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tablishing the bureau. In these States the policy of
setting apart lands for freedmen was initiated ante-
rior to the establishment of the bureau, and under
Field Orders No. 15, issued by Major General Sher-Receipts from home farm, for two hundred and
man. A comparatively insignificant amount of town
...$48,859 80
property is used as quarters for teachers and officers
connected with the bureau, and as hospitals. With
these exceptions, all property in the hands of the
bureau is held as a means of revenue.

thirty-four bales of cotton...
Paid to freed people for work by
superintendents during the year.....$6,850
Paid to superintendents on all the
plantations on the Bend, year's
work....

Paid for ginning, baling, and pick-
ing...

Paid for freight, commissions, re-
packing, &c......

Total expenses...

'Shortly after the organization of the bureau, parties whose property was held by it commenced to apply for restoration of their former rights. The policy first adopted by the bureau was to return estates to those only who could show constant loyalty. past as well as present-a loyalty which could not be established by the mere production of an oath of allegiance or amnesty. As the bureau held property by authority of an act of Congress for certain definite purposes, it was supposed that this tenure must continue to exist until those purposes were accomplished; that property must be surrendered only when it was evident that the control over it was unauthorized and improper.

This course did not meet with the approval of the President, who gave orders that a pardon, either by special warrant or the provisions of his amnesty proclamation, entitled the party pardoned to demand and receive immediate restoration of all his property except such as had been actually sold under a decree of confiscation. Shortly after this decision was made known Circular No. 15, dated September 12, 1865, was issued from the bureau, and embodying the provisions of the act of Congress establishing it, promulgated for the first time definite rules regarding the restoration of this property to former owners.

Authority to restore was vested in the assistant commissioners of the bureau. They were directed to turn over at once all property held as abandoned upon its appearing to their satisfaction that it did not fall within the terms of the definition laid down in the act approved July 2, 1864. They were also directed to restore property, when application was made for it, through the superintendents of the districts in which it was situated, accompanied by proof of claimant's title and of his pardon, either by special warrant or the terms of the proclamation of amnesty of May 29, 1865. It was provided, however, that land cultivated by refugees or freedmen should be retained until the growing crops were gathered unless the owner made full compensation for the labor expended and its products.

Under the provisions of this circular the work of restoration has progressed very rapidly, and it is probable that when the year terminates little or no property will remain under control of the bureau."

Now, Mr. Speaker, the bureau has not yet been in operation one year. And yet the greater part of the abandoned and confiscable lands in all the rebel States which had been in the actual possession of the Commissioner, and substantially all valuable for cultivation, have been taken from him and restored to their former owners. Unless Congress shall act, where then are these men to be protected, and how can the bureau be made to support itself?

Let me give you one statement to show how this abandoned property was used. The assistant commissioner of the State of Mississippi, in his report of the 2d of January, 1866, says as follows:

"I wish to present a complete statement of the workings of the Davis's Bend colony for the year.

"The land was divided and leased, houses built, and a system of government organized as reported to you in previous communications. The people worked well, and have shown by their industry, perseverance, and management that they are capable of doing business for themselves, and will do best where the greatest encouragement is held out of future reward.

"

There were on the Bend one hundred and eightyone companies or partnerships who received land. These comprised thirteen hundred adults and four hundred and fifty children. About five thousand acres of land were divided among them. These people were left free to manage their own affairs; not even officers of the bureau were allowed to meddle with the pecuniary or domestic affairs. They have produced

Corn, 12,000 bushels, worth at least.....
Vegetables, potatoes, melons, &c., sold..
Cotton, 1,736 bales......

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and by those who were, from any cause, unable to
procure land.

Paid for expenses.

Paid to white partners for stock, supplies, &c.

Paid receiving and disbursing officer of Freedmen's Bureau, for rations drawn.......

18,500

Total disbursements.........

Balance in hands of colonists..............

$12,000
38,500
347,200

397,700

238,500 .$159,200

44

The people have raised their own crops, made their own sales, and put the money in their pockets; none of it passed through the hands of white people or officers of the Government of any department. The only opportunity there has been for any cheating has been in the settlement made with white parties who furnished supplies. We have guarded this in every way possible, and demanded that settlements should be made before our bureau officers. "The home farm of five hundred acres was cultivated by transient people thrown upon our hands,

Amount turned over to receiving and dis-
bursing officer

If to this amount we add amount received
by said officer for rations issued colored
planters......

It will show the total amount received by
the bureau from the home farm and the
colonists.......

June.

July.

.$44,429 80

"Five thousand bushels of corn were raised on the home farm and fed to Government stock, which was in use for the benefit of the people.

"The experiment has been a grand success, and proves what the people can do. I regret that they cannot have the opportunity of cultivating the same lands this season. Four of the plantations have been returned to the owners; the organization of the colony is broken up, and the people advised to seek employment and business elsewhere. I still retain the Davis plantations, and will lease them this year, but will charge the people a moderate rent, and not allow them to have the land free, as was done during 1865.

"9

And here, sir, is a statement showing amount of money received and disbursed in the Bureau of Refugees, Freedmen, and Abandoned Lands for the State of Mississippi, at Vicksburg, from June 1, to December 31, 1865:

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Disbursed 1865.
Expenditures for June........
Balance to July.

Sept.

5,995

4,675
5,410

Expended in July.
Balance to August........

Nov.

Expended in September...
Balance to October....

Dec.

Expended in November...
Balance to December.........

Received 1865.
Amount on hand last statement...
Amount received during month.....
Amount from June 30..
Amount received during month.....
Error in bringing forward balance..
August. Amount from July...

Expended in December.............
Vouchers due and remaining un-
paid..
Balance due Freedmen's Bureau,

22,930 00

25,929 80

18,500 00

$8,461 86 $4,599 08 5,480 46 $10,079 54 $5,179 42 8,572 74 $13,752 16

$2,576 71
4,243 86
$4,245 69
4,216 17

$4.284 52
10,547 47
$6,223 25
$3,328

7,423 22
$10,751 47
$5,055 64

2,115 49 53,496 921 $60,668 06

Amount from August.......
Amount received during month.....

Amount from November.......
Amount received during month.....

$4,243 86 4,218 00 $8,461 86 $4,216 17 Amount received during month..... 5,863 37

October. Amount from September......
Amount received during month.....

$10.079 54
$5,480 46
8,271 70

$966 22 5,854 35

$13.752 16 $8,572 74 6,223 25 .$10,547 47 204 00 $10.751 47

Amount from October.........
Amount received during month.....

$7.423 22 53,244 01 $60,668 06

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"The financial condition of the burean is clearly presented in the reports of Captain James, who, in addition to his duties as superintendent of the eastern district, has acted as financial agent, with the assistance of Captain Seely, assistant quartermaster. The duties of the department have been very great, and have been faithfully discharged by these officers. In July, Colonel Heaton, agent of the United States Treasury, turned over to the bureau a large amount of real estate in Wilmington, Newbern, and adjoining counties, which had been leased for terms varying from one month to one year, The collection of rents from several hundred lessees of tenements and farms has been a laborious work. But the examination and adjustment of claims for this property, and the restoration of it in accordance with the President's amnesty proclamations, has been more trying and perplexing. Nearly all, however, is now out of our hands, and unless a reexamination of these claims is forced upon us by applications for rents, on the ground that the property was not abandoned, we shall be able hereafter to devote all of our time to our appropriate work.

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Balance credited October 1, 1865....

"Farms, 128; acres on farms cultivated, 8,510; acres of pine lands worked, about 50,000; freedmen employed on farms, 6,102; contracts witnessed, 257; freedmen employed under them, 1,847; marriages registered, 512; orphans apprenticed, 42; schools established, 63; teachers employed, 85; scholars attending, 5.642; cases of crime reported for trial, 12; cases of difficulty settled, reported in full, 257; cases not reported in writing, several thousand; rations issued, 508.924; value of, $106,365 11; hospitals, 14; sick in hospitals, &c., attended by direction of the bureau, 54,441; deaths, whole number of freedmen reported, in hospitals, camps, and towns, adjoining, 2,680. "Reports of sick and deaths embrace all cases in the vicinity of stations, and with which the bureau has in any way been connected.

"

Estimated crops: cotton. 858,700 pounds; corn, 32,715 bushels; sweet potatoes, 1,000 bushels; turpentine, 5,700 barrels; tar, 5,808 barrels."

So it is, Mr. Speaker, that the lands and sources of support and of revenue have gone from the bureau. I state the fact to be from the experience of less than one year that wherever the experiment has been tried with reasonable fairness the freedmen have demonstrated that the able-bodied men and women have not only supported themselves, but have been able to pay over to the Government in rent and produce substantially enough to provide for the old, the infirm, and the disabled.

And now, what should Congress do? If we will not act, or if having done all we can, no bill can be approved or passed, one of two courses must be pursued-either the power must be assumed of obtaining lands by lease or otherwise for the uses of freedmen, or else arrangements must be made by which freedmen able to work may find employment upon plantations and in the homes of former masters or owners of lands who have moved from northern States.

But, first, neither Congress nor President could properly permit the bureau to purchase or to lease lands without the authority of law, and so it will come to this, that when, as will soon be the case, no lands are left within the control of the Commissioner, all freedmen, old and young, able to work, or disabled by wounds, infirmity, or disease, must be provided for in some way or other upon lands owned, occupied, and improved for the personal profit of private owners.

Now, such owners will not want upon their farms useless laborers. They will not receive the men who have lost their arms or legs in your defense. They will not want feeble wo men, nor the old or infirm, or the children too

young to work. Especially they will not want those who are disabled by disease. Do you not see that all this multitude of non-producers must be a dead weight upon the Government? What will the Commissioner do with them? Where will he put them? You have freed them and their old owners do not want them. Where shall they go? What shall they do? There will be cases where the necessities of labor will compel land-owners to permit disabled parents to remain and to be fed upon their farms while the working season lasts in order to secure the services of the able-bodied sons. But those cases will be exceptional, and we have no right to take them into our consideration.

lieve that we had discharged our duty if we say to the Commissioner of this bureau we will not give you any lands to work with; but take care of these freedmen; see that the gulf which separates servitude from freedom is bridged over somewhat, and aid their unaccustomed steps until they stand firmly upon that land of promise which we have opened to them? Find employment for them all, and see to it they have fair play; but especially see to it that the Government incurs no needless cost. Would that do? Where could you find employment at fair wages, and how could your Commissioner secure it to them? If you compel them to work upon the old plantations, under the old owners, in the old homes, giving them no hope in life and no choice of labor but to work there or to expatriate themselves and seek homes in other States, do you not see that the price of wages must be at the discretion of the owner of the land? If you compel the freedman to work there, what wages they will give he must take, or you must support him, or he must starve. But give to your Commissioner the power to procure lands for them; the freedmen will pay fair rent and will from their labor defray the expenses of your bureau, and will thankfully pay full price for the lands which you may sell them. And when such opportunities are given them you will yourselves make that golden rule of labor operative, and a fair day's pay for a fair day's work will be secured. My friends, is not this very plain? And I say to you now, and I would that every voting man in all your districts could hear what I say, that whatever else you may do you cannot "enforce" that great amendment by any legislation more "appropriate" than this.

But you see at once, Mr. Speaker, that the present law, passed before the people of the loyal States by their Legislatures ratified the amendment which you offered to them, is wholly insufficient in this respect. The lands provided for them by that law have passed substantially, excepting the Sherman lands which I will speak of presently, into the hands of their former owners. And your committee believed that upon a fair statement of existing facts you would not hold them guiltless if they did not propose some plan that would-without one dollar of cost to the Government, as we believe-in some small measure make real to these freedmen the liberty you have vouchsafed to them. We owe something to these freedmen, and this bill rightly administered, invaluable as it will be, will not balance the account. We have done nothing to them, as a race, but injury. They, as a people, have done nothing to us but good. The friends of slavery say we Christianized the African, and therefore we gave him blessing and not a curse. We enslaved him. That is what we did. If the African has become Christian in America he may thank God, not us. So Booth murdered our President. His fatal ball opened the avenue through which the spirit passed, and Lincoln stood before his God. The assassin lifted him from earth to heaven and so conferred a blessing. But he remained an assassin none the less. We reduced the fathers to slavery, and the sons have periled life to keep us free. That is the way history will state the case. Now, then, we have struck off their chains. Shall we not help them to find homes? They have not had homes yet. We have not let them know the meaning of the sacred name of home. Why, sir, our humblest man, if God has given him strength enough of mind and body to make him accountable, may find some willing wife and lowly home. If he is a true man he will find there a heaven upon earth. No monarch upon his throne is more secure in the enjoyment of his rights than he. The invisible guardianship of law surrounds and keeps him safe. What he has is his own. His wife is his, and when he enters under the low roof at night, the day's work done, the sweet voices that call him father are the voices of his own. He may be poor and friendless outside of home, but he is rich there, and no mortal man in the Republic is strong enough to do him wrong

With lands assigned to the bureau where homes may be allotted to the freedmen and reasonable rents received from them, with rights secured to them to purchase upon fair terms, the able-bodied freedmen will take care of all their sick and their disabled, and will put into the Treasury of the Government enough to defray all the charges of this bureau. And now, if it be said by any one who claims that this is the white man's country, or by anybody else, that such a policy as this would disturb labor and prevent the plantations from being worked because freedmen would prefer their own homesteads to anybody's farm, the answer is obvious. This cannot be so if wages are offered which fairly pay for the work to be done. There is not a man upon the floor of this House that does not see in his own every-day experience this absurd argument refuted. If the freedman can pay his rent and keep his family together, old and young, and clear for himself twenty dollars a month, he will not willingly work for another man for eight or ten. Why should he? But give him the worth of his labor, and he will go quickly enough, and the women and the old men who cannot get wages will work his little land and stay at home. This is the law of labor. We all have the services of men who live at their homes when not at work; and so, as a general fact, has every northern householder. And those men employed all over the North are among the men who send us here and keep their eye upon us while we are here. Does any one know this fact better than the President knows it?

Now, sir, the same law of labor will hold good at the South as prevails at the North. The trouble is, that where for generations labor has been forced; where the minimum amount of food and clothing, without other pay, has been made to produce the maximum amount of work, those who employ labor are not willing to pay the fair value of labor. But when on the cotton plantation the land-owner is prepared to pay for skilled labor what it is fairly worth to the man who does the work, he will find willing hands to cultivate his staples. But there is another consideration which neither President nor Congress will feel disposed to disregard. "A fair day's pay for a fair day's work," is the golden rule of labor. In South Carolina there were at the last census of white population 291,388, and of colored population 412,320, of whom only 9,914 were free. There were in that State 16,217,700 acres of land, of which only 4,072,651 acres were improved. That land was owned by the white men. Here and there exceptional cases occurred; whether according to law or against the provisions of law I do not stop to inquire. But it is said that some men of African descent did own both land and slaves. But the rule was otherwise. The white men owned the land; the black men gave it its value.

with safety, for the law is mightier than the strongest man. But these men whom you have freed have been slaves. Their fathers were torn away by felon hands from ancestral homes in their native land-heathen homes, perhaps, but I suppose God was there nevertheless-and within the borders of the rebel States no homes since then have been permitted to them or to their children. Slavery cannot know a home. Where the wife is the prop erty of the husband's master, and may be used at will; where children are bred, like stock, for sale; where man and woman, after twenty years of faithful service from the time when the priest with the owner's sanction by mock ceremonies pretended to unite them, are parted and sold at that owner's will, there can be no such thing as home. Sir, no act of ours can fitly enforce their freedom that does not contemplate for them the security of home.

But let it be borne in mind that it is not intended by this bill to give freedmen homes at the cost of the Government. They will hire and pay full rent or they will buy and pay full price. But when a condition of things exists such as is now found in the late rebel States, where, as a race, the colored man could own no lands because held in slavery, and where because of his declared freedom the vindictive hatred of the old owners fastens itself upon him and would exclude him still from ownership of land, there does arise this necessity that we who have made them free should enable him from the fruits of his own industry and with his own means to procure for himself a home. And that is all that this bill proposes to do. Every man may now avail himself of the homestead law. That will secure him eighty or one hundred and sixty acres for a nominal sum of money. This bill withdraws one million out of fifty million acres of public lands in the five States, namely, Florida, Mississippi, Alabama, Louisiana, and Arkansas, and permits the freedmen to lease in lots of forty acres each and purchase at an agreed valuation. Let me read the fifth section of the bill:

But now a new condition of things is created by our own act. Every man is made free. There is no longer ownership of labor. Every fair man admits that these four hundred thousand freedmen, declared free first by military order and then by sacred enactment, must be for a season protected by the Government which released them from bondage. Would our duty be discharged; would the President who has felt through his whole life the oppressive power of southern capital; would he be

SEC. 5. And be it further enacted, That for the purpose of rendering this bureau self-sustaining, and in the place of lands heretofore assigned to freedmen and thereafterwards withdrawn from the control of the bureau, the President shall reserve from sale or settlement under the homestead or preëmption laws, and assign for the use of freedmen and loyal refugees. male or female, unoccupied public lands in Florida, Mississippi, Alabama, Louisiana, and Arkansas, not exceeding in all one million acres of good land. And the Commissioner shall cause the same, under the direction of the President, to be allotted and assigned from time to time, in parcels not exceeding forty acres each, to the loyal refugees and freedmen, who shall be protected in the use and enjoyment thereof for such term of time and at such annual rent as may be agreed upon between the Commissioner and such refugees or freedmen. The rental shall be based upon a valuation of the land, to be ascertained in such manner as the Commissioner may, under the direction of the President, by regulation prescribe. At the end of each term, or sooner, if the Commissioner assent thereto, the occupants of any parcels so assigned, their heirs and assigns, may purchase the land and receive a title thereto from the United States in fee, upon payment therefor of the value of the land ascertained as aforesaid.

There is no gift here. The freedmen pay for everything. And the lands assigned are public lands, which we have given to States and for schools and railroads and other uses which were national in their character. Millions of acres have been unwisely given away; but these lands, not given away, but sold for a price, will confer upon freedmen the inestimable blessings of hearth-stone and home.

The sixth section of the bill, as now reported, will not, I trust, be opposed in any quarter. Let me read it:

SEC. 6. And be it further enacted, That whenever the former owners of lands occupied under General Sherman's field order, dated at Savannah, January 16, 1865, shall apply for restoration of said lands, tho Commissioner shall procure other lands by rent or purchase, not exceeding forty acres for each occupant: Provided, That such lands can be procured at an average cost not exceeding twenty-five dollars per acre, and before such restoration is made, shall allot and assign them to such occupants upon the terms and conditions named in the preceding section, or set apart for them, out of the public lands assigned for that purpose, forty acres each, upon the same terms and conditions: Provided, That no sale shall be made of lands so purchased at a price less than the cost thereof to the United States.

Why, Mr. Speaker, in some of the States the bureau has given much more aid to the white refugees than to the freedmen. The bureau has not confined its operation to the men who were made free.

Gentlemen may appeal to the passions and prejudices of the people, and urge that this system should be continued as a punishment to be inflicted upon the southern people. But let me say to gentlemen that the period has In Alabama there had been on the 1st of gone by when the American people, taxed as April, eight hundred and seventy-nine thou- they are almost to death for the purpose of sand three hundred and forty-three rations is- supporting this Government, are going to consued to refugees and three hundred and sixty- tribute longer to the maintenance of this class four thousand two hundred and fifteen rations of persons for the sole purpose of inflicting a issued to freedmen, and in Arkansas there had punishment upon the southern people, who been one million four thousand eight hundred wrongfully undertook to destroy this Governand sixty-two rations issued to refugees, and ment. Sir, we do not propose to destroy ourseven hundred and fifteen thousand five hun-selves in order to crush the southern people.

The SPEAKER. The morning hour has expired, and the bill goes over until to-morrow. The gentleman from Massachusetts [Mr. ELIOT] has five minutes of his hour remaining.

dred and seventy-two issued to freedmen. Now, sir, all we propose to do is to let freedman have a chance to buy a home. No land is to be given away to him, but the Government that has made him free helps him to purchase a home. And this is all I desire to say in offering this bill for consideration. Its provisions have been carefully examined and will receive, I trust, the favor of the House. I have made a motion to recommit, and I propose to withdraw that motion and call the previous question unless some other members desire to debate this bill.

Mr. LE BLOND. There are persons who desire to debate this bill. I hope, therefore, the gentleman will not put the bill upon its passage now, but let it go over for a day or two. There are some very important features contained in this bill, and I think it should at least be amended in those respects. Whether intended or not, it is nevertheless true that this bill confers a power which I think is very objec tionable. It is all objectionable, in my opinion, because I am opposed to the entire principle and theory of this bill.

But the fourth section is exceedingly objec tionable. In that section there is a provision that authorizes this Government to furnish supplies to these colored people in the South. It is true it only purports upon its face to confer the power to furnish medical aid; yet the power is there given not only to feed but to clothe the colored people who have been slaves. That of itself is objectionable. It is class legislation; it is doing for that class of persons what you do not propose to do for the widows and orphans throughout the length and breadth of this whole country. In my judgment the entire theory of this bill is mischievous and it ought not to pass. It by no means ought to pass with a provision

of the kind to which I have referred.

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TAX BILL.

Mr. MORRILL. 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 on the special order.

The motion was agreed to.

This system encourages idleness; and that is one of the great objections to the entire theory on which this bill is based. The evidence of this fact is brought before the American people in the report of Generals Steedman and Fullerton, showing that the system which you have already inaugurated is objectionable in every form in which you can view it. I am personally acquainted with General Steedman; and I know him to be a high-port minded, honorable, and intelligent man. What ever those two men have presented to the American people as facts existing in the southern States may be received as entitled to the fullest respect.

If, sir, that report be true, then it becomes the duty of this Congress to strike down that system at once, leaving these colored people, free as they are, to make a living in the same way that the poor whites of our country are doing. Give them no encouragement beyond the encouragement to industry which the resources of the country offer to every man who will labor. Why, sir, when we look at these galleries, and see them crowded day after day with stout, hearty, able-bodied colored men, who, to all appearance, draw their rations from the Government, and who seat themselves here in our galleries during the entire day, it is but an evidence that the system itself is mischievous, and ought not to be encouraged by the Congress of the United States. Let those people be thrown upon their own resources, and wherever labor is in demand you will find them going there seeking employment, and they will obtain it.

So the rules were suspended; and the House accordingly resolved itself into the Committee of the Whole on the state of the Union, (Mr. DAWES in the chair,) and resumed the consideration of the special order, being a bill of the House (No. 513) to amend an act entitled "An act to provide internal revenue to sup

the Government, to pay interest on the public debt, and for other purposes," approved June 30, 1864, and acts amendatory thereof. The Clerk read as follows:

That section one hundred and fourteen be amended by inserting after the word "periodically" in the first sentence of said section the words, or otherwise, or publishing any guide, almanac, catalogue, directory, or any other paper or book."

Mr. JENCKES. I believe that no vote was taken last night on the amendments offered to the paragraph preceding this. When the gentleman from Vermont offered them, I understood that no vote was to be taken upon them then.

Mr. MORRILL. As I understand it, the amendments which I offered last evening were adopted; but it was understood that the paragraph should be open to amendment this morn

ing.

his recollection.

But if the Chair hears no objection the amendment will be considered as again before the committee for action. The Clerk read the amendment, as follows: Amend by inserting at the close of the first proviso the following:

But the returns required to be made by such providentinstitutions and savings banks after July, 1866, shall be made on the first Monday in January and the first Monday in July in each year, in such form and manner as may be prescribed by the Commissioner of Internal Revenue.

Mr. MORRILL. Mr. Chairman, I will sa say this amendment is to allow these institutions to make their returns and pay their taxes semi

annually instead of monthly, because it is almost impossible for them to keep accounts with so large a number of depositors and make returns monthly.

Mr. BRANDEGEE. That subject is not now before the House, as the amendment was agreed to last evening,

The CHAIRMAN. The Chair put the question to the committee, and there was no objec tion to taking up the amendment again.

Mr. THAYER. I understand the gentleman from Vermont said there would be no vote on the amendment last evening.

Mr. JENCKES. I did not understand that

the last amendment offered by the gentleman
was voted on last evening.

I pre

Mr. MORRILL. I thought it was. sumed that no one objected to it.

The CHAIRMAN. According to the recollection of the Chair, the amendment was adopted; and the Globe sustains the Chair in

Mr. MORRILL. I referred to the paragraph, and stated that that would be open to further amendment.

The CHAIRMAN. The Globe corroborates the Chair. The amendment is before the House by unanimous consent.

Mr. BRANDEGEE. I rise to a point of order. The Chair asked whether there was objection and my colleague [Mr. DEMING] demanded that the amendment should be reported before he yielded his consent. After the amendment was read he rose and objected.

The CHAIRMAN. The Chair did not hear the objection, and the amendment is before the committee.

The amendment was agreed to.

Mr. BLAINE. I move the following amend

ment:

Insert after the word "thercof" in line twentyfour hundred and forty, as follows:

And provided further, That in lieu of all other taxes imposed on national banks there shall hereaf ter be levied, collected, and paid a tax of one half per cent. per annum on the average amount of their deposits.

Mr. Chairman, I wish to make a statement of one or two minutes on the question of taxation as it will hereafter affect the national banking system. By the decision of the Supreme Court of the United States the stock of national banks has become subject to local and municipal taxation. I know a great many gentlemen indulge the hope that that decision will be reversed or that Congress will declare the stock based on United States bonds exempted from all local taxation. I do not believe any gentleman here will live long enough to see either result attained. We must therefore make up our minds henceforth that the prop erty of national banks is to be taxed by local

authority as other property is taxed. I consider that is inevitably settled and permanent. It is no longer a theory; it has become a stub

born fact.

The question is whether we shall tax these national banks in an extraordinary manner by the national Government. We tax them two dollars per thousand upon their capital. We tax them five per cent. semi-annually on their net earnings. We tax them one per cent. on their circulation and one half per cent. on their average deposits-making thus an aver age aggregate taxation by the national Government of more than two per cent. on the capital of national banks.

I am informed this morning by the Comptroller of the Currency one half of one per cent. on the gross deposits on the present av erage in the banks will yield $2,600,000, while all the expenses of the Currency Bureau will not be over $260,000 a year. The tax which I propose will therefore yield ten times as much as all the expenses involved in conducting the Currency Bureau, and I include cost of engraving and renewing notes, clerk hire, and all incidental charges.

banks have averaged ten per cent. per annum.
Some of them have paid enormous dividends.
Take the national banks of this city. Does
anybody doubt that the First National Bank of
Washington has paid forty to fifty per cent. per
annum?

How about the Merchants'

By our own action here, whether intended or not, these banks have lost the immunity which they thought they had when they were organized, that they were to be free from all local and municipal taxation. It is now from two to five per cent. throughout the United States. The city banks, with large deposits, may not care for it, while it will result in driving the country banks to the wall. I repeat it, sir, that, stand it as well as the city banks may, the currency banks, under the duplex system of taxation now in force from the General Government and the local authorities, will eventually destroy the weak banks in the country. We have no power over local taxation. That may be said to have passed from our control; but we do have power to relieve a large portion of the burden we now put upon them by national authority. I do not believe we should use these banks as a source of revenue, to the destruction of their business. If we get ten times as much out of them as they cost us, I think the General Government ought to be satisfied with it.

Mr. PIKE. The processes by which wealth is produced ought to be relieved. That we all agree to. But here is an attempt, at the expense of those processes, to relieve wealth itself. I protest, upon sound principles of political economy, against it, and I hope the attempt will not succeed. I am surprised that my colleague, with the history of our State before him, should make this motion. I have looked at the report of the Comptroller of the Currency, and I find the fact to be in regard to the banks of Maine, according to the returns of July and October last, that they pay a tax of less than one per cent. per annum on their capital.

Mr. BLAINE. I made my statement in view of the tax to be levied under the decision of the Supreme Court-not what has been but what is to be imposed hereafter.

Mr. PIKE. Now, then, our banks for a series of years have paid to the State one per cent. on their capital. The United States gathers less than one per cent. upon it and in return therefor furnishes them with their circulating notes. So that to-day the banks of Maine are paying a less amount to the General Government than they have heretofore paid to the State, and by law they are exempt from State tax. It is said that they have now to pay local taxes, in accordance with the decision of the Supreme Court. Well, local taxes are burdensome, but farmers, merchants, and everybody else have to pay them, and in the banking act it is provided specially that the national banks shall pay precisely the same tax that the State banks do. In my own State the local banks have always had to pay local taxes in addition to the one per cent. State tax, so the national banks to-day are upon the same footing precisely as the State banks were before the national bank act was passed, with this exception, that the General Government now furnishes their circulating notes which before, as State banks, they had to furnish themselves.

Now, sir, is this bank interest suffering? Will anybody say that it is suffering? No returns of dividends are provided for under the general law. I cannot ascertain from the Comptroller what dividends these national banks have made. But I suppose no man can doubt that from the beginning of the present national banking system until the present time, their dividends have been on average at least nine or ten per cent. Mr. PRICE. I desire to ask the gentleman a question. I understand him to say that there is no means by which he can ascertain the amount of dividends of these national banks.

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A MEMBER.
Bank?

Mr. PIKE. I do not know about the Mer-
chants' Bank. There has been the same kind
of rascality in that bank that has pervaded some
other banks that we do not know so much about.
[Here the hammer fell.]

Mr. LYNCH. I move to strike out the last word in the amendment.

Mr. Chairman, I think it would be better if
my colleague would withdraw his amendment,
and allow it to be offered to the currency act,
where it properly belongs. It is not appro-
priate to this bill, which provides only for the
taxation of State banks, and not national
banks. It provides that this section shall not
apply to associations which are taxed under
and by virtue of the act "to provide a national
currency secured by a pledge of United States
bonds, and to provide for the circulation and
redemption thereof." The national currency
act provides for the taxation of national banks.
The amendment of my colleague does not
properly belong to this bill.

Mr. BLAINE. What my colleague [Mr.
LYNCH] suggests is a mere matter of form.
The amendment as offered by me is entirely
pertinent to the pending bill. I rise now to
correct my other colleague's [Mr. PIKE's] fig-
ures. He is usually very accurate, but he is
out of the line just now. I understand him to
say that the national banks now in existence
are no more heavily taxed by the national Gov-
ernment than the State banks formerly were
by our State laws. Now, the gentleman knows
that for years and years in Maine we had a tax
of one per cent. only on the capital of the
banks, as levied directly by State authority.
Their circulation was not limited as is that of
the national banks. No matter how much it
was, they were not taxed on their circulation,||
and were not taxed for a license. They paid
only one per cent. on their capital stock. The
national banks pay for a license, five per cent.
on their annual net earnings, one per cent.
annually on their circulation, and a half per
cent. on their deposits.

Mr. PIKE. The average tax, taking the
July and October returns of 1865, on the cir-
culation and deposits of Maine banks amounted
to eighty-two one hundredths of one per cent.
I take those two months because they give a
fair average. Now, you have to add to that
five per cent. on the dividends, and one fifth of
one per cent. for a license, so that altogether
the tax is less than one per cent. per annum.

Mr. BLAINE. All I maintain is, that whereas the old State tax was one per cent., the national banks pay more than double that tax.

Since this discussion commenced, the gentleman from Iowa [Mr. ALLISON] has placed in my hands a letter from a constituent of his which clearly shows how very heavily the tax on national banks foots up in certain localities. The bank referred to is a small one of but $50,000 capital, and yet the taxes, national and local, for the past year amounted to $3,467 87, or nearly seven per cent. on the capital of the bank. And this is no exceptional case. In many communities the taxes are fully as heavy as in the instance named, and in some places they are even higher. As to the question of profit, my colleague says that these banks have made dividends of ten per cent. Why, the bonds they have deposited in the Treasury, national securities, paying six per cent. in gold, would have divided ten per cent.

[Here the hammer fell.]

Mr. LYNCH. I withdraw the amendment to the amendment.

Mr. KELLEY. Mr. Chairman, there will come a time for the discussion of this whole banking system. It was adopted under exigencies, and may or may not be a permanent part of the system of the country. At any rate,

experience is suggesting that it needs improve-
meut. The proposition of the gentleman from
Maine, [Mr. BLAINE,] to remove all taxes
but the tax on deposits, unless that tax-
ation be made by gradual increase at fixed
periods so as to prevent discounting upon
deposits, would only be to strengthen one of
its greatest vices. The chief vice of the sys-
tem is discounting upon deposits.
It aggra
vates every financial crisis. When money is
abundant it tempts the banks to invite opera-
tors into speculation, and the moment contrac-
tions begin it exaggerates their virulence by
hundreds of per cent. There should be no
banking upon deposits, or at least not to an
extent greater than sixty or seventy per cent.
beyond the capital of the incorporation. I
hope that when the banking bill comes before
us it will be so restricted, and that the banks
will be called upon to pay at least the taxes they
now pay. These banks have paid dividends of
from ten to one hundred per cent.-I can name
one of them that declared a dividend of one
hundred per cent.; and this is the last place in
the world to begin remitting taxes. The Gov-
ernment keeps in these banks an average bal-
ance of from forty to sixty million dollars, and
for the use of that money they can well afford
to pay the taxes assessed upon them. I hope
that when we consider this banking system again
we shall prohibit the Government from keep-
ing deposits in any of these banks, to be banked
upon and scattered by the half million as was
done by the bank in this city which lately ex-
ploded. If you transfer the tax to deposits, I
venture to say that before this session closes
you will so restrict the system of deposits as
to diminish the collection of taxes from the
national banks with their dividends and reserve
profits averaging probably forty per cent. per

annum.

Mr. BLAINE. Does the gentleman from Pennsylvania [Mr. KELLEY] understand that my amendment proposes any change in that respect?

Mr. KELLEY. The gentleman from Maine [Mr. BLAINE] proposes to put a tax upon deposits.

Mr. BLAINE. I do not propose to put any more tax upon deposits than is imposed now.

Mr. KELLEY. It will prove to be putting the tax upon the gas of the balloon after the balloon has exploded.

Mr. BLAINE. If the gentleman will explain to the House how taxing deposits is going to facilitate banking on deposits, he will give us some new light upon it.

Mr. KELLEY. The gentleman proposes to remove all other taxes and to leave the tax on deposits.

Mr. BLAINE. The present tax is a half of one per cent. upon the deposits. The amendment which I have proposed leaves that tax just where it now is. Therefore if you are going to stimulate discounts by taxing deposits, then you have done it already. The gentleman from Pennsylvania [Mr. KELLEY] maintains that if we put this tax on deposits it will stimulate these enormous discounts. I cannot see the point of the argument. I do not see the connection between the cause and presumed effect.

My proposition is just this: in view of local taxation we must lighten the national taxation; and I would take it off the country banks, where circulation is the great object, and leave it on the city banks, those of Philadelphia and New York and other large places where deposits in the course of mercantile transactions are very large. Probably the gentleman from Philadel phia [Mr. KELLEY] represents a large banking. interest in that city; and it may do very well for him to resist this proposition. I represent acountry district, and I want the city banks, with their enormous profits upon deposits, to pay the expenses of this system. I do not wonder that the gentleman from Philadelphia should resist that. But I want to put it there; I want those who are able to pay the tax to bear it. I want the sources of business, the country banks in the small communities, the

tion. Now, I do not desire that the deposits, which I hope will not hereafter be as great a source of profit to the banks, shall be the only source of taxation. I wish that when we come to deal with the banking system we may be free to perfect it as experience may suggest. That is my philosophy.

Mr. Chairman, I withdraw the amendment to the amendment.

little rills away up in the mountains, before they get into the oceans of Philadelphia and New York, to get a chance to live.

Mr. KELLEY withdrew his amendment to the amendment of Mr. BLAINE.

Mr. BOUTWELL. I renew the amendment to the amendment.

Mr. LYNCH. I rise to a point of order. My point of order is, that the amendment of my colleague [Mr. BLAINE] is not germane to this paragraph.

The CHAIRMAN. The Chair overrules the point of order.

Mr. BRANDEGEE, It is too late to raise that point of order now, for the amendment has been received and debated.

Mr. BOUTWELL. While we have no means of knowing exactly what the profits of these banks are as a whole, the report of the Comptroller discloses some facts which will enable the House to judge whether they are able to bear the taxation which is proposed to be put upon them by this bill. On the 1st of July last, according to their returns, the aggregate of the banks had a surplus fund of $31,000,000. They were also liable for dividends unpaid, that is, dividends which had been declared but which had not then been paid, to the amount of $4,700,000 more. And they also had a profit account of $23,000,000, the whole making an aggregate of profits of between $58,000,000 and $59,000,000, then undivided, upon a capital paid in of $325,000,000, or nearly eighteen On the 1st of October last their surper cent. plus funds, which of course originated in profits previously made, amounted to $38,700,000. Their unpaid dividends, that is, dividends declared out of profits earned but not paid, amounted to $4,931,000 more, and their profit account proper, that is, the account not embraced either in unpaid dividends or surplus funds, amounted to $32,350,000 more, making an aggregate of profits on the 1st of October last of $85,000,000 on a capital paid in of about $393,000,000, and showing that between July and October, a period of three months, after deducting all the dividends paid, they have carried their profits from $58,000,000 up to $85,000,000.

Mr. BLAINE. Does not that come from the sale of gold?

Mr. BOUTWELL. I do not know from whence it comes; I only know that it is there. Mr. HOOPER, of Massachusetts. I merely want to state in regard to that little bank that the gentleman from Maine [Mr. BLAINE] says is now so heavily taxed, that I find upon looking over the returns that with only $50,000 capital they have about $190,000,000 drawing interest, upon which, if they get only six per cent., they will receive over $11,000 of profits. And I understand that this little bank-one of these rills up in the mountains, as the gentleman describes them-pays semi-annual dividends of ten per cent., making twenty per cent. per annum.

Mr. BOUTWELL. I withdraw my amend

ment to the amendment.

Mr. KELLEY. Mr. Chairman, I move pro forma to amend the amendment by striking out the last word. My object in offering this amendment is simply to say a word in reply to the gentleman from Maine, [Mr. BLAINE.] The gentleman suggests that I represent a large banking capital in Philadelphia. I wish him to understand that if that banking capital derives as it does enormous profits from banking on deposits, I desire to impose a restriction upon it. I want to prevent, by legisla tion, the effect of which shall be gradual, the banking institutions of the country from banking on their deposits, whereby I affirm they stimulate and produce crises and aggravate them when they come.

My philosophy, which the gentleman could not comprehend, is this: if we now put all our taxes on the deposits, we shall not, when we come to consider the bank bill, be able to restrict the banking on deposits, because he and others will make the argument that if we do this we will release the banks from the taxa

Mr. RANDALL, of Pennsylvania. Mr. Chairman, I consider that the best course we can pursue in reference to this question of State taxation and Federal taxation upon these banks is at this time to follow the Committee of Ways and Means in reference to this tax. I deem this not the proper time to touch that conflict which must arise between Federal and State taxation upon these banks. I would prefer to reserve that question till it shall be presented, as it will be shortly, by the Committee on Banking and Currency. Then we can take up and discuss the whole system of banking in reference to taxation. We can then decide also whether this House is prepared to continue a system of deposits in these national depositories without any adequate security therefor a system which has led to such immense losses by the Government. I hope, therefore, that the House will follow the committee strictly in reference to this taxation.

Mr. MORRILL. Mr. Chairman, I believe that the loss of revenue by taking this out will amount to about seven million dollars. The subject has been hitherto considered in connection with the currency bill, and therefore it has not been introduced in connection with this

bill, which merely relates to State banks and savings institutions. I think that the whole subject of the laws regulating national banks requires revision. I am satisfied that some relief must be given to those institutions or they will soon perish; I am willing, for one, to afford them some relief. But I prefer that the question should come up distinctly and separately in its proper place.

For the purpose of terminating debate, I move that the committee rise.

The motion was agreed to.

So the committee rose; and the Speaker having resumed the chair, Mr. DAWES reported that the Committee of the Whole on the state of the Union had had under consideration the Union generally, and particularly the special order, being bill of the House No. 513, to amend an act entitled "An act to provide internal revenue to support the Government, to pay interest on the public debt, and for other purposes," approved June 30, 1864, and acts amendatory thereof, and had come to no resolution thereon.

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Mr. BLAINE. The chairman of the Committee of Ways and Means did not hear me or he would have been relieved from the necessity of moving that the committee rise. There is an impression prevailing that the amendment belongs to the currency bill. I suppose the idea is to get Congress to enact a law absolutely prohibiting local taxation. I believe that to be a "harder lick" at the local revenues than this would be to the national revenues. We can better afford to remit the tax here than they can to forego it there. I think nothing in the currency bill will prove as acceptable as this would. But as I do not wish to press my amend ment at a time when its friends would be somewhat divided, I now propose to withdraw it.

Mr. STEVENS. I had intended to offer an amendment to this section relieving the Statebank circulation, after the 1st of July next, from the ten per cent. tax, but understanding the Committee on Banking and Currency design to make a revision of the general currency act I shall withhold my proposition until then.

Mr. BALDWIN. Imove to strike out in line twenty-four hundred and forty-eight, "five hun dred" and insert " one thousand.""

So the rules were suspended; and the House accordingly resolved itself into the Committee of the Whole on the state of the Union, (Mr. DAWES in the chair,) and resumed the consideration of the special order, being a bill of the House (No. 513) to amend an act entitled "An act to provide internal revenue to support the Government, to pay interest on the public debt, and for other purposes," approved June 30, 1864, and acts amendatory thereof.

Mr. Chairman, my opinion is that the deposits in the banks described in this paragraph ought to be entirely exempted from taxation. They are banks having no capital stock, and do no other business than receive deposits to be loaned for the parties making the deposits, without compensation. A title to signify what these banks are would be "loan agencies." They are mere loan agencies. There is no more reason for taxing money put at interest through these agencies than for taxing money put at interest by other methods. In deference to the views of some gentlemen I waived the amendment I intended offering and submitted the one now pending. The depositors in these banks are generally poor people who make small gains and lay them aside quarterly or yearly. All their income from money invested through savings banks is taxed five per cent. without regard to its amount, while the income of richer people is exempt to the amount of $1,000. In view of that tax, I suppose it is not more than just to exempt all deposits below $1,000 from taxation.

Mr. MORRILL demanded tellers. Tellers were ordered; and Messrs. MORRILL and BALDWIN were appointed.

The committee divided; and the tellers reported-ayes 44, noes 49.

So the amendment was disagreed to.

Mr. O'NEILL moved to strike out these words:

Provided, That this section shall not apply to associations which are taxed under and by virtue of the act to provide a national currency secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof." And the deposits in associations or companies known as provi dent institutions or savings banks, having no capital stock and doing no other business than receiving deposits to be loaned or invested for the sole benefit of the parties making such deposits, without profit or compensation to the association or company, shall be exempt from tax or duty on so much of their depos its as they have invested in securities of the United States, and on all deposits less thon $500 made in the name of any one person: And provided further, That any bank ceasing to issue notes for circulation, and which shall deposit in the Treasury of the United States, in lawful money, the amount of its outstanding circulation, to be redeemed at par, under such regulations as the Secretary of the Treasury may prescribe, shall be exempt from any tax upon such circulation.

The amendment was disagreed to. Mr. THAYER. I move to strike out in line twenty-four hundred and forty-two the word "or," and insert after the word "banks" the words "savings-fund and other savings institu tions."

The amendment was agreed to.

Mr. HARDING, of Illinois. I move to strike out the following:

Provided further, That any bank ceasing to issue notes for circulation, and which shall deposit in the Treasury of the United States, in lawful money, the amount of its outstanding circulation, to be redeemed at par, under such regulations as the Secretary of the Treasury may prescribe, shall be exempt from any tax upon such circulation.

The amendment was disagreed to.

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