tions. It must grow up as the credit of an individual would grow up.

It has been well stated heretofore that we have suffered a great deal by the war. We were during all the period of the war destroying instead of producing; we were reducing our wealth rather than adding to it; and so great was the destruction, so great the reduction of our wealth as a nation, that it became impossible for us to pay as we were paying before that time; and at this day our credit is very considerably below par. Our promises to pay are only worth about seventy cents on the dollar in gold. This is a fact that is patent to us all. Our credit is so much below par that there is no use in trying to conceal the fact, or by vain declarations to reach some other conclusion.

We are now improving our condition as a nation. We are adding to its wealth rapidly. In a few years we shall be in a position to pay our current liabilities in the ordinary coin of the world, and to pay also our bonds in the same currency. But until we have built up our credit, until time elapses, until our wealth has been increased, it will be utterly in vain for us to attempt the payment of all our obligations in gold. I suppose the credit of a nation does not differ much from that of an individual. Before the war we were exceedingly prosperous. We lacked hardly anything that makes a nation great. But we suffered calamity after calamity; and so our credit was reduced. If an individual who was in a prosperous condition meets with calamity by fire or flood it for the time being will destroy his credit; and if he is compelled to borrow for the purpose of replacing his losses he will pursue precisely the same course that we as a nation have done; he will have to mortgage the property that he has, and pay a heavy interest, and his credit will be for the time reduced; but when he has had time to repair his losses, then, and not before, his obligations will be at par. I do not believe that it is possible by a declaration to bring ourselves back to a specie basis. The only way in which it can be done, in my judgment, is by the process which adds to our national wealth. When we have reached the position that we occupied before the war we shall then be upon a specie basis; but we cannot reach there by any short cut.

Mr. CONNESS. Mr. President, I do not know that I have any views on the subject now before the Senate which are of any value to the public; but, like all other Senators, I feel a deep interest in it, and as the discussion has progressed I have been not a little pained at the direction it has taken.

The proposition directly before us is an amendment offered by the Senator from Maine, to leave the option of payment within ten years to the Government of the bonds proposed to be issued, the effect of which, in my opinion, if adopted, would be to defeat the purpose of the pending bill, which is, as I understand it, an offer to the bondholders to release and give up the bonds they now hold for bonds of a longer date and lower rate of interest, absolutely and positively, by the terms of the law providing for their issue, payable principal and interest in gold. I regard that proposition as a fair one.

In place of attempting to hold the Senator from Ohio up to public odium for inconsistency or change of opinion I hail and welcome the proposition that he has now presented to us, as contradistinguished from that presented at the early part of the session by him. The former was a coercive proposition, and the views in which it was advocated were perhaps more strongly coercive than the terms of the measure, and I regretted the utterance of both. You cannot deal with a creditor and maintain your character except in one of two ways: you must either pay what you owe or you must propose an honest and honorable mode of settlement and adjustment; that is to say, you must pay when you can, and if you cannot pay him now, or when the debt is

due, and you can agree upon terms with your creditor for an extension of the day of payment, those terms must be acceptable to him, or else your credit falls. Therefore, as the pending measure offers a long bond with absolute security by the terms of the law of the payment of the principal and interest in gold or silver, though presented at a lower rate of interest, which the public welfare demands, it is a fair and honest proposition, and one, in my opinion, that will be accepted by the bondholders. It is therefore an advantageous proposition. It is one that I am in favor of.

I regretted most deeply when the honorable Senator from Pennsylvania [Mr. CAMERON] denounced the measure in the severe language which he applied to it. I do not think that my friend could have meant what he said in truth and earnestness in imputing to the Senator from Ohio the introduction of a measure here gotten up, as he said, by the Treasury Department, having for its purposes some mys. terious objects, which he could not comprehend nor understand. I do not always, while I sit here and listen to the able Senator from Ohio, agree with all he says; but I think no one can deny him the highest integrity and purity of motive and purpose. I do not think that my honorable friend from Pennsylvania intended to say just what he did. I agree with him in both the letter and spirit of what he otherwise said, except that part of it which so strongly deprecated the presentation of this measure at this time. Mr. President, I think it is an opportune time. It is a time when a party in this country, seeking and contesting for the power of this nation, have emblazoned upon their banners repudiation of the public debt and destruction, consequent of the public credit. The time when such a proposition is made is, in my opinion, the time to meet it.

It is not many days since a resolution was adopted in the House of Representatives, not by a party vote, but by a non-political vote, instructing the Committee of Ways and Means of that body to report to it a measure imposing a tax of ten per cent. upon the coupons of the bonds. The committee obeyed the behest of the House, but to their lasting credit reported that they were against the measure, and between that bold and honest declaration and the indignation and common sense of the country standing by the public credit, that not simply questionable, but corrupt and faithless proposition fell still-born. It fell as it ought to fall, stamped with the infamy of an attempted violation of the public faith.

But, Mr. President, while I say this it is an unmistakable fact that the rates of interest paid upon the public debt of the United States are rates that make great additional public burdens; and I welcome the proposition at this time and in the manner proposed to reduce the rate of interest without in any manner tainting the public credit. Therefore it is that I regret the remarks of my honorable friend from Pennsylvania. In the other part of his remarks, which described in a few short, terse sentences the political failure of every man in his State who, in the days of its distresses, undertook to ride into power by an assault upon the credit of the Commonwealth, I recognized a true and just statement; and so it will be with those who undertake to originate or to cater to a dishonorable public sentiment touching our national credit and our national debt.

Why, Mr. President, when and how and under what circumstances was that debt created? When the national existence was assaulted by a party that through long years of war proved nearly our equals in point of use of force; when loans that might be obtained from exist. ing banking institutions were totally inadequate to the payment of the public expenses, and the nation itself had to go out among its own people, we were proud, and should still be proud, of the patriotism which furnished the means of carrying on the war and defending the nation's integrity. It is yet fresh in the memory of every Senator and of every man in

this land how we hailed each morning the heralded statements of the amount of our obligations that the people from hamlet and village, from town and city, all over our broadspread land, sent in to invest in the national bonds. We said, “here is America, in defense of republican institutions and in defense of human liberty, not only ready to take the field and spill its people's blood, but here, too, it comes with its means ample from every source;" and it was our proud boast that this

was the case.

Mr. President, have we forgotten so soon what were then our proud boasts? Shall we now join in this dishonorable cry of a party who seek the acquisition of power for other reasons and purposes by uniting in their assault upon the public credit? No, sir; I am happy to say that that is not the position of the party to which I belong; and though there are found here and there men weak for the time, who live in the midst of a public sentiment that they feel it either their interest or to their taste for the time to cultivate and pander to. Yet they are the inconsiderable numbers. The banner which we have erected of "security of national unity and national credit" will go on and attract the support of the people of this country until both shall be consolidated in the results of the next election.

There are some views touching some of the causes which lie at the foundation of the present condition of our public debt that I should like just at this time to go on and utter, but I did not rise to make a speech and will confine myself within narrower limits.

I regretted, and regretted deeply, the speech made by my honorable friend from Indiana, [Mr. MORTON.] I know that there is in the West what is termed a greenback sentiment, a common sentiment such as has been uttered by the convention recently convened at New York, that the money in which the soldiers and the people are paid is good enough for the bondholder. Why, Mr. President, the money in which all are paid and shall be paid shall be made good, and we are not the men to cast a stain or discredit upon it.

I regretted, too, the utterances of my colleague. My object is not to reprobate either him or his views, but I feel it incumbent upon me to make a statement to the contrary of them. He of all men, representing the Commonwealth he does, should not undertake to reduce the standard of the public credit. If there be in regard to any part of the bonds that have been issued by the United States a doubt as to the currency in which they shall be paid, and the letter is not positive as to their payment, let the spirit of the statute be obeyed; let us go further than the letter of the law to maintain inviolate the public credit. Why, sir, what did his own State do? It had issued more than four millions of bonds when this war took place. They were not made payable in gold by any specific statement. They stated expressly even less than the condition of the five twenty bonds. When Congress, in the exercise of its power-an extreme case we all admit it to have been, but it was done and exercised under a controlling public necessitypassed the legal-tender act, California might have paid its debt to the holders of its bonds, and the interest upon them, in legaltender notes. Did it do so? No, sir. When gold was at three hundred in notes, California came forward and voluntarily paid its interest in gold. Massachusetts did the same. I honor Massachusetts not for that alone, but for all of her proud record, and for none more than that; and so the credit of those two States stands preeminent to-day.

Mr. MORRILL, of Vermont. Should they stand higher than the credit of the United States?

Mr. CONNESS. My friend asks should they stand higher than the credit of the United States. Certainly not. The United States with its great resources, with its now proud history, with its recent accomplishments, with a conceded status in the economy of the world

over all nations and all peoples, should stand high and peerless above all States; and so it will if we manfully do our duty. Let us not let the standard trail; let it not come down. Let us go beyond either the letter or the spirit of the law, if necessary to maintain the public credit.

But, Mr. President, we are not called upon to do that. What is the proposition before us? It is whether we will offer to the public creditors a long bond at low interest which they may voluntarily take or not. I am in favor of passing affirmatively upon that proposition. There is no compulsion about it. It will be profitable to those who seek investments, and the exchange will be made. I cannot characterize it nor see it as an effort of interested men to make money out of the public faith or the public necessities. I think that our highest duty consists in it.

But, sir, are we called upon to discuss the question of whether the five-twenties shall be had in legal tenders, or not, at this time? Certainly not. It is not involved. If we pass this bill, those bonds will be exchanged for the bonds we propose to issue under this act, and then the question will be set at rest. But if we continue eternally to discuss the question between ourselves as to what that statute meant, whether it meant national honor or national disgrace, whether we are to maintain it as the one or the other, our credit necessarily is to fall by that discussion. I hope that in the further discussion of this bill we shall confine ourselves simply to the propositions before us and pass upon them. Let us reduce the public burden by reducing the public inter

est.

For some time past money has been in the New York market at three and four per cent. Why shall we not avail ourselves of such advantages as the money market shall give us? Why shall we not offer the means of a longer investment to those who will exchange their bonds? I think it is but a simple duty. But, Mr. President, over and above all, let there be no word and no taint of repudiation. Let there be no question as to what both the interest and principal shall be paid in where the law does not specifically affirm it. Let our contract be kept not only in its letter but in its spirit, and then the credit of our country will stand high; and when reconstruction shall be complete, when peace shall obtain, when the national industries shall again be reënlivened, all will be well.

Mr. CRAGIN obtained the floor. Mr. CAMERON. I hope the Senator from New Hampshire will allow me to make a brief explanation.

Mr. CRAGIN. Certainly.

Mr. CAMERON. I am reminded by the Senator from California that other persons like himself may have supposed that I intended to cast a censure on the Senator from Ohio, the chairman of the Committee on Finance. Certainly I had no such intention. There is no member of this body of whom I have a higher opinion, personaily and politically. His relations and mine have always been pleasant, and I think I am the last man who would willingly encounter so able an adversary as he would be. But I intended to say that I had no confidence in the Treasury Department, and I look upon the Finance Committee as the agents of the Treasury Department.

Mr. CONNESS. You are wrong in that. Mr. CAMERON. I suppose these bills are in a great measure instigated from the Treas

ury.

Mr. MORRILL, of Vermont. Not a bit of it.

Mr. CAMERON. I think I am not wrong in that. We are all very apt to take impressions from the heads of the Departments which we represent. I believe there are in this country a large number of persons who would like to depreciate our credit. Some men in the South would very gladly have our public debt reduced as low as their own, in the hope that at some future day we should be compelled to redeem their debt as well as our own.

There are

people in this portion of the country who affil iate with them. A great many probably have interests with them. There are a large num ber of persons in the North who are interested in the rebel debt. They would like very well to have this country in such a condition that the larger portion of both debts should be made a common stock and the whole country bound for them.

I think the Secretary of the Treasury has shown a great want of ability in the management of his Department. I am satisfied that no wise man, acquainted with finance, would have suffered for years, as I believe he has done, $100,000,000 in gold to lie unused in the done, Treasury, equal to $150,000,000, probably, of greenbacks, taking the average of the price of gold, thus losing every year about nine million dollars in interest. Those $9,000,000, making $27,000,000 for three years, applied to the public debt, would be a very good item off.

Now, as to the payment of the public debt, I repeat and reiterate that I do not believe there is anybody belonging to the Republican party in this country who will ever consent that the public debt shall be paid in anything but the currency of the world. I am sure that the Senator from Indiana will be one of the last to do so. He has a right to argue, as every other man has, that there is a possibility, on looking at the form of these laws, that some of the loans may legally be payable in something else than gold. I I do not admit it; but men's minds may come to that conclusion; and I know that good lawyers sometimes get very technical, and they say things may be done which they would not do themselves. But I have no doubt of the payment of the whole debt, every dollar of it, in gold or silver.

I meant to say, when up before, that I deprecated bringing this question now before the country. No good can come from it, and it naturally brings up matters of detail, and makes men's minds give forth the results of their own reflections. They are thrown out here without much consideration, and they are sent abroad, not only as the sentiments of the individual, but as the sentiments of the party. I believe, indeed I am sure, that we shall elect General Grant, and when we have him at the head of affairs, a wise and able statesman as I believe he will prove to be, with the Republican party in its full strength and vigor, I think we shail present to the country such a bill funding our debt as will enable us to reduce the amount of our interest very much.

The Senator from California said a little while ago in passing, and I have heard it repeated so often that I desire to contradict it, that money can be had in New York at four per cent. If the Senator from California had $10,000 in bonds of the State of California, and wanted to loan $8,000 for twenty days, he could probably get it at four per cent.; he would be more likely to get it if he only wanted it for a week; but if he went there with the best security of the State of California, and desired to borrow ten or twenty thousand dollars or any other sum of money for any length of time, he could not get it at anything like four per cent.; he would have to pay six or eight per cent. Mr. CONNESS. The market is falling all the time.

Mr. CAMERON. Yes, the market is falling, because the credit of the country is rising. Therefore, after we shall have completed the work of reconstruction we shall be in a condition to make terms about our loans. When an individual is in trouble he can make no terms with his creditors; but whenever he becomes prosperous they are willing to trust him and give him better terms. The affairs of a nation are but the affairs of an individual carried to a greater extent.

I rose only to say that as between the Senator from Ohio and myself there will be no wrong done him by me.

Mr. SHERMAN. I did not hear the remarks of the honorable Senator from Pennsylvania when he first rose, the distance was so great

across the room, and his voice was not raised so that I could hear him. I am very glad that I did not, because if I had drawn the same inference from the remarks that the Senator from California did it would make me feel very unkind, and I should at once have said something that I perhaps would not like to have said. I am very glad, indeed, to hear what the Senator from Pennsylvania now says on that point.

I desire to say, in justice to the Secretary of the Treasury, as the Senator's remark would seem to have a reflection upon him, that he should not be held responsible, nor any one else, for this bill. This bill is the emanation of the Committee on Finance, and if any one ought to take the most blame I am perfectly willing to do it, although the first section of the bill was not drawn by me, but by the Senator from New York, [Mr. MORGAN.] I desire to say that every section of this bill is framed in the interest of the people of the United States without regard to any other interest whatever. Every clause of the bill tends to lower the burden of the public debt; and no comment by the people at large, or in the newspapers, or even here would make me hesitate a moment in pressing constantly upon the attention of the Senate this and all other measures that I deem advisable to lower the burden of the public debt and to advance the interests of the people. I believe I can say that it is the unanimous opinion of the Committee on Finance, who have studied the matter over, that this course should be taken. Their whole purpose is to elevate the character of the greenbacks, to raise the greenbacks as near as pos sible to the standard of gold, and to lower the burden of the public debt by reducing the rate of interest. That is the whole object of the bill. It can have no other purpose. son can be benefited, no interest can be ben||efited, except the general interest of the people of the United States. I have no doubt that this measure, if passed unabridged in the form in which it is presented, will do a great deal of good. It can by possibility do no harm, and it will, in my judgment, do a great deal of good. It will not impair the public credit.

No per

It does not trench upon that question which has been partially discussed to-day, as to whether the principal of the five-twenty bonds is payable in lawful money or not. It seeks to avoid that issue, about which there is greater division among the people of the United States than there is here in the Senate. If this bill is successful, by funding the public debt the Government of the United States will save $20,000,000 of gold in a year; enough in itself without any other provision to pay off the whole of this debt in forty years. If it should fail in its purpose by the refusal of the bondholders to take the new bonds in exchange for the old, it can do no harm; it is simply an offer refused; and then it will be for Congress to determine whether or not the people of the United States must go on paying six per cent. interest in gold, free from all tax, to the end, I may say, of time. That is a question I am perfectly willing to postpone.

In regard to another question mentioned by the Senator from Pennsylvania, there is a provision in this bill which, in my judgment, will do more to promote specie payments than any other provision that can possibly be introduced. The people of the country do not favor a reduction of the amount of greenbacks now outstanding. They demanded of us a repeal of that law which authorized the cancellation of greenbacks and the diminution of the amount further and further under existing laws. This bill restores the old provision of the act of February 25, 1862, by which the owner of a greenback may at any time put himself on a par with the bondholder by converting his note into bonds.

Mr. FESSENDEN. I ask the Senator if that note must not be put out again?

Mr. SHERMAN. Not necessarily. It may remain in the Treasury, or it may be usedMr. FESSENDEN. It cannot be canceled;

it must go out. If it is used for paying other duties it goes out, because, as the law stands now in relation to that subject, there must be a certain amount of greenbacks always kept in circulation.

Mr. SHERMAN. The fallacy of the Senator's argument-and I will not anticipate that, because when the third section comes up I desire to submit my views upon it, not at any considerable length, but more than I shall say now the fallacy of his argument is the idea that the Treasurer must pay out greenbacks as rapidly as they come in. If he can properly pay them out in the payment of debts well and good. But I will not answer that observation now.

There was another observation made by the Senator from Pennsylvania that I want to correct his mind about. This bill does not confer additional power on the Secretary of the Treasury. Not one particle of power is given by the bill to the Secretary of the Treasury. This section is a limitation upon his power. He may now take your six per cent. bonds, payable forty years after date, and sell them at par for lawful money.

Mr. CAMERON. If the Senator will allow me, I think it does give a great deal more power to the Secretary of the Treasury in this respect: it enables him to employ agents, paying them just what he pleases, for the purpose of converting these bonds.

Mr. SHERMAN. I will correct that. Mr. CAMERON. I shall be glad to hear the correction.

Mr. SHERMAN. Under the existing law, the Senator from Maine will bear me witness unless we pass some other law on the subject, the Secretary of the Treasury has the power without limit to employ agents, or any agency whatever he chooses, provided only the expense is not more than one per cent. Under the law as it now stands he employs agents. Whether that is wise or unwise I do not stop But under this bill he can employ no agent whatever who can be engaged in this matter or do anything.

to argue.

Mr. CAMERON. I know he has the power under existing law; but there is no use for that power now, unless you give him authority to reinvest these bonds. At present that authority is utterly powerless; but if you go on to make another $2,000,000,000 of bonds he will have the right to convert them, and whenever he does convert them he pays what he pleases by way of commissions and allowances. I desire to prevent that; and I shall offer an amendment for that purpose.

Mr. SHERMAN. Under this bill the Secretary cannot employ anybody. He cannot by himself or any one else sell a single dollar except of the particular kind named in this act, and then he can only lift a bond bearing a higher rate of interest by issuing a bond bearing a lower rate of interest; that is, under the first section of the bill he cannot sell a five per cent. bond running twenty years unless he can get what is equivalent now to the market value of a five-twenty bond; so that this is a vast limitation upon his power under the law as it stands. If Senators want to leave in the hands of the Secretary this unlimited power, and then shield themselves from responsibility by saying he has the power to do all this, that is one way.

Mr. FESSENDEN. Allow me to ask my friend a question. According to my recollection of those bills, for the purpose of negotiating bonds or other securities he might negotiate he had power to expend a sum of money not exceeding one per cent. He has negotiated nearly the whole, as I understand, except a very small sum. What is there left?

Mr. SHERMAN. If my friend will reflect a moment, under the law of April 12, 1866, the Secretary may go on and convert any description of bond described in the act of 1864, which is a bond bearing six per cent. interest and running forty years.

Mr. FESSENDEN. Has he the right to use the fund for that purpose?

Mr. SHERMAN. Certainly he has.

Mr. FESSENDEN. Then that ought to be restrained by law.

Mr. SHERMAN. It was the subject of complaint two years ago by me that that law gave him such extraordinary power. Now, I say to the Senator from Pennsylvania and the Senate, so far from this bill giving the Secretary of the Treasury any power whatever every section of it is a restraint upon his power. The first section is a vital and material restraint upon his power. It takes away from him all authority, all license, all discretion unless he can negotiate, par for par, the new bond for

the old.

It is due to the Secretary of the Treasury that I should make this statement: he has never come before the Committee on Finance to urge us to pass this bill, or, so far as I know, ever asked a single member to urge the passage of the bill. It is a restraint and limitation upon his power. I have no doubt he is satisfied with it. He has stated to myself and to others that he thinks he can, if the market continues favorable, exchange a considerable portion of these bonds, if they are left twenty-year five per cent. bonds for the existing six per cent. bonds; but we must leave him free to make that exchange on the best terms he can by selling the new bonds at a rate that will enable him to buy the old; and if we do so, and he makes the exchange, it is for our benefit. If he fails, there is no harm in it. That is the way in which the bill appears to me.

I am indebted to the Senator from New Hampshire for his courtesy in yielding the floor. Mr. MORTON. I ask the Senator to yield to me for a few minutes.

Mr. CRAGIN. These personal explanations are rather long.

Mr. MORTON. The Senator from California made one remark to which I desire to reply. He said he regretted my speech, but there were certain greenback localities, and the intimation was that I had come from one of them, and I was in some way pandering to that sentiment. I have as little occasion, perhaps, to pander to public sentiment as any other Senator here. I am not a candidate for any thing, and do not expect to be very soon. But I would say to that Senator and to others, when they come to discuss this question, instead of indulging in general declarations about good faith and preserving the nation's honor, it would be better if they would condescend to argue the law for a moment. I did not argue it as a question of opinion, nor as a question of choice; I simply argued it as a question of law. Those who generally argue on the other side hardly ever condescend to argue the laws which creates and determine the quality of what are called greenbacks or legal tender notes.

Now, Mr. President, I desire to enter my protest against having the Republican party committed to the dogma that the five-twenties are to be paid in coin. As a question of law it is a dogma that cannot be sustained. There is not a Democratic lawyer in the country who has ever read Blackstone and Kent, and who can read these statutes, but what can meet Senators on the stump and beat them on this legal || question; and I protest against the Republican party being committed to that doctrine throughout this contest.

Mr. CONNESS. Mr. President

Mr. CRAGIN. I must decline to yield any further.

Mr. CONNESS. I did not know the Senator had the floor.

Mr. CRAGIN. I shall only occupy a few

moments

Mr. ANTHONY. Will my friend allow me to ask the Senator from Ohio, with the thermometer at 90°, whether he wishes us to come here this evening?

Several SENATORS. Oh, yes; let us finish the bill.

Mr. SUMNER. I hope we shall have no night session. I suggest to the Senator from Rhode Island to move to suspend the evening session for to-night.

Mr. SHERMAN. I think we had better sit along and get through with this bill. Mr. ANTHONY. Very well. Mr. CRAGIN. Mr. President, I am op. posed to the amendment offered by the Senator from Maine because I believe it will defeat the objects of this bill. Being strongly in favor of the passage of the bill, I am opposed to that amendment. If the Government finds itself in a condition to pay any considerable amount of its indebtedness within twenty years it will have ample opportunity. Some eight hundred millions of the public debt will be outside of the bonds provided for by this bill, if it becomes a law, and I apprehend that that is more than can be paid in the next twenty years. I am in favor of this bill because it looks to a large reduction of interest on the public debt, and a consequent reduction of the burdens of the people. The amount of indebtedness likely to be funded under this bill, if it should become a law, is about seventeen hundred million dollars. The interest on this amount at six per cent., as at present authorized, is $102,000,000 per annum. By this bill only $700,000,000 are to be funded at five per cent. The annual interest on this amount would be $35,000,000. If the other $1,000,000,000 is divided equally between the four and a half and four per cent. bonds, the annual interest will be $42,500,000, or a total interest of $77,500,000 on the entire $1,700,000,000. This will be a saving of $24,500,000 in the amount of interest paid by the Government. In other words, the burden of the people will be lightened to that extent. A tax of ten per cent. on the income, supposing it remains at six per cent., would be only $10,200,000, or less than one half the reduction of interest under this bill.

If States were allowed to tax the five-twenty bonds, as other property is taxed, the ag gregate tax would not begin to amount to $24,500,000, the amount that will be saved by funding them under this bill. This reduc tion of interest is equal to a tax of one and three eighth per cent. on the principal, or about twenty-four per cent on the income.

The reduction of interest on the public debt will reduce the rate of interest generally in commercial and business transactions among the people. Industry will be relieved all over this land. Those doing business on borrowed capital will be able to make more profits, and consequently pay more for labor. I regard it as of the first importance that the rate of interest should be reduced in this country. It will benefit all our industries, and tend to elevate the condition of the laborers. The Government must begin this work, and now is a good time.

I am for this bill for another reason-because it puts further off the time for the pay. ment of this large debt. A very large amount of this debt is now due, if the Government chooses to pay it. It cannot be paid without crushing the people with taxation. It should

not and must not be done. The debts incurred by the States, counties, and towns, for the patriotic purpose of prosecuting the war for the Union are very great. Indeed, they are more than the people ought to be called upon to pay in the next twenty years. The resources of this country are almost beyond calculation.

The wealth of the nation is increasing more than three times as fast as its population. The individual wealth of the people is increasing annually more that the total amount of the national debt. In 1860 our aggregate wealth, not including property owned by the United States or by any State, was over sixteen thousand million dollars, being an increase of one hundred and twenty-six and a half per cent. over that of 1850. The increase of our population was only about thirty-five per cent. Supposing we increase one hundred per cent. during each ten years in the future up to 1900 the result will astonish the world. In 1870 our national wealth will be over thirty-two thousand million dollars; in 1880 over sixty

four thousand million dollars; in 1890 over one hundred and twenty-eight thousand million dollars; and in 1900 over two hundred and fifty thousand million dollars, or more than eight times what it now is. The people can then pay eight dollars as easy as they can pay one now. This generation has paid largely in life, toil, and treasure for the blessings we now enjoy. If we transmit them to a future generation unimpaired they should pay the national debt that now hangs over us as their price for the legacy of liberty and human rights.

The PRESIDENT pro tempore. The question is on the amendment of the Senator from Maine [Mr. FESSENDEN] to the amendment of the Senator from Ohio, [Mr. SHERMAN.]

The amendment to the amendment was rejected.

Mr. RAMSEY. I move to amend the amendment of the Committee on Finance by striking out the last section of it, which is in these words:

And be it further enacted, That any contract hereafter made specifically payable in coin shall be legal and valid, and may be enforced according to its terms, anything in the several acts relating to United States notes to the contrary notwithstanding.

I am opposed to the enactment of such a law as is contemplated in this section, because I believe it will virtually result in specie payments, for which the country is not prepared and of which it has had no notice. The prac tical effect of it in the country will be that small borrowers, men of small means, men who must take money where they they can get it, will be compelled to enter into contracts payable in gold; and thus indirectly, and not in a bold and manly way, you attempt the resumption of specie payments. That object is desirable, of course, but the country is uot prepared for it, the people do not anticipate it. Almost every scheme of resumption heretofore has contemplated a notice to the people, notice of a twelvemonth, of eighteen months, of two years; but here, immediately upon the passage of this section, you say that contracts for payment in gold shall be legal. The man who wants $300 to improve his farm has not the choice of places to which to go and get this small accommodation. Probably there is but one moneyed man in his vicinity, one of those men that we find in the West who have gone from the East without conscience, who have no scruple about exacting five per cent. and sometimes even ten per cent. a month. Many a farmer will want a few hundred dollars to carry on his operations, and when he goes to borrow the money he is told, "You can have it; but evidently Congress contemplates that in a short time there will be a resumption of specie payments, and I must be prepared for that time. Now, I will give you this money in greenbacks, but you must enter into a con tract with me to pay me in gold."

I do not believe the Senate contemplate that state of things. I do not think they intend to do this injustice. I do not believe the country contemplate it or desires it or will endure it. Instead of "taking the bull by the horns" boldly and repealing your legal-tender act and letting the whole country come to a resumption of specie payments, you attempt to do it indirectly by commencing with the small dealers and the men who borrow small sums of money throughout the country. This will be the effect of it. They will be oppressed; they will be compelled to enter into these contracts. It is true the Senator from Ohio may tell us that a contract of that kind would be usurious; but why should it? A dollar in greenbacks is a legal dollar, and so is a gold dollar. How, then, could such a contract be pronounced usurious? What court in the land would so declare? We have nothing to do with the construction of the law; it is the enactment of it which is our province. We cannot guaranty against a construction by the courts that such a contract would be legal.

I say this is not contemplated, not expected by the country. They have had no notice of

it. When the time comes for the resumption of specie payments ample notice should be given and the whole country placed on an equality in regard to it. By this kind of special legislation the small borrowers of the country, the poorer men of the land, will be compelled to pay specie, while the larger dealers, the men borrowing large sums, will be dragged on in their own good time. I say it is unfair, partial, and oppressive to the country, and I hope the Senate will reject this portion of the committee's amendment. The honorable Senator from Massachusetts, [Mr. SUMNER,] in his very fine speech the other day, said that the effect of this provision was that men would make their contracts as they pleased, and he added, let them take their choice. He regarded it as a matter of contract in regard to which each man would have a right to act for himself. If the honorable Senator had seen a great part of the western world he would find that it is the money-lender who is a law unto the moneyborrower. They do not meet on equal terms. It is the man who has the funds to lend that makes the law to the man who wants to borrow money. You propose here to give him this assistance to enable him to exact a gold contract from the borrower. I do not believe the country expects it. I believe the country will reject it, and I hope the Senate will.

Mr. MORRILL of Vermont. We have existing laws that require the payment of all duties in coin, and yet under a construction of the law, as it now stands, any contract that is made for the procurement of the coin canno not be enforced. Is it not reasonable, while we are under the necessity of collecting our duties in coin, that the parties who make contracts to obtain that coin may make valid contracts which can be enforced? The Senator from Minnesota talks as though all the people who go from the East to the West are parties with their pockets filled with "rocks" and without conscience.

Mr. RAMSEY. I do not say all; I say

many.

Mr. MORRILL, of Vermont. I am afraid the Senator judges of the East by himself. I believe he went from the East to the West. I want this law passed for the protection of the poor men who are going West to buy land, among other reasons. Men, as the Senator from Minnesota, who have large possessions in land are now able to dispose of them at an inflated currency price, take a mortgage for payment for the property at a long term of years, and when that comes due the party who has purchased the land finds to his surprise that he is obliged to pay some forty or fifty per cent. more than he would have been compelled to had he had an opportunity to make a coin contract. Take, for instance, a man who is going to build a house: he cannot pay for in for a long term of years; he is a mechanic; if he could obtain a credit upon that house upon any terms which he would venture to risk he might afford to take it and buy it, but under present circumstances it is so dangerous that no man with ordinary prudence, unless he is possessed of extraordinary wealth, is willing to make a contract payable at any future term of time.

one.

Mr. President, I do not believe that this idea of the Senator from Minnesota is at all a valid Every Senator must be aware, I think, that contracts that are made where the usury laws are attempted to be evaded, where property of any kind is put in above its value, are always decided to be usurious; and so it would be in this case. If a contract was made where the consideration was currency, and the agreement that the interest should be paid in coin, the courts, I believe, would hold it to be usurious.

Mr. HOWE. Mr. President, I am decidedly of the opinion expressed here by the Senator from Minnesota, and I differ with the Senator from Vermont. I do not believe when that law is passed any law in any State of the Union against usury can be enforced. I believe that it is in effect a repeal of every limitation upon

the rate of interest now existing in the statutes of the States. I cannot think there is a doubt upon that point. The Senator from Vermont says, and truly, that the laws now require duties on foreign imports to be paid in coin, and he urges that it is nothing more than right and reasonable that the men who have to pay the coin into the Treasury upon those importations should be allowed to make a contract for the coin. He is right; but there is no sort of difliculty in his making a contract as the law now stands. He can go anywhere where he can find a man with coin to sell and buy the coin and pay for it, and then he has it, and then he can meet his obligations to the Government. But buying coin to be delivered now is one thing and buying coin to be delivered sixty days or sixteen months hence is a very different thing. The first he can do; the second, it is the purpose of this clause in the bill to enable him to do.

Now, the Senator from Minnesota says, and I think he says with absolute truth, that the practical effect of this provision will be to change all contracts from currency contracts to coin contracts; at least all men who want to borrow will be compelled to borrow of those who stipulate to be repaid in coin, whether they borrow to be repaid in sixty days or six months or six years. The lender will require the contract to be redeemed in coin. And what is the effect of that? Why, in two months after this provision is passed every borrower in the country is a purchaser of coin, of necessity, to redeem his contracts, to meet his obligations. He is upon the market seeking to purchase coin; he must have it because his mortgages can be canceled in no other way; so that your borrowing classes who have not any coin at once become responsible for paying the indebtedness of the country in coin by their own contracts. At the same time your Wall street operators, your speculators there, are operating upon the price of coin. The capital of the country is released by the law as it stands; they are released from the obligation of furnishing a dollar of coin to any body; but the borrowers of the country are put under obligations by virtue of their own contracts to procure it. Your coin speculators have the necessities of the borrowing classes then to operate upon, and when coin goes up one cent or five cents, it is the pocket of the borrower that feels it; and the borrowing classes have then a double difficulty to deal with, the exactions of the lender, always quite as much as the borrower can stand, and the ingenuity and the schemes and the contrivances of the coin speculator in the great markets. I do not believe that this is the way to commence to bring about specie payments. The capital of the country should take the lead in this matter, and not the neces sities and the poverty of the country. The question is suggested to me now for the first time. I am speaking to it as from first impression. I believe the operation of it will be just as has been stated.

The PRESIDENT pro tempore. The question is on the amendment of the Senator from Minnesota to the amend.nent of the Senator from Ohio.

Mr. RAMSEY called for the yeas and nays, and they were ordered; and being taken resulted-yeas 6, nays 29; as follows:

YEAS-Messrs. Cameron, Harlan, Howe, Osborn, Ramsey, and Wade-6.

NAYS-Messrs. Cattell, Chandler. Cole, Conkling, Conness, Cragin, Drake, Ferry, Fessenden. Howard, McCreery, McDonald, Morgan, Morrill of Vermont, Morton, Nye, Patterson of New Hampshire, Pomeroy, Rice, Sherman, Stewart, Sumner, Tipton, Trumbull, Van Winkle, Welch, Willey, Williams, and Wilson-29.

ABSENT-Messrs. Anthony, Bayard, Buckalew. Corbett, Davis, Dixon, Doolittle, Edmunds, Fowler. Frelinghuysen, Grimes, Henderson, Hendricks, Morrill of Maine, Norton, Patterson of Tennessee, Ross, Saulsbury, Sprague, Thayer, Vickers, and Yates-22 So the amendment to the amendment was rejected.

Mr. WILSON. I move to amend by striking out the three first sections of the amendment, and inserting what I send to the Chair.

The words proposed to be inserted in lieu of the first three sections of Mr. SHERMAN's amendment were read, as follows:

And be it further enacted, That the Secretary of the Treasury be, and he is hereby, authorized and required to issue, upon the faith and credit of the United States, in suins of not less than fifty dollars each, coupon or registered bonds to an amount suflicient to redeem all the interest-bearing bonds of the United States, except the five per cent. bonds, to be known as the "consolidated debt of the United States."

And be it further enacted, That the bonds issued under the provisions of this act shall be payable in fifty years from the dates thereof, and shall bear interest at the rate of five per cent. per annum; the said interest shall be paid semi-annually, and at such dates as will cause an equal amount thereof to be paid quarterly, to wit: On the first days of January, April, July, and October, in each year; and the principal and interest of the said "consolidated debt of the United States" shall be paid in coin as hereinafter specified.

And be it further enacted, That the said bonds shall be issued solely in exchange for and in redemption of the herein before mentioned interest-bearing bonds of the United States, and such exchange and redemption shall be made at any time prior to the 1st day of January, 1870, at such places and under such regulations as the Secretary of the Treasury may prescribe.

And be it further enacted, That the said bonds shall be subject to a national tax of one half of one per cent. per annum, to be paid semi-annually in coin at the date of maturity of the interest thereon, and the amount of said tax shall be specified on the face of said bonds; and it shall be the duty of the Seeretary of the Treasury, under such regulations as he may prescribe in making payment of the interest on said bonds, to deduct therefrom the tax hereby provided, and to cover the same into the Treasury of the United States.

And be it further enacted, That it shall be the duty of the Secretary of the Treasury to ascertain, as nearly as may be, the residences of the persons or corporations owning the bonds upon which said tax of one half of one per cent. shall be collected, and he shall thereby determine as accurately as is possible the amount of said tax paid by each State respectively through persons and corporations resident therein, which amount shall, by said Secretary, be paid over annually to the State from whose citizens and corporations the same was received. And such taxes shall be in lieu of all State, municipal, or local taxation on said consolidated debt of the United States."

And be it further enacted, That the gradual reduction and final extinction of the said "consolidated debt of the United States" shall be accomplished in the following manner., to wit: All the taxes paid under the provisions of this act on bonds held or owned by persons and corporations not resident in the United States shall be applied annually to the payment and liquidation of the principal of said debt and to no other purpose, and the Secretary of the Treasury shall for ten years, from and after the passage of this act, redeem annually by purchase, in coin, $10,000,000 of said debt; from the tenth to the twentieth year thereafter he shall in like manner redeem $20,000,000 annually; from the twentieth to the thirtieth year thereafter he shall in like manner redeem $40,000,000 annually; from the thirtieth to the fortieth year thereafter he shall.in like manner redeem $60,000,000 annually: and from the fortieth to the fiftieth year thereafter he shall in like manner redeem $80,000,000 annually, or until the whole of said debt is redeemed.

Mr. WILSON. Mr. President, this amendment proposes to submit to the bondholders the simple proposition to change their six per cent. bonds without taxation for five per cent. bonds running fifty years with one half of one percent. taxation. The amendment does not propose to put upon the market this consolidated debt of the United States, amounting to nearly two thousand million dollars, and using the proceeds to redeem the outstanding bonds. In this particular the amendment differs from the amendment of the Committee on Finance, which provides for exchanging these new bonds for the old bonds, or for using the proceeds of the new bonds to redeem the old ones. The amendment of the Committee on Finance necessarily raises the question whether the five-twenties shall be paid in gold or in greenbacks. My amendment avoids that disturbing question, a question upon which gentlemen of unquestioned capacity and character entertain widely different opinions. My amendment gives the bondholders the privilege, from its passage to the 1st day of January, 1870, of exchanging their ⚫ bonds bearing an interest of six per cent. for bonds bearing an interest of five per cent. less one half of one per cent. taxation, and having fifty years to run.

There has been, and there will doubtless continue to be, unless we remedy it, much complaint that millions of dollars of active capital, invested in the bonds of the United

States, are exempt from municipal or State taxation. In the dark and trying hours of the war the necessities of the nation imposed upon Congress the policy of exempting the bonds of the United States from taxation. It was clear to the comprehension of all that the exemption of these millions of capital, invested in the bonds of the Government, would work inequalities among those who bore the burdens of local taxation. Congress could not permit if it would the municipal or State authorities to tax the bonds of the United States, and thus impair if not destroy the credit of the Government. Congress could not, in those days of stern necessity, provide for the taxation of bonds, either for local or national purposes. But the pressing needs of the country are now over; the opportunity is now given us to consolidate our national debt upon new terms and conditions. It is in the power of Congress now to do something to equalize the burdens of State taxation. Many of the States, especially those east of the Alleghanies, owe large amounts for moneys borrowed to fill the ranks of the armies during the war. Hundreds of millions of bonds held in these States where local taxation bears heavily on the people escaped contributing anything toward the burdens of State taxation. By imposing upon the bondholders a tax of one half of one per cent., and paying over that tax. to the treasuries of the States where the persons or corporations who hold the bonds reside or do business, Congress does something to equalize taxation and to lighten the burdens of the people. The inequalities of taxation and the burdens of taxation are greatest where the largest amounts of bonds are held. The taxes received upon the bonds held abroad go into the Treasury of the United States, and may be used toward paying the interest on or extinguishing the principal of the bonded debt.

Mr. HOWE. Would it not suit the purposes of the honorable Senator just as well to make the interest on the bonds four and a half per cent. and exempt them from taxation as to make it five and take out one half per cent? Mr. WILSON. No, sir.

Mr. HOWE. Why not?

tieth year thereafter he shall in like manner redeem $20.000,000 annually; from the twentieth to the thir$40,000,000 annually; from the thirtieth to the fortieth tieth year thereafter he shall in like manner redeem

year thereafter he shall in like manner redeem $60,000,000 annually; and from the fortieth to the fiftieth year thereafter he shall in liko manner redeem $80,000,000 annually, or until the whole of said debt is redeemed.

The property of the United States is now estimated to be $22,000,000,000. It is proposed to pay $10,000,000 annually for the next ten years; in 1878 the property of the United States will have increased to $37,466,000,000. From 1878 to 1888 it is proposed to pay $20,000,000 annually; in 1888 the property of the United States will have increased to $65,184,000,000. From 1888 to 1898 it is proposed to pay $40,000,000 annually; in 1898 the property of the United States will have increased to $114,824,000,000. From 1898 to 1908 it is proposed to pay $60,000,000 annually; in 1908 the property of the United States will have increased to $263,724,000,000. From 1908 to 1916 it is proposed to pay $80,000,000 annually; in 1916, forty-eight years hence, the property of the United States will have increased to $323,212,000.000, and our debt will have been extinguished. By this plan it is proposed to pay during the next twenty years only $300,000,000 of the $2,000,000,000 of the consolidated debt. The balance of the debt, amounting to $1,700,000,000, will be paid during the following twentyeight years. Twenty years hence the property

of the United States will have increased more than threefold, and the debt will have become a light burden, easy to be borne. Our national debt can easily be carried and easily extinguished if the nation is honest and if we make wise provisions for its payment.

Mr. FESSENDEN. I desire to have an executive session.

Mr. SUMNER. Allow me to ask the Senator whether he thinks we had better come here to-night?

Mr. FESSENDEN. I think not. Mr. SUMNER. adjourn.

I think we had better

Mr. FESSENDEN. We shall adjourn at five o'clock.

Mr. SUMNER. The Senator is aware that unless we do adjourn there will be a recess at five o'clock.

Mr. FESSENDEN. I move that the Senate

proceed to the consideration of executive

business. We can settle that matter in due time.

The motion was agreed to; and after some time spent in executive session, the doors were reopened, and the Senate adjourned.

HOUSE OF REPRESENTATIVES.
MONDAY, July 13, 1868.

The House met at twelve o'clock m. The Journal of Saturday last was read and approved.

Mr. WILSON. I think the two thousand millions of active capital invested in the consolidated debt of the United States ought to pay something toward the support of the State governments. It is a source of complaint among the people that the money invested in Government bonds contributes nothing to the support of the schools, the poor, the roads, or to pay the county or State taxes. The inequalities of taxation in States or municipalities are in proportion to the amounts invested in Government securities. Those communities that came forward in the most prompt and patriotic manner during the war and furnished money to carry on the contest suffer most from the inequalities of taxation. Those sections of the country where many of the people believed the bonds of the Government were worthless, who would not invest in bonds themselves, and who advised their neighbors not to invest in Government securities, are burdened the least by the inequalities of taxation. I notice, how-setts, and Mr. NIBLACK, as the committee of ever, that those persons who denounced greenbacks as wanderers and vagabonds like Cain, and who denounced the bonds of their country as worthless, who predicted the repudiation of the obligations of the Government, incurred for the preservation of the national existence, have the most now to say about the inequalities of taxation. I therefore propose that in funding anew the debt of the United States we do something to relieve the people of the States from the inequalities of taxation that press upon them.

I propose that the consolidated debt of the United States shall be paid mainly by the increasing population and wealth of the country. My amendment provides that the Secretary of the Treasury

Shall for ten years, from and after the passage of this act, redeem annually by purchase in coin $10,000,000 of said debt; from the tenth to the twen

INTERNAL TAX BILL.

The SPEAKER announced the appointment of Mr. SCHENCK, Mr. HOOPER of Massachu

conference on the part of the House upon the bill (H. R. No. 1284) to change, and more effectually secure the collection of internal revenue on distilled spirits and tobacco, and to amend the tax on banks.

ORDER OF BUSINESS.

The SPEAKER. This being Monday, the first business in order is the call of the States and Territories for bills and joint resolutions for reference to their appropriate committees, not to be brought back into the House by a motion to reconsider, commencing with the State of Maine. Under this call memorials and resolutions of State and Territorial Legislatures may be presented.

NAVY-YARD AT CHARLESTOWN. Mr. LYNCH introduced a joint resolution (H. R. No. 382) authorizing the appoinment of examiners to examine and report upon the