Mr. Carlile [John Snyder Carlile (December 16, 1817 - October 24, 1878) Virginia (U) studied law, admitted to the bar]. I move the postponement of all prior orders for the purpose of taking up a resolution I submitted some weeks ago on the subject of the finances.
The motion was agreed to; and the Senate proceeded to consider the following resolution submitted by Mr. Carlile on the 13th of January, with modifications as hereafter explained:
Resolved, That the Committee on Finance inquire into the expediency, of raising by direct taxation upon real and personal property of every kind and description taxing liquors and articles of luxury at a higher rate than other property a sum sufficient to pay the interest, at a rate of seven per cent. per annum, upon $200,000,000, and also the principal, in ten years; and a sum sufficient to pay the interest, at a rate of eight per cent. per annum, upon $800,000,000, and also the principal, in thirty years. Of issuing for ten years, at the rate of interest first aforesaid, bonds for $200,000,000; and for thirty years, at the rate of interest last aforesaid, for $800,000,000; reserving to the Government the right to redeem the whole or any part of said bonds for $200,000,000 at any time after five years, and the whole or any part of said sum of $800,000,000 at any time after twenty years, and of pledging the public lands as an additional security for the payment of the said sum of $1,000,000,000, by providing that no disposition shall be made of them until the whole of said sum of $1,000,000,000 shall be fully paid off and discharged, other than the sale of the same under existing laws, and for the deposit, with the fiscal agency hereinafter provided for, of the proceeds arising from the sale of the public lands, to be added to the specie fund of said agency. Second. Of creating a fiscal agent or agency, to be located in the city of New York, with a specie basis of not less than $25,000,000, and authorized to issue notes of the denomination of five dollars and upwards, payable on demand at the agency, to an amount not exceeding $800,000,000. The said sum of $200,000,000 of coin to be deposited in sums of $25,000,000 at the time with the said agency, and $75,000,000 in thirty year bonds by the Secretary of the Treasury, who shall receive from the said agency $100,000,000 in its notes; and thereafter, upon a deposit by the Secretary of the Treasury with the said agency of $25,000,000 in coin and $75,000,000 of the said thirty-year bonds, or any part thereof, from time to time, in such amounts as the exigencies of the Treasury may require, he shall receive from said agency an equal amount of demand notes, with the specie so deposited, and the par value of the said bonds. Of authorizing said agency to sell said bonds so deposited, or so many of them as may be necessary to enable said agency to redeem the notes issued by it, taking care never to allow the coin on hand to bear a less proportion to the circulation than as one to four. Third. Of providing that whenever notes issued by the said agency shall be presented to it for redemption and payment, in sums of $100 and upwards, the holder thereof shall have the right to demand and receive from said agency a like sum in the eight per cent. bonds. Fourth. Of providing for the payment by the said agency of the interest upon both the seven and eight per cent. bonds in coin semi annually. Fifth. Of providing that if at any time, in the opinion of the said agency, the market value of the bonds deposited and the specie on hand shall bear to the circulation a less proportion than one to four, said agency shall have the right to call upon the Secretary of the Treasury for a further deposit of thirty-year bonds. Sixth. Of requiring all payments by the Government to be made n the demand notes issued by the said agency.
Mr. Carlile. I submitted this resolution after Congress had been in session some weeks, for the purpose of, if possible, bringing to the attention of the Senate the necessity of early action upon the financial policy that is to be adopted by the Government. I am aware, sir, that all revenue bills, under the Constitution, must originate in the House of Representatives; but the power of proposing amendments is given to the Senate. It is therefore not out of place to bring to the attention of the Senate, as this resolution proposes to do, the subjects of taxation, revenue, and currency.
There is another reason. I fear that, under the plea of a pressing necessity, we may be induced to adopt a system that will be ruinous to the interests of the country, if not in violation of the Constitution of the land.
The exigencies of the country require an expenditure of $50,000,000 a month. I have a statement from the Treasury showing that the payments during the month of October last were $45,787,054.02; for the month of November last, $55,524,675.86; and for the month of December last, $42,401,266.73. These are the payments from the Treasury; they do not include the demands upon the Treasury which are yet unsettled and unpaid. It is but fair, therefore, to infer that at least the sum of $50,000,000 a month is necessary to supply the wants of the Treasury. I had supposed that some well-considered financial policy would have been submitted to Congress upon its meeting in December from the Treasury Department; but, so far as I am advised, we are without any such aid. The scheme which seems to have the most favor is one authorizing the issue of Treasury notes, declaring them to be a legal tender, and looking to the aid of the banks to furnish the means.
Now, sir, the Treasury is empty. How shall it be replenished and the country saved from an irredeemable paper issue ? These are subjects for the consideration of Congress, to be disposed of by this Congress and at this session. They can not be delayed or postponed. Can the wants of the Treasury be supplied, and at the same time a sound and uniform currency, convertible at the will of the holder into gold and silver, be secured to the people ? This is the want. That this can be done, I have no doubt; and it is in order that we shall not, under the plea of a pressing necessity, be forced to the adoption of temporary expedients and temporary measures of doubtful constitutionality that I submitted on the 13th day of the last month the resolution which is now before the Senate.
I am opposed to any system looking to a departure from the well-established policy of the Government, which is an entire separation of the Government from the banks. I am opposed to a reunion. I am not willing that the national credit shall be dependent upon the banks, nor am I willing that banks shall be used by the Government as Treasury agents.
I would inquire if the credit of the banks is not now based upon confidence alone. Take away from them confidence, and depositors will take away their deposits. Take away from the banks the Government, and all bank credit is gone.
The banks cannot exist without the Government; the Government can exist without the banks; the people and the people's Government should not be controlled by the banks, but the Government should control the banks. A financial policy that will command the confidence of the country by making Government securities the safest and most desirable investment for capital, and at the same time secure to the people a sound and uniform currency, is what the country needs, and what the people have a right to expect at the hands of Congress.
Whenever you assure the capitalist that certain provision is made for the prompt payment of his interest in coin, and the return of the principal at maturity, you will be able to command all the coin that you may want. Whenever the people see that your circulation is secured by an ample specie deposit, and a deposit of Government securities equivalent to specie, your notes will be received at par everywhere, and the banks, instead of controlling the financial policy of the Government, will be compelled to resume specie payments or lose their own local circulation. If, however, the credit of the nation is dependent upon banks, it will not be long until banks, Government, and people will all go down together, for financial ruin follows an irredeemable paper issue as the night follows the day.
Now, sir, I wish to inquire where Congress derives the power to compel a creditor to receive, in payment of his debt, depreciated paper ? Nowhere in the Constitution is the authority given to Congress to make Treasury notes, any more than bank notes, a legal tender.
The resolution looks to the creation by Congress of a fiscal agency, to be located at the great money center of the country the city of New York. It looks to the issue by it, upon the deposit by the Secretary of the Treasury of a certain amount in coin, and a certain amount in Government securities, of notes equal to the amount of coin and Government securities deposited. It looks to a rate of interest and to a time of payment which will command the capital of the country and the confidence of those who have it. I propose, with the leave of the Senate, to modify the resolution so far as to strike from it the word "fifty" wherever it occurs, and insert the words "twenty-five," and the words "one hundred and fifty," and insert the words "seventy-five," so that, upon the deposit by the Secretary of the Treasury of $25,000,000 in coin and $75,000,000 in bonds proposed to be issued under the resolution, the Secretary of the Treasury would receive from the agency $100,000,000 of notes; and so, from time to time, as the exigencies of the Treasury may require it, a further deposit of like amounts of specie and of Government securities to be made with the agency.
The resolution proposes the issue of two classes of bonds: bonds having ten years to run and bearing seven per cent. interest, to the amount of $200,000,000; and bonds having thirty years to run and bearing eight per cent. interest, to the amount of $800,000,000, if the exigencies of the Treasury require it, reserving, however, to the Government the right to redeem the first class of bonds at any time after five years, and the second class at any time after twenty years.
I venture the prediction that if some such policy as that suggested in the resolution shall receive the approbation of Congress, there will never be one of the eight hundred millions of bonds sold in the market. The two hundred millions will command all the coin that will be necessary to keep up the proportion of specie to the issue of notes, and the eight hundred millions of bonds will only be taken by those who hold to the amount of one hundred dollars or upwards the notes issued by this agency, provision being made for the holders demanding, instead of specie from the fiscal agency, the eight per cent. bonds upon the presentation of the notes that are issued by the agency. I would have these eight per cent. bonds issued in sums of $100 and upwards, so that the holder of $100 of the notes of the agency may have it in his power to receive an eight per cent. bond for that amount.
This, in brief, Mr. President, is the scheme contemplated by the resolution. I trust that it will receive the consideration of the Finance Committee of this body, and that when a bill from the other House looking to the raising of revenue shall come before it, and thus the power be given to the Senate to propose amendments, the subject of taxation will receive its consideration, in connection with the other subjects contemplated by the resolution. I propose to raise the means to pay the interest upon these bonds that are to be issued by what I will call direct and internal taxation; in other words, by taxation other than that derived from our ordinary tariff laws. The tariff should be left to provide the means to defray the ordinary civil expenses of the Government; and if it shall receive that attention which so important a subject deserves at the hands of Congress, it will be so modified, it will be so reduced, it will be so changed from its present prohibitory character, as to make it a tariff for revenue, under which we may reasonably expect to derive all that may be necessary to defray the ordinary civil expenses of the Government. Our present tariff ought now to be entitled "an act prohibiting importations from abroad," for that is its character.
The sum to be raised under this resolution to meet the interest upon the bonds proposed to be issued, and to redeem within the time specified the principal, will not exceed $100,000,000. The resolution looks in the first place to the payment of seven per cent. interest upon $200,000,000, which is $14,000,000; then to the payment of eight per cent. interest on $800,000,000, which is $64,000,000; and then to the providing of a sinking fund to redeem within the time specified these bonds that are to be issued. Do that with the pledge that the resolution proposes shall go along of the public lands forever to be held sacred as a fund for the payment of these bonds, and you will have no difficulty in commanding in the market all the coin that you may want to enable you to conduct the Government in this extraordinary emergency, and at the same time to save the people from a depreciated and irredeemable paper issue, one of the greatest calamities, save that of civil war, that can be inflicted upon them.
The resolution, as modified, was agreed to.
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. Spaulding. I move that the rules be suspended, and the House resolve itself into the Committee of the Whole on the state of the Union.
The motion was agreed to.
Mr. Wickliffe. Before we go into committee I hope the House will limit the debate, so that we may have a vote to-day on the pending bill.
The SPEAKER. The House is now in committee.
The House accordingly resolved itself into the Committee of the Whole on the state of the Union, (Mr. MALLORY in the chair.)
The CHAIRMAN. The question before the committee is the consideration of 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; on which the gentleman from Maryland [Mr. Crisfield] is entitled to the floor.
Mr. Crisfield addressed the committee for one hour. [His speech will be published in the Appendix.]
Mr. Pike.[Frederick Augustus Pike (December 9, 1816 – December 2, 1886) (R) Maine; studied law, was admitted to the bar] Mr. Chairman, Sir Robert Peel on introducing his bank bill in 1844 said, that in the opinion of her Majesty's Government "inquiry had been exhausted."
Upon no subject are the discussions fuller, or opinions expressed in a more authoritative manner, than that of the currency. Embracing the every-day business of an important and intelligent class of the community, and dealing with the values of every man's property, men's wits have been sharpened by their necessities, and they have expressed themselves fully and cogently, if not learnedly and wisely.
It is true that even the wisest have not always reached correct conclusions. The provisions of Sir Robert's bill, supposed by her Majesty's Government to be the embodiment of financial wisdom, were found not to work favorably in a mercantile pinch, and the aid of the ministry was invoked by the bank managers, on the first stress in business affairs, to protect the institution and the mercantile community from the effects of the provisions of the charter in relation to the specie reserve.
Following in the footsteps of all legislators upon the subject, we are in some sort speculators in public affairs, and our measures, "rough hew them how we will," must be submitted to the practical operation of every-day business life, before we can say of them that they are entirely satisfactory.
I do not know that I can add anything to the argument in support of the measure under consideration, but I venture to submit to the committee the process of reasoning through which I came to the conclusion to give it a hearty support.---[Then, why not just keep quite, and save us time and paper ? You could have simply gone to the out-house and pass gas there...]
In one thing we are all agreed. We agree that the necessity of action is upon us. It is said to have been delayed too long already, but I think not. It is better to have this and the cognate plan of taxation well matured and made as perfect as we know how before launching them. If in the end we arrive at a reasonably correct set of measures to alleviate the present distress I shall be satisfied. Rectifying every manifest injustice that shall be brought to our notice, it cannot be that the process of setting apart a large portion of the property of the country for public uses by means of taxation shall not work with special hardship upon different localities. If it is impossible to assess an ordinary tax upon a small city without causing complaint of unfairness in the levy, how small a chance must there be of compassing this immense job without just reason by many to find fault with our action. Time spent in guarding against errors is well spent for those who shall pay the assessments.
The problem before the committee is neither new or complex. It has occurred times without number to individuals, been pressed upon their attention by necessities that would not be postponed, and each man has been obliged to solve it in his own way and at his own peril; and Governments all the world over, in all ages, have been discussing the same thing, constantly seeking the means by which they could eke out their slender revenues and make good awkward deficits in their budgets.
It is certainly favorable for us that the people of the whole country have come to demand action in this matter of taxation. They expect and desire it. They are willing to set apart a generous portion of their earnings find their accumulations for the public use. They have contributed their sons in ample numbers to swell the ranks of our grand Army, and now they will send after them their money and valuables for their support. We certainly commence our labors under favorable auspices.
We find ourselves with the control of abundance of property. The census presents an account of it in billions. There are some eleven or twelve thousand millions in the loyal States to draw from, and starting, with this as a basis, even throwing out of present account the footings of the rebellious States, one would think we could float a debt against this enormous mass of valuable property for an amount sufficient for the necessities of this Government during the war.
It is quite necessary to create a debt. We have no means of discharging obligations already accrued and those which are accumulating everyday, but to borrow.
The property of the country is nominally in our power; but practically, the only means of reaching and controlling it is by taxation. This takes time, and while we are waiting to receive the returns from the tax-gatherers, we must borrow. There are two ways of borrowing proposed. One conforms to the mercantile idea: it claims that the Government, like any other debtor in distress, shall get the money at the market rates, issue its bonds, and sell them for what they will bring. If those who have money will pay par for the bonds, well and good; if not par, then ninety, or seventy, or fifty per cent. The mercantile idea is inexorable sell your paper for what it will bring, and pay or fail. We are adjured to adopt this standard as the only one of high and honorable tone. The rights of the creditor should be held sacred, and in no event be postponed or jeopardized, and it is insisted that whatever fails to come up to this high point should be discarded by those having control of the Government finances. This is certainly easy to be understood. It is plain and straightforward. We comprehend the rule and the reason for it.
But we know, too, that those who urge it do not always act upon it. We know that the dealers in money who manage the banking institutions never act upon the rule when their interests are not subserved by it. In ordinary times, when merely ordinary sacrifices are necessary to sustain credit and effect prompt payment, the rule is invariable; but when there is a pressure the rule relents, and the whole mercantile interest relaxes and approves a temporary abnegation of the maxim, "pay or fail." They do neither the one or the other. The banks go into temporary bankruptcy, under the easy name of suspension. They are in such condition now, and, so far as I know, with the approbation of the mercantile world. The New York banks, with specie in their vaults equal to about one third their capital and three times the amount of their circulation, refused to pay out any more specie because they deemed it for the interests of themselves and their customers that they should not do so. Why they did not continue to pay at least until they had run their specie reserve down to its ordinary limits half a dozen years since, does not appear. It seems to be sufficient reason to be given that they did not deem it wise to do so.
But it is a pungent commentary upon the stringent mercantile rule that it is sought to impose upon the action of the Government. It is like the abusive comments of the London press upon the suspension of specie payments by our Treasury, in which they insist upon considering it a collapse of the financial system of the Government, when they know very well that their own Government was successfully run for a quarter of a century, in the most important period of its history, upon paper alone, under a chronic state of suspense of specie payments.
Of course the objection to this plan is the expense; acting as trustees of the property of the country, it is our duty to protect it, as far as possible, from waste. Large Government loans created now must be placed at enormous sacrifice. Intelligent financiers reckon upon the sale of Government bonds at eighty, if issued in large amounts. We know that even the comparatively small amount sold during the second war with Great Britain only eighty-six millions was purchased by Girard and others at eighty and less, and paid for in their bills, which were at a discount for specie of some fifteen or twenty per cent. Of course those who have money to invest would necessarily accumulate large sums on an advance of funds upon the cessation of hostilities, and in the end the labor of the country must pay the bills, for change and shift it as you will, there is where the burden will eventually fall. The banker and merchant are the middle men, speculators more or less adventurous in the productions of others, and the changes thus far made in the tariff furnish additional evidence that this is so. We raise twenty or thirty millions of extra revenue by means of our taxation of tea and coffee and molasses and sugar a tax which falls like a per capita tax upon the country, the rich and poor paying in proportion to the extent of their families, rather than the extent of their properties; and unfortunately for the fairness of the tax, the poor man's family generally increases in inverse ratio to his other worldly possessions.
Considering, then, who is to receive the benefit of this discount, and who is to pay, it is our part assuredly to see to it that it is as small as possible.
Nor in refusing to adopt such a plan of raising a revenue do we depart from the custom of nations. No nation in time of stress of revenue has adhered strictly to the mercantile rule. England, in effect, went through her great wars upon paper not issued by the Government but by an institution under Government control, legalizing the suspension of specie payment, and authorizing an enormous issue of irredeemable bank notes, which were in effect, although not in terms, a legal tender. The Russian Government called in the aid of the paper ruble, and watched its gradual decline in value, until finally extinguished at something less than three for one. The French Government resorted to assignats and mandats, and threw them out in such immense volumes that they sunk by their own weight. Our own Government in its earlier days found paper indispensable, and it has been seriously questioned whether we would have got through the revolutionary war without its aid. And these are the four great nations of modern times. The finances of other nations have a similar history.
The opposite extreme of the mercantile idea is the issue of irredeemable paper in unlimited quantities. This has been done in former times under a mistaken impression of the power of Government. The most eminent examples, and those which are held up in terrorem most frequently in the discussion of the present action of Government, are found in the revolutionary paper of the Continental Congress, and, at a later time, of the French Assembly, in 1792-94. Both assemblies were newly possessed of power, and were disposed to set no limits to their authority. They resolved and voted as if all human action was under the control of legislative enactment. And yet the history of both transactions shows how little danger there is in the issue authorized by this bill.
The issue of Continental notes began in June, 1775, and up to April, 1777, $20,000,000 had been thrown out, besides a large amount of similar currency by the States, and yet at that time no marked signs of depreciation had made their appearance. Our population at that time was but about two and a half millions. Of the valuation then or since, until 1850, there is no record, and few estimates. But basing an estimate upon the proportionate increase of population and wealth since, the valuation at that time could hardly have exceeded five or six hundred millions. And this small population, poor and engaged in a war with a foreign nation of the first magnitude, carried notes to this amount without sensible decline.
It was only when the issue of paper bore an enormous disproportion to the means of payment that it depreciated. It could not be expected that a revolutionary Government could issue two hundred millions of bills without basis other than the voluntary contributions of States, over which the Government had no control, and give them currency. The only wonder is that there was so much vitality in the paper and it maintained its position so long as it did. It is reckoned that the cost of the revolutionary war was about a hundred and seventy millions of dollars, of which two thirds were raised by the Continental Congress, and the present Government finally assumed about forty-four millions of it. This enormous sum, equal to perhaps twelve or fifteen times that sum for this Government at this time, was raised in several different ways. The most fruitful source of revenue was the notes, and as they depreciated and went out of existence gradually and the increasing discount was spread over so many interests and localities, it was perhaps as equitable as the ordinary methods of taxation. Besides this, there was taxation of various kinds in the States, borrowing in Europe, and running in debt by taking property and giving certificates of indebtedness. There were other schemes, such as lotteries and taking property in kind, but they yielded small sums. The great resource was paper, and the history of the paper currency of that era should inspire us with confidence in this measure.
The French currency expanded with great rapidity. French vivacity drove their revolutionary energies headlong. The first loan amounted to about eighty million francs, and was followed in a very short time by one of double that amount; and in two years, they had issued over five hundred million francs of irredeemable currency based on nothing but confiscated estates. This issue, considering the character of the Government making it, and the amount of population and property that is represented, would hardly be equaled by the issue of eight or ten times the sum by that Government now. One can hardly wonder that the circulation thus thrown by Government into the channels of business induced an enormous rise of property of all kinds; and that even the robust washerwomen of Paris complained that soap had more than doubled in value. But the experiment was followed, and bolstered up, as in the case with our revolutionary paper, by laws fixing a maximum value on property until the issue reached the enormous sum of 19,000,000,000 francs; and the same thing was done over a second time by a kind of paper called mandats, issued for the purpose of redeeming the other at a discount; but which, in its turn, went the same road of excess and depreciation, thousands of sheets being issued each morning wet from the press, for the purpose of serving the wants of the day. But it was not only the issue of this paper, but the enacting of violent laws outraging every sense of right, which attempted, on pain of pronouncing the recreant hostile to the republic, to force a circulation of the paper, which caused such distress and misery. The true lesson of the issues of those revolutionary times is that of moderation. They simply teach us to avoid enormous issues. The Government had but one method of raising money. Like the famous Sangrado, who knew no weapon against disease but the lancet, and whatever the complaint, fever or rheumatism, colic or cold, his universal panacea was to bleed; and if one letting of blood did not suffice, another was tried, and an other, until disease and life left the patient hand in hand. So when these financial doctors found one issue of paper depreciating, they made an other and larger, making up the deficit of discount by enlarging the figures, and, Sangrado like, followed the remedy until the body of public credit was destroyed.
These two, then, are the extremes.
The one plan of raising money puts the Government on a plane with the merchant; throws it as helpless as the individual merchant into the market of money-lenders, and takes from them for its bonds just the sum they please to give it; in other words, takes the market rate as fixed by them.
The other plan makes the Government assert an omnipotence it does not possess; makes it at tempt to create when it only possesses a certain control, under a mistaken idea that because acting in conjunction with the laws of trade, it possesses powers which may relieve it from being hardly pressed by them, therefore it possesses the power to control the laws of trade themselves.
The truth lies between. The theory of power must be taken in connection with the practices and habits of the people. We must bear in mind that all logic has its practical limitations.
I know there are those who have great and sincere fear of entrance upon this plan of paper circulation. They shrink from it as if they were doing violence to the eternal fitness of things when making anything a legalized currency except silver and gold. There is a feeling that in the normal condition of things silver and gold are the natural regulators of value. But neither history or reason justifies it. Oxen, in Homer's time, and salt, shells, tobacco, and other articles since, have formed currency; and it is said that now, in the kingdom of Baghumi, in the interior of Africa, negroes form the larger currency and cotton shirts the small change of that enlightened country ! Men everywhere act as their intelligent interest and convenience dictate, and I know of no more reasonable course to adopt than to act in view of the circumstances that surround us, irrespective of theories adopted in times of peace and only adapted to it.
And, practically, I see no difficulty in making a rule for our guidance as to the amount of paper to be issued. We experiment with the sum contained in this bill. We issue this amount on a venture. Let us watch the reception it meets with. In making the issue, we measure it with population and wealth and existing currency. We compare it with the action of the past. Viewed in any light, it is moderate and timely. Certainly it is not less than our immediate necessities require. But if, contrary to our expectation, this plan does not work harmoniously with the business of the country, and the issue becomes depreciated, or, what is the same thing, other values appreciate sensibly and inconveniently, then we must refrain from further action in the same line. There are other remedies in our saddle-bags besides bleeding, and we must try them.
If anybody complains that this is indefinite, I reply in all confidence that it is the only rule of action ever adopted by wise men for their guidance in the many instances where they are not directly controlled by moral considerations, or in other words, in the hosts of cases, comprising the great bulk of instances in which legislators are called to act, when there is a choice of measures, simply on the ground of what is most advisable for the time, what is wiser.
More than that, the trade of the country is in an abnormal condition, caused by our own action, and its condition for the future will depend upon the action of the General Government. We have given a new business to all our people. Directly and indirectly they are all engaged in war. At the call of the country, dropping other pursuits, our people have taken up the pursuit of arms. It is their business. Looking upon it from a European stand-point, we should say that the American people had foregone all the schemes, plans, and speculations for which they have been distinguished for nearly a century, and turned their energies to arms. The necessities of the times called for it, and they have yielded cheerfully their various plans for private advancement, and come to the rescue of the body politic.
And who knows what course this business shall take for the next ninety days ? With us here it is matter of guess-work. We are the money partners in this governmental concern, and it is our duty to provide with wisdom for the wants of this war business, and still nobody is allowed to know anything about it; and nothing to my mind more forcibly shows the absolute folly of the doctrines of abnegation preached in this House and elsewhere with regard to the rights and duties of members in relation to the war. If we knew the intention of the executive managers of the war we could form an intelligent idea of the best time in which to attempt to float our bonds, and the character of paper to issue. In other words, we could provide more intelligently for a business that we knew something of than for one of which we are entirely ignorant.
If the plan shadowed forth by the gentleman from Ohio, [Mr. Cox,] who spoke so zealously for the Commanding General, is the one which is really to be adopted, the sooner we supply ourselves with the money we want the better for the Treasury. This "anaconda" scheme, as it is well called in the Richmond papers, simply contemplates inaction for the future. It is to surround, cut off communication with the world, threaten after the Chinese fashion, and wait for the result. And meantime debts that we must pay are overwhelming us like a flood; disease is wasting our noble Army, and uneasiness is increasing in every portion of the loyal States; and we have yet to see among the white population of the rebel States a single indication of that loyal devotion to the Union which is so anxiously hoped for. Even the slight fringes upon the coast which have been taken possession of within a few months, upon a recent examination of their condition, are found to need a re-conversion already. The special agent of the Post Office Department could not find loyal men enough in Accomac and Northampton counties to fill the post offices vacated by resigning secessionists; and at Hatteras the intelligent men of that sandy locality have been busy conveying information of Burnside's expedition to the enemies on the mainland.
But, sir, I do not believe that to be the intention of the leader of our armies. I prefer the declaration of the Secretary of War, upon whom the country now leans with entire confidence, trustingly believing that his clear head and strong will shall prove sufficient to discharge the great trusts he has assumed with the general consent, in this time of great distress. I listen with satisfaction to his ringing words of commendation to our gallant troops at Mill Spring, and believe to the full his declaration to the Army, that
"The purpose of this war is to pursue and destroy a rebellious enemy, and to deliver the country from danger menaced by traitors. Alacrity, daring, courageous spirit, and patriotic zeal on all occasions and under all circumstances are expected from the Army of the United States."
I believe these inspiring words. He has struck the key-note. The Army will respond with enthusiasm, and victories, which are the best financiers in these days of gloom, shall be the happy result.
Upon the clause in this bill providing that the notes shall be a legal tender there has been much discussion here and elsewhere. Its importance to the success of the measure cannot be over-estimated. I regard it as the life of the plan. Strike it out, and we are but duplicating an issue of notes already at a discount. It is really the specie clause, and no hard-money man and I claim to be one should vote for the issue of these notes without it. Objections have been made that it is unconstitutional; and a word upon that point.
In my judgment, any measure of finance now assumes the highest character. The existence of the Government depends upon a successful administration of the finances. Crippled here, we are balked everywhere. Upon the consideration of every financial measure there might well present itself anew the same question so fitly put by President Lincoln, in his message to Congress in July: "Is it better to assume powers, the exercise of which shall violate a portion of the Constitution, rather than allow the whole to be destroyed?" and the country came to the paradoxical conclusion that it was his is duty, as President, to violate the Constitution in order to preserve it.
I trust that I have as much respect for that instrument as any man in the House; and it is because I would not have its authority over any portion of the Union impaired that I am bold in the exercise of power under it. But I would construe it in the light of the rule authoritatively announced for our action: "The Sabbath was made for man, and not man for the Sabbath."
It is well known that Mr. Clay rested his support of the second bank upon a clause granting Congress "the power to make all laws which shall be necessary and proper for carrying into effect the powers" expressly granted by the eighteenth section of the first article. The great patriot of the West, in time of profound peace, was disposed to consider the financial question of such magnitude as to place a law, calling into being a fiscal agent, among those which were "necessary and proper." With how much more force can we, situated as it were amid the dying agonies of the Republic of our fathers, acting, as many wise men believe, as the last Congress which, under the Constitution, shall represent the whole country, claim that all power which, under any circumstances, could be exercised by the Representatives of the people should be used now.
The gentleman from Kentucky [Mr. Menzies] was wrong in supposing the action of Davis and his confederates had given us no new power. It gives us the same power that the action of an incendiary who fires my house bestows upon the fire department, who may enter and use what they will for extinguishing the flames, and even destroy adjacent buildings if necessary to prevent their spreading, and the destruction of valuable property; actions which had otherwise been trespass become legal and in the highest degree praiseworthy.
I have a high respect for the motives of gentlemen who discover so many constitutional objections to contemplated action; but for myself, I have concluded that whatever has a tendency to furnish means to suppress this rebellion, and affords a reasonable probability of hastening the consummation of what all loyal men so much desire, is perfectly constitutional. Nothing but an absolute prohibition would prevent me from adopting a measure which answers these conditions. I will never render to my people as a reason why I voted against such a measure that I deemed it unconstitutional, nor will I assist this Congress in proclaiming to the world and sending down to posterity the lack of constitutional power as a reason for failing to enact any law which will have a tendency to preserve this Union. This is no time for the exercise of thin constitutional pedantry. Let us act boldly and forcibly, and so discharge the high and solemn duty imposed upon us infinitely better than if we shrunk from action under fear of constitutional scruples.
Nor need we fear that what we do will be used as a dangerous precedent, for the circumstances which form our justification must be duplicated before our action can be taken as an example for others.
The objection which is supposed to be fatal to the constitutionality of this measure is that it impairs the obligation of contracts. But granting that the prohibition in the Constitution of State action with reference to contracts extends to Congress, still the objection has no validity. The legal effect of all contract language is to pay the sums specified therein in legal currency. The gentleman from Ohio [Mr. Pendleton] is mistaken in construing it to mean gold and silver only. Congress may coin money out of gold or silver or copper, or either alone, and fix the value; and the gentleman may as well say that a contract to pay $100 is a contract to pay a quantity of gold between five and six ounces, because such weight of gold according to the present low represents $100, and that it would be impaired if we passed an act establishing the value of gold coin at ten dollars to the ounce, as to say that it means gold and silver and will be impaired if we substitute paper. Congress has frequently exercised the power to change the comparative value of gold and silver. The gentleman from Vermont yesterday told us how many times it had been done. We all know that our old gold coins are worth more than those of later years; and the Spanish dollar, formerly so common among us, was driven out of circulation by the lighter Mexican, and that in its turn by the American half dollar, which contained less silver than either. The exercise of this power would have the same effect upon the discharge of contracts that a debased paper currency would have, and yet it, is of conceded constitutionality.
The opinions of the distinguished statesman who have been quoted are of great value in ordinary times. It is well known that the opinions of Mr. Webster changed very greatly at different portions of his life with regard to trade and currency. Had he adhered to his earlier convictions it is quite probable he would have reached the object of his ambition; and were he acting with us now, I have no idea that he would hedge in the powers powers of Government. His construction of the Constitution was a liberal one, and would readily adapt it to the necessities of the occasion.
As to the expediency of making these notes a legal tender, I have no doubt. Those who favor the issue of the notes and oppose this clause, present this anomalous position: they favor the issue of the notes for $100,000,000 for the purpose of paying creditors to whom that sum is due. They say to our Treasurer, "You will take these not notes and pay Government debts with them at par." A Government creditor will be obliged to take these notes or wait, without interest, until that happy period in the future when the Government shall resume the payment of specie in the discharge of its indebtedness. Nobody proposes that the market value of them shall be ascertained from day to day, and scaled down, as the Russian Government did with their paper rubles, and payments made according to value thus ascertained.
Thus, then, the Government will pay its creditor $1,000 in bills in full discharge of a debt of $1,000, and still it will not authorize that creditor to pay a debt he owes John Doe, for the same sum, with the same money ! In this way it is tacitly acknowledged that the indebtedness of the Government, which represents all property, is not so valuable as that of the private citizen, who represents but a small fraction of that property. If this be not the meanest kind of bankruptcy, I do not know the meaning of the term.
It is said we are in debt largely. The enormous sum of $100,000,000 is estimated as the amount of floating debt. We are incurring large debts every day, and the Army and Navy are our great creditors. More than three quarters of the immense daily expenditure is made for the Army and Navy. We have called these six or seven hundred thousand soldiers and sailors from their homes into active service, and now we cannot pay them. What shall we do as honest men ? Shall we issue to them an additional quantity of Treasury notes, when it is said here upon the floor of the House that the sutler followed the paymaster at the last pay-day, like a shark in the wake of a ship, and gobbled up batches at four dollars in gold for five dollars in notes ? Would a new issue of the same kind of paper fare any better ? Some of the leading banks of the country have already discredited the old issue. Will they be any more liberal with the new ? Shall we place ourselves entirely in their power ?
If we cannot pay our creditors in gold and silver, let us come as near it as possible. It is not doubted by anybody that making the notes a legal tender will add to their value in the hands of Government creditors. It is a kind of indorsoment that cannot possibly injure the circulation of the note in any event, even if declared by the courts as of no validity, and will, for a time at least, add considerably to their money value. If not exchangeable for specie, they will come nearer to being of the same value.
And further: I wish gentlemen to consider the practical operation of this measure when castrated of this clause. You authorize your Secretary to sell $500,000,000 of bonds. He does it, and realizes perhaps $400,000,000. This amount he gets in bank paper, itself at a discount, larger or smaller, compared with specie. If he makes a favorable bargain, he will obtain part of the amount in specie, and part in bank bills. He has then in hand three kinds of money specie, bank bills, and Treasury notes. The value of these notes, according to the reckonings of gentlemen opposed to the bill, is to be measured by the price of the bonds into which they are convertible. If the bonds are sold at twenty per cent. discount, these notes should go at that discount.
Thus the Secretary will have specie, bank notes at three or five per cent. discount, and Treasury notes at twenty per cent. discount. These are his means of paying the public creditor. How shall he Marshal his assets and his creditors ? Is he to open accounts, like a broker in uncurrent money, and place the bills of the Government at the foot of the list of his assets ? And what direction shall he give to his subordinates about the payment of bills ? Will he classify daily, and say that to Peter Funk for a ship shall be paid $100,000 in Treasury notes, and to Billy Cheatem for blind horses $10,000 in specie ? Or will he reverse the proposition ?
It may be that he will pay a part in each, but upon what principle of division ? Will he divide in thirds, and pay one third, each ? Or will he reckon the amount of each kind of currency he has on hand, and pay in proportion to what he has ? So that one day a Government creditor would receive a large sum in specie and little in Treasury notes, and on another many notes and little specie. Creditors could exercise their wits in finding out the exact state of Mr. Chase's funds before presenting their drafts. The rich could hold on for the Government pond to fill up with specie, and let the needy take the Treasury bills, because they could not wait for the movements of the yellow flood. It would afford new and abundant occupation for the spare time of the head of the Treasury to give audience to claimants, and listen to the reasons they shall offer for a high place to be given to their demands upon the assets of the Department.
I fear our worthy Secretary would adopt no such methods. He would attempt, no doubt, to mete out exact justice to all; but, amid the crowd of subordinates, who do you think would receive the good currency and who the bad ? Does any one doubt where the soldier and the sailor would turn up in this list of debtors ? Contractors can take care of themselves. The men who make sharp bargains in the sale and hire of ships can lookout for their own interests. They would stipulate specially that their pay should be in specie or bank notes; and, in accordance with special bargains, the best currency would go to them. The soldier and sailor is at your mercy. He cannot resign, for it is desertion. He cannot complain, for it is mutiny. He cannot refuse to serve, because it is insubordination. He must work on, and take such pay as the Government chooses to give him. The debased notes shall be reserved for his special benefit, and he may sell them to the sutler for as much as he can get for them.
Such would be the every-day operation of this bill when stripped of the clause which makes all moneys obtained by it alike for the practical purposes of life.
Whether or not this issue is large enough to inflate the currency is an open question. The most intelligent men of our great money centers think it will not. Mr. Opdyke, in his clear and forcible letter on the subject, makes a reckoning of currency at twenty dollars to the inhabitant as a safe rule, and says that the issue of this amount will not exceed the limit. The banks have necessarily curtailed their operations with the lessening in mercantile transactions, and their bills have been partially withdrawn. These bills will fill the vacuum. They will furnish a popular currency. Let us send them out under the highest sanctions, and they will carry the Treasury safely through this period of darkness.
If we will furnish a currency to the people, let it be as good as we can make it. Let us not follow the mischievous example of European monarchs and debase it at the start. The readers of Dean Swift know very well the result of such an attempt even upon the copper coin of a small island. Let us grow wiser while reading their histories. When we cannot issue a currency of the highest kind, let us refrain altogether from the attempt. Let it be good, or none of it be sent out by our sanction.
The bill purports to be for a temporary purpose only. The next sixty days are to be the opportunity for the nation to reassert itself. In them, past blunders can be remedied, and the memory of inefficiency be lost in the brilliancy of triumph. I have till faith in the war when it shall move to the tones of our new Secretary. It has already done much to enlighten our people as to the destiny of the Republic. Civilians in high station and officers of leading rank have been converted by it to sound doctrines of political action. It is the measure of our civilization and Christianity. In its grand march in the future it shall carry with it, like a torrent, the sophisms and heresies of vicious political organizations, and presently, clearing itself of all entanglements, it will make plain to the world that this is a contest of ideas. It will try aspirants for leadership, and when one fails another shall supply his place, until, in God's own time, the appointed Joshua shall be found who shall lead us into the promised land of peace and liberty.
Our duty to-day is to tax and fight. Twin brothers of great power; to them in good time shall be added a third; and whether he shall be of executive parentage, or generated in Congress, or spring, like Minerva, full-grown from the head of our Army, I care not. Come he will, and his name shall be Emancipation. And these three Tax, Fight, and Emancipate shall be the Trinity of our salvation. In this sign we shall conquer.
[John Bassett Alley (January 7, 1817 – January 19, 1896) Massachusetts (R); became connected with the Union Pacific Railroad; in 1866 loud proponent of reduction of currency and return to specie payment]
Mr. Chairman, my apology for troubling the House again upon this question is to be found in the deep solicitude I feel for the deranged financial condition of the country, and my unutterable amazement at the indifference of Congress to the financial perils that surround us.
Upon the decisions of this hour are involved, in great degree, the prosperity and growth of all the material interests of this country for generations to come, no less than pecuniary salvation in the present.
The measure now before the House receives, under the embarrassing circumstances in which the Government is placed, the approbation of my judgment; for I see clearly that under its provisions the rights of all will be protected, the prosperity of the whole people promoted, the credit of the Government revived, and its power and dignity maintained. Beneficent as this measure is, as one of relief, nothing could induce me to give it sanction but uncontrollable necessity. While I have always believed it to be the duty of Congress to regulate and control the currency by such legislation as would make it of uniform value throughout the country, I have never regarded it as politic or wise for the Government to make issues of paper, at any time, except for temporary emergencies. Disguise it as you may, everybody knows, that knows anything of the laws of trade, that to carry this people through this crisis, collect $150,000,000 tax, maintain these vast expenditures, and conduct the legitimate and necessary business of the country, you must increase the volume of the currency to such an amount as to make it impossible, under the present banking system, to give it confidence upon the ground of its immediate convertibility into specie.
The question then for us to decide is, whether the Government shall share with the banks and keep them in check this circulation, or purchase their irredeemable bills at ruinous rates. Without some check upon the banks, if they remain in a state of suspension, which they will do to sustain themselves through this war, we are like the mariner in a storm, without pilot or rudder.
If this measure should fail to receive the support of Congress because of the timidity of some, and a misapprehension, as I believe, of its effects with others, then I am ready to give my support to any project that we can unite upon, even though it should scarcely approximate the measure of our desires, if it but furnish even some degree of relief.
The first and greatest objection to this measure is, with its enemies, that it is unconstitutional. Upon this point I shall say but little, for I am reminded by a legal friend that it does not become me to discuss constitutional questions; and while I freely admit that the opinions of merchants and bankers are of little value upon purely legal topics, I think they are perhaps not less valuable upon those subjects than are the views of mere lawyers upon commerce and finance.
Alexander Hamilton, the eminent lawyer, has been eulogized upon this floor and justly so as among the greatest of financiers. His reports have been quoted from to show that this measure never would have met with his approval. I think on the contrary that he, above all the statesmen of his time, would have supported this bill were he to-day living and a member of this Government. It was Mr. Hamilton's rare good fortune to enjoy the friendship and confidential intimacy of leading merchants and financiers of New York and Philadelphia, and with no one to a greater degree than Robert Morris; and but for that patriot those reports which have immortalized his name in financial history would have been much less remarkable productions than the judgment of the world has pronounced them. It was mainly through the influence, management, and skill of Robert Morris that we were able to keep our armies together during the last years of our Revolutionary struggle. In 1780 the credit both of Congress and the States had become so reduced that the paper money which had been issued and their bills of credit became almost worthless, because there was no power in the Government to control and regulate the currency; and he who reads history carefully will discover in that fact, more than any other, the cause of the formation of the Federal Constitution. The Army at that time was reduced to a mere skeleton for the want of means to feed, clothe, and equip it; but the experience and genius of the Philadelphia merchant found a partial remedy in the establishment of the Bank of North America. That institution was established in 1781 mainly through the influence of Robert Morris, not, however, without severe opposition. It was said by some, and reasserted by many, that they were creating a vast corporation and clothing it with monstrous power, which they had no right to do; that allowing it to issue a paper currency would flood the land with worthless rags. The patriot Morris replied: "Our wants are urgent, our necessities great, and the demands of the Army imperative; and unless some thing is speedily done our ruin is inevitable. Try the experiment, and my word for it, you will be carried safely through." It did so, and the result was that confidence was in a great measure restored; public and private credit was greatly improved; the Army was increased, and the war brought to a successful issue; and some think it not too much to say that "the cause of American independence owed as much to the financial arrangements of Robert Morris as it did to the negotiations of Benjamin Franklin or the arms of George Washington."---[Sadly, sir, the facts are very different from your wishful fantasy. Let us read William Gouge who lived and wrote somewhat closer to the events: "the capture of Cornwallis, which is described by historians as the closing scene of the Revolutionary War, took place on the 9th of October, 1781, and the Bank [of North America] did not go into operation till January 7th, 1782."]
These constitutional objections are always raised by those who are opposed to measures upon other grounds. From the organization of the Government down to the present time, legal gentlemen of great eminence, judicial tribunals of surpassing purity, illustrious statesmen of world-wide renown, find no difficulty in their opposition to public measures, in discovering them to be of doubtful constitutionality, if they are not in specific terms granted in the Constitution; and on the contrary, if not expressly prohibited in that instrument, if they desire their enactment, they fail with equal facility to discover any constitutional impediment. In illustration of the view here presented, permit me to relate an anecdote of an old and distinguished lawyer of my own county. Shrewd and sagacious, he was reputed to possess one of the best legal minds in our State. He was the intimate friend and associate of Story. One day a friend and neighbor expressed to him fears that our State of Massachusetts would lose a case then pending in the Supreme Court of the United States, in which the question of State rights was involved. Quiet your fears, said the old gentleman, the court will decide for our State. Why so, said the neighbor. Oh! said Mr. Merrill for that was his name State rights, State rights five slaveholders on the bench, it is all right. It won't do for them to decide otherwise. What! exclaimed our friend, with mingled feelings of surprise and indignation, to think that one of so much legal eminence should thus disparage the Supreme bench, which he had always looked upon with so much reverence as the personification and embodiment of all that was pure and excellent What ! would you intimate that those judges would be governed by such considerations in their decisions ? Oh, said he in reply, there is a good deal of human nature in this world; I have seen and known a great many judges, and they are very much like other folks; this will all be right. The case was decided as he predicted.
It is pretty hard sometimes to get even the best of courts to enforce plain constitutional provisions when the public judgment is against them, so long as decisions can possibly be delayed and the purposes of litigants thwarted. Some years ago the city council in the place of my residence passed an appropriation to defray the expenses in part of a 4th of July celebration. One of our citizens, who was opposed in party politics to the city government, took umbrage at the action of the council, and denied their right to make such an appropriation, and expressed a determination to obtain an injunction to restrain the Mayor from drawing the money. He accordingly got up a petition for an injunction, and had it signed by a large number of his party friends, and took it to that eminent jurist, the late Chief Justice Shaw, than whom a wiser and purer judge never lived. This was some ten days before the 4th; and the old chief looked at his petition, and told him that such appropriations had been usual and customary from the days of the Revolution in American cities, and whether legal or not, he thought him engaged in small business; and while he thought better, perhaps, of his law than he did of his patriotism, if he insisted upon it, his rights must be protected, and he therefore would give him a hearing when the court sat in November, and ordered one accordingly. This was like awarding damages to be paid ninety-nine years after date to an old gentleman upwards of seventy.
The gentleman from Ohio [Mr. Pendleton] quoted the other day from the debates in the convention, to show that the framers of the constitution never intended that Congress should have the power either to emit bills of credit, or allow them to be made a legal tender. Why then did not the convention prohibit the exercise of that power ? When we see the deep feeling which existed at that time against paper currency, with sharp debates upon the question, with the insertion of the prohibition upon the States to emit bills of credit, and the determination of many to extend that prohibition to the General Government in view of the recollection, fresh in the minds of all, that the exercise of that power by many of the States had saved some from great embarrassment and distress, and carried all successfully through the perils of the Revolution, hard though it might have been, but impossible without it; and in view also that Mr. Hamilton and his followers held, that whatever power was forbidden to the States, and not prohibited to the General Government, might properly be exercised by Congress whenever of paramount necessity for the preservation, or prosperity even, of the Government is not the inference just, that a majority of the convention thought that the emergency might arise when the salvation of the Government would greatly depend upon its ability to exercise this power, and consequently while they did not like to expressly grant it, they forbore from these considerations to prohibit it ? It certainly appears so to me.
Mr. Jefferson and Mr. Madison, although such great sticklers for strict construction and for this I honor their memory never hesitated, when the necessities of the Government were overwhelming, to depart, in some instances, from their favorite views, and adopt, practically, those of the Hamilton school in Mr. Jefferson's term, in the acquisition of the Territory of Louisiana, and by Mr. Madison, while he was President, in the establishment of the United States Bank; both measures acknowledged by them to be of doubtful constitutionality, although not positively prohibited. So, Mr. Chairman, in view of these differences from the organization of the Government to the present hour, I think it the part of wisdom and patriotism, in all questions of doubtful constitutionality, to give the benefit of the doubt to the cause of the country, and that of justice and right.
But this question of its constitutionality is hardly worthy of consideration in the face of the overshadowing necessities of the Government, for the reason that at most it can only be claimed as doubtful; for, to say the least, we have the authority of legal eminence as much in favor as against it; and every intelligent man knows, and will admit, outside of the legal profession, that legal enactments, and constitutional provisions themselves, have always in this country, whenever occasion required, with courts as well as statesmen, proved as pack-threads upon the arms of an unshorn Samson before the resistless will of the people.
No, sir; not a man will oppose this bill, or vote against it, upon any constitutional grounds, unless he is opposed to it for other and satisfactory reasons, This question of making paper money legal tender has never before been seriously entertained or discussed in this country since the adoption of the Federal Constitution, because the emergency has never before arisen to make it necessary. Alexander Hamilton and Daniel Webster, it is said, have pronounced it unconstitutional to make paper money a legal tender. Any one who will read the opinions of Mr. Hamilton carefully, as expressed in the famous bank report of 1790, and still more fully and clearly, upon constitutional points, in answer to the request of Washington for the opinions of his Cabinet in writing upon the constitutionality of establishing a Bank of the United States, will perceive that in Hamilton's advocacy of the necessity and usefulness of that institution, it legitimately and inevitably follows from this reasoning that Congress does possess this power to make paper money a legal tender, and that it possesses sovereign authority over the currency. Whoever will read his opinions as therein expressed, and fail to discover any doubt of Hamilton's belief that this measure would be strictly constitutional, I should say his opinion is of little value. I would gladly quote from those reports at length; but as these sentiments permeate almost every sentence, and I am limited for time, I will only commend their perusal to all. Let us be content, therefore, upon the constitutional question, in this great emergency to rest upon the authority of Hamilton, who was one of its framers, and its ablest exponent and advocate one who had the Confidence of Washington, and whose financial measures received the full approbation of the almost unerring judgment of that illustrious man.
The gentleman from Ohio [Mr. Pendleton] referred to the opinions of Mr. Webster, and quoted from his speeches to show that that eminent statesman had declared that Congress had no power to make paper money legal tender. It is true Mr. Webster did remark, incidentally, that Congress had no power to make paper money a legal tender; but it is hardly to be supposed that this was a settled conviction upon mature reflection and thorough investigation, as he was known and relied upon by the whole banking interest of the country as the ablest champion of bank expansions and a paper currency. In the very speech from which the gentleman quoted, upon the specie circular, he was speaking in the interest of the banks, against the attempt of General Jackson, by means of that measure, to check somewhat the spirit of speculation and the expansion of paper issues which marked that period, and which finally engulfed the business interests of the whole country in overwhelming disaster.
In the other speeches from which he quoted to show Mr. Webster's fear of the overissues of a paper currency, he was advocating the recharter of the United States Bank, and was trying to show the necessity of having an institution in connection with the Government of commanding strength and overshadowing influence and power; and in that connection it was necessary, for the purposes of his argument, to question the safety and magnify the evils of local banks and the dangers of a depreciated currency, in the absence of a great regulator, such as the United States Bank, he believed, would be. At the very time he made the last two speeches from which the gentleman quoted he was advocating the increase of the banking capital of his own State of Massachusetts, notwithstanding she had more than doubled in the preceding ten years her banking capital, under his sanction and with his approval, and at that moment he was advocating the establishment of a mammoth bank in Massachusetts with a capital of $10,000,000, and power to increase its paper circulation indefinitely, when the circulation and deposits which constituted the immediate liabilities of the banks of Massachusetts amounted to more than ten dollars for every one of specie they had on hand; when the whole specie in the country but three years before was estimated by Albert Gallatin to be but little more than double the amount of the immediate liabilities of the banks of Massachusetts at the period to which I allude. Not withstanding the isolated declarations of the New England statesman, whose wisdom in financial matters the gentleman calls upon us to emulate, it is the opinion of some who knew him well, and the character of his thought and mind upon financial questions some gentlemen, too, of great eminence, who are opposed to this bill, have admitted to me, if there is anything to be deduced from analogy, that Mr. Webster, of all men, if living, would favor this bill.
But the gentleman from Ohio must have read the whole of the speeches from which he quoted, and known the circumstances under which they were delivered; and if so, I am sorry that he should treat this question, so momentous for weal or for woe in its consequences to all American people, as he would stake a five-dollar case in a justice's court. But times change, and men change with them. The experience of 1837 and the subsequent years modified materially Mr. Webster's views, as well as those of the great party to which he was attached. In the remarks which I had the honor to submit to the House the other day, I stated briefly something of the history of the currency in England, and showed that under a metallic currency greater revulsions, attended with more disastrous consequences, resulted from its derangement than had ever been witnessed with a mixed currency, composed of paper and coin. I now propose, if the House will bear with me, to say something of the history of the currency in this country, and the effects of legislation upon it.
I said then, and I repeat now, that the prosperity of every people depends, in a great measure, upon the wisdom of its legislation for the regulation of the currency. My observation and experience have taught me that our permanent interest under ordinary circumstances, in view of the system of mixed currencies in other countries, with an eye to the most rapid development of all our material resources, is to be found in a currency composed of gold and silver for all small transactions of ten dollars and under, with paper issues for all large operations, immediately convertible into specie. While we can never be entirely free from fluctuations in the currency, of greater or less degree, so long as the credit system exists, we may nevertheless, with such a basis for our circulating medium, obviate, to a great extent, the evils and calamities which are sure to follow excessive expansions and unnecessary contractions of the currency.
In the colony of Massachusetts the Government having become involved in pecuniary difficulty bills of credit were issued in 1690 to the amount of £50,000, in sums varying from five shillings to five pounds each. They were made a legal tender. As long as the colony was willing to tax the people to provide for the payment of the interest and partial redemption which continued several years the scheme worked well, and was very popular, affording great convenience and relief both to the Government and the people. After the lapse of some twelve or fourteen years, expenses increased, and taxation became burdensome; and instead of taxing, the issues increased, until the nominal amount in 1748 was over two millions of pounds sterling. The real amount received by the Government upon the issues was about four hundred thousand pounds sterling such had been the terrible depreciation, commencing to depreciate rapidly when they ceased to tax. With the assistance of Parliament and excessive taxation of themselves, they raised over two hundred and fifty thousand pounds sterling, and redeemed the whole circulation at less than half which the Government had actually received in value for the issues. It was the best they could do, so all were forced to be satisfied. From 1750, down to the Revolution, Massachusetts had a specie currency, as did most of the colonies.
The revolutionary war was carried on, as all very well know, chiefly with a depreciated paper currency until 1781, when it became almost worthless. It was based upon nothing, with no power of payment, and could not be otherwise than worthless. In 1781 the Bank of North America was established under the auspices and through the influence, as I have before said, of the patriot Morris. It received its charter from the old Confederated Congress and was the first bank established in America. Congress, under a pressing necessity, gave it extraordinary powers and privileges, which nothing would justify but the great exigencies of the moment. It is difficult to see how the war could have been successfully prosecuted but for the establishment of that institution.
---[The war was over by the time that bank went into operation, so the war was prosecuted just fine, thank you, without Morris's bank. How much credit should we put in the rest of your story ?]
The next bank established, I believe, was the old Massachusetts Bank in Boston, which was chartered in 1784. Nor other bank was established in Massachusetts until 1792, when the Union Bank was chartered, and from that time till the present they have continued to multiply and increase, occasionally expanding their paper currency to most unwarrantable proportions, to be followed by unavoidable contractions, occasioning wide-spread disaster, desolation, and ruin.
The first Bank of the United States was established in 1791, and its charter expired in 1811. During this period there were occasional revulsions, as the mother bank, as it was called, influenced, if not controlled, the operations of the others, expanding or contracting the currency at will. Congress refused to recharter the bank in 1811, when its charter expired. Local banks now began to multiply throughout the States, and to issue great quantities of paper currency, when the war of 1812 created almost universal bankruptcy both of individuals and banks. All the banks in the country, outside of New England, suspended specie payments, and continued in a state of suspension until the close of the war. The Government was in great distress for means to carry on the war with England. Its securities sold for eighty cents on the dollar, payable in irredeemable bank paper, which had depreciated about twenty percent. Capitalists who purchased the securities of the Government at such ruinously low prices realized immense fortunes out of its necessities, and millions were thus upon wrung from the hard earnings of a patriotic people; and we shall have a similar state of things again if the short-sighted policy of the opposition prevails.
After the war was closed a national bank was chartered in 1816, Mr. Madison and the Democratic party getting over their constitutional scruples, under the pressure of the necessities of the Government.
---[What necessities ? the war was over !]
In 1817 the bank began to issue, and all the State banks increased their circulation, until the country was flooded with paper circulation. A great state of apparent prosperity followed; high prices, excessive speculation, and cheap credits. As was inevitable, in 1818 and 1819 the crisis came, followed by the ruin of half the merchants in the country, creating a period of pecuniary distress unparalleled in the nation's history. In a few months a recovery from the wreck commenced, and those banks that survived the shock, together with the United States Bank, once more began to expand, with the same results as before, until 1822, when the banks were again compelled to contract their issues, and the bright visions of the merchants and the manufacturers were destined to culminate in the bitterness of despair. This time the western banks all failed, and their paper became nearly worthless, and the United States Bank barely escaped the general ruin. Mr. Cheves, its excellent president, afterwards said if there had not been a change the bank could not have gone another month. In my own city, which was then but an inconsiderable town, I have understood all but six or eight of its business men failed, and the grass grew in some of the principal streets of Boston, so great was the stagnation of trade. Again trade revived, and another undue expansion of the banks, followed by the inevitable contraction, which, in 1825, caused an other revulsion hardly less disastrous to the business interests of the country than that which preceded it.
In 1825 credit and business were prostrated everywhere. The trouble was greater in England than here. It shook British interests to their foundation. The circulation of the Bank of Eng land and the country banks of Great Britain was increased, from the 10th of October, 1823, to the 10th of October, 1825, £7,500,000, about twenty-five per cent. Speculation was rife all over England; Government securities rose to a high point. But confidence began to be impaired; money became scarce; the banks had, of course, to contract; merchants failed; a few banks stopped, and then came a general panic; the Bank of England was run upon; credit was entirely destroyed; and such a scene of alarm was never before or since witnessed on London 'Change. The rate of interest was as high for a short time as sixty per cent. Thus closed the year 1825, forever memorable in the history of the monetary world.
From 1825 to 1837 in this country the business interests of the country were very stable, with occasional slight revulsions in 1829, 1832, and 1834; but attended with no very serious results either to the mercantile interests or banking institutions. The banks all over the country began to multiply and expand from 1830, when the bank capital of the country, including the Bank of the United States with its $35,000,000, was $145,000,000; the circulation was $61,000,000; the loans and discounts about $190,000,000. The specie was estimated about $33,000,000. In 1837, a period of seven years, the bank capital was increased to over $400,000,000; the loans and discounts to near $600,000,000; and the circulation to $200,000,000, with an individual and State indebtedness increased abroad in that seven years more than fifteen-fold. This state of things of course stimulated speculation of every description, in eastern lands, morus multicaulus, bogus stocks, negro slaves, and moon-shine property of every description. All the commercial, financial, and manufacturing interests of the whole country seemed to be infatuated, and the ignorant and the wise equally unable to see the storm that was brewing. It was during this period that Mr. Webster was the champion in the interest of the banks, and advocated the expansion of the currency, when it seems strange, in the light of the present, that any man should be so blind as not to see the appalling distress which was sure to follow such disastrous action.
But the crash now came; and in May, 1837, a monetary revulsion swept over the land like a tornado, crushing at a single blow every bank in the country; and the blight of ruined fortunes and blasted hopes of hundreds of thousands was sickening to contemplate. A partial recovery marked the advent of 1839, with another bank expansion, to be followed by a monetary crash in 1842 still more disastrous, if possible, than that of 1837. From that time to the hour that rebellion raised its bloody hand, the American people enjoyed an almost uninterrupted period of mercantile and financial prosperity.
All this, as I endeavored to show the other day, but proves that it has been with us as with other nations an unwise, unnecessary inflation of the currency beyond the legitimate wants of trade, always ending in disaster and distress.
Let us ponder well the experiences of the past that we may better understand the wants of the present and the need of the future. To my own judgment it is perfectly clear that the Government must take the regulation of the currency into its own keeping. I see no alternative to preserve the credit of the Government and provide ways and means to carry on the war but this bill, unless you submit to ruinous sacrifices, as in 1812, taking from the pockets of the people to fill those of the capitalist and speculator. Shall we be justified, when the Government possesses this mighty power to help itself, in refusing its exercise, and leaving it to the prey of those whose voracity knows no bounds ? I think I have shown from the history of the currency of this country that we could hardly adopt any system that would be more unstable than that which we have had during the largest part of the nation's history.
But if the Government supplies the currency, say the enemies of this bill, you will have the same state of things that was before occasioned by inflation of the bank currency. Like causes produce like effects. Undoubtedly you will, in such degree, however, as would not be harmful. We are now situated, so far as our business interests are concerned, just as we have been always in periods of great revulsion as we were in 1837, when our credit was prostrated, our currency deranged, and confidence destroyed with an overwhelming indebtedness that could not be immediately liquidated. Then, as now, our people were suffering, notwithstanding we had overflowing granaries and ample resources, with all the elements of real wealth in affluent supply; for the wealth of every people consists, not in its gold and silver, but in its productions and capacity to produce. All the avenues of productive industry were closed, with a stagnant trade paralyzing for the moment the mighty energies of this great people. Now, what was necessary to be done to revive trade and make available the resources of the country ? It was to restore confidence and supply a currency sufficient to meet the wants of trade. The remedy was at hand, but unfortunately it was always abused. With no check upon bank issues and no control over the currency by the Government, a returning prosperity was always followed by undue expansion and excessive inflation, which robbed the poor and ruined the unsuspecting.
This is what we need to guard against, and the most important step towards such a consummation, in my judgment, is to adopt substantially this bill, with adequate although burdensome taxation, which we must make up our minds to; without it you will have all the evils upon you, and more, too, than have been predicted; and I would no more vote for this bill without accompanying taxation than I would vote to sink the nation. Pass this measure, and provide for the redemption of all the paper issues of the country by basing them upon Government stocks, thereby securing a safe and uniform currency, and you have as much protection against these oft-recurring evils as by any system it is possible to devise in the present condition of the country. It is said the experience of all history is against it. Not so; but always to the contrary, without an exception, when accompanied by proper taxation. In our own country, as I have shown in the early history of Massachusetts, and in several other colonies before the Revolution, Government paper was made a legal tender with most beneficent results, so long as it was supported by suitable taxation.
But, some say you will flood the country with an irredeemable paper currency. Not at all. There can be no more issues than the real necessities of the Government require, and the legitimate wants of trade demand. The Government cannot make issues like the banks for profit, and furnish means to speculators. Its issues must necessarily be limited to its absolute wants, and all admit that these must be supplied at any cost and every hazard. It is idle to talk about its worthlessness or serious depreciation, because it is not immediately convertible into gold and silver. No considerable portion of the currency of the country is now or ever has been immediately convertible into specie. It rests for its security upon the confidence of the people in the ability for its ultimate redemption from the proceeds of the property which it represents. Take away this confidence, and the paper currency of the country becomes as worthless for any useful purpose in the present as so many rags. As long as Government issues are limited to a bare supply of its imperative necessities, no matter how abundant they are, they must have our confidence; for confidence, the world over, depends upon the ability and power of ultimate redemption, and it matters but little how distant the day. The people know you have the power, and if they see you but willing to tax, there cannot be the slightest difficulty. To say such securities are not good because they are not immediately convertible into specie, is as absurd as to say that the note of an individual is not good who owes ten thousand dollars of immediate liabilities, and has a million of dollars' worth of property to meet them with, which is not immediately available.
A short time since a friend of mine, with a large estate, found himself suddenly and unexpectedly called upon to meet some engagements in the shape of indorsements which he was required to pay. He called upon me for advice; and said he, I have got a large estate, but no money. What should he do ? His name upon a note was never dishonored before. I said to him, take up the small claims with your notes on demand, which you can soon pay from your income, and the larger ones renew until such time as you can make available your large resources. There will be no difficulty in arranging it, as long as these parties know your ability for ultimate payment. But, said he, suppose they refuse to accommodate, what should he do ? He could not possibly meet the notes at maturity. They will not refuse, said I, because it is not for their interest to do so; and if they do, you have the power to compel them to wait, and you must exercise it. If you have done the best you can, you have performed your duty. Now, the Government is precisely in that man's situation, and its course is equally clear.
It is further said, you have no moral right to make these paper issues a legal tender if you have a constitutional right; because you practically destroy the measure of value, and make a man take $900 for $1,000. The practical effect of altering the currency at any time in any form, either by alloying the coinage, or expanding or contracting paper issues, must necessarily have that effect. Yet who ever heard that objection raised before ? Mr. Webster once said that many people suppose that they can determine, their duty upon all questions of right and wrong by an absolute standard of abstract principle, just as easily as you could solve a problem in Euclid. But, said he, this cannot be done. In order to determine duty you must look to consequences, not upon a few, but upon all.
The tenure of all property is held by the consent and regulation of the Government, and it is the imperative duty of all Governments so to adjust it as to produce the greatest amount of good to all the governed. Shall the Government be deterred from the exercise of its high powers because it will necessarily equalize more the division of property, when its very destruction is threatened; which to avert, it is absolutely necessary should be done ? It seems to me such an objection is trifling with the great interests of the people. To dispose of the bonds of the Government at anything greedy avarice may dictate and the alternative really amounts to this rather than resort to this measure, is sucking the very life blood of the nation to fertilize the already prolific soil of the capitalists; in other words, benefiting the few upon the ruin of the many. I have as little sympathy with those who raise this objection in holy horror as I have with him who is shocked beyond measure at his neighbor's taking extra interest for his money, however trifling, when its scarcity will command it, but who can see no wrong in charging double price for wood and coal to the freezing widow and orphan children because their necessities require it and the scarcity of the article will permit it.
If you do not adopt this measure you will see the country flooded with an irredeemable bank currency, a great deal of which will be found, as after the war of 1812, utterly worthless. At that time Government securities were exchanged at eighty cents on the dollar for worthless bank promises, not worth the paper upon which they were written. Why, I ask, are Government securities worth in the market to-day but ninety cents on the dollar in exchange for irredeemable bank paper ? Is it because they have confidence in bank paper, or because it will command specie ? Not at all; but because the bank paper will liquidate the obligations of debtors.
It is for you to determine whether Government obligations shall be as good as irredeemable bank notes; and whether you will allow these irredeemable issues to be preferred and take precedence of a national currency issued by a Government that never repudiated a dollar of its indebtedness; and a nation whose fabulous growth, immense interests, and exhaustless resources have excited the wonder and admiration of an astonished world. I confess that when I reflect upon our condition, and the misery and suffering which such a policy inflicts upon the business interests of the country, I can have no toleration for such suicidal action.
Congress has the power to inaugurate to-day a system of financial policy, both for Government and people, which will establish our prosperity upon a firm foundation, and give strength and stability to all our institutions; and I conjure you, by all the memories of the past and every hope in the future, not to disappoint in this moment of peril the just expectations of the American people.---[Today you say it is essential for the Government to issue legal-tender Treasury notes; today you say bank notes are irredeemable promises to pay. Four years from now you will say we must get rid of this Government-issued currency, and we must use the irredeemable notes of banks as currency. On December 7, 1865 it will be you who leads and whips the House in that public orgy of declaring themselves for the resumption of specie payment. In 1866 you will not only vote for the Reduction of Currency, but will be a vocal advocate of it during its debate]
Mr. WRIGHT obtained the floor.
Mr. Spaulding. I move that the committee rise, with a view of closing this debate.
Mr. CAMPBELL. I hope this motion will be agreed to, and that this bill will be pressed to a vote to-day.
Mr. Spaulding. I desire to say, in connection with this motion, that I have, within the last two or three hours, received a note from the Secretary of the Treasury, informing me that it is absolutely necessary that we should press this measure to a vote without further delay. Therefore I move that the committee rise, with a view of closing debate.
Mr. Horton. I wish to say that the Committee of Ways and Means do not make this motion, and I hope it will be voted down. ["Good!" Good!"]
The CHAIRMAN. The Chair would state that this motion is not debatable.
Mr. ENGLISH. I move to lay the motion upon the table.
The CHAIRMAN. That motion is not in order in committee. The question being upon the motion that the committee rise,
Mr. Roscoe Conkling demanded tellers.
Tellers were ordered; and Messrs. Blair, of Missouri, and THOMAS, of Massachusetts, were appointed.
The committee divided; and the tellers reported yeas 52, nays 62.
So the motion was not agreed to.
Mr. SPAULDING. With the permission of the gentleman from Pennsylvania, I wish to make one word of explanation in reference to the motion I made. The object of the motion was simply that we should limit this debate, with a view that we might take a vote upon the bill to-morrow, say at one o'clock. I expected to go immediately back into committee to allow the gentleman from Pennsylvania to make his speech, and then to allow Mr. Horton to speak, and then Mr. Stevens, in close of the debate. After that the vote could be taken.
Mr. Thomas, of Massachusetts. Then you arrange the manner in which speeches shall be made on this floor.
Mr. Lovejoy. I would like to know whether the gentleman from New York has any right to farm out the floor ?
Mr. Spaulding. I make this explanation with a view to show the House that I have no disposition to cut off any member of the committee, or to force a vote unduly. The motion was made under the necessity which, the Secretary of the Treasury assures us, exists for passing this bill. I did not make it with a view to cut off those who are entitled to speak, by courtesy or otherwise. I think this explanation will satisfy the House that there was no effort upon my part to force a vote improperly. I did not expect to have a vote until tomorrow at one or two o'clock. After the debate is closed, we proceed to voting upon amendments which are pending and which may be offered, and then five-minute speeches will be in order, as upon other bills. Those speeches can be continued until amendments are exhausted.
Mr. Wright. It is not my design to inflict an hours speech upon the House, and I have already entered into an arrangement with my friend from Ohio, [Mr. Horton] by which I agreed to divide my hour with him. I suppose the House will have no objection to confirming that agreement.
Mr. KELLOGG, of Illinois. I will reserve my right to object when the proper time arrives.
Mr. Wright. Mr. Chairman, I have never been more embarrassed in my life as to how I should cast my vote than I am in regard to the vote I am about to cast upon this bill; for as I live, I have no object or desire to embarrass the Government in regard to any of its measures, or the measures of any, of the committees of this House, which have in view the putting down the rebellion now upon our hands. I am willing to do anything I constitutionally can, to bring about that result which, of all others, is most desirable; but at the same time, Mr. Chairman, I have the obligations of a constitutional oath resting upon me. I do not desire, and it is not my intention, unless we arrive at a period when there are more difficulties surrounding us than there are now, to violate the obligations of that oath. If it is to be done, it must be done in a case of more extremity than we have now upon us.
I voted, sir, to approve the act of the President of the United States to suspend the privilege of the writ of habeas corpus.
Mr. Hutchins. I rise to a question of order. It is, that this is a special order before the committee.
Mr. Wright. If the gentleman has intelligence enough, he will see that I am in order. If he has not
The CHAIRMAN. The gentleman has not stated his point of order. He will state it.
Mr. Hutchins. My point of order is that the Treasury note bill is a special order, and therefore that the discussion must be confined to the subject-matter. It seems to me that the remarks of the gentleman are not relevant to this bill.
The CHAIRMAN. The Chair does not perceive that the remarks of the gentleman from Pennsylvania are irrelevant to the bill. The gentleman will proceed.
Mr. Wright. A second Daniel, although he may have come to judgment, has not thrown us, Mr. Chairman, from our platform. If there is anything on earth I dislike, it is to be interrupted by a gentleman who fancies that he can look further into a millstone than I can myself.
I was going on to state that I voted, during the extra session of Congress, to affirm the act of the President of the United States in the suspension of the writ of habeas corpus. I voted also to approve his act by which he declared certain of our seaports in a state of blockade. I also voted to approve his act declaring the establishment of military law. I did it for the sole reason that I regarded, at that time, that the exigency had arisen which justified us and the President of the United States himself in violating a constitutional provision. It was a vote in extremis. I voted the other day also to give the President of the United States the control of all the railroads in the country for the transmission of troops. Nay, I went further than that, and voted for a clause in that bill which gave to the President the privilege of bringing into the public service the officers and employés of all the railroads of the country. I did that because it was an extreme case. And now we are called upon, according to the terms of this bill, to vote to declare it to be constitutional and legal to make paper itself money.
Now, sir, I do not feel justified in going so far as to cast my vote for any such measure. I am well aware that the troubles which are upon us are of the most serious kind of any difficulties which can befall a nation. I am willing to concede that even the question of our notional existence is at stake, and perhaps there has not been a more gloomy period since Congress assembled than we have upon us at this very time.
It becomes necessary that Congress should raise money, and what is humiliating to me is that the credit of the nation is not able to make loans of money of foreign countries. It cannot be done. We cannot look to the English Government for loans. We cannot look to the French Government for loans. I do not think there is any Government in Europe that we can expect to make an advance to us, in the shape even of making us the loan necessary to carry on the war. It brings us back to the position that the American Congress must stand upon its own basis. We must rely upon our own elements of power and strength. The giant is writhing, and they are attempting to put upon him the chains. The question of liberty itself is at stake. I believe we have yet those elements of power, of strength, and of greatness that will bear us above this terrible conflict which is extending, from one end of this country to the other.
I have an abiding faith in the honesty, the honor, and the integrity of the American people; and I believe they will not stand idly by, withhold their treasures, or only contribute them grudgingly, when they are to be used in saving the Government. Therefore, Mr. Chairman, I am one of those who do not wish, in this great emergency, to resort to a subterfuge. If we have money let us bring it into use. I will vote for taxation to the very uttermost limit. The people have means enough in their hands. As the gentleman from Maryland [Mr. Crisfield] said this morning in his well-timed remarks, if we must resort to a thing of doubtful expediency, let that resort be made as the last act of the drama. Let us not commence at the outstart by attempting to do, in the first place, an unconstitutional act, and in the second place by putting ourselves into positions which will, in my opinion, bring upon the country a worse ruin than the arms of rebels have already brought upon it. If I were clear in my own mind that Congress had the right and power to make paper money a legal tender with reference to all the transactions of Government, even making its application retrospective as well as prospective, I should have no hesitation in casting my vote in favor of this bill. If we are compelled to flood the Country with an issue which has no time for redemption, that being at the pleasure of the Government, I would clothe the issue with all the power which the Government has to give it currency.
The gentleman from Ohio, [Mr. Pendleton] in his remarks the other day, entirely exhausted this subject. He presented it in a way that has not been met by gentlemen on the other side of the question; and I take it upon me to say that his argument cannot be met. The position that he took was one which, according to my view of this matter, was invincible. Now, sir, if Congross, in its attempt to put this currency upon the country must, in the first place, trample on the provisions of the Constitution to effect that, and must besides run the risk of what view the Supreme Court may take of the measure, I ask whether it is wise, prudent, and just to incur such risks and hazards.
The gentleman from Massachusetts, who last spoke, [Mr. Alley] made a remark that Mr. Webster had changed his views with reference to the sentiments which he expressed in the Senate on the subject of constitutional currency. Pray, let me ask that gentleman when it was that Daniel Webster changed his views on so momentous and important a question as that ? Can he refer me to the time and occasion, or to whom the communication of such a change as that was made ? If he cannot, I cannot permit the statement which he has made to have currency and credit in this committee. If I were to say that Daniel Webster was one of the greatest constitutional lawyer's in the land, I would be rally repeating what every gentlemen here must know. There is no dispute among us with regard to that Mr. Webster, in a speech made in 1836, says:
"This is a constitutional principle, perfectly plain, and of the very highest importance. The States are expressly prohibited from making anything but gold and silver a tender in payments of debts; and although no such express prohibition is applied to Congress, yet, as Congress has no power granted to it, in this respect, but to coin money and to regulate the value of foreign coins, it clearly has no power to substitute paper, or anything else, for coin, as a tender in payment of debts and in discharge of contracts."---[Webster said this while speaking in opposition to the Specie Circular, on December 21, 1836. While a Senator, Webster was on retainer to Nicholas Biddle. What else did he say ?
That sentiment was uttered by Mr. Webster after he had been twenty-two years in public life. I only refer to it as an authority which is not only entitled to the respect and consideration of the committee, but as an authority which, in ordinary matters, ought to be binding on the conscience of the committee. On another occasion Mr. Webster says:
"Congress can alone coin money. Congress can alone fix the value of foreign coin. No State can coin money. No State can fix the value of foreign coin. No State, not even Congress itself, can make anything a tender but gold and silver in payment of debts."---[ Senator Webster, attorney on retainer to the bank of the United States, said this on May 25, 1832, while advocating for the re-newal of the charter of the Bank of the United States.....
I am willing, Mr. Chairman, to be bound by an authority of this character. I feel it an obligation on me to look with great consideration, perhaps I might say now that that distinguished man has been gathered to his fathers with reverence, to the principles which he laid down, and to the conclusions at which he arrived.
But not only did the gentleman from Ohio [Mr. Pendleton] refer us to the authority of Mr. Webster, but he referred us also to the debates in convention at the time the Constitution was adopted; in which it appears that the power to issue bills of credit on the part of the Government was excluded in express terms. How can I, under the oath which I have taken here to support the Constitution, vote to sustain the principle contained in this bill namely: that Congress has the power to emit not only bills of credit, but to make these bills of credit a legal tender in all transactions of the Government and among people everywhere in the country, giving it a retrospective as well as a prospective effect ?
It is said and there is where I think the gentleman from Ohio [Mr. Bingham] fell the other day into a grievous mistake that this is among the great powers of the Government. Why, sir, all the powers that this Government has under the Constitution are the powers delegated to it by the several States which thus met in convention. There is no such thing in construing the Constitution as inference. There is nothing to be implied. The States that met together in convention clothed Congress with all the powers, in express terms, that Congress can legitimately exercise under the Constitution. Who doubts that ? Who can gainsay that proposition ? The gentleman from Ohio [Mr. Bingham] stated that in certain countries shells, leather, and other articles were made currency; and I suggested to a gentleman sitting near him at the time he made use of that language, that as a matter of course Government would have a right to do this, if not restricted in its powers. I suppose that the King of Dahomey has all the sovereign powers necessary to make bits of leather, or sea shells, not only a currency, but a legal tender between his subjects. But there is a mighty difference between the sovereign power of a State, where there are no restrictions or limits upon it, and that of the United States, which possess only powers delegated under a constitution. Not one iota of power does this Congress possess save what it derives under the Constitution. In plain terms have the States written their charter. It is in language not to be misunderstood. The powers of the General Government are expressed in the debates and votes of the men who gave it existence; in the decisions of the Supreme Court of the United States, and of the supreme courts of the several States; and in the views and votes of our predecessors in the Halls of Congress. It seems to me that it is vain on our part to attempt to override these conclusions and to set them at naught, in the delusive idea that we have a clearer view and a keener perception of the powers with which this Government is clothed than had these worthy men who have gone before us.
This bill proposes, sir, to throw on the country, according to the terms of the first section, $100,000,000 of Treasury notes, payable at no time, payable no where payable at the pleasure of the Government and the astounding clause is added, that those Treasury notes, payable at no place and at no time, shall be lawful money, and a legal tender in payment of all debts, public and private, within the United States. Now, I submit it to this committee as a matter of law, as a correct conclusion from the Constitution itself, that you cannot, under the Constitution of these United States, make anything but gold and silver a legal tender on contracts. I come to this conclusion because there is no such written power in the Constitution. I come to it because the members of the convention which framed the Constitution had this very question before them, and decided it by a vote of nine States on the one side to two on the other. Now, gentlemen who are in favor of passing this bill must not pretend to say that its provisions accord with the principle, the spirit, or the letter of the Constitution. If they ask us to throw this issue upon the country as a measure of expediency, disregarding the provisions of the Constitution, that is another question; but they must not pretend that is another question; but they must not pretend that they are doing a constitutional act in the emission of bills of credit, because I do not think that, under the terms of the Constitution, Congress has power even to emit bills of credit, much less to make these bills of credit a legal tender in regard to contracts between private parties, or between the Government and the parties with whom it is dealing.
Under the power of Congress to coin money, there is certainly no power to emit bills of credit. Under the terms of the Constitution giving to Congress the power to regulate commerce with foreign nations and among the several States, there is certainly no power to emit bills of credit. And under the concluding clause of that section, giving to Congress power to pass all laws that shall be necessary and proper for carrying into execution the foregoing powers, it cannot be contained, because the Constitution gives to Congress the power to do only those things which had been enumerated in the foregoing sections.
Now, I lay it down as a principle and in that I am sustained by the decision of the Supreme Court of the country; I am also sustained by the votes of the framers of the Constitution itself; I am sustained by the best legal that the learning country has, at any time, ever afforded, in the views of those distinguished gentlemen who have occupied seats in this and in the coördinate branch of Congress in times past I say, I lay down the principle that we are to conform our action to the Constitution of the country as it is, and I call upon gentlemen to show me how, when, where, in what particular, we have power, under the Constitution, to make anything, except gold and silver, a legal tender ? I think, Mr. Chairman, it cannot be done. If it can be done, then courts, members of conventions, and the statesmen who have gone before us, have committed an egregious error, and we are coming now to perform the solemn act of condemning their judgment and of setting all their precedents at defiance.
There may be a time before this rebellion shall come to a final conclusion when stern necessity may drive us to the accomplishment of a great many acts from which we would recoil at the present moment with fear and trepidation; but that time I do not think exists at this day.
The first section of the bill reported by the Committee of Ways and Means provides for the issue of $100,000,000 of Treasury notes. The next section provides for the issue of $500,000,000 of six per cent. bonds. This issue of Treasury notes, according to the terms of the bill, may be funded in these bonds.
Now, sir, if you or I live to see an irredeemable currency of seven, eight, or nine hundred, or a thousand millions of dollars, if you please, set afloat upon the country, with no time fixed for their payment, no place designated I say, I think, if we live to see that day, we shall live to see that currency as much depreciated as was that currency adopted in the hour of necessity by the Continental Congress. Why, even at that period of time, they made their bills payable at a certain place, and payable in Spanish milled dollars. The provision was contained upon the face of this issue of Continental money, that it was payable in specie, even in the stress in which our fathers were placed at that early period in our history. They did not venture, they did not presume to do what we are now asked to do, although there was then ten thousand times more necessity for it than there is now, because there is a hundred times, yes, sir, a thousand times more property subject to taxation on which revenue may be raised than they had in that time.
Mr. Horton. I ask the gentleman to yield to me.
Mr. Wright. I will yield to the gentleman in two or three minutes. It has been stated in the course of this debate that the gold and silver in the country at this moment is from two to three hundred millions of dollars. It was also stated that the property assessed in the country for the purposes of taxation amounts to $16,000,000,000. Now, sir, with this vast amount of property, and with the undoubted right of Congress to impose taxation; with all these resources, why is it not the duty of Congress, in the first place, to look to the amount of property that we have to sustain the credit of the country ? If we, instead of that, look to a thing that exists in imagination, and in imagination only, my theory is that the object we seek to accomplish can never be accomplished.
Now, Mr. Chairman, in obedience to my promise to the gentleman from Ohio, I yield to him the remainder of my time.
Mr. Horton.[Valentine Baxter Horton (January 29, 1802 – January 14, 1888) Ohio (R)] Those members who have taken any notice of my course, will remember that I have not often imposed myself upon the indulgence of the House; and I would not on this occasion were it not for the fact that in my judgment we are about taking a dangerous departure from the financial system of the country. If this bill passes, as I hope and pray it will not, this will be a point from which we shall date a new financial system in the United States. Old things will have been done away; all things will have become new.
Being a member of the Committee of Ways and Means, I have been engaged in working according to the best of my ability, saying nothing; but I wish upon this occasion, as the saying is very commonly uttered here, to "put myself right before the House and the country." If I am wrong in my convictions, I wish to take the responsibility of the wrong. If I am right, I do not wish the responsibility to attach to my skirts of the great wrong which I believe to be involved in this bill.
I do not expect by anything I shall say to convince any man who has already examined this question; but still I wish to utter my voice of warning against being driven by a supposed and asserted imperious necessity into this measure. It is conceded to be against all the teachings of experience, against all our habits of thinking, against all our sentiments of right, and against all our opinions about political wisdom and prudence.
It has been asserted upon this floor, with the utmost apparent sincerity, that this is a measure not of choice, but of necessity. But, Mr. Chairman, that assertion is only reiterated, not proved. Where is the proof that it is a matter of necesssity ? There may be proofs abundant, but they have not been produced, so far as my knowledge or observation extends. They may exist outside, or they may possibly exist here; but they have not been made apparent so far as I have been able to discover.
I propose, Mr. Chairman, in the brief period I shall occupy on this occasion, not to go into the constitutional questions involved in this bill. They have been discussed upon one side or the other. I shall leave them in the same condition in which I found them; but I shall call the attention of the committee to some practical views, which it seems to me are decisive. And I ask those who listen to me just to keep in mind their own practical knowledge, and their own practical experience in the ordinary transactions of life; and unless they can prove to their own minds and to their own satisfaction that there is something applicable to governments that is not applicable to individuals in their own financial affairs, they will have no difficulty in understanding what I shall say.
Now, Mr. Chairman, I believe all of us will agree that a tax bill and a loan bill should have been passed through this House side by side. The Committee of Ways and Means were convinced of the importance of this, and were desirous that this should be done. It is from no neglect of the Committee of Ways and Means or of the subcommittee which has had the preparation of the tax bill in charge, if the loan bill and the tax bill have not been brought forward side by side. This will be understood readily when the fact is suggested that the preparation of a tax bill providing for the necessary amount, and drawn with the care requisite to an equitable operation upon all the subjects to be taxed, is a work of great labor, and cannot be well done by anybody in a short time. The members of the sub-committee who have the tax bill in charge have devoted all the time at their command in the preparation of the bill. They have worked night and day; and although we do not get much credit for being industrious, still substantial progress has been made.
But the loan bill is brought before us, and the necessities of the Government compel us to consider it without waiting for the tax bill, which should be accounted a part of the same measure. There are two measures before the committee, and I propose to discuss them. One is the proposition of the gentleman from New York, [Mr. Spaulding] and the other that of the gentleman from Vermont, [Mr. MORRILL.] The proposition of the gentleman from New York [Mr. Spaulding] provides for the issue of $100,000,000 of Treasury notes, without interest, payable at the pleasure of the Government; and with a provision for funding them in six per cent. bonds, having twenty years to run. It provides further for the disposition in the market, at par, of six per cent. United States bonds, having twenty years to run. It proposes to make this $100,000,000, with the $50,000,000 notes already issued, a legal tender for the payment of all public and private debts and demands. Those are in substance the provisions of the pending bill.
The substitute introduced by the member from Vermont [Mr. Morrill] provides for the issue, by the Secretary of the Treasury, of $100,000,000 in Treasury notes, redeemable at the pleasure of the United States, and bearing interest at the rate of three and sixty-five hundredths per cent, per annum. These notes can be used as currency when additional currency is desired, or laid aside for the sake of the interest. They are receivable for all dues to the Government except imposts, and are payable by the Government whenever the Government creditor chooses to accept them. These notes, too, are fundable by the holder in United States bonds having ten years to run, and bearing interest at the rate of seven and three tenths per cent. per annum payable half yearly in coin. It will be seen at a glance that these notes have all the characteristics for circulation which the Treasury notes of Mr. Spaulding's bill will have, (save the legal tender clause,) and have the important advantage of earning interest, and being fundable in a more desirable stock for the holder, because bearing a higher rate of interest, and more advantageous to the Government; because having only half the time to run, the Government can redeem them at an earlier date. By this substitute the $50,000,000 issued in July, called demand notes, are left to be used by the Secretary of the Treasury under the law authorizing their issue. It was considered that this $50,000,000 demand notes were as much as the market would bear. Should there be, however, a further demand, it could be met from the $100,000,000 bearing a small interest, which, to say the least, would be as desirable for the purpose of currency as those not bearing interest.
Mr. Chairman, the substitute provides for the issue of $200,000,000 United States bonds, having ten years to run, bearing seven and three tenths percent. per annum interest, and $300,000,000 six per cent. bonds, having twenty-five years to run, interest on both descriptions being payable in coin, half-yearly. The bill of the member from New York does not provide for the payment of the interest in coin. That of the member from Vermont recognizes throughout the obligation of the Government to pay all its debts in coin. There are other provisions which are common to both bills.
The Committee of Ways and Means are equally divided in regard to the two bills. I, however, am for the substitute, and decidedly opposed to the legal tender scheme of the bill now pending before the committee. I ask the attention of the committee to some suggestions which I propose to make against the pending proposition.
I will first make some remarks about the present financial condition of the country. I think that I may take it as true that the country never was so wealthy as to-day; that never was so little due to foreign countries as to-day; that it never had so much property, and never was so free from embarrassments. The only drawback is that the Treasury wants money to an immense amount.
The question arises how shall we get the required amount of money and put it into the Treasury to defray the expenses of the Government ? That, sir, is the question which we are practically to determine by a vote of the House to-day or tomorrow. Can we best accomplish our purpose by a legal tender Treasury note bill, or can we best do it by going to the capitalists of the country and saying: "We are a powerful nation, an honest nation, a wealthy nation engaged in an effort to put down a gigantic rebellion. All that is valuable to us depends upon our success. The country is powerful; the people are full of patriotism; we are providing by law a sure fund to pay the interest of the public debt, to defray the ordinary expenses of Government, and a fund with which ultimately to redeem the principal. What we desire to borrow is to be expended in the suppression of this infamous rebellion. We have not only the means but we have the will to meet all our own engagements promptly."
Do yon think, Mr. Chairman, that an individual wanting to borrow money, presenting himself to his neighbors who had money to lend, would have any difficulty in procuring it ?
So with the United States. The Government has the ability and it has the will to pay; and all that it has to do is to announce to the capitalists that it is a good husband, and will take care of its business; that it is honest in its expenditures, and that it will use this money to put down this rebellion; that it will not spend time upon side issues, but that it will devote this money judiciously, honestly, and energetically to the end proposed; and I think you will see that the coffers of the capitalists will open, and that gold will run out in the utmost abundance.
The declaration that this is a necessity is a legislative declaration that this Administration is not equal to the occasion for which it was elected. I, for one, will not vote for that declaration. Such is not my opinion. I think the Administration bas committed errors; but I am not willing to say by my vote that it is not equal to the emergency.
The plan suggested in the bill of the member from Vermont [Mr. Morrill] will, if followed up by judicious and energetic measures, I am convinced , accomplish the purposes of the Government. You have all that is valuable in the credit of the United States in this form; and you have the additional inducement of laying it aside temporarily, or funding it upon better terms than the Treasury demand notes. Then there is another point to which I will call the attention of the committee. It is in accordance with the usage of merchants and men of business of all sections, because when you postpone payment you are or ought to be willing to pay interest. You do not believe that it is right when you cannot pay not to pay for the delay. And it keeps the specie standard according to our old notions of gold and silver. You know that in all the business of life it is a most important thing that the standard of payment or the standard of value shall be as nearly invariable as possible. You know if I could sell you one hundred thousand yards of broadcloth, and I should have the power of having a gum-elastic yard stick, you would not know really what amount of cloth you had. If it be right to vary the standard it will be very much as in the early history of Michigan, when furs were the staple commodity of that now prosperous country, and when a fur trader called the weight of his foot a pound of fir on the scales. You may have seen in the papers how in the pepper district a pound of pepper was weighed by the foot of the merchant. That, Mr. Chairman, is a variable standard; and if a legal tender can be allowed to vary the standard whenever the friends of the Administration and the friends of the Government can say that the Government is under a necessity, where will you land with your ideas of value ?
The first exhibition, Mr. Chairman, that the people will see in this country if this bill goes into effect, will be this: It will enable the contractors who cannot now get their pay from the Government, to get it and to pay it over to their debtors. They in their turn will be anxious to get some one to take it, and money will seem for the time to be abundant, and trade will seem to be active. All parties, however, will find that the Government has wronged somebody out of the, difference between the par and the present value of the stocks of the United States, and they will submit to that operation simply because they cannot help themselves. And what will they do next ? They will bide their time. The Government is obliged to get supplies, and the contractors will put their supplies up to the amount they have lost, and ten or fifteen her cent, more. They will say that next time they deal with Uncle Sam they will take care to get all that they are entitled to, and the Government will have to pay all that they have lost, and a percentage for future indemnity.
But among the people, Mr. Chairman, what will be the effect ? What will be the effect in Ohio, in Kentucky, and in all the States ? The first shock will be that the moral sense of the country will be outraged. Your friends and neighbors will not at first be made to believe that it is right, when they have agreed to pay a hundred to get a clear receipt for eighty-five, or ninety, or ninety-five. And I tell you, it is not safe for a legislative body to undertake to teach the people laxity of morals. Our Government within the last four or five years have clandestinely taught lessons of corruption, wide enough and well enough understood, to corrupt public morals as far, at least, as the extreme point of safety; and when we get together here, and in solemn legislative act say that wrong shall be right, the virus of dishonesty will extend to limits you cannot very well calculate. I for one will have no part or parcel in a legislative act of that sort.
The next thing, Mr. Chairman, to which I would call the attention of the committee is this: that confusion and uncertainty will extend in relation to the value of all exchangeable articles, add you will never know how much you have; how much what you have is worth, or anything certain about it, simply because you have no standard; because the standard of depreciated paper currency changes from day to day, and from hour to hour; and all the legislation of the Congress of the United States, even if it is as powerful as my friend and colleague, [Mr. Bingham] who made a speech yesterday, said it was and I have no doubt of it cannot make paper currency anything but what it is.
There are some things, Mr. Chairman, which cannot be done. Inflation of prices, although it might not be rapid, and although the country might not be ruined at once, and although we might not find ourselves in that Serbonian bog in which armies whole have sunk at once, we will get there soon enough. Inflation of prices will be the result; and when inflation of prices begins, exports decrease and imports increase. Agricultural interests will be injured to an incalculable extent, and the next great result will be upon us, which is the export of gold out of the country to pay debts abroad for excessive importations, superinduced by the inflation of prices here. We shall not then be able to say as we can now, "the farming productions of the West have been sent abroad to such an extent that even gold has been brought back to pay the balance of trade in our favor."
In 1836 we imported wheat into this country, not because we did not grow it as well as now, but because prices became so inflated that we all speculated in western lands and town lots and became perfectly wild, and the farmers of Europe supplied the citizens of New York with wheat to make flour of. What has been done will be done again. In the end, the Government will be vastly the loser by the inflation of prices, because it has to buy such an immense amount of supplies; and the contractor will hold in his hand, not the legislative power, but the practical power to say, here is my property, and you shall have it at such a price, and not for less. We have not yet reached the point when the Government, exercising its high prerogatives, as the member from New York [Mr. Spaulding] calls them, can take for its use the property of the citizen without pay. Mr. Chairman, I put the question to you with all respect, would it not be as honest to go to the banks, and say, "you have such an amount of gold; just pay over, and we will give you our bonds?" The advantage of that process would be that you could measure the injury you had done and make reparation; but how can you measure the amount of injury to the country by a depreciated and fluctuating standard of payments ?
During this discussion we have been told that old rules will not answer. I have read, and I presume all have, the saying of the wise man, that "the thing that has been done, it is that which shall be done;" and that "there is no new thing under the sun." I do not believe there is any new thing in the laws of finance. I do not believe all the legislative wisdom we could get together could, if concentrated in one man, discover any new thing in the doctrine of business. Experience, practical knowledge, are the only safe guides in this matter. But there is one great interest which you will appreciate, and which, I think, I know something of, and that is the interest of labor. Of all classes of community to be injured by this great act of oppression and that is the true name for it is that vast multitude that get their bread by the sweat of their brow. You render the standard of payment uncertain, and they never will know what their wages are for a day's work, or a month's work. The capitalist of New York, the millionaire here and there, will take care of himself; and the first thing he will do will be to send his means out of the country. Every man that has foreign relations in any shape will send his coin out of the country. Why ? Because he will flee, as from an infected district, a country where there is no security for property. And if your money is not secure, your land is not secure. The only difference, perhaps, will be that the pressure will be greater; the principle is the same.
But there is a consideration stronger than all this; it disgraces the Government under which we live. It is worse than forty defeats on the battle field. It cannot be wiped out by any future heroism. It is saying to the world we are bankrupt, and we are not only weak, but we are not honest.
Now, Mr. Chairman, I know I have used strong expressions, but I only wish I had the power of language strong enough to express myself as deeply as I feel. If we once begin this course of policy, we will continue it. And then look out for the tax bill. I tell you now that the faith of this Government is pledged by a solemn vote of this House that a tax bill shall be passed to raise $150,000,000 a year; and if it were not for that, if we pass this bill, I should doubt whether we could pass the tax bill through this body. The people are very patriotic, and they come up to our committee and say, "tax us" "tax us," but, Mr. Chairman, when we get this through Congress, and it is supposed to be successful for the time being, as everybody will dislike to put his hand into his pocket if he can get along without it, we will repeat the doctrine of necessity with variations, and Congress will yield to the syren song, and members who nourish their popularity will be very anxious to lessen the amount of taxation.
I do not suppose that the bill which I advocate is going to work any miracle, but I do believe it tends in the right direction, and that every foot of progress we make under it will be a safe and sure advance according to the old standard. And when daylight springs up; when there is a little sunshine in our policy; when the Administration I speak it with all respect is invigorated and inspired with the spirit that the people have, the people will see that something is to be done, and they will furnish their money to the Government with the same readiness that they have their men. I think the indications are, and especially from the War Department, that we have a new hand at the helm; that something will be done. The people will be encouraged, and they will have faith in the ability of the Government to put down this rebellion. Faith on the part of the people, and works on the part of the Government, will accomplish all that is to be done.
There is money enough; there is patriotism enough; but there has been I am sorry to say it, but it is true there has been gradually a weakening of the faith of the people in the earnestness of purpose, in the unity, in the energy, and in the enthusiasm of the Administration, To prove it, I need only recall to your minds the fact that every movement which has been made from the time that Sumter was bombarded up to this day has been pressed forward by an irresistible current of public sentiment. The Government have always been behind the people; I think that they are just waking now to the fact that is necessary go a little faster. I say nothing about any particular movement. I do not say in a bad direction a movement should be made; but I want something done to convince the people that the Administration is in earnest, and has a definite plan which it is to work out; and that there will be no pause in their action until this rebellion is crushed; that they will do this in the quickest, the surest, and the cheapest way.
I have said that the necessity for this measure has been asserted but not proved. Of course I speak with no disrespect of the speeches which have been made upon this floor; but I have failed to hear any argument that it is necessary. I know perfectly well that the Secretary of the Treasury thinks that it is necessary, and I have the utmost confidence in his ability and zeal. I think he is mistaken. At any rate, whether he is mistaken or not, he has not furnished us with proof of the correctness of his opinion. I think I can give some reasons for my belief that he is mistaken, and until reasons can be given that will overbear these, I think that we ought to conclude that a necessity does not exist for us to blight the fair fame of the Government, to impair the public morals, and to set afloat the ship of State in a fog on a sea of bubbles where no human skill can direct or control it, and where ruin is as inevitable as cause is sure to precede effect. The proofs I offer are these: there is no want of money; there is no want of patriotism; there is only one little thing wanted which, in the phrase of the old story, is "the grand confidence." These gentlemen who hold money want to be satisfied that the Administration is in earnest, that it has able hands at the helm, and that it will conduct the ship of State judiciously, intelligently, wisely, and speedily to the desired haven.
Has any gentleman here any doubt of the ability of this country to furnish means to carry on this war ? Has anybody who is determined to vote for the legal tender bill thought of the peculiar application they are making of that old classic maxim, "learn from your enemies?" We are just following in the footsteps of the congress of the confederate States. We are following them with unequal steps, at an humble distance. They have already gone through the same process that we are now inaugurating. They have had some experience in the southern confederacy in paper circulation. It is now at forty per cent. discount, payable in trade. You cannot buy a dollar of coin for any reasonable amount of paper. And, sir, we shall be beginning to go through the same experience, if we start in this career, that our fathers did in the days of the Revolution, when $500 of Continental money were paid for a breakfast, and a poor one at that. I do not think that we shall go to the same extreme, Mr. Chairman; for we are richer than they were. We are not yet so crazy in pursuing this career but what we could call a halt, and I think we should do so; and I think we have wise and judicious men all over the country who, if we did not do so, would put other men in our places who could do it for them and for us.
Mr. Chairman, confidence is all that we want, and I think we are going to have it. I am of a hopeful temperament, and have abundant faith in some of the Departments of the Government, and especially now in the War Department. I could not have said this a little while ago. I wish to say one thing more. I know my friends will take it kindly, because I say it from the kindest motives. I think that we have a mission to fulfill in this work of reestablishing the public credit. I think there ought not to be one word uttered in this House until this rebellion is put down, except something that tends to that result. I think we ought to carry out in thought, word, and deed the I spirit of the resolutions of the gentleman from Kentucky [Mr. Crittenden] that were passed here last July; and that all side issues, and that all speeches made to minister to a sentiment that has sufficient vitality to stand in full vigor until we have put down this rebellion, should be laid aside for the time being; and that we should put our hands to the work and help the Administration to recover the hold which it has lost upon the public confidence, and which we in this House have contributed, as I think, somewhat to weaken.
I think, Mr. Chairman, that the era of oracular utterances of something that is to be done pretty soon is past. I think the time for mysterious utterances about a movement that is in the wind, or is seen somewhere, or heard, or whispered, and that gave a little hope for the time, is passed by. I do not think that the Secretary of the Treasury, when he goes to New York, will say that there is to be a great movement about such and such a time, and really inspire the bankers with a hope that the good time is coming within fifteen days; but I think that there will be something actually done, and that faith and hope will be fruition. The people, I think, want action action in the House, in the Administration, in the military department of the Government. How and when and the mode, I say nothing about, but there must be action everywhere. The people will then become inspired with the belief that this rebellion will be put down before next harvest, and they will pour out their money like water; but if you pursue the opposite policy, no matter how ready they may be to furnish the means, you will have deprived the Government of the power of regaining the ground they have lost, and again standing by the old, safe ways, during your lifetime and mine. I say, then, that action in Congress, in the Administration, and in the military department will produce this confidence. The people will see it, and they will open their purses, the sinews of war will be furnished, and this blight upon our fair fame will be avoided.
Mr. Chairman, I thank the committee for listening to me so long. You know that I am unaccustomed to speaking in the House, and my remarks of course have been very desultory. But I wish to impress upon the committee that these opinions of mine are not merely opinions superinduced by a hopeful temperament. I have, according to the best of my knowledge, examined this whole question in all its bearings, and I am willing to take the responsibility of voting against this legal tender clause of the bill, for the reasons that I have given, and for divers and sundry reasons which I have not given. I ask the committee to pause before they take a step which once taken will be irrevocable. When you have once broken the pitcher it never becomes whole again; and this fair fabric of our untarnished faith and unbounded wealth and credit ought not to be destroyed, simply because our leaders men that we have faith in have become alarmed, and have told us that there is a necessity for it. When there is danger, Mr. Chairman, then is the time to be cool and look about you, and to see that you take no false step. Now is that time, and if you take this step, it is a step downwards, and you will find that to regain the high eminence from which we shall have descended is a labor very difficult to accomplish.
Mr. KELLOGG, of Illinois, obtained the floor.
Mr. Spaulding. I ask the gentlemen to give way to me for a few moments, and then I will move that the Committee rise.
Mr. KELLOGG, of Illinois. I yield for that purpose.
Mr. Spaulding. I wish to make one statement in reference to the condition of the Treasury which I presume all will be anxious to know before we adjourn. The Secretary of the Treasury has yet unexpended, of the loan of last July, $46,000,000. He has a right to issue this sum in three and six sixty five hundredths per cent. notes, or in seven and three tenths per cent. notes; but he is unable to put out either of these classes of paper without a discount. He cannot pay out the seven and three tenths per cent. notes without a discount of two per cent., and he cannot pay out the three and sixty-five one hundredths per cent. notes because they will not be taken as currency. This bill of Mr. Morrill proposes simply to repeal the authority to issue the same kind of notes, which cannot be issued advantageously by the Secretary of the Treasury at this time. 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 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.
Treasury NotesClose of Debate.
Mr. Spaulding. I move that all debate an House bill No. 240 be closed in one hour after its consideration shall have been resumed in the Committee of the Whole on the state of the Union.
Mr. THOMAS, of Massachusetts. I suggest to the gentleman to modify his motion, so as to make it read two hours.
Mr. Spaulding. The exigencies of the country are such that I cannot consent to do so, unless the House so order it.
Mr. VALLANDIGHAM. I move to amend the motion by striking out "one hour" and inserting "two hours."
The amendment was adopted; and the motion as amended was agreed to.