Be it enacted by the Senate and House of Representatives of the United States of America, in Congress assembled, That in order to remove any doubt as to the purpose of the government to discharge all just obligations to the public creditors, and to settle conflicting questions and interpretations of the laws by virtue of which such obligations have been contracted, it is hereby provided and declared that the faith of the United States is solemnly pledged to the payment in coin or its equivalent of all the obligations of the United States not bearing interest, known as United States notes, and of all the interest-bearing obligations of the United States, except in cases where the law authorizing the issue of any such obligation has expressly provided that the same may be paid in lawful money or other currency than gold and silver. But none of said interest-bearing obligations not already due shall be redeemed or paid before maturity unless at such time United States notes shall be convertible into coin at the option of the holder, or unless at such time bonds of the United States bearing a lower rate of interest than the bonds to be redeemed can be sold at par in coin. And the United States also solemnly pledges its faith to make provision at the earliest practicable period for the redemption of the United States notes in coin.
Mr. Schenck, [Robert Cummin Schenck, (1809-1890) (R) Chairman of the Ways and Means Committee, Took the seat of Clement Vallandigham] by unanimous consent, introduced a bill (H.R. No. 1744) to strengthen the public credit, and relating to contracts for the payment of coin; which was read a first and second time, referred to the Committee of Ways and Means, ordered to be printed, and also ordered to be printed in the Globe.
The following is the bill :
A bill to strengthen the public credit, and relating to contracts for the payment of coin.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That in order to remove any doubt as to the purpose of the Government to discharge all just obligations to the public creditors, and to settle conflicting questions and interpretations of the laws by virtue of which such obligations have been contracted, it is hereby provided and declared that the faith of the United States is solemnly pledged to the payment in coin, or its equivalent of all the interest-bearing obligations of the United States, except in cases where the law authorizing the issue of any such obligation has expressly provided that the same may be paid in lawful money, or other currency than gold and silver: Provided, however, That before any of said interest-bearing obligations, not already due, shall mature or be paid before maturity the obligations not bearing interest, known as United States notes, shall be made convertible into coin at the option of the holder.
Sec. 2. And be it further enacted, That any contract hereafter made specifically payable in coin, and the consideration of which may be a loan of coin, or a sale of property, or the rendering of labor or service of any kind, the price of which as carried into the contract may have been adjusted on the basis of the coin value thereof at the time of such sale or of the tendering of such service or labor, shall be legal and valid, and may be enforced according to its term and on the trial of a suit brought for the enforcement of any such contract, proof of the real consideration may be given.
Mr. Schenck. I introduced this morning, and had referred to the Committee of Ways and Means, a bill to strengthen the public credit and relating to contracts for payment of coin. I now move to reconsider the vote by which that bill was so referred. I do this with a view to bring a bill back into the House for action, for which I hope to have the authority of the Committee of Ways and Means. This I propose to do in a week or two when the business of the House will permit the consideration of the subject. I shall then submit some remarks myself in support of the bill, and allow some discussion of the subject, with a view to action by the House.
The motion to reconsider was entered.
Public Credit -- Gold Contracts.
The House resumed the consideration of House bill No. 1744, to strengthen the public credit, and relating to contracts for the payment of coin.
Mr. Schenck. Mr. Speaker, when I introduced some three or four weeks ago the bill which is numbered 1744 on the files of the House, and had it printed and referred to the Committee of Ways and Means, I gave notice that on a motion to reconsider that reference, which I afterwards entered, I would at some convenient time bring the subject before the House for its consideration. I call up that motion now. In doing this, if I can secure the concurrence of a majority of the members, I shall hope not only that the motion to reconsider may prevail, but that after such discussion as may be deemed expedient and desirable at this late period of the session the bill may be put upon its passage and receive the favorable judgment of the House. I am encouraged in this hope by the action and sanction of the Committee of Ways and Means. Since the bill has been before them they have given it careful examination and consideration, and have instructed me to report their approval of it with a recommendation that it be passed without amendment. Before proceeding with any further remarks I will ask to have the bill read at the Clerk's desk.
The bill was read by the Clerk, as follows:
A bill to strengthen the public credit and relating to contracts for the payment of coin.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That in order to remove any doubt as to the purpose of the Government to discharge all just obligations to the public creditors, and to settle conflicting questions and interpretations of the laws by virtue of which such obligations have been contracted, it is hereby provided and declared that the faith of the United States is solemnly pledged to the payment in coin or its equivalent of all the interest-bearing obligations of the United States, except in cases where the law authorizing the issue of any such obligation has expressly provided that the same may be paid in lawful money or other currency than gold and silver: Provided, however, That before any of said interest-bearing obligations not already due shall mature or be paid before maturity, the obligations not bearing interest, known as United States notes, shall be made convertible into coin at the option of the holder.
Sec. 2. And be it further enacted, That any contract hereafter made specifically payable in coin, and the consideration of which may be a loan of coin, or a sale of property or the rendering of labor or service of any kind the price of which as carried into the contract may have been adjusted on the basis of the coin value thereof at the time of such sale or of the rendering of such service or labor, shall be legal and valid, and may be enforced according to its terms; and on the trial of a suit brought for the enforcement of any such contract proof of the real consideration may be given.
Mr. Schenck. Mr. Speaker, the first criticism that will naturally be made on this proposed act of legislation will be that there is very little of it. That is true. I do not pretend that it embraces by any means all that it may become necessary to do in order to the restoration of our country and Government to a sound financial condition. I do not pretend that it is more than a step or two in that direction. But the first steps, in that direction must be taken; and I shall be happy if I have suggested those which are safe and of obvious and primary necessity, and which will be adopted with such unanimity or by such majority as will make them the beginning leading to some fixed and extended system to be developed as our national policy in the future.
To the future and to another Congress I am willing to leave much of this work. Restoration in anything is a task of time and not of a day; and the perfectness and the ultimate success of any such work of restoration as generally proportioned to the deliberation and caution with which it is conducted. And I believe more than this. I believe that with a nation, as with an individual, health is to be restored by care and diet and nursing, more even than by the use of right remedies, and that we can reach only through gradual convalescence a normal soundness of condition. Disease may be protracted by an impatient attempt to hasten a cure.
To follow up this homely figure, I may say that we are not without the exhibition of plenty of nostrums as well as an abundance of regular and in many respects valuable prescriptions in this matter of finance. Perhaps no committee has ever been more advised and instructed than the present Committee of Ways and Means on this subject. Schemes and plans have come to us in form and number quite beyond our time or opportunity to study or even carefully to peruse. Besides unnumbered articles, editorial or communicated, sent marked in newspapers or clipped from their columns and inclosed to us, we have had rolls of manuscript and stacks of pamphlets. For these favors from our general constituency I desire here now to return my thanks and the thanks of my committee, in gross, inasmuch as we have not been able to make our acknowledgment to their various authors individually. If such productions prove nothing else, they manifest, at least, the widespread and deep interest which is felt at this time in our national credit and currency, showing how almost every active mind has been roused to the consideration of the questions involved in those subjects. It is remarkable, however, how widely the doctors differ. I have been struck with one fact applicable to nearly all of these plans: that while scarcely any two agree as to principle or details, each writer is confident that his own scheme or programme presents the one sure panacea for the remedy or removal of the evils under which we labor.
Mr. Speaker, I am going to make a confession. It is one which will probably lower me in the estimation of some persons who think that all which relates to public credit and its kindred topics has been reduced to reliable scientific theories and formulas, comprehensible only by the political economists and inexplicable to the uninitiated. I do not believe there is any great mystery in what is called finance. The management of debt and its payment and the restoration of impaired credit, it seems to me, are with a nation, only on an extended scale, what the same undertakings should ordinarily be with an individual.
Eight months ago, when presenting from my committee a general bill for the regulation and collection of internal taxes, I had occasion to speak incidentally of the financial condition. I said then what I still believe and now repeat, "that however we may dispute in regard to the changing of one form of public security for another, the amount or volume of currency to be kept up, or the contraction to be made, viewing this financial question in all lights, there is after all but one way in which the debt of this country is to be paid -- it is to be worked out. The industry of the people, the productions of our labor and of our soil are eventually to pay it." Off the stage, with its fictions and illusions, there is to be found no "new way to pay old debts."
Is not this the common sense of our case ? What should a reasonable man do who, being in possession of a handsome and productive estate, finds himself, on account of the extraordinary expenses to which he has been put in defending his title, incumbered with heavy debt for which his notes and bonds have been given, while at the same time the magnitude of his liabilities and some uncertainty as to his purpose of prompt and faithful payment have together contributed to impair his credit and depreciate the value of his obligations ? The answer is easy. He should increase by every proper means his resources and the regular income from his property without diminishing its value. He should limit and retrench all unnecessary expenses. He should thus show to his creditors and the public a good margin of saving applicable to the reduction and ultimate extinguishment of his indebtedness, with an increasing surplus to be so applied as his liabilities diminish from year to year. And to all this he must add, in order to regain lost credit, a manifest determination to meet and pay every just obligation according to the letter and spirit of the contract by which it was incurred. All this will be necessary to reestablish himself in the confidence of those with whom he deals; and with all this he will have not only that capital which consists in the ownership of property, but that other and in some sense higher security to offer which comes from confirmed and trusted credit. Such a citizen need never fear bankruptcy. Such a citizen can pay in good time all he owes. Such a citizen will always be able to borrow anew whatever money he needs at the lowest rate of interest in the market.
Now, make the case of this responsible and trusted citizen the case of the nation or Government; and is not the same in all respects true of one as of the other ? Is anything else true or to be relied on to lift us from our resent embarrassments ?
Let us consider briefly the revenue of the United States. I will not ask you to hear me speak of our resources. In that direction the theme is too vast for our present discussion. Measuring the future wealth of this broad land by the present, as we do the present by its increase on the past; it is almost too great for the reach of imagination. But let us look at the actual means we have now or may count on hereafter with which to meet, provide for, and discharge every incumbrance on this our magnificient and rich national inheritance.
Take first the revenues of the past year with all its exceptional and unfavorable circumstances. We have had a corrupt and extravagant Administration. Inefficient and dishonest officers either failed to levy or collect a great share of the taxes, or aided others to rob and defraud the Treasury; while conviction of the scoundrels has, in most instances, only been followed by executive pardon. Foreign territory was purchased at a cost of $7,200,000 in gold, equal to $10,000,000 of currency. The bounties paid to soldiers who served in the war against rebellion was $43,000,000. The arrears of accumulated interest paid on compound-interest notes amounted to over $10,000,000. We have had to disburse to meet the great expense of an Indian war other millions beyond the ordinary needs of a time of peace. Other large expenditures have been required, which we shall after this in whole or in part escape, to keep up a military force in the unreconstructed States of the South, and to support the Freedmen's Bureau and other machinery incident to the government of those States in their abnormal and transitional condition. And yet with all these extraordinary demands on the Treasury a balance of over $28,000,000 was carried to surplus account at the close of the fiscal year.
Look next to the coming year, and what is the prospect ?
The Secretary of the Treasury has estimated for the fiscal year to end on the 30th of June, 1870, to meet all expenditures, including interest on the public debt, $303,000,000. This is against $336,000,000 for the present year, which will expire an the 30th of June, 1869; making a difference in our favor of $33,000,000. But the Committee on Appropriations in this House assure us that all that will be required for the next fiscal year will not exceed $290,000,000, thus promising an additional saving of $13,000,000, or an aggregate retrenchment of $46,000,000 as compared with the present year. I have confidence that this is not too favorable a statement.
What will probably be our receipts for the fiscal year ending June 30, 1870 ?
Mr. Wells, the Special Commissioner of Revenue, places them at--
From customs duties (in gold) ......... $170,000,000
From internal taxes on the basis of the present laws, and with a new and more efficient and honest administration of them ....... 160,000,000
From miscellaneous sources, including the premium on gold, sales of land; and other public property, &.c. .............. 26,000,000
Making a total of ...... $356,000,000
The reasons of the Special Commissioner for anticipating an increase of revenue are set forth with some fullness of detail in the official report made by him last month. They are founded, so far as revenue from internal taxes is concerned, in part on the receipts to be expected from distilled spirits, tobacco , cigars, and other sources. Those receipts will be much increased, as is already proved by the working of the amended law of July last relating to distilled spirits; and if, at this session, or even, in the next Congress, we can enact into a law the pending general bill, which has passed the House and gone to the Senate, revising, reforming, and readjusting the whole system of internal taxation; with its provisions for deriving more from banks, brokers, lotteries, public amusements, and various luxuries, a still larger aggregate sum will be raised for public use without any proportionate addition to the burdens of the people.
But counting confidently on a reformed, faithful and honest administration of the Government under the incoming President, I look for a larger public income, even without change of the laws, than the Special Commissioner has estimated. Studying the subject with all the care and calculation that I have been able to give to it, I venture to set my figures against his. I believe we shall have for the fiscal year ending June 30, 1870:
From customs duties (in gold) ......... $180,000,000
From internal taxes ........................ 188,000,000
From miscellaneous sources ............. 20,000,000
A total of ........................................ $388,000,000
This will indicate a surplus for that year of $98,000,000 as against a surplus estimated by the Special Commissioner of $66,000,000, over the aggregate of needed expenditures estimated by the Committee on Appropriations.
Let not gentlemen around me deem me extravagant in these calculations of our national wealth and national resources for even the near future.
If time and the occasion would permit I would gladly fortify my opinions and predictions by carrying you to what, by change of circumstances, has become almost a new and fresh field of prosperity -- the reviving South.
The immense and wonderful growth of agricultural resources in the great interior of our country -- on the rich plains and in the valleys of the West and Northwest, and the untold mineral wealth which is not much more than beginning to be understood and developed in the middle States, among the mountains of the Pacific slope, and in other portions of our wide-spread country, are subjects of familiar speculation. But who has yet fully anticipated what is to be the measure of prosperity opening to the States which have so lately emerged from a career of mad rebellion ? Whatever their crimes and the crimes of their people have cost to us in blood and treasure, they at least will have recompense for all their sufferings and disorders and temporary impoverishment in their freedom from the curse which formerly paralyzed their energies. Under a system of free labor and general industry, when they shall have grown wiser than they yet are, so as to put aside the political and social obstacles which still so much impede their progress in material wealth, it is not possible to calculate a limit to the career of prosperity on which they may enter; and such prosperity must soon, by its returns in the shape of taxes, help to contribute, far beyond what that part of the country has done heretofore, to fill the common Treasury of the nation.
Though I do not go further into the causes and reasons for this general view of renewed and largely increased riches and improvement in the South, I cannot forbear to enforce what I have said by some interesting statistics which have been furnished me from a most intelligent and reliable source in regard to two of the peculiar and leading agricultural staples of that region. My excuse for this is that the facts may not have attracted the attention of many; and they serve aptly to illustrate a growth in sectional wealth and resources which must correspondingly enable, indirectly at least, those who thus prosper to add to the national revenue.
Statement of the Cotton and sugar crops of the United States of 1860 and 1868.
Crops of 1859-60, 5,000,000 bales of 400 pounds at 10 cents, or $40 a bale ... $200,000,000.
Crops of 1867-68, 2,500,000 bales at an average of 20 cents, and 450 pounds to the bale, $90 a bale, $225,000,000 in currency, or with gold at $1.40 ....... 160,000,000.
"Thus it appears that the crop of 1868 was equal to one half the largest crop ever made --that of 1860-- while in gold value it was worth four-fifths, or eighty per cent. of it. But to make this crop it is said that only one third of the old area of cotton culture has been occupied; so that if the old area had been cultivated with a corresponding yield, the crop made would have been 7,500,000 bales of 450 pounds, or to make the comparison with the crop of 1860 complete, 8,437,500 bales of 400 pounds, or sixty-nine per cent. more than that of 1860. Suppose that so large a crop had reduced the price of the staple in gold to the price of 1860, ten cents, the gold value would have been $337,500,000; which is, again, sixty-eight per cent. above the value of the crop of 1860.
The crop of 1859 and 1860 was 228,753 hogsheads of the average value of $62 a hogshead ........ $14,311,435
The crop of 1867 and 1868 was estimated at 100,000 hogsheads, worth $1.50 per hogshead, $15,000,000 currency; in gold, at $1.40 .......... 10,714,285
"The crops of the current year now making is expected to be 250,000 hogsheads.
" Thus it appears that the crop of last year was forty-three and a half per cent. in quantity of the crop of 1860, and seventy-six and a half per cent. of it in gold value. But it is said that the area of sugar lands planted is not more than one fourth of the old area of sugar culture, and that much of this not yet productive, as the cane is a perennial taking three years to mature. Making a considerable abatement from this estimate of the area under cultivation, the results are extraordinary, and can only be explained by the admitted fact that the yield was never so great per acre and per hand as at the present time. The crop is naturally an exhaustive one, the land has gained strength by lying fallow during the years of the war."
Mr. Speaker, I will not pursue this subject of national resources and national revenue -- this proof of our means to live and our means to pay -- any further. I return to the practical questions which occupy all minds :
How are we to restore an impaired public credit ?
How are we to be relieved of the inconveniences of a depreciated currency ?
What are the first steps to be taken ?
To my mind the very foremost of all duties is to meet directly, squarely, honestly the questions, What do we owe, and in what money are we bound to pay ? Let us dig to the solid rock and on that build. For this I offer the first section of this bill. Let us be frank with our creditors and with the world. This great nation cannot afford to be otherwise. Our credit in the money market of the world ought to to be as high as the highest; and if it lingers almost the lowest on the list, measured by the rate of interest which we have to pay on our public bonds, it is not because capitalists at home or abroad are ignorant of our great means to pay, but because we have given them too much reason to doubt our willingness to meet our our obligations in the letter and spirit of the terms on which they were contracted. Listen to what I read from a foreign paper which has just been sent to me. Felix Aucaigne, a French journalist and economist, has published in the Patrie, at Paris, a very friendly notice of American securities in Europe. An English paper, translating and republishing this article, makes this comment:
"If the French get hold of the idea that the most secure Government is that of Washington; that the most rising country is the United States; that the most scrupulously honorable among communities is the great Republic, an immense strength will be given to American credit. Germany is impressed with these notions, and the consequence is that the strength of American credit in Europe centers in Frankfort. The time will shortly come when that credit will be as strong in Paris."
Can anything be truer ? Fas est ab hoste doceri; and yet that is written in no spirit of hostility.
We have issued certain bonds and agreed to pay them only "in lawful money," in "United States notes;" in that which by law we have made currency in this country and for our people. In that currency, where it is so stipulated in the law authorizing the issue, we have a right to pay.
We have issued certain other bonds under provisions of law which only describe the amounts of them as for so many "dollars." In those authorizing laws it has not been expressed that the "dollar" was to mean or stand for anything else than what a dollar had been held to be always since the beginning of the Government -- a hundred cents, or its equivalent in coin. We have had disputes among ourselves as to the true meaning of these statutes, and conflicting interpretations have been given, depending on comparison and construction of their various sections and clauses, until the heads of honest men have been made to ache in the endeavor to hunt a clear meaning through ambiguity. Honest men have remembered, too, that the bonds were taken on the faith of contemporaneous declarations by Congress and the agents of the Government that they were payable in gold. But there, in the law, all the while, has stood out plainly the promise to pay so many dollars to the public creditor. Let us do it. Let us do it, remembering that the most priceless property of a nation is its credit, on the maintenance of which untarnished its very power to preserve its existence may some time depend. Rememhering, too, that while dealings between individuals of the same country may be presumed in the absence of express agreement to be in what is made the lawful currency of that country, a nation, on the contrary, is but as an individual member of the family of nations; and when it puts forth its obligations it offers them not only to its own citizens, but in the market of the world for the money of the world. And, the money of the world, it needs no argument to show, is that universal standard of value and medium of exchange which all Governments have concurred in making of the precious metals.
So much for the first section of the bill.
The second section is not a provision for the resumption of specie payments, but a preparation for resumption. It leaves to the people by their voluntary transactions to bring about for themselves a change from the use of depreciated paper to the representative of actual values. And while this is done by giving the power to enforce contracts for coin and coin values, the provision is so carefully guarded in terms as not to be subject to the objection most frequently urged against such an act of legislation. It cannot be made an instrument in the hands of a hard creditor for the oppression of an embarrassed debtor under the specious pretext of renewal of a contract made on a different basis.
I think there are few intelligent persons now who do not believe that a return to specie payments is desirable. The common judgment of the country is for only such paper substitute, to be used for a circulating medium, as is convertible at pleasure into that which is recognized as a safer and more certain measure of values all the world over.
Whether in view of the decision just made by the Supreme Court of the United States any provision of law for legalizing contracts for the payment of coin be needed, may, perhaps, be a question. But it is a question which had better be resolved by positive enactment. And in any event it is desirable to be moving in the direction of judicial judgment.
But how, or by what process, are we to come back, to the gold standard ? That is the problem to be solved.
Return at once to specie payment is, from the want of coin sufficient for such an occasion, simply impossible. And if such sudden resumption were possible it would be most disastrous in its effects by the ruin it would bring upon the debtor class, which controls the productive industry of the country.
A scheme for resumption to take place at any near certain date in the future, to be fixed by law, would be productive, I believe, of embarrassment and disaster little less serious and immediate. While the Government would be hoarding or purchasing coin to prepare for the given day, thus withdrawing that solid part of our currency from any use as such, and so enhancing its comparative value by an increased demand, brokers and speculators, on the other hand, stimulated and tempted by the percentage of profit to be made by the operation, would be taking the paper money of the Government out of circulation and laying it up for conversion into gold when the day of coin payments should arrive. Thus the channels of trade would be drained of money in two directions, and the country deprived in a good degree of both kinds of currency. Prices of all property and labor would go down under this double exhaustion of the present supply of a circulating medium until the prescribed period for resumption; and then the hoarders of greenbacks, having converted them into coin, would make accumulated gain by purchasing everything at the ruinous rates to which market values would be reduced; and a third profit would follow from the subsequent gradual and natural rise of prices to an ordinary specie standard.
To me it seems that every plan is a mistake which proposes resumption as the direct object of legislation, or which at this time would enforce specie payments at a fixed date. Resumption, in my opinion, to be safe and lasting, must come as a consequence of wise and wholesome legislation, and of an economical and sagacious administration of our financial affairs.
And here I conclude.
It is for the House now to determine by its action whether the bill I offer embodies in its two plain and simple propositions the initiation of such wholesome legislation. Can we not all cordially unite in a clear, bold declaration which will strengthen our national credit; and at the same time popularize the use of coin as a means of drawing up to the level of its universal value a paper issue which is now depreciated only because it is inconvertible ?
Pardon me if I add that I feel quite sure of the good effect of this measure, when I see that its mere introduction, and the indorsement of it by my committee, and the prospect of its becoming a law, have already had a happy influence on the public credit and given increased value to the securities of the Government at home and abroad. No other fact could so enforce my argument. We are a nation of abundant wealth and wonderfully increasing resources; let us add to those, universal confidence in our good faith, and no power can command on more favorable terms than the United States can whatever we may need of the capital of the whole world.
Mr. GRISWOLD. I ask the gentleman to yield to me.
Mr. Schenck. I have seventeen minutes left, and I propose to yield ten minutes to the gentleman from New York.
Public Credit -- Gold Contracts.
Mr. Schenck. What is the next business in order ?
The SPEAKER. The consideration of the bill reported from the Committee of Ways and Means, if the gentleman from Ohio claims the floor.
Mr. Schenck. I do claim it.
Mr. Robinson. Will the gentleman yield for three minutes to allow a message from the President in regard to Warren and Costello to be taken up ?
Mr. SCHENCK. Does the gentleman want to make some remarks upon it ?
Mr. Robinson. For about three minutes.
Mr. SCHENCK. No, sir; I cannot yield for anything that requires time.
The House then resumed the consideration of House bill No, 1744, to strengthen the public credit, and relating to contracts for the payment of coin, upon which Mr. Schenck was entitled to the floor for seventeen minutes remaining of his hour.
Mr. Schenck. I yield ten minutes to the gentleman from New York, [Mr. Griswold.]
Mr. Griswold. Mr. Speaker, I wish to do little else than to express the hope that the bill presented by the gentleman from Ohio, the chairman of the Committee of Ways and Means, may become a law. The interest and appreciation that the country has given in regard to this question of our national finances have, as that gentleman has well said, been evinced by the numberless papers that have been presented to Congress during the last two years from almost every source and in almost every shape and form. And, Mr. Speaker, for myself I can say that very many of the plans submitted to this House bear evidence of merit, and I have no doubt that a greater or less number of them would prove effectual as a means of carrying us through to a successful settlement of our financial difficulties. But, sir, I do not believe that at this time, at all events, any congressional legislation is necessary for the purpose of bringing into existence machinery with reference to the resumption of specie payments or the payment of our national debt. Whatever it may be necessary in the future for Congress to do in the way of legislation prescribing the means in detail, the course that shall be taken, at this time I believe no such legislation is called for, and that this bill involves all that is required to settle preliminarily the problem of our national finances.
The two great necessities for a nation as for an individual owing largely and desiring to defer the payment of its indebtedness are first to evince an ability to pay, and second, to carry conviction of the intention to pay. Our capacity for the payment of the national debt needs no further illustration. The world concedes it. The evidences of our ability are of themselves sufficient to carry conviction everywhere that this country is fully able to meet and discharge to the very letter and to the last dollar every obligation which it has taken upon it. And, sir, that being the case, it only remains for us to give the capitalists of the world equal assurance that the intention to pay exists and is just as well grounded with the Legislature of this country and with the people as that we have the ability.
With these two things settled the great step in the solution of the problem will have been taken. These two points established, there will be no trouble in bringing the national securities of this Government up to a point as high as that of the most favored nations. There will be no possible reason why the bonds of the United States should not be taken in the money markets of the world at the lowest rate of interest. There can be no reason why the bonds of the State of Massachusetts, bearing only five per cent. interest, should sell to-day in the markets of Europe for about twenty per cent. higher than the bonds of the United States. The difference can only be accounted for in the fact that the State of Massachusetts has taken care that its credit should always be protected, while we, on the contrary having this enormous indebtedness upon us, have not been equally cautious in giving to the world evidence of our intention as well as our ability to pay.
Hence I say that after having secured confidence in our ability, this expression by the solemn enactment of a law by the Congress of the United States of our intention to pay our obligations will carry the credit of our country to a point where we can easily reach the desired resumption of specie payments. The only difficulty will have been overcome when the obligations of this Government shall be considered equal to specie. That is the great problem to be solved; and whenever our credit shall be sufficiently established the resumption of specie payments will be but a matter of form. I agree with the chairman of the Committee of Ways and means [Mr. Schenck] that the ultimate resumption of specie payments in this country is but an incident growing out of a condition to which we may arrive.
A bill passed this House the other day forbidding the further issue of gold-bearing interest national bonds. The result of the passage of that bill, together with the agitation on the bill now before the House, had a tendency at once to advance United States bonds in the markets of the world. The mere expression on the part of this House of a determination to make no further increase of our national indebtedness, and the mere anticipation of the passage of the bill now before the House, were of themselves sufficient to carry our bonds up from three to five per cent.
With the passage of this bill, or some similar bill, enunciating, as this bill does, the determination of the Government to pay its indebtedness not only in accordance with the letter, but with the spirit of its obligations, there will have been reached a point which will at all events be well nigh a solution of the important financial question which now occupies our attention. The difference between four per cent. and six per cent. interest will at once relieve us of $50,000,000 annually.
And if our expectations in regard to a reasonably efficient and a reasonably honest administration on the part of those officers of the Government who are charged with the collection of the revenue, if those expectations shall be realized, we have a right to suppose that even under existing laws we shall have a surplus at the end of the current fiscal year of not less than from one hundred to one hundred and fifty million dollars. The Special Commissioner of Internal Revenue in his reports estimates the surplus for the present year at $125,000,000. The chairman of the Committee of Ways and Means [Mr. Schenck] I think estimates the surplus at more than that. And it will be borne in mind that this estimate is made with dishonesty, with profligacy, with corruption, with exemption from responsibility and punishment on the part of a very large proportion of those in whose hands are intrusted the collection and disbursement of our revenue. If with the condition of things which has existed in the past the estimates are warranted we are certainly justified in taking a still more hopeful view of the future.[Here the hammer fell.]
Mr. SCHENCK. I propose to yield the remainder of my time to the gentleman from California, [Mr. Higby] But before doing so I desire to say that as the House on yesterday manifested a determination not to let this debate extend beyond the hour to which I am entitled, I propose at the close of that hour to call the previous question. If that call shall be sustained I shall then be entitled to an hour to close the debate on this subject, and I will parcel out my time among gentlemen who want to speak, allowing them as much opportunity as I can to discuss this question, hoping to hove a vote on it to-morrow.
Mr. WARD. I desire to ask the chairman of the Committee of Ways and Means [Mr. Schenck] if he thinks he ought to call the previous question now on a bill of this importance ?
Mr. SCHENCK. If the House compel me to do so I must do so. I asked the House yesterday to allow more time for debate, and my request was refused.
The SPEAKER. The Chair will state that twenty-five or thirty gentlemen have expressed a desire to obtain the floor at the close of the hour to move the previous question, stating that at this period of the session they prefer, on account of the pressure of public business, to vote rather than to make speeches.
Mr. Ward. I suppose that if we vote down the previous question--
The SPEAKER. Then the bill will be open to general debate.
Mr. Schenck. Of course the House, if it desires the debate to continue, can vote down the demand for the previous question.
I now yield to the gentleman from California [Mr. HIGBY] all the remainder of my hour except half a minute, which I reserve for the purpose of calling the previous question.
Mr. MILLER. Before the gentleman from California proceeds will not the gentleman from Ohio allow me to offer an amendment to strike out the proviso of the first section ?
Mr. LYNCH. I desire to suggest to the gentleman from Ohio [Mr. Schenck] that having made his speech upon this subject, he now allow the bill to be postponed so that the public business may go on.
Mr. SCHENCK. I regard this as public business and I desire it to go on.
Mr. Higby addressed the House. [See Appendix.]
Mr. SCHENCK. I rise to demand the previous question. Gentlemen ask to have a separate vote on the first section because they desire to vote against it. I am sorry to hear that anybody proposes to vote against that section. Some gentlemen also ask to have a separate vote on the second section. Before demanding the previous question I will allow those two amendments to be moved.
Mr. Niblack. I move to strike out the first section.
Mr. ALLISON. I move to strike out the second section.
Mr. Schenck. I now demand the previous question.
Mr. LYNCH. I move to proceed to the business on the Speaker's table.
The SPEAKER. That would be in order if there had been a morning hour. There was no morning hour to-day, and the Chair doubts whether there will be any during the remainder of the session.
The House divided on seconding the demand for the previous question; and there were---ayes 72, noes 41.
So the previous question was seconded.
Mr. Holms moved that the bill and amendments be laid on the table. The motion was disagreed to.
Mr. LOUHRIDGE demanded the yeas and nays on ordering the main question to be now put. The yeas and nays were ordered.
The question was taken; and it was decided in the affirmative-- yeas 101, nays 43, not voting 78; as follows:
YEAS-- Messrs. Allison, Ames, Delos R. Ashley, James M. Ashley, Axtell, Barnes, Benton, Blair, Boutwell, Bowen, Boyden, Broomall, Buckley, Cake, Callis, Churchill, Sidney Clarke, Clift, Corley, Cornell, Cullom, Dawes, Delano, Deweese, Dickey, Dockery, Dodge, Donnelly, Driggs, Eckley, Thomas D. Eli, James T. Elliott, Ferris, Ferry, Fields, Halsey, Harding, Haughey, Heaton, Hill, Hooper, Hotchkiss, Chester D. Hubbard, Richard D. Hubbard, Hulburd, Jenckes, Alexander H. Jones, Judd, Julian, Kelley, Kellogg, Koontz, Laflin, George V. Lawrence, Logan, Mallory, Maynard, McKee, Mercur, Miller, Moore, Moorhead, Morrell, Mullins, Myers, Newsham, Norris, Nunn, O'Neill, Parham, Peters, Pettis, Phelps Pierce, Poland, Pomeroy, Price, Prince, Raum, Robertson, Roots, Sawyer, Schenck, Scofield, Spalding, Starkweather, Stewart, Stover, Taber, Taffe, Twichell Upson, Van Aernam, Burt Van Horn, Robert T. Van Horn, Ward, Cadwalader C. Washburn, William B. Washburn. Thomas William, James F. Wilson, and Windom -- 101.So the main question was ordered to be now put.
NAYS-- Messrs. Archer, Baker, Beatty, Beck, Bromwell, Buckland, Burr, Gary, Cobb, Coburn, Cook, Ela, Eldridge, French, Getz, Golladay, Goss, Gravely, Grover, Holman, Hopkins, Hunter, Johnson, Thomas L. Jones, Kerr, Knott, William Lawrence, Loughridge, Marshall, McCormick, Mungen, Niblack, Pike, Pruyn, Shanks, Stevens, Stone, Tift, Van Trump, Henry D. Washburn, Welker, John T. Wilson, and Young-- 43.
NOT VOTING-- Messrs. Adams, Anderson, Arnell, Bailey, Baldwin, Banks, Barnum, Beaman, Benjamin, Bingham, Blackburn, Blaine, Boles, Boyer, Brooks, Benjamin F. Butler, Roderick R. Butler, Chanler, Reader W. Clarke, Covode, Dixon, Edwards, Eggleston, Farnsworth, Fox, Garfield, Glossbrenner, Gove, Griswold, Haight, Hamilton, Hawkins, Higby, Asahel W. Hubbard, Humphrey, Ingersoll, Kelsey, Ketcham, Kitchen, Lash, Lincoln, Loan, Lynch, Marvin, McCarthy, McCullogh, Morrissey, Newcomb, Nicholson, Orth, Paine, Pile, Plants, Polsley, Randall, Robinson, Ross, Selye, Thomas, Sitgreaves, Smith, Stokes, Sypher, Taylor, Thomas, John Trimble, Lawrence S. Trimble, Trowbridge, Van Auken, Vidal, Elihu B. Washburn, Whittemore, Van Lawrence, William Williams, Stephen F. Wilson, Wood, Woodbridge, and Woodward --78.
PUBLIC CREDIT--COIN CONTRACTS.
The SPEAKER. The House resumes, as the regular order, the consideration of the bill (H.R. No. 1744) to strengthen the public credit, and relating to contracts for the payment of coin. The previous question has been seconded and the main question ordered. The gentleman from Ohio, [Mr. Schenck,] who reported the bill from the Committee of Ways and Means, is entitled to one hour in which to close the debate.
Mr. SCHENCK. Mr. Speaker, having already addressed the House on this subject I am disposed to afford other gentlemen as much opportunity as possible to express their views. There is one fact, however, of which I wish to remind the House. The bill consists of two sections: one pledging the faith of the Government to pay its securities according to what is understood to be the right interpretation of the contract, the other relating to the legalization and enforcement of coin contracts in accordance with the recent decision of the Supreme Court. In order that gentlemen who are in favor of one of these sections and opposed to the other may have an opportunity to express their views by their votes, I have allowed two amendments to be offered: one to strike out the first section, the other to strike out the second section. These amendments are first to he voted on, and gentlemen will have an opportunity to place themselves upon the record upon each proposition separately, though I hope both sections will prevail. I now yield, ten minutes to the gentleman from New York [Mr. Pruyn.]
Mr. PRUYN. Mr. Speaker, on a previous occasion I submitted to the House some remarks on the legal-tender act of 1862, and on the question of our public debt. In the ten minutes now allotted me it will be impossible for me to go over that ground again, and for my general views upon those questions I must refer to what I have heretofore said. When the gentleman from Ohio [Mr. Schenck] announced his intention to speak on this subject, and said to the House at the beginning of his remarks that he did not mean to discuss the question of finance generally, but to confine himself strictly to the bill before the House, I supposed we should hear some reason for the adoption of the first section of the bill. But to my surprise the gentleman appeared here with a labored treatise on the finances of the country; in which he gave statements as to the crops of the South, cotton and other crops, and dealt largely in generalities in stating to the House the object he had in view in the first section of this act. Let me have his attention for a moment; and first, I should like to know what he means by this declaration in the bill:
That the faith of the United States is solemnly pledged to the payment in coin or its equivalent of all the interest-bearing obligations of the United States, except in cases where the law authorizing the issue of any such obligation has expressly provided that the same may be paid in lawful money or other currency than gold and silver.
What does he mean by that ? Does he mean that any existing statute should be changed ? Does he mean to say that the act of 1862 -- the legal-tender act, to which I suppose this is directed, and the issue of five-twenty bonds under that act -- does he mean to say that that act does not provide for the payment of five-twenty bonds in coin, and therefore a statute of this kind ought to be enacted ?
Mr. SCHENCK. Does the gentleman want a reply ?
Mr. Pruyn. Not now, but when the gentleman is entitled to the floor.
Mr. SCHENCK. I cannot answer at any other time, for I have given all my time away. If the gentleman had done me the honor to read my speech he would have known I have replied to every one of his inquiries.
Mr. Pruyn. I listened to it as attentively as I could when it was delivered.
Mr. SCHENCK. I am sorry that I was not understood.
Mr. PRUYN. I will confess to my mind the gentleman did not meet the point at all. What do we mean by this legislation ? Do we mean anything or nothing ? Is it a renewed declaration of what former statutes provide or something else ? If the former it is deceptive, and so I look upon it; but if it is the latter, then the gentleman undertakes by this law to create a new obligation on the part of the Government to its creditors, such as the acts under which the issue of bonds was made did not create.
Now, sir, this whole question will eventually be solved in one way. If the gentleman is of the opinion that in 1882, when the bonds of 1862 will have matured, the Government will then have resumed specie payment, the whole question is then solved, for we will then pay coin, of course. The labor, the industry, and the toil of the country must work out this problem; but if, when that time arrives, we cannot pay in coin, if we shall not have reached coin value, then we must pay in new obligations, and the public creditor must wait until the country is able to meet its obligations in coin. We stated to the world that we meant to carry on the war not upon a specie basis, that we were not able to carry on the war with coin, but we intended to draw on posterity and the labor of the future. We promised gold for interest, but that the public creditors must take the result as to the principal that if we put down the rebellion, if we succeeded in that work, we should soon resume specie payment, and then, of course, every obligation of the Government would be paid in coin. If we did not reach that point, then it would be impossible for us to pay in coin, and the public creditors must take new obligations and wait until we could reach specie payment. That was the proposition we made in 1862 to the public creditors, and under which they took those bonds.
Now, sir, what has been the cause of our expenditure since the war closed ? We are more indebted now than we were then, notwithstanding a system of taxation more heavy than was ever before imposed upon any people living under a republican form of government. Notwithstanding these drafts upon our resources our debt has been accumulating, and we are further from specie payment than three years ago; and so it will be until we have a sound system of finance on the part of the Government -- a sound system of taxation on one side levied on a few articles, and a wise system of expenditure on the other. Until we do that we shall have to give the public creditors renewed promises to pay. On the other hand a wise, sound, and judicious system of finance can bring us to specie payments in a very few years. But Congress can do nothing by legislation of this kind. It is futile, it is useless, it is deceptive. The first section of this bill, so far as I can see, means nothing. If it means more than the former statutes do, then I submit that this is not the way to meet that question. If this Government is to come under increased and enlarged obligations, this whole thing should be fairly and squarely considered in open debate, giving an opportunity to all gentlemen to advance their respective views in regard to it, and we should determine by conjoint effort in what way we can best protect the credit and power of the country.
I regret, Mr. Speaker, that I cannot enlarge on some points connected with this matter, and that so important a matter must be disposed of under such pressing circumstances. But I felt bound to say this much in regard to it, and to express the hope that the first section of this act will be stricken out; and that with regard to the second section, while it may be well enough to pass it, there is really no need of it. But I do not know that there is any substantial objection to it. The decision of the Supreme Court has fortunately put us right on this subject, and I do not think that this House can supplement anything to the Constitution by its action on this subject. There are other views in regard to the matter that I would like to present, but I see my time is exhausted.
Mr. SCHENCK. I yield ten minutes to the gentleman from Illinois.
Mr. JUDD. Mr. Speaker, the tax-payers of this country demand that their burdens be lessened. They have proved in the past, as I think they will in the future, that they are ready to respond to all that the wants and necessities of the Government actually required at their hands. And while this feeling of patriotism prompts them to furnish all the means necessary to sustain their Government, they demand an economical disbursement of those means thus furnished, and that this Congress determine, so far as possible, in what manner the burdens of taxation can be reduced.
It is said, and truly said, that the first method is by a judicious and proper economy in the appropriations, the limitations of these appropriations to such objects and purposes as are absolutely necessary and essential to the existence of the Government. I think, Mr. Speaker, that that career has been entered upon by this Congress, and the reports of the Committee on Appropriations show that we shall, for the next fiscal year, disburse only about two hundred and ninety million dollars, about one hundred and fifty million dollars of which sum is to be applied to the payment of interest upon our various forms of indebtedness. That is a large reduction upon any former yearly expenditure. If the same spirit of economy continues we shall soon reach a point when no expenditure shall be made beyond the necessities I have before referred to. Such is my confidence in the patriotism and honesty of the people that I believe no exigencies can arise which involves the good faith and honor of the country but what they will respond with their means to the fullest extent necessary. Show the necessity and the action will be prompt and effectual.
Having entered upon the career of retrenchment we must pursue it to the end, far the purpose of relieving the tax-payer. And the rejection of all subsidies and grants looking to private interest at the expense of the public purse shows clearly the tone and temper of this House. The question is now before the nation whether there is any other mode in which we can be relieved of a portion of these burdens, and at the same time act in perfect good faith to all of our creditors. Mr. Speaker, we are paying a higher rate of interest than any nation on the globe that has equal resources to meet its obligations. We have more resources in proportion to our population, when compared with the amount of our indebtedness, than any nation. These resources have been and are being developed with a rapidity that is unparalleled in history. Why, then, is it, I ask members of this House, that to-day while European nations borrow money at three or three and a half per cent. interest we are compelled to pay six per cent. on all the loans we have made ? Is it because any one doubts our ability to meet our obligations ? No, sir. We are the only nation on the globe that has ever discharged in full its national debt, it is our history, and we are entitled to be proud of it. All know that we can meet our obligations, and that the spirit which carried us through the rebellion which has just closed will carry us through any financial necessities that honesty and honor may demand.
Mr. Eldridge. I would like to know what the gentleman means by saying that we are the only nation that has ever discharged its debt in full. I certainly do not understand what he means.
Mr. Judd. The gentleman is extremely critical. I suppose he has faith in General Jackson; he ought to have. President Jackson, in his seventh annual message to Congress, says:
"Since my last annual communication all the remains of the public debt have been redeemed, or money has been placed in deposit for this purpose whenever the creditors choose to receive it."
This is what I mean when I say we have before paid our debts in full.
But to return to the point I was discussing. I was asking the question why it is that with resources conceded to be adequate to meet all the claims upon us we are now paying six per cent. interest on our interest-bearing debt, amounting in the aggregate to $150,000,000 per annum ? I will tell you why, in my opinion, it is so. It is because we have thrown discredit upon our own obligations. It is because by our internal strife in politics we have thrown doubt upon our good faith. It is because some have pretended that if a creditor held our note for $1,000 bearing interest that we had a legal right to pay that with ten $100 notes not bearing interest. If between individuals such a transaction would not come within the definition of honesty, is the case changed when the Government does that or attempts to do it ? We cannot pay our indebtedness now. If we desire to reduce our rate of interest we must have the money to pay the outstanding obligation and that must he borrowed. So long as a doubt remains as to the intentions and good faith of the nation no money can be borrowed, and the present rate of interest must continue to be paid.
It was said by the chairman of the Committee of Ways and Means in opening this debate that faith in our intention to meet our obligations is the basis of all credit, a belief not only in our ability to pay, but in our disposition so to do; and I say very frankly that technical discussions as to the meaning of our undertaking when we promised to pay a dollar and the search after some way in which that obligation might be abridged is one of the great causes why our debt cannot be funded at four per cent., thus saving to the nation $50,000,000 per annum. I make no attack, Mr. Speaker, upon any person or party. I only refer to facts which are now a part of the history of this country, and the doubts occasioned thereby, that our discussions have shaken the faith of the public as to our securities, and until set at rest all hopes of reducing our rate of interest must be given up. Our ability to pay finally is undoubted. Place our faith beyond debate and cavil and this nation can command the money market of the world. Our five-twenties, bearing six per cent. interest, are payable at our pleasure after five years. When we can borrow money at four per cent. we are authorized by the terms of the contract to call in these obligations and stop the six per cent. interest. The purpose of the first section of this bill is to establish our credit by acting in good faith, and that done the result I have named follows. We discussed at the last session a funding bill, the purpose being to consolidate the debt and obtain a lower rate of interest, and in that mode and to that extent to relieve the people. All such laws will be useless until we are in condition to say and show that our income from honestly collected taxation exceeds our expenditures, and that our promise to pay is perfectly sure at all times and upon all occasions. It is perfectly evident from the estimates of income and the amount authorized to be expended that we are in a condition to comply with the first of my propositions. Shall the second be demonstrated without resort to technicalities and quibbles ? When that is done the United States of America can borrow any amount of money to take up her outstanding high interest-rated obligations and substitute therefor a lower rate of interest, and we can change our obligations from six per cent. to four percent. It is said that no man will give up six per cent. obligations and take four per cent. obligations. It is no matter whether he desires to do so or not. The law allows us when we have the money to pay the five-twenties. We can order the holders to surrender them and get the money at the Treasury, and a failure to do so stops interest on them. Such are the express terms of the contract. Why, then, should we not save $50,000,000 per annum ? It is worth struggling for; and to that end the bill of the Committee of Ways and Means has been proposed. The gentleman from New York [Mr. Pruyn] says that he does not see any object or purpose in this bill, and he asks the gentleman from Ohio [Mr. Schenck] whether he intends to change the terms of the law. What are the terms of the law has been and is a disputed question. It has been in the arena of politics and party strife; good men have differed and demagogues howled vociferously, and while this controversy was going on among ourselves the man that is in condition to help you reduce your interest from six to four per cent. stands back and says I have your note for a dollar, if it does not mean a dollar I shall avoid getting any more of such stuff. The commercial laws of the world recognize coin as the standard of value, and the United States, as part of that whole, made and recognized a dollar a dollar in coin. Many of the laws under which five-twenties were issued were enacted before the legal-tender act; and they had in part been executed by the issue of bonds under them. Will the gentleman from New York make us believe that anything but coin was within the intent of the law-makers ? My time will not allow me to discuss this question or endeavor to satisfy doubts. It is to avoid these doubts and thus enable us to be in condition to lighten taxation by reducing interest that I would have this law passed. Will the act be beneficial in producing this result ? If so, I am in favor of it. It is my firm belief that such will be the result. This House on Saturday last closed the business of Treasury brokerage, so far as its action could do it, by the taking from the Secretary of the Treasury all power to sell and buy bonds, settling thus the amount of our debt. The duty of wise statesmanship is to proceed with such legislation as will consolidate our debt at the lowest possible rate of interest.
Mr. Speaker, I do not suppose it would be out of order in the discussion of this question to remind our friends on this side of the Hall, and with whom I act politically, that we are committed to the principles of this bill by the action of the convention that presented General Grant's name as the standard-bearer in the late political contest. In the declaration of principles will be found the following:
"That the national debt, contracted as it has been for the preservation of the Union for all time to come, should be extended over a fair period of redemption; and it is the duty of Congress to reduce the rate of interest thereon whenever it can be honestly done."
"That the best policy to diminish our burden of debt is to improve our credit, that capitalists will seek to loan us money at lower rates of interest than we now pay, and must continue to pay so long as repudiation, partial or total, open or covert, is threatened or suspected."
I find that my convictions of what is both expedient and right are fully in accord with the principles enunciated by the party with which I acted politically, and I shall with pleasure give my vote for this bill.
[Here the hammer fell.]
Mr. Schenck. I yield five minutes to the gentleman from Illinois, [Mr. Bromwell]
Mr. BROMWELL. Mr. Speaker, so far as the first section of this bill is concerned, I have heard with great pleasure the words of my colleague from the Chicago district. [Mr. Judd] The people of Illinois, and I believe the people of every State in this Union, are determined that the war debt of the United States and every other public obligation of this country shall be paid in such manner as to reflect no dishonor whatever upon the Republic. Now, all the Government of the United States has to do is to make its promises for gold, its greenbacks, as good as gold, and the question which divided parties last year will be no more. It is true, in my opinion, that the speeches and arguments of distinguished gentlemen upon this floor, Republicans and Democrats, on the subject of paying off our greenbacks have cost this Government $50,000,000 a year, and will cost it that much until we have satisfied the world that our bonds mean just what an English bond means, and that is gold for gold.
The way to economize is to get money at a low rate of interest, and nothing will bring that about but the plan suggested by my colleague. It may be that the second section of this bill may have some effect in that direction. But take it all in all I do aver that I never will vote for any section in any bill that scales down the greenbacks of this country. This is not -- and I commend this thought to the chairman of the Committee of Ways and Means [Mr. Schenck] -- this is not like a case in which the Government is legislating about bank notes. This currency is the work of the Government itself. And will this Government issue notes purporting to be a legal tender, and then, by your own legislative action, advertise the Government as bankrupt, by declaring that your notes are not as good as gold, and that you will do nothing to make them so ? I am opposed to any such measure, come from what source it may.
And I am glad this opportunity is offered me to speak my mind about this matter, lest I should be compelled to vote without an explanation, as I did the other day upon the constitutional amendment. Rather than vote that this Government will consent for a moment that its money is not as good as gold and so considered I will vote against the whole bill.
I cannot sit down without further calling the attention of this House to the great importance of banishing and forever from the public mind the thought that this Government will ever quibble with its creditors by offering them paper of its own in place of gold, which paper it does not make equivalent to gold in their hands. They are paying to-day for the stump speeches which gave candidates for the Presidency their prominence last year at the rate, I believe, of $50,000,000 a year. And the tax-payers, Democrats and Republicans, are bound to struggle under this burden as long as we keep up the controversy whether we will make our credit good or not. This is all I have to say on this subject.
Mr. SCHENCK. I now yield to the gentleman from California [Mr. Axtell] for five minutes.
Mr. Axtell. I propose to address the House at this time for the purpose of sustaining both sections of this bill. The first section provides that bonds of the United States, except where otherwise expressly provided for, shall be paid in gold and silver coin, which is simply equivalent to saying that the bonds shall be paid. And I think that this Congress should give no uncertain utterance before the world to that sentiment.
There is no payment of these bonds except in gold and silver. Payment does not mean that you shall take up a bond bearing interest and give in its place a note bearing no interest and irredeemable; but it means that you shall really pay the amount of the bond. And it is necessary that we, as the American Congress, shall go squarely and boldly before the world with no uncertain utterance upon this point.
The action of this Congress, commencing with its vote that the bonds should be paid, but five or six voting in the negative, has brought up the value of American securities twenty per cent., gold receding from 150 to 130, from which point it will probably never rise; or, in other words, American securities and legal-tender notes have gone up, for to say that gold rises and falls misleads the mind. Gold cannot rise and fall, in fact. But nominally it is quoted now at 132 and a fraction, and last autumn it was quoted at 150. But we have in fact enhanced the value of our paper, while the value of gold remains the same. It is a misnomer to say that gold rises and falls. And the theory that you can make money out of chips and whet-stones and paper and the like is all a delusion and a snare. There is no money except gold and silver. And when we say that we will pay our bonds we mean that we will pay them in gold and silver. We are paying at the rate of $125,000,000 a year in gold in the way of interest on our debt, and we are abundantly able to do so. The product of bullion from the Pacific States alone will reach this year $100,000,000, and it will remain at that figure for twenty years to come.
I have not time now to explain the data upon which I base this assertion, but I challenge the attention of thinking men throughout the country to the fact that we are developing there gold and silver mines that will bring up the product of bullion to $100,000,000 a year, and this added to $20,000,000 received from abroad will afford ample means for meeting the national obligations in the only currency in which they can rightfully be discharged. But for the untimely expressions of politicians designed for political purposes, our bonds would not now be depressed in the markets of the world; we could go abroad and borrow money, enabling us to issue new bonds at a lower rate of interest. If this bill be passed, as I hope it will be by an overwhelming, or still better, a unanimous vote, our bonds will at once exhibit a decided advance in the markets of the world. But, sir, the policy of paying our bonds in greenbacks and then allowing those greenbacks to depreciate as they must to almost nothing, the policy of redeeming our interest-bearing bonds with mere due-bills which bear no interest and are never to be paid, is repudiation such as must stamp with disgrace any man or any nation that may be guilty of it.
Mr. Schenck. I now yield five minutes to the gentleman, from Illinois, [Mr. Logan.]
Mr. LOGAN. Mr. Speaker, in the brief time allotted to me it would be impossible to discuss the legal question involved in this measure, and I will not undertake to do so. I shall merely seek to direct the attention of the House to the position toward which the current of events is naturally tending, and to which we must, all of us, within a short time find ourselves inevitably drawn. If we intend that this Government shall ever resume specie payments it is proper that we should at this time indicate that intention to the world by some bill or resolution which shall express our determination in emphatic and unmistakable language.
The question as to the currency in which our bonds shall be paid, which has been so much discussed in this Hall and throughout the country during the last two or three years can be as well settled now as at any other time. I presume that no wise man in the country believes at the present day that the policy of the Government will be to discharge its indebtedness by the issue of new obligations. Although my own mind once tended in the direction of such a policy, yet the discussion which the question has received, both here and before the people, has brought me to the conviction which I advocated before my constituents last fall, that the payment of a debt by the creation of a new debt is no payment at all. Although this proposition had for a time been considered doubtful by a portion of the people of my State, yet they then decided that the bonds of the Government are payable in money -- not in paper currency, not in greenbacks, not in bank notes, but in that which is considered money by all civilized nations. The decision of the people of my State on this question was given in such a manner as should satisfy their representatives that the decision must be sustained.
I have stated the position I took before my constituents, not that the law necessarily requires by its terms the redemption of our bonds in coin, but that it is our duty to make such redemption and to declare specifically that such is our intention. Sir, it appears to me it is nonsense for us to discuss this question any longer. It is nonsense for us to talk of paying $2,000,000,000 of bonds with $2,000,000,000 of greenbacks. And, sir, at this time when we are about to enter upon a new Administration it is highly befitting that we should proclaim to the world that we intend to pay our obligations in the currency of the world; that we do not intend that hereafter the bonds of our Government shall be worth in London but eighty cents on the dollar, while the bonds of the State of Massachusetts are worth 105. There is no reason for this depreciation of our bonds in the markets of the world except that the discussions we have had on the question have raised a doubt as to the currency in which we intend to discharge our national obligations. Heretofore our bonds have constantly fluctuated, rising upon the introduction here of every resolution looking to their payment in gold, and falling upon the introduction of every resolution proposing payment in greenbacks.
Now, let us stop this higgling about it, and say as an honest people that we mean to pay our honest debts, both greenbacks and bonds; in such money that the world recognizes as money. If you pass the first section of this bill -- I speak of the first section; I have nothing to say of the second section, for I leave the discussion of that to other gentlemen -- if you pass the first section of this bill in less than thirty days the bonds known as five-twenties will be higher in the market than ever before since their issue.
[Here the hammer fell.]
Mr. Schenck. I now yield for one minute to the gentleman from Massachusetts.
Mr. BUTLER, of Massachusetts. Mr. Speaker, I desire to say nothing myself; but I have sent up to the Clerk's desk to have read a letter from one of the best financiers in the country.The Clerk read as follows:
New York, February 18, 1869.
Sir: There is another point that I wish to bring to your notice. The Secretary of the Treasury in his report says that while the large customs receipts are satisfactory in a revenue point of view, they show that we are running in debt to foreign nations very fast. It is not probable that the present tariff will produce more than $90,000,000 a year when we cease to run in debt. In other words, nearly one half of our customs receipts came from goods for which we run in debt to foreign nations. When our bonds are all exhausted, and we cease to import more than we pay for, it will be necessary to increase the duties on tea, coffee, and sugar, and other articles of necessary consumption, in order to pay the interest. We shall have to do this or reduce the interest. The talk about funding at a lower rate of interest is all nonsense; such a measure cannot be accomplished except by compulsion. These foreign bond holders buy our 1862 five-twenties at a great shave, receiving six per cent. in gold on the par value, and expect to receive the equivalent of gold for them in thirteen years hence (1882.) It is no wonder that our bonds go abroad. They buy at 85, for instance, receiving interest at the rate of seven and a half per cent. in gold on 85, and in thirteen years they get 100 in gold. That is the expectation which Mr. Schenck's bill gives them.
Now, I hope you will not be satisfied to tax the coupons ten per cent. I hope you will reduce the interest to four per cent, and let the interest be taxed in the shape of income, this reduction of the rate of interest to be in lieu of taxation of the face of the bonds. I think we cannot rightfully tax any but our own citizens.
The amount of bonds that have been shipped recently is perfectly enormous, and in my judgment the man is a fool who supposes the country can suffer any such exhaustion. Is it altogether safe," asks Burke, "to allow the patience of the people to be the only limit to taxation?" Mr. Schenck's bill should be entitled: A bill to increase the burden of taxation, encourage the export of bonds, and insure repudiation. The real repudiators in this country are those who are crushing the people to the earth with unequal taxation and goading them to desperation.
I am, yours, respectfully,
Hon. B.F. Butler, M.C. Washington, D.C.
Mr. Schenck. I now yield for ten minutes to my colleague, [Mr. Delano.]
Mr. DELANO. Mr. Speaker, considering the time allowed to me I must direct my attention strictly to the provisions of the pending bill. The first section pledges the faith of the United States to pay in coin or its equivalent all the interest-bearing obligations of the United States, except in cases where the law authorizing the issue of any such obligation has expressly provided that the same may be paid in lawful money, or other currency than gold and silver. How many members of this body are there who do not believe that all the obligations of the nation calling for dollars, and not expressly payable in currency or lawful money, will be paid in coin or its equivalent ? I will risk my judgment for accuracy by saying that there are not thirty.
We are part of a great family of nations; we are an important integer in this family. We recognize and are bound by the laws, regulations, and customs of this great family, and one of these laws, regulations, and customs is that the precious metals alone constitute the standard of values; and the history of centuries, nay of hundreds of centuries, has established, continued, and sanctioned this custom. We cannot ignore nor violate this law without dishonor. We may have for our own use as a temporary necessity a paper dollar, but this is in its utility local, and unknown and unrecognized among other nations, and even here with us the value of this paper dollar depends largely upon its convertibility into coin. He who endeavors to give value to paper money otherwise than by its convertibility into coin does not understand what he is talking about. I regard, therefore, all efforts to create paper into money as futile, chimerical, and mischievous, come from whatever source they may; and all efforts made here or elsewhere to pay our debts in paper promises which we have agreed to pay in dollars seem to me as tending to dishonor and disgrace.
But I may be asked, Mr. Speaker, why make this declaration or pledge now and at this time ? I answer, because the conduct of certain political organizations and of individuals has rendered it necessary. A great effort has been made by the party which during the war opposed the loyal people to break down and destroy the debt which was necessarily contracted in saving the nation's life. And the late rebel and rebel-sympathizing party are endeavoring to rebuild their disrupted organization by this attack on the nation's credit, supposing that the cupidity and avarice of the people will be a guarantee for success. I trust they will be mistaken. This effort in all parts of Europe, but in some places more than others, has impaired confidence in our national credit and honor, but not in our financial ability; and this impaired confidence has and still does depress our securities abroad, and it is to restore this confidence and credit we are at work to-day. We ought, as far as possible, to remove this stain. We must show the world that we are as just and honest as we are strong and powerful. This being done we shall hereafter, and as soon as we are able to pay coin on our circulating notes, be able to borrow money here and elsewhere at rates of interest as low as any nation upon the earth, I think much lower. Then, as our bonds become payable at the option of the Government, we shall be able anywhere and everywhere to negotiate new loans at a reduced rate of interest, and thus mitigate our national burdens and preserve our integrity and good name unsullied and without reproach.
If the attacks upon the nation's faith, to which I have alluded, had hot been made, this pledge of faith would not have been needed. If the rebellion had not been commenced the war to crush it would have been avoided. As we met and vanquished the assaults upon the Government so must we meet and vanquish the assaults upon our credit and our honor. I should be glad to move an amendment to the second section, which, I think, would remove objections to that section; but as I cannot offer it, I will read it here. I move to add to the second section, so it will read as follows:
Sec. 2. And be it further enacted, That any contract hereafter made specifically payable in coin, and the consideration of which may be a loan of coin, or a sale of property, or the rendering of labor or service of any kind, the price of which as carried into the contract may have been adjusted on the basis of the coin value thereof at the time of such sale, or of the rendering of such service or labor, shall be legal and valid, and may be enforced according to its terms; and on the trial of a suit brought for the enforcement of any such contract proof of the real consideration may be given; and if it shall be shown that the consideration was not entirely a loan of coin, or that the property, labor, or service, the price of which as carried into the contract was not adjusted on the basis of its real and actual coin value at the date of the contract, then such agreement to pay in coin shall be void, and the obligation shall be enforced as if this act had not been passed.
This section of the bill legalizes contracts payable in coin where coin was the only consideration, and where property, labor, or service being the consideration were placed at an actual coin value at the date of the contract. This provision seems to me necessary for several reasons.
First, it is a step toward resumption, and serves to grade the road to resumption, thus reaching this desirable end by easy steps that will not shock nor violently disturb the business or material interests of the country.
Again, in our large commercial centers coin must be used; it is necessary to pay duties, and for other reasons. The borrower of coin now has to pay something for the hazard which the lender runs when the loan is made, and business is embarrassed and rates of interest increased. Legalize such contracts and you will facilitate the business of the country; you will diminish the rate of interest when coin is loaned; you will let loose coin, and, to some extent, introduce it into the channels of business; and all this looks toward and prepares for the great desideratum of the nation, a resumption which shall not be attended with a too cruel and disastrous shrinking or reduction of value. [because he knows that that is what will happen, and in 1873 that is exactly what happened, inspite of Credit Strengthening]
I give this bill in all its parts my hearty and cordial support, because I think it is what the nation sooner or later must do, and I sincerely think the sooner we do what is here proposed the better.
I cannot omit to express my sincere thanks to the Committee of Ways and Means for introducing this measure; and I feet assured that whether it be adopted now or not it is destined in the end to become the nation's policy. The ability with which the measure has been sustained by the chairman of the committee strengthens the credit of this nation, let the present fate of this measure be as it may.
Mr. Schenck. I will now give three minutes of my time to the gentleman from Pennsylvania.
Mr. BROOMALL. Mr. Speaker, I have no doubt about the proposition that the five-twenty bonds are, by the law which authorized their issue, payable either directly or indirectly in gold coin, for if payable in notes, the notes are national obligations, as sacred as the bonds, and are due on demand in coin; and hence I shall vote for the first section of this bill upon the ground that it is a mere expression of opinion on the legal question involved. I, however, regret its introduction here for reasons which I will state. If it is a mere legislative opinion upon an existing contract, in giving that opinion we are going outside of our duty. That business is for the courts. On the other hand, if my opinion about the law as it stands should be erroneous, and if it requires legislation to make these bonds payable in gold, then I affirm we have no right to legislate. The contract as it now stands is written in the law under which it was made. It was entered into by the parties with the law before them. The tax-payers and the bondholders are the parties to it. What right have we upon the application of one of these parties, and without the consent of the other, to change the terms of that contract. Hence it is that while I shall vote for the measure as an expression of opinion upon the existing law, I regret its introduction at this time. If there is any doubt in the law the tax-payers have a right to insist that that doubt shall be suffered to remain for the purpose of enabling us to borrow again under a law clear of that doubt, and at a lower rate of interest, to discharge those bonds alleged to be questionable, and we have no right to deprive them of that.
With respect to the second section I am under some difficulty. If I could be satisfied that it was so guarded that the creditor could not use it as an engine of oppression toward the debtor I would vote for it with pleasure, provided some means were attached to it by which the legal-tender notes would not become further depreciated as they are thrown out of use by the introduction of coin in the business of the country. Without this the step we are asked to take is one from rather than toward specie payments. But I shall probably vote for this section also with the hope that some means will be provided to prevent further depreciation of the notes as a consequence of the introduction of coin, and with the hope that Congress in the future will protect the debtor class against the creditor class if the law should prove to be an engine of oppression.
[Here the hammer fell.]
Mr. Schenck. I yield five minutes to the gentleman from New York.
Mr. BROOKS. Mr. Speaker, this bill is before the House, and as we all have a vote to give upon it, and as I intend to vote "ay," I wish to say a word or two by way of giving my reasons therefor. I look upon it as a step toward the resumption of specie payments in cooperation with the recent decision of the Supreme Court of the United States; and as I consider the return to specie payments one of the greatest blessings I feel it my duty, directly or indirectly, in whatever manner I can, to bring about that result.
The recent decision of the Supreme Court in making gold contracts legal has led the way to the resumption of specie payments, which will be availed of first by the importers of the country, next by traders generally, and in the end, through the action of all classes, will sooner or later, either with or without the cooperation of Congress, in my judgment, enforce the resumption of specie payments.
The next step is a general belief or impression that the credit of the country and the character of the country are able to maintain specie payments; and this exposition of the law, or what is intended to be the law, is calculated, so far as Congress can go, to give that pledge to the country and the world that we intend to meet all our obligations of whatever kind and character sooner or later in coin. There is nothing, as I understand it, in this declaration here which goes further than the declaration of both parties prior to the presidential campaign.
Mr. VAN TRUMP. I wish to say that that is not Democratic doctrine.
Mr. BROOKS. This bill declares that "the faith of the United States is solemnly pledged for the payment in coin or its equivalent of all the interest-bearing obligations of the United States, except in cases where the law authorizing the use of such obligations has expressly provided that the same may be paid in lawful money or other currency than gold and silver." As I understand this we pledge ourselves to the maintenance of the law, and only to the maintenance of the law.
In reply to the remark of my friend from Ohio, [Mr. Van Trump,] as I shall not have time to continue the argument I designed to make, I have to say that the precedents of the Democratic party, the whole history of that party, its beautiful and glorious history, made by its trials and temptations, has been for hard money. Hard money is written upon its creed over and over again; and for the sixty years that the Democratic party was in power all the party were more or less faithful to their obligations.
Mr. VAN TRUMP. Does the gentleman say that the Democratic creed is embodied in the first section of this bill ?
Mr. BROOKS. I understand nothing here to be in conflict with the Democratic creed as enunciated in its council in New York.
Mr. VAN TRUMP. I understand a great deal of it to be in conflict with the Democratic creed.
Mr. BROOKS. I hope the gentleman will have time to reply to me. What I have to say is that in voting for the first section of this bill I pledge myself to abide by the law of the country, and only by the law of the country, nothing more and nothing less. So far as the country has pledged itself to pay in coin it is bound by the most solemn obligation to discharge its debt in coin; and where its debt is to be paid in paper the pledge is to execute the law, and only the law.
[Here the hammer fell.]
Mr. ARNELL. If this bill was in a condition to be amended I would move to strike out the entire exception in the first section, to wit:
Except in cases where the law authorizing the issue of any such obligation has expressly provided that the same may be paid in lawful money or other currency than gold and silver.
I would do this, Mr. Speaker, in order to leave no shadow of doubt as to the manner in which the public debt of the United States should be paid. I hold that this debt is a sacred obligation, made to preserve the nation's life, and no shade of doubt, in my opinion, should rest upon the character of its payment. The nation has been saved. Her integrity should be as spotless as her victory has been great and overwhelming.
Leave was granted to Messrs. Burr, Coburn, Loughridge, Phelps, Beatty, Van Trump, Holam, Boyden, and Miller to print remarks on the bill.
[The speeches will be published in the Appendix.]
The SPEAKER. The gentleman from Ohio [Mr. SCHENCK] has five minutes remaining of his hour.
Mr. WOOD. Will the gentleman from Ohio permit me to ask him a question ?
Mr. SCHENCK. Yes, sir.
Mr. WOOD. I desire to know whether he will permit any gentleman opposed to this first section of the bill to speak against it, or whether he confines his liberality to the friend's of the measure ?
Mr. SCHENCK. I have already permitted two gentlemen to do what they could, and I would gladly have permitted more; for the more the subject is discussed the better assured I am that the world and the people of the United States will confirm favorable action upon an honest bill like this. But, sir, this House would not permit discussion. I labored, as the House will remember, to get a full discussion to allow fifteen-minutes speeches to members upon both sides of the Hall, and my successive propositions were voted down and I was reduced then to the advantage of the hour allowed by the rules of the House to myself, and I have given it all away. If I had given no part of it to any gentlemen on the other side of the question no complaint could be made, for it was all mine to speak in favor of the bill, and it was a mere gratuity upon my part that I have liberally given two gentlemen an opportunity of opposing the bill.
Mr. WOOD. No Democrat has had an opportunity to speak against this proposition. The gentleman has given liberally to those Democrats who are in favor of it, but none to those who are against it.
Mr. SCHENCK. I proposed if I had time -- but carried away by my usual amiability I have given it nearly all away -- to say a word or two in reference to the second section of the bill. I ask gentlemen to look particularly at that section. I cannot doubt that the first section will be sustained, and I trust the second will be also.
The objection made to a provision legalizing gold contracts has always been, as is well understood, the apprehension that it may afford to a hard creditor, upon the renewal of an old contract, opportunity to embarrass or grind his debtor. That objection, I think, is fully provided against by the care with which this section has been drawn. I ask gentlemen to look at it. They will find, in the first place, that these contracts must be specifically made payable in coin, and that they can only be made so when the consideration is a loan of coin itself; or when it is for some labor or service performed, or property purchased, which labor or service or property has been reduced to its coin value as that value stood at the time the consideration was agreed upon. And to avoid all questions about remedies in courts it is then further provided that in every case where it is set up in support of a contract of this kind, that it has been made in pursuance of these provisions of the law, there shall be permitted an inquiry into the actual consideration so as to ascertain whether it be so or not. The Supreme Court has to a certain extent, perhaps, obviated the necessity, by its late decision, of passing a section of this kind; but the dictum of the Chief Justice and the actual case before the court are not precisely coextensive, and some doubts may exist upon the subject, and we are but legislating in the direction which the court has taken by its judgment in affirming by positive enactment of law this provision which is proposed here in the section under consideration.
I hold, therefore, that instead of its being in argument against this second section that the Supreme Court have rendered such a decision, it is an additional reason for passing it; it is a reason consisting in the fact that we are giving clearness and precision to the law so as to relate to past contracts and future contracts, contracts made since the passage of the legal-tender act as well as contracts made before, so as to brush away all question, all doubt, all possibility of the people being misled by not knowing precisely to what extent the court yet intend to go.
The previous question having been sustained, gentlemen will have an opportunity to vote against the sections of this bill separately.
Mr. Barnes. I ask unanimous consent of the House to speak for five minutes on the first section of this bill.
Mr. SCOFIELD. I object.
Mr. SHANKS. I move that the bill laid on the table.
Mr. Holman. On that notion I call for the yeas and nays.The yeas and nays were ordered.
So the bill was not laid on the table.
During the call of the roll,
Mr. Schenck said: My colleague, Mr. Garfield, has requested me to state that he is detained in his room by illness, and that if here he would vote for the bill.
The question was upon the motion of Mr. Niblack, to strike out the first section, as follows:
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That in order to remove any doubt as to the purpose of the Government to discharge all just obligations to the public creditors, and to settle conflicting questions and interpretations of the laws by virtue of which such obligations have been contracted, it is hereby provided and declared that the faith of the United States is solemnly pledged to the payment in coin or its equivalent of all the interest-bearing obligations of the United States, except in cases where the law authorizing the issue of any such obligation has expressly provided that the same may be paid in lawful money or other currency than gold and silver: Provided, however, That before any of said interest-bearing obligations not already due shall mature or be paid before maturity the obligations not bearing interest, known as United States notes, shall be made convertible into coin at the option of the holder.
Mr. Pruyn. I wish to ask the gentleman from Ohio [Mr. Schenck] if he will consent to so modify the first section as to specify which of these issues of bonds are payable in paper ?
Mr. SCHENCK. The main question has been ordered, and the subject has passed beyond my control.
Mr. NIBLACK. As I have had no opportunity to debate this bill, I call for the yeas and nays on my motion to strike out the first section.
The yeas and nays were ordered.
The question was taken and it was decided in the negative-- yeas 54, nays 130, not voting 33; as follows: ................
So the motion to strike out the first section of the bill was not agreed to.
The question then recurred on the motion of Mr. Allison, to amend by striking out the second section, reading as follows:
Sec. 2. And be it further enacted, That any contract hereafter made specifically payable in coin, and the consideration of which may be a loan of coin, or a sale of property, or the rendering of labor or service of any kind, the price of which as carried into the contract may have been adjusted on the basis of the coin value thereof at the time of such sale or of the tendering of such service or labor, shall be legal and valid, and may be enforced according to its term and on the trial of a suit brought for the enforcement of any such contract, proof of the real consideration may be given.
Mr. Holman called for the yeas and nays.
The yeas and nays were ordered.
The question was taken; and it was decided in the negative-- yeas 72, nays 100, not voting 50; as follows: ..................
So the motion to strike out the second section was not agreed to.
The bill was ordered to be engrossed and read the third time; and being engrossed, it was accordingly read the third time.
The question being on the passage of the bill,
Mr. Schenck demanded the previous question.
The previous question was seconded and the main question ordered.
Mr. Eldridge. I call for the yeas and nays on the passage of the bill.The yeas and nays were ordered.
The question was taken; and it was decided in the affirmative-- yeas 120, nays 60, not voting 42; as follows:
YEAS-- Messrs. Allison, Ames, Anderson, Arnell, Delos R. Ashley, James M. Ashley, Axtell, Baldwin, Banks, Barnum, Beaman, Benjamin, Benton, Blackburn, Blaine, Blair, Boyden, Boyer, Brooks, Broomall, Buckley, Callis, Chanler, Churchill, Reader W. Clarke, Sidney Clarke, Clift, Corley, Cornell, Cullom, Dawes, Delano, Dixon, Dodge, Driggs, Eckley, Thomas D. Elliot, James T. Elliot, Ferriss, Ferry, Fields, Getz, Glossbrenner, Gove, Griswold, Halsey, Harding, Heaton, Higby, Hill, Hooper, Hotchkiss, Chester D. Hubbard, Richard D. Hubbard, Hulburd, Jenckes, Alexander H. Tones, Judd, Julian, Kellogg, Kelsey, Ketcham, Kitchen, Koontz, Laflin, Lash, George Lawrence, Lynch, Marvin, Maynard, McKee, Mercur, Miller, Moore, Moorhead, Morrell, Mullins, Myers, Nowcomb, Newsham, Norris, O'Neill, Paine, Perham, Peters, Pettis, Phelps, Plants, Poland, Pomeroy, Price, Bantu, Robertson, Robinson, Roots, Sawyer, Schenck, Scofield, Shellabarger, Smith, Spalding, Starkweather, Stewart, Stover, Taber, Taylor, Trow bridge, Twichell, Upson, Van Aernam, Burt Van Horn, Robert T. Van Horn, Ward, Cadwalader C. Washburn, William B. Washburn, Welker, Whittemore, Thomas Williams, James F. Wilson, and Windom-- 120.So the bill was passed.
NAYS-- Messrs. Archer, Baker, Beatty, Beck, Bowen, Bromwell, Burr, Benjamin F. Butler, Roderick R. Butler, Cake, Cobb, Coburn, Cook, Covode, Deweese, Donnelly, Eggleston, Ela, Eldridge, Farnsworth, Fox, French, Golladay, Goss, Grover, Haight, Hawkins, Holman, Hopkins, Humphrey, Hunter, Ingersoll, Johnson, Thomas L. Jones, Pig Iron Kelley, Kerr, Knott, William Lawrence, Loughridge, Marshall, McCormick, Mungen, Niblack, Nunn, Orth, Pike, Ross, Shanks, Stevens, Stokes, Stone, Taffe, Thomas, Tift, Van Trump, Henry D. Washburn, William Williams, John T. Wilson, Wood, and Young --60.
Not Voting-- Messrs. Adams, Bailey, Barnes, Bingham, Boles, Boutwell, Buckland, Cary, Dickey, Dockery, Edwards, Garfield, Gravely, Hamilton, Haughey, Asahel W. Hubbard, Lincoln, Loan, Black Jack Logan, Mallory, McCarthy, McCullogh, Morrissey, Nicholson, Pierce, Pile, Polsley, Prince, Pruysn, Randall, Selye, Sitgraves, Sypher, John Trimple, Lawrence S. Trimple, Van Auken, Van Wyck, Vidal, Elihu B. Washburne, Stephen F. Wilson, Woodbridge, and Woodward-- 42.
Mr. Schenck moved to reconsider the vote just taken; and also moved that the motion to reconsider be laid on the table.The latter motion was agreed to.
In Senate, February 27
Mr. Garfield. I move that the rules be suspended to allow me to record my vote on the bill (H.R. No. 1744) to strengthen the public credit, and relating to contracts for the payment of coin. I was sick yesterday when the vote was taken.
The rules were suspended; and leave was accordingly granted.
Mr. Garfield. I vote "ay."
Mr. Cary obtained leave to have published with the debates remarks on the bill (H.R. No. 1744) to strengthen the public credit, and relating to contracts for the payment of coin. [See Appendix.]
Remarks of Hon. Samuel F. Cary,
In the House of Representatives,
February 25, 1869,
Mr. CARY. Mr. Speaker, in my opinion the title of this bill is a misnomer. Instead of a measure to strengthen the public credit, it should be termed a bill to render repudiation of the public debt a necessity. There is a possibility and even a strong probability that our national debt, large as it is, can be paid according to the letter and spirit of the laws under which it was created. While the tax-payers of the country will make any reasonable sacrifices to meet in good faith the obligations of the Government they will not so readily consent to have their burden made heavier to gratify the rapacity of bondholders.
The introduction of this bill by the Committee of Ways and Means is a tacit acknowledgment on their part that the laws providing for the issue of five-twenty bonds, and the bonds themselves, do not positively provide for coin payment. If by a fair construction of the law coin payment is required, then this bill is a simple declaration on the part of this Congress that the public debt shall not be repudiated. If, on the other hand, it is clear that the five-twenty bonds are payable in the money of the people, then this is a proposition to disregard the law creating these bonds, repudiation in behalf of bond holders, and impose new and additional burdens upon the productive industries of the country.
But it is said that the mode of payment of the five-twenties is a mooted question, and the passage of this bill will settle it and give assurance to the holders of Government securities that they will be paid in coin. If doubts exist on this subject, then I maintain that these doubts should be resolved in favor of the debtor and not the creditor class. This construction should be given for the additional reason that the bonds were purchased at a discount of fifty per cent. in coin, and have been yielding a gold interest of twelve per cent. on cost price. Upon what principle of law, justice, morality, or fair dealing should the producers of wealth, now staggering under a load of debt, have one third more added to the burden solely for the benefit of a privileged, non-tax-paying, moneyed aristocracy ? This outrage assumes a greater magnitude when we remember that the very class of men who must pay the bonds is the only class who made sacrifices during the war. We are told that this measure will strengthen the public credit and inspire the holders of our securities with confidence that they will get their pay. Much is said of the sacredness of our obligations and the imperative duty resting upon us to pay the war debt in such manner that no taint or stain of dishonor shall attach. I believe, sir, in the full payment of the nation's debt according to the fair construction of the law and the bond; but there are obligations more sacred, there are duties more imperative resting upon this people than even the payment of Government bonds. The people owe it to themselves first to support their families and see that their earnings are first appropriated to secure food, shelter, and education to those dependent upon them. The right to possess and enjoy the fruits of one's labor is a divine right older than civil government and paramount to all other claims. Government may exact from the poor man such share of his daily earnings as will enable it to give him and his full and adequate protection. When Government demands more than this, when it leaves him only rags and an empty cupboard, taking all else to fill the coffers of an untaxed, moneyed aristocracy, it becomes a robber rather than a protector. That Government which beggars me by its exactions and takes the bread from the mouths of my children to give it to the bondholder I am under no moral obligation to maintain.
When Congress assumes to bind the people to a money contract, the payment of which would result in degradation, bankruptcy, and ruin, and make the producers of all wealth, the laboring classes, the mere vassals of a privileged class, they have a right by the laws of God and man to repudiate it. If this or any other Congress shall attempt to subject the laboring whites and the enfranchised blacks to a common slavery in order to keep faith with the public creditor, and pay bonds in a money not known to the people, the power behind the throne will make bare its almighty arm. Chief Justice Marshall said:
"That every man has a natural right to the fruits of his own labor is generally admitted; and that no other person can rightfully deprive him of these fruits and appropriate them against his will seems to be the necessary result of this admission."
Another distinguished authority says that every man's earnings belong to himself exclusively as against the whole world; and that the taking away of any portion of them on any pretense whatever, except a small share for the use of the Government which protects him, is robbery.
It will be said that the people have a right to do what they please with their earnings; that we are the Representatives of the people, and are here to do their bidding. Admitting this proposition in its full force, I deny that they have given us any instructions, either express or implied, to pass this bill. On the contrary, its passage would be an imposition, a fraud, and a deception. The Republican national convention at Chicago declared that the public debt should be paid according to the letter and spirit of the laws under which it was contracted; but it did not and dared not say that the letter and spirit of the law required payment of the five-twenty bonds in coin; nor did the leaders of that party in their discussions before the people intimate that these bonds were to be thus paid. The Republican city council of my own city with great unanimity passed a resolution, and the Republican State conventions of Ohio and Indiana by their platforms declared that these bonds were payable and should be paid in greenbacks. Hundreds of thousands of voters in the West were misled and deceived by these pretenses. They may quietly submit to the frauds practiced upon them, but I do not believe they will. The same great convention of the dominant party solemnly declared that the question of suffrage in all loyal States properly and rightfully belonged to those States respectively. Here, again, the people have been deceived; for the very men on this floor who received their votes on this assurance now propose that negro suffrage shall be forced upon a loyal State against the will of its people. I rejoice, sir, that neither of these flagrant abuses of public confidence are without remedy.
The passage of this bill may temporarily enhance the price of Government securities and give the "bulls" an advantage over the "bears;" but it does not follow that the bonds will be paid in coin. This law can be repealed by a subsequent Congress without in the slightest measure affecting the good faith of the nation. The laws under which the debt was contracted are to be interpreted according to their own terms without regard to the opinion of a majority of this Congress. Our constituents will have something to say about the proper interpretation of these laws and of these bonds before the bondholder gets his gold. I warn gentlemen not to presume too much upon the forbearance of a betrayed, an overtaxed, and an unequally taxed people. The maintenance of the public faith, the sacredness of the nation's honor, are patriotic themes and will induce the producers of wealth, the tax-payers, to endure much and suffer long, but endurance and long suffering have their limits; and I mistake the character of the American people if there will not be a limit to the taxing power of this Government.
The people have been, and they are still, patriotic. They cheerfully poured out their blood to preserve the integrity of the Union, and there is no reasonable sacrifice which they will not make to preserve the public faith and pay the debts of the war. But such a war debt never was paid in coin by any Government under heaven. With our immense resources we can pay this debt according to the fair construction of the law, be magnanimous to the bondholder and just to the tax-payer. The Shylocks took every advantage of the Government's extremity when it was struggling for life. They demanded exorbitant rates of interest for their money, and now ask the payment of currency bonds in gold at more than twice their cost price. To make this swindle upon the people effective every effort has been made by the Secretary of the Treasury and bankers and bondholders to contract the circulation, call in and cancel the legal tenders, that there might be no lawful money except gold and silver. There has been a studied, persistent, and combined effort to deprive the people of the only means they had of making exchanges and payments. They have been insulted by the miserable pretense that there was a plethora of money when they have scarcely had enough to satisfy the inexorable demands of the taxgatherer, much less to supply the necessary wants of their families. I concede that the money-lender, when he gave fifty per cent. in gold for his bond, believed that at its maturity he would receive one hundred per cent. in gold; that then there would be no lawful money but coin. It was with him (with honorable exceptions) a matter of pure speculation, and this bill proposes that his hopes shall be realized. Greenbacks are still the money of the people, and although insufficient in quantity to answer the legitimate requirements of business they are satisfied with them as a safe and reliable measure of value. The people comprehend the situation. They perfectly understand that if gold payment of bonds is assured the commercial value of all other property depreciates, that labor and its products fall in price, that their taxes are increased while their ability to pay them is diminished. The only persons to be benefited by the passage of this bill are bondholders, bankers, and brokers, while every other man, woman, and child must suffer. I am aware, sir, that the national banks are ably and fully represented on this floor by over sixty stockholders, directors, and presidents, and that the money power is a terrible one to resist, but I appeal from its despotic edicts to the people. The interest of the people requires that the national bank notes should be called in and canceled; their places supplied with legal tenders, and that the amount should be increased sufficiently to payoff the $516,000,000 of five-twenty bonds now redeemable. This action would only require $200,000,000 more of currency than we now have, and we should then have $100,000,000 less than we had when the insane and wicked policy of contraction was inaugurated in the interest of bondholders and national bankers. This would not only furnish money for the transaction of business, but would relieve the people from more than thirty millions annually of taxes.
This policy would open a way out of our difficulties, give relief to an overtaxed people, encourage manufactures, give full and remunerative employment to labor, develop our agricultural and mineral resources, enable a desolated and impoverished South to contribute her share toward the payment of the public debt. Give the people an absolute paper money sufficient in volume to answer all the requirements of business, made a legal tender for all payments, prohibit all banks of issue, let gold and silver remain as now, commercial commodities, and your war debt can be paid. When other bonds are redeemable pay them in the same manner, or if preferred by the holders give them other bonds at three per cent. convertible at pleasure into lawful money. Let the Government borrow all surplus money at three per cent. and there never can be an excessive issue of legal tenders. On the other hand, pass this bill, make it irrevocable, if you can, that all the bonds of the Government shall be paid in coin, and repudiation will be a necessity and a blessing. Whenever Government becomes an oppressor instead of a protector the time will have come for the exercise of the divine right of revolution.