Reduction of Currency

An Act to amend an Act entitled "An Act to provide Ways and Means to support the Government," approved March third, eighteen hundred and sixty-five.

Paulson debt to America Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the act entitled "An act to provide ways and means to support the Government" approved March third, eighteen hundred and sixty-five, shall be extended and construed to authorize the Secretary of the Treasury, at his discretion, to receive any Treasury notes or other obligations issued under any act of Congress, whether bearing interest or not, in exchange for any description of bonds authorized by the act to which this is an amendment;  and also to dispose of any description of bonds authorized by said act, either in the United States or elsewhere, to such an amount, in such manner, and at such rates as he may think advisable, for lawful money of the United States, or for any Treasury notes, certificates of indebtedness, or certificates of deposit, or other representatives of value, which have been or which may be issued under any act of Congress, the proceeds thereof to be used only for retiring Treasury notes or other obligations issued under any act of Congress;  but nothing herein contained shall be construed to authorize any increase of the public debt:  Provided, That of United States notes not more than ten millions of dollars may be retired and cancelled within six months from the passage of this act, and thereafter not more than four millions of dollars in any one month:  And provided further, That the act to which this is an amendment shall continue in full force in all its provisions, except as modified by this act.

Sec. 2.  And be it further enacted, That the Secretary of the Treasury shall report to Congress at the commencement of the next session the amount of exchanges made or money borrowed under this act, and of whom, and on what terms;  and also the amount and character of indebtedness retired under this act, and the act to which this is an amendment, with a detailed statement of the expense of making such loans and exchanges.
APPROVED, April 12, 1866.

Thirty-Ninth Congress
First Session
December 4, 1865 to July 28, 1866.

House of Representatives
Thursday, March 15, 1866.


The House then proceeded to the consideration of the special order, House bill No. 207, to amend an act entitled “An act to provide ways and means to support the Government,” approved March 3, 1865.

Printed copy on Lulu.

Mr. Morrill moved to strike out the following words:

Provided, That the bonds which may be disposed of elsewhere than in the United States may be made payable, both principal and interest, in the coin or currency of the country in which they are made payable, but shall not bear a rate of interest exceeding five per cent. per annum.

Mr. Hulburd. [Calvin Tilden Hulburd (1809-1897) New York (R)]  The national public debt on the 1st day of March, 1866, was officially declared to be $2,827,868,959;  the portion of it funded was $1,181,861,291;  the portion of it not funded, bearing interest, was $1,181,434,980;  the portion not funded and not bearing interest was $464,572,683.  The last item includes the matured debt not presented for payment, $985,979, and $423,435,573 legal tenders.  At that date there was reported by the Secretary in the Treasury coin and currency to the amount of $116,018,959.

I do not see the chairman of the Committee on Banking and Currency here, but I see a distinguished member of that committee, the gentleman from Massachusetts, [Mr. Hooper] and I will yield the floor to him to make an explanation, if he will do it, in reference to the varying statements of the amount of public money in the Treasury of the United States.

Mr. Hooper, of Massachusetts.  Mr. Speaker, in the statement made by the Secretary of the Treasury on the 1st of March, he represents the amount of coin in the Treasury at that time at $55,736,102.12, and of currency $60,282,767.12, making together a total of $116,018,959.24.  The letter to which the gentleman from Now York refers states that this is inexcusably erroneous, and goes on to state that the Secretary had omitted, among other items, the amount of money deposited in the national banks, which, the letter says, was $28,000,000.  The Committee of Ways and Means, having seen this letter, deemed it expedient to appoint a sub-committee to ascertain whether there was any foundation for this statement.  That committee ascertained that the amount of money in the national banks was included in and made a part of the $116,000,000, as reported by the Secretary of the Treasury on the 1st of March.  The statement of the Comptroller has been reported to have been that instead of $116,000,000 there was $170,000,000 in the Treasury.  In his explanation contained in the letter referred to by the gentleman from New York, in regard to that discrepancy, and as evidence of it, he counts in $28,000,000 in the national banks, which he says was omitted in the Secretary's report, in which I think he is entirely mistaken, as I am satisfied that was included in the balance of $116,000,000.  He then goes on to state that the amount of United States notes and compound-interest notes which had been retired, and which in his opinion ought not to have been retired, should be in the Treasury;  but the fact is that the Secretary, whether he had authority or not, did retire them, and therefore that amount was not in the Treasury.  He then has another sum of $1,300,000 for the difference between the amount of seven-thirties purchased and the amount of the five-twenty bonds sold, and he says that money ought also to have been in the Treasury;  because the Secretary was not authorized to make that disposition of the bonds.  But the fact is that that disposition had been made, and therefore that amount could not be in the Treasury.

He then adds $15,000,000 for the premium which might have been obtained if the Secretary had undertaken to sell the coin in the Treasury.  Now, the fact is that the coin had not been sold, and therefore the premium had not been received and could not be in the Treasury.

I do not see, therefore, that there is any reason to suppose that the statement of the Secretary is not entirely correct.  The amount of deposits in the national banks is included in the Secretary's estimate;  the gold was not sold, and therefore nothing had gone into the Treasury or could go into the Treasury for premium upon it.

The result of the investigation made by the committee was that $116,018,959.24 was the correct amount, and that there was no foundation for the statement in the letter referred to that it was inexcusably erroneous.

Mr. Hulburd.  Whatever the amount may be, it is subject to draft as follows:

At sight, amount of gold certificates ......... $12,627,600
On ten days' notice after thirty days, temporary loan ...... 118,577,939
One year from date, certificates of indebtedness ........ 62,264,000
One, two, and three-year five per cent. and compound-interest notes .... 182,549,041
Three-year seven-thirty notes mature in the years 1867 and 1868 to the amount of .... 818,044,000
In the same years six per cent. bonds mature to the amount of ....... 18,323,591

It thus appears there is now due at the Treasury, and falling due in the next ensuing two years, interest-bearing and otherwise, liabilities to the amount of $1,676,958,854.  Amount in the Treasury deducted leaves $1,560,939,895 to be provided for.  Deducting $450,959,107 fractional currency and legal tenders not bearing interest;  and the large amount of $1,109,980,788 remains to be provided for.

It may be worth noticing that in the year 1867 the options of the first issue of six per cent. five-twenty bonds become available.  If the Treasury should then be in funds to retire them or place them at a lower rate of interest, it can thus find legitimate employment for all its spare means.

With such heavy interest-bearing liabilities constantly and rapidly maturing, why should the power be asked to call in and pay or fund the non-interest-bearing notes ?  A species of currency everywhere popular and satisfactory surely might be left out until the interest-bearing unfunded liabilities of Government have been retired or provided for.  Or is the retirement of some $1,200,000,000 of such expected to be of so easy accomplishment that more absorbent power and capacity should be asked ?

Let us look a moment for and at the means wherewith such results are to be achieved.  Should the system of customs and of internal revenue, ably and perspicuously set forth in the report of the revenue commission appointed by the Treasury Department, be substantially adopted — as I trust it will be, and realize when in operation all expectations — for some years it is estimated to yield only some $367,000,000 per annum.  Allowing only an excess of expenditures of $16,000,000 over estimates, and there will be left, after paying interest and defraying current expenses of Government, to be applied to the liquidation of the principal of the public debt, all told, the yearly sum of about $67,000,000.  Double this estimate, and still Government accruing liabilities are stupendously in excess of all imaginable receipts from all conceivable sources.  What, then, shall be done ?  Does any one say more and heavier taxation ?

While taxation is conceded to be the true touchstone of sound finance, no sane person familiar with the ubiquitous ramifications of our present tax system will think of adding very much thereto or of being able to hunt up new objects of taxation.  The school, highway, and district taxes, the ordinary municipal, town, county, and State taxes, the extraordinary undertakings and assessments by reason of bounties and other local war expenditures, though for the most part voluntarily incurred, nevertheless now constitute grievous burdens.  Superadd to all these the multiform direct and indirect taxes which the United States assessor and collector and stamp purveyor exacts;  and it will be acknowledged that it is probable, for the present, endurable taxation has about reached a maximum.

How, then, are the existing and maturing obligations of the Government to be taken care of ?  Individuals embarrassed with heavy indebtedness usually ask time — time to adjust, time to economize and make provision, and, if solvent, in time, pay.  Is not the principle that governs private interests in this particular broad and potent enough for public availability ?  This is the originating idea and the basis of a funding system.  In bringing in the bill under discussion, it is obvious the committee do not believe the national funding system a failure, or that the bottom of the national loan bag has been reached;  nay, the bill proposes to enlarge its capacities.

The act of March 3, 1865, which this bill supplements and extends in very broad terms, conferred the funding power upon the Secretary of the Treasury.  The first section authorized him to issue bonds payable at any period, not less than five nor more than forty years from date, as he might deem expedient, and concluded with these words :

"And any Treasury notes, or other obligations, bearing interest, issued under any act of Congress, may, at the discretion of the Secretary of the Treasury, and with the consent of the holders, be converted into any description of bonds authorized by this act;  and no bonds so authorized shall be considered a part of the amount of six hundred millions hereinbefore authorized."

The second section authorized the Secretary to dispose of any bonds or other obligations issued under this act, either in the United States or elsewhere, in such manner and at such rates and under such conditions as he may think advisable, for coin or for other lawful money of the United States, or for any Treasury notes or other representatives of value which have been or may be issued under any act of Congress.  A clause in the second section declares that the loan act of June 80, 1864, shall be so construed as to authorize the issue of bonds of any description authorized by this act, (March 3, 1865.)

The first section of the June act, so referred to and enlarged, authorizes the Secretary to dispose of any bonds, commonly known as five-twenties, remaining unsold in the United States, or, if he shall find it expedient, in Europe, at any time, on such terms as he may deem advisable for lawful money of the United States, at his discretion, for Treasury notes, &c., issued under any act of Congress.

Now, under these two acts — June, 1864, and March, 1865 — can there be a doubt as to the power the Secretary has had and yet has to issue and sell, at home or abroad, and on such terms and time as by him thought advisable, six per cent. five-twenty coin bonds, to any amount, limited only by the consent of the holder of Treasury notes, certificates of indebtedness, certificates of deposit, or other representatives of value issued under any act of Congress, or of coin or lawful money of the United States, within the compass of his negotiation and control.  In those acts there yet remains the unexhausted power conferred upon the Secretary, without additional legislation, to call in, if he so elects, every dollar of legal tenders in circulation, convert them into interest-bearing notes, and then fund them at his discretion.  Broad and unquestioned as this somewhat latent authorization is, the committee now propose that he shall have the direct power, to be exercised at his discretion, to retire from circulation any Treasury notes or obligations, whether bearing interest or not, in exchange for any description of bonds authorized by these acts, and to dispose of the same in such manner and at such rates as he may think advisable for lawful money of the United States, &c.  In other words, the power is asked, not only to retire by conversion or purchase the hundreds of millions of short obligations before enumerated, but in direct words to grant the additional power, to be exercised at his sole discretion, to withdraw from business uses and general circulation, in part or in whole, $27,523,734 of fractional currency and $423,435,373 legal tenders, and to exchange or sell five-twenty bonds to that vast aggregated amount, checked, limited, restrained in no sense or manner save by his discretion and the harmless enunciation that the proceeds thereof are only to be used for retiring Treasury notes or obligations.  Now, while I yield to no one in respect for the financial tact, confidence in the ability, personal and official integrity of the present able and most acceptable Secretary of the Treasury, I submit, sir, is it the part of wisdom, in time of peace, unnecessarily to devolve the exercise of such power upon the discretion of any one officer of the Government ?  Under this bill his absolute control of the currency, and of course of the business and the fortunes of men and of the country, is perfectly tremendous.

---[retire Treasury notes and issue bonds !  what sense does that make ? Why not retire bonds using Treasury notes ?]

Necker, upon whose successful administration of the public finances in the antecedent convulsions of the French Revolution suspended the fate of the King and of the empire, wielded no such powers as are couchant in this bill of the committee.  Pitt, who, as First Lord of the Treasury, for nineteen years ruled Parliament and sovereign with an unquestioned sway, "When Europe paled before the maddened Gaul," never asked nor exercised such vast discretion and power over the business of men, over the prosperity and honor of a realm, as this bill proposes to bestow upon the secretary of the Treasury, whoever may chance to be that officer.  I repeat, this is not a personal but an official trust, and as such is exposed to all the mutations of life and of office.  As a principle and a precedent, it is not merely questionable, it is dangerous, except established under the duress of direst necessity.  No such a necessity has been or will be pretended.

Again, suppose, under this bill, large amounts of these bonds are sold for coin or lawful money of the United States, and the Secretary fails, or for any reason finds it inexpedient, to purchase in any of these outstanding obligations, is it desirable the Secretary or the Government should hold large sums of money carrying no interest ?  With heavy outstanding liabilities in the way of requisitions, temporary loans, special deposits, &c., I admit the Treasury should be kept strong and the Secretary should have funds "well in hand" at all times, but is there not, or should there not be, a limit to this unproductive accumulation ?  The payment of the temporary loan at once and the discontinuance of that species of indebtedness, or if continued on, only at a very low rate of interest, certainly would meet the approbation of the best business men and financiers in all our commercial centers.  But, leaving this consideration, can it be the wish and the intention of the committee to place the whole Government currency of the country and the $1,200,000,000 of Government obligations at the beck, not, be it remembered, of Hugh McCullogh, but of a Secretary of the Treasury ?  The bill undeniably does this.  It may turn out well if enacted into a law;  and all is well that ends well.  Nevertheless, it is a dangerous experiment;  would be as a war expedient;  as a peace measure, can it be justified in view of any existing or probable apprehended exigency ?

The committee's bill contains yet another anomaly — at least it is such in our past financial policy.  It has a proviso declaring "that the bonds which may be disposed of elsewhere than in the United States, may be made payable, both principal and interest, in the coin or currency," and territory of a foreign country.  Surely such an innovation is entitled to careful examination and consideration before it is adopted.

Four years we have waged a terrific and costly war, the theater of which was spread over many degrees of latitude and longitude.  During its continuance we brought into the field from the nineteen loyal States east of the Rocky mountains, including the soldiers of West Virginia, and the District of Columbia, 2,610,677 men.  Doubtless the eight Federal Territories and the remaining fifteen States, "as was and as is," would swell the Federal forces full up to 3,000,000 men.  These troops were better appointed, better supplied in all the departments and branches of the service, than those of any other nation or time whereof history has made a record.  We built and equipped and manned such a navy as never floated before.  We promised and we paid soldiers and sailors larger bounties and higher wages;  while in hospital and camp and active service we fed and clothed and cared for them better;  and when peace came we paid off and mustered out our vast levies quicker than was ever before attempted;  and all, all, without going abroad to make a loan of a dollar.  Why must the expedient now be resorted to, now when large war expenditures have ceased, when we are no longer in the attitude of a necessitous borrower, when anxiety and foreboding have given place to stability and assurance ?  Is there a necessity sufficiently urgent and imminent to justify so grave a departure from our past policy or present self-consideration, not to say the proprieties of our national pride and honor ?  If there is, let it be pointed out.  We shall be told, as such bonds are only to carry five per cent. interest, there will be a saving of one per cent. interest to the Treasury.  Grant it.  Is that modicum a sufficient expiation for the violation of that American sentiment, familiar round all our hearth-stones, "Millions for defense, not a cent for tribute ?"

We cannot be oblivious of the fact that such change in our bonds is to be made, if made, to induce foreign capitalists to invest in them;  the very capitalists, perchance, that but yesterday watched for our halting and hoped our overthrow.

But aside from such a general, perhaps too purely, patriotic consideration, how much will the saving be ?  The last foreign advices put United States five-twenties in the London market at 71 and a fraction.  Continental prices did not very much differ.  Interest in coin semi-annually, on the full face of the bond, ultimate payment of the full face in coin, make a pretty dear, I should say, expensive loan.  If kept at home, and our own Country and citizens have the benefit and profits, we can see, and, I think bear, the operation with a better grace.

Permit me in this connection to read a brief extract from a letter addressed to me last month.  It emanates from one of the able men and sound thinkers of a past generation.  Enjoying "a green old age," with natural force unabated, though by irreparable misfortune there is no longer speculation in his gaze upon outward objects, yet within that head of a god there still dwells a mind unimpaired, keen and bright as Ithuriel's spear, observant and watchful of all that pertains to the welfare and prosperity of his country:

" By a just and equitable system of taxation, secure the prompt payment of the interest in gold and silver in New York, and as much of your stock will go abroad as is desirable.  It is better for the people of this country who are to be heavily taxed for the next half century, to pay six or even seven per cent. on the bonds in the hands of our own people, than to crowd our debt into the hands of foreigners by any financial contrivance, to be returned upon us at every panic."

Mr. Conkling.  If my colleague has no objection, I would like to know the name of the writer of that letter.

Mr. Hulburd.  The name of the writer was familiar to all New York once.  It is Azariah C. Flagg, once comptroller of the State of New York.

What with fiscal agencies established abroad to negotiate loans, to keep transfer books, insurance, freight, commissions, coin brought back, coin remitted, or purchase of bills of exchange to pay interest, &c., how much will be left of the one per cent. margin difference of interest ?  Scarce enough, we may be sure, to lacquer over the humiliation of a great nation going abroad and crying to its commercial compeers and rivals, "Help me, Cassius, or I sink !"

How often have we been vauntingly told that we are a great, independent people, destined ere long to be the nation of the world ?  What with our telegraph wires and our railroads, stretching across the continent;  our steamship s bringing home "the wealth of Ormuz and of Ind" from every soil and clime, for use and merchandise, we have verily believed that our emporium cities were to be the marts of trade, that here were to be the clearing-house and money exchanges of the commerce of the world.

Waiving, however, the propriety of all such considerations and even expectations, is it quite certain that our hat-in-hand application will be successful ?  Would a five per cent. loan now probably be well received ?  While at present I attach no especial importance to the reported discoveries of our consul general at Montreal, that such an animus exists as would gladly concoct and carry out such a scheme, and perhaps now only awaits a fitting opportunity to vent itself, I can easily conceive as quite probable.

But from a mere financial stand-point, what is the prospect ?  In England the bank rate of interest last month was sharp eight per cent., and our five-twenties were quoted at 66 to 67.  The first day of this mouth the interest rate was lowered to seven, and Federal five-twenties advanced to 71 and a fraction.  Something of this advance, no doubt, is due to our financial exhibits, more to a distrust of the stability of the English funds, caused by the Fenian excitement.  Even with this adventitious and at best, temporary aid, granting that our monthly statements continue, as we expect they will, favorable, can we reasonably anticipate success for a five percent foreign loan?  We now have such a loan;  and it is, and has always been, far below par;  indeed, "a heavy flat" upon the market.  If foreigners can send their capital here and get six per cent. for its use, and the one per cent. of difference is not absorbed in commissions, transmissions, &c., assuredly they will find it out, and do it as quickly and as economically as our Treasury agents.  But suppose it is authorized and tried — and if it is not to be tried it should not be authorized;  for, in my judgment, the less we have of needless, contingent, uncertain, discretionary grants of power, the better — suppose, I say, the loan should be put upon the market, and neglected ?  We have hawked our credit in vain.  Or suppose, contrary to probabilities, any appreciable quantity of it should be taken to that extent, have we not multiplied and supplied bands and withes in hands that in the future as in the past will not be slow to make use thereof to cripple and to bind us ?

Instead of legislating to increase the acceptability of our bonds abroad, we may yet see a day when we shall regret inducements had not been stronger and more prevalent to keep them at home.  In this connection, perhaps, an item in the financial history of the State of New York may not be unworthy of consideration.  Between the years 1825 and 1835, when that State for those times was creating and carrying a large canal debt, the commissioners having its management in charge were repeatedly importuned to make the interest on the State loans payable specifically abroad.  They steadily refused.  What followed ?  Depreciation ?  Neglect ?  Embarrassment ?  Not at all.  In January, 1833, the redemption of the canal debt was commenced by paying a premium of nine per cent. on the six per cent. stocks due in July, 1837;  eighteen per cent. premium was paid on five per cent. stocks due in 1845, and twenty-two to twenty-four per cent. premium was finally paid to anticipate by ten years the payment of six per cents due in 1845.

Did foreigners neglect these stocks because principal and interest were made payable at home ?  In 1834 it appeared of $5,522,659 of one species of stock outstanding, foreigners held $4,102,975.

Neither the time, nor the instincts of men, nor the channels of trade and of exchanges, are so widely divergent from the past that special legislation is requisite to shape and direct and beacon the courses and thoroughfares of enterprise and thrift and interest.  Large amounts of our national securities have already gone abroad.  Some estimate the amount at $350,000,000;  some place the figures as high as $500,000,000.  Increased, whatever it maybe, no doubt by every steamer that leaves our ports for Europe, the lower figures maybe found inconveniently large if a panic or crisis should ensue of magnitude and intensity potent enough to touch to the quick the sensibilities of the Old Lady in Threadneedle street.  Would she not in such event clutch and hurl back upon us, reckless of sacrifice, any quantity of our bonds ?  Suppose such an occurrence should happen when we were in the throes of a financial, commercial, belligerent, or even political crisis.  The consequences need not be depicted;  they can be foreseen without a prophet's eye.

I have never been able to see a national blessing in a national debt.  But I am aware the large public debt of Great Britain has sometimes been held up in that light.  Beyond question it is true that it has not been as burdensome as under some circumstances it might have been.  Owed and kept at home, the interest has been disbursed and employed among and by the subjects of the realm.  The Government scrip or consols, widely and generally held by the well to do of all classes and grades, have everywhere constituted large numbers of citizens, by direct interest, firm Government supporters.  This consideration may weigh little with us, yet I apprehend the announcement that a few hundred million Federal securities are now of choice held in the insurgent States by those who whilom were rebels would be hailed as a most auspicious omen.

But, it is urged, some operation is needed to clear out of the way our floating debt and obtain specie to enable us to resume.  Without stopping to consider all these suggestions involve, let me ask, do the people, mechanics, merchants, manufacturers, men of means, burdened as they all are by taxes, direct or indirect, wish such a sacrificial preparation made to resume specie payments ?  The present inflated, high-priced condition of nearly every staple article that enters into the use and consumption of families bears hardest upon men of small means, small incomes, small salaries.  And yet I do not believe such persons, even, desire Government to incur such sacrifices and perils as indicated to obtain coin to prepare to get back to the normal condition of gold valuations.  I do not say old low prices;  that condition we are not again to see while all the commodities of production are burdened and their prices enhanced by heavy taxation.  No, sir, we cannot expect soon again to see those times unless called to behold wide-spread bankruptcy, suffering, ruination.  Shall I be told, importation of coin through the medium of a foreign loan is a necessary preliminary step preparatory to a resumption of specie payments ?  No one can be more desirous, anxious, to hasten that period, by all and every proper means, than myself.  I believe, too, the people desire and expect that Congress, in concert with the Secretary, will adopt measures tending to an early adjustment of prices, business, and trade, to the constitutional basis of values — the coin standard.  And well I know that specie payments inevitably must be temporary and spasmodic, while large amounts of call loans or short obligations are or can be precipitated upon the market.  No sane person ought to expect a resumption unless the banks and Government usher the way.  The banks cannot resume until Government leads, and if the half of them are then able to do it and maintain resumption, great relief will be felt in more senses and quarters than one, and a most agreeable surprise will be generally experienced.  The connection of Government with the national banks is very intimate, if not inseparable, borrowing as it has their capital and giving as security and in lieu its obligations.  These institutions, generally, really have no money means wherewith to make specie payments.  If they should attempt it in the present posture, of things they could not stand a single business hour without throwing a mass of Government bonds upon the market.  It is said on the 1st day of last January they held in their own right over $440,000,000 of United States stocks.  Probably at the same date they held of Government short obligations full $200,000,000.  With such an impending avalanche of some $650,000,000, potential as Government is, it could not resume and stand the specie call ten consecutive days.

It follows, then, if we are to have a permanent resumption, it must be by the joint and simultaneous action of the banks and Government.  As this is impossible in the midst of a floating mass which at any time may impinge and whelm, that mass must he put one side or for a term of years be merged.  Admitting, as I do, the full force of all this, I fail to see in this necessity a necessity that only long bonds payable and sold abroad can be employed for such relieving and funding purpose.  It is not believed, it is not supposed, that a dollar of these short obligations is now held abroad.  On the contrary, every dollar is now held in this country, somewhere, by somebody, association, company, or corporation.  On the first Monday of October, 1865, the national banks alone held nearly one sixth of the floating liabilities, ($192,094,365.)  Is it not just possible, nay probable, that other holders now carrying some of these short obligations would be able and willing to carry in place of them longer, and, of course, more valuable Government securities — especially if made payable in coin at a fixed and comparatively distant future period — provided the opportunity was presented to them.  Once only, I believe, and that within the last six months, has the Secretary, by public notice, tested in this direction the public estimation and ability.  He offered $50,000,000 of five-twenties in exchange for five per cent. compound notes and certificates of indebtedness.  The whole amount was taken inside the prescribed time, and five-twenty bonds at a premium of three per cent. received therefor.  Did not the quickness with which this proposal was filled, notwithstanding the premium, indicate what might be expected, if the bonds in exchange had been offered at par ?

Am I to be told the operation produced a stringency in the money market, and therefore it was inexpedient to follow it up ?  There can never be resumption of specie payments without contraction, and there can never be contraction without a stringency, a pinch somewhere.  But in this instance no intelligent observer believes the withdrawment of so small an amount of such representatives of value from business influences could be perceptibly felt or perceived in the effervescing eddies of Wall street.  A stringency, no doubt, did exist simultaneous with the Secretary's operation, caused, however, by large calls for currency, to be used in various ways at the South, and in moving western products, the high prices of which required more money than usual to handle them.  Judging by that transaction, holders of Government short obligations would gladly exchange them for the common five-twenties if opportunity had been given.  Why that operation was not continued, if there existed, as I believe, a desire and a purpose to get ready to resume specie payments, I know not.  Certainly the power, under the respective acts of June and March, to issue bonds and to convert these floating liabilities, was not exhausted, nor is it believed to be now.  It has been exercised by the Secretary within the last month.  Certainly the exercise of the power was not intermitted because there was a difficulty in finding a home demand for the bonds.

Will it be seriously urged that by sale abroad, with the proceeds, the Secretary can buy and bring home gold and thus more easily and speedily resume ?  Nearly every such attempt to force exchanges, to obstruct and divert the natural courses of trade by unusual efforts, purchasing and importing coin wherewith to resume specie payments, has resulted disastrously.  The old United States Bank made the experiment on a large scale by buying up the cotton crop to ship and sell abroad to buy and bring back gold to enable it to resume and maintain specie payments.  The attempt hopelessly wrecked that institution.  Are not the beacon-lights of experience as safe and as useful for Governments as for corporations or individuals ?

If Government when so large a debtor essays in eager haste to overleap the usual barriers of trade or endeavors to obstruct or divert the established channels and courses of exchange, we may be sure a reaction ere long will follow.  Sluices will be opened, dikes will be pierced, and the tidal ebb and flow will restore a commercial equilibrium irrespective of what or who is stranded.  The Bank of England, the Bank of France, the Germanic banks, observing such a scheme inaugurated, at once would be stimulated to gather up our securities and force them back upon our market in such quantities as to stop the sale abroad by depreciating the home price, and, of course, deranging our own home traffic in them.

No, no this extraneous method will be found a most untoward, perilous, and futile way to travel toward a healthy permanent resumption.

If we are to resume and maintain specie payments we must take legitimate steps;  we must get out of the way our short obligations;  we must prepare for other liabilities as they fall due;  we must contract our paper circulation, certainly cease enlarging it, whether denominated United States legal tenders or national bank currency;  we must produce and sell, and manufacture and sell, buy and consume less until the balance of production and of manufacture, of trade and of commerce, and of exchange is in favor of families, communities, States, and the nation itself, and then, virtually, resumption of specie payments will be nigh, at if not in hand.  It ought not to be overlooked that after the 1st of next July the State bank circulation will be rapidly retired under the operation of the tax to be imposed upon its subsequent reissue.  As thereafter nothing but greenbacks and national bank notes will circulate, is it not possible this new condition of thing may constitute an auxiliary contraction, which, added to the Secretary's policy in the same direction, will produce all the stringency and all the reduction in issues that the Secretary or any discret business man will care to see in the country, on 'change, or in commercial circles ?  Money is plenty now and everything is easy.  A month or a week even may present a reverse phase, and instead of being complacent spectators or content actors we may be struggling in the depths piteously asking help or forbearance.

But I must not forget that I am discussing not so much the probabilities and the instrumentalities of resumption as the loan bill.  Not to prolong further the consideration of its foreign feature, I have but to add that, in this very particular, I stand with the able and patriotic Secretary of the Treasury.  He commences the second paragraph, on page 18 of his annual report, December, 1865, with these positive words:

"The debt is large, but if kept at home, as it is desirable it should be, with a judicious system of taxation, it need not be oppressive.  It is, however, a debt," &c.

Again, page 29, he says:

"Although it is not desirable that our securities should be held out of the United States, it is desirable that they should be of good credit in foreign markets on account of the influence which these markets exert upon our own."

If, as I believe, this foreign and home view of the question is financially correct and sound, then it is worthy of our consideration, although it disposes at once of the committee's proviso.  As seen, the Secretary has declared the undesirableness of our stocks being held abroad.  The thermometer of Wall street, on the first promulgation of a purpose here to legislatively superinduce an exotic demand, indicated the domestic effect.

I chanced to be in New York the very day the committee reported the bill.  Gold did indeed drop — a little; so did, more, the Federal five-twenties.  In a banking-house where I was sitting a gentleman hurried in to inquire if the telegraphic report of the introduction of the bill with the foreign feature was to be believed, declaring, if he thought it would become a law he would that day sell every Government bond he owned.  And that man is no stock gambler, but is said to be the heaviest holder of Government securities in New York, if not in the United States.

Another objection of a different character remains to be noticed.  The committee's bill prolongs, if it does not augment, some of the most insolvable uncertainties which more or less during the war have attached to and affected all large business engagements and transactions.  Under it, at any moment, unannounced, a process of contraction or of expansion may be in operation, materially modifying time contracts or the movements of property.  In a condition of peace does a paramount necessity exist for vast occult Government financial operations ?  Have capitalists, bankers, brokers, during any of the many emergencies Government has passed through in the last four years, in a single instance evinced a disposition to drive a Shylock bargain with it ?  Outrageous commissions, exorbitant rates, enormous prices have, indeed, been exacted and paid in one if not more of the departmental branches of the Government.  If the Treasury Department has been thus victimized, it is not known.  On the contrary, I am assured the Secretary has never asked and not been aided.  Why should not the same coöperative influences continue in carrying the Government through ?  Why should additional power be given;  or rather why should the Secretary's war discretion and war powers now be enlarged ?

Trained myself in a political school, one of whose cardinal principles of faith and practice was, Government should never unnecessarily engage in or interfere with private enterprises or business operations, I am frank to avow the belief that the sooner Government now dissolves, and separates itself from all connections and interpellations with individual transactions, refrains from endeavoring to influence them, the sooner will a sound, healthy equilibrium be restored in all the conduits and pools and great expanses of trade and commerce and exchange.

The accumulation of a large surplus of coin, with power to sell at his discretion;  the authorization, and the exercise of it, to receive ad libilum temporary loans, to issue certificates of indebtedness in indefinite quantities, if continued in, assuredly makes him sufficiently potential to disregard the pranks or the combinations of a herd of stamping "bears" or tossing "bulls."

The bill authorizes the Secretary to call in and fund all or any of the outstanding liabilities of the Government, whether interest-bearing or not;  it may be fifty, five hundred, one thousand, fifteen hundred millions even, will be within his scope and reach;  he may exchange five-twenty bonds for the amount, whatever it may be.  It authorizes him to go without proposals upon the market and sell bonds at his own discretion, to raise money wherewith to pay off any or all of these varied and vast amounts.  In Scripture phrase, it is this "hiding of his power," which may be bared and exercised at any moment, that constitutes the impolicy and the objection of its bestowment.  Sir, the gamblers in Wall street will hold high revel in the glorious uncertainties continued and created by this bill.  They can discount the probabilities and the phases with every fluctuation of politics, prices, prospects, and vicissitudes of the seasons.

Is such a feverish, speculative condition of things desirable or necessary ?  If not, the correction is in our hands.  The unexhausted acts of June, 1864, and March, 1865, give all needed authority to the Secretary to issue six per cent. bonds, payable at his discretion, not less than five and within forty years from date, to fund the interest-bearing obligations of the Government.  Authorize him to give public notice, and require him to be in readiness, according to notice, to issue bonds running a fixed term of years in exchange for these unfunded obligations, specifying the kind, the amount, the priority, and the time of presentation.  If it is found Government bonds can be advantageously placed in larger amounts than the interest-bearing liabilities, then, and not until then, let the non-interest-bearing legal tenders be taken in hand by the Secretary, due public notice being given of the intention.  Such a course would enable every business man to know what Government contemplated, and to arrange his business and engagements accordingly.  Public notice dissipates much of the uncertainty and consequent speculation attending Government stock transactions, engendered and fostered by stealthy precipitancy.  There would be no new loan on the market, no apprehension of one;  no inexplicable fluctuation of Government securities.  Trade would adjust itself to a defined policy.  Every man would have the same facilities of information, and of course an equal chance in the marts and thoroughfares of venture and adventure.

Would such an open financial programme be successful ?  To a very considerable extent I believe it would — dependent of course upon an easy money market, without which under no circumstances can the five-twenties be floated at par.  If for any reason, extraneous or indigenous, this expectation should be disappointed no disasters could ensue, no bankruptcy could befall the Government before the reassembling of Congress.

On the whole, are not the mischiefs and abuses and dangers so palpable on the one hand, and the probabilities, the inducements, and the seeming advantages so manifest on the other as to determine and justify the rejection of the committee's bill ?

For myself, I do not believe any present legislation of the kind is needed;  I believe the Secretary has all necessary power now to retire, and fund the obligations of the Government.  But if some bill must pass, then the supplement or amended bill of the gentleman from Pennsylvania [Mr. Stevens] striking out the foreign proviso, the simultaneous right to fund non-interest-bearing with interest-bearing notes, or to issue and sell bonds below par, is by far preferable to the original bill reported by the committee.

If there were time, I should be glad to call attention to an anomaly in our existing financial system, which if any bill is to pass, might, as it seems to me, very properly be the subject of an amendment.  In the incipiency of our gigantic loan operations the customs receipts were required to be paid in coin.  These receipts were solemnly set apart and pledged for two specific objects — payment of the interest on the public debt, and the creation of a sinking fund for the ultimate extinction of the principal of the public debt.  The interest has been promptly paid, and not infrequently anticipated.

The last Congress authorized the Secretary of the Treasury to sell, from time to time, any surplus coin in the Treasury not needed to pay interest, due regard being had to previous provisions pertaining to a sinking fund.  By reason of such surplus and such authorization, sales of coin have from time to time been made;  the amount and the rates we have no means of knowing.  But this we do know;  thus far the sinking fund, notwithstanding the pledge and its subsequent recognition, is yet a legislative ideal, a mere myth, that may or may not hereafter have a veritable, tangible Avatar.  I do not care to characterize this withholding as bad faith with the public creditor, for thus far the Government has met its pecuniary obligations with comparative punctuality.  I do not care to characterize the emission as quasi, oblique repudiation;  for in the future, as in all the troublous past, the Government may be able to pay "the uttermost farthing."  It may be, in the midst of a war requiring immense expenditures, necessitating, after the absorption of every species of revenue, large and numerous loans, the propriety and the economy might be questioned of setting apart borrowed money, or what in effect would be the same thing, diverting other needed funds from common use for the purpose of establishing such a fund.  I know elaborate calculations have often been made, and surprising results have been attained, in figures, showing the wondrous fecundity of small sums, the potentiality they possess over vast amounts, when such sums are sacredly placed and the yearly interest is compounded and consecrated to accumulation.  Nevertheless, does not the practicability and the economics of such a hypothesis, in the midst of heavy expenditures and loans, remain to be demonstrated by actuality ?

But now, emerging as we are from a condition, comparatively, of consumption and of non-production;  no longer in the attitude of a needy borrower, expecting that henceforth revenue taxes and reduction will more than balance expenditures, is it not possible, is it not expedient, to "return to the old ways and walk therein," pay as we go;  and make provision for the coming future ?  If gold accumulates in the Treasury in excess of interest demands, does not correct principle as well as solemn pledge obligate us to see the surplus goes, if not to create a sinking fund, at least in positive curtailment of the national indebtedness ?

Perhaps in this particular we need not be much exercised.  Should the Secretary be at all successful in funding, at no remote day, the coin-interest bonds will be so included that it is not likely the Treasury very long or very soon will be burdened with a specie plethora.

But if such surplus is probable hereafter, may not the mode of disposing of it be improved and made more satisfactory ?  In the best condition of the market the present attainment of gold is difficult and expensive, cheerfully submitted to, it is true, while the exigencies of Government needed and demanded it to maintain its credit and enable it to make loans.  When thus hardly obtained, its sale for currency to go to the commonest uses of Government forces the consideration upon the minds of business men whether the extortion, as it were, of coin thus and the sale of it in part for such a purpose is necessary, economic, desirable, or even just.  Would not the commercial interests and business of the country generally, and the credit of the Government in particular, be subserved, with no detriment to any interest, if the Secretary was authorized to sell any excess of gold over interest requirements for legal tenders and cause the cancellation of the same without substituting or issuing other notes or representatives of indebtedness in lieu or in place of those thus withdrawn from circulation ?

This would be reduction of the public debt, in a small way indeed, but in the way and by the very instrumentality, if not in the very mode, solemnly covenanted and pledged to be done in and by former legislation.  I have no doubt the announcement of such an authorization and requirement would be gladly hailed by all who desire to have the Government keep faith in all its implied as well as its specific obligations.  I can conceive of a simple method of treating and disposing of this surplus coin question, which, if it did not, as some think, operate an indirect reduction of the customs imposts upon importations, to my mind would be "a more excellent way."  Let the Secretary be authorized on all customs payments of $100 and over to receive, say ten per cent. of the duties in United States non-interest-bearing legal-tender notes, and cancel the same, with no issuance of notes or other representative of indebtedness in place of those retired.  I will not pause to particularize the obvious effects and advantages of this disseverance of the Government from gold speculations;  its considerateness of the importer's difficulties in gleaning coin for the customs;  its direct appreciation of its own paper in its receipt for its dues.  Legal tenders thereupon would begin to approximate in business estimation, perhaps, I might better say, gravitate at once toward our only constitutional standard of value, the specie basis.  Persistence in this small percentage of retirement in time would bring an insensible proximity of specie payments to as well as by Government.  Is it not worth the trial ? irrespective of being, as it would be, a quasi restoration or use of any surplus beyond immediate wants, to the purpose and object fixed and pledged by former legislation.  Certainly, if not an adjunct, it would be no impediment to the Secretary's constant and most commendable effort to contract, to retire, and to prepare to resume.

---[little, over-educated fucked up moron !  is there 1,000million in gold/silver to re-place circulating Government notes ?  than how do you want to contract, to retire ?]

But I must not enlarge.  I am hopeful that with economic habits and industrial pursuits in private life;  with carefulness in expenditures and appropriations;  with such increase of internal revenue as we have a right to expect in a condition of tranquillity and assurance throughout all our borders;  with a continuance of the propitious agricultural seasons a beneficent Providence has generally heretofore vouchsafed unto us;  with the rapid disemboweling of those vast and varied accretions of mineral wealth of old hid away in such wondrous profusion in the matrix of mountain ranges stretching through many parallels of latitude, by the inevitable sequence and revolution of events we shall ere long be in the very midst of that age of gold, foretold, indeed, in old song and story, but awaiting its fullest realization here, here in the birth-land and home of the Great Republic of the Ages.

---[in your warped mind you imagine that all this development can be facilitated by the reduction of currency to the level of 1860 ?!]

Mr. Wentworth. [John Wentworth (1815-1888) (R) Illinois, he drank at least a pint of whiskey each day]  If the people were asked what, next after the sufferings of the battle-field, had been the source of their greatest grievances during the war, they would unanimously respond that they were those from a irredeemable paper currency.  Second only to war is the calamity of losing the reliable standard of values.  No sooner was it announced that the rebel armies had surrendered than all classes, conditions, and sexes of people asked how long before weights, measures, and values would return to a fixed standard.  The toiling masses who had fought our battles, as they were scattering to their various civic pursuits, wanted to know how much labor they were to give for a dollar and how much a dollar would buy.  In fine, they wanted to know what was to be the national standard of a dollar;  I mean its fixed standard.  They wanted to know if the dollar upon which they made their labor contracts was to be the dollar when their contracts were completed.  They wanted to know if the wages upon which they fed themselves and families one week would not starve them the next.  The speculator who had bought at high prices, the Government contractor already made rich by Government plunder but yet with considerable stock on hand, attempted to stifle these cries of patriotic penury by raising the question whether the Government was not so near bankruptcy that it would require a great many years of depreciated paper currency before it could pay its debts at par or before the people could realize their legitimate standard of values.  While the people were thus agitated between their hopes of justice from a Government for which they had sacrificed so much blood and treasure, and their fears of cowardly speculators who were boring holes in the bottom of the ship of state while their braver southern allies were fighting upon the quarter-deck, the Secretary of the Treasury, at Fort Wayne, Indiana, made a speech which indicated that the policy of the Government was to be frugality and honesty, and that all salutary measures would be resorted to in order to glorify peace with stability in prices.  I have only time to make one quotation:

"I have no faith, sir, in a prosperity which is the effect of a depreciated currency, nor can I see any safe path for us to tread but that which leads to specie payment.  The extreme high prices which now prevail in the United States are an unerring indication that the business of the country is in an unhealthy condition.  We are measuring values by a false standard.  We have a circulating medium altogether larger than is needed for legitimate business;  the excess is used in speculations.  The United States are to-day the best market in the world for foreigners to sell in, and among the poorest to buy in.  The consequence is that Europe is selling us more than she buys of us, (including our securities, which ought not to go abroad,) and there is a debt rolling up against us that must be settled in part at least with coin.  The longer the inflation continues the more difficult will it be for us to get back to the solid ground of specie payments, to which we must return sooner or later.  lf Congress shall early in the approaching session authorize the funding of legal tenders and the work of reduction is commenced and carried on resolutely, but carefully and prudently, we shall reach it probably without serious embarrassment to legitimate business;  if not, we shall have a brief period of hollow and seductive prosperity, resulting in wide-spread bankruptcy and disaster.

"There are other objections to the present inflation.  It is, I fear, corrupting the public morals.  It is converting the business of the country into gambling and seriously diminishing the labor of the country.  This is always the effect of excessive circulation.  The kind of gambling which it produces is not confined to the stock and produce boards, where the very terms which are used by the operators indicate the nature of the transactions, but it is spreading through our towns and into the rural districts.  Men are apparently getting rich, while morality languish and the productive industry of the country is being diminished.  Good morals in business, and sober, persevering industry, if not at a discount, are considered too old fogyish for the present times."

The sentiments of this speech were at once telegraphed and everywhere placed upon bulletin boards in advance of the newspapers as containing the most gladdening news since the surrender of rebeldom.  The Chicago Board of Trade lost no time in unanimously indorsing them.  Other public bodies all over the country did the same.  That they were condemned by reckless speculators I have no doubt, and for the same reason that—

"No rogue e'er felt the halter draw,
With good opinion of the law."

But, amid the overwhelming preponderance of favorable public opinion, their condemnation was as quiet as the captured traitor inside a Union prison.

Gold had been as high as 287.  In other words, it had taken two hundred and eighty-seven cents to make a dollar.  It has been as low as 129, or one hundred and twenty-nine cents to the dollar.  Meanwhile the consumers and the producers were making all their calculations upon one hundred cents to the dollar.  The farmer was in his field, the mechanic in his shop, and the mere operative wherever he could find labor.  But all were distant from the telegraph.  Now and then one could afford to take a daily paper;  but then he could only find time to read it in the evening.  Some could afford to take a weekly paper;  but most took none, and only got news as reported from one to another.  So they knew but little of prices, except as they wanted to buy or sell.  But the men who were speculating upon their necessities were near the telegraph and took the daily papers.  Thus, while pocketing their profits, they had time to shuffle off their losses upon their ill-informed neighbors.  This speech indicated a speedy termination of such a condition of things, and brought to the few surviving soldiers of the Revolution a reasonable hope that they might live to see the day when the Government founded upon their valor would cease to pay them in depreciated paper whose value from time to time they had no means of knowing.

Those who feared that the sentiments of that speech were not official in their character soon found relief in the annual message of the President of the United States, who spoke as follows:

"It is our first duty to prepare in earnest for our recovery from the ever-increasing evils of an irredeemable currency without a sudden revulsion, and yet without untimely procrastination.  For that end we must, each in our respective positions, prepare the way.  I hold it the duty of the Executive to insist upon frugality in the expenditures;  and a sparing economy is itself a great national resource.  Of the banks to which authority has been given to issue notes secured by the bonds of the United States we may require the greatest moderation and prudence, and the law must be rigidity unforced when its limits are exceeded.  We may, each one of us, counsel our active and enterprising countrymen to be constantly on their guard to liquidate debts contracted in a paper currency, and by conducting business as nearly as possible on a system of cash payments or short credits to hold themselves prepared to return to the standard of gold and silver.  To aid our fellow-citizens in the prudent management of their monetary affairs the duty devolves on us to diminish by law the amount of paper money now in circulation.  Five years ago the bank-note circulation of the country amounted to not more than two hundred millions;  now the circulation, bank and national, exceeds seven hundred millions.  The simple statement of the fact, recommends more strongly than any words of mine could do the necessity of our restraining this expansion.  The gradual reduction of the currency is the only measure that can save the business of the country from disastrous calamities;  and this can be almost imperceptibly accomplished by gradually funding the national circulation in securities that may be made redeemable at the pleasure of the Government."
---[why not reduce the bank paper which caused this inflation ?]

Such sentinels as these are worthy the successor of Jackson, whose valor at New Orleans may have been equaled in the late war, but whose superior valor in the Cabinet against a corrupt internal enemy in the shape of a defiant combination of irredeemable paper money advocates has yet to be equaled.
---[fakken asshole;  the ir-redeemable paper money of Jackson's time was private bank notes !  which you now advocate, you only want to reduce/eliminate interest-free government notes]
It stands out as an example to us, who are members of this Congress, where we see the same class of men who always bullied and often cornered us in the late war striving to perpetuate their power.  If southern traitors are not to be forgiven, what is to be done with the worse than traitors of the North who speculated upon our calamities, monopolized all the necessaries of life, and did their best to ruin the credit of the country ?
---[those alleged rebel traitors ye put in jail, how come ye never did anything to these speculators ?  ye sent goons to Vallandigham's house and evicted him from the country, ye never sent anyone to Jay Gould's house]

You passed laws against certain men at the South.  They resisted them.  You chastised them into submission; and, repentant, they are now thronging this city for pardons.  You passed a law against the gamblers in gold.  Like Napoleon, when he sent Maximilian to Mexico, these gamblers knew that you could not carry on more than one war at once;  so they nullified your law and defied you.  What Jeff. Davis could not do these gold gamblers did.  You passed your law on the 17th of June.  They made you repeal it on the 2d of July;  and you never crossed their track again, although at times you seriously doubted whether the best interests of the country did not require that you should reverse your guns and fire upon those who were laboring to destroy your financial system.

The annual report of the Secretary of the Treasury accorded with the President's message, and was a reflex of the Fort Wayne speech.  Once again he sent a thrill of joy throughout the nation, and the sons of toil thought they could number the days of depreciated paper money.  He says:

" The rapidity with which the Government notes can be withdrawn will depend upon the ability of the Secretary to dispose of securities.  The influences of funding upon the money market will sufficiently prevent their too rapid withdrawal.  The Secretary, however, believes that a decided movement toward a contraction of the currency is not only a public necessity, but that it will speedily dissipate the apprehension which very generally exists, that the effect of such a policy must necessarily be to make money scarce and to diminish the prosperity of the country."
---[if you want gold currency, why issue paper bonds ? why allow bank paper to circulate as currency, un-funded, as always, by gold ?]

Since the earliest days of General Jackson's administration I have carefully read the annual report of every Secretary of the Treasury, and noticed its effect upon the public mind.  I never was so pleased with a report of the kind, and I never knew a report that so universally met with public approbation.  After that report had been published long enough to be appreciated in the most distant parts of the Republic, this House took action.  It was upon the 18th of December, a memorable day, that the members of the House of Representatives almost unanimously assured the people that upon the currency, as well as upon the preservation of the Union, its members were disciples of Andrew Jackson.  The vote was not a mere general indorsement of the Secretary's report, which might be construed to mean everything else but the very thing it did mean.  It was specific.  It hit the nail directly upon the head.  It could have hit it nowhere else but where it did and have been of any service to the people.  This House did not give a mere general indorsement of a resumption of specie payments, but it indorsed "a contraction of the currency" as a means thereto.  And there is no other way in which you can bring about a resumption.  For whenever more paper money circulates than is wanted by the regular demands of business the market is excited, speculation is encouraged, panic follows, banks suspend, and gamblers revel in the calamities of the people who have lost every standard of value.  Every member of this House present but six, on the 18th of December, voted for the following resolution.  And it must be remembered that we were then fresh from our constituents, and sympathized with them.  Shoddy had not then sent on its lobby.

"Mr. ALLEY (the rules having been suspended for that purpose) submitted the following resolution, namely:

"Resolved, That this House cordially concurs in the views of the Secretary of the Treasury in relation to the necessity of a contraction of the currency, with a view to as early a resumption of specie payments as the business interests of the country will permit;  and we hereby pledge coöperative action to this end as speedily as practicable.

"The same having been read,

"Mr. Alley demanded the previous question;  which was seconded, and the main question ordered and put, namely, Will the House agree to the resolution ?

"And it was decided in the affirmative— yeas 144, nays 6, not voting 30.

"The yeas and nays being desired by one fifth of the members present.

"Those who voted in the affirmative are:

Mr. John B. Alley, Mr. And'w J. Kuykendall, William B. Allison, Addison H. Laflin, Oakes Ames, George R. Latham, Sydenham E. Ancona, George V. Lawrence, George W. Anderson, William Lawrence, James M. Ashley, John W. Longyear, John D. Baldwin, Samuel S. Marshall, Nathaniel P. Banks, Gilman Marston, Abraham A. Barker, James M. Marvin, Portus Baxter, Joseph W. McClurg, Fernando C. Beaman, Walter D. McIndoo, Tennis G. Bergen, Samuel McKee, Ulysses Mercur, George F. Miller, James K. Moorhead, Justin S. Morrill, Samuel W. Moulton, Leonard Myers, William R. Niblack, John A. Nicholson, Thomas E. Noell, Charles O'Neill, Godlove S. Orth, Halbert E. Paine, James W. Patterson, Sidney Perham, Charles E. Phelps, Frederick A. Pike, Tobias A. Plants, Hiram Price, William Radford, Samuel J. Randall, William H. Randall, Henry J. Raymond, Alexander H. Rice, John H. Rice, Burwell C. Ritter, Edward H. Rollins, Lewis W. Ross, Lowell H. Rousseau, Philetus Sawyer, Glenni W. Scofield, George S. Shanklin, Samuel Shellabarger, Abner C. Harding, Charles Sitgreaves, Roswell Hart, Ithamar G. Sloan, Rutheford B. Hayes, Rufus P. Spalding, James H.D. Henderson, John F. Starr, William Higby, Thomas M. Stilwell, Ralph Hill, Myer Strouse, John Hogan, Stephen Tuber, Sidney T. Holmes, Nelson Taylor, Samuel Hooper, Anthony Thornton, Giles W. Hotchkiss, Lawrence S. Trimble, Asahel W. Hubbard, Row'd E. Trowbridge, Chester D. Hubbard, Charles Upson, Denim Hubbard, Henry Van Aernam, John H. Hubbard, Burt Van Horn Edwin N. Hubbell, Robert T. Van Horn, James R. Hubbell, Daniel W. Voorhees, Calvin T. Hulburd, Hamilton Ward, James Humphrey, Samuel L. Warner, Ebon C. Ingersoll, Elihu B. Washburne, Thomas A. Jenckes, William B. Washburn, Philip Johnson, Martin Welker, George W. Julian, John Wentworth, John A. Kasson, Kellian V. Whaley, William D. Kelley, Thomas Williams, John R. Kelso. James F. Wilson John Bidwell, John A. Bingham, Henry T. Blow, Goorge S. Boutwell, Benjamin M. Boyer, Augustus Brandegue, James Brooks, John M. Breomall, Hezekiah S. Bundy, Render W. Clarke, Sidney Clarke, Roscoe Conkling, Burton C. Cook, Shelby M. Cullom, William A. Darling, Henry L. Dawes, John L. Dawson, Joseph H. Defrees, Columbus Delano, Henry C. Deming, Charles Denison, Nathan P. Dixon, John F. Driggs, Charles A. Eldridge, Thomas D. Elliot, John H. Farquhar, Thomas W. Ferry, William E. Finck, James A. Garfield, Henry Grider, John A. Griswold, Robert S. Hale, Aaron Harding, Donald C. McRuer, Michael C. Kerr, Stephen F. Wilson, John H. Ketcham, Edwin R.V. Wright.

"Those who voted in the negative are:
Mr. Jehu Baker, Mr. Benjamin G. Harris, Amasa Cobb, Grenn Clay Smith, Ephraim R. Eckley, M. Russell Thayer."
---[But, my dear sir, you carefully left out that this exact same Mr. Alley, in 1862, vigorously advocated for the issuing of these legal-tender Treasury notes; and heartily supported the establishment of national currency banks --the New York free bank system applied to the whole Union.]

I leave it for every man to make his own record in this House, and I believe when a man comes fresh from home he makes his best record.  I have been ordinarily successful in public life;  and if I was asked in my dying hour to say how it was I had been so successful, so far as I have been successful, I would say to the young men of this Republic that I owe it to nothing but my fidelity to my constituents.  And when members come here fresh from their constituents, knowing their feelings, knowing their wants, and place themselves upon record, it is not for them to rise here and explain how they came to give such votes.  Their explanations are due to their constituents.  No power on God's earth can step in between me and those men, whatever you see fit to call them, who went up to the polls and cast their ballots in my favor.

The veto of the United States Bank bill by General Jackson did not fall upon the speculators of this country with more crushing force than did this resolution;  appalling enough to them in itself, but perfectly crucifying with its immense majority.  When the gold gamblers made their raid upon this House two years ago, they had but fourteen majority to overcome.  The vote stood 76 to 62.  Besides, the attention of Congress was engrossed in the war.  But now there is no war, and the majority to over come is one hundred and thirty-eight.  Then they had the prestige of the high price of gold.  They predicted that the fall would be calamitous;  that it would ruin every one.  But now, we have the prestige of its comparatively low price.  It has fallen.  It has fallen three times as far as it has got to fall;  and the injurious effects cannot be individualized, while on every side the advantages are perceptible.  Again, our banks will have a gold dividend in July and another in January next, and many have gold-bearing bonds in excess of their circulation, and they can buy back their own gold for less than one quarter of the price at which they sold it.  Besides, the banks have an advantage from distant and diverse circulation, such as was never enjoyed by banking institutions of any age or country.  What large business man does not daily receive bills upon banks in almost every State in the Union ?  I mention all these things to show under what great disadvantages our alarmists are laboring.  It is up-hill work for them to frighten any one after the progress we have made toward resumption, over three quarters of the distance having been traveled.  The passage of this resolution so unanimously has been a notice to all men of the policy of the Government;  and if they have been prudent, they have prepared themselves for a gradual return to a fixed standard.

But the policy of the Government was proclaimed even earlier than the Fort Wayne speech.  For on the 9th of March, five days after the inauguration, the Secretary of the Treasury made a speech to the heads of bureaus, in which he said:

"My chief aim will of course be to provide the means to discharge the claims upon the Treasury at the earliest day practicable, and to institute measures to bring the business of the country gradually back to the specie standard, a departure from which although for the time being a necessity, is no less damaging and demoralizing to the people than expensive to the Government."

After this speech, I think all heads of bureaus not concurring with it should have resigned their places.  The moral rule is that a subordinate remaining under his chief one moment after he believes him to be in the wrong, becomes a particeps criminis.  After that speech there should have been no pulling at both ends of the rope at the Treasury Department.  The national Treasury should not be a house divided against itself.  Some people have a great deal to say about Moses in the White House, about these days ;  but I wish there was less mosaic in the Treasury Department.  I do not like to see the responsible head of the Treasury Department send a recommendation in at one door of this House while irresponsible heads of bureaus enter at another to oppose it.  In sporting-fields it is customary to give the hare a little the start of the hounds;  but I thought one day here that the hounds in their impatience had got the start.

In accordance with this address so early made, in accordance with the Fort Wayne speech so universally approved, in accordance with the message of our President, reflecting the views of General Jackson, in accordance with the annual report of the Secretary of the Treasury, which no man in this House has yet dared to assail, in accordance with the almost unanimous vote of this House, the Committee of Ways and Means have reported a bill.  The intention of that bill is to make the Secretary of the Treasury master of the situation.  He is more interested than any other man can be in bringing the paper of the Government to par.  He has contracts to make, debts to pay, and loans to negotiate.  He wants a stable market.  He cannot rely upon even his own estimates, when it is in the power of a few men to inflate prices in view of his necessities.  His personal pride and his official interest alike favor the smallest possible margin between specie and paper, while speculators, stock jobbers, and all kinds of gamblers fatten upon the largest margins.  Such persons stand upon a par with sound business men and the laboring masses in a natural condition of things.  But the moment you depart from that condition the chances are all in their favor.  Sound business men and operatives are lost in fictitious values, while the further you depart from them the more speculators, stock jobbers, and gamblers are at home.  They want to crowd down the value of paper to buy, and then they want to crowd it up to sell.  They combine to prevent competition, and hope to control the market.  If the Secretary wants a loan, they want him to negotiate with them;  and the same with States, counties, and individuals.  They say it would ruin the country to resume specie payments.  They would say the same if you should propose to fix the value of Government paper at what it now is.  You could not name a value that would suit them.  Stability is their natural enemy.  Stability is the friend of the Government at large, and of the people individually.  Such persons fear no one but the Secretary of the Treasury.  Within the last few days they have combined to run gold up to 140, and many of them are paying large daily interest for carrying gold until this loan bill can be defeated, when they hope to force it up even above 140.  New York papers charge that the Secretary of the Treasury has been obliged to sell gold in large quantities to break up such combinations.  He has not sold near as much as is attributed to him;  but so long as he has the power to do it, it is all the same to them.  They ask us to tie the hands of the Secretary of the Treasury, so that they can gamble in gold as recklessly as they did during the war.  They object to the bill of the committee because it gives him too much power;  and the opponents of the bill in this House, while pretending to be for restoring the people their lost standard of value, place themselves in the attitude of certain northern men who professed to be for the late war, but were opposed to every measure for carrying it on.  These men profess to be opposed to a suspension of specie payments, but you cannot get them to support any bill which leads to resumption.

Now, when I have an object to accomplish I must use all honest appliances necessary therefor.  If we expect the Secretary of the Treasury to compete successfully with the most desperate body of men in the world, we must confer upon him all the necessary powers.  This bill was reported for that purpose, and is objected to because it will accomplish it.  Give me a bill that will more effectually attain the same object and I will favor it.  Show me another man more capable of doing the work than the present Secretary of the Treasury and I will follow him.  I hear of but one other man connected with the finances of this country who has a plan in opposition to that of the President, of the Secretary of the Treasury, and of this House.  And that I hear only from common report and the news papers.  I refer to that of the Comptroller of the Currency [Freeman Clarke], which is said to be identical with that so unceremoniously kicked out of this House on Monday, the 5th.  Out of respect to the poor soldiers who were numerous that day in the galleries, I was glad to see any proposition which indirectly tended to reduce their pay and pensions by diluting the currency met at the threshold.  The question was raised on its reception, and when we consider what questionable propositions this House has received at this session, the rejection of a bill by 114 to 17 must be a very withering rebuke;  and some of the seventeen must have voted as they did out of regard to the very commendable principle of giving every proposition a hearing.  That plan was the one often resorted to by dishonest dealers who increase the quantity of their liquors by adding water or of their sugar by adding sand.  It may be better compared to that of the quack doctor, who, after you have taken bottle after bottle of his medicine, advises you to "keep taking."

Mr. PRICE.  I would ask the gentleman from Illinois [Mr. Wentworth] whether, in his opinion, adding water to liquor injures it ?

Mr. Wentworth.  If you sell it all as water, I have nothing to say.  [Laughter.] But if you sell it to the boys as all whisky, adding water to it is another thing.

If it be true that the Comptroller of the Currency is engaged in thwarting the efforts of the Administration to bring about the earliest practicable return to par values, then I recommend an appropriation be made to furnish his room with the History of the French Assignats and also of John Law's "South Sea Bubble."

Mr. Price.  I would ask the gentleman if we are to understand that he charges the Comptroller of the Currency with an attempt to thwart a return to specie payment or to dilute the currency, to use his own words.

Mr. Wentworth.  I wish to say that day after day I have seen the Comptroller of the Currency in this House;  I have seen him talking with members;  I have seen him talking with the lobby, when my own constituents, who have come on here at great expense to see him on official business, could not get him to attend to it, because he was here, not at his desk.

Mr. PRICE.  If the gentleman will allow me, that does not answer my question.  I insist that the gentleman shall answer the question whether he charges the Comptroller of the Currency with an attempt to dilute the currency — that is his language — or to thwart the return to specie payments ?  It is due to the Comptroller of the Currency that that question should be answered directly.

Mr. Wentworth.  I will say that I have a resolution partly written calling for a select committee to examine into this matter;  and I pledge myself to the gentleman from Iowa [Mr. PRICE] that if he will not offer such a resolution, I will offer one which will bring the Comptroller of the Currency before a committee to testify in this matter.

Mr. PRICE.  Until that time I submit to the gentleman from Illinois that it would be more in accordance with propriety and strict justice not to make a wholesale charge against a public officer who stands high in the estimation of the people, until the matter can be fully examined.

Mr. Wentworth.  All I have to say to the gentleman is this:  that when a man holds an office as a subordinate, and will not resign when he knows he differs from his chief, then I do not think he is doing right.  I think that while I know the opinions of the chief, I know the opinions of those on the other side.

Mr. PRICE.  Then the House is to understand that the gentleman from Illinois does not make any charge against the Comptroller of the Currency.

Mr. Wentworth.  I will tell you what—-

[Here the hammer fell.]

Mr. Pike obtained the floor.

Mr. ASHLEY, of Ohio.  Will the gentleman from Maine [Mr. Pike] yield in order to enable me to move that the time of the gentleman from Illinois be extended ?

Mr. PIKE.  Certainly.

Mr. ASHLEY, of Ohio.  Then I move that the time of the gentleman from Illinois [Mr. Wentworth] be extended to enable him to conclude his remarks.

No objection was made.

Mr. Wentworth.  I am obliged to the House for this courtesy, and I will try and not trespass upon it too long.

To the gentleman from Iowa [Mr. Price] I will say that day after day I have been in this House, and have seen the Comptroller of the Currency here.  His relations and mine are so friendly that I know that if he does not agree with what I say he will speak to me about the matter.  And I hope that my friend from Iowa, who is so sensitive upon this subject — whether his sensitiveness is of the Pickwickian kind or some other I cannot tell — if he will be writing a resolution calling for the appointment of a select committee to investigate this matter, while I go on with my speech, I will offer it for him when I get through.

Mr. PRICE.  In reply, I must say one word.  My remarks were not Pickwickian.  I only said what I did because the gentleman whom my friend from Illinois has assailed is not here and cannot be heard.

Mr. Wentworth.  What ! is he not here ?  Where has he gone ?  He was here a few moments ago. [Laughter.]

Mr. Price.  Well, sir, whether he is here or not, every one knows that he cannot be heard here in his own defense.  If the gentleman from Illinois has any proof to present of either of the two charges which his remarks would imply, I have not another word to say.

Mr. Wentworth.  I am not the man to attack another behind his back; and if the Comptroller of the Currency had not attacked Secretary McCulloch while the latter was where he ought to be at his desk, I would not have said what I have said, although the Comptroller did come to the same conclusion as the New York gamblers.

I was recommending, when interrupted, an appropriation to furnish the room of the Comptroller with the History of the French Assignats, and also of John Law's "South Sea Bubble."

It might be well, also, to add a history of the paper-money system of the late southern confederacy, where the secretary of the treasury cured all financial diseases with the hair of the same dog and advised all his patients to "keep taking."  Resumption by expansion is the old story of the frog who was to get out of the well by jumping up two feet every day and falling back three every night.

The question is asked if it is sound policy to take up legal tenders that bear no interest, and replace them with bonds bearing interest;  to which I answer promptly, no, if you can keep your legal tenders at par.  But this is not the real question.  It is only asked in order to throw dust in the eyes of the people.  It is a Wall-street argument, and the people should so regard it.  The real question before the country is this:  shall our Government, now that the war is over, continue to pay the pensioners of the Revolution, of the war of 1812, of the war of the rebellion, all its employés and all its creditors in depreciated paper, when by borrowing a little money at six per cent. it can bring its paper to par ?
---[hah ?! borrowing more, at interest, will increase the value of greenback compared to gold ?  in any case, nothing is preventing you from paying gold coins to the soldiers;  but you only want to pay gold to the bond-holders]
Who in the Government service anywhere, from highest to lowest, has not an application before us for increase of pay ?  And when you look at such petitions you find they are all based upon causes originating in the depreciation of Government paper, and that the object of their petition can be fully attained by its appreciation.  Suppose A to be a very wealthy man in his locality, and to have a very large number of employés.  It is all right for him to give them as many of his demand notes without interest as they please to take.  At length he has driven out all other hinds of currency;  and his employés, having use for currency abroad, find they cannot use his notes at par.  They tell him he has got too many out, more than the demands of the locality require.  They ask him to contract his issues so as to keep his notes at par all the time.  Now, is this man to inquire whether it is policy for him to be honest ?  Or is it not his duty to go and borrow money upon interest sufficient to make his paper good wherever it has found its way ?

Originally I would have favored Government's putting out all the non-paying interest notes that it could keep at par;  but I am not responsible for the condition of our financial affairs, nor is the present Secretary of the Treasury, nor is any one else except the rebels who got up the war, and that class of northern financiers who were trying to embarrass their country all through its existence.  Had we known at its outbreak of its extent and expense we might have had a system of finance more uniform.  As it is we have all sorts of systems;  and there is no member of this House who can carry them all in his head.  And the Secretary of the Treasury is like the superintendent of a long line of railroad.  He cannot change his connections at any one point without first studying to avoid collisions at all the others.  He has specie for imports and paper for excises.  Some interest and some principal is payable in specie, and some in paper.  Some bonds are registered and some have coupons.  Some are due at once and some at different times for forty years.  Some bear no interest and some bear all rates, simple and compound, up to seven and three tenths, and this interest is payable in nearly all the months of the year.  The same necessity that drove the General Government to borrow money also drove the States, counties, cities, and towns to the same thing.  And the Secretary has to compete with them all in addition to his other embarrassments.  But his greatest trouble arises from our anomalous system of banking, which originated in our unavoidable difficulties;  and for which no one is to blame except as above.  Our banks can neither suspend nor resume.  They are prohibited by law from suspending, and yet they are virtually in suspense;  and you cannot make them resume while legal tenders are less than par.  It is too late to change this system now, nor would it be fair to blame any one for it.  We must take it exactly as we find it.  It would be difficult to bring about a resumption of specie payments without the coöperation of the banks, and that coöperation cannot be secured without giving power to the Secretary of the Treasury to take up such an amount of legal tenders as will leave the balance at par.  I do not expect this can be done all at once, nor even in a year;  but I do believe that we can approximate resumption by such sure degrees that an afflicted people can feel certain that the days of the India-rubber yard-stick are numbered.  I am one of those who believe it policy for the Government to withdraw legal tenders to such an amount as to make the banks pay par money when they have legal tenders.  But I make not the issue upon this policy, except upon the understanding that honesty is the best policy.  I ask if it is honest in the Government to pay its creditors in depreciated paper when it can get money at six per cent.?  And there cannot be any war between sound Government banks and the Secretary of the Treasury, because they hold his legal tenders for the redemption of their notes;  and when he brings his legal tenders up to par, their notes are consequently at par.  So I took upon it that all national banks that are solvent and wish to continue so are the natural allies of the Secretary of the Treasury.  One of the oldest and wealthiest bankers in the United States thus writes me :

---[oh those 'rebels' the cause of everything !  pray tell what ye are going to sell your bonds for, the banks have no gold.  In the year 1865, 283 brand new currency-issuing National banks set up shop, and 731 State banks turned themselves into currency-issuing National Banks;  but that had nothing to do with currency inflation.  As of October 1865 National bank note circulation was $171,321,203;  State bank circulation was $78,867,575 (altogether: $250,189,478), yet no Representative asked for the contraction of their currency, or for their payment in specie, or for the convertion of their notes into 6% bonds.]

" Pay no attention to outside pressure so far as the national banks are concerned.  We have paid for no pamphlets, no money articles in newspapers, and no lobby.  It is the speculators, the shoddies, the lame ducks, that are belaboring Congress.  The national banks will be ready for specie payments as soon as the Secretary of the Treasury is.  Give him a good, strong bill and have no fears.  He cannot afford to quarrel with solvent banks, nor they with him.  There is no way to separate their legitimate interests."

The principal argument against the pending proposition is the old one — the dernier ressort of speculators nailed to the wall, namely, ruin.  "It will ruin the country," is the climax of their arguments.  O Ruin ! where are the charms that brokers have seen in thy face ?  O Ruin ! where have you been since General Jackson died ?  I was accustomed to hear a great deal of you from 1832 to 1840.  O Ruin ! where were you when gold fell from 287 ?  Why do you come to haunt us just at this time ?  Cannot you stay away until we get gold down to 125, for the sake of more even change ?  The tax upon labor and capital for irredeemable paper will then be very convenient to reckon.  It will be exactly twenty-five percent.  Before members of Congress pay much attention to this stale cry of ruin, let them read the debates of Congress all through the memorable contest between the people, headed by General Jackson, on one side, and the irresponsible bankers, headed by Nicholas Biddle, on the other.  By the way, I could, if I had the time, convict some of these ruin manufacturers, whose pamphlets have been placed upon our desks, of plagiarism.  Neither their language nor ideas are new upon the subject of ruin.  They are rather antiquarian.  Mr. Biddle was not only a very able man himself, but he had in his aid some of the ablest lawyers and ablest writers in the country, (and some of them appear to be writing now;)  and their gigantic efforts to alarm by prophesying ruin had so little effect upon the masses of the people then that even the old women have no fears from it now.  I feel very confident that if the oldest of the widows of our revolutionary soldiers should get her next payment in par money, she would not be at all frightened even if she should read all these circulars and pamphlets upon ruin that have been sent to us, or if she should hear all the evil predictions of that immense lobby that so thronged this Hall for several days that my colleague [Mr. Ross] had to make repeated calls upon the Speaker to enforce the rules which cast them out of this temple of liberty as our Saviour cast their fathers out of His temple.

---[forgive me, mister, but you are advocating the exact same banking system that Mr. Biddle and crew advocated;  are you confused ?  did you support the Sub-treasury system a few years earlier ?  isn't you a partner in a bank as we speak ?]

There has been one class of men here lobbying against specie payments that surprised me very much.  I allude to the importers.  As they paid for their goods in foreign exchange and for their duties in gold and silver.  I supposed they would rejoice in having the paper of their Government brought to par.  But they know that irredeemable paper begets extravagance, and that men who become suddenly rich by speculating upon other people's necessities at once outgrow the plainness of American manufactures.  The suddenly rich, especially if they are illiterate, are the best patrons of importers.  Such persons rejoice in diamonds and laces, can drink no liquors without a certificate of their importation, and always travel in their best clothes, fresh from a foreign market.  These importers think that a bloated currency bloats the fashions.  They know that the golden eagle of this Republic is at war with monarchial diamonds.  The importers are very few in numbers, and as a class are very rich, and Government expends millions annually for their protection on the seas.  Where ever their commerce floats there go our ships of war for their defense, yet repeatedly have we seen these millionaires about this Hall lobbying for the debasement of our currency and the privilege of paying the guardians of their property over the dangers of the ocean in money under par.  It would offend these gentlemen much to be compared to ordinary stock gamblers, yet in their present vocation I do not see how they are to claim exemption from the old rule, that a man is known by the company he keeps.  There is one class of men opposing this bill with whose misfortunes I have much sympathy.  I allude to those who bought large stocks at speculative prices.  But I fear that their condition is so helpless that I cannot aid them in any other way than by supporting the bill of the gentleman from Rhode Island.  I allude to the bankrupt bill.  It is, however, too expensive as it now is.  A bankrupt law should be in every sense the poor man's law.  It should be for the man who has lost his all by sickness, by fire, by indorsement, or any unavoidable calamity, as well as for the speculator who has saved assets enough to pay enormous expenses.  The advantages of such a law should come to the poor without price.  The vilest criminal always has gratuitous counsel assigned him when he is destitute of means, and why hold honest destitution at the mercy of its creditors because it has nothing for the fees of judges, clerks, and attorneys ?  The old law was wiped from the statute-books in indignation on account of its expenses.  Men have been speculating in everything.  They have undertaken to form such combinations as would control all markets.  They have been especially cruel in their attempts to monopolize all the necessaries of life.  They bought at high prices.  They bought when gold was at nearly 300, and they hoped that such a calamity would befall our soldiers in the field as would inflict a still greater one upon their families at home by forcing prices still further beyond their reach.  God bless our soldiers for crushing the traitors at the South and for bringing Government credit so near to par in spite of northern speculators, who were fattening upon their country's calamities !  Let those soldiers now see to it that when they get their pensions they get par money.  A man learns much from little children, who at play throw their balls in the air and cry:

" What goes up must come down
Upon your head or on the ground."

Gold has gone up, and with it the prices of all the necessaries of life.  It has now fallen over three quarters of the distance it has got to fall.  Every one knew it would fall from some point;  and when it commenced falling it was the duty of people to get their heads out of the way so far as they could.  If a person has been rendered bankrupt by the fall so far, there is nothing that Congress can do for him except to pass a bankrupt law.  He must wipe out and begin anew.  If a person has not been injured by the fall to this date, (and very few have,) he need have no fears.  Let him only be prudent and he will reach bottom in perfect safety.  The Secretary of the Treasury has proven himself a cautions man.  He would not be precipitate if he could, and he could not if he would.  It is because I have this confidence in him that I favor this bill.  For the same reason that Congress gave full powers to General Grant when he went out to raise our flag in the rebel States, I am for giving Secretary McCulloch full powers when he goes out to raise our credit.  I was not in favor of General Grant's conducting his war upon peace principles, nor am I in favor of the Secretary's doing the same thing.  The people are in favor of the earliest restoration of their standard of values, and how not to do this, while pretending to be for it, is not the question with me.  If it were, I would vote for striking the legal-tender clause out of this bill;  and I would expatiate upon the folly of paying interest upon money in order to redeem our depreciated paper.  But "how to do it" is my question;  and as there is no other plan before Congress for doing it, and as the present Secretary of the Treasury has my implicit confidence, I should be false to my own convictions of right if I did not strengthen his hands in every possible way.

Mr. Kasson.  Will the gentleman allow me to read, in support of his views, a brief extract from a letter from an eminent merchant of New York ?

Mr. Wentworth.  I am occupying the floor by the Courtesy of the House.  I have no objection to yielding to the gentleman if it be the pleasure of the House.

The SPEAKER.  The gentleman has the right to yield if he desires to do so.

Mr. Wentworth.  I yield to the gentleman.

Mr. KASSON.  My object is to show that the industrial and mercantile interests of the country are with the Secretary of the Treasury on this question, and are even in advance of the Government.

This gentleman says:

"Since seeing you I have made further inquiries in relation to the transactions in merchandise based upon gold, and I find my opinion confirmed.

"Teas, both from first and second hands, (until in fact it reaches the smaller grocers and jobbers,) are almost invariably sold for gold.  The imports from the East Indies, gunny-cloth, bags, linseed, &c., are also usually sold for gold.  Coffee is usually likewise on a gold basis.  Dry goods, the imports from England and the Continent, are on the contrary very generally sold for currency, as are also iron, raw silk, and other European articles of import.

"From figures you no doubt possess, you can see that the transactions in articles having gold for a basis are immense;  and it shows to my mind that the merchants are preparing for a return to a specie basis whenever the Government considers it judicious itself to return to the 'hard-pan system'."

I read this for the purpose of showing that the people are already moving, even in advance of the Government, for a return to a specie basis in their business transactions.

Mr. Wentworth.  I am much obliged to the gentleman from Iowa for his suggestion, and will now proceed with the remarks which I was submitting.

Many of the most experienced business men, after doubling their capital by the rise in gold, preferred to retire rather than replenish their stocks at high prices and run the risk of a fall in gold.  Their personal enterprise as well as their pecuniary capital have been dormant ever since, awaiting with impatience for a time when business can be resumed upon a reliable foundation.  There are hundreds of the most enterprising capitalists with their millions of money in this situation, and we want some of it in the manufacturing business at the West.  There are also thousands upon thousands of the most honorable young men who lost their old business relations by going to the war, who wish to form new ones as soon as they can safely do so, but they are too well informed to open shop upon a falling market.  They have read the parable of the man who built his house upon the sand.  They want to build upon the rock of a stable currency, where honest industry and skill can calculate upon reliable profits.  The best measure of the wealth of a country is its productive industry.  What every nation wants is to have everybody producing something.  One man's judgment is about as good as another's as to the proportion between those who live by their wits and those who live by their work.  I estimate that not more than half of the able-bodied men are producing anything, that is, adding anything to their country's wealth.  I say it with shame for my country, that about one half of its able-bodied men are mere drones;  or to be more explicit, I say that the wealth of the country has not been increased at all by the industry of one half of its able-bodied men.  Hence, I argue that he is a public benefactor who sets any idle man at work.  You can set thousands of men now idle at work by giving them reliable landmarks.

Take the case of office-seekers.  I estimate that there are one hundred office-seekers for every office in the country.  I do not refer to the industrial classes who would take office if offered them, but who nevertheless continue in their industrial pursuits;  but I refer to those who earn nothing, do nothing, add nothing to their country's wealth.  The country has no conception of the manner in which members of Congress are annoyed upon this subject.  One half of our time is employed in home correspondence in relation to it.  The other half ought to be devoted to public business.  But it is impossible.  Why so ?  Because we are awakened in the morning early and kept up late at night by men of former position, of actual wealth, of evident qualification, and of apparent honesty.  We find such all over this city in the greatest abundance.  And when we ask them why they do not go into business, what do they say ?  Their answer invariably is, we intend to do so;  but we want something to support us until business gets settled down upon a reliable basis.  Now, this reliable basis has got to be furnished by the Secretary of the Treasury.  He must set our people at work;  he must set them at producing something.  We cannot all be office-holders.  We cannot all be non-producers.  We must be earning something;  and to do this we must invest either our capital or our labor, and it is unsafe to do this when a man knows not whether the dollar of to-day will be a dollar to-morrow.  The Secretary of the Treasury, I honestly believe, can restore values to actual reliability, and transform hundreds of thousands of idlers to producers of wealth, if the members of this Congress will not turn their backs upon their own constituents to gratify the conceited wealth of greedy importers and the corrupt plans of desperate stock-jobbers.

---[Oh yes, sir, secretary Culloch will set this country on such a basis that these idlers won't get off for a generation;  I can hardly wait to see what you said in 1873]

If we adopt the policy of the Secretary of the Treasury, we shall wake up some morning and find the paper of our country at par.  Every bank which has a legal tender will have the equivalent of so much in gold.  Then we shall see Hamlet played with the part of Hamlet omitted.  Then will ruin have come and no body be hurt.  I shall rejoice;  but others will feel like fiends in pandemonium at the conversion of sinners.

---[one morning they woke up, alright, and they were bankrupt, because there was no money to circulate]

I answer the objection to the Secretary's selling his bonds abroad by stating that, in his Fort Wayne speech, he himself says, "Our securities ought not to go abroad."  And I have no hesitation in asserting that it will not be his fault if the bonds of our own people are not owned here at home by our own people.  But supposing American money operators combine against him, is he to submit ?  Such combinations have existed, and there is but one way to prevent them, and that is to give him the entire world in which to negotiate.  American brokerage is not that kind of American industry that particularly needs protection from foreign competition.  Our bonds, however, were going abroad all through the darkest hours of the war, and are now going abroad, and will continue to go abroad.

With cotton restored to loyalty and our currency restored to honesty, worse calamities might befall our country than negotiating its bonds abroad, and especially if it could be done at five per cent.  One per cent. will be worth saving from our interest account when our large importations shall be curtailed by the policy of the Government, and we shall have large balances from the sale of cotton.  Complaints are reaching us from all quarters that Government bonds are not taxable for State, county, and municipal purposes.  The same necessity that compelled the General Government to issue bonds compelled our States, counties, cities, and towns to do the same thing.  And the bonds of the latter cannot be negotiated upon fair terms while the bonds of the General Government are in competition with them.  The agricultural interest, which has suffered the most from the war, not only has to pay its usual proportion of the local taxes, but also that proportion which would fall to their wealthier neighbors if they had not invested all their means in the securities of the General Government.

---["cotton restored to loyalty" ! another good reason for that war ?]

Even the poor soldier who tills the soil is taxed, while the rich man who not only remained at home, but often opposed the war, is in this way exempted.  Now, if one million of exempted bonds go abroad do they not leave room for one million of taxable bonds or their equivalent in other taxable property ?  To make this plain I will suppose, Mr. Speaker, that your property consisted last year of $1,000,000 in United States bonds.  Your State, your county, your beautiful South Bend derived no advantages from you.  But you have since sold them and invested the proceeds in Indiana bonds or other taxable property.  Then the State, county, and municipal taxes of every man would be reduced in proportion to your increased taxation.  And, supposing your bonds were sent out of the country, do you suppose that the real estate holders of Indiana, whose taxes were reduced thereby, would think any the less of you therefor ?  The people of that country are the happiest whose wealth is most equally diffused, where none are poor and none are rich.  Competence, when attended by health and intelligence, is the best standard of happiness.  Differences will arise under any forms of government in the means of men.  But those differences should not be created by the Government itself.  Especially should it not discriminate against the tillers and defenders of the soil.

"Princes and lords may flourish, or may fade,
A breath unmakes them as a breath has made;
But a bold peasantry, their country's pride,
When once destroyed, can never be supplied."

You may cry, "Shame upon a country that sells its bonds abroad !" but you cannot keep issuing non-taxable bonds without that cry being hushed to silence by the reactionary cry from every ballot-box in the land of "Shame, shame, eternal shame upon that country whose tax-gatherer passes by the palaces of the rich United States bond-holder to reach the sweat-bedewed crops of the cultivator of the soil !"  You may rely upon the life tenure of the judges of the Supreme Court to resist the ultimate consequences of this cry.  So once relied the men who bred God's image for the shambles.  But God made vacancies where the black man had no rights which the white man was bound to respect;  and God gave us Abraham Lincoln to fill them.  The people of the United States will endure all and will suffer all that the necessities of the late war required;  but now that the war is over, I believe that a great many very good men, feeling themselves oppressed by the non-taxation provision, desire to have their sale abroad encouraged;  and in default of this, I believe they would struggle for a legal revolution in our United States courts if the policy of issuing bonds is to be continued.  And I believe that there are a great many very bad men who are looking forward to the agitation of the injustice of this non-taxation provision in our Government bonds as a means of destroying the Government.  It is only necessary for one State to insist upon the right to tax, and then for others to deny the right of the General Government to coerce a State, and you have another war upon a northern issue.  Thus do disloyal men North and South hope again to have a pretext to shock civilization with their Alabama and Shenandoah piracies, with their Andersonville and Libby prisons, with their massacres at Fort Pillow and Lawrence, with their infamous vaccine matter, with their conflagrations of New York hotels and robbery of Vermont banks, with their attempts to spread the yellow fever and to burn Chicago, with their presidential assassinations, and with all those other barbarous acts that marked the pathway of slavery to its final damnation.  Any attempt to tax our present bonds for any other than national purposes would be repudiation.  Repudiation is only another name for nullification.  Nullification was the first name of secession.  Secession is treason.  And the rope that ought to hang the last traitor should hang the first repudiator.

I think we should deal more frankly with the people touching the power to tax the securities of the United States.  The rulings of the Supreme Court to this day have been all one way upon this subject.  There never has been a dissenting opinion.  In 1819 Chief Justice Marshall delivered the unanimous opinion of the court that the State of Maryland could not tax the branch of the United States Bank located within its dominions, because—

"It was an instrument employed by the Government of the Union to carry its powers into execution."
He said:
"If the States may tax one instrument employed by the Government in the execution of its powers, they may tax any and every other instrument.  They may tax the mail;  they may tax the mint;  they may tax patent rights;  they may tax the papers of the custom-house;  they may tax judicial process;  they may tax all the means employed by the Government to an excess which would defeat all the ends of Government.  This was not intended by the American people.  They did not design to make their Government dependent on the States."

Our bonds could not be taxed if the non-taxation clause was omitted from the face of them.  Nor could they be taxed if the permission to tax was given by Congress.  He who votes for a national custom-house, court-house, post office, arsenal, or a United States bond, or other evidence of indebtedness of any kind, votes for something that cannot be taxed.  Our lands are not taxable until Government parts with its title;  and if Government ever buys back its own land, the right to tax at once ceases.  Concede the power of a State or any municipal government to tax national property or indebtedness, and what would not have been done during the late war in States where the preponderance of power had been hostile to Mr. Lincon's administration !  Disguise it as you may, there is but one way to avoid this inequality of taxation, and that is to avoid running in debt.  Evil, be thou my good !  And until our already contracted debt is paid, it will be a temporary relief to send more of these bonds abroad while we are preparing for their gradual liquidation.  For it is useless to think of leaving them for posterity to pay, as the non- taxation provision will force their payment within a single generation or work a revolution in the United States court.  We should issue no more except for liabilities contracted prior to the 1st of July next.  After that, we should pay as we go, and should try the experiment of paying all our expenses except those for interest from duties upon imports.  Our interest alone should be paid by the internal revenue taxes;  and the annual reduction of these very unpopular taxes, added to the unpopular non-taxation provision in the bonds, will be an unceasing stimulus to their extinguishment.

Now, I come to the liquidation of the principal of our indebtedness, which can be accomplished in one generation without adding a dollar to our taxes.  Not a dollar.  My first step would be the completion of the Pacific railroad, which has already been provided for, as a means of developing the mines.  Where there is now one man in the mineral regions there would then be thousands.  I would then set apart their almost inexhaustible proceeds exclusively for the extinguishment of the principal of out indebtedness.  This will do the work, and our country, now free from slavery, in twenty years can rejoice in freedom from debt, and from all taxation save that indirectly raised by the tariff.  To inaugurate such a policy let us strengthen the Secretary of the Treasury in his efforts to deliver us from a depreciated currency, from uncertain wages, and fictitious values.

Mr. PIKE resumed the floor.

Mr. J.L. Thomas.  If the gentleman will yield to me, I will move to adjourn.

Mr. PIKE.  I have no objection to that.

Mr. J.L. THOMAS.  I move that the House adjourn.

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

March 16