ular system of keeping these loans within our control at short periods. We have issued two kinds of bonds, five-twenties and ten-forties. The idea has been to have them controllable, to keep them so that within a very short period of time comparatively we could, if the finances of the Government would permit, take them up. The suggestion which is made by the Senator of issuing bonds at thirty years, or twenty-five years positively, involves the idea of losing that controllability which has been a part of our system; and I suppose what the Secretary is waiting for is to see whether Congress is ready to give up that idea upon which we predicated our financial system heretofore in order to bring about a reduction of the interest. You may issue a five per cent. bond and reduce the rate of interest of course one per cent. and replace the six per cent. bonds now out with that five per cent. bond; but in so doing you decide that you will give up the power of redemption for a certain long period of time, which power you now have.

The first Secretary of the Treasury under the administration of Mr. Lincoln, Mr. Chase, adopted the system which I speak of. I thought it was a good system. I have been waiting for the time to come, and I have believed it would come, when the matter would be all in our own hands, when we might not be obliged to issue a bond even at five per cent., when we might fund a portion of our debt at least, if not the whole of it, at a still lower rate. So long as we hold the control, as we have it now, that is in our power; but if we replace our present bonds, which are within our control, with bonds at a less rate of interest running for thirty years, we lose it, and consequently we cannot look to a lower rate still. The question for Congress to decide is what it is best to do with reference to that particular matter; and it is that question, I take it, which the Secretary of the Treasury prefers that Congress should decide, whether it will abandon the old system upon which we stood in the beginning or whether we will adhere to it.

Mr. SHERMAN. Let me say this further, in justice to the Secretary of the Treasury: it is his opinion undoubtedly, from his public messages, that a bond, say running twenty or thirty years, ought to be issued. It is the opinion of the Senator from Maine, and my own opinion corresponds with his, that we ought not to issue a bond, the principal of which is beyond the powers of redemption beyond ten years. The very first question that the Secretary will have to determine, if he issues new bonds, will be, what shall be the duration of those bonds? He will make them long bonds. He has so stated in his official reports. Now, I do not think that such bonds ought to be issued, and I never would, in any event, issue a bond in the present state of the money market running more than ten years, because I have no doubt that at the end of ten years we can reduce the rate of interest below five per cent. Now, we cannot get money for less than five per cent.

But

we have failed to legislate on that subject. We have left the matter open; and the Secretary will be compelled, from the pressure of public necessities, to act on his own judgment, on the general laws to which the Senator from New York referred, which are ample, and he will decide this question according to his judgment instead of according to the judgment of Congress. But, sir, I trust we shall not be led any further into this discussion.

The only question now before us, in my judgment, is whether we are willing to give to the southern and western States-nearly all to the southern-some little additional facilities in the way of banking until we can determine the great questions of currency that have been proposed here, and which will be discussed at the next session of Congress. My own judgment is, that public policy will require us to extend these banking facilities to the amount of $10,000,000 or $20,000,000. I shall be willing, in case $20,000,000 be thought by any Senator too much, to give them $10,000,000';

so that in the leading cities of the South, in Mobile, Charleston, Atlanta, New Orleans, and other places, they may organize banks to aid in promoting the movement of the crops and the like. It ought to be done now. That is the only question in this case, and I trust nothing else will be brought into the debate.

Mr. POMEROY.. I have no disposition to make any remarks on this subject, especially upon those questions that are not contained in the bill. This bond question is a bottomless pit, that we can throw into forever, and I believe we shall never then be agreed in regard to it. But the question of allowing our national banks that have been organized and have got no currency to have some currency, is a question of very great interest to those sections of the country from which the currency has been withheld. I suppose it is known to Senators that in the State that I in part represent, we organized national banks without any currency. We had to waive the question; because when we got ready to organize, there was no currency to be given out. Under that clause of the law allowing the banks in the East the right to convert their capital into national banks and take precedence of other organizations, they took up the amount limited in the law.

The apportionment of this currency was made upon the census of 1860. By that census we had a population in Kansas of one hundred and nine thousand, whereas to-day we have a population of three hundred and ninety or four hundred thousand. Even upon the basis of that apportionment, the population of 1860, when we had but one hundred and nine thou sand inhabitants, we were entitled to $750,000,|| and yet we received only $350,000 circulation, or just about one half the circulation we were entitled to even under an apportionment based upon the population of 1860. But as our population increased the people of our State organized banks, and they waived the question of having circulation. They had the capital to make national banks, and they wanted banks of that character. Although they got no circulation from the Government, yet in some instances they were enabled to buy circulation. They went to New York and found where there was a surplus of circulation, some banks retiring which had more than they needed, other banks failing, and by some circumlocution, I never knew how it was, by paying three or four per cent., they were able to get circulation. They bought it of those who had it to spare and were willing to retire it, and by concert of action with the Comptroller they were able in some instances and by some means to obtain it.

Mr. JOHNSON. How much have you altogether?

Mr. POMEROY. We have $350,000 received from the Government, and then the banks have bought fifty or seventy thousand dollars from other parties; so that in the State there may possibly be $400,000 of bank circulation. Now, I say there is great complaint on this head. I only speak of my own State because it represents a class of States around on the borders that are growing, that are pros. perous, but have no circulation comparatively. This bill in its last section is looking a little in the direction of giving relief. It is not anything like the remedy that I think ought to be applied. The Senator from Ohio begins to hint that if Senators think $20,000,000 too much, he will cut it down to $10,000,000. I had not supposed, if there was to be any change that it was to be in that direction. If there is to be any amendment to this $20,000,000 clause reported from the committee, do not let it be downward toward $10,000,000, but let it be upward toward the wants of the country.

There are those who think we might dispense with all national banks and issue greenbacks; but even if that was done the remote States on the border would not get any of the greenbacks. In order to have circulation distributed over the country to any great extent, to anything like an equal amount, there must be organ tions in the locality that can control the carrency, or otherwise the great money centers

and markets of the country get it. It is an inevitable law of trade and commerce over which we have little or no control. It may be true that we might dispense with our national currency; these national banks might have issued to them greenbacks instead of national currency, and make them responsible; it would be better to have all one kind of currency in that respect; but there must be organizations in the different localities to control it, or else we lose control of the currency entirely, and it follows our products to market and goes where our products go.

I do not wish to see the amendment of the Senator from Massachusetts adopted. I fear we are not prepared to adopt a system which we must ultimately reach, because the western and southern States are not going to be kept without circulation if we continue the system of having national banks; but I hope there will be at least no diminution of the $20,000,000 contained in the last section of the bill. This measure may do for this session. It is only a temporary measure if we are looking to the wants of the country. Before long, before we adjourn, there will be Senato: here who will demand circulation and banks from six or seven States not represented here now. While this measure is before the Senate why can we not make some provision for those States? I propose when they are returned here to treat them not only as our equals, but in the most liberal and friendly manner. No one can shut his eyes to the wants that have already come to us from those sections of the country.

There is a restlessness, an uneasiness, and I think I may go as far as to say that there is a complaint in my own State and in other western States on account of the unequal distribution of circulation. They cannot see why it is that the eastern States, New York, and Pennsylvania, should have so much of the circulation of the country, and when they organize banks under the law in the West they are not able to get a dollar. I receive letters almost every day from my State inquiring why it was that I was sitting here and allowing such an unequal distribution of what was contained in the law. The Senator from Ohio has explained it; everybody can explain it; but our legislation ought to be of such a character that it does not need explanation. It ought to bear on its face such perfect equality among the citizens of the States and among the States that we should not have to explain to our constituents why it was that we lost our circulation and why we did not get our proportion.

I have thought that law was a most remarkable one. That law got into the tax bill. I confess I did not see it. That law that gave a preference to the old banks to convert their currency into national currency and have a preference over the new organizations found its way by some circumlocution or other into the tax bill where no one would expect it, and it became a law without my attention being called to it, I know. From that day to this, on the border, in the West, we have never had a national bank with national circulation, and we never shall have. We have applied to the Comptroller time and again. He tells us. what of course every one knew before he told it, that although his disposition is to give us circulation, he cannot do it under the law.

The last section in this bill reported by the Committee on Finance, affords a little relief. It is half a loaf, at any rate; and, if the amendment of the Senator from Massachusetts should not prevail, as I hope it will, I certainly hope there will be no diminution of the $20,000,000 contained in this section. The Senate certainly should come up to that; and that will not satisfy the wants of the South at all. That will be taken up by banks already organized. If you notice the language of this section, they cannot organize another new bank under it. The language is, "which amount shall be issued only to banking associations organized." You cannot organize a

new one.

Mr. SHERMAN. Oh, yes, you can.

Mr. POMEROY. I think the intention is to give it only to those banks that have organized and waived the question of circulation. If it means that new banks may be organized, I am glad of it; but I concluded that the construction was that it applied only to banks that are now organized.

Mr. SHERMAN. Oh, no. It applies not only to banks now organized, but banks to be organized. If the Senator has any real doubt about it, it can be made certain; but there is no doubt about it. The section has been care

fully prepared. The word " organized" applies not only to the past, but to the future.

Mr. POMEROY. A little amendment of course would make that perfectly clear. If it is intended that banks to be organized shall have it, it is all very well; but there are enough old banks organized to take up $4,000,000 of this amount. The Senator from Ohio, I suppose, has had his attention called to the fact that there are enough banks already organized that have waived their circulation to take $4,000,000 out of the $20,000,000.

Mr. SHERMAN. Those are only in three or four States, not in the South.

Mr. POMEROY. And they certainly should be first supplied. Then we may have $15,000,000 or $16,000,000 to organize new banks with. But, sir, to conclude, I will say that I am sure that anything less than the committee have reported will meet with most decided opposition in the country.

Mr. ANTHONY. Mr. President, I think the reason why the States that have a disproportionate circulation came to have so much may be very readily explained. My friend from Kansas seems to overlook the fact that these States were compelled to take that circulation. They did not want to take it. We did not want to take it in my State. We had a bank circulation there; we had banks that satisfied us; but the Federal Government taxed our bank circulation out of existence, and told us to take this circulation or we should have none. Now we are told that that which was forced upon us against our will was a great favor, and we ought to make some compensation for it!

Mr. COLE. The same rule was applied to the banks in the West, in those States where banks were scarce, where the whole banking capital was swept away. They were taxed out of existence, also, but they are not now supplied with circulation.

Mr. ANTHONY. But if they were taxed out of existence, they had the opportunity at the same time to take the national circulation, to organize themselves as national banks.

Mr. COLE. But they cannot get the currency, because it cannot be furnished by the Comptroller.

Mr. CORBETT. The proposition of the Senator from Massachusetts to issue to the West $100,000,000 in bank currency, in my opinion, is a very generous one. It adds that much really to the West. It is true those banks would have to provide themselves with means to redeem that currency, but it retires that much of the legal tenders that are now circulated mainly in the cities of the East, and sends $100,000,000 of bank capital to the western and southern states. I think that is a wise provision, and we are approaching the time when something of the kind should be adopted. It places the Government in a position where it can more easily return to specie payments, so far as its own legal tenders are concerned. The Government and the banks must each prepare for a redemption of the notes eventually in specie. If this proposition be adopted there will then be about $400,000,000 of bank capital, and upon that they have to retain twenty per cent. That will be $80,000,000 of legal tenders that they will have to provide themselves with to redeem their currency. There will be, after the withdrawal of that $80,000,000, $170,000,000 of legal tenders in circulation. The amendment of the Senator from Massachusetts, in my opinion, is a very wise one; but if that cannot be adopted,

then I trust the amendment of my friend from Vermont will be adopted.

Mr. MORTON. Mr. President, I do not desire to argue this question; I do not feel that I am not qualified to do it; but there are two or three very plain things about it. If the amendment of the Senator from Vermont is adopted, if we increase the bank circulation $20,000,000 we then withdraw the legal-tender circulation to the same amount, and as there is not money in the Treasury to spare for that purpose, it has got to be done by selling bonds; in other words, we add $20,000,000 to the bonded debt and $1,200,000 to the interest every year by that operation. If we adopt the amendment offered by the Senator from Massachusetts, we increase the bank circulation $100,000,000, and we withdraw the legal-tender notes to that amount. We increase the bonded indebtedness $100,000,000 thereby.

Mr. CORBETT. Do we not pay the interest on the debt now, the same as we should do then? We do not issue any new bonds. The bonds are in the market, and these banking institutions will go into the market and purchase the bonds.

Mr. MORTON. Mr. President, I am not mistaken. If we issue $100,000,000 of bank currency more than we have, the proposition of the Senator from Massachusetts is that we shall take up $100,000,000 of United States notes to avoid inflating the currency. How shall we take them up? We have not got those notes in the Treasury collected from taxes to spare. That would make a deficit in the Treasury. Therefore we must get these legal-tender notes by selling bonds to that amount. We would add to our bonded debt $100,000,000, which would increase the annual interest $6,000,000, unquestionably.

Mr. President, we are certainly not prepared at this time to adopt the proposition of the Senator from Massachusetts, to increase the bonded debt $100,000,000, and the amount of interest paid $6,000,000. If we had the money in the Treasury to take up and cancel these legaltender notes without selling bonds, if these notes were in the Treasury derived from taxes, and we had the amount to spare, we could just cancel them; but as we have not got the money in the Treasury to spare for that purpose, we must get these legal tenders by selling bonds, just as was done by the Secretary of the Treasury before we stopped the contraction by our late act. That was the way he was there contracting. He was contracting the currency, not by canceling so many legal-tender notes that might be found in the Treasury received from taxes or revenue, but his cancellation took place entirely by selling bonds to that amount, and converting a debt that did not bear interest into a debt that does bear interest. That was the way he contracted the currency, as everybody knows.

Mr. CORBETT. I think the Senator is entirely mistaken about the issue of any addi tional bonds. There is nothing in the provision, according to the proposition of the Senator from Massachusetts, to increase our debt by issuing new bonds.

Mr. MORTON. I should like to ask my friend one question. That proposition includes the cancellation of $100,000,000 of greenbacks. Now, how is the Government going to get the $100,000,000 to cancel them?

Mr. CORBETT. They issue that amount of bank currency to the country, which is based upon the bonds of the United States, which the banks purchase in the market, and retain just that amount more bonds in the country that would otherwise flow to Europe.

Mr. MORTON. The bank currency does not belong to the Government. That goes to the banks upon condition that they deposit bonds to that amount with ten per cent. as a margin. Now, the question of canceling the legal-tender notes is a different proposition entirely, and is done to prevent the inflation

the currency. But to cancel them we must get them; and we can only get them in two ways either by taxation or by selling bonds

of that amount. We cannot bear the taxa

tion now. Therefore we must get them as the Secretary of the Treasury got them before, by selling bonds to that amount, and thus add $6,000,000 to the interest of the public debt every year. We cannot stand that.

Now, Mr. President, I will say to the Senator from Ohio that, in my estimation, his proposition amounts, after all, substantially to the proposition of the Senator from Massachusetts, leaving off the question of inflating the currency. If you begin to issue bank currency for the purpose of equalizing the circulation, you cannot stop at $20,000,000. It will take at least $100,000,000 to equalize the currency among the several States.

Mr. HOWE. That will not do it.

Mr. MORTON. The Senator from Wisconsin says that will not do it; I say it will take at least $100,000,000 to do it; and whenever you begin to equalize the currency you will not stop until you have done it. Therefore I say the proposition of the Senator from Ohio amounts substantially to that of the Senator from Massachusetts, with this difference: that the Senator from Ohio would begin now with $20,000,000 and he would then go up to $100,000,000 or $125,000,000, or whatever may be necessary for that purpose, while the Senator from Massachusetts begins with $100,000000 at first. That is the principal difference.

I know that the distribution of our bauk circulation is unequal; it is a hardship; but I think it is rather too late in the session now to begin upon that question, and I would rather have it deferred until some general system can be adopted. We do not know yet what course we are going to take with these questions; and it seems to me that the whole question ought to be considered together, because it is connected in every part.

Mr. CORBETT. It is said that we shall have a surplus in the Treasury over and above the expenditures from the taxes this year. I think it quite probable that such will be the case. According to the argument of the Senator from Indiana, we have got to have a surplus, and there should be a provision in the bill directing the Secretary to redeem the circulation at such times as he should have a surplus of money to do it with; and there ought to be, perhaps, in the amendment of the Senator from Vermont the same provision. I have no doubt in my mind from the present exhibit of the Treasury that there will probably be a surplus this year, and I think that provision should be made.

I hardly think the amendment of the Senator from Massachusetts will be carried; but it suits me better than the amendment of the Senator from Vermont. If, however, the amendment of the Senator from Massachusetts should not be adopted I shall vote for the amendment of the Senator from Vermont, because it was understood when we stopped the contraction of the currency that we should not go into inflation, and it was especially so stated here by the chairman of the Committee on Finance that he had no idea of taking any steps in the direction of inflation. I charged at the time that that measure to stop the contraction of the currency was but the entering wedge; that the next step would be to inflate the currency. The Senator from Ohio then stated that it was not the idea of the Finance Committee to inflate the currency at all. This is a direct proposition to inflate the currency $20,000,000, and, unless the amendment proposed by the Senator from Vermont is adopted, it certainly does inaugurate a system of inflation which will create great dissatisfaction in financial circles where there is plenty of money now, and who will take advantage of that inflation to increase the prices of everything, and the West will not get any of the additional money.

Mr. FERRY. I am opposed to the amendment proposed by the committee as the fifth section as it stands, mainly for the reasons which have been already given, believing that the adoption of that amendment would be a

up four millions of money a month formerly, and I am utterly opposed to giving him authority to destroy any kind of property that he takes out of the pockets of the people for taxes. The only excuse you have for taxing a man is that you want the money to disburse, to meet the Government expenditures. You have no right to tax him in order to get means to destroy, I take it.

Mr. MORRILL, of Vermont. Mr. President, I do not know of anybody that has really shown such an exhibition of hostility against any parties destroying their own notes except an Irish mob that once broke into a private banker's establishment in Great Britain, and they thought they were doing him immense harm by burning up his own printed notes. It seems, according to the Senator from Wisconsin, to be an immense harm to the Government of the United States to destroy their promises to pay! I certainly do not comprehend it. I think this is a question merely of expansion and I propose to introduce an amendment so that we shall neither expand nor contract, so that there shall be an equal amount of circulation afloat after the passage of this bill that there was before it. That is all there is to it.

Mr. HOWE. Mr. President, the Irishman and I would have reasoned precisely alike if it had happened that the house that was broken open was controlled by a man situated precisely as the Government of the United States is. If the notes had been the only means the man had to live on, I think the Irishman would have been entirely right in refusing to destroy them and entirely right in concluding that they would do the owner of the house a great injury in burning them up. These notes are just what the Government has got to live on for this year, and you raised these notes for that very purpose. That is the difference.

The PRESIDENT pro tempore. The question is on the amendment of the Senator from Vermont to the amendment of the Committee on Finance.

Mr. MORRILL, of Vermont, called for the yeas and nays; and they were ordered.

Mr. TRUMBULL. IfI knew how to accomplish it I should vote either for or against the amendment of the Senator from Vermont in such a way as to defeat this fifth section. I deeply regret that a proposition should be brought into the Senate by the Finance Committee to commence the work of expansion, to borrow $20,000,000 in time of peace. I think it a humiliating spectacle to this nation that we should propose now to borrow $20,000,000. That is exactly what this is. I had hoped that we were gradually, as time passed on, approaching the period when we should again have specie payments, when the business of the country would be done upon a specie basis; but it seems we are to depart from that, and to commence borrowing, $20,000,000 at a clip here, and the Senator from Massachusetts proposes, I believe, to borrow $100,000,000.

Mr. DRAKE. Will the Senator from Illinois please explain how, if this section is adopted, we borrow $20,000,000?

Mr. TRUMBULL. If the Senator will read it, he will see that it proposes to amend section twenty-two of the banking act so that the maximum limit of circulation fixed by that act shall be increased $20,000,000. That authorizes an additional issue of $20,000,000 for which the Government will be bound.

Mr. DRAKE. How bound? Mr. TRUMBULL. The Government will be responsible for the notes.

Mr. COLE. It seems to me the position taken by the Senator from Illinois is hardly tenable. I do not know how this can be considered as borrowing. The proposition is simply to authorize the issuing of $20,000,000 more of circulation, for which United States securities are to be placed in charge of the Comptroller. I do not regard it in any light as adding to the indebtedness of the United States. It cannot possibly be so construed.

Mr. TRUMBULL, Whenever an individual

or a Government puts out a circulation, or authorizes anybody else to put it out, for which it is bound, I regard that as borrowing so much money; it comes back to the Government to be paid. You propose to issue an additional currency here, and get further and further. as it seems to me, all the time from that specie basis to which it ought to be the desire of the country to return. I think the material interests and the prosperity of the country require us to get back to specie payments as soon as we can. I do not believe we are approaching it when we are expanding the currency.

Mr. DRAKE. I shall be very far from attempting to participate in a general discussion of the general aspects of our currency and finances; but there is one thing in regard to this matter which I know enough about to be able to say. I find that the opposition to this section, which is avowedly intended for the benefit of those States where there is very little circulation, comes from those portions of the country where they have all the circulation they need and plenty to spare; where they have fifty dollars of circulation for every inhab itant, and are not willing to give more than fifty cents of circulation to some of the other portions of the Union. The chairman of the Committee on Finance stated that fact, that there are some of the States south and west which have not twelve cents, I think he said, per capita circulation.

Mr. SHERMAN. If my friend will allow me, I will give him the figures. In the three States of Massachusetts, Rhode Island, and Connecticut they have $59,000,000, more than twice their proportion of circulation according to population. If an amendment were offered proposing to withdraw the $20,000,000 from the States having a great excess, I should feel disposed to vote for it, though I do not want to disturb those States.

Mr. ANTHONY. Will the chairman of the Committee on Finance now state how the taxation per capita is in those States?

Mr. SHERMAN. I am not prepared to do that here.

The PRESIDENT pro tempore. The Senator from Missouri is entitled to the floor.

Mr. DRAKE. My State happens to be one of those so situated when the banking act went into effect that we could not command the bonds that could be commanded in other sections of the country in order to get banking circulation. Overrun with war, with our whole population profoundly afflicted and impoverished, we could not do as New England could, accumulate money and buy bonds and get national bank circulation. They were growing rich while we were growing poor. Now, sir, when we are beginning to gather up a little again from the adversity of that period and are in a position where we can get bonds and pledge them for national bank note circulation, New England and New York, gorged with all that they want, stand here to say that we shall not have any addition whatever to our national bank circulation.

Mr. President, I confess that I do not know much about finance; but I know enough to understand that kind of injustice, and to utter my protest against it here on the floor of the Senate. I know another thing about this matter: that there is now not a circulation of money in this country more than equal to about twelve dollars and some cents per capita of the population of the country; whereas, in 1860, there was a circulation per capita of fifteen dollars. I know another thing, too, that the business of the country was largely conducted then with notes and bills of exchange, requiring much less money than it requires now, when the business of the country is so largely a cash business. And yet, sir, we are to be kept down and down and down all the time by that region of country which is going about loaded down with the money that it made in the period of our affliction. Sir, I think I can see this, and I can see it strong enough to justify me in expressing my views in this man

ner in behalf of the region of country from which I come.

Mr. WILSON. Mr. President, I am sorry to hear the remarks made by the Senator from Missouri. The Senator speaks of what he knows, and he tells us very positively that we have less money in circulation per capita than we had before the war. Sir, we have $650,000,000 of paper money in circulation now. had $200,000,000 before the war, and the percentage is larger than it was before the war. So his knowledge is at fault on that point. Mr. DRAKE. Perhaps not.

We

Mr. WILSON. Sir, the Senator's knowledge is at fault on another point. He tells us that we in New England made money in the war, so as to be able to establish banks. The fact is we in New England have no more banks now than we had when the war began. Several of our State banks refused to become national banks. The banking capital of Massachusetts has been increased but little, if any, and the same is true of the New England States. The Senator talks about our making money. Let me say that no part of the country made money in the war as did the agricultural States of the West. They increased their wealth and their population largely, they paid off mortgages, and they came out of the war stronger than ever before. New England made money in the war, but the percentage was not one third of what the profit of the Northwest was.

How comes it that in New England we have so large a proportion of the national bank capital? We had the banking capital before the war. In my State we had more than sixty million dollars of banking capital when the war began. On this capital we received one per cent. into the Treasury to support the State government. Congress asked us to change our State banks into national banks, and we promptly did it. Is there anything in this deserving reproach? Is there anything wrong in it? Is this patriotic action to be assailed here? The other States that chose to convert their State banks into national banks did so. The western States did so, and they established some new banks.

I wish we could come to a free-banking system at once. If we could reach specie payments I would be for it; but we cannot do it at present. Now, it is proposed by this committee to add to the national currency $20,000,000. I propose to have $100,000,000 of banking capital established in the new sections of the country and in the South, for the reason that what they want there is not circulation so much as capital. Establish banks there, and they will be managed by the business men of the locality who have a local feeling and interest, and they will invest the capital at home, invest it in their local business. Issue an equal amount of greenbacks, and they will float to the Atlantic sea-board, and this greenback is a talk in favor of Boston, New York, and Philadelphia, and against all the agricultural portions of the country.

Mr. FESSENDEN. On the same principle, would not the bank notes come here?

Mr. WILSON. Not to the same extent, by any means. They generally contrive to keep a portion of the circulation at home. Of course the circulation will tend to the commercial points, but the capital will remain at home, and will be employed in the local business of the country. What they need in these new sections is active capital much more than circulation.

I

Sir, I regret to hear assaults made on any section of the country. There is an inequality in the banking system which ought to be remedied, and I am in favor of beginning now. have, however, been voted down in my amendment, and now I will vote the $20,000,000. But, sir, the idea thrown out in the Senate about founding circulation on population is one of the most absurd ideas ever uttered by sensible

men.

There are portions of a State that need one hundred times the banking capital that other portions of the same State do. There are some States that need ten or twenty times as much banking capital and circulation as