stored at Florence, in the State of South Carolina, and over two hundred bales, part of it sea-island, were stored at Sumter; that the confederate army retreating before General Sherman burned the cotton at Florence, and that after the surrender of Charleston some national troops, under the command of General Potter, made a raid on Sumter and burned the cotton there.

The petitioner concedes that the Government is not legally liable, either for her services, her charities, or her losses; she never expected any compensation for either. And although she found her family at the close of the war reduced from affluence to poverty it was no part of her purpose to ask any recognition from the Government of the sacrifices which she had made, or of the sacrifices to which she had been subjccted. Her trust was that business would return to Charleston with peace, and that with returning business the fortunes of her husband would revive. That hope has been disappointed, and she now feels compelled by necessity to ask of the Government some return for what she and her family have done and suffered.

The loyalty of the petitioner and her husband, and the excellence of their personal characters, are approved by Senators who have known them for years, and by many prominent citizens who have enjoyed the same advantage, and some of whom reside in this city, and some elswhere.

The tireless diligence displayed by Mrs. Potter in her care of our sick and imprisoned soldiers is attested by a voluminous correspondence submitted to your committee, to which correspondence such soldiers and their friends in different, portions of the country are parties.

The nature and extent of the services rendered by Mrs. Potter are graphically stated by Mr. Fredrick R. Jackson, formally a sergeant in the seventh regiment of Connecticut infantry, and now a clerk in the Treasury Department.

Mr. Jackson was himself one of the subjects of Mrs. Potter's care. His own good character and truthfulness are vouched for by one of the Senators from that State. His statement is as follows:

WASHINGTON, D. C., June 18, 1868. HONORABLE SIRS: Your chairman, Senator HOWE, having requested me to put in writing a short statement that I made to him in the committee-room this morning, I now comply, adding such facts as during my short audience with the honorable gentleman I was unable to state, and which I think will be further proof of the loyalty and devotion to the Union cause of the noble woman in whose behalf the statement was made:

I, Fred. R. Jackson, formerly a sergeant in company F. seventh Connecticut volunteer infantry, lost my left arm in an attack made by the United States troops upon Fort Lamar, at Secessionville, James Island, South Carolina, June 16, 1862. I lost my arm at five a. m.; lay upon the field until half past ten p. m., when I was taken prisoner and carried through the earthwork which we had attacked to a house in the rear, where my arm was amputated. The amputation took place after I had been stripped of all my clothing. Ilay,upon the bare floor of the house until late in the afternoon of June 19, 1862, when I, with others who were severely wounded, was placed upon a tug-boat and taken to Charleston, South Carolina; arriving there after dusk of the same day, I was transferred with the rest to a building known as the Mart, and which then was styled the Mart hospital, upon Queen street, near Church street. I was placed in a cell upon the third floor. When I was carried into it there were six already in it; one more was brought in after me, making eight in all in the cell. I was wrapped up in a horse blanket, which smelled as though fresh from the stable, when put on board of the boat to be taken to Charleston. This blanket was removed from me when put into the cell, and I was laid naked upon the floor and hearth, with my head resting in a pile of wood ashes in the fire-place. A small piece of dirty cloth was laid over me to hide my body from waist to feet. I laid there in that condition until about ten a. m. next day, when one of the nurses (an Irishman by the name of Flynn, who was a confederate soldier) came and brought me a small piece of meat and a small piece of corn bread or cake. Soon after he appeared and washed the stump of my arm with cold water, although not effectually enough to cleanse it of the maggots which literally covered it. In washing it he allowed the water to run under my shoulder and head, and that, together with the perspiration which the weakness of my body naturally caused, coming in contact with the wood ashes under my head and neck, made a lye which ran down the entire length of my back, and in the space of a few hours my back was one large,

raw sore.

I think it was the second morning (June 21, 1862) after my arrival in Charleston that Mrs. L. T. Potter, in company with a gentleman, came into the Mart hospital, and went through the various cells and saw our condition. She immediately sent out and had food of sufficient quantity and most excellent quality cooked for us. She also obtained clothing, such as shirts, drawers, and socks, &c.. (for we were all in an almost nude condition,) towels, soap, toothbrushes, cups, sponges, and cologne, and had almost all of the men (forty-nine) on mattresses, before seven p. m. A large, broad, and very soft lounge was obtained for me. She supplied us all with sheets and pillows, and within three days each man had a mosquito-bar resting over his bed on a framework. After this she came every day, bringing sufficient and excellent food for all, and often custard, arrow-root, lemons, &c., for such as could not eat heavy food, Occasionally she brought us delicacies that one or two of her friends had given her for us. Every second or third day she furnished clean under-clothing for us all, and, as fast as occasion required, all articles which necessarily pertain to a

Almost hospital where wounded men are lying. daily she brought her son Fred., a young man about fourteen years of age, who performed such services Ho for us as it was not proper that she should. actually performed all of the menial services of a hired man-nurse.

After she first came to us she came daily (Sundays not excepted) at about nine a. m., and distributed to those who had soiled clothes the clean clothing she had brought. While the men were donning their clean garments in one cell, she would be in another dressing the wounds of all there, taking always the worst wounded first.

The wounds of all literally swarmed with maggots, and, as the surgeon who had us in charge took no steps to keep them from our wounds, she herself took the matter in hand, and procured, as often as was necessary, all of the "labarague" that was needed. (This was the name by which we knew the solution; so named, I understand, from its discoverer or original maker. I believe it is otherwise known as solution of chloride of soda.) The wounds of some discharged so much that it was actually necessary to change their clothing two and three times a day. I have in mind now the case of a man named Cole, of the eighth Michigan infantry, whom Mrs. Potter always gave daily three changes of clean linen, and another by the name of McVeigh, of the same regiment, I remember was always given the same.

This man Cole complained that his mattress was not high enough above the waist; he wanted to be propped up; so Mrs. Potter had an inclined plane made for him, and he used it until he was sent to Columbia, South Carolina. All of this clothing she procured, bought and distributed herself. She daily two or three large baskets of soiled clothes taken away by the washerwoman, whom to my knowledge she paid out of her own pocket, I know this from having heard the washerwoman talking with her about it in the entry by our cell.

In addition to all this she never entered our cell door in the morning without being followed by a negro carrying a basket of peaches and ripe figs, and frequently watermelons and cantelopes. She always carried upon her own arm a basket in which she brought us brandy and wine and sometimes cordials. The day never passed during the two months I was in Charleston that Mrs. Potter did not bring for the eight in our cell either brandy, wine or cordial, which she distributed around after dressing our wounds, which she always did in the most tender and motherly manner, talking to us, when not watched by the guard or nurses, kindly, and in a lively vein, apparently striving to keep up the spirits of all. Those in the other cells were treated in precisely the same way. She furnished all with pipes and smoking tobacco, and those that chewed with chewing tobacco. (A paper of Solace" cost then two dollars; a paper of "Mrs. Miller's" put up in blue paper, seventy-five cents.) We were never, while in Charleston, out of this article; in fact, all of us carried tobacco away with us when we went from Charleston to Columbia. When we were sont to Columbia she furnished every man with coat, pants, boots.(or shoes,) caps, shirts, drawers, socks and towels, besides many with handkerchiefs. She generally remained with us until four or five o'clock p. m., always busy either waiting upon us or mending our clothes when they were worn, and I have known her upon two or three occasions to stay until cleven o'clock p. m. The guards at the lower door always used to stop her and examine her servant's baskets, but she hired them by giving them money, and in some cases clothes for their children, not to examine hers. Once she came into our cell quite agitated, and upon Captain Pratt's asking. Why, Mrs. Potter, you seem quite agitated-what is the matter?" she replied, "Not much, only the guards charged bayonets on me at the lower door when I attempted to come in, and I had to coax and finally to push my way in; it seems they had orders to stop me. or words to that effect. I think, however, I have given the conversation verbatim. Finally she was stopped, and through the doctor and by means of money, she got permission from headquarters of General Pemberton to visit us.

After a long talk he (the doctor) was told-so I understood at the time-that "if she was such a fool as to spend her money on those Yankees, why then let her, as she claims British protection." She came to us regularly, day by day, against all opposition and the entreaties of former friends, many of whom had not only said that they "would no longer recognize her as a friend," but actually went so far as to insult her upon the public street. These facts we learned from others, who knew Mrs. Potter, and who knew of the insults above stated. She herself never complained of any trouble that she encountered on account of visiting us, and never would let us know any of the trials which she sustained on our account. The nurses which the rebels placed over us were two Irishmen in the confederate service and one Irish woman. Although I believe the confederate government furnished us with something approaching to full rations, we never got one-tenth part of a ration. In fact when able to walk, (about five weeks after I was put into the cell,) I went one day into the cell opposite ours, (the doors being left open, as all were too weak to make any attempt to escape,) and looked out of the window fronting on Queen street. While there I saw the man Flynn go out of the lower door with an uncovered basket full of meat and corn bread. The nurses have said in my presence that we did not need any government ration, as Mrs. Potter fed us all more than anybody could get at any of the hotels." I suppose that was the reason they stole our government rations. Certain it is that during the latter part of our imprisonment none of us got any of the confederate rations. The man Flynn was continually drunk. We used to think that he stole our rations for liquor. His duty was to wash our wounds, so the doctor told him, twice a day, in

the morning and in the evening; but he never washed the wounds of any in our cell in the morning, and but seldom in the evening. In the morning either Mrs. Potter or her son Fred would wash my wound and the wounds of the others in the cell. It was always the first attention we had in the morning. She and her son did the same for all in the other cells. The man Flynn would sometimes come up and eit in the entry in the evening, opposite our cell door, and smoke; when called to come and dress our wounds, he would curse us and call us all of the evil names he could make his vile tongue utter. We used to hire him to come in and wash and dress our wounds. I have often paid him five dollars to come in with his pan of water and dress my own wound. The money that I did this with was given by Mrs. Potter. She gave all of us all the money we wanted. There was not a man in that prison but that had all he wanted, and none of them asked for it. She came around daily and offered it to all in sums of ten, fifteen, and twenty dollars. Captain Pratt once, to my knoweldge, took fifty dollars. If any of us were nearly out, she always pressed more upon us. We used it to hire the nurses to do what we wanted done when she was not there; also to send out for anything we wanted in her absence.

We seldom got any change back, no matter what the price of the article sent for. One of our officers once sent out, shortly after our arrival, a gold piece, which he had managed to keep, in payment for something he wanted, and only got back a few "eonfederate shinplasters;" they charged the regular price, but would give no premium for gold, as they said "it was a prison offense to deal in United States money;" no citizen could use it for fear of being imprisoned. The money Mrs. Potter gave us was confederate money, but it was worth just as much there, it seems, as our own money. "She dared not circulate our money," she said. From hearsay, we all knew, or thought, that Mr. Potter was one of the richest men in Charleston, and that Mrs Potter was rich in her own right. She sent us money while in Columbia. I received money from her while there four or five times; once she sent it through an officer who had been a friend of hers from early life; he happened to be "officer of the day" soon after, and then came in and gave it to us. For this he was arrested and kept under arrest for a year. When in Columbia we corresponded with her, addressing her by an assumed name at times, but we never told her of our troubles and sufferings there, feeling that she had done so much for us, and knowing that she still had so many to do for there. She earnestly desired to know our wants, saying that she would supply them, but we could not bear to write her of them, as we knew it would sorely grieve her. We did not realize that we were prisoners while under her care, but after a few hours' stay in Columbia we knew only too well what it meant to be in a rebel prison. Holmes and Gilbert of my regiment, and others of other regiments, who died at the Mart hospital, ail died in Mrs. Potter's arms, expressing to her, in the hearing of all, their deep and heartfelt thanks for her great kindness and solicitous care for them and us, and praying, with their dying breath, that she might have her reward both on this earth and in heaven. In stating all that Mrs. Potter and her son did for us I should require two or three days, and the statement would be so lengthy, I fear, as to cause your honorable committee to cast it aside without a reading. She has suffered, in one way or another, as no other woman, North or South, ever has suffered in the cause of the Union. I could tell your committee things that would make your hearts bleed concerning the death of that same son, Fred, caused by injuries received for coming to our hospital and tending to our wants; but I forbear, as an allusion to the subject might be very painful to Mrs. Potter's feelings.

If you require further evidence of me I should be most happy at any time to testify in this dear and noble-souled woman's behalf.

I am, very respectfully, your obedient servant,
FRED. R. JACKSON,

Room 59, Third Auditor's office, (late sergeant
company F, seventh Conn, vol, inf.
Hon. Senators of the United States Senate Committee on
Claims.

The committee are of opinion that the Government cannot undertake to make return for all the individual charities by which the history of the late war is distinguished, nor to make compensation for all the property destroyed in the prosecution of that war. But, considering the munificence with which the petitioner voluntarily ministered to the necessities of the nation's soldiers when they were in distress, the committee think it would befit the generosity of the nation to relieve her necessities now that she and her family are in distress, more especially since that distress has been in part occasioned by the national forces.

Your committee therefore ask leave to report the accompanying bill, and to recommend its passage. Before the reading had been concluded, Mr. STEWART. It seems to me a bill of that kind ought to be considered in a full Senate. It is a matter about which there is a diversity of opinion. When we commence to pay these claims in the South, it seems to me we ought to have a quorum.

Mr. CONNESS. There will be a quorum here soon.

Mr. STEWART. I move that the further consideration of the subject be postponed. Mr. HOWE. No, no. The reading has now come to the statement of Mr. Jackson.

I wish the Senate would hear that statement, and then see who will object to the passage of the bill.

The Chief Clerk resumed the reading of the report, and having proceeded for some time further,

Mr. STEWART. I think enough has been read to satisfy the Senate in regard to the character of the evidence. I presume the com. mittee have examined the items. It appears to me that the claim ought to pass. I do not think there is any necessity for reading the report further.

Mr. HARLAN. I will not insist on reading any more of the report, as I perceive my honorable friend from Nevada has become impatient; but I wish to call attention to the character of this class of claims, not this one in particular, for this is the second one that I remember of this kind where an attempt has been made by Congress to pay for the charities that our noble women have bestowed on our brave men on and near the battle-fields of the country. There is no nation on earth that can pay for these charities. I had supposed that the reward they would receive was laid up in a surer place; that it was a higher reward. This may be an anomalous case; but if you will notice the report, there is no evidence that this is a case different from a thousand cases that I think I could name, except the testimony of the woman herself and one sergeant who says he was nursed. There are hundreds of ladies in this city, some of them the wives of members of this and the other branch of Congress, and their sisters and daughters, some of whom are not now living, who bestowed the same kind of charities with as lavish a hand as this report says that this excellent lady bestowed on this patient and others. I do not know where such appropriations would end.

Of course it is a very ungracious thing for any Senator or member of Congress to vote against an appropriation of money for such an object. This is only $20,000; but can the nation pay $20,000 to every noble American woman who has bestowed charities and kindness on our suffering soldiers? I suppose they never dreamed of any such a thing themselves origin ally; and if we undertook to do this, to reward them from the Treasury of the United States, every Senator will bear me evidence that the less meritorious as a general rule will receive the reward.

The bill was reported to the Senate, ordered to be engrossed for a third reading, read the third time, and passed.

REMOVAL OF DISABILITIES.

Mr. STEWART. I move that the Senate proceed to the consideration of House bill No. 1353.

The motion was agreed to; and the bill (H. R. No. 1353) for the removal of certain disabilities from the persons therein named was considered as in Committee of the Whole.

An amendment had been reported by the Committee on the Judiciary, to strike out all after the word "namely," in line ten, being the names in the House bill, and in lieu thereof to insert a long list of names.

Mr. SHERMAN. I ask the Senator from Nevada whether there is anything in the bill except to remove from certain individuals who are named the disabilities imposed by the fourteenth constitutional amendment.

Mr. STEWART. There is not; and I will say that as we propose to amend it it includes additional names which have been sent on by prominent men and by the North Carolina delegation recently admitted.

Mr. SHERMAN. And concurred in by the || Judiciary Committee?

Mr. STEWART. The amendment is reported by them and I have added some names. I have consulted them from time to time. There is no name that is not vouched for by good authority.

Mr. SHERMAN. I move to dispense with

the reading, because that gives us no information.

The PRESIDENT pro tempore. The reading of the amendment can be dispensed with by unanimous consent. The Chair hears no objection, and it is dispensed with.

The amendment was agreed to.

Mr. WILLEY. After the name of "Peter Saunders," in line one hundred and forty, I move to insert the word "senior."

The PRESIDENT pro tempore. That correction will be made.

The bill was reported to the Senate as amended, and the amendment was concurred in.

Mr. DOOLITTLE. I do not wish, as a matter of course, to move an amendment that I know the Senator from Nevada is disposed to oppose; but I appeal to the Senator from Nevada to adopt some general provision in the bill that shall operate generally in a State on persons in the same condition. I have received several letters from persons stating that they have been elected to little offices in counties in some of the States, some as justices of the peace, and some as county commissioners, and so on; and if they have been properly elected, and the authorities there certify that they are properly elected, the bill had better apply to them generally, and not put us to the trouble of stating by name all these persons of whom we can know nothing. Because their names are put in the bill we cannot know them to be any more entitled to this relief than anybody else. I wish the honorable Senator from Nevada would just put some general clause in the bill by which all persons who are elected to county officers, or members of the Legislature, if they are properly elected under the laws in force there, shall have their disabilities removed. I suggest to the honorable Senator to add that, and save a great deal of trouble Men have been elected together at the same time, and you pass a bill by which some can be sworn in and some cannot. It is a very improper mode of dealing with persons who have been properly elected to have one class of men send up their names and have their disabilities removed while the others are to remain under those disabilities, whatever they are. not think it just to deal with this question in this way. It is utterly impossible for the Senate to take up each case and judge of the|| merits of the particular case. I suppose there

I do

We can

are five hundred names in the bill. know nothing of them. I will not divide the Senate, but I will ask the honorable Senator to allow the bill to lie over until to-morrow morning, and then without any discussion I shall simply propose to amend the bill and let it come to a vote.

Mr. STEWART. It will be impossible to get such a measure as that through. There are difficulties about that.

Mr. WILSON. Put it on the next bill. Mr. STEWART. Let this go through. Mr. DOOLITTLE. I will draw an amendment in a moment. I should like to take the sense of the Senate upon this subject.

Mr. SHERMAN. If the Senator from Wisconsin insists upon it, I call for the regular

order.

Mr. STEWART. I appeal to the Senator from Wisconsin to let his proposition be tested on some other bill. Let this go through.

The amendment was ordered to be engrossed, and the bill to be read a third time. The bill was read the third time, and passed.

THE FUNDING BILL.

Mr. WILLIAMS. I desire to suggest a modification of the amendment proposed by the Senator from Michigan, which I believe he is willing to accept. That is to insert after the word apply" the words "to contracts for the borrowing of currency."

Mr. HOWARD. I accept that modification of the amendment, and I ask the Clerk to report the amendment as now modified.

The CHIEF CLERK. The amendment, as now modified, reads:

Provided, That this section shall not apply to contracts for the borrowing of currency or the renewal or extension of an indebtedness under a contract already entered into, unless such contract originally required payment in coin.

Mr. RAMSEY. Will not the Senator add "or payment of interest," to guard against possibility of adding gold interest?

Mr. HOWARD. This guards every species of contract.

The amendment to the amendment was agreed to.

Mr. RAMSEY. I move to amend the third section by striking out "hereafter," in the second line, and inserting after the word "made" the words "from and after the 1st of July, 1870;" so as to read:

And be it further enacted, That any contract made from and after the 1st of July, 1870, 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.

Mr. SHERMAN. I would rather at once strike out the section than have it put off a year and a half. People are compelled to get gold to pay duties, and they cannot make contracts for it now.

Mr. RAMSEY. Does the Senator expect to resume specie payments in a year or a year and a half?

Mr. SHERMAN. It is idle to ask that question now. Congress will meet twice before January 1, 1870. I trust the Senator will not press the matter any further. Every objection to the section has been fairly met by the amendment already adopted, and it is not worth while to postpone its operation so long.

Mr. RAMSEY. I propose the amendment; it simply postpones its going into operation for eighteen months.

The amendment to the amendment was rejected.

Mr. FERRY. I have been seeking an opportunity to offer an amendment to come in at the end of the first section, which I will now offer with a remark or two as to the object of it:

No payment compulsory upon the creditor of any portion of the interest-bearing debt whose payment is authorized in this section shall be made under its provisions, otherwise than in coin.

I will state the reason why I offer this amendment. The chairman of the Committee on Finance informs us that by his construction of the existing law, under this section authority is given to pay the five-twenty bonds in greenbacks to the extent of the $400,000,000 of currency now authorized by law. In other words, the chairman of the Committee on Finance informs us that it is his construction of the law now that those bonds may be redeemed to the extent of $400,000,000 in greenbacks. The Senator from Indiana [Mr. MORTON] yesterday in the argument which he made demonstrated that under that legal theory which he himself held and argued for, the new bonds authorized by this first section might be sold, as he stated, to the amount of $50,000,000, and so much of currency received into the Treasury by that sale, and then that currency employed to pay $50,000,000 of the five-twenty bonds which have run inore than five years. I do not see but that if the theory of the chairman of the Committee on Finance and of the Senator from Indiana with regard to the lawfulness of paying any portion of the five-twenty bonds in greenbacks is correct, or shall hereafter be held to be correct by the Administration that now is or that is to be, I do not see but that the reasoning of the Senator from Indiana is correct; and that in this first sec

tion the Secretary might, if we are to have a Secretary holding the views either of the chairman of the Committee on Finance or of the Senator from Indiana, thus apply the avails received from the sale of the new bonds in greenbacks in compulsory payment of so much of the interest-bearing debt of the Govern

ment.

And, sir, as was remarked by the Senator from Maine, this bill is not a mere temporary affair; it is a law which is likely to be permanent. None of us know with certainty what is to be the political character of the next Administration; and if it should so happen by possibility that the next Administration should have one holding the doctrine announced by the New York convention, then most certainly under the first section of this bill the fivetwenty bonds could and would be paid in greenbacks derived from the sale of the bonds provided for in the first section of this bill; and if we are to judge by the somewhat strange developments which are surprising us every day, even if the next Administration is a Republican Administration we have no security that the principle adopted by the Republican party at Chicago will be held to be binding upon those who shall conduct that Administration, for it was but yesterday that the Senator from Indiana, not now in his seat, declared that we should not impose upon the Republican party the doctrine that the five-twenty bonds were not payable to some extent at any rate in greenbacks, therefore for himself thus far directly repudiating the Chicago platform. So that, sir, whatever may be the political character of the incoming Administration, I see certainly under the first section of this bill, as it now stands, a danger of a direct authority given by law to apply the currency avails of the sale of these bonds in compulsory payment of the fivetwenty bonds. If there be no such danger, then certainly the amendment which I have offered is harmless. If there be such a danger, I, for one, holding the Republican principle of the inviolability of the faith of this Government pledged for the payment of the now outstanding five-twenty bonds in coin to be as cardinal a principle of the Republican party as any for which it has been fighting for the last fourteen years, cannot consent to the enactment of a law under which the possibility of a violation of that faith may be incurred. I hope, therefore, this amendment will be adopted.

Mr. SHERMAN. I trust it is not necessary for me at this period of the session to say that it is unwise in every sense of the term to bring that question into this bill. As I said in the opening, there is nothing in the first section to compel the payment of any existing bond or to authorize its payment except by the consent of the holder. If you introduce this very troublesome question, in regard to which there is a difference of opinion in both political parties, you not only defeat the bill, but destroy any hope whatever of passing any bill by which we can reduce the burden of the public debt. This provision would not at all settle the question in favor of the views of the Senator from Connecticut. If under the present law, as it stands, the holders of these bonds are entitled to coin this bill does not change it, nor can any change of their security be had except by their free and voluntary consent. To put this construction of preceding laws on this bill would be simply to raise a question that is not involved in the bill, that has no relation to the bill, and it would at once defeat any effort or any purpose on the part of the people of this country to relieve themselves from the burden of the debt by a voluntary conversion of a bond bearing a higher rate of interest into a bond bearing a lower rate. I trust the Senator from Connecticut will withdraw the amendment, and that we may come to a vote and pass the bill. Mr. DAVIS. I do not believe the Senate or Congress at the present time is prepared to take any action on the subject of this bill, and I therefore move to lay the bill on the table. Mr. DRAKE called for the yeas and nays,

and they were ordered; and being taken, resulted-yeas 9, nays 24; as follows: YEAS-Messrs. Cameron, Davis, Fessenden, Fowler, Harlan, McCreery, McDonald, Patterson of Tennessee, and Wade-9.

NAYS-Messrs. Anthony, Cattell, Cole, Conkling, Conness, Cragin, Drake, Ferry, Frelinghuysen, Howard, Morgan, Morrill of Vermont, Osborn, Patterson of New Hampshire, Pomeroy, Ramsey. Rice, Sherman, Stewart, Tipton, Welch, Willey, Williams, and Wilson-24.

ABSENT-Messrs. Bayard, Buckalew, Chandler, Corbett, Dixon, Doolittle, Edmunds, Grimes, Henderson, Hendricks, Howe, Morrill of Maine, Morton, Norton, Nye, Ross, Saulsbury, Sprague, Sumner, Thayer, Trumbull, Van Winkle, Vickers, Whyte, and Yates-25.

So the motion was not agreed to.

Mr. FERRY. I wish to modify my amend

ment.

Mr. FESSENDEN. I desire to suggest to the Senator whether an amendment that I propose to offer, if adopted, will not meet the difficulty he has.

Mr. SHERMAN. The Senator from Con

necticut, I understand, has prepared a modification of his amendment which I am perfectly willing to adopt.

Mr. FESSENDEN. The amendment I was about to suggest is in the eighteenth and nineteenth lines of the first section to strike out the words "for the redemption, payment, or purchase of or," and to insert the word "in ;" so as to provide "the said bonds and the proceeds thereof shall be exclusively used in exchange for an equal amount of any of the present interest-bearing debt," &c. As the purpose of this bill, and the sole purpose, as I understand from the committee, is simply to substitute one kind of obligation for another, that is, an obligation bearing five per cent. interest for one bearing six per cent. interest, at a longer time, there is no need whatever of giving the Secretary the power-and it is not necessary to give him a power which he ought not to wish to use-to sell any portion of the present bonds and appropriate the proceeds to the purchase of others. Why not simply confine him to exchanging the new bonds for other bonds? That will answer the purpose.

Mr. CORBETT. Will the Senator not add the words "at the option of the holder?"

Mr. FESSENDEN. That is not necessary. The holder, of course, will not give up his present bonds unless he sees fit.

Mr. CORBETT. Should it not be expressed to be at his option?"

66

Mr. FESSENDEN. I ask the chairman of fining it to an exchange. the committee what objection there is to con

Mr. SHERMAN. 1 know that the Senator from Maine is astute enough to know that the effect of this amendment would simply be to defeat the bill. It would be to confine all negotiations, all efforts to reduce the burden || of the debt to a simple arrangement between the Secretary of the Treasury and the present holders of the bonds. As a matter of course, that would be perfectly idle. Instead of passing such a bill, you had better lay it on the table and be done with it. The way this will operate, the way the Senator himself as Secretary of the Treasury would act, would be to take advantage of the money market wherever he could to sell the new bonds at a rate which would enable him to buy up in the open market an equal amount of the five-twenty bonds. I have no doubt it can be done; and I say this authoritatively, for propositions have already been made by persons who are perfectly able to comply with their stipulation, both at home and abroad, to surrender to the Government of the United States five-twenty bonds and take in payment these new bonds par for par. How is this to be done? The persons who make this contract to take these new bonds sell them at a price which will enable them to buy up in open market the five-twenties.

The proposition of the Senator from Connecticut, as he has modified it, there is not in my mind the slightest objection to. He proposes, if I understand him, to make the clause read:

To be used exclusively for the redemption or pay

ment at the option of the holder, or purchase of, or exchange for, any of the present interest-bearing debt.

I have no objection to that. Indeed, the payment could not be made under this bill except with the consent of the holder. Undoubtedly the new bonds will be used in the purchase of the old. With that modification I am perfectly willing to accept it; but to confine this simply to a narrow exchange between the holder of the bond who has it in his possession and the Secretary of the Treasury would be to simply cripple the power of the Secretary, so that it would be perfectly nugatory for him to have the power.

Mr. FERRY. I prefer that the vote should be had upon my amendment as I have modified it, and then if the Senator from Maine wishes to move a further amendment the vote can be taken upon that. My sole object in proposing the amendment was to prevent a construction of this first section whereby the public creditor might, against his consent, be compelled to have his pay for his bond in greenbacks. The modification is to insert between the word "redemption," at the end of the eighteenth line, and the word "payment," in the nineteenth line, the word "or;" and after the word "payment" to insert "at the option of the holder;" so as to make the clause read :

And the said bonds and the proceeds thereof shall be exclusively used for the redemption or payment at the option of the holder, or purchase of, or exchange for, an equal amount of any of the interest-bearing debt.

So that the bond cannot be paid to the holder, without his consent, in greenbacks.

Mr. SHERMAN. That leaves the Secretary perfectly at liberty to purchase them at the market price, provided he can purchase as many of the old bonds as he issues of the new.

Mr. SHERMAN. I have not the slightest objection.

Mr. FERRY. The only effect it has is to prevent the compulsory payment in greenbacks.

Mr. SHERMAN. The Senator from New York principally framed this section, and I would ask him if he sees any objection to the amendment?

Mr. MORGAN. I think the exchange should be made wholly at the option of the holder.

Mr. SHERMAN. Then I am perfectly willing to accept the amendment.

Mr. CORBETT. I desire to call the attention of the Senate to the point that this amend ment is not sufficiently explicit. The phrase is, at the option of the holder." Does that begin before the first five years have expired, or is it the option of the holder after the first five years have expired? The point in my mind is that after the first five years have expired it might be construed that the bonds were then due, and the holder would not have the option of refusing payment. I think it ought to be expressed that this option is to be after the first five years.

The amendment to the amendment was agreed to.

Mr. CAMERON. I offer this amendment as an additional section, to come in after the last section of the amendment of the committee:

And be it further enacted, That from and after the passage of this act, no percentage, deduction, commission, or compensation of any amount or kind, shall be allowed to any person for the sale or negotiation of any bonds or securities of the United States disposed of at the Treasury Department or elsewhere on account of the United States; and all acts and parts of acts authorizing or permitting, by construction or otherwise, the Secretary of the Treasury to appoint any agent, other than some proper ofheer of his Department, to make such sale or negotiation of bonds and securities, are hereby repealed.

Mr. SHERMAN. All I have to say is that to-day, in an act which has been passed, that very provision is inserted as part of the law, and it has now passed both Houses, that no money shall be paid from the Treasury for any commissions directly or indirectly for the negotiation of any loans.

Mr. CAMERON. I did not know there was any such law.

Mr. SHERMAN. If the Clerk has the mis

cellaneous appropriation bill, the report of the committee of conference which was acted on to-day, it can be read, and it will be seen that there is such a provision there.

The PRESIDENT pro tempore. The Chair is informed that the bill has gone to the other House.

Mr. SHERMAN. I can assure the Senator from Pennsylvania that he will find that both Houses in that bill have agreed to an express provision that no money shall be paid out of the Treasury for commissions on the negotiation or sale or transfer or exchange of any loan of the United States.

Mr. CAMERON. I believe that bill has not become a law.

Mr. SHERMAN. It has passed both Houses. Mr. CONNESS. It is an appropriation bill; it must necessarily become a law.

Mr. CAMERON. Well, let us hear what it is.

The PRESIDENT pro tempore. That bill has gone to the other House to be enrolled.

Mr. CONKLING. Does the Senator from Pennsylvania withdraw the amendment?

Mr. CAMERON. No, sir. I still think this had better be passed. The clause in the appropriation bill can only apply to such bonds as were then authorized. This bill authorizes the issue of a new edition of bonds; and it can do no harm to have this clause in. It is only repeating the good word.

Mr. SHERMAN. I do not like to incumber this bill with this provision; and I say to the Senator that it has now passed both Houses in another bill. If the Senator has any doubt about it, any member of the committee of conference on that bill who is present can inform him that it is so. The Senator from Maine [Mr. MORRILL] was here and consulted me about the terms of it. The only authority under which commissions were paid was the law of April 11, 1866, which authorized the exchange in accordance with previous laws. That is expressly, in as few words as possible, repealed in the appropriation bill.

Mr. CONKLING. How does it incumber this bill?

Mr. SHERMAN. This bill does not contain any provision by which any commissions can be paid to mortal man.

Mr. HOWARD. It will be a mere superfluity, then, and will do no harm.

Mr. CONKLING. I did not know there was such a provision in the bill that was passed

state the reasons why that section was inserted. I will first, however, answer the question of the Senator from New Hampshire.

Under this bill the new bonds of the United States cannot rise above par in legal tenders. In other words, legal tenders will always be equivalent to these bonds. That is not the case now; and it presents one of the most vicious and scandalous features of our financial system. Here is the holder of a note which upon its face declares that the United States owes the sum of five dollars and that note is less valuable than any security of the Government in market except a three per cent. certificate. That is the scandal and reproach of the system. It is seized upon by our political adversaries as a just ground of complaint. A poor man may have $100 of United States notes in his hands which are an over-due debt of the Government of the United States. He cannot get a bond for them; he can do nothing with them except pay his debts; but every bondholder may exchange his bonds for notes. The result is that the least valuable Government security in the market is the over-due note on demand of the Government of the United States of America, while all the bonds are above that in value.

The object of the third section is to give to the holder of the United States notes the right at his pleasure at any time to demand bonds for them, so that it will not be possible hereafter that these notes which a man is compelled to take willing or unwilling in payment of his labor and in payment of his debts, shall be less valuable than any other security of the United States.

I say, then, in response to the Senator from New Hampshire that if this bill passes such a state of affairs cannot occur, because this bill will raise the value of the notes up at least to the value of the new five per cent. bonds, and I have no doubt that this provision will be the most rapid, the most easy, the most natural road to specie payments that can possibly be devised by mortal man.

What is now the difficulty in the market? Money is too abundant. Money is not valuable. The note of the Government which is over due is now worth only seventy cents on the dollar, while the five per cent. bond of the United States is worth seventy-two; the six per cents are worth seventy-eight, and a bond of 1881 is worth eighty-two. Why should that be so? Why should not the note of the Gov

And provided further, That no commission shall be allowed or paid for the negotiation of the loan authorized by this act."

I think it is a very wholesome provision; and if it be true, as the Senator supposes, that it has already as to the action of Congress become a law, as the Senator from Michigan says, it will be merely surplusage to add it here, it will not incumber or embarrass the bill, and I hope it will be adopted.

The amendment to the amendment was agreed to.

Mr. PATTERSON, of New Hampshire.

I

wish to ask the chairman of the Finance Committee a question in relation to the third section. When our ten-forties were thrown on the stock exchange in London they immediately went up, and they now stand at a premium of seven and one fourth per cent. Suppose these new bonds shall be at a premium of seven and one fourth per cent., are they still to be sold at par for greenbacks? A thousand dollar bond in that case would be worth $1,072 50, and every time the Government sold a bond of $1,000 it would be giving the individual $72 50.

Mr. SHERMAN. That question will enable me to say the few words that I desire to say in regard to the third section of the bill. I was expecting some Senator to move to strike out the third section, so as to enable me briefly to

take in payment for his labor, have equal value with the lowest security of the Government? There is no reason for it in the world. You never can resume specie payments until you elevate the value of the greenbacks up nearer to the standard of both bonds and gold. This is the crying scandal of our system now, and I heard it last fall upon the stump and I never could answer that point, that this note which a man is required to take is less valuable than any other form of Government securities. I say the third section of the bill, which I regard as the best feature in it, the only feature that relates to currency and advances the value of the currency, is important, for it will raise the value of the greenback up to the standard of gold.

Mr. PATTERSON, of New Hampshire. I wish to know if the provision in the first section which has just been amended will not counteract the influence of which the Senator speaks. All the money that comes from the sale of these new bonds is to go into the Treasury of the United States; and it is to be used, how? Exclusively for the redemption, payment, purchase, or exchange of the old bonds. If you are to buy the old bonds in greenbacks, that process is constantly throwing down the value of your greenbacks quite as rapidly as they will be elevated by the third section.

Mr. SHERMAN. I may represent the idea better by the illustration of a yard-stick or gold. A yard-stick represents the par; or gold represents the par of all the money on the earth. That is worth one hundred cents

on the dollar. Our bonds of 1881 are worth eighty-two cents on the dollar. The fivetwenties are worth seventy-eight cents in the markets of the world in gold. The five per cent. bonds are worth seventy-two. The green back is worth seventy cents. What is the first duty of the people of the United States? Here is the greenback which is the promise of the United States to pay so many dollars in money. It is worth but seventy cents. Is it not the duty of the United States to lift the value of that greenback up nearer to the standard, first of bonds, and finally of gold? The operation of this section will be undoubtedly to raise the value of the greenback nearer to that of the bond, and then both the bonds and the greenback will gradually, as the credit of the country is restored, advance to the par of gold.

There are two ways of restoring specie payments. One is by contracting the currency until it becomes so valuable as to be equal to gold. That can only be done through distress and ruin, through a disturbance of the prices of all commodities and of all contracts in this country. The other way is by the gradual process pointed out by this bill, by raising the value of your greenback nearer to the value of bonds, and then of gold.

The principal objection that has been made to the third section is that it provides for what is called the oscillating process. It is said that if, by the rapid contraction of currency under the operation of this law, from other causes or from any panic or unforeseen events, money will become more valuable than bonds, it provides that the money may be supplied by a voluntary exchange of the new bonds for currency. Thus those bonds and the greenbacks will be convertible one into the other, and both will advance to the standard of gold. I have no doubt that that process, simply in itself, will do more to restore our credit than any other feature of this bill or of any bill that has been proposed.

I do not wish, under the terrible heat that is prevailing in the Senate Chamber, to discuss this matter further. I simply throw out these ideas as most palpable, and leave the matter to the Senate to judge.

Mr. FESSENDEN. Mr. President, I cannot possibly take the view which the honorable Senator from Ohio does of this third section, and especially in the existing condition of the law on the subject. The Senator says he wants to bring the greenback up to the par of the bond. Now, I wish to bring the bond, and the greenback too, up to the par of gold. He stops short of that. He wishes to place the bond and the greenback on a level, but he does not design to place them all on a level with gold, which is the object we wish to accomplish by the resumption of specie payments.

I do not agree with him, either, that the process of reduction is to bring about distress. That depends entirely upon how rapid or how gradual it is. I have stated here before that I am not in favor of doing the thing suddenly, but I am in favor of moving toward that object gradually and surely so as not to produce distress, but so as by degrees to get this currency out of the market. There is one way in which you can relieve the poor man that my friend talks about, and that is to take out of the market this depreciated currency not redeemed, and I wish that our legislation should point in that direction, so that we may have only one currency, and that a sound one, and that all our paper, whether it is in the shape of bonds or in the shape of greenbacks, may be brought to a par with gold.

The Senator has not answered the question of my friend from New Hampshire. My friend asked this question: the six per cent. bond now in the market is above par some four or five per cent.; this bill is predicated upon the idea that the new five per cent. bonds running for a longer time will be exchanged for them dollar for dollar; then they will be above par necessarily.

Mr. SHERMAN. Above par in what?
Mr. FESSENDEN. Above the nominal par.

Mr. SHERMAN. That is paper. Mr. FESSENDEN. Undoubtedly. I am speaking now of the comparison merely. I am not on the other point. They are nominally above par in paper. My friend says they will be exchanged for these new bonds. Very well; if a six per cent. bond is to-day worth 105, and the five per cent. bond will be exchanged for it, then that five per cent. bond will be worth 105 in the estimate of those who make the exchange.

Mr. CATTELL. And so will $100 in greenbacks.

Mr. FESSENDEN. No; because they are not up to that. But what do we do in that case? We take $100 in greenbacks for a bond which is worth $105, and which is only worth $105 because we agree to take it for that. Therefore, whatever our five per cent. bond may be worth in the market, under the operation of the bill, we have got to take $100 in green backs for it; that is to say, we have got to take that which is nominally $100 for that which is really $105.

Mr. CATTELL. The Senator from Maine objects, then, to increasing the value of green backs.

Mr. FESSENDEN. No, sir; I do not object to that, but this provision simply increases their value so far as they are used in exchange for the bonds. Non constat, to use a legal phrase, that they will buy more in the market, that they will buy more beef or more pork or more flour or anything else in the way of commodities than they buy to-day; but they will buy our bonds which are nominally 105, because by the law we say we will take them for them. "You do not raise the value of the greenback for any purpose in the world except to buy the bond with it; and you will buy the bond with it because the law says it shall be taken for that purpose. That may be right enough; but the answer of my friend's question is in fact precisely what I say it is; you oblige yourself to take $100 in greenbacks in exchange for a bond which you can sell to anybody else in the market for $105 in greenbacks. You raise the greenback in that way, to be sure nominally. I do not know but that it is right; I am not objecting specially to it. ground of my objection to the whole system is that as long as the law stands as it does now you are providing in this third section for an indefinite emission of bonds. Why? Because you must keep out the greenbacks; you say by your law that the quantity of greenbacks shall not be reduced below $356,000,000, where it stands now.

The

Mr. SHERMAN. That they shall not be canceled.

Mr. FESSENDEN. Very well; that they shall not be canceled beyond that amount. So long as you do not cancel them they are subject to the uses of the Treasury. What is the consequence? A bond is brought in, is sold for greenbacks, one of these bonds if you please; that money goes into the Treasury, and it is paid out by the Treasury; it is there, and will be used. It goes out into the community. You must take it in exchange for your bonds, and thus you are constantly increasing your funded debt, running it over and over, and for no purpose whatever that I can see, and you are indefinitely extending the greenback system.

Mr. SHERMAN. Suppose $100,000,000 of greenbacks should come in and be funded into bonds, does the Senator suppose they would come in indefinitely until we got out several hundred thousand millions of bonds?

Mr. FESSENDEN. I do not know how far you would get it to. The only limit is as to the $400,000,000 of greenbacks; but as to the bonds you may go to any extent.

Mr. SHERMAN. The greenbacks cannot be paid out unless the people bring these very bonds to exchange for them. According to the Senator's argument they would never do it because the bonds are worth 105.

Mr. FESSENDEN. I say, if they do bring them back that will be the consequence.

||

Mr. FESSENDEN. Three hundred and fiftysix or three hundred and sixty millions. They are canceled down to that already. That is to say, that is about all there are out. You do not go beyond that; and I cannot see-unless my friend can explain to me, and if he will I shall be very much obliged to him-as long as you cannot cancel these notes, and are not per mitted to cancel them, what is to prevent the purchase of bonds over and over by an exchange of greenbacks just as long as they are in the market. The Senator says the bonds will be brought back again and the greenbacks paid out for them; but the greenbacks are paid out for something else; they are paid out for the ordinary expenses of the Treasury. My friend from New Jersey shakes his head. What is to prevent this operation? Will he tell me now?

Mr. CATTELL. I will answer the question. The greenbacks exchanged for these bonds are not part of the current money of the Treasury to be paid out again, but they are to be held in reserve to pay these bonds.

Mr. FESSENDEN. Where does my friend find any such thing?

bill

Mr. CATTELL. In the very nature of the bill itself. This money must be held, because the holder of the bond has the right to bring it and exchange it.

Mr. SHERMAN. And the law forbids the cancellation of the greenbacks, so that there must be $356,000,000 either in circulation among the people or in the Treasury to answer every call.

Mr. FESSENDEN. But my friend from New Jersey says it all will be in the Treasury, and must be kept there.

Mr. CATTELL. All that will be funded. That is the very point I make. Surely by the provisions of this bill the Treasury cannot use this money in meeting the current expenses when they come under obligation to return it again when these bonds are presented for pay.

ment.

Mr. FESSENDEN. My friend is mistaken. They can use and they will use it, and must use it; and when the bonds are presented they must find enough greenbacks to take them up. There is nothing in this bill which provides for that contingency. My friend says that will be the necessary operation. I differ with him entirely. It may not be the necessary operation, because there is no provision in the bill which compels the Secretary of the Treasury to keep these greenbacks there. If you change the law and let them be canceled, very well; but suppose you do not change the law and it is as my friend says, what is the effect? Then you are contravening the provisions of that very law, because you are reducing the greenbacksI want to accomplish that-far below the amount which you yourselves have fixed, because if you must keep them in the Treasury, it is all the same as if they were canceled; in fact, for the purposes of circulation in the country, they are so.

Mr. CATTELL. They will come out again if currency is wanting.

Mr. FESSENDEN. But suppose the currency is not wanting?

Mr. CATTELL. Then they ought to be there.

Mr. FESSENDEN. If my friend concedes that, that is so much; but I apprehend that would not be the operation. It strikes me that it is a contrivance with reference to that matter, and it amounts to nothing more than that. It is making the Government a banker to a certain extent. When a man has money that he does not know what to do with he buys a

We

bond with it, and the Government says, will keep your money for you, and let you have a bond bearing five per cent. interest, and when you want it again come and take it;" that is to say, the Government is paying everybody who has a surplus of greenbacks five per cent. interest for the privilege of taking care of his money until he wants it; and five per cent. gold interest, too; seven per cent. in paper. That is all there is of it that I can perceive. I do not believe in the section nor in the contrivance. I do not believe it will have the effect gentlemen think, and I am opposed to the whole of it.

Mr. SHERMAN. I wish to reply very briefly to the honorable Senator from Maine. The Senator would seem to infer that this process of funding the debt was something very novel. I desire to state that this very provision is in the law of February 25, 1862, which was reported by the honorable Senator from Maine, and without this provision the legal-tender clause, in my judgment, would never have passed Congress. The reason was this: the Government of the United States was unable to pay its notes in gold. What was the next best thing? It said, We will issue $150,000,000 of legal-tender notes; we are not able to pay them in gold, but we will do the next best thing."

Mr. FESSENDEN. I ask the Senator if there is any provision in that law that a man holding a bond may at any time bring it back and receive pay in greenbacks?

Mr. SHERMAN. I will answer that. Mr. FESSENDEN. One part of the provision was in that bill I know, but the other part of it was not.

Mr. SHERMAN. I hope the Senator will not interrupt me. I will answer him before I get through. The very principle, almost in hæc verba the words of this bill, was contained in the act reported by himself, of February 25, 1862; and without the provision the legal-tender clause never could have passed. If the Senator will look back at the argument that he and I both used at that time he will find that this clause was commented upon as one of great importance. Why? "We are not able to pay off in gold our notes; we must coin our credit; we must issue $150,000,000 of legal tender notes; we must compel everybody to take them; but as we cannot pay in gold we will give them something as good as gold; we will do the next best thing; we will give them our bond;" and, according to the language of this law, it was provided:

And any holders of said United States notes depositing any sum not less than fifty dollars, or some multiple of fifty dollars, with the Treasurer of the Uuited States, or either of the Assistant Treasurers, shall receive in exchange thereof duplicate certificates of deposit, one of which may be transmitted to the Secretary of the Treasury, who shall thereupon issue to the holder an equal amount of bonds of the United States.

That is, the five-twenty bonds. It so happened as the war progressed that it was necessary for us to depreciate the value of the United States notes in order to induce them to flow more rapidly into the Treasury. What did we do? It was then our policy during the war to depreciate the value of these notes, so that they would come into the Treasury more freely for our bonds. Why, sir, we did a very natural thing for us to do, we increased the amount to $300,000,000, then to $450,000,000, and we took away this important privilege of converting them into bonds on the ground that while this privilege remained the people would not subscribe for bonds, and the notes would not be converted; that the right a man might exercise at any moment he would not exercise at all; and on this ground that this clause prevented the conversion of the United States notes, we repealed it by the act of March, 1863.

Now, what was the duty of the United States, as soon as the war was over, when we no longer had occasion to borrow money? It was to restore to these notes their former value. Every privilege that was given to them under former laws ought to have been promptly