On motion of Mr. HUNTER, the Senate, as in Committee of the Whole, resumed the consideration of the bill (S. No. 13) to authorize the issue of Treasury notes; the pending question being on the amendment offered by Mr. Fessenden, to add to the tenth section of the bill:
And provided further, That the power to issue and reissue Treasury notes, conferred on the President of the United States by this act, shall cease and determine on the 1st day of January, 1859.
Mr. HUNTER. There is a verbal amendment which I should like to make, which can be done by general consent. It is in the eleventh line of the first section. The term "raised" is applied to Treasury notes. I move to strike out the word "raised," and insert "issued."
The amendment was agreed to.
The PRESIDENT pro tempore. The question is now on the amendment of the Senator from Maine, [Mr. Fessenden.]
Mr. WILSON. [Massachusetts (R)] Mr. President, the closing hours of the Thirty-Fourth Congress were consumed by efforts to deplete an overflowing Treasury; the early days of the Thirty-Fifth Congress are consumed in efforts to fill an empty Treasury. Then, the Secretary of the Treasury invoked Congress to reduce the accumulating coin in the Treasury by a revision of the revenue laws; now, the Secretary of the Treasury asks Congress to fill an empty Treasury by the issue of $20,000,000 of Treasury notes. Then, the far-seeing business men of the country hoped to ward off the impending commercial revulsion by the depletion of the Treasury; now, that Treasury has been emptied by the most sweeping commercial revulsion which ever came upon the country.
The Finance Committee, in compliance with the recommendation of the executive department, proposes to issue $20,000,000 of Treasury notes, as a temporary expedient. The Senator from New York [Mr. Seward] proposes to restrict this issue to $10,000,000. I shall vote for this amendment, although I have no doubt we shall be called upon, within sixty days, to grant the entire amount. I regard the proposed mode of supplying the temporary wants of the Government preferable to a loan. These Treasury notes, if the interest is low enough, will not be taken or held by the capitalists, but will be used by the banks and the merchants, as remittances. They will be, in fact, equivalent to specie funds. I am willing to vote to supply the temporary wants of the Treasury by this mode, but I am not willing to begin, by this system, a national debt. I am opposed to increasing the national debt without providing the means to liquidate that debt at the earliest practicable moment, by increasing the duties on iron, cotton, and woolen manufactures. The issue of these notes is limited to the 1st of January, 1859. It is, so far, temporary in its form; but I believe that, on the 1st of January, 1859, the Treasury will be more than $20,000,000 in debt. Sir, I make the prediction, and I am willing to put it upon record, that on the opening of the year 1859 we shall be from $20,000,000 to $30,000,000 short of the means to meet the current expenses of the Government.
On the 1st of July, the beginning of the fiscal year, the amount in the Treasury was nearly $18,000,000. The receipts of the first quarter, ending on 30th of September, amounted to nearly $21,000,000, making $39,000,000. The receipts of the present quarter, ending on the 1st of January next, of course are not yet known; they must, however, be somewhere between five and ten million dollars. The expenditures of the Government from the 1st of July last to the 1st of January next, must be somewhere about forty-five million dollars for the first half of the fiscal year.
Now, sir, we are to commence the year 1858 with an empty Treasury, and the Secretary of the Treasury comes here for $20,000,000 of Treasury notes. He estimates the receipts from the 30th of September last to the 1st of July next, at $33,000,000. Although it is a very difficult thing to speak with accuracy on a subject of this character -- for if we turn back and read the debates from the foundation of the Government in regard to the working of the tariffs and the finances, we shall find that the most eminent men of the country have been greatly mistaken in their estimates of the operation of revenue laws -- I believe that we shall commence one year from this time with the Treasury short by more than the $20,000,000 we now propose to issue in the shape of Treasury notes. I think that the Secretary of the Treasury has overestimated largely the receipts for the remainder of the current fiscal year. He makes a deduction of twenty-five per cent. for diminished importations into the country, but he makes no deduction whatever for the diminished value of the goods imported. Now, sir, I venture to say that the reduction of value of the importations of the country is at least thirty or thirty-three per cent. The Secretary of the Treasury makes no allowance whatever for this reduction in value of our importations. I do not believe that the importations, during the coming six months, in quantity, will be anything like the importations of the same months last year, and the reduction in the value of those importations will be from twenty-five to thirty-three per cent. I think the Secretary has overestimated the receipts for the last three quarters of this fiscal year by from eight to ten millions of dollars, and that we shall find this to be the case when Congress assembles in December next.
The President and the Secretary of the Treasury both commit themselves against any revision of the revenue laws of the country at the present session. They propose no mode to increase the revenues of the Government. They come here and say that the expenditures of the Government must be nearly seventy-five million dollars. They show us, on their own estimates, which I believe to be overdrawn by ten or twelve million dollars, that the Treasury will fall short by eighteen million dollars. I believe, therefore, that their own estimated expenditures will exceed the receipts of the Government by from twenty-five to thirty million dollars. They do not propose to reduce the expenditures of the Government, but they recommend an increase of expenditures. They estimate that, according to the standing laws, according to the requirements of the Departments, an expenditure of $75,000,000 will be required for the next fiscal year. The Security of the Treasury recommends the repeal of the law of 1849, limiting the expenditures for the collection of the revenue to $2,500,000 on the Atlantic coast. He tells us that the expenses of collection, instead of being limited as they now are to $2,500,000 on the Atlantic coast, and $500,000 on the Pacific coast, will be $4,000,000. No proposition is made to reduce the expenditures in the collection of the revenue. The Secretary tells us that the revenue has been largely diminished, while the expenses of collection have increased. The labor necessary in the collection of the revenue ought to be diminished; yet the Secretary asks us to repeal a law which restricts those expenditures; tells us that those expenditures will go up to $4,000,000 to collect $50,000,000 of revenue. We all know that there has been a pressure in all the offices for the collection of the revenues of the country to provide places for men who are warm and earliest supporters of the past and present Administrations. I believe that the force employed in the collection of the revenue of the country is larger than is necessary, and that that force ought to be reduced, and that the proposed increase of the expenditures ought not to receive the sanction of Congress.
Well, then, sir, we have the Secretary of War, backed by the President of the United States, proposing to raise four or five additional regiments, at an expense of four or five million dollars annually, so long as that force shall exist, for every regiment will cost $1,000,000 annually. Then the Secretary of the Navy, although we last year ordered five vessels to be built, asks us to build ten steam vessels this year, at an expense of $2,500,0000; probably, if they are ordered to be built, they will cost from three to four millions. We are told that this additional naval force is wanted to go up the rivers of China; but I believe that instead of going up the rivers of China, it is intended to operate in the Gulf of Mexico, on the coast of the coveted Island of Cuba. Here is a proposed additional expenditure of $1,000,000 for the collection of the revenue; of from four to five millions for the Army; of from three to four millions for the Navy; being a recommendation to add a permanent expense of the Government of nearly ten million dollars annually. These propositions to increase the expenses of the country are recommended by the President, and by the Secretary of the Treasury, the Secretary of War, and the Secretary of the Navy. They come here and ask for a loan of $20,000,000 in this shape. They overestimated, I believe -- and I think I shall be borne out in this by the facts to be developed in future -- their receipts for the next year eight or ten million dollars. By their own showing, their ordinary necessary expenses, without the additional ones recommended, will exceed their receipts eighteen or twenty million dollars; then we have a recommendation to increase the amount of expenditures some ten millions more annually. The expenditures of the last Administration exceeded, by about eighteen millions annually, the expenditures of the preceding Administration, and we seem now to be entering on another Administration with an increase of expenditures of the Government, over the last Administration, of from ten to twenty millions more.
Sir, I think that the President should have recommended -- I think that Congress at any rate should enter upon -- a revision of the tariff. In my opinion, the duties on iron, on cotton, on woolen goods, should be restored to what they were in the tariff of 1846. This will increase the revenues of the Government some few million dollars. I agree with the Senator from Rhode Island, and with the Senator from Kentucky who has just introduced a resolution bearing on this subject, that we should have a home valuation. That frauds exist in the collection of the revenues of the country has been proved, and is admitted by all who have any knowledge of the manner in which the revenue laws are executed. If we are to make a temporary loan to fill the exhausted Treasury, I prefer this issue of Treasury notes. The Senator from Rhode Island [Mr. Simmons] objected to this mode of replenishing the Treasury yesterday.
Mr. Simmons. The Senator will allow me to correct him. That objection of mine to this form of raising money was made when the bill permitted the notes to be reissued without limit; but when it was limited to a year, I had no such objection to it, but preferred it to the other mode.
Mr. Wilson. I now understand the position of the Senator. These Treasury notes will, if the interest is not too high, be used as specie funds by the banks and merchants. I shall vote, however, for the amendment suggested by the Senator from New York, to reduce the amount to $10,000,000. We, shall be called upon, I doubt not, for $10,000,000 more within the course of sixty days; but by that time we can have an opportunity to reflect, to see if something cannot be done to increase the necessary revenue; for I believe that on the 1st of January, 1859, we shall find ourselves from twenty to twenty-five million dollars short of funds to pay the current expenses of the Government.
Mr. HUNTER. Mr. President, it seems to me that the argument of the Senator from Massachusetts would go to show the necessity of voting the $20,000,000, instead of diminishing the sum, because he is of opinion that the estimates of the Secretary of the Treasury as to the revenue likely to accrue during this year, are extravagant. I will not enter into that question now. All estimates are conjectural, and in times like these they must be exceedingly so; they can only be based on probabilities. I will merely say, however, as I said yesterday, that so far as we can form some approximate estimate from the receipts at the port of New York, the accounts would seem to show that the amount of dutiable imports received during the year will be reduced about one fourth, as the Secretary has estimated in his annual report. What is a little more remarkable, and what would seem to show that his estimate possibly may be correct, is that the whole amount of imports, if we add those that go into warehouse to those that enter into consumption through the custom-house, is not very much below the imports for the corresponding two months of last year at that port alone.
However, I do not propose to go into this matter. I confine myself simply to this issue of Treasury notes; to this money, which, as I said before, we must have; for I believe the Senator from Massachusetts is right in saying that if we confine the present issue to $10,000,000 we shall have to come forward, in January, with another demand for perhaps $10,000,000 more. If we are to issue $20,000,000 we had better provide for it all in one bill, for the reason that, by so doing, we can issue most of the Treasury notes, after advertisement, to the bidder who will agree to take them at par for specie at the lowest rate of interest. I believe that mode of issuing the Treasury notes is a great improvement on the past practice. I think we should lose the advantage of that mode of issue if we passed the bills authorizing the emission of Treasury notes at separate times, and in more limited amounts. If we wait till January we shall probably be then in the condition we are now in relation to the $6,000,000 proposed to be issued immediately; the wants of the Treasury may be so pressing that we may not be able to wait long enough to advertise for thirty days, in order to enable the lowest bidder to take them, and I see no other way to make the Treasury note precisely and exactly equal to specie, which is the great desideratum in regard to that form of credit.
The Senator from Massachusetts expresses his surprise and regret that we should be asking for Treasury notes, and that this demand should be accompanied with such extravagant estimates as are made by the Administration. I would call his attention to the fact that the Treasury notes are asked for to meet the demand created by the appropriations of the last session of Congress, not of this. In regard to the estimates, I will say to him that when the proper time comes, when the bills which relate to them are presented, if he will show me any one item wherein they can be lessened or diminished, I will not only go heart and hand with him, but I will thank him for doing so. "Sufficient," however, "unto the day is the evil thereof." I confine myself now to the demand for means to meet the existing appropriations, and I believe that demand is fully equal to the $20,000,000 which we propose to issue.
I will advert but for a moment to his criticism on the demand for $4,000,000 in order to pay the expenses for collecting the revenue. I say "but for a moment," because I do not wish, as I am anxious to get the bill through to-day, to enter into a debate on any subject not immediately connected with this issue of Treasury notes. As the law formerly stood, (and it was passed, I believe, during the administration of Mr. Polk, some ten years ago,) there was a permanent and indefinite appropriation for defraying the expenses of the collection of the revenue on the Atlantic coast, which were regulated by law, but the expenses of collecting the revenue on the Pacific coast were entirely undefined, and left to the discretion of the Secretary of the Treasury. He now asks that both services may be brought under one law, that his discretion may be taken away in regard to the collection of the revenue on the California coast, and that a fixed and limited amount may be appropriated for the purpose of paying those expenses. The amount which he has asked is based on past practice. It seems that when this appropriation was first made, it was rather more than enough, and balances accrued; but as we have gone on, the demand for money to defray the expenses of the collection of revenue has increased, and we have been paying that increased expenditure out of balances that accrued seven or eight years ago; so that the estimate which the Secretary has made for that object is not founded on any desire to increase the annual expenditures for the last two or three years, but is made with reference to those expenditures as they actually occurred. It is to be remembered, too, that he proposes to include within this expenditure of $4,000,000 the expenses of collection on the Pacific coast, which have heretofore been indefinite and left to his discretion merely.
But, sir, I pass away from that subject, and come to the point in regard to the $20,000,000 proposed to be issued. If the Senator from Massachusetts be right (and most of the Senators on the other side of the Chamber seem to agree with him) in supposing that the estimate of receipts made by the Secretary of the Treasury is excessive, then so much the more reason for agreeing to this application for the issue of $20,000,000 of Treasury notes. By passing a bill for the whole amount at this time, we shall be able to issue these notes on the best terms for the Government and the country. I believe I stated yesterday, that probably $6,000,000 would be required by the 1st of January. In addition to that, we have to provide a surplus, as we all know, to administer the affairs of the Treasury; and besides that, a Mint fund has been considered necessary heretofore.
Mr. Fessenden. I shall be obliged to the Senator if he will allow me to ask him a question for information, in reference to the point he is now discussing.
Mr. HUNTER. Certainly.
Mr. FESSENDEN. I have had no time to make any particular examination of the subject; but on looking to the law, I find that there is a provision that $1,000,000 shall be kept in the Mint for the purpose of making advances to depositors. I am not able to discover that there is any provision of law requiring any larger amount to be kept there at anytime. If there is any such provision, the Senator from Virginia is undoubtedly familiar with it, and can inform the Senate how the fact is. The Mints, both at Philadelphia and New Orleans, are made sub-Treasuries, and as sub-Treasuries they receive a certain amount of the public money. Now, I desire to know the idea on which the Senator predicates his statement that it is necessary to keep $6,000,000 in the Mint. Is any amount necessary to be kept there for the purposes of the Mint; and, if so, what amount ? If it is not required for the Mint purposes, the amount kept there is a part of the general balance in the Treasury. I understand that $6,000,000 has been considered the surplus necessary to be kept in the Treasury. Is not the excess of coin at the Mint over and above the $1,000,000 required by law to be kept on hand there; in fact, an increase of the surplus deemed necessary for Treasury purposes ? Is not that surplus thereby increased from $6,000,000 to $10,000,000 or $11,000,000 ? I should like, as one of the members of this body, an explanation on this point; because the two subjects were presented by the chairman of the Committee on Finance in different aspects -- one as peculiarly relating to the balance proper to be kept in the Treasury, and the other as relating to the amount necessary to be held in the Mint, as I suppose, for the purposes of the Mint from year to year. I should like to know whether that is so or not ?
Mr. HUNTER. In reply to the Senator from Maine, I will state that they are separate funds. I am not able to say whether it is by law or by Treasury regulation that $6,000,000 are kept in the Mint. I rather incline to think it is by law, and I think it was a measure introduced by a distinguished Senator from Massachusetts, [Mr. Webster] I remember his moving in this subject. However, whether it be by statute or departmental regulation, that amount has usually been kept there.
Mr. BENJAMIN. There is a statute. I mean to say a few words in relation to the Mint fund in a few moments. I can inform the Senator that there is a statute on the subject.
Mr. HUNTER. This fund is kept for the purpose of exchanging coin with those who have bullion, in order to save the interest on it which would be lost by the delay in coining, for it frequently happens that the Mint cannot coin bullion as fast us it is presented. This was found to occasion inconvenience, not only to dealers in bullion, but to the merchants in the large cities -- so much so that Mr. Webster's attention was called to it; and I recollect the time the provision was made: but whether that precise amount was provided for by law, I did not remember until the Senator from Louisiana reminded me of it. In practice, however, it is considered necessary to keep that amount in the Mint, besides the $6,000,000 surplus required to work the Treasury. It is doubtful whether $6,000,000 surplus are enough to work the Treasury, because, in a country so extensive as this, we cannot always know when drafts will be drawn on the Treasury. As I stated yesterday, we have already been obliged, where those who held these drafts were within reach, to have them held up, where it could be conveniently done, until means were provided for filling the Treasury. I hope, therefore, it will not be the pleasure of the Senator to reduce the amount which is proposed in this bill.
I do not propose to say anything more on this subject. I have stated what are said to be the necessities of the Government by the Secretary of the Treasury. They seem to be admitted by gentlemen on the other side. Indeed, they seem to think they will be even greater than the Secretary of the Treasury has supposed. If so, I hope they will join with me in keeping in this provision, and passing the bill to-day.
Mr. WILSON. A single word in reply to the Senator from Virginia. I have no doubt that we shall be called upon for these $20,000,000 during the session. I should not be surprised if, before the session closed, we should even have a call for more. By the estimates of the Secretary of the Treasury, our receipts will fall short nearly twenty million dollars beyond the expenditures of the current year; and I believed these were overestimates, and we shall fall short eight or ten million dollars more. The executive department of the Government recommend increased expenditures to the amount of eight or ten million dollars. All this is proposed without any proposition to increase the sources of revenue; but, on the contrary, a recommendation of the President and Secretary of the Treasury that the revenue laws shall not be revised by this Congress. When we meet in December next, I think we shall find the Treasury empty, and more than empty, by the amount of these $20,000,000 of Treasury notes.
I understand the feeling of Senators on this side of the Chamber to be this: that we shall supply the wants of the Government now; that we shall do nothing to embarrass the Government, but give them what they desire now, but that we shall limit this sum to $10,000,000, and then take a little time, and see if something cannot be done to furnish the means to meet and redeem these Treasury notes on the 1st of January, 1859. The business interests of the country require this. This is the part of wisdom, and I think the suggestions made on this side of the Chamber are reasonable and fair.
The Senator says that the receipts in New York for the months of October and November were nearly equal in amount to the receipts of the corresponding months last year.
Mr. HUNTER. Not the receipts at the custom-house. I said the receipts of goods were about twenty-five per cent. less.
Mr. WILSON. So I understood the Senator. There is no doubt of the truth of that statement; but the most of those goods were ordered before the revulsion, and at the high prices which existed before this commercial revulsion. I think he will find that, for the months of December, January, February, March, and April, the receipts will be greatly reduced in quantity from the receipts of last year, and that in value they will be reduced from twenty-five to thirty-three per cent., and that there will be an immense reduction for the next four or five months in the importations of the country.
I think we ought to take some means to provide for these expenditures which are recommended by the Government; for I tell the Senator from Virginia that I am opposed to the increase of a national debt, to a loan, or any permanent issue of Treasury notes, and I believe the people of the country are opposed to both. I readily consent to either as a temporary measure for the relief of the Government.
But, sir, in addition to the expenditures recommended by the different Secretaries of eight or ten million dollars, we have a claim coming in from Oregon and Washington Territories of nearly six million dollars, for the butchery of the Indians on the Pacific coast. We have removed two regiments from Florida to Kansas or Utah; but volunteers are hunting Billy Bowlegs, one or two squaws, and three or four papooses, through the everglades, and we shall have a large bill coming in from that quarter. We have, it is said, nearly half a million dollars of a claim on the Government for the property destroyed by the invasions of the Territory of Kansas. Then, sir, a portion of the army, with immense supplies, have been sent to Utah. These are now in the snows of the mountains. Their freight trains have been captured, many of them have been burned, and great losses of property have taken place. We may be involved in a war that may cost us during the coming year several million dollars. The army, instead of being sent last May or June to Utah, as it ought to have been, was kept in the Territory of Kansas, when no military force whatever was needed; and now the army on its way to the Great Salt Lake, is involved in the storms and snows of winter. This course of the Administration in regard to the Army may involve us in an expensive war. Therefore, sir, while we are willing to supply the immediate wants of the Government, I think we, on this side of the Chamber, have a right to ask that we shall not adopt a policy increasing the public debt; that we shall provide means by the revision of the laws, by an increase of duties that will be favorable to the laboring interest of this country now depressed -- that great interest to which the Senator from Rhode Island so forcibly referred yesterday. We have a right to ask that Congress shall not regard the recommendation of the President and the Secretary of the Treasury, but that we shall meet the demands of the country and the exigencies of the Treasury, and so legislate as to provide ample means to meet these $20,000,000 of Treasury notes, or any additional expenditures which we are called upon to incur.
I know, Sir, that the expenditures of the past six months have been in accordance with the laws of the last session. I know that the Senator from Virginia stands almost alone on his side of the Chamber in his efforts to keep down the expenditures of the Government. I will bear that testimony to him here or elsewhere. But we have been increasing the expenditures of the Government. We increased them nearly eighteen million dollars annually during the last Administration over the preceding one. Now, I think, we are in a fair way of having the expenditures of this Administration exceed those of the last by fifteen or twenty millions annually. We shall, if we adopt the recommendations of the executive department, and pay the claims pressed on us. With these recommendations, with the necessities of the Treasury for immediate relief, with the claims that will be pressed upon us, I think we have a right to ask, I think the country has a right to ask, that, before we give all that is demanded, we shall take some measures to provide the money for the support of the Government, to pay its current expenses, and to meet all the legitimate demands on it. In making these suggestions, I do not think the Senator from Virginia, or any other Senator on that side of the Chamber, can complain of us, or say that we are disposed to be either captious or factious on the measure now pending.
Mr. BENJAMIN. [Judah Philip Benjamin (1811-1884), Louisiana (D)] Mr. President, I do not wish to enter into any debate upon the general financial condition of the country. I suppose that this is not the time for so doing. The exigencies of the Treasury are represented to us as being so imperative, that the executive officers of the Government require immediate relief in order to enable them to sustain the credit of the Government by the payment of its debts incurred under appropriations made by us, not by them. The proposition now is to sustain the credit of the Government.
Upon some other occasion I think we may more appropriately enter into the cause of the financial distress, and into the question of the proper mode of providing a regular and established revenue for the Government. I propose to say a few words upon a single point. It has been suggested here by several Senators that the Mint fund, which has already been encroached upon for the daily needs of the Government, may continue to be so appropriated, and that it is not required for the business of the country. That impression I wish to dissipate, so far as it may be in my power to do so; and first, in relation to the law. I will satisfy the Senator from Maine, who made an inquiry on that subject, what the present exact state of the law is. He is right in stating that, upon one occasion, there was an express appropriation made for a bullion fund of $1,000,000. That, however, was found to be entirely inadequate, and, in the year 1850, a law was passed with a single section, which I will now read to him:
"That for the purpose of enabling the Mint and branch mints of the United States to make returns to depositors with as little delay as possible, it shall be lawful for the President of the United States, when the State of the Treasury shall admit thereof, to direct transfers to be made from time to time, to the Mint and branch mints, of such sums of public money as he shall judge convenient and necessary, out of which those who bring bullion to the mints may be paid the value thereof as soon as practicable after this value ascertained."
Under this authority vested in the President in the year 1850, soon after heavy imports of gold began to come into the Atlantic States from California, sums of money have been from time to time transferred to the different mints, branch mints, and assay offices of the country, and the practical operation of the Treasury has demonstrated the necessity of a fund of about six million dollars for that purpose. Anything short of that creates distress and confusion. I desire, to refer a little to the experience of the last six months on this subject of a bullion fund for branch mints. I will refer to the experience which we have had in my own State, and will relate to gentlemen what occurred there during the recent panic, on this subject of a bullion fund.
In the spring of last year, for the first time in the history of our Government, we deviated from a principle established at the very first Congress that ever assembled. We repealed all laws authorizing foreign gold and silver to be received at their values as a legal tender. Up to that period, foreign coin of gold and of silver was received at the different custom-houses of the United States at fixed rates, and was also received as a legal tender between man and man, under the acts of Congress, in payment of debts. Our Treasury was so full last spring, the bullion fund was so ample, that it was deemed by the Committee on Finance that they might, without imprudence, report a bill repealing all former laws on that subject, and making foreign coin in this country mere bullion -- bullion which it was requisite to carry to the Mint, and have re-coined into our currency in order to render it useful or serviceable in the business of the country.
I believe, sir, all writers on finance agree in relation to the exceeding importance of silver as a basis of national currency; and, indeed, up to a very recent period, several of the most important nations of the world had silver as the only legal tender, convinced as their Governments were of the absolute necessity of that metal as a basis of the currency. Its qualities are obvious. Its value is always about the same. Its bulk, somewhat larger than that of gold, enables that subdivision to be carried out which brings this silver coin into the pockets of the lower classes, spreads this currency throughout the entire country, and creates and sustains a metallic basis which is of itself a considerable check on the over inflation and over circulation of paper money by the banks. In the year 1853, our silver coin was depreciated -- deliberately depreciated, and, in my judgment, wisely depreciated -- just to a sufficient extent to make it more for the interest of those who held our silver coin to retain it in the country than to export it. It became a losing operation to export it. It remained in the country, and it has gradually increased, and now forms an important element in the metallic basis upon which our banks operate. It would be the part of wise legislation to encourage the increase of that metallic basis in the country.
Now, whence do we derive our supplies of bullion ? The gold bullion from California, almost exclusively, and the silver bullion from Mexico. When in October and November last this financial crisis occurred, efforts were made in all parts of the country, by those who had control of our monetary institutions, to introduce into the country a sufficient quantity of metal to form a basis for the bank circulation, and to put our monetary institutions beyond the reach of a panic. The managers of the banks in New Orleans, in pursuance of this wise and judicious system, endeavored to provide and fortify themselves by the importation of heavy sums of money from Mexico and from Cuba, these being the nearest points from which we could receive any metal. We received millions of dollars in silver from Mexico; we received millions of dollars in doubloons from Cuba; and we received them in the best possible manner for the public interests -- we received them in exchange for produce. The Mexicans sent their silver dollars, and the Spaniards sent their gold doubloons to New Orleans for the purchase of cotton and flour at the specie rates then prevalent. We had plenty of bullion therefore in the city; but what was the condition of the banks ? In a moment of panic, exposed at every instant to a run on them for the redemption of their deposits and circulation, with millions of dollars of bullion in the city, it was impossible for the banks to afford the slightest relief to the commercial community, because that bullion was not a legal tender and there was no bullion fund in the Mint.
Mr. FESSENDEN. Why could not the State pass a law making it a legal tender ?
Mr. BENJAMIN. Pass a law of our State (and at a time when the Legislature was not in session) in contravention of the act of Congress of the last session ! The gentleman's suggestion takes me by surprise. I have not examined into the power of the States to make foreign coin a legal tender. It may be that the States have that right; but at all events, no State, I think, has yet exercised it. That matter has been left to the exclusive legislation of Congress.
Mr. FESSENDEN. The suggestion I meant to make was this: The Constitution of the United States provides that "no State shall make anything but gold and silver a legal tender in payment of debts;" but it does not specify what kind of gold and silver.
Mr. BENJAMIN. I have not examined that question, and it does not now come into the line of argument. I do not know that there was a Legislature of a solitary State in session in October. It was not supposed, at the time, that it was possible to obviate this state of things at the moment. But I was going on to explain the necessity of a bullion fund in the Mint, under the legislation of Congress.
At that time, with this large quantity of bullion in our city, our banks were compelled to distress the commercial community by constant contraction. They were compelled to refuse the deposits of all Mexican dollars; worth $1.04 or $1.05, because they were not a legal tender. They know that people would be willing to take them at a dollar, but they could not get them unless they bought them at $1.04 or $1.05. The Mint was paying $1.06 for them whenever there was a fund with which to do so; but there was then no fund in the Mint to buy them. The Mint was being repaired; we could not get this foreign bullion coined; and there, with millions of dollars in the hands of our people, and deposited in the vaults of the banks in special deposits, in boxes, the banks were compelled to press on the commercial community by a merciless contraction of their facilities, in order to save themselves from the penalties of the law, the Treasury of the United States being unable to give us any assistance by furnishing us the coin of the Federal Government in exchange for foreign coin, which had been converted, by your law of the last session, into bullion, and was no longer serviceable in the affairs of commerce. We applied again and again; I myself sent repeated telegraphic dispatch to the Secretary of the Treasury. He was very anxious to assist us. It was his duty to do so; it was his interest, and the interest of the Government to do so; but the Treasury had no means. The bullion fund had been appropriated to the general service of the Government. The President of the United States had been authorized to appropriate so much of it as the other necessities of the Treasury would admit, and only so much, to the service of the Mint. The result was that, for want of a proper Mint fund, all this bullion was there unserviceable for the demands of commerce at the moment when the greatest necessity existed for its application to these purposes.
Now, gentlemen say they are willing to allow an issue of Treasury notes at this time, when we are informed by the Department that they will be immediately absorbed by the necessities of the Treasury, and that it will have to come back next month for $10,000,000 more. The result will be that we shall be just where we are now; that the assay office in New York, the Mint in Philadelphia, the branch mint in New Orleans, will be unable to supply to the merchants of the country on the deposit of bullion, that current coin which is required to relieve them from their necessities. Under these circumstances, I can see no warrant for our declining to make an issue which we know will be wanted in a few days further. I see no propriety in refusing to the Government this aid, so as to allow it to furnish to the mints of the Country the sum necessary for the redemption of bullion as it is deposited. The other day we had $2,500,000 of gold dust from San Francisco, sent to the assay office in New York. They have no means to buy it. Men send remittances of what we most desire for the relief of commercial distress -- gold and silver; but by reason of the needs of the Treasury, they are kept out of public circulation, and the merchants of the country are to suffer for the want of it.
Sir, if we know that this money will be wanted; if, according to every argument that we have heard on this side of the Chamber, it is satisfactorily established that the Secretary of the Treasury, so far from having overestimated the wants of the Treasury, has underrated them, what motive can we have for going through this legislation and this discussion twice ? If $20,000,000 must be wanted within the next thirty or forty days, why not vote them now ? Why keep the commercial community in distress, by withholding that Mint fund which is essential for their convenience, and to relieve the pressure of the necessities which are now weighing them down ? I do hope, as it is admitted on all sides that the entire sum will be wanted, that it will be voted now, and that the bullion fund will be kept separate for the service to which it was intended to be appropriated. I know that, at my own home, that fund is wanted; we have never had enough there. We have never been able to buy the Mexican dollars as fast as they came in; we have never been able to buy the Spanish doubloons as fast as they came in; but our merchants have been compelled to wait weeks, and sometimes months, for the return of their coin from deposits of bullion in the public mints. The money is required there; I am satisfied it is required in New York; and I trust the Senate will agree to provide the means which the public interests demonstrate are so urgently necessary to be now provided.
Mr. Fessenden. I have but a single suggestion to make. I made an inquiry of the honorable chairman of the Committee on Finance in order to get the facts before the Senate, that it might be distinctly understood whether this Mint fund was required at the present time, and to what extent it was required. The honorable Senator from Louisiana has given us a statement, from which it is very easy to see that it may be convenient for the several communities where the Mint and branch mints are established that there should be a sum of money on hand, not for the purposes of the Government, but for the purpose of aiding the commercial community in obtaining specie. That may be a very good consideration to address to gentlemen who hold certain notions in regard to the powers and duties of the Government in relation to the currency; but it is hardly one that can be consistently urged by those who call for this bill.
I do not understand that it is urged by the chairman of the Committee on Finance that there must be a certain amount of money --$6,000,000-- kept on hand for the purposes of the Mint, to accomplish the object which has been dwelt upon by my honorable friend from Louisiana. If the Government is now applying to us to authorize it to issue a certain amount of Treasury notes for the purpose of aiding and relieving the different commercial centers, the large commercial places, that is one thing, and we shall understand the argument. It does not meet the objection which has been suggested on this side of the Chamber at all, and it does not show that, for the purpose of the operations of the Mint, it is absolutely necessary that this Government should become a borrower of money, or put out its notes to such an amount as this.
I do not say that under no circumstances would I consent that the Government should aid, so far as it consistently could, the distresses which exist in the general commercial community of the country; but that is not the ground on which this proposition is brought before the Senate. The honorable Senator from Louisiana explains to us that when the Government withdraws its surplus, or a large portion of its surplus, from the several branch mints of the United States, it by that means takes away from itself the power of relieving the community by purchasing bullion under certain circumstances. If the object be to provide for that, the question arises whether the Senate is prepared to adopt that as a principle; whether it will permit the Government to issue a large amount of Treasury notes for the purpose of getting coin to aid the operations of the Mint -- not the operations proper of the Mint -- but the operations of the Mint in purchasing bullion to relieve the commercial community of distress brought on it under a certain state of things. That is presenting the question in altogether a new aspect; and I should like to know of the honorable chairman of the Committee on Finance if that be the aspect in which he presents this measure to the Senate ?
Mr. HUNTER. The aspect in which that question presents itself to us, I think, is a very simple one. It is the exclusive business of this Government to coin money; and, in order that it may carry on that business to the greatest advantage to the public, it ought to be enabled to coin it rapidly. If it has not the necessary machinery to coin money as rapidly as the wants of the community require, the next best thing it can do is to keep on hand an amount of coin to exchange with the depositor, so as to save him from the loss of interest which would accrue if he had to await the tedious operation of coining the money. It is well known that since the discovery of California gold, our mints have not been adequate to the coinage of the money that has been demanded of them, with sufficient rapidity for the wants of the community. It is the business of this Government to furnish coin to the community as rapidly as its wants demand, if it can do so. The object of the Mint fund, as I understand it, is not for the relief of this or that class; but it is for the purpose of discharging a duty which the Constitution has devolved on this Government, and which no one but this Government can discharge -- and that is to coin money with sufficient rapidity to meet the demands of the country for it.
Mr. Fessenden. That is the idea which I had, when the proposition was presented to have on hand a certain amount of money --$6,000,000-- in the Mint; but the honorable Senator from Louisiana [Mr. Benjamin] puts it on entirely different ground. Now, I revert to my original proposition when I put the question this morning to the chairman of the Committee on Finance, that there is no law which requires more than a single million dollars to be kept in the Mint. Under the powers conferred on the President in 1850, as read to us this morning, he may keep a certain other amount at the Mint for that purpose; but I do not know of any law requiring it to be done.
What I desired to have explained was simply this: how does it become necessary that at all times, under all circumstances, the large amount of $6,000,000 should be kept at the Mint ? In times of distress, and great scarcity of money, especially when the Government is hard pushed, is it compelled, in order to meet the demands of the country for a circulating medium, to keep the whole $6,000,000 there ? Is it not rather the design of this bill, that instead of $6,000,000 surplus, there shall be ten or eleven million dollars surplus for the purposes of the Treasury itself ? If that amount is necessary, if a surplus of $6,000,000 is not large enough for the operations of the Government, and if the honorable chairman will make that evident to my mind, I shall withdraw my objection; because I am free to say that, in the exigency presented, I am for giving the Government power to move, to pay the requisitions on it. If $6,000,000 surplus is not large enough, I am willing to grant power to raise a surplus that is large enough to meet the necessary expenditures at the present time, in advance of any arrangements which maybe made by law to raise revenue enough to meet the ordinary demands of the Government with relation to its expenditures. But I wish it to be put on a proper basis in order that Senators may understand that this really provides a larger surplus than is required. Instead of so large an amount being necessary for mint purposes, I believe that surplus can be dispensed with without any great injury to the public service, for a short period of time.
Mr. Seward. I should not think it necessary to say a word more in this debate if it were not to correct an impression which may be made by some of the remarks made yesterday by the honorable and venerable Senator from Rhode Island, [Mr. Simmons] He seemed to labor under the idea that I had advanced the proposition that the commercial revulsion through which we are passing is causeless. The honorable Senator quite misunderstood me. What I said, or what I intended to say, was that the suspension of specie payments was, in my belief and according to the general conviction of this country and of Europe, not necessary, and might have been avoided. The honorable Senator, in the course of his very able and interesting speech, finally arrived at the same conclusion with myself in this respect, because he maintained that the suspension of specie payments resulted from a rivalry between the banks of the city of New York and banks of the city of Boston to see which could hold out the longest. I think this is true. In that rivalry they attempted to press the depositors, who were the owners of their capital, and the depositors in retaliation drew out their deposits, and that broke the banks.
Now, that there was a cause, and a sufficient cause, for a commercial revulsion, I have always known, and always said. I do not consider the causes for it altogether the same with those to which the honorable Senator alluded, though I agree with him in part, and indeed to a very considerable extent. I think that the opening of California and the Pacific coast to cultivation so rapidly, the establishing of mining operations, commercial operations, and agricultural operations there, together with the opening of the great mediterranean country lying between us and the Rocky Mountains, tended to cause a rapid and sudden diversion of capital from the eastern to the western portions of the continent; and that the policy of constructing railroads, fostered and stimulated by the laws of the States, which relieved them from the penalties of usury, caused a diversion of capital from the centers of manufactures and commerce to the great western regions, where those roads were being constructed; and that all this was accompanied by an existing unreasonable preference for the manufactures of other countries to the manufactures of our own, producing excessive importations; and that the excessive importations thus incurred here, were causes enough to produce a commercial revulsion, which I am sure did not take me by surprise. My only wonder was that it took anybody by surprise. That it came, was only what ought to have been anticipated. When it should come, it was also foreseen that it would be modified by the very extraordinary circumstances of the development of the mineral wealth of California and the mineral wealth of Australia, just at the proper moment to supply such an excessive mass of bullion as the world had never before seen, contributed to sustain the commercial currency of the world. It came, and it was modified by these causes. This is my explanation, in reply to the honorable Senator, on that point.
I wish now barely to state the position I take in regard to this bill. I see nothing extraordinary, I see nothing peculiar, I see nothing singular in the condition to which the Government is brought to need this measure of relief -- the issuing of some amount of Treasury notes. There is no secrecy in it, there is no mystery about it. What is it ? The farmer produced last year more than he has produced in a great many years before. The agriculture of the country has contributed more to its wealth than in any previous year; but the products of the farmer, although thus increased and accumulated, remain in his barn, in his granaries, for the want of purchasers; so that the agriculturist is unable to pay his debts, and he gives a note where he was to pay the cash, and if you consider him to have a treasury he begins with giving a treasury note as a matter of temporary relief. The farmer failing to bring his produce to the merchant, the merchant is unable to pay the bank the discounts he has heretofore obtained; and to obtain new discounts in order to carry on exchanges, the merchant gives the bank his note out of his treasury. He gives a treasury note. Finding that the merchants fail to pay their debts in cash, but pay them in treasury notes, the banks, instead of being able to pay in cash resort to the same measure temporarily and pay in their treasury notes. The operation went on up to the State governments. The State of New York, which is certainly a very independent and strong and rich one -- one of the richest communities in the world, and one of the best administered governments in the world -- suspended, but gave its promise to pay in thirty, sixty, or ninety days, until this derangement should cease. We come to Washington, and we find that not only the agriculturist, the manufacturer, the merchant, the banks, and the States have suspended, but the Federal Government, richer than them all, richer than any other Government on earth, scarcely owing a dollar except what is necessary to pay its average daily expenses, is without funds, and it also proposes to pay temporarily in Treasury notes.
That is the long and short of the whole case. This condition of things is inevitable. What struck me with surprise, when I came here, was that the Administration, instead of admitting this to be a mere temporary derangement -- a derangement resulting in the way I have described -- an accidental one -- took occasion to lecture us and the country on the demoralization of the banks, as if the banks were to blame, exclusively or chiefly, for the universal derangement, and threatened to denounce bankrupt laws, for the purpose of winding up banks for issuing treasury notes, at the very same moment that they come to Congress and ask us to enable the Administration to commit the same crime against the commercial morals of the country. Still I did not think this was an occasion on which it was necessary to reply to these suggestions, because I considered this a mere practical question. The Government must pay its debts. If it has not the money to-day, it must borrow money until to-morrow. Then there are two questions, how shall it borrow and how much shall it borrow ? We all agree that it is to borrow in that way which will meet the occasion and leave no evil consequences beyond it; that is, to make these Treasury notes for just the amount which is necessary, if we can ascertain it, and payable at the shortest possible day and not again be reissued. The issue of Treasury notes for an unnecessary amount is indefensible, for that would be to constitute the Government of the United States a national bank.---[and you highly object to a government-owned nation-wide bank, only private one(s) you approve !!]
Then the question is, how much shall it borrow ? We differ in our estimates about the amount, because we differ about the operation of the revenue laws. My honorable friend from Massachusetts [Mr. WILSON] thinks the revenues will be much less than is anticipated by the Secretary of the Treasury, and therefore he thinks and expects that there will be need for a repetition of this loan. His admission that the revenues will thus be deficient is taken on the other side of the Chamber as an admission against those of us here who desire to limit the amount to $10,000,000. In that, it is my misfortune to differ from my honorable friend from Massachusetts, and from those who take his view of the subject. This his been a sudden prostration -- a prostration of unexampled suddenness and severity. Forty days -- so many days and nights as constitute the season of Lent -- constituted the whole period of the pressure in the country, and produced the crisis. There was no panic or pressure before the 1st of September, and the banks had suspended specie payments, and so the country found relief on the 16th or 17th of October, and on the 15th of December the banks were again paying specie.
Now, a large amount (nearly all) of the produce of the country is on its passage to the commercial centers for exchange. A large amount of the fabrics which are to be paid in exchange for them are already in the Government storehouses, and deposited there waiting for the exchange to be made. In my judgment, the acceleration of business is going to be rapid just in proportion to the rapidity with which business has declined; and I expect to see every day, and every hour of every day, marked by a rise in the prosperity of the country, graduated just exactly by the suddenness of the depression. The cause of the disaster are gone. I think there is nothing before as but a great revival of business and plethora of money to revive it in all departments. I may be mistaken in this, but I am willing to stand by it. I do not, therefore, agree with those who think that there is to be, for a long period, a deficiency of the importations, and that the duties must necessarily be revived for this purpose. My objection to the last tariff act which we passed was, that the duties were so low that it would increase importations to such an amount as to produce a needless and injurious surplus of revenue. I expect to see a surplus in the Treasury of the United States within the next two or three years, because I think the tariff is too low instead of too high.
Having these opinions, my simple object is to have this measure made substantially in its forms and in all its features just what the occasion requires -- a measure of temporary and exactly adjusted relief. I think that one year is time enough to allow for the issue of these notes. I think that $10,000,000 is large enough an amount for which to issue them. Feeling a strong desire to benefit the commercial interests of the country, in its resuscitation from embarrassment, I feel, a very strong desire that the notes which shall be issued by the country shall not take the character and meet the fate of a permanent loan, but that they shall go into the circulation of the country immediately as an equivalent of gold and silver, and for that reason I want as low a rate of interest as possible. These are my views. They were at first submitted with deference, but they remain unchanged.
Mr. WILSON. Mr. President, the Senator from New York [Mr. Seward] seems to think that the commercial revulsion through which we are now passing, was brought upon us by the suspension of specie payments by the banks, and that the revulsion is now over because the banks have resumed specie payments. If this is the idea of the Senator, I must differ from him altogether. The suspension of the banks did not cause the revulsion -- the revulsion caused the suspension of the banks. This sudden commercial revulsion which is swept over the country with appalling force, carrying down monetary institutions, business corporations, and commercial houses, and turning out of employment tens of thousands of toiling men, was not brought upon the country by the suspension of the banks of New York and Boston, which were the last to bend before the storm, and are now the first to right up when the violence of the storm has somewhat spent its force. The banks of New York were the first to feel the approaching revulsion; they undertook to breast the storm, to save themselves by a sudden and violent contraction of their loans, but after a vain struggle they were compelled to yield -- to go down-- under the pressure their own short-sighted and selfish policy had increased. The Boston banks, which had adopted a policy far more liberal, followed the New York banks in the suspension as they have now promptly followed them in the resumption of specie payments. This early resumption of specie payments is a gratifying evidence of the resources and strength of the resuming banks, but it is not an evidence that the effects of the revulsion have passed away. Light is dawning. The violence of the pressure has ceased --the panic-- which did not, as the Senator from New York suggests, cause the revulsion, although it greatly increased its force -- has partially subsided, and the country is slowly recovering from the effects of this sudden and sweeping commercial storm.
But this revulsion was brought upon the country by causes far too great, and its effects have been far too general and destructive, to pass away at once. The country possesses vast resources, and the energies of the people are so great, that we shall recover from the effects of the pressure, and bound forward in the race of prosperity. But weeks and months must pass away before we shall fully recover from the effects of the pressure under which the interests, business, and labor of the nation now suffer. The rates of interest continue to rule high; money to the masses of business men and the people, continues exceedingly scarce; merchandise of most descriptions has depreciated in value at least thirty per cent., to almost ruinous rates; hundreds of manufacturing and mechanical establishments are closed, or work on short time, and at greatly reduced rates for labor, and tens of thousands of mechanics and laboring men are out of employment, or laboring for wages which will hardly afford to themselves and families even the absolute necessaries of life. Sir, I live in a commonwealth largely engaged in commerce, manufactures, and the various mechanic arts, and I know that the business of that State is but slowly recovering; that many manufacturing establishments and mechanic shops are yet closed; that thousands of intelligent, skilled, and industrious men are still seeking of their fellow-men leave to toil.
Sir, this monetary crisis, this wide-spread commercial revulsion, came upon the country at a time of apparent prosperity, at a season when the earth bore upon its bosom the largest harvest the farmers of the country were ever summoned to gather. Years of great prosperity have followed each other in succession. During these years of prosperity, the various causes have sprung up which have this year precipitated upon us a commercial crisis of unexampled severity. Revenue laws which were not wisely adjusted to protect the productive industry and capital of the country; a banking system not wisely guarded by law or prudently directed; a vast expenditure of capital in unproductive railroads; an undue expansion of credits by States, cities, corporations, banks, and business men, resulting in enhanced prices, excessive importations, over-trading, wild speculations in western lands, and public and private extravagance, have precipitated upon the nation this sweeping and far-reaching revulsion, the effects of which are everywhere seen and felt. The wave which has swept over us has reached the Old World, and the monetary institutions, the commercial houses, and all classes of people in England, France, Germany, and, indeed, all western Europe, are shaken by its force. Governments have been compelled to interpose their powers to break the force of this pressure. American stocks, mercantile credits, and staple products have fallen, and all is distrust concerning the future.
Now, sir, if Senators believe that we are at once to recover from the effects of this crisis now upon us, which we see by the news just received from Europe is now producing bankruptcy and distress, they are greatly mistaken. If they believe that the importations during the coming six months, for the remainder of the present fiscal year, are to equal either in quantity or value the importations of the corresponding months for 1856 or 1857, they are, in my judgment, altogether mistaken. While millions of merchandise are held in your warehouses -- while millions of merchandise of most kinds remain on hand at depreciated prices which are almost ruinous -- while the merchants of the sea-board hold millions of dollars of renewed or protested paper, they will be in no haste to go into foreign markets for goods. European merchants and manufacturers, smarting under losses already incurred, and the ruinous depreciation of stocks and goods, will be in no haste to crowd their goods upon a losing market. The money market will soon become comparatively easy; but the immense sacrifices which the merchants have made to sustain their credit, the losses they will incur on renewed notes which will not be met at maturity, the ruinous depreciation of merchandise now unsold, and the great lesson of economy taught the people by this disastrous revulsion, will tend to check importations during the remainder of the present fiscal year.
The Secretary of the Treasury estimates the balance in the Treasury on the 1st of July, the close of the present fiscal year, at less than half a million of dollars. I believe when that day dawns upon us we shall find no balance at all. We shall commence the next fiscal year with an empty Treasury. The Secretary estimates the expenditures for the year at $75,000,000. The Secretaries of War and the Navy ask for new regiments and new ships, which will call for several millions more; several millions of claims are pressing upon us for payment; and we have a Mormon war impending over us. When the year 1859 opens upon us, these Treasury notes must be paid. On that day I think we shall find no money in the Treasury to meet their payment. We shall find, if I am not mistaken in my estimates of the effects of the present revulsion upon the revenues of the next twelve months, both upon the lands and the customs, that we shall have to borrow millions of money to meet the obligations of the Government.
Now, sir, I am willing to vote for this bill as a temporary expedient. I am not willing to increase the national debt, or to commence a system of expedients to supply the ordinary wants of the Government. While I shall vote to give the Government the means to meet its immediate wants, I demand that Congress shall reduce the expenditures, or so revise the revenue system as to enable the Government to promptly meet its obligations.
Mr. Davis. [Jefferson Davis (1808-1889), Mississippi (D)] I look on the proposition that is submitted to us as simply a proposition to borrow money for the immediate use of the Government. If the Government is censurable for the fact that the Treasury is empty, or about to become so, then I can perceive the point of the inquiry as to the cause which has produced the financial distress and thus prevented the receipt of revenue into the Treasury. I would say, however, that I have heard not yet assigned what I believe to be the true reason for the diminished revenue of the United States. Among the remarks which have been made, there have been some directed to that interest and to that section of the country which I, in part, represent. The honorable Senator from Rhode Island [Mr. Simmons] yesterday gave warning and advice to those who represent the cotton-growing region. To-day, time after time, we have heard one cause and another assigned, and among them, chiefly, the great imports of the country.
Now, sir, that, as the country increases in its wealth and population, imports should increase, should excite the surprise of no man. I am sorry that it should excite the regret of any one. It is a fact that the imports of last year did not exceed those of the preceding year as much as those of the preceding year exceeded those of the one before it. There is a steady progress, owing to the very great prosperity of the country, and something is also due to that excitement which over banking produced.
The sale of cotton is usually transacted by bills of exchange. That is the ordinary commercial course; and the whole embarrassment which fell on the southwest and the lower Mississippi, was due to the fact that the goods were imported into the city of New York which were consumed in that section, and the cotton was bought with bills which were to pay for the goods imported into New York. When New York, by extravagance, by her speculation in railroad stocks and western lands, became bankrupt, and was no longer able to pay for the goods she imported, not because there were not consumers in the country, but because they had proceeded on credit alone in their importations, and could not, therefore, buy the bills of exchange which were to move the cotton -- then it was, and for that reason entirely, that commercial distress came upon the southwest.
We are told, also, of the great increasing expenditures of the Government. Sir, I have no respect for that sort of economy which adds up long columns of figures, and announces this to be economical and that extravagant. This year one may spend a large amount and next year a small amount; but, if the fruits of that expenditure of this year remain to posterity, and are worth more than the money disbursed, that is good economy.
Then again, sir, how are administrations, this or the past one, to be held responsible ? It comes badly from the other side of the Chamber, where so many criticisms, and even denunciations, were heaped on the last Executive for his vetoes, to now point to the aggregate sum expended, and arraign that as an accusation against him. The estimates of this Administration are sent to Congress in accordance mainly with the acts of Congress. Change the service if you wish to reduce the expenditure. It is idle to call on the public officer to reduce the estimates, and yet require him to perform the particular service. The President and his Secretary recommend measures in advance of legislation, because in their belief they are necessary for the good of the Country. It is for the Senate and House of Representatives to decide whether they will adopt the recommendation or not; but if they adopt the recommendation -- if they impose the execution of the duty on the Executive, they have no right to turn around then and add up how much has been expended, and charge it to the Executive.
As to the advice which was given to the cotton planters, (which, if I understood it correctly, was that they were to encourage an increased consumption of the raw staple in the United States,) I will merely say that if that encouragement is to be given by paying additional duties on imported goods, that is to say, if we are to get our neighbor to use our corn by sending him a mill to grind it, we have a right to add up the dollars and cents there, also, and ascertain whether it is to our interest or not. My impression is that it is not -- that it matters not to us where our customer comes from. We have an article to sell, and it is for sale to him who will give the most for it. New markets are an advantage, but encouragement to a particular buyer is none. We want markets in every quarter of the world, so that the consumption of that staple which we produce may keep pace with its increased production, or, if it exceed it, may enhance the value of it to those who produce it. So far as this is made into the form of an appeal to our support to a protective tariff, I imagine there is not one among us who will ever yield to it.
Looking upon this bill, however, as a mere proposition to borrow money, I will not say it is the form which I would prefer. Fearing the temptation to extravagance, not in the Administration, but in the Congress which directs the objects of its expenditure, I am sorry to see adopted a plan which so easily exceeds the just revenues of the country. If we may run on increasing our debts from year to year, meeting every extravagant scheme by an appropriation which will cover it in this easy manner of furnishing the means, no one feeling the pressure, no representative responsible to his constituency for a tax which is imposed, I fear that abuse may come, and therefore I say this is not with me a favorite method of raising money.
But I am glad to find that instead of these notes being issued, as has been recommended in some of the commercial portions of our country, merely to throw specie into circulation, to become a safe deposit, they are to bear interest. That interest, and the necessity of assignment from hand to hand as each note passes, will perhaps prevent these notes from going into general circulation, and assuming, as has been asserted, the character of bank notes. Then, according to the limitation which I think has been wisely proposed by the Senator from New York, to confine the bill to one year, if our hopes are realized of returning prosperity to the country, and the equalization, by exchange, of that which we have to give for that which we have to buy, thus restoring to us the ordinary revenue of the Government, I trust when these notes are redeemed, the day will be far distant when we shall have to issue another.
I say this especially to those who have arraigned the last and the present Administrations for their extravagant view, because it depends on the Congress and not on the Administration to keep down the expenditures of the Government. The Executive can alone see that the money is honestly disbursed, and properly applied to the objects indicated by Congress, and in such sums as Congress may grant. If we are going to make harbors where nature has made none, to build up cities where commerce has to be drawn, by heavy appropriations from the United States, then we shall want increased means of supplying the Treasury, and probably shall have to extend the credit of the United States also.
Nor am I at all opposed to the suggestion of the honorable Senator from Kentucky, [Mr. CRITTENDEN,] to connect with every use of the credit of this Government, whether in the form now proposed or in any other, some direct and special mode of supplying the money which is to redeem the debt created. On this occasion I should be glad to see every article now on the free list put on the dutiable list. Those articles of general consumption which, by the popular cry, have been put on the free list, and which are the most fit subjects of taxation, ought to be restored to the dutiable list and thus contribute to fill the Treasury. All that long list of articles which my honorable friend from Virginia added at the last year to the free list, which, however advantageous they may be to the manufacturers of the country, enter into the increased value of their article, are as fit subjects for duty as the article itself. Everything that will bear a duty, according to my ideas of a revenue tariff, should have the duty imposed on it which it can pay, and then we should scale down to the lowest duty that will furnish a sufficient revenue to the Government. That would be my mode of answering the proposition of a just distribution of duty -- a distribution which should cover everything which is imported, and which should be the lowest on each thing that the necessary revenue of the country would permit -- approximate free trade; I wish it were absolute. I wish that no Secretary of the Treasury ever had again to send in an estimate of the cost of collecting the duties from imports, that the custom-houses were abandoned, and the army of retainers of the Federal Government employed to collect the taxes through impost duties, dispersed among the people. I should like to see free trade existing throughout this Union, with all its fraternizing effect on the nations, with all its beneficial results to the laboring masses, each receiving that which can be made elsewhere cheaper than he could produce it himself, and each exchanging that which nature and the industrial habits of his country enable him to produce more cheaply than others. Then we should at once be rid of all frauds upon the Government.
But as I do not hope to attain that desired object, I will say one word on the oft-repeated charges of fraud upon the Government by false invoices. That invoices may be so skillfully framed as to deceive the best appraiser, I do not doubt; that labels may be put upon things for export to the United States, that will deceive even a practiced eye, whilst there will be that slight difference that will shield the parties and protect them from the charge of forgery, I have had occasion to observe; but I think the fault is not in the law, or if in the law, it is less there than it is in the want of capacity in the appraisers. I think the duty properly discharged by the custom-house officers will leave but little to complain of in the way of fraud, by invoices or otherwise.
It has been with me, from my earliest manhood, a matter of gratification, that my own countrymen, alone of all the world, constituted a race that looked upon smuggling as a crime -- who, parts of a Government that belonged to themselves, paid the duties which their laws imposed, and aided the Administration in collecting those duties by voluntary efforts of their own. To what other land shall we go to find a people who would discredit a man because he smuggled in foreign goods ? The evil may exist in our country; but if so, I believe it to exist in a very small degree. I believe there is no public tone in the country that would countenance it for a moment, and I am sorry that Senators should dwell upon frauds which are but incident to the imperfection of those who are to execute the laws, and thus send us forth to the world in a character not our own; for I claim for the American people the credit of having such a respect for the laws of their own land that they are willing to maintain the revenue laws, even in those sections where they most oppose them.---[It may have been so in Mississippi, but please remember that two generation before you, those revolutionaries of New England, before they became revolutionaries, were unashamed smugglers and avoiders of taxes and duties; and that tradition did not die with them. And, if I remember correctly, by this time there was sugar monopoly in the South which was proven, and did acknowledge, avoiding payment of duties by forging documents]
Mr. Simmons. I do not propose to protract this discussion, but I did not exactly comprehend the remarks of the honorable Senator from Mississippi, in regard to what I said yesterday about the great staple of his section of country -- cotton. He said that I had proffered some advice or suggestion. I hope he did not understand me as proffering any advice in an offensive manner.
Mr. Davis. Certainly not, sir. I would say to the gentleman that I considered him as presenting a set of sentiments that belong to one end of the fiber of cotton, and that I represented the opinions that belonged to the other end of the fiber.
Mr. Simmons. I should like to bring both ends together, if I could, [laughter,] and I believe that was the spirit of my remarks. I said that the nearer the consumer was to the producer the better for them both, and that, when you prevented an increased consumption of cotton in the United States, the South lost the best customer it had for its great staple. I shall not, however, go into that subject now. I mean to confine myself to the provisions of the bill before me.
Yesterday, I examined the President's message in order, if I could, to call the attention of the Senate to the fact that the President had mistaken the causes of our distress, on the supposition that if he had understood the causes to be different from those stated by him, he would have proposed a different remedy. I made myself hoarse in doing that, and I shall not advert to it again.
Now, I desire to inquire of the Senator from Virginia [Mr. Hunter] whether the Treasury notes to be issued under this bill are to pass from hand to hand by mere delivery, or whether the indorsement of the holder will be required ?
Mr. HUNTER. They are to pass by indorsement and delivery.
Mr. SIMMONS. After the first indorsement, are they to pass from hand to hand without re-indorsement ?
Mr. HUNTER. Yes, sir.
Mr. Simmons. Then this measure proposes to make the Treasury a bank of issue. I do not object to furnishing money for the purposes of the Government; and if Treasury notes are to be issued, my desire is that they shall be put in such a shape as to be a medium of exchange between the different parts of the country, and not used as a medium of circulation, passing from hand to hand. If these notes are to be issued, let them be in such a form as to remedy the evil of which my friend from Kentucky [Mr. Crittenden] spoke yesterday. He gave us an instance where a bill of exchange, drawn by a specie-paying bank in Kentucky on a non-specie-paying bank in some other part of the country, cost two per cent. I think that is a dead loss to the men who have occasion for exchange -- the producers of the country.---[Dear sir, yesterday you proudly explained that the State of Rhodes Island -- as soon as the Revolution was over and it became State -- first it issued large number of notes (which would be State Treasury notes) as tender in State expenses and receivable in public dues; then, when the new Constitution came into effect -- to get around its restriction on State notes -- it set up a privately owned, State-chartered bank that issued its notes which were received by the State in public dues and paid out by the State for expenses, therefore they circulated as currency and (non-legal) tender. Now you imply that if the Federal Treasury does a similar thing, it is not proper and should not be ?! If it is good for the goose in Rhode Island, it cannot be so bad for the goose federally....]
I have no desire to embarrass the operations of the Government, and if the Senate are satisfied that Treasury notes ought to be issued, be it so; but let them be issued in such a form that they may answer the purposes of the Government, facilitate the business of the country, and alleviate the existing distress about the causes of which we shall probably never agree. I think we should allow no Treasury note to be issued for less than $100; and we should require them to pass only with the indorsernent of the holder. If this were done, if I desired to remit a Treasury note to Wisconsin, I could indorse it to the order of the man whom I wished to receive it, and then, if the mail were robbed, he would be safe, because the money could not be collected, without his order. If, however, these notes may pass from hand to hand by mere delivery, a man might rob the mail of an envelop containing a thousand dollar note, and get the money for it.
Mr. BAYARD. Will the Senator from Rhode Island allow me to put a question to the Senator from Virginia ?
Mr. SIMMONS. Yes, sir.
Mr. BAYARD. I understand the Senator From Virginia to say, that as the bill now stands, the Treasury note is, in the first instance, to be made payable to the order of the person to whom it is issued, and after that it may pass by delivery without indorsement. If I view the provisions of the bill aright, when a note of this kind is made payable to the order of any person, there is nothing here taking away the right of that person to restrict the payment to the individual to whom he indorses it. In other words, he may make a special indorsement, and then there can be no legal title to the note, unless by the authority of the person to whom it was first issued. Whether that is right or wrong I do not pretend to say. I think these notes ought to pass by delivery alone, in the first instance, because you compel your receiving officers to receive them in payment of customs, and lands, and debts due to the United States, and if a note comes to him with six or eight indorsements on it, in hand-writings of which he can have no knowledge, you subject him to great hazard. Again, when the Government comes to redeem the notes, if any indorsement were not genuine, the payment would not be good against a person who was a special indorsee. If you issue a note payable to order, and the party to whom it was issued chooses to indorse it to a third person, how can you, by paying the note, destroy the title of that third person, unless he himself has indorsed it ? If the note were payable to bearer, you would be free from responsibility by payment to any one presenting it, but not so in the case of a special indorsement, unless the special indorsement is broken in upon by an indorsement in blank by the special indorsee. As long, however, as special indorsements may be continued on notes in the form authorized by this bill, the last indorsee may restrict payment of the note to whom he pleases, and the title cannot pass without his indorsement, so that if it were lost or stolen, the Government would pay at its own risk.
Mr. Simmons. I am sorry that I asked any question on this point, because it raises a debate about the title to notes after indorsement and before indorsement. I thought that perhaps there was some settled principle about the indorsement of all kinds of notes. I have seen a great many Treasury notes which were issued by the United States, and indorsed by the first holder "to bearer," and I supposed they passed by delivery. If I take a note payable on its face to a particular man, or order, and he, by his indorsement, orders it to be paid "to bearer," I do not see how it can afterwards be restricted; but I am no lawyer. If it is indorsed in blank I suppose the man who holds it can get the money; but I do not understand law, and I do not find anybody here who can tell me what the law is. [Laughter.] I called attention to this point because I did not see any more difficulty in the way of the Treasury issuing these notes so as to answer the purpose of exchange than in drawing, from one sub-Treasury on another.
Mr. HUNTER. I will say to the Senator from Rhode Island, as he has asked the question, that I believe the practice has been to indorse Treasury notes in blank, and they have generally passed by delivery; but I suppose there could be a special assignment of them. I see nothing in the law to prevent a special assignment of them.
Mr. Simmons. I asked the question not for the purpose of raising discussion, but because I thought the Senator from Virginia had probably examined the matter.
I understood the Senator from Mississippi to advert to the remarks which I made yesterday as if I were a protectionist. What I said was, that if the Senator from Virginia would intelligently prepare a statement of our probable exports and imports for the next five years, and would tell me how much revenue the Government would need, he might lay his duties on that amount of trade, making the articles free that he considered it best to make free, according to the plan of last year, and I would go with him whether his rate of duty was twenty, or twenty-five, or any other rate per cent.; providing only that the revenue should be fairly and fully collected without fraud on the Government. That is all I ask. Fix your rates to suit yourselves, but have a fair and honest home valuation. I would as soon let the foreign producer fix the rate of duty as fix the value on which the duty shall be assessed. It seems to me nonsensical to say that we should fix the rates of duty and the foreign producers fix the value. I want this Government to fix the value and fix the rate of duty. Then you may fix the rate as low as you can get along with, and on that system I will trust the industry of this country in competition with that of foreign nations.
I observe that this bill provides against frauds on the Treasury, which may be attempted in counterfeiting these Treasury notes. Will not the Senator from Virginia agree to insert a provision to prevent the much larger frauds occasioned by fraudulent undervaluations of imported goods ? When the bill was introduced I was sorry that it did not come from the House of Representatives, because I thought it would be improper to insert in it such a provision as I propose to incorporate into it; but on consultation with one of the members of the Judiciary Committee, I find that it is competent for us on any bill to introduce provisions for the prevention of fraud; and as the bill already provides against some frauds, it has appeared to me that the provision which I am about to suggest is entirely germane. The imported goods are now valued at the principal market of the country from which they are imported. The proposition which I have drawn up provides that upon the entry of the goods in the United States they shall be valued at the prices prevailing at the principal place of importation in the United States, to wit, the city of New York, and that the duty shall be assessed upon the market value of the goods in New York.
I propose this in order to avoid the complications resulting from the different currencies of the world. Does not the Senator from Virginia know it to be a fact that more labor has been spent in the last three years in finding out what is the relative value of the currency of the United States as compared with the currency of the nations from whom we import, than on any other single branch of the public service in the Treasury Department ?
They have not settled it yet, and they will not settle it until this country gets to be as old as any civilized nation that ever existed. It cannot be settled. Does not the Senator from Virginia also know that the Treasury instructions to our officers on this point have embroiled the executive department in vexatious disputes with our foreign ministers and consuls ? I know what would be the result of such disputes if I were officiating in any department of this Government. If a man presented to me a claim based on the state of the law twenty years ago, when he was appointed to a mission or a consulate abroad, and said that he sustained a loss on account of the currency in which he was paid, I should not higgle with him about ten per cent., but I would pay him at once. I noticed on this point a somewhat remarkable statement in a book this morning. I do not send for information because I adopt the maxim of Dr. Franklin -- when I want information I go myself; if I send for it I am not very apt to get it in season, especially within the short time we are allowed here for debating such bills as this. I understand that on account of the alterations in our currency since the organization of this Government we are losing from ten to fifteen per cent. as exchange on every payment of salaries we make to our officers abroad. I regret, and I am astonished at the fact, that the intrinsic value of our coin has been diminishing ever since the establishment of the Government. The plentier gold is, the more dross we put into the currency. I do not like that. I want the coin of the United States to be as good as the coin of any other country. I am astonished to see the discrepancy in the relative values of the currency of the different nations of the world. It is a study of itself. A man who undertakes to administer our revenue laws under the present system of foreign valuation ought to have such a mind that he could extract the cube root of any given sum of numbers in his head without going through the figures.
I think there is no difficulty in the way of establishing a system by which you shall value the goods in this country in the currency in which the duties are paid; and for that reason the amendment which I have drawn up, provides for valuing them in the city of New York, our principal port of importation. Of course I anticipate that there will be some objection to this. I read in the debates of last spring, a statement by some Senator that the home valuation had been exploded long ago on account of its unconstitutionality. Now, sir, I cannot perceive why it is not as constitutional to value the goods imported into this country at the principal market of such importations, as it is to value them at the principal market of the country where they are purchased. I was struck with the statement made yesterday by the honorable Senator from Tennessee, [Mr. BELL,] that the honest merchants at New Orleans imported their goods through New York in order to get them cheaper. Why should they be compelled to do this ? No intelligent merchant in New Orleans orders foreign goods without looking to the principal market of this country to ascertain whether the importation will be profitable or not. With the present opportunities for the transmission of intelligence throughout the country, you can, in the course of an hour or two, ascertain the value of any article in any of our ports. I say, you might as well value the imports at our principal port of importation, and then the valuation will be uniform throughout the United States.
Then there are two provisions in the act of 1842, in reference to the valuation of merchandise, which I should like to see adopted. That act also contains some provisions in regard to specific duties, to which I intend, at the proper time, to call the attention of the Committee on Finance. The law of 1842 provides that, after valuing the goods at the fair market price, and there is any dispute as to it, the collector, if he thinks there is any attempt to defraud the revenue, may take the duties in kind. For example, a man imports five cases of goods into New York, and makes his valuation, under oath, of the fair wholesale market value of those goods, but the collector thinks there is an intention to defraud the Government; then, if the duties are twenty per cent., he takes one case of the goods, sells them within twenty days, and puts the proceeds in the Treasury. Thus the Government gets its twenty per cent., let the rates of exchange or the relative values of different currencies be what they may, and the importer pays no more than twenty per cent. The seventeenth section of the act of 1842, provides a feasible mode of valuation; and then the eighteenth section, which I should like to see inserted here, provides:
"That the several collectors be, and they are hereby, authorized, under such regulations as may be prescribed by the Secretary of the Treasury, whenever they shall deem it necessary to protect and secure the revenue of the United States against frauds or undervaluation, and the same is practicable, to take the amount of duties chargeable on any article bearing an ad valorem rate of duty in the article itself according to the proportion or rate per centum of the duty on such article, and such goods so taken the collector shall cause to be sold at public auction within twenty days from the time of taking the same in the manner prescribed in this act, and place the proceeds arising from such sale in the Treasury of the United States: Provided, That the collector or appraiser shall not be allowed any fees or commissions for taking and disposing of said goods and paying the proceeds thereof into the Treasury other than are now allowed by law."
The Senator from Virginia will see that this avoids all the old-fashioned discussion about the accumulation of duties on the article itself. Suppose a merchant imports into New York five cases of goods that cost $100 a case in Germany, but which are said to be worth $120 a case in New York; there is a duty of twenty per cent. on them, and the collector takes one case and sells it to pay the duty: although it may bring $120, it costs the importer but $100, so that he does not pay more than his twenty per cent. There is now a percentage for freights and a great many incidental charges. Thus Government has been trying for the last six years to make little contrivances against fraudulent importations, when there were provisions on the statute-book that I think would have prevented the whole difficulty; but whether this be so or not, I think we should avoid the complication resulting from the different values of the various currencies of the nations of the earth. We ought to value the goods in the currency in which we take the duties. I suppose the Senator from Virginia knows the fact that there is a dispute between the Department and one of our ministers abroad as to an item of $500 a year in his salary -- not that he is not paid as much as the law allows, but because of our variations of currency. His salary formerly was predicated on the dollar unit of our currency, which was originally a silver coin; but when we made a gold dollar coin, it was insisted that that was the legal standard, and the Treasury paid by that standard, and that is not worth as much as the silver coin by the amount of $500 per annum on the salary of the officer to whom I have I alluded. I am told that the Government is put to an annual expense of more than forty thousand dollars a year in the way of exchange on the salaries of our ministers and consuls abroad.
I wish now to say a few words as to the home-valuation system and the old tariff, and to this point I desire to invite the attention of the Senators from Louisiana. I happened to be here as a spectator during a portion of the last session, and I perceived that there was very great solicitude on the part of the Senators from Louisiana about the rates of duty on sugars. In 1842, the Senate appointed a Committee on Manufactures, consisting of myself, Mr. Archer, of Virginia, Mr. Miller, of New Jersey, Mr. Buchanan, of Pennsylvania, and Mr. Morehead, of Kentucky; and that committee made a unanimous report in favor of the home-valuation system. I hold that report in my hand. Since it was made, the subject has undergone great discussion in the country. This is the point to which I adverted yesterday, and in regard to which I supposed the honorable Senator from New York [Mr. Seward] had got somewhat informed. Perhaps I owe him an apology for not alluding to the remarks he made this morning, as to the difference between him and me yesterday. I did not happen to catch all that he said this morning, because I did not know that he was applying his remarks to me; I thought he was addressing himself to what had been said by the Senator from Massachusetts, or I would have tried to reconcile our differences, for I consider it one of the glories of human life that men should always reconcile their differences.
Mr. Seward. The honorable Senator will find, when he comes to read my remarks, that I did precisely the thing which he says he would have done, if he heard me -- reconcile our differences.
Mr. Simmons. If I ever get time to read my own speech I will try to do it, and, after that, endeavor to read the honorable Senator's speech; but I have no idea that I shall be able to do so this session. [Laughter] I have no notion of reviewing this matter when it is once out of my hands.
I was about to call the attention of the Senators from Louisiana [Mr. Benjamin] to the report made by the Committee on Manufactures in 1842, with respect to the article in which they feel interested, to show how admirably the home-valuation system embodied in that denounced act of 1833, called the compromise act, would have answered all the practical purposes of this Government. This report proceeded on the idea of having a fixed valuation for every article of importation which entered into competition with the productions of our own labor, requiring the Secretary of the Treasury to report to every new Congress the actual
[Mr. Hunter] Then, sir, I deny that, in proposing this issue of Treasury notes, we are either abandoning our policy or our professions, or are attempting to force on the public creditor, if he does not choose it, anything but gold or silver. In point of fact, I apprehend it will turn out that, in many places, many persons will prefer these Treasury notes to gold and silver, and if you give them the option they will take the notes. When you trace the history of the previous issues, you will find that they were very nearly at par with specie during the whole time they were issued. There may have been short periods when they fell below the value of specie; but generally, in our past experience, Treasury notes have been equal to specie.
Mr. Collamer. The Treasury notes issued under the act of 1847, were fundable at six per cent., and for that reason they were of course equal to specie.
Mr. HUNTER. There have been various acts for issuing Treasury notes besides the act of 1847 -- all modeled on the act of 1837. To show that there is nothing inconsistent in this bill with our professions, let me refer to the fact that at the very time when the sub-Treasury was proposed, provision was made for an issue of Treasury notes -- in 1837. This is one form of using the Government credit; it is the cheapest form; and if it follows, as an incidental consequence, that we relieve the community more by using the Government credit in this form than in any other, are we to be accused of a departure from principle, because we do not suffer that consideration to drive us from what, in other respects, looking only to the good of the Treasury itself, is the best mode to which we can resort ? Surely not.
The Senator from Vermont says that I referred to the act of 1847 as a precedent. I referred to it only as a precedent for the form of the bill, and I offered that argument in reply to the various propositions suggested for amending the form of this bill. I believe I might go back and say that it comes within the act of 1837, though I have not examined that so critically -- I mean in regard to the provisions as to the form of the Treasury note, the mode of assignment, and other matters of detail. These are all taken from old precedents, which have worked well as far as we know, and led to none of the objections that have been suggested.
Mr. COLLAMER. I have but a word to say in reply. It has been put forth all the while that we were to issue these Treasury notes, and even place them at a low rate of interest, so as to enable them to pass as a currency. Now the gentleman talks of raising money by them as a loan. Why disguise that loan ? Why not have an actual loan at once ? Again, in view of the illustration which I gave before, how can any man suppose that we can get a loan of money on as good terms upon notes payable in one year, with three or four per cent. interest, as we could upon a six per cent. stock payable in five or ten years ?
Mr. HUNTER. Allow me to refer the Senator to the fact that the average rate of interest on our Treasury notes has been much less than the average rate on our loans.
Mr. COLLAMER. I suppose you can get a premium for a six per cent. loan having five or ten years to run; but the impracticability of getting money on favorable terms, upon short paper, I endeavored to illustrate by the instance in my own State to which I alluded. There we could not raise money at all, on short paper, but could get as much as we wanted on a six per cent. stock having some time to run. The notion that it is better to raise this money on short paper is perfectly ideal -- there is nothing in it.
Mr. DAVIS. I think the advantage of a loan for a short time is, that we are very soon to be out of debt. I hope that, with returning prosperity, we shall soon have revenue enough to support the Government.
Mr. Collamer. Does the gentleman propose to borrow himself out of debt ?
Mr. DAVIS. No, sir; but I expect, with returning prosperity, to have revenue enough to pay the loan, and the current expenses also, particularly if we shall get all your free articles on the duty list.
As the Senator from Virginia has truly said, this is a cheap mode of making a loan. I do not say it is the best. It is not the form I myself prefer. When I addressed the Senate before, I was under the impression that these notes, like the notes issued under the act of 1837, must be assigned from hand to hand as long as they traveled; that they were never to pass as money -- never to be in the nature of bank notes passing by delivery. It is exactly in that view that I think it is to relieve the country. Money has been locked up on account of a want of confidence between man and man. Deposits have been withdrawn from the banks and other places where deposits are usually made, and locked up, and are now guarded with constant apprehensions lest house-breakers shall carry them away. All the gold and silver thus secured by the owners will very gladly be exchanged for Government securities bearing a very low rate of interest; those Government securities not being subject to the same hazard, either of arson or of theft, as the gold and silver which they are now hoarding on account of a want of confidence in the incorporated institutions or in the individuals of the country.
Then, sir, as to the probability of controlling the circulation and constituting a sort of regulator of the business of the country: to my mind there is no mode better adapted to that than that the Government should constantly exhaust its Treasury. In periods of prosperity money will flow in; when the people can spare it it will be collected; and in periods of commercial revulsion, when the receipts at the custom-houses cease, the Treasury will be depleted; and when the Treasury is exhausted the Government steps in and makes its loan during just such periods as this; and the like has occurred about every twenty years, running back. When confidence has been lost, when there has been a failure of the incorporated institutions to answer the purpose of furnishing money on the credit of individuals, then the Government credit comes and draws the money from those places in which it has been locked up, throws it into circulation again, and thus, in the ordinary transaction of its own functions, brings relief to the community. This is the only mode in which the Government can properly interpose, and it is an effective mode at a time like this, when specie enough is locked up in the country to answer all our wants, and it merely requires some hand sufficiently strong to draw it out and throw it into circulation.
Mr. Trumbull. I understand that the House of Representatives has already adjourned, and I suppose nothing can be gained by forcing this bill through the Senate to-night, if it were practicable to do so. It is undoubtedly true that a number of Senators desire to speak on it. If we sit longer, we shall probably be forced into a night session. As I can see nothing to be gained by that, and as it will not advance the measure particularly, I will, in accordance with the desire of several gentlemen around me, move that the Senate do now adjourn.
Mr. HUNTER. Will the Senator withdraw that motion for a moment, in order to allow me to make an appeal to him ?
Mr. Trumbull. Certainly.
Mr. HUNTER. When we adjourned yesterday, I thought it was with the understanding that we were to have a decision on it to day. The Senate is aware that there is urgent necessity for speedy action on it We know that a Senator [Mr. Bigler] has the floor for Monday for the discussion of another subject; and if we do not dispose of this bill to-day, we shall probably have a contest with him on Monday. We know, too, that the Christmas holidays are approaching, and it would very much facilitate the transaction of the public business if we were to minister to the necessities of the Government by passing this bill soon. If we are going to pass it, let us say so at once. If we will not pass it in this form, let that be known. I hope I shall not be considered unreasonable in asking the Senate not to adjourn now, but to take the question on the bill to-day or to-night.
Mr. Trumbull. I do not see what is to be gained by pressing the bill to-night. If we pass it to-night, that will not make it law. If we
Arkansas, Jones, Kennedy, Mallory, Mason, Pearce, Polk, Reid, Seward, Stuart, Thomson of New Jersey, Wilson, and Wright --30.
So the amendment was rejected.
Mr. Pugh. After this vote I ask the Senator from Virginia to accept the suggestion of the Senator from Rhode Island, to strike out the fourth section of the bill, and thus make the notes payable to the bearers. It is a manifest injustice to hold the bearer responsible for the indorser, for if the Government will not pay, he is liable for the amount. I cannot make the motion myself, because I cannot vote for the bill; but I hope the Senator will strike out that section.
Mr. HUNTER. I prefer to keep the bill in the same form in which it has been since 1837 to this time -- the form approved by experience. I have not heard of any injustice being occasioned by it.
Mr. Benjamin. If there are no other amendments to be offered by the opponents of the bill, I will offer one or two as a friend of the bill, and by way of perfecting it.
The PRESIDENT pro tempore. The Senator from Rhode Island [Mr. Simmons] laid upon the table certain amendments, which he said he would call up at the proper time.
Mr. HALE. I do not believe that time has come yet. [Laughter.]
Mr. BENJAMIN. Section twelve of the bill is intended to punish counterfeiting. After the word "counterfeited," in the ninth line of that section, I move to insert the following words:
Or shall falsely alter or cause, or procure to be falsely altered, or willingly aid, or assist in falsely altering any Treasury note issued as aforesaid.
The amendment was agreed to.
Mr. BENJAMIN. In line ten of the same section, after the word "publish," I move to insert the words "or attempt to pass, utter, or publish."
The amendment was agreed to.
Mr. BENJAMIN. In the ninth line of the twelfth section, after the word "falsely," the word "made" is left out in the printed bill. I move that it be inserted.
The amendment was agreed to.
Mr. Simmons. I ask the Senator from Virginia whether he intends to have these notes re-issued ?
Mr. HUNTER. Under the bill, the operation of which is limited to a year, it is provided that when these notes come in they shall not be reissued, but new ones may be put out in their places.
Mr. Simmons. That is what I wanted to know.
The bill was reported to the Senate as amended, and the amendments made as in Committee of the Whole were concurred in. The bill was ordered to be engrossed, and read a third time. It was read the third time; and on the question, "Shall the bill pass ?"
Mr. Trumbull called for the yeas and nays; and they were ordered.
The Secretary proceeded to call the roll. When his name was called,
Mr. BRODERICK said: I have voted steadily with the friends of this bill against all amendments offered by Senators on the other side of the Chamber, and I regret that I cannot now vote for it. Considering it to be in direct violation of the sub-Treasury act, I must record my vote against it.
Mr. IVERSON. I desire to give notice that as soon as this bill is disposed of I shall ask that the joint resolution regulating the pay of members of Congress be taken up and passed to-night. I trust Senators will not leave the Hall, therefore, before the passage of that resolution.
The result of the vote was then announced-- yeas 31, nays 18; as follows:
So the bill was passed.