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House of Representatives
Tuesday, February 4th, 1862.
H.R. 240,
to issue legal tender Treasury notes

The House met at twelve o'clock, m.
Prayer by the Chaplain, Rev. Thomas H. Stockton.
The Journal of yesterday was read and approved.

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


Treasury Notes.

Mr. Stevens.  I insist on my motion.

The motion was agreed to.

So the rules were suspended;  and the House accordingly resolved itself into the Committee of the Whole on the state of the Union, (Mr. MALLORY in the chair,) and resumed the consideration, as a special order, of the bill of the House (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;  the question being upon the amendment submitted by Mr. Vallandigham.

Mr. Morrill, of Vermont [Justin Smith Morrill (1810-1898) (R)].  Mr. Chairman, engaged as I have been upon other matters of at least equal importance, I have not had the time to prepare any elaborate speech;  but the subject of issuing $150,000,000 of paper currency and making it a legal tender by the Government at a single bound — the precursor, as I fear, of a prolific brood of promises no one of which is to be redeemed in the constitutional standard of the country — could not but arrest my attention, and, having strong convictions of the impolicy of the measure, I should feel that I utterly failed to discharge my duty if I did not attempt to find a stronger prop for our country to lean upon than this bill — a measure not blessed by one sound precedent, and damned by all.

I know the gentlemen who have had this measure in charge have bestowed upon it much time and perplexing thought, and, from their thorough knowledge of the subject and large acquaintance with the monetary circles of the country, their opinions will have great weight in this committee —deservedly so— and I shall only claim a candid hearing in behalf of the substitute of the minority of the Committee of Ways and Means;  well knowing that we are all inflamed by the same zeal for the triumphant success of our arms, the same solicitude for the honor and welfare of the people who mean to live and die under the flag of our Union, and that we can have but one wish, which is that the best plan shall be adopted.

Let no one suppose that I imagine the country will be ruined — however calamitous I might regard the passage of this bill — whether one particular measure is adopted or rejected.  This Government is, thank God ! too strongly intrenched in the hearts of the people not to be able to withstand more than one disaster, or more than one blunder.  But it is a time when it might be pardonable morality almost to say that "a blunder is worse than a crime."

We are urged by the gentleman from New York to pass this bill as "a war measure" — "a measure of necessity;"  and to enforce this idea he gives you the figures of our probable requirements if the war should be prolonged until July 1, 1863.  Sir, I have no expectation of being required to support a war for that length of time.  The ice that now chokes up the Mississippi is not more sure to melt and disappear with the approaching vernal season, than are the rebellious armies upon its banks when our western Army shall break from its moorings, and, rushing with the current to the Gulf, baptize as it goes in blood the people to a fresher allegiance.  At the same time the men of the East will only ask for an opportunity to cross bayonets with the chivalry — to leave epithets and try what virtue there is in steel !  That hour is approaching, and I have no fear of the result.

"Fly swifter round ye wheels of time !"

We can close this war by the 30th day of July next as well as in thirty years.  Let us second General McClellan for "a short and sharp" conflict.  By so doing we shall economize both blood and Treasury notes.

If this paper money is "a war measure," it is not waged against the enemy, but one that may well make him grin with delight.  I would as soon provide Chinese wooden guns for the Army as paper money alone for the Treasury.

What is it that we most need ?  Clearly we lack money, and wish to inspire our own people with that confidence that will induce them to lend the requisite amount.  But the very first step we propose is one to destroy whatever of confidence yet remains among those who have a dollar to lend.  We proclaim by an engraved advertisement — to be forced into the pocket of every man by the fiat of the Government — that we will hereafter liquidate all our debts with paper only.  With such a stamp on our forehead, it cannot be expected that we shall find either patriotism or selfishness hereafter prompting anybody to volunteer to take a single bond more of the United States.  Some unhappy contractor may be caught, and forced to accept in payment of existing debts the ill-starred notes and bonds, to be disposed of as fancy stocks for the most they will bring;  but, profiting by experience, no contractor will be caught the second time without securing an ample margin to enable him to deal at last with the Jews on the Rialto.  When the bonds of the same Government can be had, with same rate of interest, and the same time to run, for less than ninety cents on the dollar, and be paid for in bank paper worth three and a half per cent. less than par, it requires a stretch of the imagination to see anybody walking up to our worthy Secretary of the Treasury and tendering one hundred cents on the dollar for just the same thing.

By making our notes a legal tender, we make them better for the moment than we can make our bonds, and men might be willing to exchange bonds for the notes;  but notes for bonds never, with no surety of anything better than notes twenty years hence.  Twenty years' bonds, at six per cent. interest, cannot be disposed of at par.

If, by the provisions of this bill, we cut ourselves off from all other resources, it is to be considered how much could be realized from this, in my judgment, the weakest resource within our grasp, which is the power of a bank of issue, without any capital, and not even specie enough to tender the odd change.  It is an experiment to inject, by a governmental force-pump, into the arteries of Commerce a new currency when the arteries are already filled.  The whole bank circulation of the United States, in 1860, was $207,702,477.  That of the rebel States was $50,647,028, leaving for the loyal States $156,455,449.

But at this time, in consequence of the diminution of all business except that nourished by the war, the bank circulation is over $20,000,000 less, or about $136,000,000.  I admit that we can drive some considerable share of this home upon the banks, and substitute that of the notes of the United States in its place.  But how meager the result, could we even displace the whole, compared with the magnificent proportions of our wants !  These banks, however, already hold in round numbers nearly $100,000,000 of United States securities.  If in addition to this we compel them to redeem their bills now circulating as currency, we compel them to collect their notes receivable or part with their dead and I might add crucified loans to the Government.  Their customers are to a large extent composed of their own stockholders.  Of course it is easy to see what part of their assets will be melted down and realized first.  The Government stocks would be thrown upon the market, and the downward tendency of public credit could not be arrested.  The competition in the market between the Government, avowing its poverty and imbecility, and those who have divided their last crust to support the Government would be sharpened by mutual disappointment, and a distrust would be created that no subsequent measures could wholly remove.

It is pretended that as the whole United States are holden for the redemption of these notes they must be good, and will, therefore, pass at par, especially if made a legal tender.  Never was a greater fallacy.  The United States are abundantly able to meet all the vast exigencies of this war, to pay all liabilities, only put them into the proper form.  It cannot be done on demand, and it is a fiction to pretend to do so.  They must be funded until the means can be accumulated for their redemption.  As a mere currency no more of them can be used than enough to fill the demands of commerce.  That measure is the extent they will go, and it is clear and well defined.  Even when they were redeemed in specie, and stood at par all over the country, the Government succeeded in circulating but $27,000,000 of the $50,000,000 authorized;  and of these the banks had received and held $7,000,000.  It is thus apparent that $20,000,000 is about all that would be absorbed by the country, or kept afloat, in the present condition of monetary affairs, without the intervention of congressional omnipotence in making them a legal tender.  If so made, they would, to the extent they are tendered for public dues, be a forced loan;  and to the extent of the difference between their current value and that of standard coin, it would be a breach of public faith.  It is true that the measure might be hailed with delight by bankrupts;  and, if the bill passes, my friend from New York [Mr. Conkling] no longer needs to press his bankruptcy law, for they would have no occasion to go into chancery in order to scale and settle off with their creditors, as "legal tender" would soon be offered at rates entirely within their means.  I submit, however, that this class is not the one for Government to rely upon for large assistance in the way of hoarding and holding Treasury notes.

Mr. Chairman, I object to this bill on the ground, as I conceive, of its utter impolicy.  I admit that from the contracts entered into — many of which, now due, I regret have not been paid as promptly as they deserved to be, and from the heavy monthly disbursements to our Army, that the Government can flood the country with even one hundred and fifty millions of paper dollars.  But from that moment you would vastly increase the cost of carrying on the war;  prices would go up, and the addition we should pile upon our national debt would prove that it might have been even wiser to have burnt our paper dollars before they were issued.  The inflation of the currency would be inevitable.  In ordinary times few comprehend the Archimedean leverage of a very few millions added to or subtracted from the currency of a nation actively engaged in the affairs of the world.  In the former case it produces a crisis and general bankruptcy, and in the latter it puts every speculator on tip-toe to buy out his neighbor — his horse, his ox, his ass, or anything that by keeping over night will put money in his purse.  Property becomes as volatile as alcohol at boiling heat, and cannot be kept within its ancient boundaries.  The poor man, accustomed to butcher's meat, and who has not counted tea and coffee as luxuries, suddenly finds their daily use beyond his means.  The ecstasy of an inflated currency is enjoyed by the few only, and these are cruelly punished when the gaseous influence subsides.  They now have this inflated currency in the rebel States, and all property there, real and personal, sells at nearly twice its usual value.  Yet we know their positive misery.

The rich men are getting possession of even the little that poor men were before suffered to retain.  I hope we may remain true to our traditions — resolve that we are the saints, and let our happiness be increased by their misery.  Why, sir, during the contest of Old Hickory with that "monster," the old United States Bank, now buried below the lower red sandstone of geologists, I remember it was made a grave charge against the bank that it had contracted its circulation $2,000,000 to produce a monetary pressure upon the country, and thereby, as was charged, to influence pending elections.  Soon after it came Old Hickory's turn, and he urged the so-called "deposit banks" to increase their circulation, so that the United States Bank would find its "vocation gone," but "the monster" would not surrender in that way, and expanded its own circulation from about thirty million dollars, in 1830, to $44,000,000 in 1835;  and this $14,000,000 beyond the usual average, with about an equal expansion on the part of the other banking institutions of the country, was the sum of the inflation of 1836, producing its inevitable sequence, as we all know, the terrible collapse of 1837, from which the country failed to recover in less than ten years.

The question of the constitutionality of this bill, although a grave one, I do not propose to discuss, especially as it will undoubtedly be examined by far abler hands.  It will be conceded that the power is nowhere contained in the letter of the Constitution, and that, in all our history since the adoption of the Constitution, it has never been exercised.  It is an inferential or doubtful power, lodged wherever gentlemen may choose to place it, and liable, as I presume this debate will show, to change its lodging-place, like members of Congress, at very short notice.  I should, therefore, regret to see such a power, if it exists at all, exercised at this time.  The Constitution, in giving to Congress the power to levy and collect taxes, gives us ample power, so long as taxable property in the greatest abundance exists, to make loans and protect the public credit.  In this great crisis of our country, if we expect to retain the semblance of freedom, if we expect to retain any of the features of a republican form of Government, if we hope ever to see the epaulets stripped from the great host of military officers, now ready to go forth to battle, and their swords laid aside, we must hold every department of the Government and every officer to a strict adherence to the Constitution and the laws.  We are the custodians of the destinies of our country, and must not provoke the inquiry, who shall take us into custody ?

The power "to coin money, regulate the value thereof, and of foreign coins," has been exercised often and not too wisely, but it has never been construed to cover the alchemical transmutation of paper into gold and silver.  In 1792 we set up our standard of gold coins at one part alloy in eleven parts pure metal, and we made our silver dollar of the same value of the Spanish pillar dollar.  In 1834 we reduced the standard to a little less than nine parts of pure metal to one part of alloy, and in 1837 we adjusted both gold and silver coin to a standard of nine parts pure metal to one part of alloy.  In 1853 we reduced the value of the silver half dollar to about forty-six cents and a half, and fractional parts in proportion.  These are a tender only in sums not beyond five dollars, while the silver prior to 1837 is, I believe, if you could find any, a tender to any amount.  We have also tinkered to some extent in the reduction of the weight of our coins, and cents have lost something in value, vainly endeavored to be compensated by their beauty, and may be tendered to the extent of thirty cents.

The discovery of the gold mines in California and Australia has added immensely to the quantity of gold throughout the world.  As the increase of silver, after the discovery of America, depreciated its value nearly one half, so it was feared the immensity of the influx of gold would at an early day destroy it as a measure of value, and reduce it to the level of some of the baser metals.  This theory does not quite appear to be in the process of realization.  The mines have not proved to be the

"New milk that all the winter never fails,
And all the summer overflows the pails."

But their productiveness is slowly decreasing.  While in its normal hiding-places gold did not add much to the bulk of and was absorbed by the surrounding earth and rocks, so when ushered into the highways of commerce, of the arts, and of luxury, it seems to have a marvelous affinity to be absorbed by whatever it touches, and wherever it can be made either useful or ornamental.

Still it is true that the almost incredible augmentation of the gold product of the world for the last dozen years has lessened its commercial or money value not less, as I estimate, than two per cent. per annum, or twenty to twenty-five per cent., as a whole, during that period of time.  The measure of value would appear, therefore, to be quite low enough without resorting to any paper expedients or legislative action to further reduce it.  If we are to have any standard, gold is the cheapest one our country, emphatically the land of gold, ought to accept.  It should not be forgotten at the same time, as cheap as gold is, that our own standard coins are now fixed at considerably below the standard of many other countries.  The gold of England, and even of Turkey and Japan, outranks American gold;  and American silver, if so unlucky as to remain dormant in any pocket for a week, might pass the custom house for "old pewter, only fit to be remanufactured."

To begin with, then, our standard is now ten per cent. less than pure silver or pure gold.  Is not that enough ?  Shall we seek a lower deep, and at one bound make it all alloy — all paper ?  I have no great faith in an exclusively metallic currency;  but I have none whatever in an exclusively paper currency.  I have heard a carriage maker say that a carriage was really better by being made of part putty;  but even he was rather staggered at the idea for that reason of making one of all putty.  I am for the mixed currency — only a part putty, at any rate;  for specie and paper, and for making the paper a full equivalent, and exchangeable for specie at all times.

By making paper a legal tender, no more specie will be seen, except through offers of rewards to draw it from its hiding-places, until we emerge from our present difficulties, and not for an indefinite period, perhaps, thereafter.  The $300,000,000 of specie said to be in the country, though I think there is not quite so much, will be hoarded, and remain useless and idle for the rest of the war.  I am for keeping this, the vital fluid of commerce, in healthy, active circulation.  The sight of our eagles is as necessary to the courage of our people at home as to the men in the Army.

In the interesting speech of the gentleman from Massachusetts, [Mr. ALLEY,] made a few days since, while the gentleman was arguing in favor of making paper a legal tender, all his historical citations appeared to me to show the unsoundness of his position, and I could only explain it on the theory that he had espoused new doctrines, and find not had time to get rid of his old traditions, for he is traditionally right.  Why, sir, he cites us to the tyrannical reigns of such monarchs as Henry VIII to prove that whenever the coin was arbitrarily debased the people suddenly became prosperous !

No historian has heretofore ventured to eulogize this mottled-faced villain for contracting prodigious debts, and then for swindling his creditors by paying them off in base metal, and, if he could speak from across the great gulf, I think he would tender thanks for the few drops of water poured upon his parched tongue by the gentleman from Massachusetts, though it comes late and through a Puritanic ally that he could hardly have anticipated.  The gentleman's citations mean to eulogize the expedients, as found in English history from the thirteenth to the seventeenth century, of inflating or debasing the currency, or they mean nothing;  and, if they mean nothing, they should not have been cited.  This process of debasing the currency never added a single blade of grass to the wealth of any country.  It only enables it to be measured in a new and smaller measure, while counted at the old rate.  To illustrate its effects, it ordains that a half bushel shall hereafter be deemed and taken to be and is a bushel, and shall be a lawful tender on all contracts heretofore made or hereafter made.  That is all the merit there is in the prosperity of these expansions to which the gentleman referred, and it is unreal, while its demerits are real and flagrant.  The integrity of the gentleman from Massachusetts did not allow him to omit from the record the fact that, in the reign of Edward VI, "other nations now characterized the English coinage as 'infamous.' "  Now, sir, if we would escape a record like that, the brand of "infamous" upon the American coinage, let us reject any scheme for making paper a legal tender.  The civilization of the present day would not fail to be fully as appreciative of our short-comings as that of former days was of the follies and vices of our progenitors.  I trust the morality of this age is not to be placed on a par with that of the poodle-dog days of England.

The facts in relation to the suspension of specie payments by the Bank of England from 1797 to 1823 are cited to prove the soundness of the policy proposed now of making paper a legal tender.  The gentleman from New York [Mr. Spaulding] stated, and others may have done so, that the notes of the Bank of England were made a legal tender at the time referred to.  This I think is a mistake.  The bank was prohibited from paying out specie for them, and they were received and paid out in all business transactions by the bankers of London and others by common consent, but they were not made a legal tender.  The English Government did not stain their reputation with such an act, even at a time when, in their fierce hate, they did not shrink from blotting a page of their history with fastening to a rock, by Promethean chains, the Titan who, as their national foe, inspired them with perpetual terror.

But why did not the gentleman cite a more recent case, and one exactly in point — that of Austria ?  Simply because that, as all others recorded in history have been, was a total failure.  Austria undertook this process of making forced loans — for it is really nothing less — by making Government paper a legal tender, and it proved a miserable failure.  Their paper fell (or gold bore a premium, which is the same thing) forty per cent.  The Mexican mode of violent seizure is far more efficient, and about equally sound in morals.

The only legislation of any importance which occurred in relation to the Bank of England, if I am not mistaken, was after the notes of the bank had fallen below the price of standard gold, when a nobleman, owning numerous landed estates, published a notice to all his lease holders that he would not accept rents in Bank of England notes unless enough was brought to buy the amount due in gold or sovereigns.  It was then seen that this course would be likely to be adopted by others, and spread over all parts of the kingdom.  To prevent this result, Lord Eldon brought in a bill, which passed, providing that no landholder should distrain for rent after having had the amount due tendered in Bank of England notes.

Under the new charter of the bank (Sir Robert Peel's) the notes were made a tender;  but the amount of issue was limited to the amount of the public securities (£14,000,000) and the amount of specie actually in the bank;  and the bank itself is compelled at all times to redeem its own notes in specie.

But when the Bank of England, in 1823, resumed specie payments, although taking four long years to prepare for this event, the shock was so great as to convulse the whole country.  The year 1824 stands out conspicuously in the history of England as an era of commercial ruin and individual distress.  The numbers then for the first time consigned to pauperism were deplorably large, and the children's teeth were set on edge to the third and fourth-generation.

No one here contemplates but that at some future time the banks and the Government shall resume specie payments — the banks depending entirely upon whether the Government does so or not — and, if so, I invite them to calculate the cost of the descent from that basis, the cost of the return — the expiatory pains to be suffered;  and then determine whether we shall carry on this war on a specie basis or on a ceaseless flood of paper, bartered at discordant prices in every city, town, and hamlet of the country, bearing in mind that however cheaply obtained, every dollar is to be and will be ultimately repaid in gold or silver coin raised by taxation.

That I am not wrong in supposing if we launch this measure that we have nothing else to put afloat, is quite apparent in the able speech of my friend from New York, [Mr. Spaulding,] who plainly occupied his ground reluctantly;  for, besides the $150,000,000 of notes he now proposes to authorize, he more than hints at the possibility of "a further issue of demand notes, if Congress shall hereafter deem it necessary."

By taking the first step in making paper a legal tender we shall sever all connection with any other fountains of supply.  We cannot retrace our steps, but must go on.  No sane man would spontaneously take stock liable by the practices of the Government to be reduced the very next day ten per cent. or any other per cent, in its value.  So that if Congress should have the virtue to wish to cease the further issue of these notes it would no longer be an open question.  But, having tested this facile mode of paying debts, I fear the stern and honest mode of taxation would be repugnant to many constituencies, and that the doors of the temple of paper money would not soon again be closed.  Gentlemen may think otherwise, but like a certain heroine, who

"Said she'd ne'er consent, and consented still,"

Congress would consent.  If we have not the virtue and power to resist the temptation now, while our reputation is spotless, we shall have still less when the whole country becomes debauched.

Upon one point there can be no dispute.  The Constitution expressly declares that Congress shall pass no ex post facto law.  Can we pass a law compelling the acceptance of paper in lieu of standard coin in contracts made one, two, or five years ago ?  If the coin is only worth three and a half per cent. more than paper, is it not to that extent an ex post facto law, and as much a violation of the Constitution as any law of a State could be "impairing the obligation of contracts?"  The right to change the standard of coin exists, but the right to create a standard of paper, and give an option, is a novelty.  In the early days of our country it was the custom to make notes for merchantable neat stock in due form, with the addition of "bulls and stags excepted."  Hereafter all contracts will need to be made payable in coin, or with the addition of "United States bulls and rags excepted."  If the provision making the notes a legal tender should unfortunately pass, it certainly ought, in equity, to provide that it shall only apply to contracts hereafter made.

At the last session of Congress we unwisely, as I thought, raised the pay of our Army, as though our men could be only induced to espouse the cause of their country at the highest wages, with board and clothes in addition;  but having done this, shall we avoid the full contract by tendering ninety cents or less on the dollar ?  This is not the true way.  No—

"At your dessert bright pewter comes too late,
When your first was all served up in plate."

If it must be so, I would rather say, with soldier like frankness:  "Officers and men! the work is heavy; you have prolonged it somewhat beyond our calculations, and the monthly drain upon the Treasury is very large.  We shall therefore put your pay at the old mark, but we will not whittle it down by giving you anything worth less than a hundred cents on the dollar."

But, Mr. Chairman, I do not think it will be necessary to cut down the pay of our men by any modus operandi, provided they will only give us some equivalent for it.  Give us a fight !

There is another consideration of paramount importance.  The tariff of March 2, 1861, has thus far operated beneficially by keeping the importations of foreign goods within bounds, and by enabling our people to retain much the largest quantity of specie ever before in the country.  Even the enemies of that bill concede that it has done all that is claimed for it, though they add, it is by accident.  Now, more than at all other tunes, it is necessary, while every eighth mail of the loyal States must be supported in the field, while every twenty discharges of a big rifled cannon costs the price of a man's year's labor, to give employment to the decimated ranks at home — to all the yet remaining industry of the country.  But expand the currency, and the prices of living and the cost of materials would so advance that labor could no longer be profitably employed.  Everything would be obtained cheaper abroad;  and the tariff, calculated for a sound currency, would when collected in the inflated medium — the equivalent of clipped coin — be no more a shield to American labor.  We should pay for foreign goods in specie, for duties in legal tender paper, and there an end of all protection !  While we are at war every muscle and every sinew of our people should find active employment at home, and at living wages.  While we are at war every dollar of money in the country should gladden the eyes of our own people, and depart on no foreign mission.  If we are to tax the people, we should not deprive them of employment.

The European world regards it as our weak point that we cannot secure our loans by stability of taxation; and our own large capitalists, I regret to say, participate to some extent in this unworthy and unfounded suspicion.  The bill, as reported by a majority of the Committee of Ways and Means, I fear will do little towards building up public confidence.  But I am ready, if my voucher were worth anything, and I think I know something of the temper of this House, to say the Representatives here will not flinch from any duty that may devolve upon them, and will not come short of their whole duty in levying such taxation as should make the securities of the nation invulnerable even to the shadow of a miser's doubt.

Of course it takes time to gather the requisite data, to prepare the necessary machinery, and to adjust the burden equitably upon all shoulders;  but it will be done, and very speedily.  My friend from Indiana [Mr. Colfax] has ingeniously thrown his heavy pack of newspapers on to the back of the Committee of Ways and Means, and while I presume they do not intend any capital or profits shall shirk in this war, they have no purpose to signalize any interest with oppression, nor do they expect in any way to provoke a whisky or newspaper rebellion.

The past financial history of our country ought to afford some guarantee of the future.  A nation that pays a large premium for the privilege of paying its debts before they are due should, at least, have the credit of a fixed purpose to pay all debts when they become due.  No like numbers of people on the earth can sustain a greater load of taxation than the people of the loyal States, for no others produce individually and collectively so much annual wealth.  The increased taxation of this year, as large as it may be, will not absorb more than one third of the surplus accumulations of the year;  and, could it be subtracted from one of many of our mineral mountains, would hardly be missed.  The gold produced will alone pay far more than the interest on any probable public debt.  Foreign nations derive a revenue from the tobacco sent from this country of perhaps an equal amount.  The coal and mineral deposits of this country furnish an inexhaustible capital.  The agricultural and manufacturing capabilities of our land and people are sufficient to carry us through any war, offensive or defensive.  There is no lack of means, and these have only to be organized and properly led to give our credit a foundation as solid as the footstool of Jehovah, (if I may be allowed so to speak,) as our armies only need to be organized and properly led to prove us invincible in other fields.

It must also be borne in mind that the first six months of a war are more exacting than any subsequent period.  We have passed all that.  The expensive outfits and the costly transportation, it is to be assumed, will not have to be repeated.  There may be, too, more foraging upon the enemy as the Army advances, and less chance for the vampires at home, who have bled the Treasury when they ought to have been made to bleed themselves.  I maintain that the bill, as reported by the Committee of Ways and Means, should not pass, because it will infinitely damage the national credit;  because it will cut off all other chance of supplies;  because it will reduce our standard of legal tender already sufficiently debased; because it will inflate the currency and increase many fold the cost of the war;  because it would slide into the place of proper taxation;  because, as a resource, it must ultimately fail, and tend to a premature peace;  because it is a question of doubtful constitutionality;  because it is an ex past facto law, immoral, and a breach of the public faith;  because it will at once banish all specie from circulation;  because it will dampen the ardor of our men at home as well as soldiers in the field;  because it will degrade us in the estimation of other nations;  because it will cripple American labor, and throw at last larger wealth into the hands of the rich;  and because there is no necessity calling for such a desperate remedy.  I agree with the gentleman from New York [Mr. Spaulding] in one thing most cordially: our finances stand in need of the tonic of decided military success.  Without that our stocks will continue to be quoted flat.  And yet I am no chronic growler.  Standing at zero, our Army rose as by a magical wand and illumined the whole heavens by its magnificent sweep.  Do not let it be said we rose like the rocket and fell like the stick !

The result of the military campaign, though not all that could have been wished, presents nothing which should breed despondency.  Nor, considering the desperate character of the rebellion, and the wide extent of territory it embraces, need we be afraid of a contrast with any first-rate Power of Europe in any similar initial chapter of war in their history.  The first year of the English army at the Crimea was one of continual disaster, disease, and death.  Their naval attack, unlike what our own have been, was a total failure.  On land, though brave, they fared little better.  The charge of the Light Brigade, where "some one had blundered," Tennyson has fixed in all memories.  Twice they attempted the Redan, and twice got soundly thrashed.  When Lord Raglan died, then Dr. Russell, of the Times, said he was "an accomplished gentleman, but no general."  General Simpson was then made the commander-in-chief, with no better success, and he was removed for utter incapacity.  At last, Colonel Codrington, a "lucky guardsman," as he was called, was promoted to the chief command.  Three changes were thus made, and even the last did not enable the English army to bring away a fair share of laurels.  It was the French who took the Mamelon, the French who took the Malakoff, and this caused the surrender of Sebastopol.

It would seem that our English cousins at least might refrain from criticisms upon the results of our campaign while these facts are so fresh in hand.

Our Army have demonstrated that Maryland, Missouri, and Kentucky cannot fall a prey to secession.  Tennessee, not unwillingly, must follow the fate of Kentucky.  Florida is now so far within our grasp that we only wait our convenience to occupy it.  North Carolina, Texas, and Louisiana, if not Georgia, are already at least half disposed to come back to the old flag without a fight.  Virginia is only half retained by garrisons which absorb nearly one half the whole body of the rebel troops, and these without the softness of "the sacred soil" would not long be enough.  Our forces now threaten by sea, land, and river the entire boundaries of the rebellious States with the roar of artillery and the clash of arms.  Break through somewhere we must, and if anywhere, the back of the rebellion is broken.  Ten of the rebel generals have been killed, have resigned, or committed suicide, and the ides of March will be more tolerable for these than for twenty others yet living.  But General McClellan must harvest some of the glories of this war within the next ninety days or be gazetted "an accomplished gentle man, but no general."  Success is as much a financial as a political necessity.  There need be no headlong haste, but the fatal blow must be delivered, and that speedily.

Mr. Chairman, it will be seen from the substitute, as proposed on the part of one half of the Committee of Ways and Means, that I do not object to the issue of United States notes to a limited extent to circulate as currency.  It is both convenient and proper.  But I wish to have this issue marked by metes and bounds, saying at the outset, thus far shalt thou go and no further.  Then let them be based on as solid a foundation as the everlasting hills, that they shall be the full equivalent of standard coin.  This can be done by fixing the amount, ample but reasonable, that no more than the fixed amount shall at any time be put in circulation, and by providing taxation sufficient at all times to retire them or to maintain their full value.  But, with all the earnestness I possess, I do protest against making any thing a legal tender but gold and silver, as calculated to undermine all confidence in that Republic whose reputation should be dearer to statesmen, as well as to soldiers, than life itself.

I have thus in a plain, blunt manner expressed my convictions as to the policy proposed by the majority of the Committee of Ways and Means;  and now I recognize the propriety of endeavoring to show that the substitute proposed by the minority or one half of the Committee of Ways and Means is better than the original bill.  I believe it to be so, or I would not advocate it.  It is simple in its provisions, and easily understood.

We propose no new issue of Treasury notes, but leave the fifty millions already authorized to be issued and reissued as may be found necessary or convenient.  This will secure us against an inflated currency.

Then it is proposed to issue $100,000,000 in United States notes, bearing interest at the rate of three and sixty-five hundredths per cent., payable at the pleasure of the United States, and allowing them with accumulated interest to be received for all debts and demands (taxes included) due to the United States, except duties on imports, and exchangeable at the will of the holder, whenever presented in sums not less than fifty dollars, for United States seven and three tenths per cent. coupon or registered stock.  They are also to be received at par, with accumulated interest, for any bonds the Government may hereafter issue.  These are to be paid out for all salaries, debts, and demands due to individuals or corporations, at their option, within the United States.  In substance this is very like English exchequer notes issued in anticipation of revenue.  It is most probable these notes would maintain their credit at or near par;  and if there should be any difference between these and gold it would be an honest difference, visible to all men.  As they accumulate they will be funded and retired, or reissued, as the exigencies of the Government may require.  They equip the Treasury as well as any legal tender paper could do, while, bearing interest, they would not pass into the general volume of the currency, and they afford the only possible channel of obtaining any considerable sums to be consolidated into stocks.  They cannot exceed the amount of internal duties that will be levied, which will create a sure and constant demand for these notes, and sustain their credit in every State and Territory of the country.

We do not propose to receive these notes for duties on imports, for the reason that it is desirable to leave the tariff stable amid all fluctuations, and, also, that we may secure the coin we promise to pay out as interest on the bonds.

---[Mr. Stevens should pay attention to this when he proposes his amendment to pay the interest in coin.]

It is then proposed, in order to perfect this plan in all its parts, to issue $200,000,000 in coupon or registered bonds, payable in ten years, with interest semi-annually in coin, at the rate of seven and three tenths per cent. per annum.  This is comparatively a high rate of interest, and it may be necessary that it should be so, in order to get the stock taken up by capitalists;  but the time the bonds are to run is limited to ten years, because it would be much against the interest of the United States to engage to pay a high rate of interest for a long period of time.  We think there can be no doubt that these bonds will all be taken, commencing as soon as the tax bill shall be passed.  Unless the credit of the United States shall be utterly shattered, which is not for a moment to be apprehended, these bonds must be considered a most desirable investment, both in large and small sums.

It is also proposed to issue $300,000,000 in coupon, or registered bonds, payable in twenty-five years, with interest at six per cent., payable semi annually in coin.  Usually Government bonds running for the longest time command the highest price, and for permanent investment are most eagerly sought after at home and abroad.  As we emerge from our present embarrassments, the other forms of debts due by the United States will naturally be funded in such stock.

We promise coin for all interest on bonds, as it is indispensable that all engagements assuming this solemn form should in no instance repudiate the standard of the Constitution.  We strike out all words in relation to any foreign loan, as during this war we expect to fight our own battles, furnish our own means, without any foreign aid or assistance;  and if we can be permitted to do that, we shall ask no further favors.

This substitute avoids all the material, and, we might say, fatal, objections to the original bill, is entirely practical and feasible in its character, and will not only relieve the Treasury from its present necessities, but do something towards making provision for future wants.

It is a question that will mark for weal or for woe an important page of our history;  and I invoke the courage and judgment of the committee to meet the question with that cool deliberation its high moment demands.

Mr. Roscoe Conkling.  Mr. Chairman, the nature of this measure, somewhat of its grave importance, may be learned from the experience of many nations, and I regret that the gentleman from New Hampshire [Mr. Edwards] could not feel justified yesterday in withdrawing the objection he made to allowing a more satisfactory discussion of it than an hour will allow.  The member of the Committee of Ways and Means by whom it was reported was well warranted in all he said of its great magnitude, and of the thoughtful, serious, courageous attention due to its consideration.  It concerns the life of the nation — the means whereby it lives.  The credit of a Government, like the credit of an individual, consists of the ability and integrity to pay all debts and perform all promises with scrupulous exactness and punctuality.  This ability and integrity, this untarnished public faith, and unquestioned pecuniary solvency, is that without which no Government can long survive.  Public credit alone cannot confer national immortality or national longevity;  but the loss of public credit will be inevitably and swiftly followed by national decrepitude and national death.  This is true in peace, when wars and rumors of wars are hushed throughout the earth;  it is true in uneventful times, in periods barren of action and prolific of repose;  but what shall be said of its urgent, warning truth as applicable to us in this dark hour of trial and of danger ?  Immediate and adequate financial facilities constitute, beyond all question, the overtopping, overmastering subjects with which we have the power to deal.

Gentlemen have longed for victories to reinvigorate the languishing energies of finance.  Victory no doubt would exert a potent influence;  but, sir, the Treasury will control and decide the war, not the war the Treasury.  Indeed, the question of money and credit is all there is before us;  it is practically the only unsettled question of the war.  Armies and navies may perish, and a public credit well preserved can replace them;  but if the public credit perishes, the Army and Navy can only increase the disaster and deepen the dishonor.

We have patriotism and courage and fighting men enough to crush rebellion throughout the Union, and then to sweep from this continent every occupant of it but ourselves, and sponge off their ships from our waters.  We have in the field the first army in history, the first in means to conquer with.  It is said that in 1811 Napoleon had 1,100,000 men, and other instances are mentioned of exceeding numbers;  but nowhere short of fabulous narrations can be found an army so numerous and, at the same time, so powerful in material, so complete in arms and equipments.  Nowhere can be found an army so well paid;  nowhere a great army so well fed or cared for;  no nation has ever attempted to maintain an army at anything like the same expense.  The Secretary of War says that 718,512 men have taken the field;  77,000 of them were three months' men, but 640,637 are enlisted for the war.  We have eighty-three regiments of cavalry;  eight more than France.  Every one of this multitude of soldiers is entitled to at least thirteen dollars a month, besides subsistence and bounties.  Sir, there is nothing like it in all history.  No nation ever attempted it, or approached it;  never for any length of time.  I find, in a very able report recently made to the American Geographical and Statistical Society, an instructive statement on this subject, which I ask my colleague to read.

Mr. F.A. CONKLING read, as follows:

"Upon an average, our army, on a peace footing, has cost us $1,000 annually per man, rank and file.  In the war in which we are now engaged we present the extraordinary spectacle of an army hardly ever before equaled in numbers, hired at the rate of wages paid to able-bodied men in the various peaceful avocations from which they were drawn.  To the men in the ranks, $13 per month are paid, with their food and clothing.  The soldier in the French army receives only about fifty-six cents a month;  the pay of our soldiers being twenty times greater.  The estimate in the French Budget for 1860, was 345,908,744 frances, or $64,687,500, for an army on a war footing, of 762,765 men;  and, in addition, a reserve militia on a peace footing, of 415,746 men.  We all know that the maintenance of such an army has created serious embarrassment in the finances of the empire.  They have, if we may credit foreign journals, completely changed the policy of the Emperor.  It costs this country twelve times as much to maintain a soldier in the field as it does the French Government.  Our forces, now under arms, are, consequently, equivalent to 7,500,000 men for that country.  It costs us two and a half times as munch to maintain a soldier as it does the English Government.  We hire our money at twice the rate of interest.  Our expenditures per man, measured by the standard of interest paid, are on a scale more than four times greater than for that country.  England can expend $1,200,000,000 a year without creating a greater burden in the shape of a public debt than $600, 000,000 would be for the United States."

Mr. Roscoe Conkling.  Mr. Chairman, ponder here a moment !  Only $64,000,000 a year for the greatest army on a war footing, with a reserve on a peace footing, the French empire ever had !  Besides our Army, we have a Navy to construct and maintain, and the cost of both will be, if not $2,000,000 a day, $45,000,000 a month.  To provide these sums so long as they shall be needed, to secure and carry along till we can pay, the amounts which have already been expended, to devise a policy which shall carry on the Government when the war is ended, and ultimately work out the extinguishment of the public debt — this is the problem to be solved, and the Constitution says that we alone shall solve it.  I believe we can solve it, and will solve it;  and I hope by some policy worthy of the occasion and adequate to it.  But let us have no make-shifts, no subterfuges, no timid expedients to dodge honest taxation.  Above all things, let us practice no concealment or deception upon the tax-payers.  Let us find out how much we owe and how much we need;  let us tell the people of it, and then in a straightforward, old-fashioned way go about raising it.  The people need no lullabies or opiates from us.  They want us to put no blinders upon them.  They are ready for this emergency and adequate to it;  quite as much so, to say the least, as we are.  Complex as are the circumstances by which we are surrounded, other men have coped successfully with circumstances as difficult and left behind them the light of their example to warn and guide us.  We have the folly of some who have scattered ruin and strewn wreck in the midst of plenty;  we have the wisdom of others who have created and preserved empire in the midst of want and caused civilization to rise on golden wings out of the very ashes of exhausted systems.  Our own statesmen have done far more than their share to endow the world with financial wisdom.  It was to this subject that the greatest of Americans gave his best endeavors.  He delved deep in the mines of perpetual prosperity.  He founded and organized a new department.  He conceived and created a system, and the world saw that it was good.  Upon foundations of honesty and truth be reared an enduring structure of public credit, and so pervaded it that to this is day we meet at every turn the genius of the builder.  He haunts us yet with the maxims he has left;  maxims from which we are invited to depart, though we cannot forget them.  He has bequeathed to us his lessons of wisdom with that singular felicity of diction which made Marshall say "his statement was argument, his inference was demonstration."

Hamilton insisted upon "incorporating, as a fundamental maxim, in the system of credit of the United States, that the creation of debt should always be accompanied by the means of extinguishment;  this is the true secret of rendering public credit immortal."  Invested with such at tributes, Government securities are the best securities in the world, and can always be used to negotiate loans at the lowest rate of interest.  Without these attributes the obligations of a Government are the most worthless, the most short lived and shallow of all devices with which to borrow money.  Do we not know this ?  Do we not heed the teachings of history, sanctioned by the founders of our institutions ?  Do we not know that, unless we would make shipwreck of everything, we must accompany emission with taxation ?  Do we not know that we have no right to authorize the utterance of a dollar of paper, without accompanying it with a tax for its ultimate redemption ?  We do know it.

But it is said that the principle, though a good one and sound in itself, must at this time be sacrificed to necessity .  Necessity ! that market price of principle at which every virtue has been sold for six thousand years.  From the apothecary selling poison to the lord chancellor selling justice, the plea has always been, "my poverty, but not my will, consents."

Sir, I deny that any necessity is upon us to take the case out of settled rules.  We need money —large sums of money— and the whole resources and property of the nation are liable to pay tribute to raise it.  We owe debts —large debts— and the whole property of the country is holden to pay them.  Does anybody suppose that the security is not ample, or the resources not abundant ?  My colleague from the Erie district [Mr. Spaulding] told us that the taxable property of the nation amounts to sixteen thousand millions of dollars;  and he produced a statement from the Census Bureau to prove it.  In reality it is vastly more than that, because he gave us a self-fixed valuation — the valuation fixed by proprietors themselves, having an interest in reducing and covering up the amount.

According to my colleague, at the end of this fiscal year our debt will be only $650,000,000.  One would think here is margin enough for Wall street, State street, or Chestnut street.  Sir, it is margin enough, properly husbanded from first to last, to enable as to raise all the money we want at five per cent., and history proves it.

Now, sir, what does this plea of necessity mean —this plea upon which we are invited to leave the trodden paths of safety, and seek new methods of "coining false moneys from that crucible called debt?"  What is the necessity which prevents adherence to the old and approved methods of raising money ?  The argument must be twofold: first, that the people will be better ready at some other time than the present to pay what, in the end, they must pay, with interest;  and second, that necessary and legitimate taxation will be unpopular, and bring denunciation upon those who vote it.  Sir, I take issue upon both propositions.  I say the country is rich and ready.  Money is abundant — very abundant.  There is in the loyal States $250,000,000 of gold — the gentleman from Massachusetts [Mr. ALLEY] said the other day $300,000,000 — more than ever before, and if we deserve it we can have it.  The whole country is full of wealth.  The enormous expenditures of this home war have been made among ourselves, and the money has remained here, and not gone into the channel which foreign war prescribes for currency.  The harvest has been abundant;  materials and productions, raw and wrought, have been in great demand;  and nearly every loyal State teems with the elements of material prosperity.  From a very extravagant, we have latterly become a very economical people, and thus the percentage, as well as the aggregate of savings of earnings, is unusually great.  We are able to pay now, and we never can pay better than now.

So much for the ability of tile people to bear taxation.  Now, a word as to their willingness to bear it.  I believe no error could be greater, no aspersion more libelous, upon the patriotic people of the country than the supposition that they will shrink from paying the legitimate expenses of annihilating rebellion.  The millions who have risen in majesty to defend from overthrow the institutions of their fathers have poured out costlier tribute and more precious treasure than taxation asks.  They have sent their sons to distant battle fields, and gone themselves to bare their bosoms to the icy fang of death.  When such is the hallowed measure of spontaneous loyalty, shall we presume to impugn it ?  Shall we suppose that those who are pouring out their dearest jewels and offering more, will palter about honest taxation ?  No, sir;  it requires no courage for a Representative to vote taxes now.  He is entitled to no credit for doing it.  The people are eager to be taxed, and no needed levy will be a tribute wrung from reluctance, but an offering laid with a bound at the feet of the country.  One thing is needed, and only one, to make taxation welcome.  The people must know what is to be done with their money.  They must know that some things are not to be done with it.  They must know that the money is not to be swept into the lap of gamblers and thieves, whether of high or low degree, in office or out.  They must know it is not to be squandered upon favorites, whether they be politicians or brothers-in-law or clergymen or women.  They must know that frugality and honesty prevail, and that works of retrenchment are begun.

And here I turn aside to say that I differ with the distinguished gentleman from Illinois, [Mr. Richardson,] who said the other day that he was opposed to cutting down salaries — at all events congressional salaries.  I am in favor of cutting up, and cutting off, every expense which can be discarded, and I am in favor of beginning with our own compensation.  Cut it down;  cut it down liberally;  cut it down more than it will easily bear, and then with consistency and self-respect we can turn the knife in all directions.

But I was saying what the people must know about the use to be made of their money.  Above all things else they must know it is to be applied to the most vigorous policy of war — that policy most destructive of rebellion and most crushing to the idea, whoever dare suggest it, be he in high place or not, of a continental partition or dismemberment in any contingency.  They must know that no idea of accepting anything less than absolute submission lurks undiscovered or glides unbruised near any department of the Government.  They must know that dalliance and delay find no hiding-place either among the cushions or the saddles on which power is seated.

Just here I want to make a remark belonging strictly to this subject.  The determination seems to exist in some quarters to misunderstand or pervert the position of all those in this House or elsewhere who have ventured to suggest a query as to the adequacy of the progress made in the war.  Every member here who insists upon a vital policy is set down as a disciple of the "on to Richmond" school, to use the prevailing expression.  That phrase is employed to signify that a party exists in Congress in favor of dictating an advance of the army of the Potomac.  Now, sir, for one — and I speak for myself only — I want to enter my protest against this attempt to fasten a false issue upon Congress, or any party in it.

The propriety of making an advance at any given time and place is a military question, to be decided by military authority.  The propriety of an advance, with weather and roads as they are, upon a large army intrenched on its own ground, behind its own guns, is a momentous question;  and I do not believe that any constituency represented on this floor, or its Representative, would take the responsibility of deciding it in the affirmative.  No, sir;  it is not the want of an advance upon Manassas, or of an advance at any other given point that is needed to allay public solicitude;  it is not the failure to advance now that any one complains of, so far as I know.  The ground of comment is entirely different.  It is said that much time has elapsed since we have had a splendid army in the field, and that the progress of the war has not been great.  It is said that two armies are besieging each other for months together, at an enormous expense on our part.  It is said that owing to procrastination the war has ceased to be a war of maneuvers, and has become a war of positions.  It is said that December and the first half of January came with smooth roads and sunshine, and held out to us the golden hour, and that we failed to improve it.  These things and others have awakened a suspicion that the favorite policy with some directing minds might be the plan known as "the exhaustive policy;"  and it is this suspected policy which has awakened the alarm and indignation of many men.  Does anybody wonder at it ?  Does anybody wonder that the common sense of the nation is shocked at the notion of an exhaustive policy to be waged by us upon the South ?  The people all knew that our Army is absurdly large if its only mission is to hold positions here and there.  Children know that it would be madness for a manufacturing and commercial people to attempt an exhaustive policy upon an agricultural people, possessing a great and fertile country.  Fools can hardly expected to believe that it would be wise for twenty millions of people, engaged in manufactures and commerce, to sit down on the frontiers of an enemy and wait for the starvation in their own homes of eight millions of people, possessing within themselves the means of producing forever all the necessaries of life;  and this, too, with slaves to till the soil, and leave their masters time to organize and drill, and educate the country in the art of war.  And particularly would such a policy be fallacious, if the two greatest difficulties and dangers pressing upon the twenty millions were first their own exhaustion from the derangement of finances and trade and the expenses of the war;  and second, the possibility that delay would bring hostile intervention from abroad to destroy blockades and produce collisions between leading Powers, and embroil the world in a riot of nations.

No, sir;  neither the people or their Representatives want to dictate advances or to interfere with movements or details;  they simply want to know that the people's servants are using the people's money and the nation's Army to hurl swift destruction on the nation's foes.  With these wholesome conditions, we have free and full permission to vote taxes, and no man need quake for his vote.  Private letters, in scores and hundreds, attest the truth of what I say.  Private and public assurances, full of the patriotism that pays and works and suffers and fights, attest its abundant truth.  Thus armed with the power of taxation, with the country impatient for its exercise, the whole responsibility of meeting the emergency with calmness, with safety, and success, is thrown upon us.  We have abundant means in our hands;  the question is, shall we make proper use of them ?  Unless we appeal to the moneyed interest of the country with an adequate policy, we can get no money, and ought not to get it;  we shall not deserve it.  But if we do present a sound and solid policy, we can realize, and realize promptly, all the money we require.  We can, in anticipation of taxation, realize it on paper based upon and to be retired by taxation, that being made part of the compact with the public creditor.  If this very bill, in place of containing a legal tender clause, had provided that every note which it proposes to utter should have stamped or inscribed upon it, "based upon taxation," "to be redeemed by taxation," so as to be inwrought with taxation, that mode of imparting value would, I submit, have been a vast improvement on the provision as it stands.  Such a provision would have seemed like the magic touch of Hamilton.  He says:

"The true definition of public debt is a property subsisting in the faith of the Government.  Its essence is promise.  Its definite value depends upon the reliance that the promise will be faithfully fulfilled."

But, sir, for reasons and objections beyond this, I hope we shall be able to improve upon this scheme, which, it seems, for the first time this morning, comes here sanctioned by a minority only of the Committee of Ways and Means.  That committee consists of nine members.  One is absent, and of the eight who are present it is said now, and I am glad to know it, that but four favor this measure.

Mr. Stevens.  Will the gentleman from New York permit me to say that when this bill was reported, it had the concurrence, I believe, of three fourths of the committee ?  Since that some members have changed their views.

Mr. Roscoe Conkling.  Well, sir, in these times, when very high financial authorities hesitate and change and reverse their convictions so very often, I do not think any gentleman need feel any compunction for having changed his opinions.  And, by the by, I want to mention another matter.  There has been some carping at the Committee of Ways and Means because they have not brought in a tax bill before this time.  For one, I have no patience with such strictures.  Charged, as the committee is, with more onerous and perplexing duties than rest on any other persons in the Government just now, I think it is entitled to the thanks of the House and of the country for its multiplied and conscientious labors, hastened, no doubt, as fast as possible.  With very great respect to that portion of the committee favoring this bill, I venture to suggest some criticism upon it.  It has not been put forward as a measure calculated or able to stand alone;  it is admitted to be incomplete in itself.  It is to be propped up by a tax bill.  So far, so good;  but the two together cannot stand without something else upon which to loan;  but are both intended, as is now admitted, as a kind of pedal attachment to a bigger thing— a great banking scheme, a creature of gigantic proportions, "fearfully and wonderfully made !"

Mr. Stevens.  I know what the gentleman refers to.  He refers to a suggestion in the argument of my colleague from Massachusetts, [Mr. Hooper]  It is not the suggestion of the committee.

Mr. Roscoe Conkling.  I thank the chairman of the Committee of Ways and Means for saying that, on account of the personal tranquillity I derive from it myself.  Now, sir, this banking scheme which the present bill is intended by some to usher in, and render necessary, I hope gentlemen will mark it;  this forthcoming mammoth, this elephantine machine, will be a great lion when it comes here.  It will be as much of a lion as the Great Eastern, or Japanese embassy, and we adjourned to see the Japanese come ashore with their trunks, didn't we ?  Well, sir, we ought to do something for this expected visitor undoubtedly, something handsome.  The fatted calf ought to be killed;  but it seems to me that $100,000,000 of paper money, as a legal tender, to pave the way, is, considering our moderate circumstances, rather ostentatious hospitality.  I do not wish to say anything disrespectful of this great banking invention;  but with him of old "I fear the Greeks," and when this Trojan horse is trotted out, I hope some doubter with a spear will investigate his bowels and see what he is likely to emit, whether armed men or something else;  and if armed men, we'll add them to that army which my colleague from the Onondaga district [Mr. Sedgwick] said the other day goes into winter quarters in summer weather.

--- [Roscoe was proven right in his suspicion when a year later the National Currency Bank bill was passed and its section 41 stipulated "That every such association shall at all times have on hand, in lawful money of the United States [greenbacks], an amount equal to at least twenty-five per centum of the aggregate amount of its outstanding notes of circulation and its deposits;"
Senator John Sherman, January 16th 1873:
"United States notes were issued under the authority of the acts of Congress passed February 25, 1862, July 11, 1862, and March 3, 1863. ... They are made the basis of the entire system of national banks, whose notes are payable in United States notes."
But Roscoe was not a nice guy:-- in 1882 Mr. Conkling testified, as a paid witness for the railroads, that he'd slipped the 'person' language into the 14th amendment to ensure that corporations would one day receive the same civil rights Congress was giving to freed slaves. ]

There is one thing, however, about the proposed banking scheme, and about the bill before us, intended probably to attract votes, which seems of very questionable policy, and very doubtful ethics.  I mean hostility to the existing banks of the country.  And inasmuch as I own not a farthing in the stock of any bank, and have not the slightest connection with one, perhaps a word in behalf of banks in loyal States will be borne with from me.

The present troubles, or rather their own patriotic action, have broken the banks;  for every commercial man in this House knows that the banks were never stronger than when the Secretary of the Treasury appealed to them for loans.  They allowed the Government to carry off their specie, their capital from their vaults, and if that did not break them, they at all events might have adopted a policy which would have saved them.  But they had to suspend, and the design of this bill would seem to be to prevent their resumption of specie payment.  At all events it is obviously the policy in some quarters to preach a crusade against the present banks, and array prejudices and votes on that issue.

There are two questions to determine before entering upon such a course: first, is it expedient ?  Second, is it right ?  There are in the free States upwards of twelve hundred banks, with an aggregate capital of $350,000,000.  They have fifteen thousand directors, and one hundred and eighty or two hundred thousand stockholders.  They ramify everywhere and connect themselves with all the capital of the country.  In view of these facts, is it better for the Government to make the banks its fiscal enemies, or its fiscal friends ?  If we have no further use for them, if we have done with them, if we are above and beyond them, it is of no importance as to expediency either way.  But even then, are we justified now in making war upon them ?  The banks of New York, Philadelphia, and Boston represent a capital of $119,000,000, in round numbers.  Of that capital they have loaned to the Government $100,000,000.  Has any other interest in the country put so nearly its whole capital into the war ?  I know of none;  none;  and I submit to gentlemen whether, even if the stock and assets of these banks were not largely owned by orphans and widows, it would be quite the thing for us just now to indulge in unprofitable hostility to banks ?

But, sir, if this scheme is the best thing that can be devised to sustain the credit of the Government, it is entitled to, and I hope will receive, every vote here, no matter who it benefits or injures.  It seems to be conceded by the advocates of the measure, that unless the legal tender clause is retained it would not be wise to pass it;  in other words, that a good objection to that clause would be fatal to the bill.  I propose, therefore, to assign my reasons briefly for voting against the attempt by legislation to make paper a legal tender.

The proposition is a new one.  No precedent can be urged in its favor;  no suggestion of the existence of such a power can be found in the legislative history of the country;  and I submit to my colleague, as a lawyer, the proposition that this amounts to affirmative authority of the highest kind against it.  Had such a power lurked in the Constitution, as construed by those who ordained and administered it, we should find it so recorded.  The occasion for resorting to it, or at least referring to it, has, we know, repeatedly arisen;  and had such a power existed, it would have been recognized and acted on.  It is hardly too much to say, therefore, that the uniform and universal judgment of statesmen, jurists, and lawyers has denied the constitutional right of Congress to make paper a legal tender for debts to any extent whatever.  But more is claimed here than the right to create a legal tender heretofore unknown.  The provision is not confined to transactions in futuro, but is retroactive in its scope.  It reaches back and strikes at every existing pecuniary obligation.  This was well put by the gentleman from Ohio, [Mr. Pendleton] and I concur with him, that substituting anything for gold and silver in payment of debts, and still more of precedent debts, is of very doubtful constitutionality.

A memorandum from the Attorney General was produced here the other day, and the context in which it was read would indicate that it made something for this bill.  Sir, I do not so understand it;  on the contrary, if the Attorney General has stated all that he can say in favor of the bill, the plain conclusion to be drawn from his opinion is, that it has no warrant in the Constitution.  He says the Constitution contains no "prohibition."  That is not the question.  In looking for a power in the Constitution of the United States, the point is precisely the reverse.  The Constitution of the United States is an instrument of delegated and enumerated powers, and Congress has no powers except those which the Constitution confers.  Not so with the Legislatures of the States;  they have all the residuum of legislative power.  In looking, therefore, for a power in the constitution of a State, the question usually is: has it been taken away or forbidden ?  But, in looking at the Federal Constitution, the question is: has the power been given;  is it there ?  Can you put your finger upon it among the grants of the Constitution ?  If not, if it is not there at all, you have not the power, and there is an end of the whole matter.

But, sir, passing, as I see I must, from the constitutional objections to the bill, it seems to me that its moral imperfections are equally serious.  It will, of course, proclaim throughout the country a saturnalia of fraud, a carnival for rogues.  Every agent, attorney, treasurer, trustee, guardian, executor, administrator, consignee, commission merchant, and every debtor of a fiduciary character who has received for others money, hard money, worth a hundred cents in the dollar, will forever release himself from liability by buying up for that knavish purpose, at its depreciated value, the spurious currency which we shall have put afloat.  Everybody will do it, except those who are more honest than the American Congress advises them to be.  Think of savings banks intrusted with enormous aggregates of the pittances of the poor, the hungry, and the homeless, the stranger, the needle women, the widow and the orphan, and we are arranging for a robbery of ten, if not of fifty per cent. of the entire amount, and that by a contrivance so new as never to have been discovered under the administrations of Monroe Edwards or James Buchanan.

To reverse the picture: after the act shall have gone into effect, honest men undertake transactions based upon the spurious tender at its then value.  By and by comes a repeal, and they are driven to ruin in multitudes by the inevitable loss incident to a return to a metallic currency.

I understand there are forty thousand petitioners in both Houses now praying for the passage of a bankrupt law.  Sir, provision will have to be made on a scale of bankruptcy more liberal and gigantic than England ever saw, for the relief of honest people, who will be cheated and ruined under the legal tender system now proposed, if the country tries the experiment and survives it.  But, surmounting every legal impediment, and every dictate of conscience involved, viewing it as a mere pecuniary expedient, it seems too precarious and unpromising to deserve the slightest confidence.

The whole scheme presupposes that the notes to be emitted will be lepers in the commercial world from the hour they are brought into it;  that they will be shunned and condemned by the laws of trade and value.  If this is not to be their fate, what is the sense, as was said in the Federal constitutional Convention, in attempting to legislate their value up.

Now, Sir, I do not believe that you can legislate up the value of a thing any more than I believe you can make generals heroes by legislation.  The Continental Congress tried legislating values up even by resorts to penalties, but the inexorable laws of trade, as independent as the law of gravitation, kept them down.  I do believe you can legislate a value down, and that you can do it by attempting to legislate it up;  and I hope that my time will enable me to give some reasons for that, but let me continue the present point.  My colleague argued that any other thing or metal, if stamped with the same value, would be as valuable as coin for commercial purposes within the jurisdiction of the Government so stamping it.  Thus a piece of paper and a piece of gold stamped alike would be of equal value.  Here is what he said:

"Any other metal or thing that should be stamped, and its value regulated by all the Governments of the world would pass equally well in all commercial transactions, as gold and silver, although not intrinsically as valuable.  Exchange bills or Treasury notes, whose value is fixed by Government, and stamped its money, would pass as money in the payment of debts within the jurisdiction of the Government fixing such value."

A piece of gold is coined into an eagle and stamped ten dollars, and a piece of paper stamped of the same amount.  Now, cut off the stamp from both, and are they of the same value still ?  If not, why not ?  Simply because coin, like every other article of value, represents the cost of production.  Thus every coin purports to be of a value equal to the cost of producing it, less the expense of coinage, and less also the alloy, which is put into it to make it harder, and to prevent its being absorbed into the coinage or crucibles of other nations, as it might be if the standard were not controllable.  If my colleague is right in his idea that calling a thing gold will make it gold, or as good as gold, why was it that the brass guineas of James II would not pass for guineas ?  And why did the debasing alloys of Henry VIII, Edward II, and Charles II strike down the currency of England to the most ruinous degradation ?  Why was it infamous for the Stuarts to clip the coin ?  Why should we not make our dollars out of fifty pennies' worth of metal, and cause them to pass ?  That device, if it would work, would solve our difficulty.  Why was it that the Continental money, with an edict of Congress that whoever refused to take it at par should be held an enemy to his country;  why, with such value affixed, did Continental money become so worthless ?  In the city of Philadelphia $7,000 was charged in Continental money for a dinner, with wine, for two persons;  and two gold guineas settled the score.  If my colleague is right that the Government, by putting on a stamp of value, can make things really of that value, I would suggest that we pass a bill to put a stamp of $125 on each of the Government horses.  They each represent the sum of $125;  but unstamped they are said not to be worth the money.  If the thing could be carried out, a very sung sum could be made in that way, and we might even make them a legal tender.

I wish I had time;  I wish I was sure the committee would give me five minutes after the hammer falls to answer an argument made on yesterday by the distinguished gentleman from Massachusetts, [Mr. Hooper] but I am afraid to trust the committee for that, and I pass it, only saying, with great respect to him, that the only consideration he suggested which weighed with me in favor of this legal tender scheme was, that the people, the Government having taken the coin from the books, would be unable to pay their taxes in coin because they could not get it.  Sir, that is a good suggestion, and all we need to meet it is a very simple provision having none of the objections to making paper pay debts indiscriminately.  You only want in the bill we pass the old doctrine of recoupement and set off, and then the citizen can pay his tax in Government issue.  That is a sound and equitable doctrine.  It is as old as the common law of England;  as old as the civil law of Rome.  It means merely this: if my friend here has my check which has not been paid, and I have a tax or a debt against him, he may pay that tax or debt with the check, setting off one against the other and settle it.  You need no legal tender for that.

But shall it be said that because we all agree that the Treasury notes to be issued should be receivable for taxes, we shall go further and hoist the floodgates of fraud, by making these notes pay debts to the amount of their face, when the bill virtually admits that they will be worth but ninety cents in the dollar on the day the law takes effect.  No, sir;  and I thank God that the great State of New York, which carries one fifth of the burdens of the nation, and which has loaned for years to the Government ninety per cent. of the money it has borrowed;  I thank God that the State of New York has in the popular branch of her Legislature set the seal of her disapprobation upon this monstrous proposition by a vote of almost two to one.  Such a step, if it should ever be taken by a Government, should be taken only when everything else has failed and the last extremity has been reached.  It is the last expedient to which kings and nations can resort.  When you clothe an individual with the power to give his own checks to pay his debts and supply his wants when he has nothing with which to pay them, and when you ordain that every man shall receive his check, you have performed for that man the last sad offices of financial humanity;  there is nothing left to be done for him;  and if he fails then, he is past resuscitation and past resurrection.  So of a Government;  you may try any other expedient with impunity, and if it fails, you have remaining a resort to other things;  but if you once authorize the issue and compel the acceptance of its own paper, and that proves to be a failure, there is nothing left; the die is cast;  the last link is broken.

Are we reduced to any such extremity ?  Do gentlemen reflect what is the admission contained in this scheme;  the desperation which it presupposes ?  Do they think of the danger and distrust to which they expose their Government both at home and abroad ?

It is right to learn of an enemy, and already the London Times hails this $100,000,000 legal tender bill as the dawn of American bankruptcy and the downfall of American credit.  Perhaps we can learn financial wisdom from a nation which long since established in its Parliament the standing rule that the creation of a debt should never take place without being accompanied by the means of its extinguishment.

Mr. Chairman, I believe all the money needed can be provided in season by means of unquestionable legality and safety.  The substitute I have offered will, I believe, without substantial alteration, effect that result.  And let me assure gentlemen that it will stand alone upon the tax bill to be brought in, and it will not be necessary to have behind it a new banking system, which could not be set in motion until a year after the expiration of the war.

The advocates of the original bill present a more somber picture for the future than I had supposed to be necessary, although I think the account of the nation shows larger balances against us than was stated at the opening of the debate.  The estimates submitted to us show the following items:

Debt funded or liquidated up to the 15th day of January, 1862 .... $306,000,000
The floating debt contains a large unknown element, but cannot be less than ..... 200,000,000
Required for expenditures, ordinary and extraordinary, to July 1, 1862 .... 300,000,000

This last item is at the rate of $2,000,000 per day for one hundred and fifty days.  If $45,000,000 a month is taken as the estimate, the item will be $225,000,000.  But it will reach $300,000,000, because there is an item of a hundred millions nearly which will be payable at the close of the war growing out of bounty acts, and it has been nowhere included.

Eight hundred and six millions ?  Who can credit these figures when he remembers that the world's greatest tragedian closed his bloody drama at St. Helena leaving the public debt of France less than seventy millions of pounds ?

This enormous debt amounts, for each congressional district represented upon this floor, to $4,210,000, and when the war is ended it will be more than five millions of dollars.  Let gentlemen ponder upon the fact that there is more than three hundred thousand dollars of interest to be raid every year by his congressional district.

In addition, when the war is over our expenses upon a peace footing will be enormously large for many years.

Interest on public debt .................. $50,000,000
Sinking fund of one per cent. on the debt .... 5,000,000
Army, say ..... 75,000,000
Navy and coast defenses ................... 65,000,000
Civil list .............................. 50,000,000

A sinking fund of one per cent, invested in six per cents., with the interest reinvested semi-annually, will extinguish the whole debt in thirty-one years.  Therefore I have stated my figures as to sinking fund at one per cent.  If we can levy and collect the sum required on a peace footing, or nearly that sum, the Government is financially put in the best condition;  and this, or nearly this, we ought to do.  It is idle to pretend that it can be done, or that anything can be done, to carry us through without inflicting great suffering and sorrow.  But the pangs and trials of a nation are in the ratio of its destinies.  We must not forget the sublimity and vastness of the epoch, and of the sacrifices it warrants.

There has been no such occasion presented to a nation, no such demand made upon a nation, during the lifetime of the human race.  The history of America, the history of free government, the history of constitutional liberty, begins or ends now.  We have our career and our traditions as a nation;  they are safe;  but our history is yet to be made.  Our destiny is, without an ally in the world, with nations blinded against us, to hold fast a continent in the midst of the greatest, guiltiest revolution the world has ever seen.

[Here the hammer fell.]

Mr. Bingham obtained the floor.

Mr. Morrill, of Vermont.  Will the gentleman yield to me a moment ?

Mr. Bingham.  Certainly.

Mr. Morrill, of Vermont.  I move the substitute which I obtained the leave of the House this morning to have printed, as an amendment in the nature of a substitute to the amendment of the gentleman from Ohio, [Mr. Valladigham]

Mr. Roscoe Conkling.  I rise to a question of order.  My colleague from the Erie district [Mr. Spaulding] reported a bill which was referred to the Committee of the Whole on the state of the Union.  To that bill the gentleman from Ohio [Mr. Vallandigham] offered an amendment, which yesterday he modified;  and to that amendment I offered on amendment, being a substitute for the whole bill.  Now I hold it is not in order for the gentleman from Vermont to move his amendment at all at this time, and especially not to move it as an amendment to the amendment of the gentleman from Ohio.

The Chairman.  The Chair decides, that as the gentleman from Ohio has offered his amendment as a substitute, instead of an amendment, the motion of the gentleman from Vermont is not in order at this time.

Mr. Stevens.  I ask permission to have printed a bill — the original bill which has been corrected — which I mean to offer after the amendment of the gentleman from Vermont shall have been offered.

---[This is Thaddeus' complete revision of bill 240; yesterday Vallandigham and Roscoe offered modifications and those proposed amendments were presented to the House and are in the Record; the Thaddeus knew his ideas would have been --and actually were-- rejected, so he resorted to his tried and true method of sneaking an unseen bill through.]

The Chairman.  The Chair would state to the gentleman from Pennsylvania that, in his opinion, it is not competent for the Committee of the Whole to order a document to be printed.

Mr. Stevens.  It has always been done, by general consent.

The CHAIRMAN.  Not in Committee of the Whole.

Mr. Stevens.  If no one objects, it can be done.

The CHAIRMAN.  The Chair thinks not.  The gentleman can make his motion after the committee rises.

Mr. Stevens.  I know it cannot be done now, if any one objects.

Mr. Morrill, of Vermont.  I desire to know of the Chair whether any further amendment is now in order ?

The Chairman.  The Chair would say to the gentleman from Vermont that, in the way of perfecting the original bill, any amendment is in order.  The original bill is before the committee for amendment and perfection.

Mr. Morrill, of Vermont, Then I will offer my amendment as a substitute for the original bill.

The CHAIRMAN.  Two amendments to the substitute are already pending.  An amendment to the original bill is in order.

Mr. Morrill, of Vermont.  Then I move to amend the original bill by striking out all after the word "that," and inserting my amendment.

The Chairman.  There is already an amendment pending to strike out all after the word "that."