<meta name="generator" content="Yamaguchy Incorporated">
House of Representatives
Wednesday, February 19th, 1862.
H.R. 240, to issue legal tender Treasury notes

Treasury Note Bill


Mr. Stevens.  I move that the House resolve itself into the Committee of the Whole on the state of the Union on the special order, which is the Treasury note bill.

The motion was agreed to.

The House accordingly resolved itself into the Committee of the Whole on the state of the Union, (Mr. Mallory in the chair,) and proceeded to the consideration of the Senate amendments to 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.


Mr. Spaulding.  I desire especially to oppose the amendments of the Senate which require the interest on bonds and notes to be paid in coin semi-annually, and which authorizes the Secretary of the Treasury to sell six per cent. bonds at the market price for coin to pay the interest.

The Treasury note bill, as reported first from the Committee of Ways and Means as a necessary war measure, was simple and perspicuous in its terms, and easily understood.  It was so plain that everybody could understand that it authorized the issue of $150,000,000 of legal tender demand notes, to circulate as a national currency among the people in all parts of the United States, and that they might, at any time, be funded in six per cent. twenty years’ bonds.  The passage of this measure in this house was hailed with satisfaction by the great mass of people all over the country.  It received the hearty indorsement of such bodies as the Chambers of Commerce of New York, Cincinnati, St. Louis, Chicago, Buffalo, Milwaukee, and other places.  I have never known any measure receive a more hearty approval from the people.

Nearly every amendment to the bill since it was matured has rendered it more complex and difficult of execution.  I regret to say that some of the amendments of the Senate render the bill incongruous, and tend to defeat its great object, namely :  to prevent all forcing of the Government to sell its bonds in the market to the highest bidder for coin.  It might be very pleasant for the holders of the seven and three-tenths Treasury notes and six per cent. bonds, to receive their interest in coin semiannually, but very disastrous to the Government to be compelled to sell its bonds, at ruinous rates of discount, every six months to pay them gold and silver, while it would pay only Treasury notes to the soldier, sailor, and all other creditors of the Government.

I am opposed to all those amendments of the Senate which make unjust discriminations between the creditors of the Government.  A soldier or sailor who performs service in the army or navy is a creditor of the Government.  The man who sells food, clothing, and the material of war, for the use of the army and navy is a creditor of the Government.  The capitalist who holds your seven and three-tenths Treasury notes, or your six per cent. coupon bonds is a creditor of the Government.  All are creditors of the Government on an equal footing, and all are equally entitled to their pay in gold and silver.

I am opposed to all those amendments of the Senate which discriminate in favor of the holders of bonds and notes by compelling the Government to go into the streets every six months to sell bonds at the ‘market price,’ to purchase gold and silver in order to pay the interest ‘in coin’ to the capitalists who now hold United States stocks and Treasury notes heretofore issued, or that may hold bonds and notes hereafter to be issued ;  while all other persons in the United States (including the Army and Navy and all who supply them food and clothing,) are compelled to receive legal tender Treasury notes in payment of demands due them from the Government.

Why make this discrimination ?  Who asks to have one class of creditors placed on a better footing than another class ?  Do the people of New England, the Middle States, or the people of the West and Northwest, or anywhere else in the rural districts, ask to have any such discrimination made in their favor ?  Does the soldier, the farmer, the mechanic, or the merchant ask to have any such discrimination made in his favor ?  No, sir ;  no such unjust preference is asked for by this class of men.  They ask for the legal tender note bill pure and simple.  They ask for a national currency which shall be of equal value in all parts of the country.  They want a currency that shall pass from hand to hand among all the people in every State, county, city, town and village in the United States.  They want a currency secured by adequate taxation upon the whole property of the country, which will pay the soldier, the farmer, the mechanic, and the banker alike for all debt due.  They ask that the Government shall stand upon its own responsibility, its own rights, and exert its vast powers, preserve its own credit, and carry us safely through this gigantic rebellion, in the shortest time, and with the least possible sacrifice.  They intend to foot all the bills, and ultimately pay the whole amount, principal and interest, in gold and silver.

The legal tender note bill is a great measure of equality.  It proposes a currency for the people which is based upon the good faith of the people and all their taxable property.  All are obliged to receive and pass it as money, and all are obliged to submit to heavy taxation to provide for its ultimate redemption in gold or silver.  Every attempt on the part of any class of citizens to create distinctions and secure a legal preference, mars the simplicity and success of the whole plan.  The very discrimination proposed carries on its face notice to everybody that although the notes are declared to be ‘lawful money and a legal tender in payment of debts,’ yet that there is something of higher value, that must be sought after at a sacrifice to the Government, to pay a peculiar class of creditors to whom it owes money—a kind of absurdity and self-stultification which does not appear well on the face of the bill.  It is an unjust discrimination which does not appear well now, and will not look well in history.  You will, if the Senate’s amendment is adopted, depreciate, by your own acts, your own bonds and notes, and effectually destroy the symmetry and harmonious working of the whole plan.

I am in favor of having the Government pay in coin, if it can do so without too great a sacrifice ;  but I am unable to see any good reason for departing, in this case, from the usual practice of the Government in expressing the mode of paying the interest.  All bonds and Treasury notes heretofore issued are payable generally without specifying that either the principal or the interest shall be paid in coin, and yet the legal effect is the same.  I do not see why we should now, in the present embarrassed condition of the Government, give any preference to one creditor over another, or change the form of our bonds and Treasury notes by inserting the words ‘payable in coin.’  The capitalist who holds your bonds or seven and three-tenths Treasury notes is not entitled to any preference over the soldier or the man who furnishes supplies to your Army.  We should pay both in specie, if possible ;  but I am unwilling to tie up the hands of the Government by compelling it to pay ‘in coin,’ the interest on all the bonds and notes heretofore issued, or that may hereafter be issued.  The bonds and notes heretofore issued contain no such express provision ;  it is not ‘so nominated in the bond’;  and I am unwilling to have it inserted at this time, either as to those now outstanding or as to those that are hereafter to be issued.  Besides, if you commence in this way, by stipulating expressly to pay in coin on the bonds to be issued, it becomes a contract which cannot, without a breach of faith, be changed by a repeal of the law.  You unnecessarily commit the Government to a stipulation which may be very inconvenient, if not impossible, to fulfill, if the public debt runs up to $2,000,000,000, the interest upon which, at six per cent. per annum, would be $120,000,000 annually, requiring $60,000,000 of coin every six months to pay interest on your funded debt.  I think we should pause before committing ourselves to any such proposition, for no man here is wise enough to tell how long this war will continue, or how many complications with foreign nations will grow out of it, or how great will be the war debt.  By all means let us pay the interest in gold to those who desire it, if it is practicable to do so ;  but let us keep the power in the Government itself, and exercise it wisely for the best interest of the whole people.

The people in the country who hold seven and three-tenths Treasury notes are patriotic enough, while the war lasts, to receive their interest in any money that will pass currently at the banks and among the people.  Money with them is only valuable for its uses.  Legal tender Treasury notes can be used for all business purposes, without compelling the Government to sell its bonds at fifteen or twenty per cent. discount to procure coin when it is entirely unnecessary.

As I have already intimated, you compel the soldier, the farmer, and the mechanic to receive your Treasury notes in payment for services, supplies, and materials furnished;  then why not compel the capitalist to receive them in the same manner for what you owe him ?  Is one citizen owing allegiance to the Government any better than an other citizen ?  Are not the rights and duties of all on the same footing ?  Is the capitalist better entitled to have his interest paid in gold and silver on his accumulated capital than the poor man for his demand against the Government for services, supplies, and materials furnished for your Army and Navy ?

I consider all loyal men as equal, and all entitled to the same kind of pay.  One loyal man, in the eye of the law, ought to be considered just as good as any other loyal man.  Then, why make any discrimination ?  Why give one class of citizens a preference in payment over another ?  A discrimination of this kind will invite distrust.  It is like a debtor in failing circumstances giving a preference to one class of creditors over another.  It always operates unfavorably, and ought not to be countenanced.  Such preference never is favored by courts of justice, and is only enforced when legally necessary.  All preferences of this kind are odious, and in their practical workings operate unfavorably.  The pending amendment has a tendency to array one class of our people against another class.  It subjects the Government to the necessity of submitting to heavy discounts on the sale of its bonds.  It depreciates its own bonds and notes, and tends to embarrass the Government in all its financial operations.

---[Yet, in 1867 you vigorously opposed the idea that these exact same 5/20 bonds should be paid using these exact same Treasury notes !  And you left these paragraphs out of your book.]

At the extra session in July we passed two very important bills—one to borrow $250,000,000, for which bonds and notes were to be issued, and the other to call into the service five hundred thousand volunteers, and pay the soldiers thirteen dollars per month, and the officers a higher rate of fixed compensation.  Both bills were war measures, both were necessary, and action has been had under both.  Under the first bill the associated banks of New York, Boston and Philadelphia took the sum of $100,000,000 of seven and three-tenths three years Treasury notes at par, and $50,000,000 twenty years six per cent. bonds at a discount of ten and two thirds per cent. from their face—say net $44,061,230.97, being a loss of $5,338,769.03 on this transaction.  This is a higher rate of interest than our Government, with all its immense power and resources, ought to pay ;  but the loan has been made, and I only refer to it now for the purpose of showing what has been done under these two acts of Congress.

Under the army bill, five hundred thousand volunteers have been called into the service, and are now in the field.  Under both of these bills a debt has been created against the Government.  The associated banks of New York, Boston and Philadelphia are creditors of the Government to the extent of $150,000,000.  The five hundred thousand volunteer army are also creditors of the Government to a large amount.  We owe them both, and both are creditors under laws passed by us at the extra session.  Are not both classes of these creditors on the same footing ?  Are the bankers entitled to any preference over the volunteer army ?  Is the banker’s money any more sacred than the services of the soldier in battle, on guard, or in the tented field ?  I cannot see that the banker or the holder of Treasury notes is entitled to any preference over the soldier, under these two laws of Congress, and yet, if you concur in these hard-money amendments of the Senate, you will compel the soldier to take legal tender Treasury notes in payment for his thirteen dollars per month which you agreed to pay him, while you pay the banker his high rate of interest, semi-annually, in gold and silver coin.  Is this right ?  Will this be meting out just and equal laws to the loyal citizens of this Government ?  What will your army say to an arrangement of this kind ?  Sir, I can consent to no such discrimination, no such amendment, no such injustice.

We are fighting for our nationality, and the great fundamental principles of liberty and equality upon which our Government rests.  We must have the Mississippi from its sources to its mouth.  It cannot be cut in two;  and I am wholly unable to discover a dividing line between the great lakes and the Gulf of Mexico.  Our nationality and our present territorial jurisdiction, from the Atlantic to the Pacific, must be preserved.  We have been forced into this terrible war by uncontrollable ambition, and treason of the blackest kind.  It is costing us thousands of valuable lives, and untold millions.  We have accepted the issue presented by ambitious men and traitors.  We must go forward;  we cannot go back.  Success, regardless of the cost, will establish the strength and perpetuity of our Government;  defeat will be death.

It is to be hoped that this will be a short war.  It is very desirable that it should be pressed on with the utmost vigor, and be brought to a speedy and successful termination.  God grant that this may be the issue.  I have no expectation, however, that the authority of the United States Government will be respected and enforced in all the Southern States for many years.  I think the rebels are desperate and determined, and will never submit to the Constitution and laws until compelled to do so by armed force.  They may be beaten and compelled to fall back, but until Union governments are successfully established in all the Southern States the laws of the United States will not be respected, and can only be enforced by the army and navy in actual occupation of the rebellious States.  This will require a large and expensive army for many years, the total expenses of which cannot now be estimated.  It will require Federal troops in every rebellious State to collect your direct taxes and internal duties.  In any event, I look for a very large public debt that will accumulate with great rapidity:  $650,000,000 in five months from this time;  $1,200,000,000 by July 1, 1863;  and $1,800,000,000 by July 1, 1864.  The interest on this debt will severely tax the energies and resources of our people.  All needless expenditures must be cut off;  all extravagant rates of interest must be avoided.  We must enforce rigid economy and strict accountability on the part of all public officers.  It is our duty to guard the Treasury in every way consistent with the vigorous prosecution of the war.

Suppose the public debt to amount to the sum of $1,000,000,000 in one year from this time: six per cent. interest on this sum would require $60,000,000 in gold to be obtained annually-- $30,000,000 every six months to pay interest.  How is this gold to be obtained ?  You will not get it from taxes or from duties on imports, because these, by the bill, are payable in Treasury notes.  The only way then to get this gold will be by selling your bonds at the "market price" to procure it.  This is a large amount of coin to be procured on a forced sale of your bonds-- $30,000,000 every six months !  A sum greater than all the gold possessed by the New York banks at this time.  The fact that you create by your own bill this large demand for gold, will tend to greatly enhance the price.  Banks and brokers will hoard it for the express purpose of selling it every six months to the Government at a high rate.  Does any gentleman on this floor believe that with this large demand for gold, created by the invidious discrimination contained in the Senate amendment, that our bonds will not in a short time fall down to eighty and perhaps to seventy-five cents on the dollar.  Just in proportion as your public debt increases will the price of gold advance, because the amount of Government paper to be issued can only be limited by the expenses of the Government;  and any plan that may be adopted is liable to be broken down by its magnitude, rather than from any defect in the plan itself.

In every aspect in which you view this hard-money provision, its practical workings will be disastrous.  It would be all very well if the amount was small and applied to carrying on the Government on a peace footing, when you know what amount will be required ;  but in carrying on the Government at this time, when the magnitude of the expenditures are so overwhelming, all theories applicable to peace must give way to the inexorable necessities that are forced upon us in the prosecution of this war.  Look at your long line of offensive operations, extending from Kansas to this capital, and thence to Fortress Monroe, Hatteras, Beaufort, Key West, Pensacola, and Ship Island—a distance of more then four thousand miles.  This very long line of military operations cannot be maintained except at an enormous expense for transportation, supplies, and material of war.  Our trillion six hundred thousand dollars does not cover the daily expenditures.  Peace theories of finance must give way to what is practicable to be done in the present exigency.  The Government is at this moment in the situation of a merchant who has overtraded, who owes more than he has the present means of paying.  He may be compelled to stop payment in specie, when he has ample assets to cover all his liabilities.  A mere suspension of specie payments does not imply bankruptcy or insolvency.

Just so with the Government in her present peril.  We have no money, but we have vast resources in property, enterprise, energy, munitions, and material of war.  We are the richest nation in the world in proportion to age and population.  The country is full of the means of subsistence.  All the western granaries and warehouses are full of corn, wheat, pork, and beef, waiting for a market, some of which has lain there for over a year.  Every year our country grows more populous, every year it grows richer, and new fields are opened to the plow.  The earth is full of gold, silver, iron, copper, coal, and other minerals, which are worked by the most enterprising miners the world ever saw.  All these advantages are in the hands of a sagacious, inventive, and industrious people, who know how to obtain from these and other sources more wealth than any other race of men.  We should impose annually not less than $150,000,000 by direct taxes, excise, and internal duties upon this vast material wealth of the country.  The duties on imports, I trust, will be $50,000,000 more, making an aggregate of $200,000,000 annually, forming a substantial basis on which to rest the credit of the Government, and enable us to successfully prosecute the war notwithstanding the suspension of specie payments, and the overwhelming amount of the expenditures.

Our country and Government at all hazards must be preserved.  To accomplish this, our plan of finance must be simple and practical.  As has been shown, we have various descriptions of property in abundance.  We have not the money to meet the sudden demands that are thrown upon us.  Is it not better to pledge our honor, our lands, houses, personal estate, incomes, and wealth of all kinds to create this money, on the faith of the nation, than to run the risk of utter ruin to all interests for the sake of holding on to theories which may be excellent in time of peace, but which are wholly impracticable in the prosecution of this war.  How is it that England as able to carry so large a public debt ?  Because it makes all its people interested in her consols, and pays a uniform low rate of interest.  No discrimination between principal and interest is made, and all who hold the public debt of England are placed upon an equality.  Her public debt, amounting to over three thousand eight hundred and ninety-two millions of dollars, [3,892,000,000] is held mostly by her own people.  This enormous debt, incurred in her wars with the Emperor Napoleon and other Powers, has burdened past, present, and future generations.  These deadly conflicts, notwithstanding she suspended specie payments, left her developed in power and resources.  We are not to follow exactly the course which England has marked out, but we may not reject all her teachings.  European Powers are more or less inimical to our institutions, and we must shape our course accordingly.  If we maintain our free Government it is to be done by us alone, and without any aid from abroad.  Let us shape our finances at once to meet the necessities of our condition.

It is very clear that it the prosecution of this war to maintain this Union, the ways and means of carrying it on can only be limited by the actual expenditures.

We must, while the war lasts, incur all the debt necessary to crush out the rebellion, and maintain the authority of the United States Government over all the thirty-four States.  We cannot, therefore, now limit the amount of the debt to be incurred, nor can it be accurately estimated.  Notes and bonds must be issued in some form for all the debt incurred, excepting what we may realize annually from taxes, excises, and duties on imports.  In issuing these notes and bonds I think it will be much better for the Government, and for the people, to have one uniform system.  It would be better for all concerned to have a fixed policy, not to be changed, so that all business men may conform to it at once.  That policy should, in my judgment, be the issue of legal tender demand Treasury notes not bearing interest, to be paid out for what is necessary to support the army and navy, and fundable at any time in twenty years bonds, bearing interest at six per cent., payable semi-annually.  This is as high a rate of interest as the Government ought to pay, especially as our people are to be heavily burdened by taxation to pay, ultimately, the interest and principle in gold and silver of all this debt.  Let our policy be distinctly fixed and settled, and we shall hear no further importunities for higher rates of interest, or for any preference of one class of creditors over any other class equally meritorious.

I regret that my sense of duty compels me to differ so widely from the Senate.  I have great respect for that body, and would gladly yield to their views, if I did not regard it so fatal to the public interest.  So soon as our funded debt reaches $700,000,000, which will be in a very few months, I believe it will be impossible to procure the coin to pay the interest semi-annually without the most serious consequences to our credit.  The amount of discount on our bonds to procure specie would be very large.  In every view, the Senate amendment seems to me unnecessary, injurious, partial and unjust.  I trust the House will non-concur in the amendments.


Mr. Pomeroy obtained the floor.

Mr. Roscoe Conkling.  I ask my colleague to yield to me for a moment.

Mr. Pomeroy.  Certainly.

Mr. Roscoe Conkling.  I hope I may have the attention of the committee for a single moment while I suggest, (as I am permitted to do by the chairman of the Committee of Ways and Means,) to all those attaching particular importance to the three most substantial amendments of the Senate --the sixth, seventh, and nineteenth-- relating, as they all do, to the payment of interest in coin, which my colleague has just discussed -- to all those, I say, as well as to other members of the House, to suggest that there will be no objection made by that portion of the Committee of Ways and Means favoring the non-concurrence in those amendments, to going into the House and there having a square vote by yeas and nays upon those amendments, and upon any others which the Senate has made, and upon which the House desires a separate vote.

I think the suggestion may have a tendency to abbreviate the debate in the committee;  and if the chairman of the Ways and Means will be kind enough to state about when it will be agreeable to him to close the debate and have a vote, so that gentlemen may accommodate themselves to that intention, I will yield the floor.

Mr. Stevens.  Any arrangement which will be agreeable to the House will be satisfactory to me.  I believe it will be just as well, instead of having a vote in committee upon the several amendments, after gentlemen have discussed them a reasonable length of time, that the committee rise and report them all to the House, without any action in committee, and then take a vote in the House upon each amendment separately, whenever gentlemen desire it.  I certainly would consent to that with great pleasure, as it will facilitate the business very much.

The Chairman.  The Chair would say that such an arrangement can be made only by unanimous consent.  Otherwise a vote must be taken upon the amendments, one by one, in the committee.

[A message from the Senate, by Mr. Forney, their Secretary, here announced that the Senate had passed a bill (S. No. 130) in relation to the district judges of the United States;  also a bill (S. No. 153) for the better organization of the cavalry forces;  in which the concurrence of the House was requested.]


Mr. Pomeroy.[Theodore Medad Pomeroy (December 31, 1824 March 23, 1905) New York, (R);  studied law, admitted to the bar]  The action already had upon this bill has, so far as the sense of Congress is concerned, settled, if not the constitutionality and expediency of issuing to a limited amount Treasury notes made a legal tender in payment of debts, at least the existence of a necessity under which such constitutional power will be assumed and its exercise declared expedient.  I do not propose, therefore, to enter at all upon the discussion of those questions, nor would it be pertinent to the only amendment I propose to discuss, to wit, that providing for payment of interest on the national debt in coin.  They were fully discussed when the bill was first before the committee, to the neglect, as I then thought and now think, of the point presented by the pending amendment, upon which alone I desire to submit a few remarks.

The question is not now whether $150,000,000 of Treasury notes shall be issued and made a legal tender in payment of public and private indebtedness.  That proposition has been decided in the affirmative;  but if my faith in the necessity and expediency of such issue was stronger even than that of the able and distinguished Representative [Mr. Spaulding] who has originated this measure and carried it triumphantly over the Administration and through Congress, still, deeming this amendment, as proposed by the Senate and now under consideration, vital to the success of the scheme, and the only regulation by which financial explosion under it can be prevented, I could not, as an original proposition, and cannot now, without such amendment, support this bill.  My opinion may be unfounded and erroneous.  I hope it is, if this amendment is to fail.  I have no pride of opinion upon this matter, but I have convictions, clear, decided, and conscientious, which I cannot trample upon without violating my own sense of self-respect and of public duty.  The opposition which this amendment meets from the framers of the bill sufficiently demonstrates to us and to the country that it is not merely formal in its character, but is of primary importance and entitled to the highest consideration.  I shall be very brief, and will endeavor to be plain in my views respecting it.

It is conceded by the friends of the House bill that the policy of issuing Treasury notes under it with the characteristics of money is to be temporary, and that it is a divergence from the correct principles of political economy, to be justified only by necessity, and yet the primary and principal fault I find with it is, that instead of being a temporary measure, it really, by its failure to make adequate provision to raise money by loan, inaugurates and necessitates the perpetuation of a reliance upon a forced paper currency alone to meet the demands of the war, the amount of the issue of which, if sufficient for that purpose, must depreciate it to a mere nominal value, and result in ultimate repudiation.  It may be expedient as a remedy for an existing political disorder, but it is death if relied upon for permanent existence.

To illustrate: suppose you strike from the House bill the provision for funding these notes and also the limitation upon the amount of the issue, in that condition;  if there is a person here who would vote for it, it must be upon some ground utterly antagonistic to any position as yet assumed by any member in support of the bill.  Yet, to my mind, the practical effect of the bill as passed by the House was just that.  Not a dollar could be funded under it during the existence of the war, and the same necessity which now requires the amount of inconvertible paper now authorized, will require, sixty days hence, a similar issue, and then an other, each one requiring a larger nominal amount to represent the same intrinsic value.  Each issue would only sharpen the appetite for more.

There are but three ways in which the means for this war can be procured: first, by taxation;  second, by loans;  third, by a legislative currency, if I may so distinguish it, though it is in effect a forced loan, the Government merely neutralizing the hardship of compelling its creditors to take it, by compelling their creditors to take it from them, though for the purposes of this argument I concede that to the extent authorized by this bill it is expedient to force such loan.

As to the first mode, to wit, taxation, it is evident that the means cannot be in that way anticipated, nor when realized can they be in sufficient amount to meet the current expenses of the Government.  Nobody expects more from taxation than the means for the ultimate liquidation of the debts.  For present purposes, therefore, taxation is but an auxiliary to the other two modes.

My own opinion has been that the debt from the war, and all accruing within the period preceding the close of the next fiscal year, would amount to $1,000,000,000.  The estimates of the Committee of Ways and Means, I believe, place it still higher than that;  but I will assume, upon the strength of the brilliant military operations of the past few weeks, that in case the Army keeps on fighting, and Congress moderates its propensity to talking, that the $150,000,000 Treasury notes now to be authorized, with the $500,000,000 anticipated by the bill, to be raised upon bonds, together with the $150,000,000 already funded by the Secretary of the Treasury, through his arrangement with the banks, will cover the expenses of the war, with the aid of other ordinary and extraordinary income.

Then the whole secret of our financial success lies simply in borrowing that $500,000,000, or rather in funding the floating indebtedness constantly represented by the Treasury notes, so that their issue need never exceed that authorized by this bill, and which is conceded to be the extreme limit consistent with safety, to private interests and public credit.  Nobody has proposed to rely upon this currency beyond that amount;  but, on the contrary, the idea of any further similar issue has been expressly repudiated by every supporter of this bill.

The necessity for funding the debt to the extent of the $500,000,000 is then coexistent and coextensive with the necessity of issuing the $150,000,000 in notes.  Without the accomplishment of the former, the latter is a mere anodyne, which lulls, but does not cure.

When previously in committee upon this bill it was determined to raise this amount by authorizing the Secretary of the Treasury to issue $500,000,000 of bonds running twenty years with interest at six per cent., payable semi-annually in coin or Treasury notes.  If this rate of interest is clearly insufficient to attract investments, then the whole provision for funding becomes clearly inoperative.  Upon this point we have the benefit of practical experience.  The credit of the Government has been recently brought to the test of practical experiment in a much more favorable time than the present, when the banks were plethoric with gold beyond all former experience and promptly meeting all engagements in coin, when suspension had not been thought of, and the patriotism of the people was fully aroused in the enlistment of those armies that are to-day more than meeting our proudest anticipations;  and yet, under those most favorable auspices, the rate of interest, as established, was seven and three-tenths per cent. for three year coupon bonds, and seven per cent. for those running twenty years, each payable semi-annually in coin, and with the added advantage to the banks, who were the purchasers, of holding the proceeds on deposit without interest until drawn out in the usual course of expenditure ;  and $50,000,000 of the long bonds, authorized at the extra session, have not been, and could not be, sold even at the rate above named.

It was in recognition of the utter inadequacy of the rate proposed that, just previous to the passage of the bill by the House, the amendment proposed by the gentleman from Massachusetts [Mr. Rice] was allowed to be incorporated, authorizing the issue of five year bonds, at seven per cent. interest, which by ordinary commercial calculations would be deemed equivalent to a three year loan at seven and three tenths per cent., but without the saving clause that it should be payable in coin.

One difficulty with the plan of that part of the Committee of Ways and Means, who reported this bill, was the attempt to fund the debt into bonds running for a long term of years, instead of for a period which should cover merely the term of our present difficulties; and the rate of interest fixed was a compromise neither adapted to time of peace or war, the rate being too high for the former and too low foe the latter.

The science of Government is one purely experimental.  A code of laws designed for men as they ought to be, would be a terrible code applied to men as they are.  We experience no difficulty in recognizing in legislation the natural laws of matter, and we should have no more in recognizing the natural laws of mind, association, trade, commerce and business.

If we are to borrow money, we must recognize these laws ;  and I may well call them higher laws, for while legislation cannot change them, they are continually changing legislation.  One of these is that the precious metals are the representative of value.  The gold dollar of our currency is the unit of value.  Conversion into this representative is the only criterion of value.  Those who invest money or loan will make it a condition precedent that the interest shall be in money, and not in promises to pay money.  Legislation has not changed, and cannot change, paper currency into coin or its equivalent, except through convertibility.  Without this requisite it is a mere naked promise.  We cannot make Treasury notes money until we can change by act of Congress a promise into a performance, and Almighty power alone call do that.  We propose to compel the Government and citizens to receive this paper as money in payment for debt ;  but we do not propose to attempt to compel anybody to take it by way of loan, nor to compel anybody to loan it, not even to Government.  Then people must be induced to loan it ;  and how can you expect them to do it at rates less favorable than you have already established in more prosperous times, to wit:  a rate of seven and three-tenths per cent., payable in coin.

Now, this paper is or is not equal to gold.  My colleague may take whichever horn of the dilemma he pleases.  If it is not, it is folly to suppose that people are voluntarily going to place themselves in a position where, for a term of years, they compel themselves to receive it as interest, and assume all the risk of depreciation.  If it is equal, then there can be no unjust discrimination in paying interest ill gold.  I prefer to look at the question just as it is, and admit the fact that it is not and cannot be made equal, because it lacks the essential quality of convertibility.  To the extent to which it is not equal, we work a hardship in forcing it into circulation ;  but we have already decided that a necessity exists which compels us to accept this hardship rather than to inflict upon the people or submit the Government to a greater.  And we believe farther, that the evils thus produced will, in the aggregate, if not in each individual case, be more than compensated by the relief they will afford from financial stringency, and as a medium of exchanges, especially with the Government itself.

While, however, we exercise the power to compel the people to receive it as gold in payment of debts, we, unfortunately, have not the power to compel then to loan it back to us on time, and receive more of the same kind as interest.  There is just the practical point where our new political physiology fails.  As ‘Artemus Ward’ would say, ‘ its forte is not in borrowing, but in paying,’ and we have got to make it work both ways.  It is all nonsense to say that while we pay out Treasury notes from necessity in some cases, we will forbear to borrow money, without which our credit must go down entirely, because it will necessitate the payment of interest in coin, and thus conflict with our theory ;  that because we pay ourselves and our soldiers and everybody else with whom we are under contract, in paper, we will stop paying even them rather than to continue the ability to do so by borrowing money and stipulating in advance to pay the interest in a different commodity.  The inconsistency consists in not considering that we must first get the principal before we put on airs about the manner in which we will pay the interest, in which transaction the lender as well as the borrower is usually consulted.  The Committee of Ways and Means are talking about paying, whereas the problem is how to borrow.

Nor does the agreement to pay interest in coin tend in the least to depreciate the value of the notes.  The very necessity for this agreement arises from the fact of the pre-existing differences in value between coin and paper.  It does not create the inequality.  It recognizes an existing fact, and applying legislation practically to that fact, enhances the value of the paper, by allowing its conversion into a permanent loan, the principal and interest of which are to be paid in money ;  and instead of depreciating the paper, checks depreciation by reason of this very convertibility, and presents the only possible mode, that I can conceive of, by which serious depreciation can be prevented and the funding process kept in operation.  In fact, this very difference between the intrinsic values of notes and coin, thus recognized and embodied in our legislation, tends to produce the very object desired—the funding of the public debt.  If capital will seek treasury notes at par, for the purpose of investment in bonds, with the interest payable in notes, how much more readily will it seek these same notes, at a slight depreciation, for the purpose of such investment, with the interest to be paid in gold ;  and the very demand for this purpose, while it prevents serious depreciation, is induced by the very depreciation inherent in the character of the paper which it continually checks.  It produces a self-adjusting funding access, based upon things as they exist in the commercial world, by which the disparity between the valve of the two currencies ceases to be an element of discord, and becomes, during the temporary period in which the funding process is going on, an element of good.  In this manner, and through the happy instrumentality which may in this way be exerted by these notes, imperceptibly, and through the ordinary channels of financial operations, the whole process of funding the public debt will be accomplished.

As the oceans never fill, though all the rivers of the world are pouring their unceasing floods in upon them, the surplus waters being imperceptibly lifted by the natural law of evaporation, and born back by those invisible currents of air whose coming and going are unseen and unheard, to fertilize the earth in dew and rain, and then return through their appointed channels to be again obedient to the same great law of divine utility;  so this paper currency distributed to the relief of the people throughout the country, and flowing to the great centers of trade and commerce through channels as definite and fixed and known as the natural boundaries of your rivers, will be by the process of continuous conversion returned to the Federal Treasury, and may be sent back again to fertilize industry, and flow back obedient to the law of human economy which started it on its mission.  Without this conversion, the oceans of trade become full and overflow with it, and the barren country behind parches to a desert.  This is the necessity to which my colleague [Mr. Spaulding] refuses to submit.

When the principle of the vacuum first began to excite attention, and it was found that water rose in it beyond the outside level, philosophers, in their usually happy and lucid style, accounted for the phenomenon upon the principle that "nature abhorred a vacuum;"  and when it was subsequently ascertained that water stopped rising at the height of thirty-two feet, and notwithstanding nature's horror would rise no higher, philosophy again came to the rescue, and satisfactorily accounted for this new phenomenon upon the amended principle that "nature only abhorred a vacuum to the height of thirty-two feet."  Much the same philosophy appears to pervade the committee in their efforts to fund the public debt.  The necessity is admitted to the extent of $500,000,000, and the further necessity of agreeing to pay interest to accomplish it;  but it is nevertheless insisted that such necessity exhausts itself with the promise of the payment of six per cent. interest in Treasury notes.  Now, while necessity is a god at whose altars I pay no willing homage, yet, if we are to accept and act upon its decrees, we must accept and act upon them as binding and inexorable.  The only way to conquer our necessity is to create another stronger than it.  We have now that power: by making it the interest of holders of coin to come forward to the aid of the Government.  When coin shall have become supplanted by a less valuable currency it will be too late.  The interest of coin to remain in the country is evidenced by the present currents of trade, and the offering to it an inducement to unite with the Treasury notes in the funding of the public debt will soon create for it a necessity which will ultimately remove the one under which we now labor.

One thing further is evident.  If the debt can be funded under the provisions of the House bill, it certainly can under the Senate amendments.  The Treasury has prided itself on its ability to obtain money at the rate proposed by the latter in more prosperous times.  If it was satisfactory then, it should be still more satisfactory now.  In this work we cannot afford to fail.  The part of wisdom is, then, to accept the greater safety.  When paper shall have taken the place of coin, and the latter, true to its instincts, shall have taken wings and flown away—it cannot be whistled back.  It is idle to argue that two representatives of value of equal nominal amount, but intrinsically unequal, will stay together and consent to become convertible.  The more valuable always abandons the field.

One fact more must not be overlooked in considering this matter—that the security remains the same in all cases, namely :  the faith of the Government.  No inducement is offered by the House to fund these notes in the nature of the new security.  The credit of the Government is alike bound for the payment of both classes of indebtedness ultimately in gold.  Each derives its entire value from that.  The only advantage that can be then offered in funding is the more convenience in the form of the security, and the payment of interest in a commodity similar to that which the principal represents.

The theory upon which the opposition seems to proceed is that until Government pays out these notes they are as good as gold, but that as soon as they are paid out holders will fund them because they will be good for nothing else.  The truth is, the more a man has of a depreciated currency the less he wants.

Now, we proceed upon a much more truthful and honorable theory.  We concede that they are not gold, nor readily convertible into it, but that not being able to get gold, we are compelled to use the best substitute we can.  To undertake the use of the paper of suspended State banks, even if it could be had in sufficient quantities, would entail great loss upon the Government in the way of interest, exchanges, and depreciation.  From this arises the very necessity under which we are legislating.  By making the notes ultimately convertible into gold by allowing them to be at any time funded into a bond, paying specie for principal and interest, they are kept as near to par as any first class security can be not immediately convertible into cash, but immediately convertible into a first class security on time.  In other words, the depreciation will be simply the difference in the market of a check on gold in bank and a first class time security of like amount payable also at bank in gold.  This depreciation would not be heeded at all in the ordinary transactions of life.  Like the present difference in value between gold and solvent but suspended banks of established credit, it would only be heard of on 'change.

The introduction of the Treasury notes in the manner now proposed is no abandonment of specie as the basis of our credit;  it can do at least but temporary harm with much good;  but the introduction of it as a medium for the payment of interest upon the public debt removes the latter at once from the solid foundation of convertibility into the world's recognized medium for the transmutation of wealth, and affixes to it the protest of the world as the badge of its worthlessness.  It becomes simply a national promise under protest.

There is to-day much more than the usual amount of the precious metals in the country.  The currents of trade were never better.  Nobody would wish our exports lessened, nor would they wish our imports increased, simply for the duties that might be collected from them.  Individual economy is saving in the aggregate more than the ordinary expenses of the Government.  Our unpleasant foreign complications compel us to depend upon our own resources.  To drive our metallic currency from the country, is to deprive ourselves of the only basis of domestic as well as of foreign credit.  There is no inducement for it to leave, except as we by unwise legislation imperil its existence here.  The only real question presented to us is, whether by an unflinching adherence to legislative fiction we shall discard the distinction between nominal and intrinsic values, and allow public credit to perish, or whether, acknowledging a variance which no legislation can remove, we shall act accordingly, and thus make all the resources of the country available for its salvation.

I wish here for a moment to divert from the course of argument I had marked out, for I had intended simply to give my own views, without attempting, in detail, to answer the arguments of others;  but I cannot refrain, for a moment, from referring to the argument now adduced in support of the payment of the interest upon the public debt with paper, because it is an unjust discrimination between soldiers and capitalists.

Now, I do not know by what class of soldiers my colleague [Mr. Spaulding,] may be represented in the field, but I do know the character of the two thousand soldiers from my own county, and of the four thousand soldiers in the field from my congressional district, and I know that their present condition as soldiers is purely ephemeral.  Their normal condition is that of citizens, and as such I represent them here;  and they will appreciate at what it is worth the appeal of my colleague in their behalf as a class, as soldiers, in distinction from their character as American citizens.

I cannot but regard the whole argument as specious and ad captandum in its character, and not calling for an extended answer.  If the four thousand soldiers to whom I have adverted were here, and could have heard my colleague [Mr. Spaulding] use such an argument, they would have turned to me and said:  "Mr. Pomeroy, as our Representative, it is your duty to defend the national credit;  ours to defend the national flag.  We will take care of ourselves, and receive from the Government the same paper which you decree that the Government shall pay to you.  We ask you to look out for the old folks at home.  While we are away, the old homestead is being worked at a disadvantage by hired hands;  we ask you, then, to tax it as lightly as the strictest economy will permit, as much as the direst necessity requires;  but at all hazards remember the old folks at home, and save the national credit."

While our Army, respecting whose seeming inactivity so many unkind words have been spoken upon this floor within the past few months, has practically ended the war, we are still considering the first financial measure, looking to the means for its continuance;  and a tax bill has not yet seen the light.  The impatience of the country for the suppression of rebellion and the restoration of Union and peace can no longer be diverted from the forum to the field.  The mutterings of popular discontent are becoming audible to our own ears.  The Army ceased their field parades in December.  We are continuing ours in February.  Action, earnest, wise, and comprehensive, that shall bridge the chasm of our present financial embarrassments is imperative.  But do not let us undertake to cross a chasm a thousand feet in width, upon a bent one hundred and fifty feet in length.  This first bent of Treasury notes is well enough.  The others must be constructed from loans, and the whole buttressed upon firm enduring taxation.  The materials are at our hands.  Let pride of opinion and all personal ambition be laid aside, and I know there is genius enough within those walls to bridge the chasm, and carry over it the public credit in safety and with honor.

Mr. Speaker, I have thought much upon this subject, but have talked little.  Currency is a subject about which I am not in the habit of discussing.  I should have preferred to have voted on, with no participation in the debate;  but the erroneous impressions which have gone abroad respecting this bill, and which have overslaughed the consideration of the most important feature of it, relating to funding the public debt, with the much less important, but more novel, and, to the immediate creditors of the Government, more interesting features, relating to Treasury notes and legal tender, seem to demand discussion upon this amendment of the Senate.  Even the charge of disloyalty to the Administration has been clamored to the winds by greedy contractors, and reechoed by the sounding boards of the country press, against those who, forgetting other and more important considerations, would not at once give wing to this new and gilt-edged circulation.  For one I claim to be loyal to this Administration, so long as it continues, as heretofore, loyal to its mission.  No word of public denunciation against it has ever escaped my lips.  I believe I have never failed to sustain, whether it be to my credit or otherwise, any recommendation backed by a majority of the Committee of Ways and Means of this House.  As amended by the Senate in this respect, I will cheerfully support this bill.  In its original form I could not, though it has been unpleasant to diverge from so large a proportion of my political associates.  It were easier to have followed in the wake of inclination, and covered myself from criticism with the mantle of necessity.  I have preferred to walk the plank of duty, trusting to time and practical results for the vindication of its policy.


Mr. Calvert.  I certainly did not intend, Mr. Chairman, to occupy the time of the House upon this subject;  but it is impossible for me to sit in my seat and hear the monstrous arguments of gentlemen who have advocated non-concurrence in that amendment of the senate to this bill, which requires the payment of interest upon the public debt to be in coin.  Without entering my protest.  The gentleman from New York [Mr. Spaulding] has told us that through the agency of this $150,000,000 of demand notes we are to incur the whole debt to be incurred by this Government in the prosecution of this war.  But he says that "if we pay to bankers and brokers a different currency from that which we pay to other parties, we shall be doing injustice.  Why, Mr. Chairman, does any gentleman suppose that you can issue no more than $150,000,000, or does that gentleman himself propose to issue no more than that amount of demand notes ?

The gentleman tells you next that before the war is ended it will probably cost this Government $1,500,000,000.  Now, sir, I wish to ask this House a simple question, which any man may put to himself in his own business transactions.  If a man wishes to go into the market to borrow money, would he not do everything in his power to raise his credit, instead of depreciating it ?  I take it for granted that every responsible man will say "ay" to that proposition.  Then, I ask you, Mr. Chairman, if you raise the value of your Treasury notes -- not the demand notes, I do not now allude to them, for they are a small item -- I say, I ask whether, if you raise the value in market of your Treasury notes, payable at given times in the future, with interest, you are not raising your credit in the market ?

Let me say to the gentleman from New York that it is useless to talk about the injustice of paying brokers in one currency and other people in another.  When you have to borrow money you must go to the brokers to borrow it.  Farmers and others may be induced by the brokers to invest their money in your bonds;  but they will not do it without the advice of the brokers or agents with whom they are in the habit of counseling;  and, therefore, it is the broker at last who holds in his hands your credit, and it is useless for gentlemen of this House to talk about a proposition to put down the brokers, who are constantly dealing in these notes.

Again: the more you advance the value of your Treasury notes, the more generally you diffuse them through the hands of the people of the country.  Let the interest upon them be payable in specie, and you will induce many to take them, although their value may not be quite at par, and they will be more likely to be funded than if they are payable only in paper.

I contend, therefore, that the amendment of the Senate, in this regard benefits your credit more than anything you can do.  I am glad to know that the gentleman from Now York does not represent upon this question the sentiment of the the members of the Committee of Ways and Means, and I hope the Senate amendment will be concurred in by the House.

In my judgment, Mr. Chairman, it is time the Committee of Ways and Means had done something more on the subject of our national credit than to make a legal tender of paper issues.  As long ago as last July, Congress declared that they would tax the peopleWhere are those taxes ?  We are waiting now for the Committee of Ways and Means;  the brokers are waiting for them;  the capitalists of the country are waiting to see those taxes.  Gentlemen may sit here and talk about borrowing money;  they may adopt legislation authorizing the Secretary of the Treasury to borrow money;  but, Mr. Chairman, it does not bring the money.  But as soon as they see this Congress laying its hands upon its own property, as soon as they see that we are not afraid to tax the people of the country to any extent required to sustain the credit of the Government, the money will begin to flow into your Treasury.

I desire to say to the gentleman who this morning remarked that we must tax the people to the extent of $150,000,000, that that would have done for the Committee of Ways and Means at the last session of Congress;  but it will not do now.  When you are incurring a public debt of $1,500,000,000, it will not do to talk of a tax of $150,000,000.  You must nearly double that amount -- $250,000,000 must be raised in the shape of direct revenue in some way;  and the sooner the Committee of Ways and Means bring in a bill to tax everything on which you can raise revenue, the better.  The gentleman was very kind to the agricultural interest this morning in his speech.  But, sir, I am willing that the agricultural interest shall be taxed;  but the committee, at the same time, must give us a tax bill that shall include the manufacturing interest, and every other interest in the country.  Let us all be taxed.  Let the whole country be taxed to its full capacity, and then you can borrow, not $1,500,000,000 only, but $3,000,000,000, if you need so much.  The capitalists, then, who have money to spare will be ready to lend it, when they see ample provision made for the ultimate payment of principal and interest.  But they will not loan you money to be payable in paper, because although you make paper a legal tender by your legislation, it will not be a legal tender in fact.

As it has been said here, that question has yet to be tried before the State courts as well as the United States courts.  You have heard here the decisions of your courts showing that the regulation of the internal commerce of the different States cannot be brought within the operation of this bill, or at least throwing serious doubt upon the subject.  Therefore that question is not determined, and no legislation of this House can determine it.  But, sir, I contend that the best means of raising the value of your demand notes, and your notes payable on time, is to pay your interest in coin.  Gentlemen say that will force you to sell your bonds.  Should not the Government be required to do as individuals do ?  Is not the merchant obliged to do that and why should the Government expect to borrow money upon any better terms than the merchant ?  The merchant's property is all liable for his debts.  It requires your act to make the Government liable, and I trust the House will not sanction the doctrine that the payment of this interest in coin would not advance the character of both kinds of these notes.  I contend that the only way in which you can possibly have any notes funded is by paying interest in coin.  Then, if notes fall below par, they will be immediately funded.

With these few remarks in explanation, I shall vote for the amendment with the greatest pleasure.


Mr. Morrill, of Vermont.  Our whole difficulty in this matter, it appears to me, arises from our departure from sound principles in the first instance.  It appears that the House and the Senate have both decided that they will issue paper, and make it a legal tender.  I deeply deplore the fact as a blot on our national history that cannot be effaced;  but as I do not now see it probable that any other result will be reached, my only purpose and desire is to perfect and pass the best possible bill to be obtained.

I believe the Senate amendments are, on the whole, a great improvement upon the bill as it passed the House.  I could wish that we might, even at this hour, slaughter both the original bill and the Senate's amendments, and then mature such financial measures as would preserve a sound specie-paying basis;  but having no hope of that now, I trust we may adopt the Senate amendments, which will, in some degree at least, mitigate the evils to be apprehended from the bill as it left this House.

Now, the gentleman from New York [Mr. Spaulding] talks as though it would be an abandonment of the honor and good faith of the Government to pay the soldiers in any different species of money from that which we pay our public creditors.  I recollect to have read that Frederick the Great, upon a certain occasion, directed his minister, when he was about to seize upon some province of one of his neighbors, to draw up a proclamation justifying the measure to the world;  and his minister drew it up, commencing, "in the name of God."  Said Frederick, "strike out all about God, and say that I did it."  Now, I recommend to the gentleman from New York, when he is talking about this subject of compelling the public and private creditors to take paper money for all debts heretofore or hereafter contracted, to omit all mention of "honor and good faith."

But what is the fact in reference to this matter of paying off the soldiers in any different money ?  Why, the fact is that we are going to pay them in paper, according to this bill.  Now, if these soldiers were debtors and owed a grocer at home or here, and could make a tender of this paper, it might then indeed be of some service;  but how are you to compel the grocer, or any man who has anything to sell upon which these soldiers or their families subsist, to take this paper at anything more than its market value ?  Of course, if coin is worth more than paper, they have to pay to that extent more than they would pay if they had coin;  and I am in favor of keeping our promises equal to coin.  In my judgment, if we pay the interest on the public debt in specie, it will have a tendency to keep up the credit of the country, and there will be less depreciation upon these notes than there otherwise would be.

But, Mr. Chairman, the great object is to fund some portion of the public debt.  Now, it is perfectly apparent, not only from the statement of the gentleman from New York, [Mr. Spaulding] but from the knowledge all have of the subject, that our wants are large, and that we will be compelled to issue our bonds or notes, or paper of some kind, to a large amount hereafter.  Now, is it proposed to issue twice, thrice, or quadruple the amount of this legal tender paper before this session of Congress closes ?  Within sixty days we must have at least twice the amount of notes which is proposed now;  and unless they can be funded into debts due at some future time, from necessity, as we shall again be told, we shall have to repeat the dose we are now offering to the public.  Anybody may see that while it might be possible for this country to endure $150,000,000 of additional currency, even if it did unhinge all commercial transactions, that it would be utterly impossible that we could absorb twice or thrice that amount without a vast expansion of the whole monetary system of the country -- turning even sober and industrious citizens into the wildest of speculators.

I have been somewhat astonished that gentlemen from New England, and other portions of the country where manufactories are located, should, in view of the prospect of a further and indefinite increase of notes of this character -- and if any one can see anything else which is to follow, he can see what I fail to see -- vote for a measure of this kind.  The inevitable tendency is to raise the price of all raw materials, so that nothing could be manufactured in this country;  so that everything would be brought from abroad, using up whatever there may be for that purpose, while the duties would be cheaply paid in paper.  Such a policy as this gives every facility to foreign manufacturers, and none whatever to home manufacturers.  Put an artificial value upon the circulating medium, and you place labor and raw material out of the reach of the manufacturer, and at the same time, if received for duties, diminish the value of a specific or ad valorem tariff, as values abroad are not affected by the quantity of our paper currency.

Now, one word in reference to the West.  They have there seen the evil of all this kind of paper trash, and I regret to see so many willing to thrust it upon the whole country.  It may be supposed by some gentlemen from the West that they may possibly derive some advantage from it.  If that was apparent I would put it to the conscience of gentlemen how they could consent to any advantage which was not common to the whole country ?  I admit it is possible that that part of the country may be somewhat more indebted than the eastern and northern portions of the country.  But, sir, I fully believe that when this war shall close the West will recuperate as quickly as any other portion of the country, whether North or East.  The West does not need, and would scorn, I am convinced, any special legislation in their behalf.  Upon what is the West dependent for its prosperity ?  Why, it is mainly upon the sale of grain.  Who fixes the market price of grain ?  Every tyro in political economy knows that the surplus which is to be sold fixes the price of the whole product.  For considerable part of the surplus that the West may have to sell the price is fixed abroad on a specie-paying basis, and therefore the western people cannot and will not be able to avail themselves of the chief advantage, if it be any advantage at all, which may arise in consequence of an inflated or cheap currency.

But, Mr. Chairman, I did not intend to enter into a discussion of this question at any length.  The juices of this debate, as we are all aware, have been already exhausted;  but I wish, even at this late hour, we might recover our equanimity, get over our panic, and not pass any measure here from a supposed high necessity.  I do not believe that our patient is in such a dangerous condition that we need call in quack doctors;  for I say, with all respect, I consider this but quack medicine to relieve a patient that is in no need of any medicine at all.  I believe that if we could stand up here in the vigor of a nation not yet taxed a single dollar for the cost of this war, and mature a proper policy by which we can negotiate a loan standing on the credit of the country, standing on the proposed taxation of the country, standing on our hitherto untarnished honor, that there could be no need whatever of a resort to such a desperate scheme as the one now under consideration.  I hope, therefore, that we shall adopt the amendment of the Senate.  I wish that we might go much further, but that at least is better than a measure whose symmetry is only measured by its exclusively paper character.


Mr. Dunn.[William McKee Dunn (December 12, 1814 July 24, 1887) Indiana (R); studied law, admitted to the bar]  Mr. Chairman, when this bill was under consideration in the House, a direct vote was taken upon the proposition to pay the interest on the bonds in coin, and the House sustained that proposition by a very decided vote.  I do not quite understand by what legerdemain the bill went to the Senate in a different form.  I voted then that the interest should be paid in coin, and I shall vote so now, notwithstanding the arguments employed here to induce us to vote differently.
---[well, sir, I tell you what seems to have happened: on January 28 Mr. Stevens himself said that he would introduce that amendment when the time comes, but he did not.  Here is what went down, on February 6th:

Mr. Walton, of Maine.  I move to insert in the first section, after the word "interest," the words, "payable semi-annually."

The question was taken, and the amendment was adopted.

Mr. Roscoe Conkling.  I move to amend by inserting after the word "percentage" the words "in coin," so that it will read, "interest at six per centum per annum payable in coin."

The amendment was agreed to, 82 members having voted in the affirmative.

Mr. Lovejoy.  I move to insert before the word "coin" the words "gold and silver," so that it will read "payable in gold and silver coin."

The question was taken, and the amendment was agreed to.

Mr. Woodruff.  I move to add after the words "per centum" the words "per annum."  As it reads now it will provide for twelve per cent., instead of six per cent. per annum.

The amendment was agreed to.

But these amendments were NOT added to the final bill, they were added to the substitute.  Lovejoy's amendment of "gold and silver" was not added to any bill at all (so much for parliamentary procedures).
According to the Record, on February 6th, Mr. Dunn voted AGAINST the substitute which contained the "in coin" clause, and voted FOR the final bill which did not contain the "in coin" clause.  So, you were confused, sir;  or someone confused you as to what you were voting on.
Mr. Spaulding's indignation in the first paragraph of his speech today is just that, so much bullshit;  he was there, and saw that a large majority of the House was in favour of paying the interest in coin.]


The principal argument urged against the Senate amendment is that it provides for paying our creditors in different ways, and all appeal is made to the patriotism of the House to know if we are willing to pay different kinds of money for our interest from that with which we pay our soldiers.  Now, I shall vote for this proposition with the direct view and object of making the paper we offer to the soldier as good as possible.  I believe that it is impossible to pay them in coin, or I would vote for that.  It is necessary to make our notes as good as possible, and if there is any equivalent for coin, let us approach that point as nearly as possible.  If we cannot dispel the cloud of debt, let us, at least, give it a golden lining.  One mode of sustaining the credit of the notes is to have them converted into bonds;  and in order to make those bonds acceptable to those who have money to lend we must make the interest payable in coin.  We must try to induce capitalists to lend us money;  for we have no mode of compelling them to do so.

The gentleman from Vermont [Mr. Morrill] who has just taken his seat, said that the West expected some advantage from making Treasury notes a legal tender.  The members from the west, generally, who voted for making the notes a legal tender, did so because we believed it to be a governmental necessity.  We wanted a bridge to carry us over the morass.  We make it of tressel work, a temporary work, to serve only until the ground hardens.  We do not believe this war is to be of long continuance.  We do not believe the necessity of the legal tender clause will long exist.  I think that those who were despondent ten days ago have now great reason to rejoice.  The rapid succession of Union victories has filled every loyal heart with joy, and I do not doubt but that we shall soon be relieved from our pecuniary difficulties.


Mr. English.  When this bill was under consideration the other day, I had designed to offer a few remarks in reply to what was said by some gentlman upon the other side of the House in regard to the necessity of insrting the tender clause in the bill.  In regard to the constitutionality of the measure, I considered that question entirely settled by my friend from Ohio [Mr. Pendleton], and also by the gentleman from Massachusetts [Mr. Thomas] and in addition to their opinion, which I regard as of great weight, against the constitutionality of this measure, of a majority of the Committee on the Judiciary of this House, as their votes indicate.

Now, in regard to the necessity of the measure, I desire to say a few words, and it is a point upon which I have heard very little said in this House.  What is the financial condition of the country at present, and what are its bonds worth now in the market ?  We find that the bonds of the United States are to-day quoted in the New York market as selling at ninety cents on the dollar.  Six months ago those bonds were selling at eighty-three cents on the dollar.  In spite of all this immense outlay, there has been an advance in the value of the bonds and securities of the United States.  Why is this ?  It is because the people have not lost all confidence in the security of the Government.  I trust they will not;  I believe they will not;  I am sure they will not, if we but do our duty.  The people have money in their hands.  The country is no more impoverished now than it was six or twelve months since.  Capitalists hold money.  They are willing to invest in the securities of out Government in preference to any other securities that can be offered to them.  But they want to know, and it is their right to know, from this Congress what is to be the basis upon which these securities are to rest.  Sir, the country demands -- and the demand has been reiterated again and again through the public press and the resolves of public meeting -- that Congress shall pass a tax bill;  and that is the only basis, in my judgment, on which you can hold out an inducement to the capitalists of the country to invest in these bonds.

It is idle for us to say what we are going to do.  They want acts, not words.  They want performance, not promises.  When the Committee of Ways and Means report a proper tax bill, I shall most cheerfully vote for it;  and I believe that the tax should be even more than has been suggested.  I believe that the people are ready and will most cheerfully submit to any tax that we may properly lay.  The State which I have the honor in part to represent is ready and willing to contribute its part, and has instructed its members of Congress to use their best endeavors to have the matter so arranged that they may pay it in at once.  They want no Government tax collectors.  They will collect the amount and pay it in.  And that I believe is the sentiment in all the loyal States.  Now, with that state of facts, why should these bonds be depreciated any more than they now are ?  In order to make these bonds valuable to those who have money to invest we must adopt the amendment of the Senate providing that the interest shall be paid in gold and silver.  When it is ascertained that the interest is to be paid in gold and silver, then the bonds will be sought for investment.  If you issue Treasury notes, and if these Treasury notes go into the market and depreciate -- as I trust they will not -- what will be the effect ?  The effect will be that, just in proportion as the Treasury notes depreciate, in the same proportion will the interest payable on the bonds be diminished.  These Treasury notes answer very well as a means of circulation, provided the amount of the issue shall not exceed that provided for in this bill.  My opinion is that these Treasury notes may answer a very good purpose;  but the moment their volume is swollen beyond that, so soon will they depreciate.

I trust that the amendment of the Senate will be concurred in by this House.  In my judgment, it is the very best thing that we call do under the circumstances.  I voted for the issuing of these Treasury notes, but against the "legal tender" clause.  Otherwise, I was in favor of the measure;  but the judgment of the House was against me on that point.  I think that now the best thing the House can do is to concur in the Senate amendment;  and I trust that it will be concurred in.  I had the honor to receive recently, from a high and distinguished citizen of the United States, who was minister to Russia in 1847-48, a letter in reference to the depreciated paper currency in Russia at that period.  I will ask to have a paragraph read from that letter.

The Clerk read, as follows:

"There is one fact connected with paper depreciation, though based on taxation, and backed by the strongest Governments, that I have not seen alluded to.  I refer to the paper money issued by Russia during the Napoleon wars -- the old paper roubles, as they were called.  They had become nearly out or sight when I was in that country in 1847-48;  but their depreciation, reckoned in our currency, would be nearly seventy-five per cent. on the dollar.  That is, the paper rouble -- old emission, I mean -- was worth less than twenty cents, while the silver rouble, or its equivalent, was worth seventy-five cents in our money."

Mr. Vallandigham.  The Russian paper currency which I alluded to the other day was not that referred to in this letter, but was of a later date.  I mention this so that there shall be no apparent inconsistency between the two statements.

Mr. English.  The writer of this letter had good opportunities to understand the subject.  He also refers me to the Russian minister in this city for any further information in regard to it.  That is only the usual history of all similar paper issues.  There is a law of depreciation which seems to affect them all.  I hope, therefore, that the Senate amendment providing for the payment of interest in coin, will be concurred in.

Mr. Pike.  Mr. Chairman, with all due deference to gentlemen who differ with me on this subject, it does seem to me that this matter of the payment of interest in coin is a controversy about goat's wool.  The interest will be paid in coin in any event.  The recent victories of our armies have changed the whole matter.  We have now to return to a normal condition of currency.  We are in the same predicament about currency that the Executive was in the other day about lettres de cachet.  One of the most admirable State papers ever issued by this Government, was that issued a few days ago from the War Department, stating that the Government has now returned to a normal condition of affairs, and that all extraordinary arrests -- in the necessity of which at the time all loyal men acquiesced -- should from that time cease.  So now, while I was, a fortnight since, a most earnest advocate vocate for the revolutionary measure of an issue of paper money, I have not been insensible to the logic of events.  We have this rebellion under our heel.  We hear that sentiment echoed all over the country, from village to village, from city to city, and from State to State;  and it meets a fitting response in this Capitol.  Let us, therefore, join, not only in a general acclaim, but join, like sensible men, in this grand march of events.

The question now before the committee has been very well stated by my friend from New York, [Mr. Pomeroy].  It is in reference to the sale of the $500,000,000 of bonds.  Let us sell them at the largest price possible.  There is no way in which you can benefit the soldier or the taxpayer so much as by getting a large price for your bonds.  Of course, if you hold out an inducement that in any and all events payment of interest, will be made in coin, you increase their market value.  Coin is now at a premium;  but it will not probably be when the interest on these bonds become due.  This provision will induce moneyed men to invest in these bonds, while it will be no detriment to the Government.  Of all the idle and foolish political papers that were ever laid on the desks of members, the most idle and foolish, in my opinion, was that laid on our desks this morning, wherein the calculation is seriously made that there is not coin enough in the country to pay the interest, as if we were so stupid as not to recall the fact that this Government has been for years past disbursing its expenditures of $80,000,000 or $100,000,000 a year in coin.  The interest on this $500,000,000 of bonds would be $30,000,000 a year.  What difficulty will there be in paying that amount in coin ?  We know that up to the time the Government began to issue Treasury notes, its enormous expenditures, from $1,000,000 to $2,000,000 a day, were paid in coin, and the difficulty, which the writer would exaggerate into an impossibility, exists only in his foolish brain.

For these reasons, Mr. Chairman, I not only assent most cheerfully to the proposition to pay the interest in coin, but I also assent to the cognate proposition to sell these bonds at the highest price we can get for them.  We are returning now to a solid basis.  I hail the cause of the return as well as the return itself.  Let us sell our bonds to pay the creditors whom we are under contract to pay.  We never can have a better time for doing so than now, when an effervescence of delight is felt all over the country, because of the victories achieved by our arms.  It is felt everywhere now that we not only have a Government, but a country on which to base this issue.  Therefore, I say, let us now sell these bonds.  Let us realize as much money from them as we can.  Let us provide to pay the interest in coin, and let us pay the public creditors.


Mr. Diven.  It strikes me, Mr. Chairman, that the fallacy of all the arguments in favor of this amendment consists in the fact that the amendment fails to meet the evil.  It is not proposed to go back, and remedy the great national wrong, national dishonor, and inconsistency of the step that has been taken by declaring that these notes shall be a legal tender.  If this House is determined to adhere to that, if -- as the gentleman from Vermont [Mr. Morrill] has said -- the child is dead, if national credit is gone, if we are ready to assume the humiliating attitude that national credit and honor are dead, then the argument of the gentleman from New York [Mr. Spaulding] is sound.

The same plea of necessity which is resorted to in support of the legal tender clause, will require us to resort to every effort to do away with all distinction between this paper money and coin.  The requiring the payment of interest in coin will have a tendency to make such distinction.  It will have that effect, and all that we can do will not help it.  Let me make one appeal to members.  It is not yet too late to retrieve the error.  We have not yet declared that we will compel men to take those promises to pay, and to treat them as substance.  The way to recede from that dangerous proposition is before us.

The times are auspicious.  One good reason urged in favor of that policy was that the people were discouraged from the want of success in our Army.  We have now the encouragement of success.  Only let the moneyed men of the country believe that the Government is to succeed in putting down this rebellion, and we will not have to plead for credit.  It is not gold and silver that we want.  It is not things that are to be taken for gold and silver that we want.  It is credit;  it is confidence on the part of men who have money to lend, and who can lend it to the Government with the assurance that it will be returned to them.  That is all that is wanted.  And now, in view of the brilliant prospect before us of a speedy termination of the rebellion, and in view of the immense resources of the Government, in Heaven's name, let us leave no national dishonor, to forever remain a stain upon the country.  We will do that, if we do this great wrong.  I appeal to the House, in the name of honor and justice, to retrace the step it has taken, and to save the Union from the loss that will afflict it, by the passage of this law.


Mr. Washburne.  I want to ask the gentleman from New York [Mr. Diven] a question.  How does my friend propose to reach the object which he has stated ?  I understand that the Senate have passed upon the bill of the House and returned it to us with sundry amendments.  The text of the bill, therefore, is not now open to amendment.

Mr. Diven.  That is not my understanding.

Mr. Stevens.  I believe if the legal tender clause stands that the gentleman's argument will be right;  and if the House desires to get rid of the legal tender clause they have only to sustain the Senate in the specie clause which it has proposed in regard to the public debt.  So far as I am concerned and those who act with me, I will say, if the Senate amendment for the payment of coin be adopted, that I propose to offer an amendment doing away with the legal tender provision except in the payment of taxes to the United States.  We do not want so incongruous a monster as this would be, if the Senate amendment be adopted.

---[Then what were you thinking when on January 28 you said: "give notice of an amendment which I shall offer to the bill.  It is to make the semi-annual interest payable in coin" ?
And what did you mean on February 6th when you practically pre-authorized the Credit Strengthening act:  "Let me restate the various projects.  Ours proposes United States notes, secured at the end of twenty years to be paid in coin, and the interest, raised by taxation, semi-annually;  such notes to be money, and of uniform value throughout the Union.  No better investment, in my judgment, can be had;  no better currency can be invented."
On February 6th, 82 members of the House voted FOR the "payable in coin" clause; you did not have such lofty objections then !!]


Mr. Washburne.  The gentleman from Pennsylvania says that he proposes to offer an amendment.  I contend that he can offer no amendment that is not germane to the amendment of the Senate.

Mr. Stevens.  Wait until the time comes, and the gentleman will see that my amendment will be in order.

Mr. Washburne.  I suggest to the gentleman from Pennsylvania that he propose to get rid of this question to-day.  I think that it is the temper of the House to settle it to-day one way or the other.  The country is looking to this House for action.  There is not a member I think who will not stay here, until this question is disposed of.

Mr. Stevens.  Several gentlemen were obliged to leave the House unless the vote was taken on this bill before four o'clock.  I told them that the vote could not be taken to-day, and they have gone home with that understanding.  I move that the committee do now rise.

The motion was agreed to.

So the committee rose;  and The Speaker having resumed the chair, Mr. Mallory reported that the Committee of the Whole on the state of the Union had, according to order, had the Union generally under consideration, and particularly the amendments of the Senate to House bill 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, and had come to no resolution thereon.

Mr. Washburne.  I understand that the amendments of the Senate have not been brought into the House.

The Speaker.  They have not.

Mr. Washburne.  I trust, if the House is willing to pass upon these amendments to-night, that it will go back into the Committee of the Whole on the state of the Union.  In order to test the sense of the House, I move that the rules be suspended and the House resolve itself into the Committee of the Whole on the state of the Union.  Let us go into committee, and report the amendments of the Senate to the House.

A MEMBER.  That cannot be done.  It is not in order to report the bill to the House while amendments are pending.

Mr. Washburne.  It can be done by unanimous consent, and that is what I propose.

The question was taken on Mr. Washburne's motion, and it was agreed to.

The House accordingly resolved itself into the Committee of the Whole on the state of the Union, (Mr. Mallory in the chair.)

The Chairman stated the question before the committee to be the amendments of the Senate to the Treasury note bill.

Mr. Washburne.  I move that the committee rise, in order that we may close general debate upon these amendments of the Senate.

The motion was agreed to.

So the committee rose; and The Speaker having resumed the chair, Mr. Mallory reported that the Committee of the Whole on state of the Union had, according to order, had the Union generally under consideration, and particularly amendments of the Senate to House bill 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, and had come to no resolution thereon.

Mr. Washburne.  I move that the rules be suspended, and the House resolve itself into the Committee of the Whole on the state of the Union.  I also move that general debate in the committee be closed upon the amendments of the Senate in five minutes after their consideration shall be resumed.

The motion was agreed to.

So the general debate in committee was ordered to be closed within five minutes after the consideration of the Senate amendments was resumed.

The question was then taken on the motion to go into committee;  and it was agreed to.

The House accordingly resolved itself into the Committee of the Whole on the state of the Union, (Mr. Mallory in the chair.)

Mr. Windom.  I offer the following amendment:

In the nineteenth amendment of the Senate strike out the words "proceeds of the sale of the public lands."

I believe that it is the understanding we are to have a separate vote on all of these amendments.

Mr. Washburne.  It is not in order to take a vote on the gentleman's amendment in the House unless the committee adopt it.

Mr. Windom.  I ask the Committee to give me a vote on it now.  I will not consume any time in discussing it.  If the amendment of the Senate be adopted, I will only say, then it will defeat the homestead bill.  It is plain that to pledge the proceeds of the sale of the public land for the payment of this interest will be to defeat the passage of the homestead bill.  Not only that, but the settlers are compelled to pay for their lands in gold.  Instead of giving them a homestead bill, you propose to increase the price of their lands.  If the Senate amendment passes, the result will be, when the homestead bill comes up the argument will be made that every dollar has been pledged for the payment of this interest.  I want to see who they are that are willing to dodge a fair vote on the homestead question.

Mr. Roscoe Conkling.  Does the gentleman from Minnesota want the committee to understand that the effect of the amendment of the Senate will be to prevent the donation of lands to settlers out and out, even if Congress chooses to make them ?  I do not understand that that will be its effect.

Mr. Windom.  I understand if we adopt this Senate amendment that it will pledge the proceeds of the sale of the public lands for the payment of this interest.

Mr. Roscoe Conkling.  Whatever the proceeds may be.

Mr. Windom.  The friends of the homestead bill know if that bill is passed that there will be no proceeds.

Mr. Roscoe Conkling.  Then there will be none to apply.

Mr. Washburne.  I move that the committee rise, and report the bill.

The Chairman.  The amendments of the Senate must be acted on one by one.

Mr. Bingham.  I object to the gentleman's motion until the vote is taken on the pending amendment of the gentleman from Minnesota.

Mr. Washburne.  I do not object to that.

Mr. Wickliffe.  Allow me to submit whether this amendment is in order at this time.

The Chairman.  Debate is exhausted upon the amendment of the gentleman from Minnesota.

Mr. Wickliffe.  I rise to a question of order.  There are some eighteen or twenty amendments made by the Senate to this bill.  I believe the ordinary way is to take them up in order as they are numbered in the bill, and to act upon them as we go along, one by one.  I ask the Chair to enforce the rule in that respect, and have the amendments read according to their number, that we may act upon them seriatim.

The Chairman.  The Chair sustains the point of order, and decides that the amendment of the gentleman from Minnesota is out of order now.  The Clerk will read the amendments in order.

Mr. Washburne.  To carry out my suggestion, requires unanimous consent.  I suggest that by unanimous consent the gentleman from Minnesota be permitted to have a vote upon his amendment, and that then, in order to save time --as we will have a vote upon these amendments in the House anyhow-- we go into the House and vote upon them without going through the ceremony of voting upon them in committee.

Mr. Wickliffe.  I object.  The committee cannot report the bill until they have voted upon the Senate amendments.

The Clerk then proceeded to read the amendments in order.

First amendment:

Lines three, four, and five, strike out the words: "To meet the necessities of the Treasury of the United States, and to provide a currency receivable for the public dues."

The Committee of Ways and Means recommended concurrence.

The amendment was concurred in.

Second amendment:

Lines six and seven, strike out the words "and fifty;"  so that the clause will read: "$100,000,000 of United States notes."

The Committee of Ways and Means recommended non-concurrence.

The amendment was non-concurred in.

Third amendment:

Line nine, strike out the words "at Washington or New York."

The Committee of Ways and Means recommended concurrence.

The amendment was concurred in.

Fourth amendment:

Beginning at line eleven, strike out the following proviso:  Provided, however, That $50,000,000 of said notes shall be in lieu of the demand Treasury notes authorized to be issued by the act of July 17, 1861;  which said demand notes shall be taken up as rapidly as practicable, and the notes herein provided for substituted for them:  And provided further, That the amount of the two kinds of notes together shall at no time exceed the sum of $150,000,000.

The Committee of Ways and Means recommended non-concurrence.

The amendment was non-concurred in.

Fifth amendment:

Page 2, line nineteen, after the words "herein authorized," insert the words "and the notes authorized by the act of July 17, 1861."

The Committee of Ways and Means recommended non-concurrence.

The amendment was non-concurred in.

Sixth amendment:

Immediately after the clause last quoted, strike out the words, "and for all salaries, debts, and demands owing by the United States to individuals, corporations, and associations within the United States," and insert "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."

The Committee of Ways and Means recommended non-concurrence.

Mr. Pendleton.  I move to amend the amendment of the Senate by inserting after the word "notes" the words, "and the claims for pay to the officers, soldiers, seamen, and marines engaged in the military service of the United States," and then I will follow it up by moving to insert after the word "interest" in the next Senate amendment, the words, "and claims for pay of persons engaged in the military service."

Mr. Stevens.  I wish the gentleman would make the amendment a little broader.  I had intended to move a similar amendment, enlarging a little, so as to avoid all doubt about the constitutionality of the matter.

Mr. Pendleton.  I will hear the gentleman's proposed amendment.

Mr. Stevens.  It is to insert after the word "coin" the following proviso:

Provided, That the legal tender provision of this bill shall not apply to payments made to officers, or soldiers, or for provisions or supplies for the Army, nor to any transactions between individuals, but only to payments made to the United States for taxes, excises, and internal duties.

Mr. Pendleton.  I should be very willing to vote for that amendment, being entirely opposed to the whole legal tender principle;  but I prefer now the amendment I have offered, which was intended to meet the objection of the gentleman from New York [Mr. Spaulding] in reference to an unjust discrimination against soldiers and others.

Mr. Washburne.  I rise to a point of order.  The gentleman from Ohio is not in order, as debate was closed upon all these amendments.

The Chairman.  The Chair understands that a gentleman proposing an amendment is entitled to five minutes, under the rule, to discuss it.

Mr. Pendleton.  I did not intend to intrude upon the time of the House.  I merely wished to say that I proposed this amendment to meet the objection of the gentleman from New York, who opened this debate this morning, that we who are opposed to the legal tender scheme were intending to draw an unjust discrimination between the Army and the creditors of the Government, who alone loaned it their money.  I am not in favor of that discrimination, but I am in favor of paying the officers and soldiers in the military and naval service of the Government in the legal coin of the country.

It is therefore that I offer this amendment;  and it is because I do not wish this amendment to be embarrassed by the legal tender proposition that I decline to accept the substitute suggested by the gentleman from Pennsylvania.  If he will offer it independently of my proposition, I shall be very glad to vote for it.

The question was taken on the amendment offered by Mr. Pendleton, and it was not agreed to.

Mr. Stevens.  I now offer the amendment which I have already read.

Mr. Washburne.  I raise the point of order upon that amendment, that it is not germane to the amendment of the Senate.

Mr. Stevens.  The effect of the amendment of the Senate is to avoid the legal tender clause to a certain extent.  I propose to enlarge that.

Mr. Washburne.  The amendment of the Senate provides for the payment of the interest upon bonds and notes in coin.  This amendment is entirely different in its character.

The Chairman.  The Chair overrules the point of order.

The amendment was not agreed to.

Mr. Hale.  I move to amend the Senate amendment, by inserting after the word "coin" the words "or its equivalent, at the discretion of the Secretary of the Treasury."

The amendment was not agreed to.

Mr. Washburne demanded tellers upon the amendment of the Senate.

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

The committee divided;  and the tellers reported --ayes seventy-six, noes not counted.

So the amendment was agreed to.

Seventh amendment:

Page 2, line thirty, after the words "United States," strike out the words "except interest as aforesaid."

The Committee of Ways and Means recommended non-concurrence.

The amendment was concurred in.

Eighth amendment:

Line forty, strike out the words "at the Treasury or sub-Treasuries of the United States."

The Committee of Ways and Means recommended concurrence.

The amendment was concurred in.

Ninth amendment:

Page 3, line forty-two, after the word "after," insert "five years and payable."

The Committee of Ways and Means recommended non-concurrence.

Mr. Roscoe Conkling called for tellers.

Tellers were not ordered.

The amendment was non-concurred in.

Tenth amendment:

In line forty-three strike out, "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," and insert in lieu thereof:

Provided, That the Secretary of the Treasury shall, upon presentation of the notes mentioned in the preceding part of this section, in sums of not less than $100, issue to the holder thereof, at his option, and instead of the bonds already described, an equal amount of Treasury notes or coupons or registered bonds, redeemable at the pleasure of the United States at any time after two years;  bearing interest at the rate of seven and three tenths per cent. per annum, and payable semi-annually.

The Committee of Ways and Means recommended non-concurrence.

The amendment was non-concurred in.

Eleventh amendment:

Commencing at line sixty-four, strike out the following:

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 Committee of Ways and Means recommended concurrence.

The amendment was concurred in.

Twelfth amendment:

In line six, section two, strike out the word "and."

The Committee of Ways and Means recommended concurrence.

The amendment was concurred in.

Thirteenth amendment:

In line seven of the same section, strike out the word "Government," and insert in lieu thereof "United States."

The Committee of Ways and Means recommended concurrence.

The amendment was concurred in.

Fourteenth amendment:

After the word "after," in the same line, insert, "five years and payable;"  the so that the clause will read:

That to enable Secretary of the Treasury to fund the Treasury notes and floating debt of the United States, he is hereby authorized to issue, on the credit of the United States, coupon bonds, or registered bonds, to an amount not exceeding $500,000,000, redeemable at the pleasure of the United States after five years, and payable twenty years from date, and bearing interest at the rate of six per cent. per annum, payable semi-annually.  And the bonds herein authorized shall be of such denominations, not less than fifty dollars, as may be determined upon by the Secretary of the Treasury.

The Committee of Ways and Means recommended non-concurrence.

The amendment was non-concurred in.

Fifteenth amendment:

In line thirteen, second section, after the word "time," insert "at the market value thereof;"  so that the clause will I read:

And the Secretary of the Treasury may dispose of such bonds at any time at the market value thereof.

The Committee of Ways and Means recommended non-concurrence.

The amendment was non-concurred in.

Sixteenth amendment:

In line fourteen, second section, strike out the words "lawful money," and insert in lieu thereof "the coin."

The Committee of Ways and Means recommended concurrence.

Mr. Washburne demanded tellers.

Tellers were ordered;  and Messrs. Steele, of New York, and Alley were appointed.

The committee divided, and the tellers reported --ayes seventy, noes not counted.

So the amendment was concurred in.

Seventeenth amendment:

In line twenty-one, second section, strike out the words "any State or county," and in lieu thereof insert "or under State authority;"  so that the clause will read:

And all stocks, bonds, and other securities of the United States, held by individuals, corporations, or associations within the United States, shall be exempt from taxation by or under State authority.

The Committee of Ways and Means recommended concurrence.

The amendment was concurred in.

Eighteenth amendment:

Insert the following as an additional section:

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 $100, 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 certificate 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 with drawn from deposit at any time, after ten days' notice, 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.

The Committee of Ways and Means recommended concurrence in the amendment, with the following amendments:

After the word "notes," in the third line, add the words "or coin," and after the word "rate," in the tenth line, strike out the words "of five," and insert "which the Secretary of the Treasury may, from time to time, prescribe, not exceeding six," and after the word "notes," in the eleventh line, insert the words "or coin;"  so that the section will read:

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 or coin on deposit for not less than thirty days, in sums of not less than $100, 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 which the Secretary of the Treasury may, from time to time, prescribe, not exceeding six per cent, per annum;  and any amount of United States notes or coin so deposited may be withdrawn from deposit at any time after ten days' notice 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 de posits shall at no time exceed the amount of $25,000,000.

The amendments reported by the Committee of Ways and Means were agreed to.

Mr. Baker.  I move to amend the amendment by striking out "twenty-five" in line sixteen, and inserting "fifty," so as to enable the Government to borrow the sum of $50,000,000, in stead of $25,00,000.

The amendment was disagreed to.

The amendment of the Senate, as amended, was then concurred in.

Nineteenth amendment:

Add the following as an additional section to the bill:

Sec. 5.  And be it further enacted, That all duties on imported goods, the proceeds of the 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 on the bonds and notes 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, 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.  Third.  The residue thereof to be paid into the Treasury of the United States.

Mr. Windom.  I move to amend the amendment of the Senate, by striking out in line two, the words "the proceeds of the sale of the public lands."  I desire to occupy the attention of the House but a moment.  The amendment of the Senate must mean something or there is no use in retaining it.  If it means anything, it means that the public lands are to be sold and the proceeds thus appropriated.  If we adopt this amendment of the Senate, we shall be told when we come to consider the homestead bill, that we have already pledged the proceeds of the sales of the public lands, and that good faith requires the defeat of that measure.  I am aware that the Committee of Ways and Means recommend non-concurrence in this amendment, but it may be that the House will disagree with the committee, and I desire, therefore, that it shall be amended, so that we may have a separate vote upon it in the House.

Mr. Wickliffe.  Mr. Chairman, I wish to amend that clause before the vote is taken upon striking it out.  I move to insert before the word "proceeds" the word "net."  My object in offering this amendment is to provide that the net proceeds of the sale of the public lands, after paying all the expenses of bringing them into market, shall be applied to the extinguishment of this debt, so far as they will go.  I am in favor of that policy;  and allow me to say that I have been trying to get before the Committee of Ways and Means a bill pledging the proceeds of the sales of the public lands for the public debt.

Much has been said here upon the subject of the credit of the Government.  All that the public creditor wants is security for his principal and interest, and you cannot hold out any security better calculated to create confidence in the capitalists of the country than the proceeds of the sale of the public lands.  Unless you thus pledge them, and refrain from appropriating them in aid of railroads and schools and colleges, the whole fund will be squandered, and the taxes will fall upon the farming interests of the country and upon the consumers of imported goods.

I am old enough to remember that we had to fight the war of 1812 on a paper currency -- a paper currency which was, on an average, at least twenty-five per cent. below specie.  We had no specie outside of New England, and we could not get at that because they had better use for it.  The soldiers fought then at the rate of eight dollars per month, and were glad to take Treasury notes at par.  What sustained your paper money then with the public, and with those who invested in them ?  It was the fact that the Government had pledged the proceeds of the public lands for the redemption of the principal and the payment of the interest.  Put that same pledge on your notes to-day;  give that as an evidence to the public at large;  and you create more confidence in the community where these Treasury notes will circulate than you can by all your pledges of public revenue.

I understand, Mr. Chairman, that there is an objection on the part of the House to this.  I did not want to have it incumbered with either a general tax bill, or a money bill.  I was willing to submit the proposition as I have submitted it in a resolution to the Committee of Ways and Means, and let us have a fair and square vote upon it.  If the chairman of the Committee of Ways and means will agree to that, I am willing that the amendment of the Senate shall be stricken out.  But I tell you that the country expects that all our resources shall be pledged to the holders of these Treasury notes, whether they be soldiers, whether they be merchants, or whether they be bankers.


Mr. Roscoe Conkling.  Mr. Chairman, I want to oppose one or other of these amendments, for the purpose of convincing, if can, the gentleman, from Minnesota [Mr. Windom] that he is in error in the construction which he puts on the Senate amendment.  Like him, I am a friend to the homestead policy, but unlike him, I understand that this amendment has no effect whatever like that which he attributes to it.  His idea seems to be that, although this amendment does not expressly or by implication provide that there shall be any given amount, or any amount whatever, of proceeds from the public lands;  it does, nevertheless, pledge in some degree the faith of the Government to devote those proceeds to a particular object, and infers that proceeds to a large amount, or to some amount, shall be derived from the public lands.  Now, I see the force of the gentleman's suggestion;  but I submit to him that it is entirely met by this fact, if not by others;  he knows that the Secretaries, in their reports, set down the proceeds from the public lands as among their estimates.  He knows that statutes now stand making disposition of the proceeds of the public lands.  It is not, therefore, true, as it would otherwise be, that this provision establishes any new rule.  Now, I grant that if, at this time, in the statutes of the country we had ignored the proceeds of the public lands as one of the sources of our revenue, this would be the introduction of a novel provision, looking to a change of policy with reference to it.

Mr. Windom.  I desire to ask the gentleman a question.

Mr. Roscoe Conkling.  In a single moment.  Inasmuch as this provision simply continues, simply perpetuates, simply harmonizes with the statutory policy of the Government as it now is, I submit to my friend that it has no such effect as he attributes to it.  I will now hear his inquiry.

Mr. Windom.  It is this: If this House proposes to adopt the homestead measure, and thus inaugurate a new policy, what propriety is there in making this pledge of proceeds of the public lands, when there will be no proceeds of the public lands ?

Mr. Roscoe Conkling.  After the manner of a Yankee, I will ask the gentleman in return why he does not propose to expunge from the statutes as they now stand this provision speaking of the proceeds of the public lands ?  Why not clear the way for a homestead policy, by bringing in a bill to repeal all enactments which propose a disposition of the proceeds of the public lands ?

Mr. Windom.  And let me ask the gentleman from New York what harm can the amendment which I propose do, in case we pass the homestead bill ?

Mr. Roscoe Conkling.  Why, sir, it will do this harm: when we inventory the sources of our revenue; we inventory all our possibilities as well as our certainties, and when we are trying to put cork into this currency to make it float, we want to support it with all the resources we have.  Whether Congress shall adopt a homestead policy or not, it is possible and likely that there will be proceeds, for a time and to some extent, of the public lands.  Therefore the Senate says, "let the same be more or less -- no matter how little -- that little we add to the other things which we have, and pledge it to the ultimate redemption and extinguishment of the public debt."

Mr. Windom.  Can there be any proceeds from the public lands under the homestead bill ?

Mr. Roscoe Conkling.  If not, this provision does no harm; but it is meaningless and nonsensical to strike it out, unless you also propose to strike out of all statutes the same provision.

Mr. Windom.  The other statutes are not now before us.

Mr. Roscoe Conkling.  Precisely so.

[Here the hammer fell.]

Mr. Lovejoy.  Mr. Chairman, I oppose the amendment offered by the gentleman from Kentucky, [Mr. Wickliffe.]  We talk about the sacredness of the public faith.  No jesuitical argument can prove to this House that this amendment, as it stands, does not effectually kill the homestead bill;  for, if we pledge the proceeds of the public lands to the payment of these bonds, that argument will be made against the passage of the homestead bill.  It will be said, "we have borrowed money on that pledge, and it would not be good faith to withdraw now that source of income;"  in other words, it would not be good faith to pass the homestead bill.

Mr. Roscoe Conkling.  I ask the gentle man from Illinois whether, according to that idea, it would not be a breach of faith in us now to inaugurate a homestead policy, in the teeth of many statutes containing this same provision ?

Mr. Lovejoy.  The pledge made here looks to future indebtedness, to the future selling of these bonds.  What I want to say in respect to public faith is this -- and I do not suppose there is much use in saying it -- doubt if there are a dozen members on this floor from the loyal States who do not stand pledged by every consideration of honor, pledged by declarations from their own lips and pens to the people of these United States that the homestead bill shall be carried through.  An overwhelming majority of this House stands solemnly pledged to that.  We claimed, as everyone knows, that the homestead measure was defeated by Mr. Buchanan, and promised that, if Mr. Lincoln were elected, the measure should be carried through.  And now we propose, in the teeth of that solemn pledge, to violate the promise made to the people.  If we do this I think there will be very little reliance placed in future on any promises that we may make.

A Member.  We did not expect a revolution then.

Mr. Lovejoy.  That makes no difference.  I insist that we are bound to amend this bill as proposed by the gentleman from Minnesota.  I will not detain the committee longer.  I saw that when Kentucky nodded her head against the homestead bill, when the question of its postponement was up, that the thing was killed.  I must submit to it;  but I must at the same time remonstrate against it.

The question was taken; and Mr. Wickliffe's amendment to the amendment was disagreed to.

Mr. Morrill, of Vermont.  I move, merely for the purpose of enabling me to say a word or two upon this amendment, to insert the word "except," before the word "the," in the clause proposed by the amendment of the gentleman from Minnesota to be stricken out.

I believe the Committee of Ways and Means were unanimous in their opinion that this provision of the amendment of the Senate pledging the public lands should be stricken out, for the reason that it would create great difficulty in the Treasury Department to be compelled to keep separate accounts of the different items of the picayune matter of the sales of the pubic lands.  I withdraw my amendment.

Mr. Wickliffe.  I understand the question is now upon the amendment of the gentleman from Minnesota, to strike out the words "proceeds of the public lands."  I desire to oppose that amendment.

The Chairman.  No further debate is in order upon the amendment of the gentleman from Minnesota.  The gentleman may propose an amendment to the amendment, if he wishes to speak upon it.

Mr. Wickliffe.  I will.  I move to strike out half his amendment, so as to have half the public lands pledged for the redemption of the public debt. [Laughter.]

Mr. Aldrich.  Which half ? [Laughter.]

Mr. Wickliffe.  Mr. Chairman, I have not turned my attention to this homestead bill which seems to have had such an impression upon the gentleman from Illinois and others in carrying out their pledges made upon the stump or in some caucus or some convention in time of peace, by virtue of which they must now snatch from the resources of the Government the proceeds of the public lands, and give them away in the shape of homesteads.  Sir, I want the public lands to assist us in sustaining the credit of the Government, and in defending the homesteads of the men who now occupy them.  It is in my judgment more important that this Government should sustain its power, enforce its authority, and restore the Union of these United States to peace, harmony, and prosperity again, than it is that John Doe, Richard Roe, or anybody else in this country, or anybody to be brought into it after our trials and troubles are over, should have the opportunity of going, free of cost, to settle upon the public lands of this Government, while the public creditor and the public credit have been permitted to suffer for want of the means of paying the interest on the public debt.  Do not understand me as unfriendly to the occupants of the soil of this country.  But let me say that my ancestors, who were among the pioneers of Kentucky, got no homesteads given them by the Government.  They won them and had to protect them from the savage by their rifles, after peace had been concluded with the British Government in 1783.  You have not given homesteads to the pioneers in the old free States, if I may use the expression.  The pioneers in Illinois and Indiana went there and bought their land and made their homes.  It is true you lowered the price of lands, and gave the settlers the right of preemption at a given price.  This advantage the amendment of the Senate does not take away.  You may fix whatever price you please, and still give the right of preemption to the actual settler.

But I understand the proposition of the gentleman over the way from Minnesota, to be to give away the public lands to persons who may come across the main, or who may leave their homes in the older States.  They are to have their lands for nothing.  If that is the gentleman's homestead bill, I am opposed to it.  While chairman of the Committee on Public Lands in this House, in former years, I always favored the policy of granting to the actual settler the privilege of going upon the surveyed or unsurveyed public lands, and making for himself a home, to be secured from the Government at the price fixed when the lands should be brought into market.

---[As it turned out --wonder how-- ye did do away with the homestead concept, and instead of giving land to small-scale owner-occupants, ye gave away 200million acres to robber barons as land grant (we should read the Record as to what you had to say about the land grants to railway promoters)]

[Here the hammer fell.]

Mr. Wickliffe.  I withdraw my amendment to the amendment.

Mr. Lovejoy.  I object to its withdrawal.

Mr. Wickliffe.  Oh, very well; I will not withdraw it then.

Mr. Morrill, of Vermont.  I desire to oppose it as a matter of form, so that further time may not be taken up with it.  I hope the amendment of the gentleman will be concurred in.

The amendment to the amendment was disagreed to.

Mr. Washburne.  I move that the committee rise, for the purpose of closing debate upon this amendment.

The motion was agreed to.

So the committee rose; and The Speaker having resumed the chair, Mr. Mallory reported that the Committee of the Whole on the state of the Union had, according to order, had the Union generally under consideration, and particularly House bill No. 240, with the amendments of the Senate thereto;  and had come to no resolution thereon.

Mr. Washburne.  I move that all debate upon the amendment under consideration in committee be closed in one minute after its consideration shall be again resumed in committee.

The motion was agreed to.

Mr. Washburne moved that the rules be suspended, and that the House resolve itself into the Committee of the Whole on the state of the Union.

The motion was agreed to.

So the rules were suspended;  and the House resolved itself into the Committee of the Whole on the state of the Union, (Mr. Mallory in the chair,) and resumed the consideration of the Senate amendments to the Treasury note bill.

The question being upon the amendment offered by Mr. Windom.

Mr. Windom called for tellers.

Tellers were ordered; and Messrs. Alley, and Steele, of New York, were appointed.

The committee divided; and the tellers reported --ayes 45, noes 57.

So the amendment was disagreed to.

The question recurred upon the amendment of the Senate; and being taken, the Senate amendment was non-concurred in.

Mr. Stevens.  I believe the remaining amendments of the Senate are all merely verbal in their character.  The Committee of Ways and Means recommend that they be concurred in, and I hope the vote may be taken upon all at once.

There being no objection, the remaining amendments were concurred in in gross.

Mr. Stevens.  I now move that the committee rise, and report the bill and amendments to the House.

The motion was agreed to.

So the committee rose; and The Speaker having resumed the chair, Mr. Mallory reported that the Committee of the Whole on the state of the Union had, according to order, had the Union generally under consideration, and particularly House bill 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, with the amendments of the Senate thereto, and had instructed him to report the same to the House, with the recommendation that some of the amendments be concurred in, others non-concurred in, and that one be concurred in with an amendment.

Mr. Stevens.  I now propose to offer a single amendment, so that there may be a vote upon it, call the previous question, and when it shall have been ordered, postpone further action upon the bill until to-morrow.

I move to amend, after the word "notes," in the twenty-seventh line of the first section, by inserting as follows:

And payments to be made to officers, soldiers, and sailors in the Army and Navy of the United States, and for all supplies purchased for the said Government.

Mr. Washburne.  I make the same point of order I did in the committee, that that amendment is not relevant to the Senate amendment, and therefore not in order.

Mr. Stevens.  It is certainly relevant.  The Senate amendment makes certain exceptions, and my amendment merely enlarges the list of exceptions.

The Speaker.  The Chair cannot see why the amendment is not germane.

Mr. Washburne.  I should be glad to give some reasons why it is not germane.

Mr. Stevens.  Oh, no.  I object to any debate.  I demand the previous question.

The previous question was seconded, and the main question ordered to be put.

Mr. Stevens.  I suppose if the House adjourns now, this will come up as unfinished business to-morrow.

The Speaker.  It will.

Mr. Stevens.  I move, then, that the House adjourn.

The motion was agreed to;  and thereupon (at twenty minutes past five o'clock, p.m.) the House adjourned.