do, not know that indorsing is a profitable business, but it is here proposed that we shall have an indorser for our paper, and what is the indorsement ?  This is to be a tender on all debts, and we say to everybody, "take it, and if you do not owe anything to anybody, you can find somebody that does owe something."  That is to make them a currency, not upon the Government's promise to pay the debt, but upon the tender clause.  That looks to me very much like the young lawyer's definition of a prima facie case.  He said that it was a case which was good in front, but bad in the rear. [Laughter.]  That is pretty much the condition of this currency;  it is to be good in front, but tremendously bad in the rear. [Renewed laughter.]  What is the language of it ?  "Why, here sir, is this note;  I want you to take it and get along with it;  but if do not get the pay of us, you see by the back it is tender for debts, and so you may get the pay of those who do not owe the debt, but hold a debt on which you can apply it at par."  That is the English of it.  I have sometime in my life seen a book about the way of putting things.  This is the way of putting things in the English language, without any financial thimble-rigging about it;  but this concession of a want of credit at the very start of your bill, an acknowledgment of bankruptcy to begin with, is not, in my mind, the way to make your paper go.

I have already said that here and abroad, in the history of the world, such paper not only always depreciates, but generally, and I think I may safely say always, fails altogether, and is never paid.  It is now proposed to issue these notes to the amount of $150,000,000.  You mean to make some other provision for getting along by and by.  I have nothing now to say on the subject of the projected bank system.  I may speak of that when see it, when I read it, and understand its merits.  I have nothing to say about it now.  I have to proceed with the measure before us, the one in hand, or, as the lawyers say, at bar.  Suppose you issue these $150,000,000 of tenderable notes, and they go into circulation at a discount, what will be the consequence ?  I understand that the circulation of all the banks of the United States is now about $136,000,000, and we have about $200,000,000 of gold in the country, though there is very little of it, comparatively, in circulation.  Of course these notes of ours will fill up the avenues of circulation, and they must displace some other circulating medium.  Of course, as has always been the case, this depreciated circulation will displace that which is of more value.  You never can have two articles of circulation;  two money mediums that are not convertible into each other, which can be in circulation at the same time.  The poorer crowds out the more valuable, and always will do so.  These $150,000,000 of notes will fill up the channels of circulation, and then what becomes of the bank notes that are redeemable ?  They are immediately crowded out, and the country will have no circulation but those notes.

Then suppose we carry out the proposed measure of taxation, which we have passed a resolution pledging our faith to do, raising $150,000,000 this year.  That will just cover this issue of notes.  We send out our tax gatherers and we take in these $150,000,000 of notes for the taxes.  Then the whole community is left as bare as a picked goose;  the people will not have a dollar of any kind;  they will have no circulation at all.  That thing will take place but once.  I feel myself authorized, from the lessons of history as well as of common sense, to say that it never will be suffered by the people a second time.  It cannot be endured.  Even if you reissued these notes, the people would never consent to repeat that experiment.  I know that members of Congress here do not mean to have the thing go on in that way.  They mean to have the notes received for taxes and paid out until they are paid for good, and finally taken entirely out of circulation.  But, I tell you that if the Representatives now in Congress visit the people with an effect of that kind they will give place to men who will not.  Whenever you issue paper which obtains a circulation and depreciates and deteriorates, it crowds out all the better circulation, and any surplus of gold goes abroad.  You cannot send this circulation abroad, for it has no value there.  It has no intrinsic value whatever;  but it displaces all other circulation, and the effect of it is that it deteriorates decidedly, largely.  But what then ?  There is not enough of it for the people to do their business with.  They demand more;  and as it costs nothing to issue it, more is issued at the public demand.  Every time a new issue is made the paper depreciates;  and every time it depreciates it requires an addition to it in order to enable our people to get along with business.  That has been the history of it everywhere.  It was not only true here in relation to the continental money, but it was true in France in regard to their assignats, and at last, for the purpose of relieving themselves, they resorted to monarchy.  So it was with Austria;  so it always is.  That is the nature of the thing.

Mr. LATHAM.  The paper money of Austria stands eight to one.

Mr. Collamer.  I believe it circulates at eight to one at this time.  We have the lesson at home.  Why was not the continental money redeemed ?  For a plain reason.  It went down in five years to nothing.  Some people had taken it at twenty-five per cent., some at fifty, some at seventy-five, some had taken it at forty for one.  It had been received by the people at all possible scales and rates of depreciation.  When the question of redeeming it arose, it was at once said:  "we cannot make any equity among these people, for they have taken it at all sorts of prices;  and besides, any taxes that we might lay to take up these bills would be more unequal than it would be to let them die in the hands where they are."

That has been the history of it always, and always will be the world over.  I am afraid of repeating such an experiment.  I am free to acknowledge that I am alarmed at the lessons of history, in attempting to enter upon an experiment of this kind again in this country.  I look upon this as, in a great measure, nothing more nor less than the initiation of that same continental money.  I know it is not so intended, but such must be its necessary consequences.

Mr. Sumner.  Will the Senator, while he is on that point, allow me to mention a fact in reference to the continental money, that it was not a legal tender.

Mr. Collamer.  Yes, sir; it was.

Mr. Sumner.  I understand not.

Mr. Collamer.  This was the situation of it: the Continental Congress issued the money for the States to take up.  That Congress could make no laws;  but they passed a resolution calling on the States to make it a legal tender, and all the States did make it a legal tender.  I believe every State did it;  but I shall not be positive about Rhode Island.  That is the way it was.

Mr. Sumner.  I meant to say that it was not made so by Congress.

Mr. Collamer.  They could not do it; they had not the power to pass laws, but they recommended to the States, and the States passed laws making it a leader.  I read to-day the declaration of Congress that any man who refused to receive it at its full nominal value, equal to gold and silver, should be considered an enemy to the liberties of the United States.  He was put into coventry, put out of society;  but all did not serve;  it went down, tender or no tender, enemy or no enemy to the Government.

It has been asked, "why not let the Government issue its paper and furnish the circulating medium of the country, instead of having the banks do it ?"  It has been said that the banks issue their paper without paying any interest on it, and that the Government should have the same opportunity to furnish a currency.  To this I have but one simple answer to make.  I have merely to say to the Secretary of the Treasury, who uses this argument, "Sir, if you will redeem your notes on demand, as the banks do, you may issue them."  But there is no provision made for the redemption of these bills at all.  They are issued, in fact, payable on demand, but nobody pretends that they are to be paid according to their tenor.

---[As you very well know, you lived long enough, and through many suspension, always, ALWAYS, more bank-notes are issued then there are coins to redeem them.  Unlike bank-notes, treasury-notes are always receivable for payment due to the government, at face value]

In the next place, it seems to me that it is practicing a deception on the people.  Poor people receive this paper for their wages.  They go to the market to buy supplies for their families, and they find that what they used to get for one dollar costs two, and that a barrel of flour which used to cost them five dollars, costs them ten.  They soon understand the cause of it.  If a man goes to them, calculating and wanting, to plaster the thing over, he says to them, "Oh, these are war prices;  terrible high prices are the result of war," and he endeavors to hoodwink the people to make them believe that it is not the act of their Government.  This is a practical deception in which I am unwilling to have any participation.

I know it is said by some gentlemen that they do not care much if creditors should suffer.  Let me inquire who it is that will suffer under this feature of the bill.  Let me put a plain case, which must be well understood by all, at least in the northern portions of this country.  We have all over New England and New York and Pennsylvania and Ohio savings banks.  There were over forty millions of dollars in the savings banks of Massachusetts last October.  There are more than two hundred millions of dollars in the savings banks of the country to-day.  In the little village where I reside, in the recesses of the Green mountains, there is a savings bank that has almost two hundred thousand dollars on deposit.  To whom does this money belong ?  It is deposited thereby the operatives in factories, the little mechanics, the small farmers, the working girls in the factories.  Whatever they save is deposited in the savings bank for a rainy day.  The trustees who have charge of these banks, loan the money out on bond and mortgage, or any other security with which they are satisfied, to the business people of the country around them.  They are enabled, after paying the expenses, to realize and divide among the depositors about five per cent. per annum.  If you pass this law, all the people who owe these bonds and mortgages, all who have thus taken loans from the savings banks, can get this paper at a discount, or can get artificial prices for their property, which amounts to the same thing, and then they will go and pay off their debt to the trustees of the savings banks with this paper, ironically called money, and they must deliver it out to these poor depositors.  Who suffers ?  A hard hearted creditor ?  No, sir.  The laboring poor lose the savings of their little industry by this course of that little legislation.  Will these people when they take which they have put by for a rainy day, and go to market and give double prices for every thing with it, be satisfied with being told that all this is owing to high war prices ?  The fact is that it is produced by the action of their Government here in these Halls.

Mr. President, I have occupied more time than belongs to me, perhaps not if the whole session was reckoned, but more time than belongs to me in debate, on this question.  The results I have come to are obvious and apparent.  We have no constitutional power, we have no right to do this great evil, and therefore I will not do it so far as my voice can go.  "Is thy servant a dog, that he should do this thing," if he is convinced that it is unconstitutional ?

I have but little to say about the subject of patriotism.  I have not been in the habit of ventilating my patriotism much in this body.  I cannot say that I have any more of it than the good Christian man had of religion, who said he had no religion to brag of.  I do not know that I have any patriotism to brag of.  I have not stood here finding fault with the Administration of my Government, nor have I said anything calculated to weaken the credit of the Government, in New York or elsewhere, to lead the people to withdraw their confidence from their Administration and from their Government.  I am content to let the Executive do his duty, while I do mine.  As to my State, I can say no more, for I believe that no State in the Union submits to the sacrifices that she does to fill the ranks of her troops and keep them full of competent men.  She says to every soldier: "I will pay you seven dollars a month in addition to the United States pay, and will never expect anything from the Government in return for it."

Mr. Cowan.  We pay eight.

Mr. Collamer.  Well, sir, it is very much to your credit, but you are a great and growing State; we are not.  We have a further provision that if any of them leave a family at home, we will see to it that it is taken care of.

Mr. President, it is said that after all this must be done from necessity.  I have already remarked that I cannot subscribe to the doctrine that any necessity can justify a breach of the Constitution;  but I do not believe in that necessity.  The honorable Senator from Maine has well gone over that point.  The remarks made by the honorable Senator from Rhode Island the other day, [Mr. Simmons] and those made to-day by the honorable Senator from Maine [Mr. Fessenden] — men who have paid attention to the subject — must convince us all on that point.  Sir, there is some courage due from us.  We have our friends and neighbors risking their lives on the high places of the field in support of the Constitution.  You have not yet raised the first dollar for this war.  You hesitate and palter and are in great distress and talk about the country being financially ruined, when you have not raised a single dollar, and have not tried.  Is not the Government able ?  It has the exercise of eminent domain — the power to command all the property in the country in the form of taxation, or in any other Constitutional method.  You want our people in the field to proceed with courage and alacrity now and immediately;  but when we are asked to do something of moral courage we hesitate and palter and shrink and find fault with it.  Sir, this country is as able to sustain the armies it has in the field as it was to put them there.  But the Government, it is said, has no property.  No;  the Government must not only be able, because it has command of all the property in the country, but must be willing.  It does not do any good to tell a man whom you owe something, as a Government, that you are able to pay, when you are not willing to pay.  That is the trouble.  You have nothing to do but to exercise the powers you possess in commanding the resources that you can command, and you can have money and credit enough.  I think some little courage becomes us, too, in performing our duty.  I have no doubt that this country is able to sustain itself in this strife, pecuniarily as well as physically.  I, for one, desire to do that;  but I do not want to do it by saying that now, because the necessity requires money, I will go and steal it, or authorize anybody else to steal it.  I will not say to a man:  "Here is my note for so much, and if I do not pay it, you must steal the amount from the first man you come to, and give him this note in payment."  I will do nothing of that kind.  I have faith in the Government.  I no way despair of the success of this Government.  It cannot fail.  Its power, its resources, its numbers are such that it is not possible it should fail.  If we are not competent to exercise the proper moral courage to do our duties and come up to what is wanted, I hope we shall give place to men who are.

Mr. Clark.  I move that the Senate now adjourn.

Mr. Fessenden.  I hope not.  I hope we shall have a vote on this bill.

Mr. Clark.  I withdraw the motion if the Senator designs to go any further.

The Vice President.  The question is on the amendment reported by the committee.

Mr. Sherman.  I ask that the amendment be read.  We may as well act on the amendments;  there are a great number of them.

The Secretary read the first amendment of the Finance Committee, to strike out of the third, fourth, and fifth lines of the first section the words:

To meet the necessities of the Treasury of tile United States, and to provide a currency receivable for the public dues.

The amendment was agreed to.

The next amendment was to strike out in the ninth line of the first section the words "at Washington or New York," after the words "Treasury of the United States;"  so as to make the clause read:

One hundred and fifty millions of dollars 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, not less than five dollars.

The amendment was agreed to.

The next amendment was to strike out the following clause in the eighteenth, nineteenth, twentieth, twenty-first, twenty-second, and twenty-third lines of the first section:

And such notes herein authorized shall be receivable in payment of all taxes, duties, imposts, excises, debts, and demands of every kind due to the United States, and for all salaries, debts, and demands owing by the United States to individuals, corporations, and associations with the United States.

And in lieu of it to insert:

And such notes herein authorized shall be receivable in payment of all public dues and demands of every description, and of all claims and demands against the United States of every kind whatsoever, except for interest upon bonds and notes, which shall be paid in coin.

Mr. Sherman.  I desire to submit an amendment, by inserting the words "and the notes authorized by the act of July 17, 1861;"  so as to make it read:

Such notes herein authorized and the notes authorized by the act of July 17, 1861, &c.

Mr. Collamer.  I desire to give notice now that, at the proper time, I shall move to strike out that part of the bill to which I have make objection in my remarks.

The Vice President.  The usual practice is to vote on the amendments reported by the committee.

Mr. Sumner.  I should like to have the amendment of the Senator from Ohio stated again.

Mr. Sherman.  I will state my amendment and the context, as I do not desire to make any observations on the merits of the bill until after it is amended, because on that my vote will depend.  The present bill authorizes an issue of $150,000,000 of Treasury notes, and requires the Secretary of the Treasury to redeem all outstanding Treasury notes by a part of the new issue.  I see no occasion for that.  I see no occasion for lifting the outstanding notes, and issuing new notes in their place.  No good will result from it.  If you place the old notes and the new on the same footing, they might as well remain out as not;  and the only effect of redeeming the old ones and issuing now ones in their place would be to put the Government to an expense of about two hundred and fifty thousand dollars for printing, &c.  The cost of printing Treasury notes, according to the letter of the Secretary of the Treasury, read the other day, has been about three hundred thousand dollars.  There is no object in lifting these notes.  At one time in the Committee on Finance it was proposed to make a distinction between the notes, to allow the old ones to be receivable in payment of the public dues;  but that having been waived, there is no occasion for lifting the old notes and issuing others in their place.

Mr. Fessenden.  I suggest to the Senator that he would have to change the whole frame of the section.

Mr. Sherman.  I propose to do that after the amendments of the committee are disposed of.

Mr. Fessenden.  The language of the section, in several provisions, looks to the redemption of the outstanding notes.

Mr. Sherman.  But I understood, according to the ruling of the Chair, that we could not act on any proposed amendments to the main part of the bill until we had disposed of the amendments reported by the Committee on Finance.  I therefore moved this amendment to the amendment of the Committee on Finance, intending, after their amendments were acted on, to move the necessary amendments to the original section, which I supposed would be the proper course.

Mr. Fessenden.  It would not cost so much as the Senator supposes, because it is only printing an additional $50,000,000 of the notes after the plate has been made, and the printing of $100,000,000 has taken place.  It does not say that there shall be an original plate and original printing for these $50,000,000.  You have got to print $100,000,000 anyhow;  and this is adding another $50,000,000.  The object is to make all the notes of the same denomination and same character;  and instead of having two classes of notes out, to have only one class.  This was proposed in committee, and the committee thought it better to retain it as it was in the original bill.

Mr. Grimes.  What will be the additional expense ?

Mr. Fessenden.  That I cannot tell.  I asked the Secretary in the committee room, and he said he was unable to answer distinctly.  We have not ascertained since;  it cannot, however, be a very large sum.

Mr. Sherman.  My amendment will save the expense of printing $50,000,000.

Mr. Fessenden.  What do you suppose that will be ?

Mr. Sherman.  A pretty large sum for paper, &c.  There has been already disbursed, for engraving and printing and paper for Treasury notes, under the act of July last, $137,809, and there are outstanding claims of over two hundred and twenty-three thousand dollar.  The Secretary informs us that the whole appropriation of $300,000 will be required.  How much of it is for printing and paper, and how much for original plates, I cannot say.

Mr. Fessenden.  In reference to that, there were four descriptions of securities to be printed.  There were the demand notes in the first place;  then the seven and three tenths notes;  then the three and sixty-five hundredths notes;  and also bonds.

Mr. Sherman.  It will be perceived that these notes are only proposed to be issued in lieu of the $50,000,000 demand notes.  It does not affect the others at all.

Mr. Fessenden.  Of course;  but all that this involves is the printing of the additional fifty millions in place of those that will be retired.  It  does not involve a new plate, and the idea was to have uniformity in the notes.

The amendment to the amendment was agreed to.

The Vice President.  The question recurs on agreeing to the amendment as amended.

Mr. Sumner.  Before the question is put on agreeing to the amendment as amended, I wish to suggest a mere verbal amendment.  This amendment it seems to me is not strictly a pact of the proviso, and yet it purports here to be a part of it, being included in the sentence beginning at "provided further."  It seems to me that the proviso properly ends with the word "dollars" on the eighteenth line, and that the next proposition which is now introduced as an amendment should stand by itself, and not form any part of the proviso, but begin with a capital letter at "And."  "And such notes herein authorized," &c.

I merely make the suggestion.  It has occurred to me on perusing the bill that this was not strictly and grammatically a part of the proviso.  If the chairman of the committee will give his attention to it and see whether it is proper or not, I shall, of course, follow his ideas.

Mr. Fessenden.  The amendment follows the original bill in that respect.

The amendment, as amended, was agreed to.

The next amendment was in the thirtieth line of the first section, to insert the words "except interest as aforesaid;"  so as to make the clause read:

And shall also be lawful money and a legal tender in payment of all debts, public and private, within the United States, except interest as aforesaid.

The amendment was agreed to.

The next amendment was to strike out the word "at the Treasury or sub-Treasuries of the United States," after the word "semi-annually," in the fortieth line of the first section;  so as to make the clause read:

And any holders of said United States notes depositing 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 shall 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 twenty years from the date thereof.

The amendment was agreed to.

The next amendment was to strike out the following proviso in the first section:

Provided, That the Secretary of the Treasury shall, upon presentation of said certificates of deposit, issue to the holder thereof, at his option, and instead of the bonds already described, 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 seven per cent. per annum, payable semi-annually, and redeemable at the pleasure of the United States, after five years from the date thereof.

The amendment was agreed to.

The next amendment was to strike out the words, "or in seven per centum bonds at five years," in the following clause, at the end of the first section of the bill:

There shall be printed on the back of the United States notes, which may be issued under the provisions of this act, the following words:  "The within note is a legal tender in payment of all debts, public and private, and is exchangeable for bonds of the United states bearing six per cent. interest, at twenty years, or in seven per cent. bonds at five years."

The amendment was agreed to.

Thle next amendment was in the thirteenth line of the second section to insert the words, "at the market value thereof," and to strike out "lawful money," and insert " the coin," so as to make the clause read:

And the Secretary of the Treasury may dispose of such bonds at any time at the market value thereof, for the coin of the United States.

Mr. Howe.  I have very serious objections to that amendment;  and I cannot very well state my objections to the amendment without stating my views upon the whole bill.  In one view of this whole measure the amendment is very proper;  in the view I take it is very objectionable.  I do not know whether it is the pleasure of the Senate to go on with the debate to-night.

Mr. Grimes.  Does the Senator desire to speak at length on this subject ?

Mr. Howe.  Yes, sir.

Mr. Grimes.  Then I suggest that we have an executive session.

Mr. Fessenden.  Mr. President, I gave notice yesterday that I should move to take up this bill to-day at one o'clock, and that I should desire the Senate, if possible, to go through with it to day.  The Treasury is just in this condition: it is enabled to get through this week by virtue of the bill which we passed the other day authorizing the Secretary to issue $10,000,000 additional in Treasury notes.  Now, sir, we must pass this bill in the course of this week through the two Houses.  If it is to lag along in the Senate we shall not be able to do it.  To-day is Wednesday, and if the bill is to go over and should pass to morrow, it must be sent back to the House.  The House may or may not concur in our amendments;  debate may arise upon them there, and we see the difficulty in which we shall be placed.  It is not an unusual case in the history of the Senate, when a bill is very pressing, that gentlemen have been compelled to stay here after the usual dinner hour.  I think we ought to do it to-day, and go on with the bill.

Mr. Grimes.  Several Senators want to speak upon it.

Mr. Fessenden.  Very well;  there is plenty of time before us until midnight or to morrow morning.  I think we had better stay and go on with the bill.

Mr. Clark.  We have no quorum.

Mr. Fessenden.  If gentlemen choose to go away and leave no quorum, they must be responsible;  that is all.  The responsibility will be with the individuals, and not with the Senate.

---[:—) senators left the building !? in the middle of the debating and voting of this bill !?]

Mr. Howe.  I certainly do not wish the Senate to adjourn for my accommodation, or to postpone this discussion an hour for my convenience.  I should have preferred a little more time to arrange what I would say upon this subject in view of the discussion which has already been had.  I commenced to consider this matter and to write upon it at a time when the country was here protesting against the issue of any such paper as this bill provides for.  I thought upon it, and read upon it, and wrote upon it until I convinced myself most thoroughly that something like the measure imbodied in this bill was imperiously demanded by the country;  but what I wrote then is not exactly pertinent to the debate which has been going on in the Senate.  Still I will, as well as I can, give to the Senate my views upon the measure as it stands here.

Mr. Howe then proceeded to make some remarks, [His remarks will be published in the Appendix.]

The amendment was agreed to.

The next amendment was to insert, as a new section, after section three:

Sec. 4.  And be it further enacted, That the Secretary of the Treasury may receive from any person or persons, or any corporation, United States notes on deposit for not less than thirty days, in sums of not less than $500, with any of the Assistant Treasurers or designated depositaries of the United States authorized by the Secretary of the Treasury to receive them, who shall issue therefor certificates of deposit, made in such form as the Secretary of the Treasury shall prescribe, and said certificates of deposit shall bear interest at the rate of five per cent. per annum;  and any amount of United States notes so deposited may be withdrawn from deposit at any time on the return of said certificates:  Provided, That the interest on all such deposits shall cease and determine at the pleasure of the Secretary of the Treasury:  And provided further, That the aggregate of such deposits shall at no time exceed the amount of $25,000,000.

Mr. Fessenden.  I move to amend that amendment by inserting, after the word "time," in the twelfth line, the words "after ten days, notice;"  so as to read: "may be withdrawn from deposit at any time after ten days' notice."  In ease of an accumulation in the sub-Treasury, it might be inconvenient to call for the money without any notice whatever.  There ought to be some notice given, so that the Government may be readdy.

The amendment to the amendment was agreed to.

The Presiding Officer, (Mr. Clark) The question is on the amendment as amended.

Mr. Sherman.  I do not propose to say anything in regard to the amendment, nor to offer any strenuous opposition to it, nor even to call for a division;  but I wish simply to state in a very few words my objection to it.  This I believe is the only one of the amendments of the committee of which I do not approve;  and I think the effect of it will be to prevent the conversion of this paper into the bonds of the United States.  Under the present bill the notes may be converted at any time into six per cent. bonds, but under the provisions of this section, any one holding these notes may deposit them with the proper officer, and draw five per cent, interest upon them.  Now, I ask, what object would a man having this privilege have in converting them into six percent. bonds, running twenty years ?  Under the operations of this section, any banker, broker, or agent in the city of New York, holding some of these notes, may, by a simple deposit of them, draw interest, and at the same time he may issue his own notes in place of them.  In other words, the Government of the United States is at the will of any banker or broker, compelled to pay interest on these notes.  It is true the amount is limited to $25,000,000;  but I prophesy that that limitation will be removed.  It is true, the whole matter is placed by the amendment in the discretion of the Secretary of the Treasury, but that discretion, as a matter of course, will soon be exhausted.  I have no doubt that the great body of these notes will soon be deposited in your sub-Treasuries, and five per cent. interest paid upon them by the Government.  It seems to me that there ought to be no rest, no stop between these notes and the twenty years bonds of the United States.  I record that as my conviction, although I do not pretend now to call for a division on it, because the Secretary of the Treasury earnestly desires this, and I know all the brokers and bankers desire it.  I record it as my judgment, however, that this section will do more harm in preventing the funding of these notes than any other feature of the bill.

Mr. Doolittle.  For the purpose of encouraging the funding of these notes into the stocks of the Government, I would be willing to allow to any person who would fund them interest at the rate of five per cent. per annum up to the time of funding them.  I would provide that whoever should take the trouble to gather up these notes, might be permitted to draw interest at that rate for a time not exceeding one year, as an inducement to have them funded.  But to allow them to be deposited as notes, and then drawn out as notes, the depositors receiving five per cent. interest in the mean time, would in my judgment operate as the Senator from Ohio has predicted.

Mr. Sherman.  I will add another objection, for I do not intend to take up time or to create any discussion.  The effect of this will be to make your sub-Treasuries all banks of deposit.  Suppose now a person in the city of New York has $1,000 of these notes which he wants to transmit to San Francisco.  He will deposit the notes in the sub-Treasury, where they must be kept to redeem the certificate which is given to him;  he sends the certificate to San Francisco, and in the course of commercial arrangements it will come back to New York, thus performing a matter of favor to the depositors;  and yet, all this time no he is drawing interest from the Government.  The Government will have to pay five per cent. interest, while the whole arrangement is merely for the convenience of the depositor and no one else.  Under the circumstances, I may consent to allow this experiment to be made;  but I record it as my conviction that within a very short time we shall be called upon either to repeal this section, or to remove the limitation upon it.

There is another difficulty.  We shall not dare to repeal this section, because it is a stipulation in favor of the holders of these notes, and the public faith and the public credit will forbid us removing any advantages which we by law have given this kind of paper, and we may tie ourselves by this stipulation to an arrangement which will not be convenient to us, but will be injurious to the Government.

I merely submit these considerations to the Senate, as I have already submitted them to the Committee on Finance and to the Secretary of the Treasury.  I think they are weighty.

Mr. Fessenden.  If it is to go no further than to have the objections of the Senator submitted for his own benefit, and no question is to be made upon it, I have no reply to make.

Mr. ShermanThere is not a quorum here, and I do not want to break up the Senate.

Mr. Hale.  I confess that I should like to have the reasons given for this amendment.

Mr. Fessenden.  The reasons are simply these: the bankers say that these notes will necessarily accumulate at the banks, and that they may not have any use for them for a limited time;  and that during the time while they were thus accumulating, they would not be drawing interest.  For instance, if it was a dull time of business, and there was no forwarding of produce which would call for paper, the notes would be accumulating in large amounts.

Mr. Lane, of Indiana.  Would not the same thing happen, whatever kind of currency the banks used ?  Does it not happen with their own notes ?

Mr. Fessenden.  That is very likely, but this is an inducement for the banks to take them.  That is the amount of it.  This is particularly desired by the banks in Philadelphia, and it will be a very strong inducement for them to take this paper, if they are able to draw a certain amount of interest on it until the time when they shall want to use it themselves.  That was the argument in favor of the proposition;  and they stated that with that they would be willing to take the paper.  It struck me favorably.  The Secretary of the Treasury, on examination, was impressed in the same way by it;  but he said that, after all, there might be some danger about it, and it should be limited to a certain amount —$25,000,000— which he thought would be enough;  and, more than that, he should retain a control of it in his own hands, so that he might put an end to it at any time when he found that it worked badly.  That does away with the idea of any pledge being given, because we notify all these people that the Secretary of the Treasury will allow it just as long as he finds it profitable, and no longer.  That is the position of it.  It is limited to $25,000,000, and is put within the control of the Secretary of the Treasury, and if it has the effect that I speak of, it gives an additional currency to the notes.  It may have, unquestionably, some effect to prevent the funding;  but if gentlemen expect the funding to take place in the present state of the money market in six per cent. bonds having twenty years to run, when men can go into the market and buy the Government bonds for eighty-five, it is an expectation that will be very likely to be disappointed.

Another argument — it is an argument in favor of the proposition, and I so used it to-day — is that it will allow the sub-Treasuries to be used as places of deposit.  It is an argument by which the banks themselves are controlled.  They live by deposits.  The banks of your great cities are not banks of large circulation.  Their money is made on deposits.  We want to induce them to take these notes on deposit;  and if we provide a place where, if they do not take them on deposit, they can be deposited by individuals, it is a strong pressure brought to bear upon the banks to give the notes a currency by taking them and passing them themselves.  Therefore, as it is desired, as it is strictly limited, as it meets the views of the Secretary of the Treasury, and is calculated to accomplish good, and give a force to these notes, which certainly they will want in order to have currency in the market, I think the section a highly important one, and I hope it will not be stricken out;  and such was the opinion of the committee.

Mr. Hale.  I am not going to occupy time, but it seems to me that if the legal tender clause is retained, this is giving these notes too much advantage.  If the legal tender clause is stricken out, then there might be a propriety in inserting a provision of this sort.  As the Committee on Finance and the Secretary of the Treasury seem to insist upon it, I will not make a noise about it;  but I think five per cent. is altogether too high.  I move to strike out five and insert four.  That will be plenty, if they are a legal tender.

Mr. Fessenden.  They proposed six, and Mr. Chase put it at five.

Mr. Doolittle.  I confess that, after hearing from the honorable Senator from Maine, I am not satisfied to allow these great bankers to gather up these notes, and by simply depositing them to draw five per cent., when, if they convert them into a bond, they only get six per cent.  What is the inducement to the moneyed men of the country to put them into bonds ?  One per cent. only;  and your bond runs then for twenty years, where keep the notes on deposit they have five per cent., and the money is loaned on call, so that they can call for it any day to go into a new speculation.  There will not be a dollar of these notes funded in the bonds of the Government, in my judgment, under the operation of this section, certainly not the $25,000,000 authorized to be deposited.  I would be willing to allow five per cent. on these notes to all who would fund them in the stocks of the Government from the date of their issue up to the time of funding.

Mr. King.  I think this a very bad feature of the bill.  If these notes are to be made a legal tender, they will be more valuable to the banks than even their own specie.  They will hold them, and will be getting five per cent. on them by depositing them in the sub-Treasury, and they will themselves pay out nothing but such notes.  All the funds which they have on hand will be retained, and these notes will draw very near the same amount of interest as the bonds, and whenever they shall be called upon for the redemption of their bills, they will go and get these notes and interest, and pay the notes out to the public with out paying interest.  My object is to express my own opinion, for I am not disposed to make a division or disturb the Senate.  My opinion is against this system — against the tender clause;  and to express my opinion, I move to reduce the rate of interest to one per cent.

Mr. Fessenden.  You might as well strike it out.

Mr. King.  I would rather strike it out, but I make this motion because I have no disposition to disturb the Senate by calls for divisions, and for the yeas and nays.

Mr. Sherman.  I suggest whether it would not be better to call for the vote in the Senate when the bill shall have been reported from the Committee of the Whole.

Mr. King.  I will make my motion now, to amend the amendment by striking out five, and inserting one per cent. as the rate of interest to be allowed.

The amendment to the amendment was rejected.

The Presiding Officer put the question on the amendment of the Committee on Finance as amended, and declared that it was not agreed to.

Mr. Fessenden.  I call for the yeas and nays, ["Oh no."]  Gentlemen are disposed to let it go now.  I shall renew the amendment in the Senate without asking for a division on it now.

The next amendment of the committee was to insert:

Sec. 5. And be it further enacted, That all duties on imported goods, the proceeds of tile sale of the public lands, and the proceeds of all property seized and sold under the laws of the United States as the property of rebels, shall be set apart as a special fund, and shall be applied as follows:  First.  To the payment in coin of the interest of the debt of the United States.  Second.  To the purchase or payment of one per cent. of the entire debt of the United States, to be made within each fiscal year after the 1st day of July, 1862, and to be set apart as a sinking fund, the interest of which shall be applied to the purchase or payment of the public debt as the Secretary of the Treasury shall from time to time direct.  Third.  The residue thereof to be paid into the Treasury of the United States.

Mr. Doolittle.  I desire, myself, to move such an amendment as shall require the duties on imported goods to be paid in coin. ["Oh, no."]

The Presiding Officer.  Will the Senator indicate his amendment ?

Mr. Foot, and others, (to Mr. Doolittle.) Try it in the Senate.

Mr. Doolittle.  I do not care where it is tried, whether here or in the Senate.  I am serious about it.  I shall withhold my amendment till the bill is reported to the Senate.

Mr. Fessenden.  I move to amend the amendment by striking out in the sixth line the words "of the debt," which is rather too broad an expression, and to insert "on the bonds and notes," so as to read "payment in coin of the interest on the bonds and notes of the United States."  That compares with another portion of the bill.

The amendment to the amendment was agreed to.

Mr. Fessenden.  In line eleven of the amendment, I move to strike out "and to," and to insert "which is," and to insert the word "and" after the word "fund," and after the word "shall" to insert "in like manner," so as to make it read:

Which is to be set apart as a sinking fund, and the interest of which shall in like manner be applied to the purchase or payment of the public debt as the Secretary of the Treasury shall from time to time direct.

The amendment to the amendment was agreed to.

Mr. Harris.  I desire to see upon the face of this bill ample provision made for the redemption of the debt created by it.  This section devotes three funds to that purpose: the duties on imports, the proceeds of the sales of the public lands, and the proceeds of confiscated property.  These may not be sufficient.  I propose to add a fourth clause to this section, in these words:

The faith of the United States is hereby irrevocably pledged to raise from time to time by taxation such amounts as shall be sufficient, after applying the moneys to be derived from the sources mentioned in this section, to pay the interest and provide for the sinking fund as aforesaid, and also to redeem the balance of the principal of said debt, if any may exist, at the expiration of twenty years.

Mr. Fessenden.  The objection I have to that is, that it is entirely unnecessary.  I have objected always to all that sort of legislation.  It is merely saying in words what we actually say in all the bills we pass.  We of course pledge, the faith of the Government to redeem our promises, and I think that it always detracts from such a bill to say, "we mean to do as we promise, and we promise you that we will do what we promise to do."

Mr. Harris.  You do not here promise to raise the money by taxation.

Mr. Fessenden.  We promise to raise it, no matter how.  It may not be so convenient to raise it all by taxation, looking forward to a period of twenty years.  For instance, if we accumulate a debt of $1,500,000,000 it is not presumed to be probable that at the end of twenty years we shall be able to pay the principal.

Mr. Harris.  I was only looking to a debt of $500,000,000.

Mr. Fessenden.  Then if you put such a provision on this bill, and do not put it on the other money bills, you make a distinction which will be unjust, and will discredit your future efforts.  The effect of all these things, which are more words, which amount to nothing by way of reality in legislation, is always in my judgment to weaken every effort which you make, and you may be burdening yourself with conditions which you cannot perform.  The faith of the Government is pledged by the passage of the bill.  When you borrow the money, you cannot make the pledge to pay it any stronger by obligating yourself to do it in a particular way, and that way may be a way you would not want to take when the time comes, for you may find a better one then.  I hope the amendment will not be adopted.

The amendment to the amendment was rejected.

The amendment as amended was agreed to.

Mr. Fessenden.  The remaining amendments of the committee in the succeeding sections of the bill are all merely verbal, and I think they may as well be read over before the vote is taken, and the question be put on them together.  However, for fear I may forget it, I will call attention to the fourth line of the fifth section, where I think there is an error.  The section reads "that if any person having the custody of any plate or plates from which any notes, bonds, coupons, or other securities in the fifth section of this act mentioned."  It cannot be the fifth section.  This section itself is the fifth section.  It must refer to the first section.  I move to strike out the words, "in the fifth section," so as to make the penalty apply to any misuse of the plates of any of the securities mentioned in the act.

The amendment was agreed to.

Mr. Fessenden.  The remaining printed amendments, as I said, are merely verbal;  and if they are to be rend, I think it best that the Secretary should read them all over, and then let the vote be taken on the whole of them.  They are all of the same character.

The Vice President.  The Secretary will read them, and the question will be taken on them all together, if there be no objection.

The amendments were agreed to.

They are to strike out the words within brackets, and insert those in italics, in the following sections:

Sec. [4.] 6.  And be it further enacted, That if any person or persons shall falsely make, forge, counterfeit, or alter or cause or procure to be falsely made forged, counterfeited or altered, or shall willingly aid or assist in falsely making, forging, counterfeiting or altering any note, bond, coupon, or other security issued under the authority of this act, or heretofore issued under acts to authorize the issue of Treasury notes or bonds;  or shall pass, utter, publish or sell, or attempt to pass, utter, publish or sell, or bring into the United States from any foreign place, with the intent to pass, utter, publish or sell, or shall have or keep in possession, or conceal, with intent to utter, publish or sell [as true,] any such false, forged, counterfeited, or altered note, bond, coupon, or other security, with intent to defraud any body, corporate or politic, or any other person or persons whatsoever, every person so offending shall be deemed guilty of felony, and shall, on conviction thereof, be punished by fine not exceeding $5,000, and by imprisonment and confinement to hard labor not exceeding 15 years, according to the aggravation of the offence.

Sec. [5.] 7.  And be it further enacted, That if any person, having the custody of any plate or plates, from which any [engraved part of any] notes, bonds, coupons, or other securities in the fifth section of this act mentioned, or any part thereof, shall have been [struck] printed, or which shall have been prepared for the purpose of [striking the engraved part of] printing any such notes, bonds, coupons, or other securities, or any part thereof, shall use such plate or plates, or knowingly permit the same to be used for the purpose of [striking any engraved part of] printing any notes, bonds, coupons, or other securities, or any part thereof, except such as shall be [struck] printed for the use of the United States, by order of the proper officer thereof;  or if any person shall engrave, or cause or procure to be engraved, or shall aid in engraving any plate or plates in the likeness or similitude of any plate or plates designed for the [striking of any engraved part] printing of such notes, bonds, coupons, or other securities, or any part thereof;  or shall vend or sell any such plate or plates, or shall bring into the United States, from any foreign place, any such plate or plates, with any other intent, or for any purpose, in either case, than that such plate or plates shall be used [in striking the engraved part] for printing of such notes, bonds, coupons, or other securities, or some part or parts thereof, for the use of the United States;  or shall have in his custody or possession any metallic plate, engraved after the similitude of any plate from which any such notes, bonds, coupons, or other securities, or any part or parts thereof, shall have been printed, with intent to use such plate or plates, or cause or suffer the same to be used, in forging or counterfeiting any such notes, bonds, coupons, or other securities, or any part or parts thereof, issued as aforesaid;  or shall have in his custody or possession, any blank note or notes, bond or bonds, coupon or coupons, or other security or securities, engraved and printed after the similitude of any notes, bonds, coupons, or other securities, issued as aforesaid, with intent to sell or otherwise use the same;  or if any person shall [strike] print, photograph, or in any other manner execute or cause to be [struck] printed, photographed, or in any manner executed, or shall aid in [striking] printing, photographing or executing any engraving, photograph or other print, or impression, in the likeness or similitude of [the engraved part of] any such notes, bonds, coupons, or other securities, or any part or parts thereof, except for the use of the United States and by order of the proper officer thereof, or shall vend or sell any such engraving, photograph, print, or other impression, except to the United States, or shall bring into the United States from any foreign place any such engraving, photograph, print, or other impression for the purpose of vending or selling the same, except by the direction of some proper officer of the United States ;  or shall have in his custody or possession any paper adapted to the making of such notes, bonds, coupons, or other securities, and similar to the paper upon which any such notes, bonds, coupons, or other securities shall have been used, with intent to use such paper, or cause or suffer the same to be used in forging or counterfeiting any of the notes, bonds, coupons, or other securities, issued a aforesaid, every such person so offending shall be deemed guilty of felony, and shall, on conviction thereof, be punished by fine not exceeding five thousand dollars, and by imprisonment and confinement to hard labor not exceeding fifteen years, according to the aggravation of the offence.

Mr. Sherman.  If the amendments of the committee are gone through with, I move, in order to conform the first section to the second amendment adopted, to strike out the words ''and fifty," in lines six and seven, so as to read, "$100,000,000;"  and to strike out the proviso from lines eleven to eighteen of the first section;  so that this bill will stand for $100,000,000.

The amendment was agreed to.

Mr. Fessenden.  In line forty-two of the first section, before the word "twenty," I move to insert the words "five years and payable;"  so as to read, "redeemable at the pleasure of the United States after five years, and payable twenty years from the date thereof."

Mr. Sherman.  That amendment will undoubtedly lead to discussion, and I would rather not proceed with it to-night;  but I desire to discuss it, if it is pressed.

Mr. Fessenden.  I shall press it.

Mr. Sherman.  The amendment is a very important one, and changes the whole character of the obligation, from a twenty years to a five years obligation.  It is a novel amendment.  I believe all the loans of the United States that are now outstanding are payable at the pleasure of the United States after a certain period.  There is no exception.  The Senator now proposes to pay these after five years, and at the end of twenty years certainly, fixing twenty years as the duration at which the Government must pay, and five years the time at which it may pay.  In my judgment, this will destroy, to a considerable extent, the value of these securities.  The value of securities intended for investment depends as much upon the duration of the time they run as upon the terms of the obligation.  A bond running twenty years is worth more in the markets of the world than a bond running five years.  Money is now worth more than six per cent.;  but as soon as this war is over, the bonds of the United States will probably be worth par.  A man now is not likely to purchase a bond running five years when he can do better with his money.  The value of money is now greater than that, and no one would have any object in buying a bond that runs for only five years.  The object of funding notes into bonds would be to get a long-time security.  There is at least a difference of eleven per cent. between a bond running five years and a bond running twenty years, and that my friend the chairman of the Committee on Finance well knew— that is to say, a seven per cent. bond at five years is not as good in the money market of the world as a six per cent. bond running twenty years.  That is shown by the quotations of your bonds.  If you make these six per cent. bonds running but five years, they will not be worth in the money markets of the world now, anything like as much as they would be if they ran twenty years.

What object does the Government of the United States now gain by issuing a five years bond ?  We know that in five years we cannot pay these bonds.  We cannot pay the principal of this debt in five years.  If we pay it in twenty years, it will be as much as we can do.  We impair the immediate value of these bonds by changing the time.  If we issue a five years bond, it is not worth, as I said before, by ten per cent. as much as a twenty years bond.  The House of Representatives in their bill proposed to issue either a five years bond or a twenty years bond, at the option of the creditor;  the five years bond was to be payable with seven per cent., and the twenty years bond with six per cent. interest, and they were about equivalent;  they were about of equal value.  I do not know what object the Senator from Maine has, except that at the end of five years, undoubtedly, it would be an important advantage for the United States to be able to redeem these bonds;  because at the end of five years, I have no doubt, bonds of the United States yet to run fifteen years will be worth a premium.  It is the object, probably, of the chairman of the Finance Committee to save that premium;  but in saving that premium, he loses a great deal now;  he cannot sell the bond for so much now;  and therefore it seems to me his amendment ought not to be adopted.

There as another reason.  In my judgment, we ought to have but one kind of securities;  and I know that is the opinion of the Secretary of the Treasury.  We ought to have but one kind of securities, like the consolidated debt of England, which is a three per cent. security.  It is true, they have some other classes of securities;  but the great body of the debt of England is the three per cent. consolidated debt, consols it is called.  It is better for this Government to have but one kind of security;  but one bond running twenty years, if you choose, or thirty years, or any time you name;  but it is better to have but one class of our securities in the markets of the world;  and therefore it is, guided by this argument, that we struck out of this bill the provision of a seven per cent. bond on the ground that it was unadvisable and improper to have more than one class of bonds.

It seems to me, if the amendment of the Senator from Maine is adopted, it will injure very much the value of these notes, and will prevent their conversion into bonds;  and certainly, if he will look at it, he will see that if he retains in this bill the five per cent. security payable on demand, no sensible broker will convert his money into the bonds of the United States.  If you give an intelligent, shrewd banker, who knows the value of money, the choice between a five per cent. security, payable on demand, and a six per cent. bond of the United States, running only five years, he will choose always the five per cent. security, because he can at any time go and get his money by surrendering the security, and use that money.  The only object that a banker or at capitalist, a person dealing in money, would have in converting these notes into the long bonds, would be that every sensible man knows very well that after the war is over these bonds will appreciate, and that he would have the benefit of that appreciation.  That would induce him to buy the long bonds, and might induce him to convert all his spare capital into these long bonds.  But if you adopt the amendment of the Senator from Maine, you at once take away that inducement.  You take away all object for him to convert his money into bonds.

I have thus stated — I know, imperfectly — the objection to this system.  We know very well that we cannot redeem the debt of the United States in five years;  and therefore it is idle to issue a class of bonds of this kind.  If we do it in twenty years, it is all we can expect;  and we ought to give the holder of these bonds whatever benefit there is, whatever addition there is to the value of the bonds, on account of the length of time for which they run.

Mr. Fessenden.  I think the mistake that was made by the Senator in his opposition to this and to the other amendment, and by other Senators, is in supposing that people are to be very anxious to convert these notes into bonds.  Why, sir, the great principle upon which the House acted was that there would be no such anxiety;  and as it is a doubtful question whether or not the legal tender clause will be retained, I have been very anxious to provide all the inducements possible for people to take the notes.  The section which was struck out by the Senate was, in my judgment, a very important inducement to that end.  I do not think it of very great consequence, although the banks will not be so friendly without it.  I have spoken of the position we should assume in regard to them, in case the legal tender clause should be retained by the Senate;  but if it should be struck out, I think the clause that has been struck out on motion of the Senator from Ohio, important, and our bill will be essentially weakened, and I should lose very much of my confidence in its force if that motion should be sustained when we come to take the vote in the Senate.  I only say this because the Senator has alluded to it.

Now, with reference to this particular amendment, the Senator has spoken of the views of the Secretary of the Treasury.  I move it at his particular request, and I have on my bill, in his hand writing, the alteration proposed.

Mr. Sherman.  I meant that he was in favor of having all our bonds made of the same kind.

Mr. Fessenden.  He is, as a general principle, undoubtedly in favor of that;  but with reference to this particular amendment he is very decidedly of opinion that it ought to be made.  I was of the same opinion myself.  I was overruled by the committee, and I now renew the proposition here.  It will be seen that if we are to run in debt $1,500,000,000, it has been demonstrated that, considering our capacity to pay, the valuation of our property and the different amount of interest paid by us from that laid in Great Britain, our debt will be substantially equal to the debt of Great Britain at the present time.  We undoubtedly shall gain very rapidly, and we may lessen the debt, and probably should;  but that will be the effect with regard to our condition at that period.  Hence it becomes us to avoid, just as far as we possibly can, saddling ourselves irrevocably, without any power whatever to lift the burden or to make it less, with this very heavy interest to last for a long period of years.  We can stand, the country can stand, and ought to stand — the necessity is obvious — for short periods a heavier rate of interest;  but when we come to accumulate so large a debt, and put it forward to a period of twenty years, it becomes a very serious consideration when you think how fast interest accumulates upon interest.  We all know that if this war should end in the course of one or two years, if we retain the Government — and I suppose no one doubts that — these bonds would rise very rapidly in the market and go far above par, and how far soever they might be, it would be out of our power to lessen the burden;  but if they do rise what is the consequence ?  At the end of five years, although we may not have the money, if money is to be borrowed at a much less rate of interest, we can then borrow the money and pay off the bonds.

The argument of the Senator from Ohio undoubtedly is entitled to much weight.  He says that it will lessen the value of the bonds in the market.  In an ordinary time it would.  If we were at peace and borrowing money, this provision would make them less valuable;  but at the present time the error is in considering that people are anxious to take these bonds.  They are not anxious for them, and they are not anxious to take them on long time;  they prefer the short time, as a general rule, and the shorter the time is the more likely they will be to prefer them.

Mr. Sherman.  Will my friend allow me to ask him then, why it is that Mr. Chase was not able to sell his seven and three tenths bonds at par, and yet was able to sell his six per cent. bonds, rendering them equivalent to seven percent. bonds, at par.

Mr. Fessenden.  The original $100,000,000 of seven and three tenths bonds were taken at par.

Mr. Sherman.  But they could not now.

Mr. Fessenden.  Neither could he sell his seven per cent. bonds at par now.  They are far below par.  They both stand at the same rate.  The difficulty he meets with is the accumulation of them in the market, and you know that when you accumulate more than the market needs, more than can be used, the result is a fall.  That is the occasion of the difficulty.  My judgment is, that we ought not in advance to saddle ourselves so that we cannot get rid of it, with this heavy interest on these very large sums of money.  I have no fear that it will affect the taking of the paper at all, and I think the precaution is a very wise one.

I would say further, that with reference to all these matters of detail merely, I am very much more inclined to trust the judgment of the Secretary of the Treasury than my own.  It is a matter that he has studied.  His position has obliged him to study the state of the market.  He is in possession of vastly more information than we are.  Where there is a mere matter of detail not affecting a vital principle, I am disposed in all cases, unless I see very clearly indeed, to submit my judgment to his with reference to these questions, and it was for that reason that I moved the amendment.

Mr. Chandler.  I am in favor of the amendment of the Senator from Maine for the reason that I believe we need not borrow money at long dates upon a high rate of interest.  Still, I object to the Senator's hypothesis that this war may last one or two years.  There has not been a day since the 1st day of November when we could not have closed the war in sixty days with our forces then in the field, and from this day forth we can close the war in sixty days by an advance of our armies;  and I believe that the time has now arrived when we will advance our armies, and when the war will be brought to a close within sixty days from this date.  I am therefore in favor of restricting the bonds, and giving the Secretary of the Treasury the right to redeem them within five years, and I would even make the time shorter than that and say "within three years."  The time has arrived when this rebellion is within our grasp.  The time has arrived when the order "forward" will close this rebellion.  The obstacles are small.  The objects are great.  We can remove the only obstacle that stands in our way, and we can close this rebellion before the 1st day of May next, and I believe, I believe solemnly, that we shall do it.  We have but one obstacle, and that obstacle is so small that we can remove it to-morrow if Congress, if the Senate, say so.  It is a very small obstacle, yet it has stood in our way for four months.

I hope that the amendment of the Senator from Maine will prevail;  and I would prefer to reduce the time which he has fixed from five years to three years.  I would not pay seven per cent., nor even six per cent., more than three years.  Our five per cent. bonds will be worth more than par in three years front this date.  I know that the money market is the touchstone of the national credit;  but I know, at the same time, that the United States five percents would be worth more than par to-day if the country and Congress knew our present position.  One obstacle stands in our way, and that is a very small one.

I hope the amendment will prevail, and that we shall reduce the time at least to five years.  I should prefer its reduction to three years.  This war is nearly ended.  A single order "forward" to-morrow, and we have the man to give the order in the Secretary of War, and the war is ended.

The amendment was agreed to.

Mr. FessendenI move to strike out all of the first section after the fifty-fifth line.  That is the provision in regard to what the notes shall have on their back.  I do not think it worthwhile to have any indorsement upon them.  I move to strike out these words:

There shall be printed on the back of the United States notes, which may be issued under the provisions of this act, the following words:  "The within note is a legal tender in payment of all debts, public and private, and is exchangeable for bonds of the United States bearing six per cent. interest, at twenty years."

The law fixes the character of the notes, and there is no necessity for printing these words on the back of them.

Mr. Trumbull.  But everybody who will read the notes will know what the law is.

Mr. Fessenden.  I think it is just as well to leave it without prescribing by law what shall be put on the back of the notes.  Let the Secretary put there what statement he chooses.  We do not want anything there, in my judgment.

Mr. Sherman.  I agree with the Senator in that.

Mr. Howard.  I rather object to striking out this clause.  It seems to me that it will be useful.  Certainly it will be a great convenience to persons who are the holders of these notes, and who are not perfectly acquainted with the voluminous statutes of the country.  It will serve as a brief and clear explanation of the nature and character of the security which they hold.  There will be, of course, thousands of persons who will look to this as their only source of information as to the character of the paper.  It strikes me that it will be a real convenience and a great utility to the public generally.  I hope the amendment will not prevail.

Mr. Fessenden.  The Senate will observe that, according to the amendment made on the motion of the Senator from Ohio, two kinds of paper are to be in circulation: notes with this indorsement and notes without it, and both having the same effect.  This will create confusion.  In an interview with the Secretary of the Treasury, this morning, he said that he thought it would be better to have no indorsement.

Mr. Howard.  I am very sorry that he gave such an opinion.

The amendment was agreed to.

Mr. Fessenden.  There is one other amendment that I propose.  At the end of the second section there is a provision that all stocks and bonds of the United States shall be exempt from taxation by any State or county.  That might leave them liable to taxation by cities or towns.  I suppose it is intended to keep them free from all taxation under State authority.  I move to amend by adding after the word "county," the words "city, town, or district."

The amendment was agreed to.

Mr. Fessenden.  I had drawn another amendment, a very important one, which is substantially what I know is to be offered by the Senator from Rhode Island, [Mr. Simmons] whom I do not see in his place, and I am sorry that he is not here.  It is after the word "thereof," in the forty-second line of the first section, to insert:

Provided, That the Secretary of the Treasury shall, upon presentation of such certificates of deposit, issue to the holder thereof, at his option, and instead of the bonds already described, an equal amount of bonds of the United States, bearing interest at the rate of seven per cent. per annum, payable semi-annually, and redeemable at the pleasure of the Government of the United States after two years from the date thereof, which said bonds shall be convertible at the pleasure of the holder at any time within the said term of two years into bonds payable in twenty years, as hereinbefore described.

That is to be instead of the proviso already struck out of the first section.

Mr. Trumbull.  That is substantially what was stricken out.

Mr. Fessenden.  No; that was a provision for five years bonds at seven per cent.

Mr. Trumbull.  Then this is the same except as to the time.

Mr. Fessenden.  The reason of my difficulty as to offering the amendment is that I had some conversation with the Senator from Rhode Island, who has left the Senate.  If the question can be taken to-night on the passage of the bill, I should prefer to go on with it, on my own responsibility;  but if not, and if that is obvious to Senators, I shall not urge it to-night.

Mr. ShermanThere is no quorum here, and we must have the yeas and nays on it.

Mr. Fessenden.  If it is evident that there is no quorum here I shall not offer it, as we cannot have the vote on the passage of the bill to-night in that state of things.

Mr. Sherman.  If you waive the motion to strike out the legal tender clause, there will be no difficulty about passing the bill.

Mr. Fessenden.  Judge Collamer gave notice that he would move to strike it out.

Mr. Sherman.  If the Senator from Maine will allow the bill to pass now with it in—

Mr. Fessenden.  I shall certainly renew his motion, he being absent, if we reach that question.

Mr. Sherman.  Then we cannot go on now.

Several Senators.  We may as well adjourn.

Mr. Wade.  It can be offered to-morrow, when the bill comes out of committee.

Mr. Fessenden.  It is obvious we cannot pass the bill to-night, because there are gentlemen here I know who are opposed to that clause, and the Senator from New York, [Mr. King] for one, would call for the yeas and nays on the passage of the bill with it in;  so that if it is reduced to a certainty that there is no chance of passing the bill on account of the want of a quorum, that must necessarily be the result.

Mr. Foot and others.  Let the bill be taken out of committee.

Mr. Fessenden.  I have no objection to the bill being taken out of committee.

Mr. King.  I desire to offer a substitute for the bill;  but I did not intend to offer it until the other amendments had been gone through with.  The Senator from Rhode Island [Mr. Simmons] intends to offer an amendment which he thinks very important, and the Senator from Vermont [Mr. Collamer] intends to move to strike out the legal tender clause of the bill, which is also a very important one.

Mr. Fessenden, (to Mr. King) I supposed you would call for the yeas and nays on the passage of the bill with the legal tender clause in.

Mr. King.  The motion to strike out the legal tender clause must be made before we take the bill out of committee.  I understand the Senator from Vermont, who spoke upon the subject to day, intends to make that motion;  and, after a conversation with him, I preferred that he should move it.  He supposed the vote would not be taken to-night: I regard that as the most important provision in the bill, and I desire to vote upon it.  I presume there is nobody who desires to delay action on the bill.  It is a matter which we should bring to a termination as soon as we can, in accordance with the sense of a majority of the Senate.  I will suggest to the Senator from Maine to let the bill go over, and let gentlemen offer their amendments in committee to-morrow;  and I do not think that course will delay the passage of the bill at all.  I am sure there is no disposition to delay it.

Mr. Fessenden.  It is not within my control.  It is perfectly within the control of the Senator from New York.  He can move to strike out the legal tender clause, and call for the yeas and nays upon it.

Mr. King.  After the conversation with the Senator from Vermont, I prefer not to make the motion in his absence.  I would prefer that the Senate adjourn or send for him.

Mr. Wade and others, (to Mr. King) Make the motion.

Mr. King.  I prefer to be guided by the advice of the Senator from Maine.

Mr. Fessenden.  I cannot consent to it.  I am responsible for the bill.

Mr. Grimes.  There is evidently a quorum here.  I hope we shall go on with the bill.

Mr. Pearce.  I move an adjournment.

Mr. Fessenden.  I ask for the yeas and nays.

The yeas and nays were ordered;  and being taken, resulted— yeas 3, nays 21;  as follows:

YEAS— Messrs. Henderson, Pearce, and Sherman —3.

NAYS — Messrs. Browning, Chandler, Clark, Doolittle, Fessenden, Foot, Grimes, Harlan, Harris, Howard, Howe, King, Lane of Indiana, McDougall, Morrill, Pomeroy, Powell, Ten Eyck, Trumbull, Wade, and Wilson of Massachusetts —21.

The Vice President.  The Senate refuses to adjourn;  but the vote discloses, at the same time, that there is not a quorum present;  no legislative business is, therefore, in order.

Mr. King.  I have no doubt now that the Senator from Maine will at least not object to a motion to adjourn, as we have not a quorum.  So far as I know, I am not aware of any further discussion to take place upon the bill.  All we have to do will be to vote to-morrow, and I move that the Senate adjourn.

The Vice President.  That motion is not in order.

Mr. Trumbull.  The Senator from New York [Mr. King] has made a speech since the other motion, and I think that ought to entitle us to consider this.

Mr. King.  We shall evidently have no quorum here to-night.

The Vice President.  There has been no act of the Senate subsequent to the last vote.

Mr. Doolittle.  I move to send for absentees.

Mr. King.  I renew the motion to adjourn.

The Vice President.  The motion is now in order.

The motion was agreed to;  and the Senate adjourned.