Mr. WILSON. I suggest to the gentleman from New York that this bill ought to go to the Committee for the District of Columbia.

Mr. STEELE, of New York. I would state to the gentleman from Iowa that it is simply an extension of the charter of this insurance company. The charter expired by a mistake, and I cannot conceive that anybody can have any objection to the bill. The District Committee in the Senate reported it unanimously, and it passed the Senate unanimously.

Mr. WILSON. Has the Committee for the District of Columbia of this House passed on this bill?

Mr. STEELE, of New York. We have not considered it, but I do not think there is any necessity for its reference. This company has been in existence for forty years in Washington.

Mr. WILSON. I move that the bill be referred to the Committee for the District of Columbia.

Mr. STEELE, of New York. I do not think it necessary to refer it.

Mr. WILSON. I think it had better be examined by the committee, if they have not already examined it.

Mr. WILSON's motion was agreed to; and the bill was accordingly referred to the Committee for the District of Columbia.

UNITED STATES COURTS IN VIRGINIA. Mr. BOUTWELL, by unanimous consent, reported back from the Committee on the Judiciary bill of the House No. 664, for changing the time of holding the circuit courts in the district of Virginia, with an amendment in the nature of a substitute.

The substitute was agreed to.

The bill, as amended, was ordered to be engrossed and read a third time; and being engrossed, it was accordingly read the third time, and passed.

Mr. BOUTWELL moved to reconsider the vote by which the bill was passed; and also moved to lay the motion to reconsider on the table.

The latter motion was agreed to.

OATH OF OFFICE.

Mr. BOUTWELL also, by unanimous consent, and from the Committee on the Judiciary, reported back, without amendment, bill of the Senate No. 72, supplementary to an act entitled "An act to prescribe an oath of office, and for other purposes," approved July 2, 1862.

The bill provides that no person, after the date "of this act, shall be admitted to the bar of the Supreme Court of the United States, or at any time after the 4th of March next be admitted to the bar of any circuit court or district court of the United States, or the Court of Claims, as an attorney or counselor, or be allowed to appear by virtue of any previous admission, or any special powers of attorney, unless he first takes and subscribes the oath prescribed in the "act to prescribe an oath of office," approved July 2, 1862, which said oath so taken and subscribed shall be preserved among the files of such court, and that any person who shall falsely take said oath shall be guilty of perjury, and, on conviction, be liable to the pains and penalties of perjury, and the additional pains and penalties prescribed in the said

act.

The bill was ordered to a third reading; and it was accordingly read the third time, and was passed by a vote of-ayes 66, noes 26.

Mr. BOUTWELL moved to reconsider the yote by which the bill was passed; and also moved to lay the motion to reconsider on the table. The latter motion was agreed to.

On motion of Mr. BOUTWELL, also by unanimous consent, the Committee on the Judiciary was discharged from the further consideration of bill of the House No. 578, prescribing an oath of loyalty to all persons practicing law in any of the States declared to be in rebellion, and the same was laid on the table.

TESTIMONY IN UNITED STATES COURTS. Mr. KELLOGG, of New York, by unanimous consent, submitted the following resolution; which was read, considered, and agreed to:

Resolved, That the Committee on the Judiciary be instructed to inquire whether it is not expedient to enact further laws providing for perpetuating testimony of wit

nesses and taking the testimony of witnesses de bene esse in the Supreme Court and in the circuit courts of the United States, and report by bill or otherwise.

WILLIAM HANCOCK.

Mr. TRACY, by unanimous consent, introduced a bill for the relief of William Hancock; which was read a first and second time, and referred to the Committee of Ways and Means.

HUNDRED-DAY REGIMENTS.

Mr. SCHENCK, by unanimous consent, introduced the following resolution; which was read, considered, and agreed to:

Resolved, That the Secretary of War be directed to inform this House on what terms and understanding men were accepted from Ohio and other States during the year 1864, to serve in the Army for one hundred days, and whether there exists any reason why credit should not be given on any draft to be made to the several States or districts which furnished these men, in proportion to their terms of service.

COMMUTATION ILLEGALLY PAID.

Mr. NOBLE, by unanimous consent, offered the following resolution; which was read, considered, and agreed to:

Resolved, That the Secretary of War be directed to inform this House why the amounts paid for commutation by persons who were declared to have been illegally drafted, on a supplementary draft made after the 4th of July last, on a call made prior to that date, have not been refunded to them.

PRIVATE BUSINESS.

lieu thereof, shall not exceed the sum of $400,000,000; and such Treasury notes may be disposed of for lawful money, or for any other Treasury notes or certificates of indebtedness or certificates of deposit issued under any previous act of Congress; and such notes shall be exempt from taxation by or under State or municipal authority.

SEC. 2. And be it further enacted, That any bonds known as five-twenties, issued under the act of 25th February, 1862, remaining unsold to an amount not exceeding $4,000,000, may be disposed of by the Secretary of the Treasury in the United States, or, if he shall find it expedient, in Europe, at any time, on such terms as he may deem most advisable. And the Secretary of the Treasury is further authorized to issue bonds of the description issued under the authority of the act of 22d June, 1860, in pursuance of the notice for "proposals for loan," dated 8th September, 1860, to subscribers to that loan for the one per cent. deposited under said notice and not repaid: Provided, That the bonds so issued shall bear not more than five per cent. interest: And provided further, That fractional amounts may be repaid in lawful money of the United States.

Mr. BROOKS. I desire to ask the chairman of the Committee of Ways and Means for some explanation of this bill. The act itself, as it reads, is somewhat blind, and it requires a good deal of study in connection with other laws to understand it properly. I think that the House and country will be much obliged to the chairman of the Committee of Ways and Means if he will put it in English. I do not mean to say that the bill is not English, but if he will translate the act into mercantile language, so that every one will be able to understand it, it will be very desirable.

Mr. STEVENS. Mr. Chairman, it will be recollected that by the act of 30th June last Congress

The SPEAKER. It would be if the House had not, by a suspension of the rules, made the loan bill a special order.

Mr. HALE. I suggest, then, that next Friday be set apart for the consideration of private business exclusively. We have had no day at all this session for that business. I ask unanimous consent for this proposition.

There being no objection, it was so ordered.

MESSAGE FROM THE PRESIDENT.

A message from the President of the United States, by Mr. NICOLAY, his Private Secretary, announced that the President had approved and signed an act (H. R. No. 203) for the relief of

Jacob Weber; and

An act (H. R. No. 625) to amend an act entitled "An act to provide for carrying the mails from the United States to foreign ports, and for other purposes," approved March 25, 1864.

WAYS AND MEANS.

Mr. STEVENS. I now insist upon the special order.

The SPEAKER. The special order is the consideration of the bill (H. R. No. 677) to amend an act entitled "An act to provide ways and means for the support of the Government, and for other purposes," approved June 30, 1864.

The Chair will state that this bill is made a special order in Committee of the Whole on the state of the Union, and it will require unanimous consent to consider it in the House.

Mr. HOLMAN. I suppose there will be no objection to considering the bill in the House as if in Committee of the Whole on the state of the Union subject to the same rules.

The SPEAKER. Is there any objection to that proposition?

Mr. SPALDING. I object.

Mr. STEVENS. I move that the rules be suspended, and that the House resolve itself into the Committee of the Whole on the state of the Union. The motion was agreed to.

The rules were accordingly suspended, and the House resolved itself into the Committee of the Whole on the state of the Union, (Mr. SPALDING in the chair,) and proceeded to the consideration, as a special order, of a bill (H. R. No. 677) to amend an act entitled "An act to provide ways and means for the support of the Government, and for other purposes," approved June 30, 1864. The bill was read, as follows:

That in lieu of any bonds authorized to be issued by the first section of the act entitled "An act to provide ways and means for the support of the Government," approved June 30, 1864, that may remain unsold at the date of this act, the Secretary of the Treasury may issue, under the authority of said act, Treasury notes of the description and character authorized by the second section of said act: Provided, That the whole amount of bonds authorized as aforesaid, and Treasury notes issued and to be issued in

half of which the Secretary had a right to issue in seven-thirties, as they are called. He has gone on and issued to within sixty or seventy million dollars of that amount.

Mr. BROOKS. Making about how much issued?

Mr. STEVENS. About $130,000,000 issued. They seem to be a favorite form of loan. The Secretary is of opinion that if the whole $400,000,000 authorized by the act of June 30, 1864, were to be issued in this shape, it would be more acceptable than in the form of bonds; and he has requested the same permission for the one $200,000,000 that he has for the other. There is about $130,000,000 of that loan still undisposed of in any authority to issue that amount on the same princiform; and the Secretary of the Treasury desires ple on which he issued the seven-thirties. That is all that this bill proposes. But lest he might issue under this authority some legal-tender notes, interest-bearing, the Committee of Ways and Means has instructed me to offer at the end of the bill a further proviso that this act shall not be so construed as to give any authority for the issue of any legal-tender notes in any form beyond the We amount heretofore authorized by law. thought that, taking the two acts together, it might be doubtful whether the Secretary of the Treasury would not have that power unless we put in this proviso. We had no idea that he intended to do this; but, as the power might possibly exist, we deemed it best to insert the proviso.

Mr. KERNAN. Do I understand that the Secretary of the Treasury has issued the $200,000,000 of notes provided for by the act of June 30, 1864 ? Mr. STEVENS. He has issued them in the shape of seven-thirty notes.

Mr. KERNAN. Are not those notes, of which the second section of this bill proposes to allow him to issue $130,000,000 more, a legal tender to every extent except that they cannot be used in the redemption of the currency used by the United States banks?

ers.

Mr. STEVENS. None of them are legal tendIn that law authority was given to the Secretary of the Treasury to make those that were payable at maturity a legal tender for their face. Mr. KERNAN. Precisely.

Mr. STEVENS. But no part of that has been executed; and by this proviso we propose to restrain that power and not allow him to make them legal tenders.

Mr. KERNAN. Those issued, as I understand, are not made payable at maturity?

Mr. STEVENS. No, sir; none of them. Mr. ALLEY. As I understand this matter, no additional loan is to be created by this bill. It simply proposes to change the form of the fivetwenty loan to a seven-thirty loan. That is the sum and substance of the whole proposition. Am I right?

Mr. STEVENS. That is exactly what it is

intended to effect, with the further restraint which I have already mentioned.

Mr. ALLEY. I understand further that no part of this loan is intended to be a legal tender in any shape.

Mr. STEVENS. It cannot be if we pass the amendment proposed. No part of it has yet been issued in that form, and we do not intend to allow it to be.

Mr. BROOMALL. I desire to ask whether or not this issue is intended to be in the form of notes calculated for circulation?

Mr. STEVENS. It is intended to be in the form of seven-thirty notes, precisely in that form. Mr. BROOMALL. I wish to ask also whether the $200,000,000 authorized by the act of June, 1864, are not now circulating to a considerable extent as currency?

Mr. STEVENŠ. I have no knowledge on that subject. They have been issued probably in the shape of bonds with coupons. They may circulate in the same way as promissory notes do.

Mr. BROOMALL. I see no provision in the law requiring them to be issued with coupons. May they not be issued under the law as compound-interest-bearing notes, such as are really in circulation?

Mr. STEVENS. No, sir; because by this proviso we propose to restrain the Secretary of the Treasury in that respect.

Mr. BROOMALL. The gentleman does not exactly understand my question.

Mr. STEVENS. There are notes running for three years, which bear compound interest, and are a legal tender for their face.

Mr. BROOMALL. Are there not also in circulation similar notes, made a legal tender, but bearing interest compounded at six per cent.?

Mr. STEVENS. I have not seen any. I have no knowledge of them.

Mr. BROOMALL. Is there anything in the law that prevents these notes from being issued simply in the shape of the compound-interest notes now in circulation, and without coupons? Mr. STEVENS. As stated before, the object of the proviso is to prevent that.

Mr. BROOMALL. The proviso, if I understand the gentleman aright, provides that they shall not be made a legal tender. I also understand the gentleman to say that the present issue, the $200,000,000, are not made legal tenders; that the Secretary of the Treasury did not see proper to exercise the power given to make them a legal tender. Am I right?

Mr. STEVENS., You are right.

Mr. BROOMALL. Then the $130,000,000 will be precisely like the present six per cent. compound-interest-bearing notes in circulation, lacking the element of legal tender?

Mr. STEVENS. No six per cent. compoundinterest-bearing notes have been issued under this law; they have been issued under the law of 1862.

Mr. SCOFIELD. I wish to inquire of my colleague [Mr. STEVENS] whether under that act and the amendment he proposes the Secretary of the Treasury will not still have the power to issue about $70,000,000 more of legal-tender notes than have been issued hitherto?

Mr. STEVENS. We do not interfere with the first $200,000,000, but we do interfere with the balance, which we are now providing for.

Mr. SCOFIELD. My inquiry is this: if we pass this bill, then, with the proviso which the gentleman has proposed, will not the Secretary have the power to add to the volume of the legaltender notes now in existence some $70,000,000?

Mr. STEVENS. The gentleman means by legal-tender notes compound-interest-bearing

notes.

Mr. SCOFIELD. I mean the notes to pay duties, and which are usually known as legaltender notes.

Mr.STEVENS. There is an express limit to the legal-tender notes of $450,000,000. That is the law now.

Mr. SCOFIELD. There are about $70,000,000 of notes which may be issued under this act, and when we authorize the Secretary to issue them in the form of seven-thirties he will then have power to make them legal-tender notes under the two acts, notwithstanding the proviso. Mr. STEVENS. No, sir.

Mr. SCOFIELD. Then strike out all after the word "for," in the proviso, and say that he shall

not have power to issue any more legal-tender notes in any form.

Mr. MORRILL. Will the gentleman yield to me for a moment?

Mr. SCOFIELD. Certainly.

Mr. MORRILL. Mr. Chairman, I will state to the committee what I understand to be the precise facts in connection with this matter. The Committee of Ways and Means do not propose to give to the Secretary any power to issue any legal-tender notes by the bill now before the committee. They do not propose to repeal any authority he now has in relation to that matter. Under the first section of that act that power is not yet exhausted, and the gentleman from Pennsylvania is correct in supposing that there is still the option on the part of the Secretary of the Treasury to issue some sixty or seventy million dollars more. We do not propose to interfere with the law as it now stands upon the statutebook. That is considered by the Secretary of the Treasury as exceedingly useful in the negotiation of loans as it now stands. So far it has only been used to issue compound-interest-bearing notes to take up previous notes issued bearing five per cent. interest. There have been no legal-tender notes issued, as I understand, under this act-not a dollar. We propose now simply to give authority to the Secretary to issue seven-thirty bonds or notes, as you may choose to call them, to the extent of $200,000,000. That is all there is of it, more or less.

Mr.PIKE. I wish to move an amendment to the first section of the bill.

The CHAIRMAN. The gentleman from Pennsylvania is entitled to the floor.

Mr. STEVENS. I think that there is yet unexhausted, under the law giving to the Secretary of the Treasury the right to issue seven-thirty bonds, $70,000,000, and some $130,000,000 under the other. Under that section no legal-tender note in any shape, no compound-interest-bearing note, has been issued. They have all been issued simply in the form of seven-thirty bonds.

Mr. BROOMALL. Let me call the gentleman's attention to the law.

Mr. STEVENS. I yield for that purpose. Mr. BROOMALL. I find in the act of Congress which this bill proposes to alter these words:

"And the said Treasury notes may be disposed of by the Secretary of the Treasury on the best terms that can be obtained, for lawful money; and such of them as shall be made payable, principal and interest, at maturity, shall be a legal tender to the same extent as United States notes for their face value, excluding interest, and may be paid to any creditor of the United States at their face value, excluding interest, or to any creditor willing to receive them at par, excluding interest; and any Treasury notes issued under the authority of this act may be made convertible, at the discretion of the Secretary of the Treasury, into any bonds issued under the authority of this act."

How does the gentleman get over the provision of law making them legal tender?

Mr. STEVENS. They are only legal tender when they are made payable at certain times; and it is so expressed on their face. None of them have been issued, not a dollar. They have issued seven-thirty bonds, and none have been issued under the other power contained in that law. Mr. PIKE. If the gentleman will allow me, I

will offer an amendment.

Mr. STEVENS. I will hear the amendment. The amendment was read, as follows:

And provided further, That the Treasury notes hereby authorized shall be three-year notes with coupons, and may be convertible into bonds of the United States.

Mr. STEVENS. I cannot agree to that, because he may wish to issue one or two year notes. I think that discretion should not be taken away from the Secretary; but we do propose to take away from him the power of making the notes a legal tender.

Mr. PRICE. I am not particular about the time. I only wish to obviate the difficulty which exists in the minds of some gentlemen upon this floor, and therefore my proviso was designed to fix the fact that the notes shall be coupon notes, and shall stand upon the same footing as the coupon notes now authorized to be issued under existing acts. I am not particular about the time, whether it be one, two, or three years; but I desire to fix the fact that they shall be coupon notes; because it is no secret that these notes are intended to be used for banking capital. By making the notes coupon notes, and taking away the

objection which exists in the minds of gentlemen, I presume the bill will pass without any objection. Mr. PIKE. I desire to offer an amendment. Mr. STEVENS. I desire to say what I have to present, and then I will yield the floor to others. The Secretary of the Treasury is of opinion that he ought to be left the same discretion which the former Secretary had, and he says it aids him very much in making loans. He is enabled with it to make loans when otherwise he could not; but the committee, so far as the $200,000,000 are concerned, are not willing to leave him quite that discretion. They have not thought proper to interfere with him in executing the law as it now stands. We did not think it expedient to do so. But it is well known that all notes he has issued have been issued in the shape I have mentioned. No one of them has been a compound note, or a legal tender. But as I said before, as we are enlarging the authority of the Secretary, it seems right to restrain, so far as we choose to do so, his power in regard to issuing legal-tender notes.

These notes are not intended as banking capital. I never heard of their being the foundation of banking capital. They are not of the kind used for that purpose. Registered bonds have to be used, and if others are offered they are not received, but are required to be converted into registered bonds. So I think there can be no kind of difficulty about this. As my colleague [Mr. MORRILL] has said, we do not propose to change the present law in regard to the seventhirties; but when we give further power to issue seven-thirties we do propose to restrain the Secretary more than he is now. If the House does not think proper to give him the discretion to convert these bonds into seven-thirties, they will say

80.

Mr. HOLMAN. I move to amend by striking out the last clause of the bill.

Mr. PIKE. That is what I sought the floor to do.

Mr. HOLMAN. I hope the gentleman will yet have an opportunity to present his views. I move to amend by striking out the last clause, as follows:

And such notes shall be exempt from taxation, by or under State or municipal authorities.

I do not see how we can well avoid conferring upon the Secretary of the Treasury the authority sought to be obtained by this section. I understand that the only effect is that whatever may remain of the $200,000,000 authorized by the act referred to, may be issued in the form of bonds or Treasury notes, bearing interest not to exceed seven and three tenths per cent., and having a period of not more than three years to run. Whatever gentlemen may say upon the subject, it is under this authority that the Secretary of the Treasury can issue-if he has not already issued

compound six per cent. Treasury notes. The object of my amendment is this: the whole benefit of this Treasury note feature of legal-tender notes bearing interest is to inure to the benefit of the bankers of the country. It does so in this way: the bankers of the country are required to keep on hand a given amount of money. Instead of keeping on hand legal-tender notes, not bearing interest, they throw them into circulation and place on deposit the six per cent. legal-tender notes authorized under this law. It is very true they cannot issue them over their counter, but they can use them for all other purposes the same as legal-tender notes, as men do in their ordinary transactions. The effect then is this, that the whole banking interests of the country are enabled to deposit in their banks a paper bearing interest, at least at the rate of six per cent., and compound interest at that, and at the same time be exempt from all taxation.

Now, while I do not well see how the authority to issue these notes can be withheld from the Secretary of the Treasury, because means must be obtained to carry on the Government, yet I do protest against conferring upon an interest already receiving such extraordinary favors under our system of finance, the power not only to receive interest on the money deposited in their vaults, and that too at enormous rates as compared with those of other nations, but, at the sume time, exempt it from all taxation whatever. Sir, it is withdrawing from taxation for national purposes, for State purposes, for county purposes, for municipal purposes, millions and millions of

our capital, and at the same time throwing upon the labor of the country, upon the producing interests of the country, increased burdens of taxation. It seems to me that nothing could be more unwise.

Gentlemen may say that this question has already been discussed in this House, and that the House by a small majority has decided in favor of exempting this species of property from taxation. But it will be remembered that when the question was before the House the argument was that the exemption only applied to the bonds; but now, by the express terms of this bill, the principle of exemption from taxation is to apply to the notes, and not only to the notes, but to the legal tenders to the amount of their face; and at the same time, bearing interest, those notes go into circulation; independently of the bond feature to which I have referred, they are found in the hands of our citizens everywhere, so that any man can exempt himself from his share in the burdens of taxation which the extraordinary expenditures of the times have imposed upon every town and township and county in the loyal portions of the country; he may exempt himself from the payment of a single dollar of taxes by simply investing his means in the six per cent. compound notes or the seven and three tenths authorized by this act.

It is not sufficient for gentlemen to say that under the second section of the original act "to provide ways and means for the support of the Government, and for other purposes," approved 30th June, 1864, no six per cent. compound notes have been issued, because, in point of fact, they can be issued under the second section of that act which has been already read upon this floor, and which clearly confers upon the Secretary of the Treasury the power to issue these notes at an interest not exceeding seven and three tenths per cent. per annum, and running three years, and makes them a legal tender to the amount of their face.

In view, therefore, of the effect of withholding this species of property from taxation, in view of its injustice, in view of the fact that by exempting this particular interest in favor of the capitalists of the country, you increase the taxation of those who are engaged in industrial pursuits, I must protest against it, and protest against it more especially as the Representative of an agricultural community who cannot receive the full financial benefit of a provision like this to the extent to which it will result to the commercial interests of the country.

Mr. KERNAN. 1 think that the amendment proposed by the gentleman from Indiana will not effect his object. Within a year and a half past the United States courts have held, reversing the decision of the courts of the State of New York, that the bonds, the security issued by the Government, are exempt from taxation by virtue of the Constitution of the United States without any law; and hence, if they are to be taxed, it is necessary that Congress shall expressly waive the privilege which the courts hold that the Government has under the Constitution of the United States. It will be necessary that we shall declare expressly that they shall be subject to taxation, or else under this decision they will be exempt by the Constitution itself. Hence I suggest to my 'friend from Indiana that if he desires to legislate upon this subject he must legislate in reference to that decision, assuming it, as I must do, to be right.

Mr. BROWN, of Wisconsin. The gentleman from Indiana will allow me to call his attention to another fact in reference to this question which, from remarks which have been made in this House, I think is not understood. This bill provides for the issue of so many millions of Treasury notes, according to the provisions of section two of the act approved June 30, 1864. Section two of that act authorized the issue of a certain amount of notes, which were legal tender, in lieu of the bonds authorized by section one, but it did not exempt those notes so issued from taxation. The provision of the bill now proposed is a new provision. The policy of exempting this class of securities

hold in my hand, and which purports to be issued under the act of June 30, 1864-the act proposed to be amended by the act now pending. This note is made, on its face, a legal tender to the extent of its principal, without interest. I find that the issue under that act is in the form of currency without coupons, if the note which I hold in my hand is a fair sample. I want to be understood, however, that I do not oppose this on account of the notes being a legal tender. On the contrary, if the currency is to be further increased, I prefer it to be uniform, and that all the notes should be made legal tenders, if any are. My objection is to the form of the note. If the Committee of Ways and Means will put this bill in a shape such that the issue under it shall not enter into the currency of the country and further inflate it, I will vote for it. But nothing but being satisfied that the condition of the Treasury absolutely demands the further issue of notes that can enter into the currency in any shape, will induce me to vote for such a measure. I think that the great mistake made heretofore is in having inflated the currency too much. I think it would be better to increase the rate of interest on bonds until sufficient money can be obtained in that form, than to inflate the currency further than it is inflated. If the matter can be so modified that no further inflation of the currency shall take place under the act, I will vote for it with pleasure.

Mr. STEVENS. I desire to say that with regard to the note produced by my colleague, [Mr. BROOMALL,] it was issued under a section which authorized them to be issued for the exchange of legal-tender notes. None of the $200,000,000 referred to in the act of June 30, 1864, was issued in the form of the note which my colleague has shown. That is one of a class of notes issued in exchange for other legal-tender notes.

Mr. HOLMAN. There can be no question, Mr. Chairman, that when the Secretary of the Treasury issued these compound-interest notes, he undoubtedly had the power to do so; for the express terms of the act are that he may issue, to the extent of $200,000,000, notes running for three years, and not exceeding a given rate of interest, seven and three tenths. It is subject to that authority that the balance of the other $200,000,000 is proposed to be issued. I believe the gentleman from Pennsylvania stated the balance at $130,000,000.

Mr. STEVENS. Yes, sir.

Mr. HOLMAN. I do not agree with gentlemen that we can avoid conferring this power on the Secretary of the Treasury. I would go as far as any gentleman to avoid a further expansion of the currency; but it seems to me that it is almost impossible to avoid authorizing the Secretary of the Treasury to exercise some discretionary power in this matter, else in many instances you may subject him to the rapacity of the banks. The objection that I raise is mainly confined to the one fact, the exemption of these notes from taxation. My friend from Wisconsin [Mr. BROWN] Suggests that by the act of 30th June, 1864, Treasury notes were not exempt from taxation; he may be correct. Yet when you examine this act you will find that the last clause of the first section provides" that all bonds, Treasury notes, and other obligations of the United States shall be exempt from taxation by or under any State or municipal authority." The gentleman argues that notes to be issued under the second section of that act are not embraced by that general provision. I am apprehensive that he is mistaken in this construction, although when the subject was before the House last session it was argued, with some degree of force, that the principle of exemption from taxation did not apply to the legal-tender notes bearing interest, but to the bonds only.

In reply to the gentleman from New York [Mr. KERNAN] who has referred to a decision of the Supreme Court, I understand that decision not to have been made with reference to the circulating medium of the country, but that, on the contrary, it was held that the principle applied only to the bonds issued by the Government of the United States. It seems to me, Mr. Chairman, that there

is

session.

Mr. BROOMALL. Mr. Chairman, I wish to call the attention of the chairman of the Committee of Ways and Means to a note which I

Government and the circulating medium of the country; for if it be true that the whole circulating medium of the country, issued by authority of the Government, is exempt from taxation, then the whole body of the wealth of the country held by

the banks and capitalists is exempt from the burdens of State and municipal taxation, leaving the burden on the tangible wealth and labor of the country. If such is the result it will be the most oppressive and disastrous result that ever sprang out of the misfortunes of war; not a temporary but a permanent evil, under which the labor of the country would bend for ages; a result almost fatal to free government, for labor then would be at the mercy of capital, the one stooping under taxation for the sole benefit of the other. This is inevitable if we do not resist this exemption of the many millions of Government securities from taxation. But, Mr. Chairman, to avoid any ambiguity about this matter, and in order that the purpose of Congress may be clearly declared, I adopt the suggestion of the gentleman from New York, [Mr. KERNAN,] and propose not only to strike out these words, but to substitute words expressly conferring upon the States and municipal authorities the power to tax these notes. I move to amend by striking out these words:

And such notes shall be exempt from taxation by or under State or municipal authority.

And inserting the following:

And the notes issued under this act shall be subject to State and municipal taxation as other property.

I suppose that the use of the words "as other property" would oblige the States to impose no greater tax upon this species of property than might be imposed upon other property of a similar character situate within their jurisdiction.

Mr. SCOFIELD. I desire to move an amendment; to add the following proviso:

Provided further, That no legal-tender notes shall be issued by authority of this act, or the act to which this is a supplement.

Mr. GRINNELL. Mr. Chairman, I am constrained to support the amendment proposed by the gentleman from Indiana, [Mr. HOLMAN.] At the last session, when this subject was under discussion, I took ground in favor of exempting these notes from taxation. You remember, sir, that those were darker days than these. You remember, sir, that at that time there were doubts entertained by some in regard to the character of our securities. We wished to dissipate the doubts then existing in regard to the future of the Government, and to induce capitalists to take those securities. Hopefully, sir, they took them. They have proved extraordinary investments. Every one holding them is satisfied with them. You now find that those who own very large amounts of these securities declare that they can afford to be taxed. Of course, I do not propose that there shall be any ex post facto law on this subject; but we can provide now that the future issues of these notes shall be subject to taxation for State and municipal purposes.

We have been told, and will be told, that the surplus money of the country is stored away, and escapes the excessive taxation which must be felt by all classes of the country for years to come. Now, sir, I wish to obviate any objection of this Our taxes will be heavy. Let them be levied judiciously; let them be borne equally; let them fall upon those who are able to pay them.

sort.

Mr. WILSON. I desire to ask my colleague whether he supposes that the Government of the United States can dispose of six per cent. bonds, if those bonds are subject to a State taxation of two or three per cent., as the case may be, and also to municipal taxation.

Mr. GRINNELL. I do not know what the tax may be. I do not know whether it will be so much as two or three per cent.

Mr. WILSON. If they are subject to State and municipal taxation it may be in some instances more than two per cent.

Mr. GRINNELL. I know that in the State which the gentleman and myself in part represent, the taxation is not so high as that. One per cent. is there deemed excessive taxation.

Mr. WILSON. I will suggest to my colleague that in some places the State and the municipai taxes will amount to three per cent.

Mr. HUBBARD, of Iowa. I would like to ask my colleague [Mr. GRINNELL] whether, in many of the counties of the State of Iowa, the taxes, State and municipal, do not amount to over three per cent.

Mr. GRINNELL. I am not acquainted with any such county.

Mr. HUBBARD, of Iowa.

Well, I am ac

THIRTY-EIGHTH CONGRESS, 2D SESSION.

quainted with a good many counties of that char

acter.

Mr. GRINNELL. Even if that be true, sir, I still maintain that it is right that this Congress should so legislate that there shall in the future be no occasion for remark as to class legislation. How is it now? Nineteen twentieths of the people of this country who pay taxes are those who are engaged in business. They belong to the middle classes. They are merchants, manufacturers, men engaged in commerce, or the smaller class of farmers. Now, sir, shall we say that those who are so fortunate as to live in great cities, and can lay by their surplus funds in these Government securities, because of their peculiar facilities for making money, shall be exempted from taxation on their investments? I believe that the adoption of the legislation now proposed, without some such amendment as that of the gentleman from Indiana, will cause many people to declare, and with some justice, that we have been legislating for a privileged class in this country. I desire that our taxation shall rest equitably

upon all.

I know it will be said that, by making these notes liable to State and municipal taxation, we shall enhance the value of the securities already issued and taken. I cannot help that, sir. That increase of value will be the good fortune of those who regarded hopefully the prospects of the Government in darker days, who looked upon the bright side, who were willing to trust the Government, although there was a possibility that they might lose. Let them have this good fortune. Let them make this money, and not those who have continually talked as though the Government was to be put down, and its securities were to become worth nothing, I am not willing to favor any legislation which will bear heavily upon the industrial classes and upon the great masses of our people, and which will grant superior advantages and privileges to one class over another. But I do not wish to consume the time of the House.

Mr. STEVENS. Mr. Chairman, I do not suppose that my friend intends it, but he is so elated with the good news that he thinks the war will now carry itself on, and that we need furnish no further supplies. No man supposes with such a provision, leaving these bonds open to every State and municipal taxation, that a dollar of them will be sold. No, sir, not one farthing of them would be sold to any man having common sense. I do not even believe that the gentleman himself is so elated that he would advocate that provision. The effect of this provision of the committee is to enhance the value of the bonds which have been sold already, and to place these bonds in the market upon a good footing. Now, sir, it would be an excellent thing for capitalists to have these bonds limited to the number that they have in their hands. I suppose that these bonds would then go up twenty per cent. I am convinced that it would be highly improper to subject these bonds to taxation when we still need money, and when we have not enough in the Treasury to pay the Army.

I move that the committee rise to close debate.
The motion was agreed to.

So the committee rose; and the Speaker having resumed the chair, Mr. SPALDING reported that the Committee of the Whole on the state of the Union had, according to order, had the special order under consideration, being House bill No. 677, to amend an act entitled "An act to provide ways and means for the support of the Government, and for other purposes," approved June 30, 1864, and had come to no resolution thereon.

Mr. STEVENS. I move that all general debate be closed in the Committee of the Whole on the state of the Union in one minute after the consideration of the bill shall be resumed.

The SPEAKER. That will leave five minutes debate.

TUESDAY, JANUARY 24, 1865.

and that the House resolve itself into the Committee of the Whole on the state of the Union. The motion was agreed to.

The House accordingly resolved itself into the Committee of the Whole on the state of the Union, (Mr. SPALDING in the chair,) and resumed the consideration of the special order.

The question recurred on Mr. HOLMAN's amend

ment.

Mr. HOLMAN demanded tellers. Tellers were ordered; and Messrs. HOOPER and HOLMAN were appointed.

The amendment was rejected, the tellers having reported-ayes 39, noes 61.

Mr. FRANK moved the following amendment to the amendment:

And provided further, That the Treasury notes hereby authorized to be issued in pursuance of this section, may be used as a basis for the issue of circulating notes in the same manner as other United States securities are used under the provisions of the act entitled "An act to provide a national currency, secured by the pledge of United States bonds, and to provide for the circulation and redemption

thereof," passed June 3, 1864.

The amendment was rejected.

Mr. BROWN, of Wisconsin. I submit the following amendment:

And provided, That said Treasury notes shall not bear interest.

Mr. Chairman, I offer this amendment for the reason that the very worst form in which you can issue a legal-tender note is the one provided for in this section. The first blunder that was made in our financial system was in making a distinction by the Government itself between that class of money which it forces the people at large to take and another kind of money, gold, which it provided for special purposes and for a special class of individuals. The result was speculation in gold and depreciation of that currency which the Government had provided for the people. You now come and commit another fault of the same

kind providing for an issue of another class of legal-tender notes which are to pass into circulation, in the first instance, and then to be locked up in the vaults of the banks while they will force out into the hands of the people at large that class of money which bears no interest. The result must inevitably be to depreciate that currency which we ordinarily use.

It appears to me, Mr. Chairman, that we have gone far enough in providing for the advantage of large capitalists. The whole system is one which exempts the rich who can invest large sums in the bonds of the Government, and places all the burdens of taxation upon the poorer classes. This goes even a step further. This enables the bankers to hold in their vaults legal-tender notes which bear interest, and no bill which the gentleman has introduced this season for the purpose of preventing speculation in gold will have the pernicious effect upon the gold market which this clause of the bill will have.

Mr. STEVENS. I presume the gentleman wishes to make these notes a legal tender, as he would have them bear no interest, and he must intend them for circulation. True, he has not expressed himself in so many words. If he intends them as a loan, and could get anybody to take them without interest, it would be advantageous to the Government, I admit; but the only doubt about it in my mind is-and it is a pretty strong doubt-whether capitalists will take the loan, especially for a long period, and without interest. That is the whole proposition of the gentleman.

The amendment was not agreed to.

Mr. PRICE. I offer the following amendment, to come in at the end of the section:

Provided, That the Treasury notes hereby authorized shall be one, two, or three years' notes, with coupons, and may be convertible into bouds of the United States, as provided in section two of the act to which this is an amendinent.

The motion was agreed to.

NEW SERIES.....No. 23.

volume of currency, and we allege that the price of gold is attributable to the fact that the currency of the country is too large. That is true; and my amendment is designed to obviate that difficulty. If you make these notes seven-thirties you do not swell the volume of currency. I do not think any gentleman will say that he has scen any seven-thirty bonds circulated as currency. I propose to put this matter beyond a doubt by requiring that they shall be seven-thirties; and that, therefore, they shall not enter into the circulation, thereby increasing the price of gold in the market. If you leave the matter open the notes may be issued in some other shape, and may enter into the volume of currency, and thereby increase the price of gold. I am in favor of the bill and its general provisions, and I offer this as an additional reason why the amendment should be adopted. Any other shape these notes may take may swell the volume of currency, which every gentleman knows is too large now, and while we talk about it every day, the sun sets every day upon a larger volume of currency than it rose upon in the morning.

Mr. KASSON. I do not wish to duplicate the arguments already made, or the facts stated. I have but a few words to say upon this whole subject, and they are these: that the power to inflate the currency, which was given by Congress, and has been in force more than six months, is, by this bill, amended as proposed by the Committee of Ways and Means, reduced more than fifty per cent. We are informed by the Secretary of the Treasury that some remaining power, although very much less than that granted to his predecessor in office, but not used by him, is necessary for the successful administration of that Department, although he himself, I may perhaps properly state, is firinly opposed to any increase of the currency except under an emergency not now foreseen, where the safety of the Government may possibly And although the power has depend upon it. never yet been used, I am not myself disposed to tamper with this delicate machinery of financial operations between the Treasury Department and the financial world by taking entirely from the Secretary the power which his predecessor had, and which he asks to be continued, and which he will have, only in a less degree, when the recom-, mendation of the committee is adopted.

I believe this committee will clearly see the propriety of leaving this partial and restricted power

over the unissued balance under the second section of the bill. The Secretary of the Treasury may have no occasion to use it, but still, as it has been before a power in the Department, and as it becomes day by day less important in amount, as the seven-thirties are put upon the market, I would not interfere with it. This seven-thirty. loan is being absorbed to the great satisfaction of the friends of the Treasury and of the country, and any incumbrance now put upon the policy which has made it successful endangers the future success of the balance of that loan.

Mr. PRICE. I want to say that what I said with reference to the increase of the volume of currency does apply to issues made by the Treasury Department. Every person knows that every day, and almost every hour, during the last two years, national banks have been chartered, and those banks put notes into circulation. It matters not from what source the volume of the currency is increased; the fact is patent that it is increased. I propose to make this popular loan of seven-thirties still greater by my amendment, and that we shall have seven-thirties and nothing else.

Mr. KASSON. There is no question that the issues of the national banks are somewhat increasing, though not so very largely, the volume of the currency, because a great many of the national banks are mere substitutes for or conversions of the State banks established under the old laws, and the notes of these institutions have been withdrawn from circulation.

Mr. ALLEY. Mr. Chairman, I move to strike out the first two words of the pending amend