the States only about forty-six million dollars of circulation notes, an amount less than Massachusetts has by $11,000,000, and less than New York has by about twenty-six million dollars, and only in excess of the circulation of Pennsylvania about seven million dollars. Is this a fair and proper distribution of the circulation notes that enter so largely into the circulating medium of the country? Should this vastly unequal and unjust distribution be allowed to remain undisturbed? Certainly not. With the position of honorable Senators on the floor, who have expressed their desire that the Government of the United States and the banks of the United States should gradually come to the return of specie payments, I|| heartily agree. But, Mr. President, something must be done in the intermediate time. There is a very great want of sufficient circulation in some sections and in some States of the United States. It seems to me that in New England there is a large excess of this circulation, and that in New York and Pennsylvania there is an excess. I do not hold that a redundant circulation is advantageous to a country. I believe in a full circulation, such an amount of circulation as will stimulate industry and quicken business and commercial exchanges. That condition of things is wholesome; but when the circulation exceeds that just point it seems to me that the excess of circulation becomes a vice and a disadvantage rather than an advantage. Now, Mr. President, what is the proposition to remedy this unequal distribution of the circulation notes furnished by the United States? It is that an additional amount to the extent of $20,000 shall be issued for the purpose of being distributed in those States that have less than their due proportion. There are two modes in which this may be done. One is suggested by my amendment, that the Comptroller of the Currency upon the principle, either simple or compound, on which he has distributed these circulation notes among the banks of the different States, shall withdraw as much from those that have an excess of circulation as that excess amounts to, and that he shall distribute it, upon the same principle as he has heretofore made distribution, among the banks of the States that have a deficiency of circulation. Can there be any just and reasonable objection to that? There certainly cannot be by gentlemen who are anxious to return to specie payments, because if the very way I suggest is not adopted there must be necessarily an inflation of the currency by the issue of $20,000,000 more of circulation notes. That I do not believe to be wise. It is certainly an unnatural and a vicious state of things for a country with the population and business of the United States to have a spu rious paper circulation to the utter exclusion of all circulation of the precious metals. This evil ought not to be increased; it is not wisdom or sound political economy, in my judgment, to increase it; but it ought to be gradually reduced without producing any convulsion or great sacrifice of the interests of the country so as to reach gradually but certainly the point of the resumption of specie payments. Mr. President, if there were $20,000,000 of circulation notes in the Treasury of the United States which the Government did not want to use otherwise, it would be a simple process for the Comptroller of the Currency to distribute those $20,000,000 of notes on deposit in the Treasury among the States that had less circulation than their share. How is the Government to get this amount of $20,000,000? I have suggested one mode. There is another mode: let the Government reduce its expenditures. If it be practicable, and the Government will adopt at once the proposition to reduce its expenditures twenty or thirty millions a year, it would immediately be placed in possession of the amount of circulation notes to $20,000,000, or exceeding that sum, for distribution among the States that have less than their proper proportion. 40TH CONG. 2D SESS.-No. 200. How can that be done?. By the simplest pro- there is a way. Here is a way, and the will is Here are two modes of getting this money; Now, what is the tendency of the circula- Then an additional and a large additional They pay in these circulation notes largely. The notes are thus aggregated in the hands of the local merchants; they take them on to New York with the purpose of laying in additional supplies. In that way the course of trade produces a constant and ever-recurring aggregation of the circulation of the whole country at the commercial emporium of New York and in the manufacturing emporiums of New England and of the Northwest, as at Cincinnati and Chicago and other points where there are extensive manufactures. some of them exceeding their circulation, and on an average about equal to it. How were those banks attacked by the policy of Congress? Congress could not repeal their char ters, could not abrogate the banks by direct action; but they imposed a tax upon their circulation which the banks could not bear, and in that way forced them to withdraw their entire circulation and to go into the national banking system, and to receive the paper issued for the purposes of circulation and money from the Treasury of the United States. After this system has been adopted by Congress and the Government of the United States, is it right to leave to the State of Kentucky, for instance, that had a circulation of about fourteen million notes of its own banks, every dollar of which was convertible, at the pleasure of the holder, at the bank counter into gold or silver-is it just to that State, and other States similarly situated, to abolish their banks by the indirect legislation which I have adverted to, and to dole out to them the meagre circulation of a little above two million dollars where they had before the war upward of fourteen million? Sir, the system is wrong; it is unequal, it is unjust. If that course of measures which will finally lead to the resumption of specie payments is to be steadily persevered in, as it ought to be, in my judgment, you must compel the banks of the States that have such a vast overplus of their proportionate circulation, to yield up a portion of it, that this excess may be distributed among the States that have a deficiency. Mr. MORRILL, of Vermont. I desire to call the attention of the Senator from Ken tucky for a moment to the practical working of his amendment. I think the Senate would be more in favor of his idea if his amendment were made so that it could be practically carried out. How is the Comptroller to withdraw this circulation? Is it to be all from Massachusetts, or all from Massachusetts and Rhode Island, the two States having the greatest excess; or is a certain percentage of the whole to be taken; or is it to be drawn from the banks having a large circulation, excluding the smaller banks? The Senator will see that the amendment as it is could hardly be practically carried out by the Comptroller of the Currency. Mr. DAVIS. I am fully aware that the honorable Senator from Vermont is much more competent to mature my idea and to reach my purpose than I am myself, because he is unquestionably much more familiar with this and all cognate subjects than I am or pretend to be. I shall therefore be obliged to him or to any other Senator who will endeavor to perfect, or bring into the best practical operation, the idea which I have suggested in my amendment. I am not wedded to that form; indeed, I am not satisfied with the form in which I have presented it. There are gentlemen here whose intelligence and knowledge of the subject-matter would enable them to present it in a much better form than I have done, and I desire and earnestly request them to do so. In the mean time I will throw out a few general ideas that ought, in my judgment, to be calculated to gain favor with the Senate for the general principle which I have proposed in my amendment. The States of New England are highly manufacturing; the State of New Jersey is so; some of the principal cities of the northwestern States are so; and they send out and distribute over the whole country a large aggregato amount of the various manufactures of our people. They find their customers and their Mr. President, in my judgment, instead of the great manufacturing emporiums needing the largest distribution of circulation from the Comptroller of the Currency, they need pro||portionably the least amount, because the ten-markets, to a very considerable extent, in the dencies of trade, the results of their business and of their commerce, are to draw this circulation from every part and portion of the United States to those centers. Now, sir, the United States Government has stifled the State banks. I was present when that mischievous policy was adopted, and, in my judgment, a more mischievous policy never was adopted. The banks in my State had on hand at that time gold and silver coin, distant States; largely in my State. So of the merchants who import goods from foreign countries and sell them to the factors and country merchants all over the land. It is the interest of these merchants at New York and Baltimore and other commercial emporiums, and also of the manufacturers at all the principal points where manufacturing industry prevails, to make articles for exportation into other States, and it is important to them that the people of the States to which they send their manufactured articles and where they are sold should have the means of paying for them. It would add to their means, facilitate them in the acquisition of those means if there were a more equal and proportionate distribution of circulation notes among those States that are the purchasers and consumers of the articles sold at the commercial and manufacturing emporiums of the United States. I think a proper regard for their own interests would induce the people of the States that have a redundant currency to yield a portion of it, and the result of it would be a return of the money for which their goods and manufactured arti、eles would be sold into the States, where a redistribution of the circulation would be made, and I believe that this equilibrium, by the course of the business and trade of the country, would soon be reëstablished. I think it is not only just, but it is the interest of the importing merchant, of the large manufacturer, of the men who sell their goods, wares, and merchandise, and their manufac tured articles to those States that have a deficiency of circulation, that they should be reasonably and justly supplied with it. think that if they would consent to yield back to the Comptroller of the Currency a portion of their circulation, it would not only be to the interest of the people of the States where it would go and in whose banks it would be placed, but it would be essentially and as much to the interests of the merchants and manufacturers of the States who gave it up. ator has given a great deal of attention and The PRESIDENT pro tempore. The ques- the case, above her proportion, taking the population into consideration. Then she furnishes to the West in proportion to that excess the currency that the West must use in shipping its produce and its stock, and Massachusetts gets the profits from the western country of that banking business. That is not just in my judgment. The bill having uniform value over the country floats to the West when the demands of commerce require it to be there; but New England having the banking business given to it by partial legislation, or by a partial execution of the law, is allowed to make many millions of profit over another section of the country. That is the reason, in my judgment, why the propo|| sition of the Senator from Kentucky is a fair one and just. Just how this shall be brought about of course Senators cannot decide, but what ought to be can be done. If the eastern States have an undue proportion of banking facilities that can be credit in some way. When the bills are returned they need not be issued again, and when there shall be a sufficient return au institution can be established in the West or in the South. But, sir, I am not going to vote for any bill that will extend in any amount the banking currency of the country. I have said, and I still an of the opinion, that the banking system as established under existing laws is a stupendous folly. If it be the business of the Government of the United States to furnish to the people of the country a paper currency I cannot see why that paper currency shall not be issued directly by the Treasury, with the credit of the Government stamped upon it, instead of this indirect system, which gives the credit to the bank because the bank has depos Mr. CONKLING. Of course I shall vote for the principle of this amendment, as I indiIcated I should be glad to do yesterday before it was offered. I suggest, however, to the honorable Senator from Kentucky that if he wishes to test its strength fairly he ought to modify it so as to specify an amount. There is a criticism, perhaps as mere matter of composition, to be made on the amendment as it now stands, "that there shall be withdrawn from the States which have an excess." What shall be withdrawn? One listener might understand it to be the entire excess, whether it was needed or not; another might understand it to be so much || as should be necessary. In any event it seems to me the amount ought to be specified. There-ited in the Treasury the bonds of the nation. fore I suggest to the Senator to insert the words "the amount of $20,000,000. They will come in appropriately early in his amendment. Then we shall have precisely the proposition in bulk and amount that we have here, and the question will be fairly presented whether it shall be derived from an inflation, as proposed by the original proposition, or shall be derived, as the Senator from Kentucky proposes, by with-see. I was not able to see it when it was drawing it from the excess of those States now possessed of an excess. But, Mr. President, there is a great principle involved in this question. If I, as an individual, am in debt, and I want money to pay my debts and am about to build a fine house that will cost a sum incompatible with the payment of my debts, what is my duty as an honest and a prudent man? It is to refrain from building | my fine house and to appropriate the money which it would cost to the payment of my just debts. This relieves me from debt, makes me a freeman, for no man who owes money which he cannot pay is a freeman, and it does justice to those to whom I am indebted. The Government of the United States is somewhat in that condition. They have an Army of fiftyeight thousand men; those men cost something like fifteen hundred dollars a head per annum. To reduce the Army thirty thousand men, it is a small estimate to say, would save to the Treasury at least $30,000,000 a year. Let the majority, let the statesmen, let the patriots of Congress resort to that measure of retrench. ment; let them reduce the Army to twenty thousand men, and there is no necessity whatever, public, general, or local, that requires an army of one man beyond that number, and immediately the Treasury of the United States and the United States are placed, within a reasonable time, in the possession of more than ten millions of circulating notes above the amount that is required to execute the provision that is now under consideration for distributing $20,000,000 among the States that have none. Sir, there is no better economy than retrenchment, there is no wiser statesmanship thau retrenchment, where expenditures are excessive and unnecessary. If the Congress to-day or to-morrow would reduce the Army to twenty thousand men, they would by that single step have withdrawn an imperative demand from the Treasury of the United States of thirty or forty million dollars; the $20,000,000 which is proposed by this provision to be distributed among the States that have less than their just proportion of circulating notes would be immediately and conveniently supplied; and the policy could go into operation without an increase of the circulation of the country, without any expansion, but simply by a just, wise, and proper economy in the reduction of the numbers of the Army. I trust, Mr. President, that the honorable Senator from Vermont, or some other experienced and able member of the Senate, will put my amendment in proper shape. That Sen Mr. DAVIS. I understand that the Senator proposes to modify my amendment so as to fix $20,000,000 as the amount of the withdrawals. I accept the modification. Mr. CONKLING. Let the words "the amount of $20,000,000" come in after the word "Department" in the Senator's amendment. Mr. DAVIS. Very well. Mr. HENDRICKS. I shall vote for this amendment, but not for some of the reasons that have been assigned. Where the circulation of a country has the same value in every portion of it, its distribution over that country will depend upon the demands of commerce, and I do not think it is much more important, so far as the mere question of the supply of currency in a particular locality is concerned, whether the bank that issues the money is located in that locality or another locality, for currency being the uniform value over the country will float to those localities where there is the greatest demand for it. In other words, I do not think it more important that a bank shall be located in a particular city in order to furnish that city a currency, if the currency has uniform value, than it has that the mint which issues the gold shall be located in that particular city. The gold currency being coined in the city of Philadelphia finds its way as readily into the western country, if there be a demand for it, if commerce demands it, as if the mint were located in the West. But, sir, the business of banking under the national banking system is a very profitable business, and it is not just that a larger proportion shall be given to one section than to another. It is a question, in my judgment, of the profits to be realized by the citizens in the business of banking. For instance, the State of Massachusetts has $40,000,000, as I understand is The paper issued by the bank rests for its credit upon the bonds of the Government; in other words, the credit of the bank is based upon the credit of the Government; and in order to get that credit of the Government we are paying as a nation six per cent. in gold upon all the currency that has been issued. The wisdom of that I have never been able to adopted during the war. I could not see how that relieved the finances of the country. It was claimed by very wise men at the time that it did furnish relief. It seemed to me, and I am of the opinion still, that the credit of the Government being the basis of the credit of the bank, the issue might just as well be made directly by the Treasury without paying an interest. Now, sir, for the use of the bank bills the people of the United States are paying in interest above twenty million dollars every year. For the use of some three hundred millions of bank paper to aid the commerce of the country the people are taxed to the amount of the interest on the bonds that stand as the basis of that banking business. Why should that be so? Why not issue directly from the Treasury of the United States the Treasury notes, and rest them directly upon the credit of the Government, and save that $20,000,000 annually of gold interest. Mr. President, I would not be in favor of a sudden withdrawal of all the bank paper of the country. This must be brought about gradnally. Instead of increasing the banking business of the country under the present policy and system, I am in favor, as rapidly as we can, of withdrawing from that system, and so far as it is the judgment of Congress that the Government ought to furnish a paper currency to the people, let it be furnished directly from the Treasury. Are these bank bills in higher credit with the people, do they furnish any greater aid to commerce than the Treasury notes issued directly? This bill proposes an increase, to a small extent it is true, but it proposes an increase of the bank paper of the country. 1 shall not support that. I shall support the opposite policy of gradually, but as rapidly as we can, withdrawing from this system that taxes all the people for the paper currency that is furnished by the Government of the United States. That may be saved, and in a few years, instead of being taxed for a paper currency, we may have a paper currency not taxed, upon which the people do not pay a tax in the form of interest paid in gold upon bonds deposited in the Treasury. Getting away from that system, and saving that burden upon the people, then, as is suggested by the Senator from Kentucky, reducing the expenses of the Army $50,000,000 a year, which is practicable, which is possible, which ought to be done at once, which ought to have been done during the last two years. and abandoning the expenditures for the Freedmen's Bureau, and returning to the legitimate business of this Government, we can bring the expenditures of this Government within the easy management of the people. I am grateful to the Senator from Kentucky for his suggestion of retrenchment in the direction to which he has referred. It can be made. I have examined it somewhat. The Army of the United States, instead of costing $100,000,000 a year, ought not to cost the people more than $50,000,000 a year. When we make these plain, simple, and easy reforins, I believe that the taxes upon the people need extend to but a very few articles. Reduce your tax upon whisky to one dollar per gallon and let it be collected, which is possible, which is practicable at that rate; and then a reasonable, fair, proper tax upon tobacco, and a few other articles and perhaps upon incomes, and the other interests of the people may be relieved || from taxation. Before the war, in 1860, the production of whisky in this country was about ninety million gallons a year. In the State of Indiana it was about nine millions; in Ohio about fifteen millions; in Illinois, about fifteen millions. The policy that has been adopted has destroyed that interest. Put the tax at a reasonable rate, at one dollar per gallon, and let us collect, say sixty, seventy, or eighty million dollars upon whisky, instead of twelve or thirteen millions under the present inefficient state of legislation, or the present failure in the executive department, and we shall have made a great advance toward the relief of the people. Mr. President, I did not intend to discuss the question at any length, but simply to express my opposition to any extension of the present banking system, which in my judgment, is based upon a wrong policy. Mr. WILSON. Mr. President, I admire the skill displayed by the Senator from Indiana in the discussion of controverted political questions. I am often reminded, as I listen to that Senator, of the position of that famous down-easter, Colonel Ethan Spike, who declared that he was in favor of the Maine law but against its execution. [Laughter.] The Senator goes a little forward, then he backs a little. He bravely asserts his propositions, and then he cautiously qualifies and modifies them, so that he is for and against all the contested points relating to finance and currency before the country. Sir, this going for a thing and then backing on it, going a little this way and a little that way will hardly work out the solution of the financial problems before the country. Sir, I shall vote for the amendment proposed by the Senator from Kentucky. I am opposed to any further expansion of the currency, either by the banks or by the issue of legal tender notes. We have gone too far in the direction of expansion already for the productive interests of the country and the interests of the toiling men of the country. We have eight or ten million men engaged in the productive industries of the nation, and their weekly labor is worth seventy-five or one hundred million dollars. A few million dollars more or less imposed upon the nation in the form of taxation is of little consideration compared with a policy that shall bring a sound currency. An unsound, vicious currency may impose a loss of five hundred or one thousand million dollars a year. What, then, does a few million dollars annually amount to as a burden upon the nation, if it shall secure to us in two or three years the restoration of a sound currency? It seems to me that sound policy, the permanent and enduring interests of all sections of the country, and especially the interests of the toiling millions require that the greenback circulation shall be reduced to an amount which can be redeemed and made equal to specie. Mr. Pendleton, now the champion of irredeemable paper money, declared in 1862, on the floor of the House, that the legal-tender notes were sent into the world stamped with irredeemability; that we put on them the mark of Cain, and like Cain they would go forth to be vagabonds and fugitives on the face of the earth. He declared that private ruin and public bankruptcy, either with or without repudiation, would inevitably follow the issuing of the greenbacks. There are those who would keep the stamp of irredeemability upon the legaltender notes; there are those who would continue to send them forth to be vagabonds and fugitives on the earth, until repudiation should come. It seems to me to be the province of statesmanship to enter upon a policy that shall stamp redeemability upon the face of these greenbacks and make these vagabond and fugitive notes equal to the purest gold. Sir, it is clear to me that what the people of the new States and the southern States need is banking capital, not the further issue of legaltender notes by the Government. Banks established and managed in localities where active capital is required furnish the means of discounting local paper or of making the loans required for local interests. The Treasury of the United States will not go into the business of exchanging greenbacks for the notes of country traders, nor country money-borrowers. I believe the present banking system of the United States is the best banking system the world ever saw. The first year of the war swept away seventy-nine banks in Illinois, thirty-nine banks in Wisconsin, and nearly all the banks in Michigan and Minnesota. The people of the Northwest and of the Southwest have been robbed under the old banking system of millions of dollars. The billholders of the national banks have not lost a single dol. lar by the failure of any of those banks. and Indiana had when the war opened, safe and well-managed banks. We had $125,000,000 of banking capital in New England. The national banking system was forced upon us. New York had a safe banking system and she was forced to give it up. The safety of the present banking system to the note-holders is demonstrated. No sooner does a bank fail than its notes rise above their par value. Ohio Mr. SHERMAN. Does the Senator know why the value of the notes rises when the bank fails? Mr. WILSON. Yes, sir. Mr. SHERMAN. It is simply because the western banks then find an opportunity to go and buy them up, for the advantage of that circulation, which they ought to have without discount. There are banks in existence in the western States that have paid from ten to forty thousand dollars in New England and New York for the privilege of starting banks where ever banks there have failed. Mr. WILSON. I understand that subject. Mr. POMEROY. The banks of the West have been compelled to buy the circulation of New England and New York, and pay three and four per cent. for it. Mr. COLE. Which they ought to have for nothing. Mr. WILSON. Sir, I am opposed to increasing the circulation of legal-tender notes, and I am opposed to increasing the bank circulation. I desire to get to a specie-paying system at the earliest possible day consistent with safety; but it does not seem to me that we are doing anything in the direction of specie payments. On the contrary, it seems to me we are every day drifting further from it. This greenback policy means that we shall never come to it. It means that we shall impose upon the country an irredeemable paper currency, condemned by every man who ever wrote on banking, and every statesman in our own country or any other country. No man known as a financier in the Old World or in the New sustains the views expressed by the Senator from Indiana. An irredeemable paper currency issued by the Government has been condemned and is now condemned by financiers and statesmen. Alexander Hamilton pronounced the issuing of paper money by the Government "a seducing and dangerous expedient," "likely to be extended to a degree which would occasiou an inflated and artificial state of things incompatible with the regular and prosperous course of political economy." Sir Robert Peel declared that "the effect of the State having the complete control of the cir culating medium in its own hands would be most mischievous." Sir, I am opposed to continuing, without any effort to change it, this irredeemable paper money system. It is a burden upon the productive industry of the country, it is a heavy burden upon toiling men. Rather than enter upon a system of further expansion, I would vote to reduce the amount of circulation the Government has accorded to Massachusetts. Mr. HENDRICKS. I wish to ask the Senator one question, if he will permit me, before he takes his seat. Mr. WILSON. Certainly. Mr. HENDRICKS. I wish to know why, to the workingman, the bill of a bank is more secure when it rests for its credit upon a Government bond than a note issued by the Treasury upon the faith of the Government? Mr. WILSON. It makes no difference to the workingman whether he has a legal-tender note or the note of a national bank in his pocket, but it does make a difference to the workingman whether we have an irredeemable paper currency, or whether it be a currency redeemable in gold and silver on demand. The labor of the country demands a sound currency, a currency based upon gold and silWe should enter at once upon a policy that shall give us at no distant day such a currency. Instead of entering upon it, we now propose, in order to give twenty millions of the currency of the national banks to the new States and the southern States, to expand the currency to that amount. Why not withdraw the circulation of legal-tender notes to the same amount we increase the circulation of the national bank notes? We have passed through ver. severe commercial crisis. The business interests of the country are improving. If we shall be blessed with good crops the business men of the country have the best reason to hope for a marked improvement in all departments of productive industry. The laboring men of the country, who have severely felt the pressure upon the business interests of the nation, are now looking to the future with renewed confidence and hope. Why, then, for the benefit of jobbers and speculators who fatten upon the misfortunes of the people, derange and disturb the monetary affairs of the country by entering upon a policy of expansion? I take no part in this work of increasing the amount of irredeemable paper money, nor of imposing new burdens upon labor. Mr. HENDERSON. Mr. President, I believe the proposition now before the Senate is one to modify the twenty-second section of the banking act so as to authorize an increase of the circulation notes of the national banks to the extent of $20,000,000. It is a very simple proposition; there is but very little in it; but gentlemen have gone outside of the question Before the Senate, and they are discussing the effect upon property, upon real estate and personal property, the effect upon the wages of the laboring man, of a return to specie pay ments. No part or parcel of the discussion, it seems to me, with due deference to the gentlemen who have entered into it, has anything to do with the proposition before the Senate. The original banking act made the limit of $300,000,000 to the circulation notes of the banks. I never saw any use in it; I never saw any sense in it; because banking, in my judgment, ought to be left like any other business, perfectly free. If we bank under the national system let us bank as they banked in New York. I believe there was no limitation upon the number of banks or upon the amount of circulation there. Mr. CONKLING. I beg to dissent from the Senator's proposition. In New York there was this check: one half of all the basis of banking must consist of stocks of the State, the amount of which stocks was fixed, and by the constitution could never be enlarged except by the consent of the whole people expressed in a positive vote. Mr. HENDERSON. That, I suppose, left banking to be carried on to the extent of the entire stocks of the State of New York, only one half of the basis of the circulating medium being required to be of New York stocks. Mr. CONKLING. But the whole debt of the State was very small. Mr. HENDERSON. Was it fixed by the constitution? Mr. CONKLING. Yes, certainly; it was practically fixed. | Mr. HENDERSON. Iask the Senator, then, if a circulation could not have been based in New York under that very banking system upon coin instead of stocks? Were there not banks existing even under the very banking law of New York whose circulation was based upon coin and not upon stocks? Certainly there were. There was no limitation upon the amount of circulation. Banks might be established ad libitum, just whenever any person wanted to establish a bank, under the banking system of New York. That is my recollection. I am aware there was what is called a free banking law of New York, requiring, as the Senator says, a deposit with the register of the State of a certain character of public stocks,|| one half of which, I believe, as he states, should be stocks of New York, and the other half of which should be stocks of other States; but that did not prevent, under the laws of New York, any man from banking upon coin. He had a perfect right to bank upon coin and to issue large credits on the coin in the vaults of the bank. In other words, there never was a limitation in the State of New York upon the amount of the circulating medium. Why, Mr. President, under the old system of banking, it was very rare, indeed, for any State to have any limitation upon the amount of circulating notes. Anybody complying with the terms of the banking laws of the State might go on and bank. Was there ever any reason in establishing this national system, and coercing, as my friend from New York said so ably here yesterday, all the State banks to go out of existence, for putting on this limitation? I understood perfectly well why the limitation was put on at the time. Why was it? It was because at that time we had not less than from eight to fifteen hundred million dollars of circulating medium issued by the Government upon Government credit. had the greenbacks; we had the compoundinterest notes; we had the certificates of indebtedness; we had every variety and form and shape of indebtedness, which constituted a circulating medium; some being a legal tender, and others not a legal tender. The fear was that in the establishment of the national banks we might increase to a very dangerous extent the circulating medium, and hence it was thought advisable at that time to put a limitation upon the national notes. We Is there any cause for it at this time? We have largely reduced that circulating medium based upon Government credit. It is out of the way. A large quantity of the greenback circulation has been removed. Nearly all of the compound-interest notes are gone; I believe not exceeding twenty-five or thirty million dollars of them are outstanding at present. They will all soon be out of the way. All this vast amount of circulating medium issued upon the credit of the Government in the shape of seven-thirties, small notes, and other interestbearing notes, and some of them non-interestbearing have now disappeared, and the currency of the country has been largely reduced. And let it be remembered, Mr. President, in connection with the reduction of the currency, that we have largely increased the population that use it. It must be remembered that at the time the currency was so expanded, eleven of the States, ten of them at any rate, because a part of the State of Tennessee was under our control, a large portion of the Union at that time did not use our circulating medium at all, neither the national notes nor the bank notes. Since that time we have conquered a mighty nation; we have conquered eleven States and blotted out the entire circulating medium that they had, and we have substituted ours for it, thereby giving a larger basis for the operation of this circulating medium, giving at least nine million people, turning the slaves into freemen, who are now demanding a circulation, demanding money in this shape, just like the white people of the northern States. They are operating for themselves. They are laborers, they are mechanics, they are merchants, they are doing business like the whites of the South. A vast amount of money is needed for that nine or ten million people; and yet we have gone on contracting the circulation. The great idea here seems to be to have an early return to specie payments. I do not object to it. I should be a heretic if I were to say that I doubt the policy of a speedy return to specie payments. I am almost afraid to say it. I have got enough on my shoulders already,|| and if I were to say that, I suppose I never should survive. Every Senator seems to think that the age of happiness will be when we have returned to specie payments; commerce will revive; manufactures will be better than they were before; and agriculture will prosper beyond anything known before. I do not believe a word of it; and I do not want to force a state of affairs, the expediency of which I doubt. I doubt very much whether we shall be any better off under a reign of specie pay. ments than we are at present. I have not time to go into the reasons for this extraordinary statement. I have no doubt it sounds very heretical to a great many of my hearers, if they pay any attention to it at all. But, Mr. Presi dent, reasons can be given why in all probability we are better off without this Elysium of specie payments. I am old enough (and not very old at that) to know that commerce and business did not thrive under the reign of specie payments any better than they do now; and every Senator knows perfectly well that such is the case. Do you not know that under specie payments we had commercial and financial revulsions every eight or ten years to such an extent that people often said when a period of prosperity was upon us, that it is the beginning, or the indication, the symptom indeed of financial crisis and financial difficulty? And every. body knows that it has come upon us again and again. The Senator from New York [Mr. CONKLING] Smiles. Certainly he can smile; but when we go back to specie payments again, we shall find the same financial difficulties existing. Mr. CONKLING. I will retract my smile if the Senator wishes me to do it. [Laughter.] Mr. HENDERSON. As the smile is withdrawn, I will proceed. Now, Mr. President, to return to the proposition before the Senate, I do not wish to discuss these other matters-it is a proposition to enable the States that are without banking facilities, on account of the limitation imposed by the twenty-second section of the banking act upon circulation notes, to extend their circulation $20,000,000. Gentlemen say at once that this is a proposition to expand the eurrency. The Senator from Ohio answered that very properly when he said that it was no such proposition at all. How does the Senator from Massachusetts make clear his proposition that this necessarily expands the currency? He said it was an expansion, and he wanted to live in the ancient ways of his fathers and did not want to move either one way or the other; he did not want to disturb the currency. He has got $356,000,000 of greenback circulation out; but he would not take in a dime of it. He does not want to contract, and he does not want to expand. We have just got in that glorious fix with $356,000,000 of greenbacks out and $300,000,000 of circulating notes of banks, and that is the Elysium. He does not want to move Mr. WILSON. The Senator will allow me to say that I would reduce it at least $200,000,000 and resume specie payments immediately." Mr. HENDERSON. How would you reduce it? Mr. WILSON. I would fund it. Mr. HENDERSON. Furd it in what? Mr. WILSON. In bonds of the Government. Mr. HENDERSON. Bonds of what sort? Mr. WILSON. Of the Government of the United States. Mr. HENDERSON. Six per cent. bonds? Mr. WILSON. Yes, sir; or five per cent., or anything I could get it at. Mr. HENDERSON. Gold-bearing bonds? Mr. HENDERSON. Would the Senator do that-fund these notes of the Government called greenbacks into a six per cent. security and then not extend this limitation, so that banking could exist in any of the States? Mr. WILSON. If the Senator desires an answer, I will say this; if I had my way I would reduce the greenbacks to a point at which we could redeem them, and maintain that redemption. I would adopt free banking. I agree with the Senator in that; and I would have the banks redeem their circulation. Mr. HENDERSON. They do redeem it now. Mr. WILSON. That is, I would enter on a system that would bring that about in the course of a year or two. Mr. HENDERSON. I do not pretend to say that I would contract the greenback cireulation at all. I am willing that Senators shall enter this Elysian field of specie payments. It is a myth, a humbug, and always was. It has never been otherwise in this country; and the Senator knows it as well as I do. Mr. WILSON. It so happens that every man in the world with a knowledge of finance disagrees with the Senator. Mr. HENDERSON. The Senator knows perfectly well that the banks in this country suspended specie payments in 1837. He knows that they suspended specie payments in 1847. He knows that again in 1857 they suspended specie payments; and he knows perfectly well that they did so in 1861 and remained suspended for years, when their paper went to a discount much larger than the apparent premium on gold today. What sort of an Elysium was it? He knows perfectly well what it was. The Senator was in business, I presume, during those days, I suppose as early as 1837; and he remembers the state of affairs that existed in this country from 1837 to 1843, and again in 1847, in 1857, and in 1861. We suspended in 1861 and have remained suspended, State banks and all, from that day to this; and the Senator will find out when we get back to specie payment it will not last six months. I prophesy that our Government will be in the condition that the English Government was in 1816. They passed an act of Parliament declaring they would resume specie payments in 1816, I believe. After the close of the war with France, and Waterloo was fought, the English Government supposed they could go back to specie payments im mediately, having been suspended for over a quarter of a century. What was the success? They passed their act. Some Senator said yesterday fix a day—I think it was my friend from Indiana Mr. MORTON. I did not say that. Mr. HENDERSON. Then I take that back; but some Senator said, "Fix a day for the resumption of specie payment and work up to it." Mr. MORTON. I said that, but I was not speaking of the Bank of England. Mr. HENDERSON. Certainly not; but you would fix a day here, and that is just what the English Government did. They thought when the war closed with great glory to the Government that prosperity and everything else would come upon the resumption of specie payments. Why, sir, the English Government were enabled to carry on the war with Napoleon simply because they suspended specie payments, and never could have done it otherwise. Every man who knows anything of the history of that Government, knows perfectly well that it would have been utterly impracticable for them to carry that war through on the basis of specie. Mr. MORTON. I should like to ask the Senator this question: when the final resumption by the Bank of England took place was it not in consequence of the English Government having fixed a period of three years within which to resume, and did not the bank resume in a year and a half? Mr. HENDERSON. If the Senator wants my opinion, I give it in this way: the English Government fixed a time again and again; they fixed on the year 1816 for resuming; and what was the result? The premium on gold increased immediately on the passage of the act instead of diminishing, and when the day for resumption came they had produced a monetary distress in the country that had not existed for ten years preceding. They then fixed 1818 for resumption; and what was the result? They brought another monetary panic in that country. They then fixed 1820 and again 1822; and the history of the times will disclose the fact that every effort on their part resulted in new disasters. Go back to the history of that time, and you will find that such is the fact. Why? Simply because you cannot bring about specie payments by an edict of Parliament or Congress. Mr. WILSON. They got to a specie basis there at some time. Mr. HENDERSON. They got there before the expiration of the last term, as the Senator from Indiana properly states. They did fix the time again in 1824 or 1825, and before the time arrived they did resume specie payments, but they resumed it upon the increasing business of the country, upon the revival of industry, and upon other things that bring about specie payments, not upon the act of Parliament. So it will be here. We shall resume specie payment when the business of the country justifies it and when our productions are more than equal to our importations. When we have built up foreign balances and can draw upon those foreign balances, and can increase our circulating medium in the precious metals in this country, then we shall resume specie payments, not before. The precious metals have departed; they are not in the country; and it is idle to talk about resuming specie payments until the revival of business, commercial prosperity, agricultural prosperity, and mechanical prosperity shall have put large balances abroad to our credit. It cannot be done otherwise. Mr. MORTON. I should like to ask the Senator if the demand for gold is not governed by the ordinary law of supply and demand; and while there is no demand in this country for gold except to pay duties, I ask him if gold will not continue to go out of the country? There is no demand for gold now except for the purpose of paying duties, and therefore gold does not stay here, but goes where it is used as currency, where it is demanded for other purposes besides duties. Mr. HENDERSON. I thought gold was very much in demand. I have not heard a Senator make a speech on this subject who did not crave a return to specie payments. Every Senator seems to look forward with as much delight to that happy period as he would to the haven of rest before him. I cannot see that former times justify the belief of Senators that we are going to have such prosperous times when we do return to specie payments, because we have had financial difficulties and pauics, as I have shown, during periods of specie payments and necessity brought us to a suspension of specie payments. It will not be a year after we have resumed specie payments before an act of Congress will be passed justifying a suspension of specie payments. You will see an act of Congress passed in less than twelve months after resumption, justifying or legalizing the action of the banks in suspending specie payments. You talk about resuming specie payments! What are you going to resume with? The little coin you have got in the Treasury-$100,000,000? What will be the result? You have $356,000,000 of greenbacks out. Then, I suppose, we shall rush to the Government vaults and draw that out. The banks will do it, of course, in order to resume themselves. How much money have they got? They have not over fifteen or twenty million dollars in their vaults and $300,000,000 out. How are they going to resume? Is there coin enough to do it? Surely not. What will be the result? You will have a discount on paper instead of having a premium on gold and a uniform value to your paper throughout the country, both greenbracks and circulating notes, and they are worth just as much in Missouri as they are in New York to-day. Your paper is now perfectly uniform, though it is depreciated. I admit it is depreciated, but it is uniform; but it will not be uniform after that occurs; and do you not know it? You then set shaving shops to work from one end of this land to the other. Why? Because instead of having a premium on gold you have a discount upon paper, and it is exactly the same, and you will have to legalize your suspension or every national bank will be wound up. When you have taken up your greenbacks and canceled them, and the national banks have suspended specie payment, I should like to see the glorious haven of rest you have entered. What is the use of gentlemen talking otherwise? Do they not know that such will be the case? This is a plain, practical view of this question, and every man of business interests or doing business in the country knows it. What is the use of disguising it, what is the use of trying to conceal the fact, and with a fivecent piece in our pocket swearing to the world that we are rich? There is not a word of truth in it. We are not rich. We have been engaged for five or six years in destroying property. We have destroyed hundreds and thousands of millions of property. We have been compelled to take the laboring men from the plows and workshops throughout the country and send them into the Army to defend the Union. That was all right enough; but you cannot take a million men for five or six years and keep them occupied in destroying property, abandoning all the industries of the country, and still remain rich. Mr. WILSON. Does the Senator mean to say that we have not as much wealth now as before the war? Mr. HENDERSON. I mean to say that we have not as much wealth per capita now as before the war. I heard the Senator on that point; I know all about his views. He has a bloated state of affairs. He has blown a bladder up in the New England States and thinks he is rich. I know exactly what he is; I know exactly what the New England people are. I know they have accumulated very largely, and did accumulate during the war, because of their situation. You had not this war on your own soil as we had in Missouri. We were engaged in destroying each other's prop erty-necessarily so engaged. Civil war was upon our soil, and we were destroying each other, and destroying each other's property. You were not doing so in New England. You were carrying on your workshops and supplying the Army. You were supplying knapsacks; you were supplying harness; you were supplying guns; you were supplying every article used by the Army; and you sold at enormous rates. You sold to the Government at three and four prices, did you not? You had the capital of the country. What little we had was destroyed. You took bonds at forty cents on the dollar; and now, having them in your pocket, you come to Congress and say, "Gentlemen, we must resume specie payments." Why did you not talk about doing business on the specie basis during the war? Why did you insist upon selling a set of harness for a cavalry horse to us at ninety dollars, when at the old prices we could have bought it at thirty dollars; and you know it. You insisted on so selling, and did so sell to the Army. We had to give our obligations to you for ninety dollars for an article really not worth over thirty-five dollars. Now, immediately after that is done, and you have got the compensation in your pocket in the shape of a Government bond, you come before the country and say, Yes, you have got a limitation of $300,000,000 on national banking, and you must withdraw the greenbacks, take them out of the question," and immediately upon doing that you know you come to suspension, and the country will be bankrupt. You say, "I cannot help that; I have got a bond and want to appreciate it to par. We will see what it will be worth after you have done it. That will depreciate instead of appreciating it. It will depreciate everything in the country; and every man knows it. Why? Because you have produced a monetary panic, which always depreciates property and always depre ciates bonds and everything else. Mr. WILSON. I ask the Senator if there is not more taxable property to-day in the State of Missouri than there was in 1860? Mr. HENDERSON. Certainly. Mr. WILSON. Is it not so in every loyal State of the Union? Mr. HENDERSON. No, sir. Mr. WILSON. And measured by the gold standard, too? Mr. HENDERSON. No, sir. Mr. WILSON. The loyal States are worth at least $4,000,000,000 more than they were in 1860. Mr. HENDERSON. All the loyal States taken together? Mr. WILSON. Yes, all the loyal States together are worth $4,000,000,000 more than in 1860, and that, too, on the gold basis. Mr. HENDERSON. I am not talking about the aggregate wealth. I spoke of the wealth per capita a little while ago. I know that population has increased. There has been an immense immigration to this country. The Senator must recollect that in 1860 our popu lation was thirty-one millions, and now it must be in the neighborhood of forty millions. I apprehend that there is a greater aggregate wealth; but the Senator knows perfectly well that in all the seceding States there has been not only a destruction of $500,000,000 of property, but there has been a depreciation of $500,000,000 more. He knows that land worth fifty and seventy-five dollars an acre previous to the war is now selling for two dollars and a half and five dollars; and a very slow sale at that. In regard to the seceding States, I know they brought these consequences upon themselves; they are but the penalty of their own corrupt doings; I will not justify them; but to deny that there is a depreciation of property is idle and useless. The Senator knows to the contrary. But, Mr. President, I have nothing to do now with the aggregate wealth_nor the per capita wealth of the country. I am simply talking about this measure. Why is it that we |