1758 CONGRESS10NAL RECORD. FEBRUARY 25, 

By Mr. RAWLS: .A. paper for the establishment of a post-route 

from Darien to Number One Station, on the :Macon and Brunswick 

Railroadr in the State of Georgia, to the Committee on the Post-Office 

and Post-Roads. 

By Mr. RICE: The memorial of the Board of Trade of Chicago, illinois, relative to a revision of the customs laws, to the Committee on Ways and Mean . By Mr. SENER: The p etition of William C. Callahan, formerly 

postmaster at Warsaw, Richmond County, Virginia, for relief, to the 

Committee on Claim . Also, resolutions of the council of the town of West Point, Virginia, 

for an appropriation to improve the Mattaponi and Pamnnkey Rivers, 

and to build a light-house at Tues Marsh, on York River, to the Committee on Commerce. 

Also, the petition of citizens of Richmond County, Virginia, for 

the survey and improvement of Totuokee Creek, a tributary of the 

Rappahannock, to the Committee on Commerce. 

By 1\-Ir. SLOSS: The petition of Henry ·c. Martin and Robert D. 

Martin, surviving partners of the fum of James Martin & Sons, of 

Florence, Alabama, for r elief, to the Committee on War Claims. 

By 1tlr. S~HTH, of New York: The petition of Charity Hurd, for a pension, to the Committee on Revolutionary Pensions and War of 

1812. 

By Mr. ST.A.NDEFORD: The petition of German Dettweiler, late 

:first lieutenant Sixth Kentucky Infantry, for a pension, to the Committee on Invalid Pensions. 

.A.lso, the petition of Alexander Hogeland, of Louisville, Kentucky, 

for relief, to the Committee on Claims. 

By Mr. SW .A.NN : The petition of William T. Davis, late sergeant 

Company C, Second Maryland Infantry, for payment of bounty, to 

the Committee on Military .A.ffairs. 

Also, the petition of Sophia Camp bell, for the payment of the 

French spoliation claims, to the Committee on Foreign .A.ffairs. 

By Mr. V .A.NCE: The petition of J. Newton Bryson and others, of 

North Carolina, for a post-route from East L aporte, Jack on County, 

North Carolina, to Cherryfields, Transylvania County, North Carolina, to the Committee on the Post-Office and Post-Roads. 

By Mr. WILLIE: The petition of tobacco manufacturers and deal- ers of the State of Texas, for the abolition of the import duty on mass or stick licorice, to the Committee on Ways and Means. 

By Mr. WOODWORTH: The petition of Enoch Wickersham and 

250 other citizens of Ohlo, for an amendment to the Constitution of 

the United State which hall prohibit the manufacture, importation, 

and sale of intoxicating liquors within the un· ed States, to the Committee on the Judiciary. 

By Mr. --: The petition of Daniel Coy, for a pension, to the Committee on Invalid Pensions. 

.A.lso, the petition of Margaret .A.. Hoffner, for ~ pension, to the Committee on Invalid Pensions. 

IN SENATE. 

WEDNESDAY, February 25, 1874. 

Prayer by Rev. E. D. OWEN, of Washington, D. C. 

The Journal of yesterday's proceedings was read and approved. 

PETITIONS AND MEMORIALS. 

Ir. FENTON. I present the petition of HenryS. Van DeCarr and 

Elsie M. Reynolds, admini tmtor and administratrix of the estate of 

Rensselaer Reynolds, deceased, and Gordon B. Reynolds, of Stockport, 

in the county of Columbia, State of New York, praying for an enabling 

act. It relates to a patent. Accompanying this petition are some affidavits, which are submitted, sustaining the case. I move the ref- erence of the papers to th Committee on Patent . The motion was agreed to. 

Mr. FENTON presented the memori:tl of William H. Babcock, who wa a private in Company C, One hundred and seventy-seventh Regiment New York Volunteer , in the late war, asking the pas age of an act granting him a pen ion at the rate of eight dollars per month; 

which was referred to the Committee on Pensions. 

Mr. RAMSEY. I present the memorial of Le Grand Marvin and 

Isaiah .A.cre, citizens of Buffalo, in the State of New York, asking that 

there be published at stated periods, monthly or quarterly, a list of 

the publications made by Congress, with their weight, their size, their 

subject-matter, and the prices at which they can be furnished, ·with 

the postage from Washington to the various localities in the States. 

I think myself that this is a provision which we ,should have. It 

obtains in England, and it would lead undoubtedly to the sale of the 

documents of Congress, that are cut off largely probably by the abolition of the franking privilege at this time. The memorialists also 

protest against the renewal of the franking privilege. I move the 

reference of the memoriaJ to the Committee on Printing. Tho motion was agreed to. 

Mr. FERRY, of MichiO'an, presented the petition of farmers and 

working-men of Ma on County, Michigan, praying that national cur- rency be substituted for Treasury notes, made a full legal tender for 

all public and private debts, and for an interconvertible United 

States bond bearing 3.65 per cent. interest, payable in lawful mon y; 

which was referred to the Committee on l''inance. 

Mr. LOGAN presented the petition of the Universalist church of 

Table Grove, Illinois, signed by Rev. J. Hughes, pa tor, and ot her officers, praying for the appointment of a commission of inquiry con- cerning the alcoholic liquor traffic, its relations to pauperism, crime, 

the public health, and general welfare; which was ordered to lie on 

the table. 

He also presented a memorial of the lloard of Trade of Chicago, uggestin~ modifications of the customs law ; which was referred to the 

Committee on Finance. · Mr. D.A. VIS presented the memorial of Nathaniel Kuykendall, of 

Hampshire County, West Virginia, praying compensation for extra 

service for carrying the mail from Romney to Clarksburgh, in Virginia, for four years and a half, commencing in the year 1H39; which was referred to the Committee on Post-Offices and Post-Roads. · Mr. SCOTT pre ented the petition of the New Gard n monthly 

meeting of the Society of Friends, of Chester County, Pennsylvania, 

signed by the clerks, George Thompson and Sarah W. Linville, pra - ing for the appointment of a commission of inquiry concerning the 

alcoholic liquor traffic, its relations to pauperism, crime, the public 

health, and general welfare; which was ord red to lie on the table. 

Mr. PRATT presented the petition of John B. Chapman, praying 

the enactment of a law to carry into effect the act of February 14, 

1873, providing for the payment of his claim against the Government 

for services rendered as special agent to the OISage Indians in 1861 aml 

1862; which was referred to the Committee on Claims . Mr. HA1tiLIN presented the memorial of Arthur McArthur and 

other citizens of Washington, remonstrating against permission being 

granted to any railroad company to lay another track on Twelfth 

stre t, Washington City; which was referred to the Committee on the District of Columbia. 

P APERB WITHDRAWN AND REFERRED. 

On motion of Mr. FENTON, it was 

Ordered, That the petition and ~aper of Anson Atwood, of Troy, New York, 

~~d~fe~d~:~oc~!!f~~!~~\>~{e~~·oad-car wheels, be takeu from the files 

REPORTS OF CO:\nll'ITEES. 

Mr. DAVIS, from the Committee on Claim , to whom wa.s referr d 

the petition of Julia .A.. Nutt, of Missis ippi, admini tratrix of Haller Nutt, deceased, praying payment for quartermaster's stores taken by 

the United States forces, reported adversely thereon, anu asked to be 

di charged from its further consideration; which was arrreed to. Mr. SCOTT, from the Commlttee on Claims, to whom was referred 

the bill (S. No. 384) for the benefit of the Louisville and Bardstown 

Turnpike Company, reported it without amendment, and submitted a report thereon ; which was ordered to be printed . Mr. WRIGHT, from the Committee on Claims, to whom was referrecl 

the petition of Su an Vincent, widow of Frederick Vincent, praying 

to be repaid a balance of money a-dvanced by the firm of Le Caze & 

Mallet in aid of the Government during the revolutionary war, u bmitted an adver e report thereon; which was ordered to be printe<l, 

and the committee was discharged from the further considemtion of 

the petition. BILLS INTRODUCED. 

:Mr. FERRY, of Michigan, asked, and by unanimous con ent obtained, 

leave to introduce a bill (S. No. 536) granting a pen ion to Livanna 

Ingraham; which was read twice by its title, :mel referred to the 

Committee on Pensions. 

l\fr. FENTON a ked, and by unanimous cons nt obtained, leave to 

introduce a bill (S. No. 537) for the exten ion of the patent known as Reynolds's pn.tented brake for power-loom ; which was r ead twice 

by its title, and referred to the Committee on Patent . 

STATUE OF JEFFERBO . 

l\!r. MORRILL, of Vermont. I am directed by th Committe on Public Buildings and Grounds to report on the r esolution referred to 

the committee, instructing them to "consider the expediency of providing for the protection of the statue of Jefferson now in the op n air in the grounds of the Executive Mansion, the arne being a work 

of art by an eminent French culptor." The committee submit a r port 

which I send to the desk, and aft-er it is printed I hall call the atten- tion of the Senate to the subject. 

The PRESIDENT pro ternpore. The report will be laid on the table, 

and printed. 1tfr. MORRILL, of Vermont. It seem that there is some confu ion as to the action of the House and Senate, both Houses having at different times taken action thereon, but it is a matter of some doubt 

whether action on the same t·esolution or not; and if there is any 

doubt about it or any defect, it ought to be cured by legislation now. The committee therefore report a joint re olution. 

The joint resolution (S. R. No.6) in relation to the bronze statue of 

Jefferson presented to Congress by Uriah P. Levy, late an officer in 

the United States Navy, was read and pa sed to a second reading, 

and the eport was ordered to be printed. 

NAVAL MONUl\IENT ·IN WASHINGTON. 

Mr. ANTHONY submitted the following resolution; which was con- sidered by unanimous consent, and agreed to : 

Resolved, That the Committee on Public Bnildinga and Grounds be. instructed 
1874. CONGRESSIONAL RECORD. 1759 

to inquire ~ts to the expediency of erecting in the city of Washington th~ n:wal monument. now in process of construction by Franklin "Simmons. 

PIUX~G OF A BILL. 

1\fr. CLAYTON. I ask that Senate bill No. 343, for the relief of 

purchasers of lands sold for direct taxes in the insurrectionary St:J.tes, 

be printed. It is a general bill. 

The PRESIDENT p1·o tempm·e. That order will be made. 

ORDER OF BUSINESS. 

:Mr. CAMERON. I believe it was understood last week that this 

day, after the morning hour, should be devoted to the bill in relation 

to the centennial exhibition. I move that we now t::tke up th::tt bill. 

The PRESIDENT p1·o tempore. The Senator from Pennsylvania, moves th::tt the Cale~ar be postponed, and that the Senate now proceed to the consideration of House bill No. 1394, in relation to the 

centennial exhibition. 

Mr. H.llllLTON, of :Maryland. I hope not. 'Ve should go on with 

the Calendar during tho morning hour. The Senate is very thin now, 

and that is an important bill. I think the remaining minutes of the 

morning hour should be devoted to the transaction of the ordinary 

business of the session, and ::tt the expiration of the morning hour :we can take up this bill, which is a general order, and dispose of it or do 

wha,tever we think proper with it. 

Mr. C.lliERON. At the suggestion of some Senators, I am willing 

that this motion should go over informally for the present. I do not 

wish to interfere with the private bills of Senators. 

The PRESIDENT pro ternpore. The Senator withdraws the motion, 

th®f • 

Mr. CiliERON. Yes, sir. 

LAND LOCATED BY MILITARY LAND WARRANTS. 

Mr. WRIGHT. It will be remembered th::tt on Thursday la~t I introduced a memorial from the General Assembly of the State of Iowa, 

touching the right of the State to 5 per cent. upon certain lands that were entered in that State by military land warrants. I gave notice 

at that time that either ou Friday morning or the first morning I could 

get the floor I would introduce a bill on that subject, and would cr::tve 

the indulgence of the Senate for five or ten minutes while I made some explanation of the bill. I now present the bill according to previous 

notice, and if the Senate will indulge me, I ask not to exceed ten, ::tnd 

perhaps not over five, minutes to explain it. 

Leave was granted to introduce a bill (S. No. 538) to authorize the 

Secretary of the Interior to ascertain ::tnd certify the amount of land 

located with military w::trrants in the States described therein, and 

for other purposes; which was read twice by its title. 

The PRESIDENT p1·o tempore. The Senator from Iowa asks unani- mous consent to be heard for a few minutes in explanation of this 

bill. The Chair hears no objection. 

Mr. WRIGHT. Mr. President, the Federal Government in receiving 

lowa into the Union stipulated that that State should have paid to it 5 

per cent. on the sales of the public lands entered therein. This compact was the same in substance that was entered into with very many of 

the Western and Southern States admitted before and after that time 

In return for this, on the part of Iowa and the other States named, 

tho St::ttes then admitted stipul::tted, among other things, first, that 

they would never interfere with the primary dispo al of the soil; 

second, that they would never ta"X for any purpose the public lands 

in such States; third, that the lands or property of non-resident proprietors should never be taxed higher than the lands or property of 

resident proprietors; a,nd, fourth, there was an obligation that for 

three years there was to be no tax on lands granted for military erv- ice in the war of 1812. 

There were, then, iJil..the act of admis ion of Iowa these four stipulations on the part of The State, and one stipulation on the part of the 

}...,ederal Government, that the State should have 5 per cent. on the net 

proceeds of the sales of the public lands. These or similar provisions were also contained in the acts of admission of the other States so far aB the obligations of the States were concerned, not in terms the same but in substap.ce the arne. This obligation on the part of the Gov- ernment to pay this 5 per cent. was recognized as important by the 

State or States at the time, and appreciated a such; and so in return 

for this promise on the part of the Federal Government to pay this 5 

per cent. was the obligation or undertaking or agreement of the 

States appreciated and recognized as important on the part of the 

Federal Government. I refer to the stipulation not to tax for three 

years the lands that were entered under military land warrants granted 

for service in the war of 1 12, the stipulation in reference to non-re i:-

dent and resident proprietor, and with reference to the primary disposal of the soil, &c. 

For the most part, so far as this 5 per cent. is concerned, touching 

sales for cash in the e several States, it has been paid; in other word , the Federal Government has ob erved its obligation so far as the payment of the 5 per cent. upon sales made for cash. Commencing with 

1776 and running through 1812 and 1 14 to 1847 and 1 50, Congress 

passed many acts giving lands and scrip, one or both, as inducements for soldiers to enlist in the servic13 of the Government, to sol- diers to enter either the volunteer or other service, and for wars that were then pending or just concluded; that is to say, as an inducement to soldiers to enlist in the service of the Government in the war of 1812, in the war of 1776, and in the war of 1846, as in the late 

war there was a promise on the part of the Government to pay to 

the soMiers who might enlist in such service money, and also to pay 

them lands or scrip. Under the warrants that were thus given to 

the soldiers, or with the scrip that was received by the soldiers in 

place of land, a large quantity of lancl was entered in Iowa and in 

these other States. 

More than fifteen years since, the authorities of my State applied 

to the proper Department for compensation, or rather to be paid 

5 per cent. upon the net proceeds of the lands that were entered ·with 

this scrip and these warrants, e tima ting the lands at 1.25 per acre. The Department at that time did not regard that, in a question involving o much, they were justified in giving such a construction to 

the law. Soon afterward the war of the rebellion followed, and thus 

the claim bas been suspended until this time. 

The question presented by this bill, and to which I shall ask the 

attention of the Senate when it shall come up for :final consideration, 

i , were these lands entered by these military land warrants, and by 

this scrip, "sales" within the meaning of the act of admission; in 

other words, whether the State of Iowa and these other States are entitled to 5 per cent. upon the lands that were thns entered, estim::tted at $1.25 an acre, as well as sales of lands for cash, within the 

meaning of the actf I submit, 1\lr. President, (and that is all I propose 

to say at this time,) that upon any rule applicable to the construction 

of contract , and as applied to the word " sale," these lands were sold 

within the meaning of the law. It will be observed that these la-nds were offered to these soldiers 

before they enlisted, and as an inducement to them to enlist in the 

service of the Government. It will be observed that it was as much a part of the compensation gh·en to them as was the money at eight or sixteen dollars a month. It was as much what was given to them 

in con itleration for their hire as if it had been money. And when 

you come w r eflect that this scrip was recognized by the law as money, to be accepted by the officers of the Government as money 

just as much as gold was, in the entry of the lands, it seems to me there can be no question but that it comes up to the full definition of 

the word 11 sale" as understood in the law. It seems to me also that 

it was a contract within the meauing of the law as just stated, and a contract that the Government cannot e cape from. 

Mr. President, I have said that this was a contract from which the 

Government cannot escape; for I understand the rule to be that a government has a will, ba an understanding, bas capacity to con- h·act, and is susceptible of obligation and of laws. Chancellor Kent, 

spe::tking upon this subject, n es this language: 

That a law embodying a contract, duly passed and promulgated, thenceforward 

become the law of the land, allll that it is as binding upon Congress as upon the 

people or anv other branch of the Government, or a.s a contract would be binding 

upon the Go' ernment executed under the authority of law. 

And upon :1 question not very di similar from the question I now present, as to whether this was a contract within the me::tning of the 

law and whether this was a sale within the meaning of the law and 

the oblig::ttion of the Government under such circumstances, I read as follows. It seems that he Continental Congress toward the close 

of the revolutionary war pa sed a resolution to the effect that the 

officers and soldiers engaged in the same should have half-pay for life on account of their great sufferings, &c. A report obtained in the 

Army that Congress did not mean to comply with this pledge, which 

produced much uneasine ·s. In reference thereto General Wa~hington used this l:wgnage : 

I think it unnecessary to say anything more than just to observe that the resolu- tions of Congress now alluded to are a.s unuoubtedly and absolutely binding on the 

United States as the most solemn acts of confederation or legislation. As to the 

idea., which I a.m informed hns in some instances prevailed, that the haJ.f-pay and 

commutation are to be regarded merely in the odious light of a pension, it ought to be exploded forever. 

So I say that, so far as these lands are concerned, to treat -them 

simply in t.he light of a bounty, instead of a part of the contract that was offered to these soldier , ought to be exploded forever. 

That provi ion should be viewed as it really was, a reasonable compensation, 

otferecl by Congress, at a time when they ha{} nothing else to give, to officers of the 

Army for erviCes then to be performed; it was the only means to prevent a total 

dereliction of the service. It wa. a part of their hire. I may be allowed to say it was the price of their blood aml of your independency. It is, therefore, more than a common debt. It is a debt of honor; it can never be considered a a pension or gratuity, nor c.mceled till it is fairly dischllrged. 

\Vben these lands were offer ed to thP- e soldiers the Government bad more lands than money, and they therefore, instead of promising to 

pay twice or thrice the amount per month in money, agreed to pay 

them so much in money and the balance in land. The Government 

has thus far observed its compact, and I will not doubt but that it 

will continue to observe that comp:tet so far as these Statee are con- ...:erned. .At the time the Government undertook to pay for these serv- ices in these lands and when they undertook to pay the State 5 per 

cent. of the net proceeds of the sales of the public lands, there was no exception that they would pay 5 per cent. upon cash entries and 

not pay 5 per cent. upon entries that were made by military land 

warrants. 

In the next pla.ce, there_ wa no provision, there wa~ nothing suggesting a possibility, thatfor a purpose outside of the State all of 

these lands could be entered on warrants issued to soldiers that were to serve, not for the benefit of one State, but for the benefit of all the 

States alike. 
1760 CONGRESSIONAL RECORD. FEBRUARY 25, 

In the next place I sugrrest, if any other construction can obtain 

this will follow, that the Government, for a purpose common to all the 

States, could have provided for the entry of these la,nds by military 

land warrants, and all the lands in the State could have been taken 

up by these warrants, and not a cent woulu have gone to the State 

under that provision of the compact; and it would hence have followed that the State would have obligated itself in all the respects 

I have mentioned, and yet not have derived one cent from the obligation on the part of the Government. 

I only mention now, in conclusion, that the 5 per cent. der:iveu from 

the sales of these lands in my State, as also in many other States, is 

set apart and dedicated to common schools. If this!) per cent. shall 

be allowed Iowa '1nd these other States, I understand that jn almost 

all of them this is the obligation. I know of no higher duty devolving on the Government or the statesmen, here or elsewhere, than to 

look to the education of the masses. Having said this much, anu asking Senators to give this bill the 

attention and consideration that I ·thinkitsimportance demands, and 

looking at it with reference to t.he actual rights of the States and the 

obligation on the part of the Government, I ask that the bill may · be referred to the Committee on Public Lands, to which the memo- rial was sent. · 

Mr. SARGENT. Before that reference is made I should like to inquire of my friend from Iowa how much money this bill will take out 

of the Treasury for the benefit of his own State, if he has ma,de any 

calculation f 

1\Ir. WRIGHT. I have not made any calculation. I have undertaken to present the principle upon which the bill is founded, and 

when it shall be examined on its merits and its details, if that shall 

influence the question at all, we ca.Ji. consider it. 

1\Ir. SARGENT. If the Senator cannot answer that question, I 

should like to ask him another. I suppo e it· would be of some serv- ice to the committee in their deliberations to know how large an amount would be taken from the Treasury by this bill in this time of 

stringency; but if the Senator is not able to answer that question, I 

should like to ask him if he does not conceive that the same principle 

is also involved where the Government ha .taken homesteads, or given Indian scrip or a-gricultural college scrip, and where that scrip 

bas been located in Iowa, or any other State which claims it has a right to 5 per cent. on the proceeds of the sales of the public landswill not this bill be only an entering-wedge to pay 5 per cent. on those also Y 

Ur. WRIGHT. I have no di position to go into the details of the 

bill now. I think a very clear distinction can be pointeu out when 

it shall be .finally considereu, in which I hope to be able to satisfy the 

Senator. · Mr. SARGENT. I do not desire to embarrass the Senator's argument, but these are important propositions, which the committee honld 

consider. 

The PRESIDENT p1·o tempore. The bill ·will be referreu to the 

Committee on Public Lands. 

LIQUOR-TRAFFIC COl\DIISSIO~. 

The PRESIDENT pro tempore. The Secretary will now report the 

first bill on the Calendar. 

The Senate, as in Committee of the Whole, resumed the consideration of the bill ( S. No. 161) to provide for the appointment of n. com- mission on the subject of the alcoholic liquor traffic. 

Mr. SCHURZ. Mr. President, as has just been stated, this is a bill 

providing t hat the Presiuent shall appoint five eminent per ons to 

inquire into "the alcoholic liquor tra.ffic in its economic, criminal, 

moral, and scientific aspects in connection wit.h pauperism, crime, so ial vice, the public health, and general welfare of the people," &c. I desire to say but a very few words on this subject. I agree perfectly with the opinions expressed the other day by the Senator from 

Connecticut, not now in his seat, [Mr. FERRY.] I think the pa sage 

of this bill would establish a precedent which would lead in the direction of legislation properly belonging to the sphere of Stn.te police, 

with which the national Government has nothing to do. The Senate 

will notice by merely looking at this bill that this is not a demand 

for on.linary parliamentary inquiry, but that it is a part of n. general 

movement, as clearly appears from the character of the petitions 

upon which this bill is based. It is a movement, as we all know, in 

favor of p:rohibit,ory or coercive legislation in the States, and which 

nov, as thoro is some reason to think, attempts to commit Congress 

in the same direction. 

This inquiry is to be surround u with greater solemnity, more than 

sunounds an ordinary parliamentaryinve tigation. tfwe were merely 

to inquire into matters connected with our revenue laws, then I am sure our own committees would do the work just as well as the com- mission here prop.oseu, and probably even better. Is there any ground 

for expectmg, fTom the commission provided for in this bill, greater 

impartiality or more reliable informa,tion 7 Certainly not; but evidently a peculiarly impressive demonstration and special effect is to 

be produced by this unusual proceeding. Now, I would rospectfnlly ask, if we once launch Congres in that 

direction, what will it lead to'# Sir, there are other abuses in society jnviting inquiry just as well, and other evils for which remedies 

OUO"ht to be found. 

There is, for instance. the viciou practice of gambling·. The question might fairly be asked, whethm: gambling, in its effects upon 

society, is not in many respects just a dangerous us the habit of 

drinkingf , There is another matter-the extravagance of the female sex in 

dress. Do we not all know that thereby expenses are created that 

have ruined many a family, driven business men into bankruptcy, and 

induced clerks and officers of banks and like institutioh8 to rob their 

establishments and become criminals 

We mi~ht go still further and consider the fact that nothing is more apt to affect the mental and moral conditions of a man than the state 

of his digestive organs. We all know that indigestion sours the temper, makes men and women unsocial, may render a husband and 

father intolerable in his own household, may drive his wife to leave 

him and seek pleasure elsewhere, may disgust his children and drive 

them into the arms of bad company, thus destroying the morality and 

happiness of families, resulting in misery and crime; and, consider- ing all this, we might institute a solemn inquiry to discover what are the effects upon society of the consumption of hot soda biscuits. 

And, going on in that way, we shall ultimately arrive at the necessity 

of establishing in this Government a bureau of public health and 

morals. For my part, I am opposed to any such thing, being convinced that it 

will gradually drive the action of government into channels which are not embraced within the original principles and theory upon whioh it 

rests. . Now gentlemen, do not understand me as being inclined to trifle 

with the temperance movement; not at all. In a certain sense I am a temperance man myself. It would, perhaps, be looked upon as improper if I spoke of my own carefulness as to my personal habits; but 

I may say that nothing is more repulsive to me than the sight of a drunken man, unless it be that of a drunken woman; nothing more loathsome to me than the uspect of a human being who degrades himself to the level of a beast. 

Neither, sir, do I meari. to show any disrespect to those who are engaged in the temperance movement. I am aware there are ma.ny 

worthy persons in it who mean to be earnest and very sincere philanthropists ; and I may say that if I could do anything by judicious 

methods to extinguish the vice of drunkenness in this country without diverting the action of Government from its legitimate sphem, I 

should not hesitate to do so. But I do honestly believe that tile 

movement of which this bill forms a part is one of misdirected zeal. 

I do candidly think that those engaged in it are taking hold of the 

thing a.t the wrong end. 

Movements like the one now ~oing on we haYe seen in this country 

many times within the last thirty years. They were always com- menced with the same zeal anu earnestness, carried on with the same means,forthe same objects, and resulted always in the same failure; 

for the second movement was testimony of the failure of the first; 

the third, testimony of the failure of the second; and the present 

movement is testimony of the failure of all those that preceded it. 

Now, sir, why is it that movements tha.t run in the direction of prohibition or of legislative coercion usually fail Y The reason is a very simple one. ·when yon absolutely prohibit, or by force of ln.w attempt 

to suppress, un indulgence which, when moderate, people wi1J not con- sider morally wrong, then you will always fail. It is a matter of ex- periencethat where modera.teindnlgence does not detract from a man'~:; 

character in public estimation, whel"e whole fall)ilies-hu band, wifo, 

and child- where all classes of society, mingle together in pL'lces of 

amusement, eat and drink what they please, at the same time listening to ~ood music and amusing themselves together in a variety of 

ways, tnere the vice of drunkenness is far less frequent than elsewhere. Every ob erving traveler will confirm this statement. It may be difficult to cultivate such social habits in any country. 

But I am convinced if the efforts now engaged in the tempernnce 

movement were turned in that direction, the result would be f..'tl" moro satisfactory than anything that can be accomplished by coercive or prohibitory legislation. They would then have the hearty co- operation of a great many who, although agreeing with the genor nl 

objects of the movement as far as the extinction of the vice of tlrnn k- enness is concerned, are now repelled by the intolerant charn.cter of tho 

movement. Human nature is so constituted that it wants, and will 

seek, plea ure, relaxation, social enjoyment. The pursuit of plen nre1 carried to exce s or misdirected, will be apt to lead to vicious hn.bits, 

misery, and cP.me; but in the efforts to prevent ot remedy such evils the general tendency of human nature in this re pect must not be 

ignored. 

The effective policy does, in my opinion, not lie in the direction of the 

forcible suppression of an indulgence which, if moderate, people will 

not consider morally wrong in itself; but the surest remedy is to substitute better pleasures for bad ones. No candid observer of human 

affairs can fail to recognize the good influence effected by the enjoymentof public pleasures by all the members of families together. That 

husband must be a miserable wretch indeed who in public would bo 

-willing to appear drunk before his wife and his children ; and surely 

that young man would be an egregious fool, as well as a degrn.ded 

being, who in public would like to appear drunk be. fore his awe theart and her family. In order to neutralize the vicious tendency of an indulgence it is best to couple it with the restraining influences 

of bmily life and with social enjoyments calculated to occupy the 

mind and to elevate our moral nature. 

' 

. 
• 

1874. CONGRESSIONAL RECORD. 1761 

I think that the introduction of such social enjoyments as I have alln~ed to will effect more than all -prohibitory laws and all efforts 

to put society in a stra.it-jacket. The coercive methml on the other 

b aud, will always tend to breed a set of hypocrites, and lead to 

reactions, upsetting all that seems to have been gained, as has time 

and time again been demon trated in this country. By adopting the 

other method we may achieve a wholesome social reform, and confer a lasting benefit upon American society. 

Theso are the rea ons, and I express them with all respect to the 

sentiment of gentlemen who differ with me, that determine me to 

vote against this bill: first, because it directs the action of the Government into paths nmning beyond the limits of its legitima.te powers; 

and, secondly, because it is to operate as an auxiliary to n, movement 

which works in a direction which I consider wrong, and which will 

only lead to deplorable reactions and stand in the way of something 

better. • :Mr. HOWE. Mr. President, I am a little sorry that my honorable 

friend from l\Iis ouri has made up his mind that he cannot afford to 

vote in support of the bill now before the Senate. I had come to a different conclusion myself, and I would very much rather be countenanced by the vote and the speech of the Senator from l\fissouri than 

to be discountenanced by either one or the other. I think he ha 

given us, however, some very useful suggestions as tO the method of 

prosecuting the temperance reform. Perhaps he has suggested the 

best method possible, perhaps he has not. 

I rise, first, because to me was committed the privilege of introducing the bill now bofore the Senate; a.nd, secondly, to call the 

attention of the Senator from l\lis ouri and the attent.ion of the Senate to the fact that here is no legisla.tion proposed to interfere with 

the use of intoxicating drinks, to promote tempemnce, or to restrain 

intemperance. Here is a mere inquiry proposed, a. mere investigation 

asked for. I think we can make such a.n inquiry as is suggested in 

this bill without stepping outsiclo of the jurisdiction prescribed to 

the Government of the United States. 

nut a short time since it was suggested on this floor that officers 

connected with the government of this District had been guilty of 

mal-administration in some respects, and an investigation was asked 

for into that fact. It was at once accorded. So far as I remember 

now, there was no opposition made anywhere. Two or three yea.rs 

ago it was suggested on this floor that crime, very flagrant crime, was rampant in certain States of this Union between us :mel the Gulf. 

An investigation was asked, and an investigation was at once ac- corded. Later than that, it was sairl that gre.at a.bnscs existed in the 

administra.tion of the customs service in the citv of New York. An 

investigat.ion was asked for. It was at once accorded. Each of these 

investiga.tions was prosecuted with great diligence and at consider:tble cost. 

About the same time it was suggested here on this floor, without 

any complaint coming to us from the outside world, tba.t an officer of 

this Government had saved some money, or maclesomemoney, for the 

Treasury by selling arrn.s to a foreign power, or to somebody else who 

had sold them to a foreign power. . There was no complaint from a.ny 

foreign power; but it was supposed that that was an abuse of power, or a. misuse of power on the part of the officer, and an investigation was asked for. It wns very promptly accorded. Now there is in the Unitod States a va.st body of men whom my· friend has refen- d to, and he has accorded to them them the high 

tit-le of philanthropists; a very large body of men who for years 

have been taking counsel together as to the best methods of re- straining and, if possible, of prohibiting the misuse, the a.buse, of 

into:x).cating drinks. They come to ns this winter with the suggestion-and they come to us in great force, if numbers and ch:rra.ctor can give force to a suggestion-that if authorized so to do they cau collect and lay before the national Legislature evidence touching 

the traffic in aud the use of intoxicating llrinks which ma.y possibly 

suggest some profitable legislation to us, and will inevitably be of 

great value to the people of the United States. When that suggestion is made to llil by such numbers and by snob chara.cters a.s ha.ve 

given their names to the petitions which have been present-ed to the 

Senate at this session, can we turn a deaf ear to it with any propriety 

whatever f Ca.n we refuse to make that inquiry! If the inquiry sho~1ld result in bringing hefore u.s hereafter a bill which my honorable friend or myself should think will not promote the welfare of the 

people of the United States, or which transcends the proper limits of 

na.tiona.llegislation, then it wjll be high time for himself, m· for myself, to take a. stand in opposition to that bill. Will it not be time 

enough then? Shall we compromise any right of the United States, 

any interest of its people, or a.ny principle of the Constitution, if we forbear opposition until we are asked to do something which we ought not to do f I have not feared that any great principle or any 

great interest would be compromised by deferring opposition until we are a ked to do something which ought not to be done. When 

we arc invited to that labor, I hope I shall be ready to make such 

feeble opposition as I sha.ll be able to do. At present I do not see 

that we are asked to take any such step. Therefore I shall be justi- fied in voting for the bill. :Mr. BUCKL~G~1. Mr. President, I certainly shaU vote for the 

bill; and in doing this, I do not hesitate to say that I coincide with 

the suggestions made by my colleague a few clays ago as to the tendency of the times to press upon the considera.tion of Congress ques111 

tions which properly belong to the States. Notwithstanding this 

tendency, I think we may, as the Senator from \Visconsiu says, make 

inrtuiry into this subject. · 

What are the factsf I shall not attempt to give a temperance lec- ture here; but every ·one knows that the evils of intemperance are to 

be seen in every city, and in every village, and a.t ahnost eve1·y cor- ner, and in almost every family circle. This subject has agitated the 

minds of philanthropic and Christian men for generations, and they 

have made various effort to check the progress of intemperance, to , stop the sale and the traffic in intoxicating drinks. Thoso efforts 

have been made, as bas been suggested by tho honora.ble Senator from 

}.fissouri, by mora.l influences. :Men have been presented with the 

strongest motives which appeal to the sense of morality aml riO'ht, 

and they have been invited and urged by these motives to cease from 

selling, or from putting the glass to the mouth of those who use it aa many think improperly ; but this moral injlnence has failed to accom- plish any great result. It has done good in instances, and there is no doubt that it is a proper influence to u e. Other influences havfl also 

been at work. Efforts have been made to legislate so as to ~>oppress 

the traffic and the usc of ardent spirits; and attempt-s havo been 

made to regnla.te the traffic so that it should produce n.s little evil as possible. None of these measures have yet accomplished the object 

which philantluopic aml Christian men have in view. 

And now the question is submitt.ed to the Congress of the United 

States simply as one of inquiry, to ascerta.in what aro the facts; aml 

it seems ·to me that we may make that inquiry iu the manner proposed; and the hope is, that when the inquiry sl1all be made it will 

be so thorough tha.t it shall lead the American people to adopt some more effective measures to suppre s the evil than have yet been 

adopted; or else it will show that we have no right to interfere with 

the traffic in ardent spirits and no right to attempt to impair the lib- erty of men to do as they please in ma.tters of this kind. And if this 

inquiry shall do either, it will" stop the agitation; it will stop the 

psalm-singing and the praying of the women in Ohio and Indiana; 

and it may be that that will be the best thing that could be done. I 

do not say it is the best; but I say I believe it i perfectly right for 

the Congress of the United States to make this inquiry, and let the 

country see what can be ascertained from it. 

l\1r. FLANAGAN. Mr. President, one word on this subject. I advo- cate the bill with a great deal of earnestness. I look upon it as one of the most serious questions presented at this or any other session 

during this nation's history. Surely the inquiry ought to bo made. The response I think ought to be favorable on the part of the Sena.tc 

to the demand for this great inquiry. So far as I am concerned, I am not one of those who have any he itancy as to the ability of Congress to legislate on the subject. I think the eighth section of the 

first article of the Constitution of the United States gives us a.bun- dant liberty to do so. It is surely for tbe welfare of this nation; and . is there anything within metes or bounds that the nation is not to be 

benefited in thereby denying the power't If so, the Constitution is a failure; and I have not arrived at that conclusion by any means. I 

have no doubt about the power, and it certainly, in my opinion, ought 

to be exercised. :My friend from Connecticut remarks in the proper 

strain--

The .PRESIDE.NT pm tempore. The Sena.tor will suspend. The 

morning hour having expired, the Senate resumes the consideration 

of the untiuished business of yesterday, which is Sena.te bill No. 432. l\1r. WRIGHT. Is there any opposition totakingthevoteupon the 

bill at -this time ' 

Mr. FLANAGAN. I shall be willing to ta.ke it myself. I a.m :.mx- ious to vote for it. 

Mr. WRIGHT. If there be no objection I trustwemayhaveavote on the bill at once anrl get it out of the way. 

Mr. MERRl MON. I desire to proceed with what I have to say. 

The PRESIDENT pro tempore. The Senator from North Carolina. 

desires to discuss the bill, as the Chair understands. Mr. WRIGHT. Will not the Senator from North Carolina. be will- in~ to let us take the vote on the bill f If there is any disposition to 

deuate it, of course I shall not insist. 

Mr .. MERRThiON. I think it will excite a good deal of debate yet. 

Mr. WRIGHT. I mean the bill now before the Sena.te; not the 

currency bill. 

Mr. MERRIMON. I understand it is the bill to provide for a. com- mission to inquire into the sta.tistics of intemperance in this country. l\Ir. WRIGHT. Yes, sir. 

lli. MERRil\ION. It has alrea-dy excited considerable deba.te, and 

I think it will la-st some time to. come. · 

l\.1r. 'VRIGHT. If there is no disposition to further debate it, haa 

the Senator any objection to taking the vote f 

l\lr. MERRil\:ION. I have no objection to taking the vote. 1t1r. BAYARD. I wish to debate it. I desire to submit some views on the subject. 

ORDER OF BUS~SS. 

The PRESIDENT pro tempm·e. The unfinished business is before the 

Senate, being Sena.te bill No. 432; and the pending question is on the 

motion to recommit the bill to the Committee on. l!'i.nan.ce wit h instructions. Mr. MgRRIM:ON. I beg leave to remind the Chair t h a.t I h ad the. floor yesterday at the hour of adjournment. 
'1762 CONGRESSIONAL RECORD. FEBRUARY 25, 

The PRESIDENT p1·o tmnp01·e. The Chair is reminded of that fact. 

Mr. CAMERON. Before the currency bill comes up, I beg to remind 

the Senate that this day was set apart for the centennial bill. The morning hour was occupied by priv~te bills until the present moment. I trust now that the centennial bill m~y be disposed of; and I hope 

tho Senate will either bke it up and dispo e of it now, or fix some day when it shall have the attention of the Senate. As a test question, I will move that to-morrow, directly after the conclusion of the 

morning business, it be taken up by the Senate. 

The PRESIDENT JYI'O tempore. The Senate has already set that bill as a special order for to-day; but it is displaced by the unfinished 

business of yesterday. The same thing would result if it be made a special order for to-morrow. It will maintain its place as a special 

order without any further action of the Senate, and can be called in 

order after the unfinished business. 

Mr. CAMERON. Then I wish to remind the Senate that I gave way 

to-day out of respect to the private bills of Senators; and I trust that 

to-morrow they will forego their special bills for a little w bile in order 

to allow me to have my bill before the Senate. 

Mr. SARGENT. I am aware that the bill in relation to the cen- tennial celebration may in some sense be regarded as an appropriation bill, and perhaps it may be a very important appropriation bill 

before we get throu~h with it, probably amountin~ to a good many 

millions of dollars; tmt notwithstanding this, whicn gives it a char- acter, perhaps a privilege, I shall certainly insist, with such force as I may, that the Senate shall not give a preference to a special appropriation bill over a regular appropriation bill.} which the Committee on Appropriations have been trying for weekS to get the a,ttention 

of the Senate to. At the proper time I shall endeavor to bring up, 

in advance of this specia,l appropriation bill, the regular naval appropriation bill. 

Mr. CAMERON. I am very sorry that the Senator from California 

will not agree to what I think is a very mild proposition on my part, a very small favor tha,t I ask of the Senate; and that is to dispose of 

this bill to-morrow. I gave way to-day, as I have said before, to 

other Senators. I shall say nothing more now, but when to-morrow 

comes, the Senate will see that it will only be doing justice to me to 

let me brinO' up my bill. I will s~ no more a,bont it now. Mr. SUMNER. I suggest to the Senator hom Pennsylvania that 

he allow his bill to take the chance of other bills in this Chumber, to 

be take:n up when the financial qnest~on is disposed of. 

Mr. CAMERON. 0 ! [Laughter.] _ Mr. President, there wa.s a very 

celebrated gentleman by the name of Micawber: I am not trusting 

anything to chance. Luck is a great thing; but I propose to take 

all reasonable precautions beforehand. • 

.MESSAGE FROM THE HOUS~. 

A message from the House of Representa,tives, by Mr. McPHERSON, 

its Clerk, announced that the House had passed the following bills; 

in which the concurrence of the Senate was requested: 

A bill (H. R. No. 91!>) to provide for the is uing a,nd recording of 

commissions to postmasters a,ppointcd by the Pre_sident by and with 

the advice and consent of the Senat,e; 

.A bill (H. R. No. 2081) to f:1cilitate the exportation of distilled 

spirits a,ncl amendatory of the acts in relation thereto; ·A bill (H. R. No. 21 6) granting an American registry to the American-built Peruvian steamship Rayo, now rebuilt in the United States 

and converted into a sailing-vessel; and 

.A bill (H. R. No. 2191) in relation to the customs duties on imported 

fruits. 

The message a,lso announced that the Honse had passed the bill 

(S. No. 437) to rest-ore William Kilburn, of San Francisco, California, 

to the Navy of the United States as an ensign. 

NATION~BAJ."'rn: CIRCULATION. 

The Senate, as in Committee of the Whole, resumed the consideration of the bill (S. No. 432) to m:nend the act entitled" An act to provide for the redemption of the 3 per cent. temporary-loan certificates aud for an increase of national-bank notes," approved July 12, 1870; 

the pending question being on tho motion to recommit the bill with 

instructions. 

Mr. MERRIMON. Mr. President, I listened with pleasure and profit 

to the able and well-considered speech of the honorable Senator from 

Missouri [Mr. SCHURZ] delivered yesterday. I do not rise now to 

attempt any general reply to what was thou so well said, or to express 

my dissent from many of tho views which he stated in reference to 

various principles of political economy. On the contrary, I concur most heartily in much that he sald. I complain and regret, however, 

that he did not devote more of his time to a discussion of what I con- ceive to be the practical issue before the Senate. 

It is conceded generally that the constitutional, the true and desir 

able currency for this country, and indeed for all countries, is gold and silver. It is as generally conceded, however, that we cannot 

have it now; and that we shall not be able to have it for an indefinite 

period in the future. We ha,ve a purely credit currency. It grew out 

of the exigencies of the war. We have it, and we find it a very difficult matter to get rid of it. The exchanges of this country are effected 

by it. It is, indeed, an established system, and it must continue until 

the circumstances of the country will permit it to be changed and a gold and silver currency system substituted for it. 

The question which I regret, I repeat, the Senator from Mis ouri 

[.Mr. SCHURZ] did not devote more time to ye terday-for it is upon 

tlL.<tt I desire above all things at this moment to be enlightened-i., inasmuch as we have a. purely credit currency, and must have it for some time to come, ll. there a sufficient volume of it in the cmmtry t o answer the legitima,te demandsofbu inessf Thatis the simple que - tion, and it seems to me it ought to be uninfluenced by any oth •r in 

this discussion. Is there a sufficient volume of this credit currency 

to make the legitimate exchanges of the counb.'Y easily and in tho 

regular order of commercial transactions f I have contended, alHl 

other Senators have contended, that the volume is not sufficient. Others, on the otlu3r hand, h.·we contended t.hat it is not only sufficient1 ~ut that it is more than sufficient; and tha so far from increas- ing this volume, it ought to be decreased. I do not concur in that 

view, a,ud for reasons which I have submitted, a few of which I propose to recapitulate very briefly ow. The honorable Senator from Missouri devoted much time, and cer- tainly he spoke very ably upon that view of the subject, again t inflation, and especially inflation with au irredeemable currency. I do 

not understand that anybody here is willing to concede that he favors 

inflation. I am very sure I do not. On the contrary, I rtm as ho tile 

to it as the honorable Senator or any other ~entleman in the Senate. 

I deny emphl;ttically that the propo ition which is pending to increa ·e the circulation 46,000,000 is a mea ure that tends to inflate the cur- rency beyond what tho legitimate demands of the country require; 

and therefore I desire to confine my remarks on this occasion to show- ing that the volume is not sufficient. 

In the first place, we ascertain wha,t the volume ought to be by a consideration o.£ what was.t.he condition of the country when we la t 

had the normal currency of this country, to wit, gold aud silver~ and we go back to the year 1 GO. In that year enterpri ·e and industry 

did not begin to appro:ri.ma,te to what they are to-day; that will be 

conceded. We have not only made the ordinary progress of nations, 

but we have progressed in a ratio t.hat is unparalleled perhaps in the 

history of the world within the last decade. In all ~ustrial pmsuits, in commercia,] pursuits, in science, in literature, and in every 

other way, we have progressed astonishingly. Our property and onr wants have increased just in t.he same ratio. The ostima,ted value of 

the real and personal property of the United States is $40,000,000,000. 

Our imports and exports for the last year exceeded 1,200,000,000. Our 

annual productions· last year exceeded 6,000,000,000 ; and enterprise 

has been stimula,ted by the tremendous events that have transpireLl 

within the la t ten years to a degree that astonishes the proudest, the 

most enterprising, the most far-seeing, and largest-calculating American. 

Now let us see how the question of currency is affected by this in- crease of our wants. Anterior to the war, the bank circulation of the 

country, as reported by the Comptroller oftheCurrency, amounted to 

$238,671,210. That was the bank circulation in 1 GO. That bank circulation was predicated upon a gold and silver circulation equal to 

at least $100,000,000; and, be ·ides, the pape.r circulation which th n existed was convertible into and equal to gold it, elf. There was but a very small percentage difference between the gold and the paper 

currency at that time. It is safe to sa,y, then, that if the bank circulation was 238,G71,210, there were 100,000,000 of gold which 

supported it, and that would aggre~ate 3:-*3,671,210 of currency act- ively employed in the country in 1 60, and hat does not include tJJ.e 

amount of gold which was used in the current tran aetions of the 

country. That was very considerable. That circulation was better 

than ours just in the proportion that :1 gold il·culation is better than a pure credit circulation. If we increa e this circulation 15 per 

cent., and that is the reasonable average ofthe discount ofthe gr en- back circulation, our present circulation, the ag~regate would make 

anaddit.ion to the volume of circulation then in eXI tenceof, 36,000,000. 

That would make the aggregate circulation at that time $374,671,210. 

That circulation was required in those peaceful times, w heri, although our country wa marching a,long rapidly in the progrc of civilization and development, no one could come near to ha"\"'illg a conception 

of the progre s we hn.vo made since that time. · I hn.ve adverted to the increase in our productions, the increase of our property, our population, &c. 

Mr. MORTON. Will the Senator allow me to suggest another: con- sideration ~ 

bll:. MERRIMON. Certainly. . Mr. :MORTON. I sng;;est to the Senator that before the war tho 

paper i sued by the banks of tho South and West was not current in 

the East at all, and not current in the States of the South separnt cl 

from each other, and bills of exchange 'vere resorted to in a groat 

body of commercial transactions which a.re now carried on by the 

actual exchange of currency. 

Mr. MERRlliON. That is an important sugge tion; and as tho 

Senator ha mentioned it, I will mention the fm·ther fact that at tba t 

time the circulation in the South and West was local, aml there wn no circulation in the country that circulated as the na,tiona.l anil 

greenback circulation does now, except the currency of New York 

and the New England States. 

What is our condition now in the matter of currency, and our cir- cumstances in connection with that? We have a population now of 

forty -one million people. Five millions of tho population that we l1 ad 

in 1"60, and which is takep into the calculation in ascertaining the 
·1874. CONGRESSIONAL RECORD. 1763 

aggregate population of this country now, were then slaves. · They 

have been made freemen since, and they have all t he want an<l all 

. the nece sities of a free population. They demand currency, and they 

demand it just to the extent that five million people would require 

it; and in that re pect there is a necessity, ~tnda very great necessity, 

for an increase of t.he currency to meet their wants. 

But, sir, what is the volume of the circulation now-the volume of a circulation that i& not eqnal to gold and silver, much as we desire 

tho,t circulation, and it is to be regretted on all hands that we cn.nnot 

have it What is the volume of this depreciated circulation that we have t We have, in the fir t place, , 364,000,000 of national-bank circulation; we have 356,000,000 of greenback circulation; we have 

50,000,000 of what is called the fractional circulation, ma.kingin the 

gro ·s $760,000,000. It is safe to say that at least 200,000,000 of that 

circulation is idle, that it is not in active operation; so that the actual volume of the circul&ting medium of t he country at this moment is 

really but $560,000,000. Therefore the volume of circulation, notwithstanding our increased wants in the way of increa e of popular 

tion, in t_he way of increase of industry, of enterprise, the increased 

wants growing out of the abolition of negro slavery-notwithstanding our increased wants in all the respects to which I have adverted, 

the increase of the circulation is this day but a little more than one- third greater than what it was in 1860. It seems to me that that is a strong argnmentin favor of the pend- ing propo ition to increa e the currency so as to relieve the wants of 

the people. But we know that there is a very large concentration of 

the bank capital of t he country in the Eastern States, and especially 

in New England. , We know that that ection of the Union has, in exce s.~_ of what was contemplated by law it should have, more than 

$80,00u,OOO of the bank circulation alone. Then there are circumstance , to which time will not permit me to advert now, which drive 

the great body of th'e currency of the country- and I think nnnatu- ralJy-~nto t.hat locality. Indeed, it would seem that the Government • and everything else in the land is tributary to the Eastern States. Although they are non-producing of the raw material; although they are commercial and manufacturing; although theW e t and the South are· the producing sections of the country, and the large mnjority of 

the popnlation and the industry that make up the wealth of the 

country is located in those sections, still we find the greater volume 

of the currency concentrated in this comparatively small locality of 

the com1try. 

1\Ir . .ANTHONY. Do you call manufacturers non-producers f 

Mr. MEllRIMON. They are producers in one sense, but they are not the producer of the raw material, and their industry is only in 

aiel of that industry which makes the raw mate1ial. 

I am not going to quarrel with the Eastern States about the con- . centration of cmTEmcy there. No one feels more kindly than I clo to 

the Eastern States; no one is prouder of their inilustry and enterprise 

than I am;·they are my countrymen, and I share in their glory, what- ever it is. But the point I wish to make is that, notwithstanding that 

concentration of currency and capital in that locality, they havo not 

to-day an excess of the amount of currency necessary to carry on their commercial and industrial transactions. We have been told that in 

New York money can be borrowed at 3 to 4 per cent. upon call. That 

very fact of it elf is s~ong evidence that there is not too much money 

there. That is high interest for such a loan. If money but performs 

it.s legitimate functions, tliat would be fair interest. for an ordina,ry 

loan. Then, again, I take it that 'vith first-rate securities, securitie ns good a the money itself, a regular lonn could be effected in Boston or in New York upon time at a rate of interest of from 7 to 10 per 

cent. Why, sir,· that is a very high rate to pay for interest. That is . too high a rate to pay for interest at a time when the currency of the 

country is in a normal condition, when there is sufficient of it to answer the purposes for which it is in.tended and ought to be used. All 

experience shows that 6 per cent. is aJeasonablerate of interest; but a regular loan cannot be effected in New York or anywher.e in the 

Eastern States at that reasonable rate of interest. So we see that, notwithstandin~ this concentration of currency in that locality, that 

particular locality has not too much. Wlen it is proposed to withdmw it, and float it off to the West and the South, we find the bank-' ers and the people there protesting against it, and they declare 

they have not more th:m. they need. We not only hear from them, 

but we know that the manufactures of the New England States languish to-day. We know that some of the leading mnnufacturers there 

have become bankrupt for the want of currency to go on with busi- ness. We know that thousands and tens of thousands of laborers n,re 

starving for bread, and they n,re demandin~ labor. If there is n: pleth- ora there, if there is plenty of money, if tnere is a surplus, if there 

is redundancy, why in the name of common sense are these men not 

put to work, and thus set going again the regula,r industries of the 

countryY 

But, while we see this striking state of things in the Eastern States,. what do we witness at the Sout.h and West ¥ In the South, that 

section of the country which has been devastated by war, and which 

it seems to me the whole Union ought now to conspire to h elp build 

up, and develop, and set agoing again, we find a scarcity of mon ey 

that is hardly endurable. The small amount of money that is there 

is loaned at from 1 to lt and 2 per cent .. a month, and jn many instances loaned at 25 per cent. We haye been told by represent ative 

gentlemen from the West-and when I speak of the West, I confine 

that remark to that section of the couutry ea t of the Rocky Mount- ains- that the average rate of interest there is from 10 to 12 to 15 

per cent. I submit that these arguments go to show that there is not a sufficient amount of money in the country to effect the legitimate 

exchanges. If there was, there would be plethora in the Ea tern 

State ; there would not be this great demand in theW est and South 

for money. For I will aavert hereto a principle of political economy, that is as well established as any that my honorable. friend from 

Mis, ouri discussed ye terday; and that is, that money when it is in 

its legitimate channel, when it is effecting its legitimate ptirpo es, as naturally eeks investment as water seek a level. If there were plet.hora in the New E!!gland States, those p ople are a shrewd and 

enterprising -people, men who know the value of a dollm·, and how 

to nse a --dollar to make more dollars-if, I say, there were plethora 

there, as is contended, the surplus of mo~ey in that coru1try woulcl 

seek investment in the West and South, or somewhere. 

Gentlemenhn,ve said that it would do no good to increase this b an k 

circulation; that if it were increased the people of the South are impoverished and they have no money there with which to buy the 

bonds and to establish the banks; and the honorable Senator from 

Missouri said yesterday if they had the money to buy the bonds with, 

they have then to .go to New York nnd buy them, and the money they 

ox:pend in the enterprise of establi bing banks they take to New York 

for the very bonds they are obliged to buy in order to set a b:mk 

going. I concede that the money would ha.ve to go to New York to 

buy the bonds; but, sir, if there were currency plethora in New York 

and in the Eastern States, as he contends, when this money is taken 

to New York to buy these bonds, immediately that money would go 

out to the West and go out to the South, in order to eek inve tment; 

if there was no legitimat-e use for it in New York or elsewhere, thls 

would be the natural consequence. The money does not do o; and 

therefore I infer, and it seems to me the conclusion is inevitable, that 

it may be usefully and profitably employed in New York and other places in the East. But the Senator says that the South particularly has been de olatea 

by the war, and he expre ses warm sympa.thy with her. I thank him 

for his sympathy ; I only regret that he does not make it a little more practical at this time. But, sir, prostmt.e as the South is, there are immense re ources there, the very be t resoru·ces in this country. The 

Senator took my State to illustrate the po ition which he occupied 

and the condition of the South, and I will take it also to answer the 

purpose that I have in view just now. In the first place, we have a climate and a soil unsurpassed, as I 

believe, by any in this highly blessed land. We have everything to 

invite industry and enterprise and investment. We have a population of a fraction over a million. The estimated value of our real 

estate is over $'260,000,000. The annual procluctions of the State are over $GO,OOO,OOO; and yet we are told that in North Carolina people 

owning that amount of property, that is as good as gold. itseJf, cannot 

have a bank circulation of five or six millions, the amount that we had anterior to the late war. I do not believe that. I believe that 

if there were money in the Eastern State , if there were money in 

New York to lend that cannot be employed there, the capitalists who own it would des-ire investment; and they could not get a better 

investment than to go South and lend it to people there to encourago 

industry and enterprise, and take a mortgage upon their real estate. They could not have a better security. The same remark will apply 

not only to my State, but to every State in the outh. ·Although the 

South is downtrodden, the population is there, the real estate is thm-e, 

the personal property is there-these belong to them- that they can mortgage t() secure any capitalist in the North who will go thm·e and 

let them have money. Any one who will look at that country, any one acquai.Qted with its resources, any one acquainted with the enter- prise of tho e people, any one acquainted with their nece sities for 

laboring as they never labored before, when we consider that the great 

crop of this country, that which produces more gold than any other 

in this country, is grown in the South, and can only be grown there, 

it must be manifest that the position that there is nothing there upon 

which to borrow capital goes for nothing. I make these remarks for the purpose of showing that the present 

volume of currency is not what it ought to be. I believe that it ought 

to be increased, that it ought to be increa ed at least '100,000,000 ; 

the bank currency ought to be increased, as it seems to me, $46,000,000, and the $44,000,000 "reserve" of green backs ought to go out, and stay 

out, so that the gross volume of currency of the country shall be 

r>O,OOO,OOO at least. Then the volume of bank currency would bo 

exactly equal to the volume of green backs. I know some gentlemen 

favor, if the currency is to be increased, the issue of more greenback 

currency. I would prefer it ordinarily; but under the pre ent cir- cumstances of the country I prefer this. I prefer it, in the first place, because th e propo ition to increase it 

is so simple, that if the judgment of the Senate is in favor of an in- crease of the currency, it can give rise to no prolonged debate. If we 

discuss the propriety of abandoning the national banking system~:::mcl 

I am a anxious to get rid of it as anybody- if we discus now the 

propriet y of e ta.blishing a general systE\m of finance for the country, 

to become permanent, the discu ion will last the e sion out, a.nd 

Congress will adjourn, giving the people no relief in that pa.rticnJar in which they demand it so .vehemently from one end of the land to 

the other. 
1764 CONGRESSIONAL RECORD .. FEBRUARY 25, 

Then there is another reason in this line of view. If banks are stablished in the 'Vest and South the t~dencv is to localize capit al. 

If a baJlk is there, and it lends the money every thirty, sixty, or ninety 

days, it must go back there, and the effeCt is to stimulate enterprise, industry, and all sorts of industrial-pursuits in t)le locality where the 

bank is established. If the greenback currency is issued, those who 

speculate in the money of the country will get it, and we know where 

those speculators do congregate. They congregate in the great money 

center. It will then go to New York1 and unless the currency of the 

country "is so inflated as that there will become a great surplus there, 

not a dollar of it will go to the West or South. It will be used there 

in speculations in that locality. 

But, sir, I did not :rise for the purpose of entering into any general 

discussion of the subject before tho Senate. I simply wanted to offer 

these considerations to show that there is a necessity for the increase 

of the present volume of paper cmTency in this'country. I concur, I 

repeat, in many of the views expressed by the honorable Senator 

from :Missouri yesterday, in reference to various questions of political 

economy; but I do not concur with him in reference to this question, 

to wit, whether we shall have an increase of the currency or not; and 

in view of what I have said, I desire to propound to the honorable 

Senator these two questions, and ask him to give the Senate a satisfactory reply to them; and if he shall fail to1

satisfy any one, I ask anv Senator to answer them who can: First, if what the Senator says is true, why does it not. appear that 

there is an excess of currency in New England and tho Ea-stern States 

in view of the acknowledged concentration of the currency there; 

and if there is excess or redundancy, why do prices not go up materially in those localities ' . Secondly, if there is redundancy there, why does the currency in excess of reasonable demands fail to seek investment in the South and 

West, where it is admitted it.js so much needed 'I 

Mr. SCHURZ. As the Senator from North Ca.rolina has put these 

questions in writing, he will permit me to look at them, and afterward reply to them, unless the Senator from Ohio, who intends to 

speak now, should in the course of his remarks reply to them. 

Mr. MERRIMON. Certainly. 

Mr. SHERMAN. Mr. President, I do not wish to protract this debate ; and if there was a disposition to vote now I would cheerfully 

give way. I am weary of this discussion, a,nd I wa,nt to bring the Sen-. u,te, if possible, back to the original proposition before us. The pending question now is on a proposition to increase the bank 

paper money in this country $46,000,000. There is no proposition for 

its distribution a,mong the States; there is no proposition that the 

South and West that have now less than their share shall have the 

whole of this; but it is simply an irulrease of· the bank paper money 

of the United States. This is the first time since the close of the war that any m:m has had the boldness and temerity to propose an inflation of the currency. I wish to call the attention of Senntors to 

this fact, that in the face of an the promises that ha,ve been made by 

political pa.rties, in the face of promises made by the President of ~he 

United States, made by Con~ress, made by the very Senators who now are advocating this propositwn, in the face of speeches without num- ber made by these Senators to the people of the United States and ns Senators here, this is the first time since the close .of the war when a deliberate proposition has been made to add to the irredeemable paper 

money of the country. 

I know that Senators forget and aYoid this question. When we come to talk to them about inflating the paper money, they aU deny 

it. The Senator who bas just taken his seat [Mr. l\fER.R.D10N] says 

he is in favor of specie payments; the Senator from In!Iiana [Mr. 

MOHTON] said yesterda,y he is in favor of specie payments; all of them 

say they are in favor of specie payments; and yet on this day, the ~5th of Februa1·y, 1874, nine years after the close of the war, they propose to a_dd to the paper money of this country $46,000,000, without 

any plan of redemption, without any promise of redemption, without 

any hope of redemption. ' And this is all to relieve the country. 

Mr. President, this proposition shocks me so much tha.t I c:m scarcely 

discuss it ; but let me take up and answer, if possible, some of the 

arguments by which it is pla.usibly maintained. 

The Senator who has just taken his seat tells us that they want more paper money in the South; that t.hey must have more pa.per 

money; tlh'tt there is distress there. How will you get this paper 

money 'I What have you got to sell f Ca.n you get it unless you have 

something to sell T What have you got to sell 'I 

1\Jr. MERRIMON. Does the gentleman desire a,n answer! 

Mr. SHERMAN. Certainly. 

Ml'. l\ffiRRIMON. We had in the South a cotton crop that equaled 

last year nearly four million bales, worth nearly $375,000,000 in cash. 

We have in our State, as I said awhile ago, real and personal property 

worth $261,000,000, and om· annual productions are equal to sixty 

millions; we have a population of over a million; we have a climat 

and soil unsurpassed by any upon this continent. We are in the con- dition of a man despoiled of his rea.dy money, but who has the substrata which, if he can get ready money to carry into pra.ctical opera- tion his ideas, will make him rich; and yet as we are we cannot use this -rust amount of ren.l and person~ property in order to start again. 

Mr. SHERMAN. I asked the Senator the simple question wh..."tt they 

had to sell; and he tells me they have real estate, lands, &c. Their 

cotton crop is a.lrea.Uy sold for gold. · ' . 

Mr: MERRil\iON. I b eg the gentleman's pardon; the cotton crop 

in my State, as I underst and from gentlemen ther e, is not half re- moved yet, and the eropof North Carolina is equal to about one hun- . clreu and eighty thousand bales. 

Mr. SHERMAN. For every pound of cotton his people have they can get the market price either in gold or p·aper money Without the 

slightest difficulty, ancl promptly. There is more paper money now in circulation than there has been at any time. The amount is actually swollen from twenty to thirty millions of dollars beyond what 

it was only last· September; and yet he wants· more paper money. 

Does he want to increase the price of that he has to buy and not to 

affect that he has to sell T 

In all this debate, that which has struck me as the most remarkable 

is that Senators repre-senting States whose products bring gold and 

who must sell them for golcl, and the price of which is fixed in gold 

at Liverpool, the price of which is not affected by our cuiTency in tbe 

slightest degree, suould demand more paper money in order to pay 

higher prices for that which they buy, without aflecting at all that 

which they sell. 

1\fr. MERRIMON. Will the Senator. pardon me for making one suggestion at this point'/ 

. :Mr. SHERMAN. Yes; but I did not intend to prolong my remarks, as I fear will be the :result if I am interrupted. I will hear the SenatorJlOW. 

Mr. MERRIMON. He suggests that we have no money in the South 

to take this bank stock. If we have no money in the South to take 

this bank stock, what harm will there be in passing the act so as to 

give us the opportunity to take it when we shall•have something to 

take it wit h 'f 

l\fr. SHERMAN . . Why, sir, the bill we reported does give you the 

opportunity yon ask for. We propose to give to the South ample 

opportunity to organize all the banks they ca,n. I have here for five 

years, at every session of Congress, demanded for the South and West 

the opportunity t.o charter and start local hanks; and four years ago we carried a proposition which gave you an opportunity to take up to 

$54,000,000; and how much of that dicl you ta.ke 'I Very little. My 

honorable friend will see that even yet, accoriling to the tables, North 

Carolina has a balance clue her to make up her fa.ir· share of between 

four :1J1d five million dollars. I am in favor of his object, of giving his 

people the benefit of local banks, certainly. 

1\f:r. l\fERRIMON. 1\Jay I say a word at this point"' 

l\fr. SHERMAN. Yes, sir. 

Mr. l\IERRIMON. I trust I shall not be deemed discourteous. 

Mr. SHERMAN. Not at all. 

l\fr. MERRThfON. I give tho gentleman due credit for the sym1Jathy ancl the zeal he has manifested in the direction he indicat es;. but 

with all respect to him, and all respect to other gentlemen who advocate his proposition I concm with the view expressed by tbe honorable Senator from Indiana,, that, in the first place, that afforus no reJief whatever, and, in the next place, it is not just, because it is l ess than a half-way measute; and there is this, fmtber: if the bill shall 

pass as it came from the Committee on Finan ce, I do not b elieve the 

South will get one dollar by wa.y of redistribution ; and why 'f The 

honora.bleSenatorfrom Vermont [Mr. ED:i\ItTh"DS] the other dn.y argnell, 

and he made an able argument, to show that. by the law as it exist.cd 

at the time the Eastern States got this .excess of bank capital, they 

had a right to demand it. If he is correct in that construction of t h e law, then if this bill shall pass and a New Enolanu banker should • apply to me, if I were in the practice of the law here, I couM in three homs get an injunction to restrain the Treasury from selling his bonds 

whic-h he had deposited in the Treasmy, and I could get up a litiga- tion that would last for two years. I do not regard that proposition as amounting to anything. But I do give the honorable Senator 

credit for his zeal and his desire to benefit my section. 

Mr. SHERMAN. l\Ir. President, this is a kind of free and easy 

debate; and my friend thus far has consumed one-half my time, but 

I will stop now, abandon the line of argument with which I started, 

and show him how terribly he would be mistaken when he applied 

fol" his w1it of in.Junction. 

The act quoted by my honorable friend from Vermont, which authorized the old banks to get the preference in the distribution of tllis national-bank circulation, expired by its own terms on the 1st of July 

following its enactment. Tllat provision of the l:tw only was in force for four months, from the 4th of March, 1865, to the 1st of July, 18G5 ; 

aJld after the expiration of the 1st of J nly $110,000,000 were issued to 

old banks without law and in defi:m.ce of law. My honorable friend 

from Massachusetts [Mr. BOUTWELL] will r emember that tho l aw which requiTed the distribution to be upon the old basls, passed on 

the 3d of 1\ia.rch, 1865, expressly provided that the circulation shonlcl 

be divided according to population and wealth. A law which passed 

on the same day gave a preference to the old State banks over new 

national banks, but that provision of law was limited to the 1st of 

July following; and so the old banks had no right whatever to any 

preference in the distribution of the share nllotted to their St ate after the 1st of July, and yet after the 1st of July more than $110,000,000 were issued to old banks in open defiance o{ law. Besides that, that law itself and all these banking laws contained 

the provision that Congress might at any time alter, amend, or I'epca.l : l1Ild no bank now has a dollar of circulation which it holds by Tigh t·. 

It holds it at the plea-sme of the United States; and Congress might 
1874. CONGRESSIONAL RECORD .. 1765 

t.o-morrow, if they desired, withdraw from all the banks in existence 

their circulation and transfer it. It is all within the power of Congre.s. Therefore, sir, when the honorable Senator says that this act, if 

passed, would not operate in their favor, he is not correct. No one tli.,putes the power of Congress over this whole subject. The Ia,,,. of 

Cong:cess 'is mandatory; and for them to say to UB, as the Senator 

from Imliaua clid the other cby, that the executive officers here would 

not enforce it, is to affirm that au executive officer dare disobey an op"n mamlate of Congress. I say to the Senators nom the South and 

We t that, if they pas t.he bill reported by the committee, which 

authoriz at once the organization of banks in the Southern States, 

they will have the opportunity to organize them; and let an officer 

dare violate the law which requires him to withllraw the circulation 

from th New Eng'land States. 

Mr. LOGAN. Will the Senator a1lowme,right there, to"interpolate a. word J He sn,ys that no executive officer dare violate this ln.w. I 

ask him if the executive officers clicl not violate the ln,w in issuing over $100,000,000 of circulation to the old banks at the time to which 

he just now referred Y 

Mr. SHERMAN. Yes, sir. 

Mr. LOGAN. I a'sk him, as chairm:bll of the Committee on Finance, 

wha.t he (lid with that officer Y 

Mr. SHERMAN. We had not anything to do with him. My hon- ora,ble friend was then a member of the Honse of Representatives, 

and he ha.d it in his power to file articles of impea-chment against him, 

if he thought it necessary ; but I always took it to be an honest discharge of duty. I had nothing to do with it. We could not act upon 

it here . . Mr. LOGAN. We offered articles of impeachment in one case, and 

dicl not care about coming in with any more: I will ask the Senator 

what right ha he to say that an executive officer will not vioL'\te the · bw, that he dare no'i do it, when right in his fooe the h~w was viola.tod, and stands violattld to-day, ::~,nd no remedy has 6Ver been propo edY 

Mr. SHERMAN. I ought to say, in justice to tho gentleman who 

ma.de this decision, that while I have always thought it was wrong, 

an!l from that clay to this I have warred against it, I have no doubt 

that :Mr. FREE::\lAN CLARKE, who was then Comptroller of the Curroucy, looking upon these laws ~ge~her, constru~d ~hat he had the 

lHnver. I never thought he chd nght; but shll, if ·there was a qncstion of pt~nishment, it was a matter for the HoUBe of Repre- sentatives to bring up. Dut~ sil', no one pretends, no one claims but what, if we do pass this 

bill now, it could be executed, and would be executed. The Comptroller of the Currency, the very officer who is called upon to do this 

dnty, himself wrote this bill. He wrote it with tho sanction of the 

Secretary of the Treasury, and it was communicated to the committee officially, so that there is no question about the power, the right, 

the ability, and the willingness to c:trry this bill into execution. . Now I say aga.in to the epresent:.~,tives from the South and West we are willing to give you the opportunity. to organize all the banks 

under existing law that yon desire, anu to orgahlze all that you are likely to org:.~,uize. We say that in all human probability you cannot u ·e more than twenty-five millions. We do not deny that if you can organize more than that., you ought to have more; bnt we s:.~,y that in 

giving you a right which yon ought to have, in securing that which 

the law gives you, in conecting an error that was made, you ought 

not to up et our whole financial system and open wicle the flood-gates 

of more paper money. That is all we say. Now, 1\Ir. President, if tho amendment now offered by the Senator 

from North Carolina is passed, what does it dot Is a.nybody benofite(l by itt Who 1 Forty-six millious of more bank paper money are is ned. By what banks shall it be issued 7 I take it Sena.tors 

expect it to bo issued from the South n,nd West; but there is nothing on the faco of the proposition to in(lic:tte that. . Mr. MERRIMON. The proposition refers to the section contained 

in the act of March 3, 1865~ which provides for thf} distribution to the 

South and West. 

Mr. MORTON. The old laws making the apportionment are still 

in force. 

1\ir. SHERMAN. I supposed that was the design. Then this money can only be issued iu the Sta.tes that have not their proportion; it 

cannot be issued in the St..'l.tes that now have au excess. That was the purpo ·e undoubtedly; and yet they tell us that they cannot issue 

but a very little of it in. the South; they are not prepared to issue 

much. What •Yood will be accomplished by itt What end will be achieved by it f Nothing but to unmoor our whole financial system. The South a.nd West will not be benefited by this plan of gaining more local banks any more than they would be by the plan reported 

by the Committee on Finance, but onr whole financial system is up- set. The policy of inflation will be inaugurated. All the safeguards 

we have erected will be obliterated, all our promises violated, and we will have no power to resist new demands of paper money-when- ever a temporary stringency arises. It is the first step that costs. If we ca.u but stand still we may reach a specie standard, bnt if we en- hrgo the limit of paper money we add enormously to the difficulty of rcsumpt.iou hereafter. I wish now to como back to the point from which I was diverted 

by the Senator. I wi::!h to show him how strongly we all are romrnitted again t inflation. I intend to quot.e largely from tho Senator 

from Indiana., to show him how he is committed on this proposition 

of issuing more paper money. In the first place, let me again call your· attention to the sacred 

promise made by the act approYed March 18, 1869, byw hich we declared 

that a.t the earliest practicable period Congress would make provision 

for the redemption of the Uuite<l States notes in coin. How do you 

propo e to fulfill that obligation 7 But I said enough on that subject 

when I opened this debate. Both political parties are pledged in the 

most sacred manner to do no act whatever that will carry us farther 

away from a specie standard. Does not every man see t.hat the is ·ue of more paper money will take UB farther and fru:ther from the road 

to specie payments f 

Mr. ALLI ON. I do not see it. 

Mr. :MERRDIO:N. I do not. 

1\ir. SHERMAN. Then you announce the strangest opinions here 

that cun enter the human mind. Here we now have 760,000,000 of 

paper money, irredeemable; more than Great Britain ha ; more than 

France has~ more than Germany has. This paper money is depre- ciated; it is Hold now at about eighty-seven cents on the dollar. You 

ay that to add to that volume will not furtht3r depreciate it. Wby, 

sir, you might as well say that to pour wa.t.:lr on n. pail that is full 

will not make tho water overflow. 

1\i.r. LOGAN. Will the Senator allow me to interrupt him right 

there, because that is:.~, point upon which I desiro to ask him, ques- tion 'f Speaking about the resumption of specie payments, we have 

all hearcl tha.t vory frequently here-- Air. SHERMAN. I hope the Senator will ask me the question. 

Mr. LOGAN. I will. I am only going to premise by saying that we who have opposed that have been denounced as inflationists. Now, 

I ask the Senator if he is in favor of an immediate resumption of 

speoie payments 'f 

Mr. SHERMAN. Is that exa-ctly fair when the Senator rose only to 

ask rue a. question t I will come to that point after awhile. Does 

tho Senator wish me to stop in tho midst of the extract-s I was about , to read to ask me that question T 

1\ir. LOGAN. Not at all. The Senator was talking about specie pay~ents at that point, aml I desired to ask him if he was in favor of 

it; for if he is I can show him a road that will do it to-morrow. Ab:. SHERl\IAN. We will not diopute about that. I want toremind the Senator that he as well as the I'est of us is committed by 

tho same pledges, that we cannot violate here without being held up 

to public ceUBlirO. 

I have here the democratic platform of 1868 and the address of 

Governor Seymour as the candidate of the democra.tic party. Both 

affirm the duty of Congress to make our currency good as gold. 

Mr. LOGAN. That is in both platform. 

M1·. SHERMAN. Yes; in both. So in the platform of two years 

ago the same declaration is made. Here is the Philadelphia platform 

of 1872: 

We den~uncerepndiation of the public debt in any form or disguise as a national 

crime. W e confes with pride the retluction of the principal of tho debt, of thtl rates of interest 11pon the balance, and confidently expect that our excellent national currency will be perfected by a speedy resumption of specie payments. 

The democratic platform declares thatA spee:J.y return to specie payments i& demanded alike by the highest conside:ra. 

tiona of commercial mornlity :mtl hone~t government. 

These are the latest pledges of political faith by great pnrties. 

But I want now to call the attention of the Senate to some extracts 

from a speech made by the Senator from Indiana. [:Mr. MORTON] a few 

years ago. The Senator from Indiana,, who has been arraigning us who oppose infla.tion, introduced a bill on the 16th of December, 1 68, "to providg for the redemption in coin of the United States notes and 

fractional currency, and requiring the national banks to redeem their 

notes in coin," on which he addressed the Senate. Here is the view 

he then took of paper money : 

It is impossible to calculate the ag!ITegate loss to tho country, eT"en in one ye..'1r, 

by this t'!l:ate of things, or to estimate tho suffering and destitution produced by stn.g- na.tion of lmsiness and the w:mt of ~mploymentfor labor; a.mlit is not only the busi· ness, but the imperntivo dnty, of Con!!l'ess to address itself to the great work of 

reform, by adopting such 1 !ri. htion, if po ible, whereby the currency shall be matlo 

_good, and lmsmess be made to flow on prosperously through its regular channeL~. 

Tho business transactions of the conn try, amonntin"' to many thous:.mcl million llollars i.it tho com'Se of tho year, ar contlncted throngYt the medium of the currency, and if the currenc:y is depreciated, finctua.ting, and decepti"n~, the pro perityof the conn try must ineVItably be seriously injured and its geneml progres anti lieYPlop- ment deL'tyed. * * * * * 

Why is onr currency depreciated. And wliy would it be depreciated if the Gov- ernment ilicl not owe a ingle bond 1 Because the green back note is a promise by the Government to pay so many dollars on demanil which it does not pay. The 

promise is daily broken, and has long been clishonoreil.. Tho note draw no l.ntercat :tml the Government ha fix.ed no time when it will pay it. Under suohcircumr.t:mcc~ the not.e must be depreciated. The soh·ency or ultimate al>ility of the pro miser never k ept overdue paper at r'U', and never will. To clo t.hat somethincr moro is 

required than the ultimat-e wealth or ability of the promisor. There must lJo COl'· 

tainty in the paymeut a.nd time of p<tyment, ancl if the time of payment he deferred 

compensation must be m:1.do by the payment of interest: Let mo suppose, by way of argumentHere is a supposition that I woulcl call the attention of the Senate to. Let me supposl', by way of argument, that .A.. T. Stewart, the great mercbrmt in ow York, shoultl pay off his numerous employes in due-bills or notes p ayable on d emand, which draw no interest, n.uu wlJic.h ho r efuses to pay on demand. and will 

fix no tim:~ when he will. .:. otwithst:miling his immense wealth and his en tiro 

ability to pay, his not£>~ would inentably depreeiate, and could only be sol•l at a 
1766 CONGRESSIONAL RECORD. FEBRUARY· 25, 

l:l.rge discount, which woulcl be increased if it were admitted that there was no legal remedy by which he could be comp•dled to pay them. One of the we..'llthiest men in theNorthwe t, now dea.d, who left some $5,000,000 to be divided amon.r his heirs, bad an unfortnn..1.te habit of refu ing to pay his mall debts. Instead·o¥ 11a.yin~ h would give his nores for them, refutie to pa. the notes a.t maturity, suffer 

uimself to be sued. then hire a l:l.wV"er t.o fight the ca.ses. The re ult was that his 

PUlJCl" wa ba\Yketi about the sl:re ts at 60 or 70 cents on the doll:w, while perhaps tlJ:!t nf his ncar nei~hbm·, who kept a .small store and was only worth "10,000, 

but who was prompt ill tho paym nt of las debts, coulu be sold at a very small discouut.-Oongressional Globe, part 1, third ses ion Fortieth Congre.ss, 1868-'69, p.102. 

• This was what the enator fTom Indiana thought in 1 G abont a depreciated paper money. He compared the condition of t.he Government of the United States to the case of 1\!r. Stewart issuing Iris 

notes and then refusing to ·pay them, and to some miserly man out 

West, whom he did not name, who not only issued his notes when- ever he could· get anybody to take them, but then contested and 

fought their payment. That wa-s undoulJtedly a true description of 

tho effect of depreciated paper money. Every word that the Senator 

said was perfectly trno; and that is just the condition of the same money now. Here we have 3BO,OOO,OOO of just this kind of paper 

money so graphically described by the Senator from Indiana-paper 

money that is overdue, owed by the United States, and which ought 

to be paid, which ought to be made as good as gold; but we refuse 

to pay it. We have said that we would pay it; we have said that we would pay it at the earliest practicable moment. Our wealth is 

overflowing. The United States, that owes this $380,000,0001 has 

property to the .amount of 32,000,000,000, aud yet it will not tulfill 

its promise. It will not take any step in that direction. Althoua-h we have agreed to do it, not a single step do we take; but, on the 

contrary, we now propo ., to issue forty-six millions more of another 

kind of pn.per money, -payable in our broken promises. Is not that 

strange f Is not that the pectucle that is now pre en ted 'I Here is our paper, just exactly the kind described so well by the Senator 

from Indiana, floating at large, depreciated below its standard, no effort made to raise it, no additional value given to it by allowing it 

to be converted into bonds, or in any way; There it is. And now we propose to allow capitalists who hold bonds to go and file those 

bonds in a safe place, issue 90 pel' cent. of the amount of those bonds 

in bank-bills payable in this very depreciated money so well described 

by the Senator from Indiana, and yet he now suys that such incre se 

will not depreciate tho money more. Sir, how fallacious this is . .Any 

audition to the volume will depreciate the value; and if A. T. Stewn.rt, who e case a.gain I will take, aftex he had arrived at that con- dition when he had refused to pay his notes, although he bad the 

means, should add more to them, would it not more and more depreciate them' Suppose the miser in the West, described by the Senartor from Indiana, ::rltcr he had shown his disposition to cont-est an honest claim, should add to the volume of his notes thus contested, 

would it not tend more and more to depreciate them Y Suppose he 

had shown, for :fi.v., years, not only an unwillingness to pay, but an ability to put off the time of payment indefinitely, I ask would not 

that still more depreciate them! .And then suppose some third per- son should propose to i ne notes payable in that kind of depreciated 

paper, what would b~ the effect of it 'f 

Here I como to a point on which I wa-s surprised to hear the view 

of myfriendfrom Iowa, [lli.ALLISo~,] whose intelligencea.ndability 

I farrly concede. He tells us that the issuing of 46,000,000 more of 

paper money, bank-bills, payable aJono in greenbacks will not tend 

to depreciate the greenbacks, and will not take us further and further 

from the road to specie payments. "'Why, sir, the addition of $4G,OOO,OOO 

of bank-notes to the volume of our currency has nJ.mo t,not precisely, 

but nearly the same effect u-s the addition of · 46,000,000 of greenbacks. Mr. ALLISON. Doe the Senator claim that the diffexence between 

gold and greenbacks is wholly owing to a redundant currency, to the 

fact that the volume is too large 'I Is that t,he sole renson for the difference between the price of greenb::teks and gold 'I 

1\Ir. SHERMAN. It is the sole reason. The cmrency falls below 

the vn,lue of gold because it is not convertible into gold. I have 

argued over and over n,gain that in my judgment we can at times 

maintain n. brger circulation in this country upon 3i specie basis, oven, 

than we have now; but it must be convertible into gold at tho pleas- ure of the holder. The fact that we lutvo thi paper which is dis-

- honored, which is now in the open market sold below par, that we refw e it for custom duties, that we ref1l.Se to receive and take in payment of bonus, that we ourselves dishono1· and 1·efuse t.o say when 

and under what circumstances we will puy it, but add to its volume, 

snch paper money will inevitably continue to depreciate more and more as the amount increases and confidence in its redemption in coin 

uiminishes. . 

Mr. ALLISON. Will not much depend on what we may do with the 

excess of greenback circulation, the difference between $356,000,000 

and the 381,000,000 Y 

1\fr. SHERMAN. Yes, sir. 

Mr. AlLISON. Theref,>re other elements entex into the calculation. · Mr. SHERI\f.AN. .I thought my friend had some way of escn.pe. If 

my friend will join in retrring an equal amount of greenbacks, then we are all right, and I suppose that is the solution. I agree that that 

would advance us toward specie payments. If we should issue 

$46,000,000 of bank currency and at the same moment and by the same bill provide for tho retirement of $46,000,000 of greenbacks, then wo should be on the l'OUU to specie payments, and a. rapid ron.U; and if 

that is the position of my honorablefriendfrom Iowa, I most heartily 

welcome him, and I do not differ with him in the least. 

1\Ir . .ALLISON. I will state my position before I vote on this ques- tion. I only desire now to put o~e inquiry. I understood tho ena- tor to say that the issne of forty- ix millions of national-bank notes 

would per se, increase the diifer nee in price between greenbacks and 

goltl. I maintain that that does not follow. • 1\lr. SHERMAN. nless it is accompanied by a proposition which 

!ctires a ili;fferent kind of pape:x.:mon y. ndoubtedly I peak o.f an mcrea~e. The Senators are talking alJout an increafile of paper money. 

Tha~ lS what ~hey want. The Senator from North C:uolina is np- p~'\J.ing for an mcreu o. of pa1)er money. The Senator from Indiana 

is appeaij.ng for an incr~u e of paper money, although he says he 

only wants a mouerute mcrease. My friend from 1\iichia-an [Mr. FERRY] wants un increase to eirrht hundred millions, four0

hundrcd 

of each kind. I say that either of the e propositions or anything that 

tends ~o increase the volume of paper money, undoubtedly tends to 

deprema~e the .valu~ of the rna_ . The proposition muy lJe state<.l 

anthmetiCally m this way: If $100,000,000 of gold will buy the outst.anuing currency of $780,000,000, and you adtl to the :1 0 000 000 

l_Oo,ooo,ooo more of paper money of the same kind, the o;ooo;ooo 

Wlll not Luy any more cotton, corn, or other produce than the 

$700,000,000 of gold; that is, a,nyaddition to th amount nece 'arily 

depreciates the purcha ·ulJl power in precisely the same ratio. You 

cannot get aroul?-~ it. I s~ppose it is out of f~ bion now to quote 

books and authont1es recogmzed as such, but that lS the plain common sen e of the thing. 

Why, sir, money, whether gold or pn.per, when unduly increased 

has the effect of _raising the p~ice of everything. Money and prop~ . erty and productions are relative termd. ·whenever there is more 

moll:ey th~ is -'!-1-eces a11 to f>e used in the ordin_ary daily oxch::mged 

of life, the mov1table effect 1s to advance the pnces of commodities. 

And, sir, the only ~a;r by which y<_m can tell the value of paper 

money, und whether It IS redundant, 1s wbether that p:tper money will 

buy less _of any commodity than ~old or silver. 'Vhcnever paper mnllt~Y will buy less than gold or silver, then it is red1mdant; :::,n,u it 

either ou~ht ~o be. retired or new employments lJc given to it. 

Something lS sa1d about t.he amount of paper money in this coun- try, and Senators say we want more currency. Woll1 sir, I am willing 

to say I wish we had more cun:ency; but what 1nnd of currency 1 

~ 0 want good ~oney ; money that is tested by the stnndurd recogmzed by all nations. When you say to me that the1·e is a dearth of 

money, that there is more money wanted down outh, I am willing 

that ~hey should have all the money that is necessary to buy their 

commodities at par with gold. 

The honoralJlc Senator from Dlinois, [:Mr. LOGAN,] in a carefully .prepared speech that he n::ado a. day or two ~ter I hucl spoken, went 

mto n.u elaiJorat calculatwn to how that in the aggregate France 

had more money than we lrad, and perhaps that some other countries 

had more than the nited State , although I believe he did not affirm 

this as to any except France. What does that prove When you come to compare ~he ::tm.ount of our paper money with the amount 

of paper money m Fmnco. w~ find thut we ha.ve in this country 

760,000,000 of paper money; we find. they have in France $520,000,000 

of paper money; we find they have in En~~and 230,000,000 of paper 

money. But the Senator from North Carolina [Mr. MERRIMON] says 

there is 200,000,000 of our papermonevlying iille as r erve . Well 

sir, it is so in England. The reserves of tho Bank of EngJ.a.nd alon~ are over$100,000,000. The reserves ofthellankofFranceare 7(30 000 000 

francs, or more than $150,000,000. The reserves in all Europea'n c~un­ tries are always greater than in ours. The amount of paper money 

actual1y jn circulation to-day in this country is greater than in France 

and England combined. 

Mr. LOGAN. Will the Senator allow me to say a word at this point, 

inasmuch as he has referred to me Y 

1\Ir. SHERMAN . . Certainly. 

Mr. LOGAN. 1\Iy" calculation on this question was induced by the 

statement of the Senator himself. He said this countl-y had more money than any country in the world. I then went towork to exam- inc into that matter to see whether that statement was true or not 

and I found that h e was mistaken. ' 

1\Ir. SHERMAN. I am not mist.aken; but the Senator can go on. 1\Ir. LOGAN. I there:i'ore made the calculation. The assertion was in reference to money, not paper money, and it is true; and he will 

find to-day by an examination of the statistics that France ha more money than we have, and so have the other countries to which I 

allndedjust as I stated. 

lli. SHER UN. Upon this point, since the Senator and I spoke 

upon it, there has been very full evidence collected by 1\Ir. Tonn•r, 

the head of the Bureau of tatistics; and after examining all the 

figures, if it is at all material, I am prepared to prove and to show, 

by what I regard as good authority, that taking the aggregate of our gold anll of our :paper money, :we !:tave more money ifi: this country than the?' hn.ve 1n France, which lS about e_quaJ. to us m population, and considerably more than any other natwn. But, sir, that is not 

material. The point I want to get at is, and that is cone ded by the 

SeD.;'ttorfrom Illi~ois, that we have more paper m~mey in this country 

than any two natwns of Europe. In France theu·· paper money is as good a gold. In England their paper money is as good as golcl. In 

the United States om paper money is at· a iliscount of 13 per cent. 
1874. CONGRESSIONAL RECORD. 1767 

Why is thisY It is because we have t.oo much of it. But it is said 

they have more gold than we have, and therefore more money. But 

why is this! It is because we disc:1rd gold as the !:lt:mdard of v::~Jue, 

and therefore banish it from among ns. · We expel it as bullion to 

pay for silks c:t.nd satins. If we would learn wisdom from the exam- ple of thoso great nations, we would decrease our paper money and 

increase our gold money, aud blentl and mingle them into a common currency, tho paper always equal to gold. 'l'he fQct that we have more paper money th~n either of these two 

countrie , in proportion to gold, i8 a conclusive argument that if the 

amount of our paper money was reduced to about the proportion of 

their paper mouey ours would be at par with gold. We produce gold 

in this country. We could rapidly accumulate gold. Gold is here "native, to the manner born." We have an annual production of $75,000,000 

of gold and silver. How long would it be necessary for us to .wcumu- late in order to obtain sufficient gold to maintain resumption Y As our paper money is depreciated below par in gold, while paper money 

is at pn.r in gold in other countries, the true remedy i."l not by adding 

to the volume of this paper money, but by taking from the volume, 

and reducing the amount until we reach the par in gold. The very 

moment our paper money is brought. down to the standard of gold, 

then gold enters into circulation ; gold forms a pa.rt of our ordinary 

currency; the volume of our cuncncy is swollen more than it was before, and the ben.uty of it is that our currency then would be good 

anywhere and everywhere, at home and abroad, and not lien, false- h ood written on it.s face. 1\fr. LOGAN. Will the Senator nJ.low me a word at this point 7 

1\Ir. SHERMAN. Certainly. 1\fr. LOGAN. In regard to the point thn.t t:Q_e Senator makes about 

the paper money in France being at par, I agree that whenever this 

country is in the condition of l<rance, our paper money will be at 

par, n.nd I should be very glad to see it. Whenever we have more gold and silver in the country than we have paper, then it will be at 

par, and when wehave an equal amount, or probably when we donot come to anequa.l amount, it will be at par ; but the conditions are different. • The Senator says we may accumulate gold, and I desiro to make ::w. 

answer to that right here. 'l'ho production of gold in the world, 

according to the statistics, cannot exceed $100,000,000 annually. 

Twenty-five million dollars of that it is estimated go into art and 

manufactures, and 75,000,000 are used in coinage and bullion. 'l'h~ 

estimates made in reference to this country are that the travelers from 

America to Europe expend from sixty to seventy-five millions of gold 

per annum. 'l'hat a.molllJt is taken from this country merely by trav- elers to EuropP.. Then we pay in addition to Europe over sixty mil- lions of gold per annum 38 interest. That makes over one hundred 

millions of gold drained from this country every year. Now I ask 

the Senator how is be going to accumUlate gold to put us in the con- dition of France until the bal:mce of trade is in our favor 'f 

1\lr. SHERMAN. Upon that question of the balance of trade I sajd 

enough the other day, l think, to satisfy my purpose, t hough probably 

it may not satisfy the Senator. . . 

Mr. LOGAN. I merely asked h ow we shall accumulate the gold. 

I have statecl tho proposition as established by the statistics of <lif- ferent countries, and I presume the Senator will not dispute thom. Mr. SHERMAN. W ithoutansweringthatlongquestionnow,I prefer to go on and read some more instructi veinformation from the speech 

of my honorable friend from Indiana, [:Mr. MoRTON.] It is so much 

better expressed than I can express the same ideas, that I hope he 

will pardon me if I make use of his speech to a. considerable extent 

t.o n.nswer some of the arguments that he has made at a later. date. 

If the Government dicl not owe a single bond, the value of our currency could not be improved except by m:tking arrangements to redeem it; and if t-he Gcrn rnment 

does lilll.ke a.rrnngements to redeem it, the existence of the bonded debt will not prevent the improvement in its value. 

· That is very true. Our notes are not depr eciated because we owe a largo debt, because everybody knows we caJl pay it. Our notes are depreciated because we do not pay them; and if overy dollar of our bonded debt was paid, the greenbacks would not rise in value until 

""N'e took some steps toward paying them. Now, upon the ground of morality, I wish to r ead what my honorablo friend said as to ouT present currency : 

Tho propo al to improve our currency by taking our surplus gold and investing 

it in bonds would be regarded b.y capit:1lists as absurd. 'l'he gold thus paid out would not enter iuto the circulation, but would sink back into tm article of mor- cbandise, to be gambled for, as it now is, in Wall street. What would tho world 

think of the morality of such an opemtion ~ We h:we S351l,OOO,OOO of the pulolic clcbt 

overdue :mel drawing no interest, and we t.:~ke the o:dy means of paying this debt 

and apply it to the purchase, at a di count, of our bonds, which will not bo clue 

under fourteen years. What would be sairl of tho integrity oftbe man who should 

refuse to payhis_debts which are due, leaving his cre~tors to suffer great loss, :md 

should employ his money to buy up .tt a heavy shave his debts that. will not be due 

under ten or fifteen years 1 Plain people woultl call such a man rascal and swindler, and would speak of tho Government in the same terms under the &'\me circum- stn.nces. The pretense that it was done to improve the value of the currency woulu 

dece.ivc nobody. Such a. plan of returning tO specie payments is worthy of the circumlocution offioo, :md should be labeled "Row not to do it." 

How remarkably pertinent that is to this occasion! Aud yet ·with 

$356,000,000 outstanding still, and $24,000,000 piled on _to that, with 

$54,000,000 of bank-notes issued since that time, added to $300,000,000 

bank currency then outstandinci, with 20,000,000 !ldderl to onr fractional currency, and now~ proposition pending to add $46,000,000 

more, we are told this will not deprecia.te or change the value of the 

cnrrency or reduce its purchasing power; t-hat it is all hone. .. t, fair, and square, and that the Government is justifie(l in d'oing it. My 

:lriend's argument, it seems to me, is too strong to be 0\7Crcome even by 

his subsequent speeches. Bnt let us go a little furtl.Jer : 

The greenha.qk currency is a part of tho public debt, for the redemption of which 

tho faith of t.he n~J tion is solemnly ploclged. 

I 'think but for the fact that made my speech since the Senator 

made this one I could have said that he quoted from me, but I must 

have quoted from him unconsciously : 

The redemption of this pledge is not only demanded by every principle of nationnl 

honor, but is imperatively demanded by the interests of the people, collectivclya.ntl inrlivid u ally. The cuiTency of a country lies at tho foundation of its daily business 

'l.Dcl vitally affects the interest of every cia s and couclition of people, all(l if tho 

Government, overlookin.,. its honor anu it.<> duty, should take the only means by 

which it can be improved' and apply it to the purchase o~ bonds which will not be 

due for many years, it would merit !tUd roceivo the indignation and contempt of 

honest men everywhere. 

lli. SCHURZ. Is not that a.bout the argument I made yestenby 'l 

Mr. SHERMAN. I think it is rather more strongly stated. Here 

is another statement made by the Seno.tor from Indiana : 

In regard to the redemption of these notes, it has never been n question of abiJ. ity bnt of purpose; and to say that. these notes cannot be paid until the general 

cro(lit of the Government is improvcu by tho expenditure of some htmrli·eds of 

millions in the purchase of bonds that will not be due for years, is to fly into the f:~.ce of common sense and insult the intelligence of the people. 

Th::mk fortune, l\fr. President, since this l a-nguage was uttered we have paid nearly 400,000,000 of these bonds and have not paid one single dollar of these notes ; so that if the argument was true then, 

how much stronger is it now l · 

But oue thing is certrun, that while nobody doubts the ability of the Government to pay the notes by makin~ rca.sonable preparations, if tho Government neglects or abv.ndons the currency, under what,ever pretense or disguise, aiul applies its sur- plus revenues to the purchase of bonds, with a view to improve the valno of the rest of them, and thus legislate for the benefit of a cla.ss- the only cla.ss in this 

country doing well enough. and better than any other- tile currency wi.ll sink from 

that hour, and the ve.ry foumlations of good faith will be shaken. Such legi~-Jlation 

would be notoriously and wickedly partial and unjust.. Wba.t would bo thOUj!ht 

of a great railroad. corpomtion that should refuse to pay its overdue floating debt, 

a.nd apply its current revenues to the liquidation of 1t.s long bonds, 1mder the pre- tense that it would thereby improve i s ability to pay its floating debt~ B11t. snch 

legislation would be as stupid a.s it would be wickcu, for the depressed currency 

would inevitably carry down the bonds in its close embrace. While our overdue 

paper, drawing no interest, antl .for which no time of payment is fixed, and no preparation made. must necessarily be depreciated as it now is, still that depreciation would be far greater but for t.he general faith c:ri<~ting among the people 

that t.he Government will speedily make arrangements for its redemption. 'Vhen 

this faith is broken, the currency Will sink lower, and sink rapidly. 

Mr. FERRY, of :Michigan. The Senator from Ohio made an allusion 

to me in regard to the volume of currency. Mr. SHERMAN. That was some time ago. I want to get t hrough 

with this point now. l\fr. FERRY, of l\fichiga.n. When the Senator closes, then, I should 

like to compal'e views with the honorable Senator, the chairman of 

the committee, on the point as to the volume of cm-rency. l\Ir. SHERMAN. After awhile; we shall have plenty of time. Now, 1\Ir. President, in view of the fact that my honorable friend 

from Indiana in 1868 was so very anxious not to allpreciate the bonds 

at the expense of greenbacks, I wa-nt to call tho attention of the Sen- ate to the spectacle now presented. The amendment proposed, the 

title of which, if passed, should be" A bill to depreciate rrreenbacks 

and appreciate bonds," adds to the volnmeofth~c:ll·culation 46,000,000, 

and it makes a mru:ket fQJ: bonds already above par in gold to the 

amount of over$50,000,000. Now, what is the effect of making a ma,.r- ket for the e bonds Y Before any of these notes can be issued, the ngw 

banks must buy tho bonds. The 6 per cent. bonds are worth 118 in 

.cmrency, and the various bonds required by this bill are worth from 11~ to llB, and here you make a market for them, you make a demand 

for them, because before this bill could be utilized they must buy 

bonds. The effect of that is to appreciate bonds, to make them higher 

and higher and higher, and to depreciate the greenbacks. You afld 

$46,000,000 to the volume of currency, thus lowering the one, and make a. market for 50,000,000 of bond , thus raising the other, and you ma.ko 

the di.fterence that is now di graceful to this country between bondd 

aud note more and more for the benefit of the boucTholder. The argu- ment then made by the Senator from Indiana is very strong and very 

true. 'l'he idea is now held out that this is for t h e benefit of the poor, to 

make money easy, to pay laborers, to start machinery, to start improvement!; of various kinds and furnish labor to the people. There nover was a greater deception than this, by which you cheat the 

laboring man by giving him for his labor paper the purchasing power 

of which is growing less and less day by day. You pay a man two 

dollars for his day's work, mid every da,y by"adding to the amount of 

that cnrrency, without any pla.n of redemption, you depreci:thl its 

pm·cha ·ing power. You add to tho value of the gold, which is the 

money of the capitalist, and of the boncl · which are held by the capitalist, while every day, in t>low and almost imperceptible degrees, 

you ta,ke food from the man who earns it by his daily l abor., or that 

which purchases food. 

I am not through yet with the speech of the Senator from I ndiana. He made st1ch '1 strong speech, anul:laid so many good things in 1868, 

when he was on the other side of the question, and stated the aq,ru-

• 
• 

. 

1768 CONGRESSIO:r.rAL RECORD. FEBRUARY .25, 

ment so much better th:m I c:m, that I will read a little further. He 

said: 

Suppose the l!reenback currency was contracted down t{) $100.000,000, could ~o 

remaining hun<lrod millions be brought to par in any other way than by ma.king arr m~emon ta to redeem it 1 · Yott cannot pay a debt without :paying it, and every trick or device to bring tho currency UJ! to par, ":ithout malpng prep~rations to redeem it ucc!lrding t~ the 

promise on 1ts faco, will be abOi"li\e and disastrous. The currency 1s depreciated 

becans0 it i8 overdue and dishonored, draws no interest, and there is no time fixed or prcpa.ration ma.de ·f or ita r edemption; and these causes would depreciate it if 

thoro were but 100,000,000 of it afloat. The effort to force depreciated and irredcomablo paper up to par by making it scarce and pinching t.hc 11noplo i3 like an attempt to enhance the price of tmwholesomc provisions by produolng n. famine. 

Mr. MORTON. Doc the Scnn.tor inclm'Se that statement Y 

:Mr. SHERMAN. Which statement 

n!r. MOUTON. · The one you havo just read. 

:Mr. SHERMAN. I will read it again: 

Tho effort t{) force <lepreciated and irredeemable p:1.per up to par by making it scarce and pinching tho people is li1~e au attempt to enhance tho price of unwhole- some provisions by producing a famine. 

I do not know but that I can indorse that; but I am in favor of a1lowin~ the holder of the greenback to have what i' equivalent to 

golll an(L siver coin for it, if that is what the Senator means. Mr. MORTON. No; the Senator advanced the proposition a month or six weeks ago that yon could bring the greenbacks to par by the 

simple method of contraction. 

1\Ir. SHER~IAN. I did sn.y that it could be done, but did not say 

that I wa-s inbvorof it. The Senator knows I do not favor contraction, but rather to give new value to the green b-ack by authorizing its 

conversion into bonds. 

1\fr. l\IORTON. You read approvingly what I said. I said that 

could not be done; ~tnd I say so now. Mr. SHERMAN. I am undoubtedly in favor, without diminishing 

the volume of our greenbacks, of advancing the whole to par in gohl 

by varioUB measures that have been proposed; but I will not discuss 

them now. · Now let us look .at what the remedies proposed by the Senator were: 

First. By esta.bliahing the period of redemption a fixed value is given to the 

greenback note. 

His proposition was to fix a day when we would resume specie payments without a contraction of the currency. 

Now it.s gold value i8 fluctua.ting and deceptive, sometimes varying as mnch as 10 per cent. in sixty days, and sca~cely ever reii1!1ining the same for a week at a. time. 

That is very true; and-it is a remarkable fact that the greenback 

has vari{}d within the last twelve mqnths more than the entire depre- ciation of the greenback to-dn.y. 

But by fixing a. time for its redemption a certa,in vnlue i8 given to it. If the note is t{) bo paid in gold on the lat of July, 1'371, its value can be determined by the 

ordlnary rules of discount, :md will steadily improve as tho time for its rt:dempti.on approacnes ; and other preparations being properly ma!le, it will be at par on or before tllo day fixed for redemption by gradu!lJ. appreciation. By fixing the time of rotlemption ono chief element in the v'llue of all commercial paper is gained, that 

of ccrtaint~ in the time of payment. Second. By fixing the periorl of redemption tho country is notifietl and may be 

prepared for the change. People will have it in view in making now contract~ and 

arrangements in business; .and debtors, fearing a decline in the prices of property, 

will ma.ke haste to pay therr debts. 

I have many other passages of this speech marked, but I have read 

enough to show that the arguments presented by the Senator from In- diana are entirely inconsistent; not in harmony at all with the position 

taken by him a little while ago. Rcmembor that to the positions 

taken by him then the country was solemnly committecl. The very year 

this speech was made was the year when the political parties con- vened in national convention, and made their decla,rations th~t they 

would take every proper step toward specie payments; and Congress 

committed the people of the United States to it at tho very next ses- aion of Congress. Now, for the first time since the close of the war, 

f·.he proposition is made to abandon that policy, to turn our b:1eks 

npon it, to go in the other direction, and increase the volume of our paper money, and leave far behind us the stanclard of gold and silver. The worst of it all is, that Senators tali:e "ihat which I have always 

cherished as among the proudest recolle!3tions of my public lifo, the 

organization of the national bankiug system, a.nd make that syst('m , the camel to bear the bmden of i.nflation. Sir, I can ahow you now, 

by a reference to the congression:::l debates at the time tho banking 

bill was passed, thn.t tho banking bill was passed as a means for specie payments. It was the design to bring n.bout specie payments at 

tho close of tho war by the national banking system. The bank bill was first proposed by Governor Chase, in 1862, but was not then 

adopted by Congress. In the session of 1862-'63 it was taken up, and 

after n. debate of something like two weeks in the Senate it was finally 

passed arid sent to the House of Repre entatives; and was there passed, 

without a!Jlendmcnt, under the 1m~vious question. The only debate 

upon the bill in its first passage was here in the Senate, which lasted 

about two weeks. I could quoto copious extracts from that debate, among the rest from my own speeches a,nd from the speeches of Judge Collamer, Mr. Fessenden, the Senator from Wisconsin, [Mr. HoWE,] 

aud others, to show that the purpose, the chief object, the benefit to 

be deri vecl from the b".Lnking system was that it was to be the mode, 

the road, to specie payments. By no one wa.s that more strongly 

stated tha-n by the Senator from Wisconsin. At the :-ime the first. ba-nking bill was passed greenbacks were convertible into bonds; and 

it was said then that at the close of the war, as bonds advanced to 

par with gold the greenbacks would be converted into bonds; and 

then these natioual-lmnk notes would take the place of the old-fash- ioned golu-paying bills. That was the intention. When this bank 

bill passed, any holder of greenbacks might present them to be con- verted in to a. five-twenty bond. Unfortunately, after the bank bill 

pasRed, that provision was suspended, a,nd finally repealed, und there 

crept in the error which finally defen.ted the whole object of tho 

system. 

· 1\fr. MOUTON. Will the Senator aJ.low me a word f 

Mr. SFillR.JIAN. Yes, sir. 

Mr . .MORTO.r . I want to call the attention of the Senate to a re- markn ble inconsistency- not occurring in six ycarR, but occurrin" in 

less than ten minutes- between the Senator's argument just now ~nd his argument a little while ago. His argument was that an increase 

of $46,000,000 of national-bank notes, although they were reqn.ire1l 

to be redeemed in greenbacks, and the volume of greenbacks was not diminished, would have tho e!fect to depreciate the value of the 

greenbacks and of the whole body of the cmrcncy. Now he tcl!s us that the national-hank notes were created for the e:x:pre s pnrposo of bringing the greenbacks to pur and returning to specie payment · ; 

th;tt the issue of onP-, two, or three btmdred millions in national-bank 

notes wa,s not thought t.hcn to hn,ove the effect of cleoreciatincr the 

greenbn.cks, but to enhance tho value of greenbacks. How f By 

making a demand for bonds, and by making :1 demand for the legnltender notes for reserve. 

Mr. SHERJ\IAN. The Senator with a good deal of inrrennity bas 

thrust a _speech into my remarks; but it is a very small mole-bilL 

Why, s1r, we expected that these bank-notes wouhl advance to par 

in gold by the retirement of the greenbacks; and I will read the 

Senator a passage to show that that was tho ex-pectation, a.nd if he 

will only agree to that there will be no t1·ouble at all alJout the matter. A proposition was made to require these bank-notes to be paid 

in coin. In reply to that I said: 

In rega.r(l to the other objection Congress fixes what is lawful money. Con2Tf'SS ~ay at any time chango _the law Ulld c.: !lange the standard ancl mako it goh'i' and ~ilver. I have· not the sli~btest tlonbt t.lte very moment our bonds are worth par ~-~old, that moment speete pa,ymouts will be r esumecl under tho operations of t-his 

bill. That is the practical working of it, and it cannot be avoided. · 

Under the la.w, a.,s it then stood, the holder of greenbacks coultl con- vert them into five-twenty bonds; and it is a remarkable fact thvt 

within one year afte:r; the close of the Wt!r the five-twenty bonds did 

reach par in gold; so that if that p1·ovision had been loft in the law as it wa,s when I made ,this argument, every dollar of our paper money 

would now be at par in gold. 

:Mr. FERRY, of :Michigan. I should like to ask the chairman a question. · 

lli. RHERMAN. I would rather finish this extract first. 

Mr. FERRY, of Michigan. It is right on that point. Mr. SHER~IAN. I hope tho Senator will wait until I get through 

reading the extract : 

The very- moment our 6 per cent. bonrls are worth p<'l>r in gold and silver, that mo- ment tho unged Stn.tes cmTenoy, as it is called, will be co'nverto(l into bonds as a matter of course; tho United Smtes notes will be retired; and then t.hcso banks 

will make spccio payments. As long a~ the war continues, experience ha-s shown 

that no bank, no nation, can make specie payments. Mr. Hm.-DERSOY. I am not insisting on that <lnring the war. Mr. SHERMAN. The very moment peace is rostort}cl, ::mtl the boncls are at pa.r, at that moment Rpecie p,1ym n~ will bo r esumed. If Congress 'ruhes to hasten tho 

time, it may chango the law in re~ard to what is lawfnl money; it may declare !!Old 

and silver the l::J.Wful money ; ::md then, by the providions of this bill, theso notes must be redeemed in gold antl sil,er. 'There i8 no doubt about that. 

That was the original foundation of this national banking policy. I say to thc Senate that the national banking bill never wm1lu ba\e 

passed either House of Congress but for t.he exvectatioil that. tho 

national b::tnks themselves would be the means, shortly after tho "·ar was over, to bring us to the specie standard. Why, ~:;ir, during the 

whole war, while my honorable friend from lllinois [ b:. LOGAN) wa::~ 

fighting the enemy in the field, both Houses of Congress wcro cnre- fnlly limiting the extent ?f paper money. In the Senate e l'ecia1ly we acted aa the conservative power of the Government and carefnlly 

limited the amount of paper money. We never issued :my without 

providing some meansforitsretirement. We carefullyrestraincrl it ; 

n.n<.l in the national banking act we provideu n. means by which, if 

the law had re!Ii'.Lined as it wns, we wo·uld have surely and safely 

returned to specie payments. :Mr. LOGAN. Allow me to interrupt the Senator at that point. If 

I undei'Sta.nd the portion of the renuu·ks that he delivered at th :.!t 

time, it was, that by passing a law making gold and silver the only 

legal tender, we should thereby arrive at specie payments through 

the natiou.::tl banks. Is not that the idea Y . 

l\Ir. SHERMAN. I simply said that the greenbacks then, unller the 

provisions of the la.w, would be converted into bonds; :md then, a-8 n. mattor of course, there would be nothing to redeem with but gold nnd silver, and that would be specie resumption. . Mr. LOGAN. In that connection I wHl ask the Senator n. question, 

carrying out the idea. of the question that· I asked him when be first 

commenced his argument, whether he was in favor of immediate 

resumption. If gentlemen are in favor of an immediate resnmpt ion 

of specie payments, is not the shortest road to it to repeal t he loge 1-

tender act, and would not that perform the same office that redemp· 

-
1874. CONGRESSIONAL RECORD. 1769 

tion would under the former theory! There would be nothing then a legal tender but gold and silver, and then we should be on a specie 

basis. The only question then would be whether we had the specie or not. I would not agree to it; but I only put th11t proposition. If 

Senators aro in earnest and desire specie payment at once, could they 

not arrive at it at once by a repeal of the legal-tender act¥ Then, if 

the country is able to maintain it, you have specie payment; if not, 

you do not. I do not think the country is prepared for it; but if you are in earnest about it, that is the shortest way to it in my judgment. 

Mr. SHERMAN. I will speak of that after awhile. I desire to call 

t.he attention of the Senate now to another matter. Some reference 

has been made to the law of 1870; and I have traced the history of 

that law, and I have found that every member of Congress, including 

my honorable friend from Indiana, most zealously declared in 1870 

that they would not do any act that looked like inflation. In 1870 we had this controversy about the distri lmtion of bank circulation. The •committee on Ji1nance reported a bill to provide for $45,000,000 for 

banks to be-organized in the South and West, just as we hn,ve done 

a.t this session;· and we provided then, in order to prevent a contraction or inflation of the currency, that the 3 per cent. certificates then 

outstanding should be retired with the -:'45,000,000. The Senn,tor from 

Iudiana in isted that by issuing $45,000,000 of bank currency and re- tiring $45,000,000 of 3 per cent. certificates we actually contmcted 

tho currency 7,500,000; on this ground, that as tho banks had to 

maint:tin a reserve, it required $54,000,000 of bank-notes to equal iu 

its effect upon the currency $45,000,000 of greenbacks, or 3 per cent. 

certificates, which were demand notes and the same as greenbacks; 

a.nd the Senat-e yielded to him, the Senator from Indiana declaring 

that he would not at a,U propose any measure that looked toward inflation. He sa.id he had always been opposed to inflation. That 

proposition was finally adopted. Then, in order to provide for the 

possibility of more being needed in the South and West, they put in 

this provision about the $25,000,_000, the la.st clause of which was penned by the Senator himself; and it is tha.t cla.use, wortls written 

in his own hand at that desk, which created the very difficulty we are now trying to remeuy. My honorable friend, if he will look over that debat~, will find that he declared that while he was opposed to con- traction he was equall. opposed to inflation, and he was opposed to 

any increase of bank paper money one dolla.r beyond the amount then 

fixed uy law; but he said that in order to_keep the balance equal between contraction and inflation, instead of the forty-five millions re- ported by the committee we ought to have fifty-four; and after some argument, I believe, I finally agreed that there was some pla.usibility 

in it, tha.t as 15 per cent. of the amount of bank-notes h:td to be kept 

in the vaults of the llanks as reserve, there was a reason why $9,000,000 more should be added to the 45,000,000; and so the l:t w pa-ssed. Then, inst.ead of going forward, he himself proposed to transfer from New En~­

land to the West $25,000,000 more, on the ground that the $54,000,0u0 

would not be enough to reach Indiana in sufficient quantity, a.nd therefore he dema.nded $'25,000,000 more; a.nd finally that was carriecl, and 

is now the law of the land. The only reason why this has not been 

executed is beca.use it was so narrowly limited and so narrowly re- strained, and so worded a.s to be declared to be impractica.ble. Now, the only object of this bill, which it ha.s taken one month t.o 

discuss, was to carry into execution a defective law penned by my 

honorable friend from Indiana; and yet the effort is to pile on thil3 

bill, the object of which is so plain and just-even if the :tmount wa.s increased to $50,000,000 it would be perfectly right-to pile on it 

the question of inflation, the increase of the volume of bank paper, 

money, which that Sena.tor declared in 1871, he would not consider, 

which he opposed only two yea.rs before by a.n argument of great 

force, a proposition which every political pa.rty in this country has 

declared against, which the Congress ofthe United States bas d-eclared 

a.ga.inst, and which the President of the United States is committed 

against in every annual message he has sent to Congreas. What will 

be the result of such a policyt To derange values, to disturb t4e 

business of the people of this country. 

Sir, you may think that this measure is a small matter; that this 

will not disturb va.lues. Why is it tha.t the business men of this conn- try send yon their mgent appeals Y Why is it that petitions come from the chambers of commerce not only of the East, but of the 

West I ca.u see tha.t the popular ad captand1tm argument of more money, unless exa.rnined ancl ana:lyzed, is one that is taking before a ·crowu. Going to an oruinary popular assemblage, I have no doubt 

the people would shout for more money; but when these same people 

examine the question, study it, and hear both sides and sive it their 

"sober second thought," the second thought which brmgs a jury 

almost always to an accurate conclusion-when they hear both sides, 

the people of this country will be just as much opposed to all these 

schemes of inflation a.s the business men of the country have shown 

themselves to be. 

Sir, I do not sa.y that the measure now proposed by the honomble 

Senator from North Carolina is as wild and bad a measure as some 

tha.t have been proposed. I know that the process of organizing 

banks in the South and West will go on slowly. I know there are difficulties in the wa.y. Perhaps the immediate effect of tha.t measure will 

not bo so great as even those who ::tre opposed to inflation fear. But 

I ao say it is turning onr backs upon our record in the past, upou our promises in the pa-st-openl11g np the door to inll.a.tion. And, sir, when a. futuro dom::tnd comes, when tight times como, SOD#el>olly is in debt, 

s'omebody cannot carry on his magnificent schemes of improvement 

and enterprise, and he comes here and demands relief, then another 

call will be made for more paper money; then the cry of my honor- able friend from .Michigan [l\Ir. FERRY] for $100,000,000 will be heard, 

and will carry; then there will be no road out of this irredeemable 

paper money except through bank1uptcy and repudiation. 

:Mr. FERRY, of Michigan. ·will the Senator allow me one word 'f 

1\ir. SHERMAN. Excuse me; I would rather get through. 

1\fr. President, it is only because I see and feel these things that I 

stand here to oppose it. There are modes by which we can get back 

to specie pa.yments-not suddenly, as my friend from Illinois says. 

We are not disposed to go into any ra.sh, harsh, and severe meastue 

looking t.owarcl specie payments. I do not know a Sena.tor on this 

floor who would propose an immediate resumption of specie payments. My honorable frieml from illinois, at the very beginning of 

my remarks, wanteu to tluost upon me the question as to how. Well, 

l\1r. President, I believe that we shall have accomplished a great re- sult, the winning of a battle, worth as much to us a-s any battle 

throughout the late war, if we can resist this cry for more paper 

money a.nd stand where we :ue. From the time I came to this Congress, feeling in the air t.hat spirit which sprang out of the panic, I felt 

that there was great uanger tha.t Congress would go back of all its 

promises and eml>ark us in a wild sea of paper money in order to give 

immediate relief. Time has passed; time has ha.d its hea.ling influ- ence. Many of the evils that existe(l when we met in December have 

disappeared; many of the fears then existing have been dissipated; 

and now, with money overflowing in all the centers of business, and 

gradually spreading itself over the country, with more money in cir- culation than we have ever had before, with increm;ed facilities, with a lower rate of interest, now after three months have dissipated many 

of the fears of those who have gone before us, now to embark on this sea of paper money would be a crime as well as a blunder. That is 

the way I look upon it. • But the Senator asks, ''What is your plan for getting back to specie 

payments f " Well, sir, if there was no other plan, I would say with 

the Senator from Massachusetts, [~fr. BOUTWELL,] "Stand still," 

and we shall see the glory of the Lord after awhile. It will be a long time hence, I fear ; and that is the trouble. If the Senate would 

go a little further; if the Senate would provide for the retirement of so much of the $44,000,000 as has been issued, either by the sale of 

bonds or iu any wa.y that can be agreed on-and if its issue be permitted at all, it should be esta.blished as a permanent, fL.""'Ced reserve, 

not to be used except for exigencies prescribed by law; and it ought never to be nsed but in a. grea.t emergency, a.nd then not under the mere discretionary power of the Secretary of the Treasury-that of itself 

would be a measure in the right direction; but I am in favor of going 

still further. I do not expect all Senators to agree with me. I believe 

that now is the golden moment to fix a. time when every dollar of our broken promises shall be made as good as gold. He wanted it done 

in 1871. I should like to see it done in 1875 or 1876, or any time. Let us fix a time in tho fut·ure which a majority of the Senate can agree 

upon, and sa.y that at that time, say the 1st of Janua.ry next, we will 

redeem our broken promises either in bonds or gold. There is no practical difficulty about it. 

My honorable friend from 1\ia.ssachusetts, who ma.cle a speech the 

other (lay, made the only ar~ument that has ever given me any trouble on this whole question; ancL tha.t is, ""Wha.t shall be the condition of 

a.ffa.irs between now and the 1st of Janua.ry~ Will not the fluctuation of 10 or 12 per cent. between the present standard of paper 

money and the gold standard produce ruin, contraction, and distress?" 

The only answer is that we ha-ve had a fluctuation of values of more than that amount every year since the close of the war ; and some- times it has gone as far as 20 or 30 per cent., and yet no ruin or great 

distress has conLe from this fluctuation. Business becomes..a.dnpted 

to it. 

Fix a d:ty in the future-that wa.s the argument or my friend from 

Indiana-and people will grow to it; they Will gradually advance to 

it; money will go on investing in its ordinary channels, and people 

will be preparetl; and when the day comes no man will care whether 

he receives gold or bonds when the greenback is payable in either. Sir, it will be the old story over again. If we only have confidence 

in the people, confidence tha.t they a.re as wise·as we are, and :fi..'C a day 

when we will make our promise gootl, there will be no difficulty. 

Why is it that I prefer a redemption in gold' My honorable friend 

from Indiana seems to think that is a very terrible' proposition, to 

redeem in bonds. He says, "Why, you promised gold, and you will 

only pay bonds." I think we shall do the note-holders a. great deal of 

good if we give them that which is a great deal better than the note 

now, and which is nearly at par in gold. The reason I prefer redemption in bonds as a step in the 1ight direction is because we could issue 

these bonds without being at the enormom:J expense of maintaining 

in the Treasury a great pile of gold. ::ijut r~demption in bonds is only a preliminary step. In my judgment, it would be the fina.l step; 

because when you have by this measure raisecl your notes up to the 

standard of the bond, the bond itself is so near the standard of gold 

that things which are equal to-the same will be equal to each other; 

and they wjll assimilate aml pass from han?- to hand. It may be tha.t a few of these notes would be converted into bonds. If so, they could 

be issued for current expenses and thus avoid making a loan now threatened; or they coulU be used in the purchase or payment of the 
1770 CONGRESS! ON AL. REC.ORD. FEBRUARY 25, 

public debt. But I am not wedded to any theory; I want to take some step in the right direction. If we can only stand still and prevent tho inflation of paper money, 

that is one step. Again, if we can go back to where we wero before 

the panic, we hc:.we gained much. I solemnly believe, after the most 

careful examination, that ev y dollar of that money issued over three hundred and fifty-six million was issued without authority of 

bw. I examined that question in the closet, carefully, deliberately. 

I have never heard anythin~ to change my opinions. I know there 

is an honest difference of opmion about it. I do not wish to thrust 

my opinion on others. I should like to see the volume of our greenbacks reduced to the standard where it was before the panic. Then, 

if it. i necessary to legislate about the reserve to enable .the Treasury to meet an exigency, we can provide for it; but we need not do 

it now. In this way we can easily approach specie payments, and then you 

may have free banking; but free b~nking without resumption is only an addition to the volume of paper money. Free banking can only 

exist upon tho basis of redemption, and a prompt and hearty redemp- tion. I would not only be il} favor of redeeming in coin- first in greenbacks, and as greenbacks approach to p:.tr in gold, in coin-but I would 

also make, not only centers of redemption, but I would make one com- mon redemption, and provide modes by which the bank paper money 

might flow back regularly, periodically, according_ to the necessities 

and the demands of trade and com}Ilerco, to be redeemed, and then 

again to be issued, as more money was needed from time to time. That only is banking. It is not banking when you issue your note to 

pay and never pay it, never fix a time when you will pay it, and do 

nothing to prepare for payment. That is the issue of inconvertible 

money. Free· banking is a machine by which paper money can for a time be substituted for real money, flow out, and be returned again to 

its sourcea performing the functions of currency, to move the crops, to 

make exchanges. The only mode by which the amount ofthispaper 

money or th.lli real money ca,n be established at is the amount. that can be maintained at par in gold. 

Now, Mr. President, my opinion is still that the Senate ought to <ro 

back to the original proposition in the bill before it, and pass it. H 

the members from the South and West, who have a majority here, · think twenty-five millions is not enough, they have the power to increa>Se it, and Senators from he Eastern States who are here will feel 

the justice of their taking whatever is nece sary to equalize the cur- rency. There is no reason in the world why each section should not 

h:1Ve an opportunity to start local banks. I know that my friends 

from New England have said," It makes no difference; the money will 

flow back again; if yort tako.money from Rhode Island and remove it 

to the West it will iiow back again." So the currency will flow back, 

but the advantage is in local banks. A local bank is a little center 

of business. It furnishes facilities. .A. local bank is more likely to · loan money to the merchants and traders of the neighbOThood and 

give neighborhood facilities. And, sir, you weaken your nn.tional 

banking system when you do not allow that. The national banking 

system never could have passed but for this provision about distribu- tion. I find, upon looking up the records of tho history of the na- tional banks1 that this provision about distribution was not in tho 

original banJr act sent to us from the Treasury Department. The 

Committee on Finance made a great many amendments, a.nd among 

the rest this very provision was inserted; and when the 3.JI!endment as to distribution was brought up,.after alittleconversationaldebate, 

it was adopted unanimously, every Senator feeling that there must 

be some mode of distributtng this currency locally throughout the 

country. That was the origin of it in the law of 1863. It was dropped 

in the compilation of 1864, merely because up to that tim& only 

60,000,000 of bank capitn.l had been taken, and it was not thought 

worth while to renew it. But tho next year, when wo found that the 

old banks were rushing into this system, when we found there was danger of incqua,lity, we l?y the act of March 3, 1B65, restored that 

provision. Up to that timo there had been no less than $100,000,000 

of banking capital undC:r the national system, so that when we re- stm·ccl the provision about the distribution there wero still two hun- dmdmillions ofoirculation not taken. On the same date a provision was suddenly put into an internal-revenue bill, about midnight, by an nmondmontof the Senator from Rhode Island, without discussion or debate, and when that was put in it only provided to give old banks 

the priol1:ty for :four months from that time, until the 1st of July. It 

didnotprovidefor a repeal or change of the general provision about 

distribution. Af-ter tho 1st of July, 1865, 110,000,000 werejssued up 

to the 1~t of October, 1865. If Senators will look at the official docu- ment , only $160,000,000 of paper money had issued, aml the limit was $300,000,000; so that aft-er that $110,000,000 were issned. 

I say, therefore, whether it is injurious to the West or East, the 

North or the South, hero is a matter of plain justice, a stumbling- block in tho way of tho Committee on Finance. We want to correct 

it a.s far as we can. While we thought it was not necessary to go to 

the whole extent of a full and complete redistribution of bank circulation, we thought the measure was a wise one to be considered by 

itself, just as the subject was considered in 1870. We therefore re- ported it. If Senators t.hink that 125,000,000 is not enough, they can make it more, and thEm pass it; and thus we still have got this 

stumbling-block out of tho way. If you adopt, on the other hand, the proposition of the Senator from 

North Carolina you willleavetholocal sorefe tering. Issue$46,000,000 

more, n.nd you will have the same question here again in two or three 

years; because if you swoll tho volume, by is _uing- 46,000,000 to the 

South and W st, hoy will not ,have their share and they will demaml 

again that this old inequality shall bo corrected, as they have demanded 

it every year, year by year. If you increa e by 46,000,000 now, giv- ing it to the South and West, you will leave this local ore, and tbns 

you open wide tho door of expansion ancl tho question of inflation. You alarm men. Already under the fear that in some way or other 

your paper money will be diluted, gold is advancing. Pa s the bill 

with this provision, and what will be the .effect of it f Tho mon y- changers of New York will measure your laws precisely as they meas- ure ingots. If they see that yoru' mea ures tend to depr ciate the 

value of your money, they will measure it at their estimate. They 

fix the value of your money; we ha,ve not the power to do it. Yon may pass all the laws yon please, and if you pass any law that swells • ~he volume of your currency or makes you turn your back on the 

promise of the faith of the nation to make the note as _good as gold, you will depreciate your currency, and the depreciation Will be meas- ured by the bulls and bears of '\Vall street. If, on the other hand, you only stand where you are, according to the view of the Senator 

from Massachusetts, but especially if you take any decided step that 

looks towanl the redemption of our broken promise, that moment the 

bulls and bears of Wall street will advance your credit in the money 

market of the world, because after all gold is the par; greenbacks are daily measured by their c:bily depreciation. No, sir, I assure the Sen- ator from North Carolina that his proposition will do the people he 

represents no good, but, by unfastening tho moorings to which we have been tied, it will do great evil, and therefore I am opposed to it. Go back to the original proposition. Now, sir, a word in regard to the effect of this upon the New Eng- land S.tates. I could read here a statement made by one of the ablest 

of New England's moneyed men to. show that this withdrawal of 

$25,000,000 from the NewEnglanCl States will be scarcely an appreci- able thing there. My honorable friend from Rhode Island the other day state(l the effect of it. This does not reduce their capital; it 

does not affect the organization of a single bank in all the United 

States. It simply provides tha,t banks which have over $300,000 cir- culation shall be required to retire from time to time as needed a cer- tain proportion of it. What is the mode in which that i done f 

Some Senators think that is going to prevent the e banks making di - counts and carrying on their ordinary business. Not at all. I have 

conversed not only with the Comptroller of the Currency, but with 

bankers affected by it. What is the effect The Comptroller will 

call on a bank for, say 10,000 of its notes, to be surrendered a,t a cer- tain time; and under the law he can give them thirty days. Suppose 

they are not surrendered, a~ they probably will not be able to surren- der them, then the Comptroller of the Currency will order 10,000 of 

the bonds of the United States belonging to that particular bank to 

be soldin the market, n.nd with the money thus received he will retire 

greenba-cks; he will buy in 10,000 of green backs an<l retire them. 

Then the provisions of the bill require that all sn b-treasurers, all the 

Government depositorie , banks, &c., shall assort the bills of this part.icular bank until 10,000 of them are found, and then this $10,000 of 

bills will be retired and the greenbacks issued again. But before this 

operation goes on, to prevent the possibility or fear of contraction, 

this is not to go on until after the new note are issued. So that when new banks are organized, and one or two million of new bank-notes are to be is ued, then commences the process of redistribution. There 

may thus be for a little while, perhaps for thirty days, a temporaq 

increase of the circulation until this process can go on. That is all. 

This will go on slowly, because these a sessments on the banks to be 

affected will be made probably evory month. Whenever 1,000,000 of 

fresh banking capital is authorized in the West and South, requisi- tions will be made on the e Eastern banks. The list of banks is 

given. It is before the Comptroller. He can say how much-1, 2, 3, or 4 per cent.-is necessary, aml he makes a printed requisition on the banks in exccs8, and the whole thing is done. All theTo is of it 

is to transfer the profits of this circulation from tho East to the West 

and South; to give to tho West and South an opportunity to organize 

banks; -to give them local facilities; and it does not aflect the capital, 

the deposits, the business discounts, or the bills receivable of any 

bank in the United States. All that it. affects is the amount of the 

bonds deposited by them as security for circ~lation. And I say to 

you, after the most careful deliberation, feeling the responsibility for 

this proposition, that this will not create the slightest shade of dis- turb::mco; it will only take from banks that by an unwise decision 

have received more than their share a portion of their circulation and 

transfer it to banks organized in the South and West, without any disturbance whatever of the business of the country. 

In this way you can remove this sore; and I appeal to Senators from 

theN ew England States, who have heard this thing cast in their teeth, 

why :uot do it. I said to them that Ohio did not care mnch &bout it, nor should Indiana. Indiana has already got very nearly her ha.re, and is entitled to no more unless you swell the volume. So with 

Ohio. I say it is far better, ven if there is to be an increa e of bank 

circulation, that thi inequality of distribution shall be removed from 

the politics of our conutry . . Mr. I ORTON. Will my friend allow mo right there f The Sena- tor has made a remark,. the importance of which I Lhink he scarcely 
1874. CONGRESSIONAL RECORD. 1771 

appreciates in this argument. He says that Indiana has nearly h~r 

share of the three hundred and fifty-four millions. So she has; but 

Indiana has not nearly what she needs to meet her local wants, and 

by the distribution of the three hundred and :fifty-four millions she 

cannot get it. · Mr. SHERMAN. I hope the Senator will not lead me off from my 

argument. I was about clo ing when the Senator thrust in a remark 

that Incliana ha ·not got enough. No tateha got enough irredeemable money. \Vhy, sir, if you give tho bank the opportunity to i sue irredeemable money on the deposit of bonds, you can swell the amount 

to 1,500,000,000. 

Mr. fORTON. That is an eva ion. I was spen,king about the local 

wants of the State, where banks in some cases are forty miles distant, 

and we cannot get them underthe 354,000,000. You must enlargeit. 

Mr. SHERMAN. I will tell tho Senator the remedy. Let us join 

in some plan looking tow:ud tho redemption of the rrreenback . Read 

the speech of 1868 over again, and then let us proclaim free banking. 

There is no trouble about it; the people of this country can have all 

the money of the 'yorld. Wo can try the question a to how much 

paper money can be kept in circulation in this country if we will only 

go toward specie payments or specie redemption. Then the people of 

Indiana can circulai.e all they want, as long as they can maintain it at 

the standard of the United States bonds or at par with gold. We will 

give thorn all the benefits of circulation. That is the remedy. . My friend wants to accomplish one thing- the organization of local 

banks- forgetting that the accomplishment of that result woulu derange t".he whole business of the country and introduce another ele- ment into this matter. ·So far as the redistribution is concerned, I 

have always agreed to it.· Senators from the East may not feel thv.t 

this thing of a local disadvantage thrown into our teeth in political 

times is one that cannot be answered, when eastern men come, as Governor Seymour didfromNew York, and travelalloveronrwcstern 

country and t-ell us that New England had got the advantage of us in this circulation, and intended to hold on to it, although Now York 

also had the advantage; a,nd in Clevela,nd, in his speech in 1868, he 

actually made that the basis of his indictment against the republican 

patty. Why, sir, we cannot stand it. It is not right; it is not fair. 

Whether we want tho circulation or not is not a matter that we will now debate. What we want is equality; what the law gives us, what 

the law promised us; n,nd although I do not believe that these banks 

will be organized to anything like the amount that the law would 

give us, yet the right to organize them shoulcl be conceded. If the 

people do want to organize them in any part of the West and South, 

the opportunity ought to be yielUed frankly. And I say to Senators 

repre enting the New England States that the actual effect of it will 

scarcely be perceptible; and I should bo willing to leave this ques- tion to the pmetical, sagacious, and well-instructed mind of my honorable friend from Massachusetts, [Mr. BouTWELL.] This whole operation could be can-ied on without any disturbance. Now, sir, I ay had we not better take this mea uret Here we have spent one mont.h-not wasted, I know, because wo have discussed 

questions that will come up a,gain~but we have spent one month in 

debating other matters than the bill before us. I want to call the 

Senate back to the proposition that is before us. 'l'he Committee on F4tance have gone over all these que tions time and time again, n.nd we felt that on one proposition we conld stand united. Although in. 

that committee all sections of the country n.ro represented ancl all 

shades of opinion are represented on this que tion of inflation, we could stand united upon the fact thn,t the law, now not carried into 

execution on account of some defective criticism, shall be carried out; 

that these $25,000,000 shall be provided in order to equalize the circuln,tion, and if necessary to add to it. That we could agree upon. 

When that is disposed of, then the q nestion as to how far we will go 

toward specie payments and how fast ; w hetber we will do anything; 

whether we will adopt the advice of the honorable Senator from 

Massachusetts, or whether we will go a little further, can be con idered. I think he will a,gree with me that we ought to provide for 

the retiremep.t of the · 44,000,000 re erve. Although I have never con- versed with him about it, I hope he will agree with moon that. We can do that much toward specie payments. Then, if we may agree on some steps further in that direction, we shaH hn. ve come to a happy 

solution. 

But, sir, I cannot tn,ke my seat without for the last time expressing 

my almost terror tha-t the people of the United States-a proud, rich, 

free people of forty millions, pledged in every way, by President, by 

Congress, by local reso1utions-shoulll turn their back in this time of 

peace and prosperity upon the promises they have so often made. I 

do not believe they will do it. 'J.'ime alone will punish those who now suggest it. :Mr. ALLISON obtained the floor. 

Mr. SCHURZ. Will the Senator from Iowa yield to me a. single 

moment? 

Mr. ALLISON. I will yield to tho Senator from Missouri. . 

Mr. SCHURZ. The enator from North Carolina [Mr. ~iERRIMON] 

put two questions to me which, when he pronounced them, I did not 

clearly understand; and as he put them in writing, he was kind enough 

to hand them to me. I wish now to reply to them. The first question is, "If what the Senator says is true, then why 

does it not appear that there is an excess of currency in New England 

and the Ea-stern States iu viow of tho acknowledged concentmtion 

of the currency of the country there ; and if th~re is an excess or redundancy, why do not price go up in tho e Iocalitie Y" 

The fact is that the eastern moo y centers are glutted at the pres- ent moment with money; and if the Senator wjll take the trouble to 

read the market reports he will be convinced that they arA. Aml as to tho rise of prices, it appears to me that prices are actually rising. 

Stocks have gone up very much. They have gone up beyond the 

point at which they st.ootl before tho cri~,;is. Gold has gone up also, 

and general commodities are doing the same. That is the answer to 

tho first que. tion. 

The second question was, "If there is redundancy there, why does 

tho currency in excess of a reasonable domand'fail to ·eek investment 

in the South and West where, itisadmitt.OO, itisso much needed'" 

As appears from the market report in the western business centers, 

there is an abundance of currency also; and as far as the cmrency 

which is now in the ea~tern market seek-ing investment in the West 

and South is concernec.l, I think that would be so but for two circumstances. In the first place those who holu it in the eastern markets 

may think that they can more profitably employ it there; and in the 

second pla,ce there is a want of confidence, not in the hone ty of south- ern or western people, but in tho general stability of bu iness at the 

present mo-:nent; and it eems to me that for that reason money does 

does not go to the West and South seeking for investment. That is 

my answer to this question. 

But, being on my feet, if the ~enator from Iowa will indulO'e me, 

I should like to make one remn,rk in reply to the speech made by the 

Senator from Indiana [l\Ir. MORTON} yesterday. I tried to interrupt 

him at one point, but he declined to yield, which, I think, in our inter- course I have neYor done. But still he may have had good reason for it. 

The Senn tor from Obfo to-day exposed some remarkable inconsistencies 

in the course of the Senator from Indiana on this question. Yesterday, · when I pronmmce(l opinions different from those of the Senator from 

Indiana, that gentleman put the "fore~~ner" atmo, alluding to the fact 

of my having ~een born on fo~eign S?il, a!Jd concluding .that I ?-id nut 

understand this country. I will not mq Ull'e whether this was m good 

taste or not, but I would merely say that I remember the time when 

I, with others, helped to promote tho political interests of the Senator 

from Indiana, and those who thought like him did not look upon me as a foreigner at all then, and they thought that I understood this 

country admirably well. But as soon as I happened to differ with 

his views, lle at once ill covered that I was not born in this country 

and do. not know anything of its affairs. I think it would be just as well for the foreign-born cop.stituents of the Senator from Inc.liana to 

understand that us long as they agree with him he recognize their 

full rights of American citizenship, but as soon as they dare to differ 

with him i11. politics he will at once let tllem know that they n,re for- eigners and had better bold. their tongues. I must observe in the same connection that to agree alw:i.ys with 

the Senatvr from Iniliana is a little difficult. It is not easy to keep 

up 'ivith him in the movements of his opinions, for I believe there 

is no public man in existence to-day who has been so frequently on · both sides of a question as the Senn,tor from Indiann,. Taking this 

mat.ter of currency a.Jone, he wa a fierce specie-payment man not 

very lopg ago. Had I been for inflation then, as he is now, he would 

have said of me that I was a foreigner, and did not understand tho 

vJfairs of this country. Now he has gone through all the phu es ancl ~hades and forms and. grades of inflation, until finally he bas landed 

where we see him; and I being a specie-payment man, he sn,ys I uo not understand the affairs of this com1try, because I am for specie 

payments, as he was not long ago. . · I repeat, sir, that as much as I would like to be recognized as a fullfledged .American citizen by the Senator from Indiana, I cannot purchase thn,t honor at the price of following him in all his changes of opinio~. · Mr . .ALLISON. Mr. President, I have said but little in this debate, 

and do not intend to occupy time n9w, only to sa,y a woru in defeuse 

of my vote for increase of bank circulation in view of the criticism 

just made upon that vote by the houorable chairman of Finance. But 

before speaking of the effect of increase of bank circulation to the 

extent of forty- ix millions, a word in reply to what ha just been 

said by the Senator from Missouri (Mr. SCHURZ] with reference to 

the nccumuln,tion of currency in New York. · \Vhen the national banking act wa passed, its provisions were such as to induce accumulations of money at money centers,. o as to . enable the Secretary of the Tr asury to negotiate loa,ns, and the 

act therefore, had a twofold purpose: fust, to float the bonds of the 

United States; and, secondly, to aid the Government in restorin~ specie payments at the close of the war, or as soon after as it coUld be 

safely done without destroying the business intere ts ofthe country. These provisions, intended to make the circulation flow to themoney 

centers at recurring intervals, are still in force, and I regret that the 

committee having charge of this subject have not proposed modifications of tho ban1.-ing act in the e re poets, aud thus check spccula.tion, particularly in New York, whence the tide flows at certain seasons of the year. We all know that in the spring and summer, 

under the machinery of this act, money goes toN ew York, and instead 

of being loaned on commercial paper is loaned on call, because it is 

uncertain when the country banks will draw their balances for the 

purpose of moving the crops and for the legitimate business of the 

country. 
1772 CONGRESSIONAL RECORD. FEBRUARY 25, 

It is in a measure true, n.s stated by the Senator from Ohio, that 

the price of gold is a:fi'ected by what financial measmes we may puss. 

It is also true that although we have been told for two months here 

that Congress would inflate the currency, and although several days 

ago the Senat.e instructed the Finance Committee to increase the bank 

circulation, the price of gold to-day is substantially wha.t it was two 

weeks ago, and has only advanced some 2 per cent. in two months. 

It is only 12t or 12} to-day, and has been in that neighborhood for 

mnny chys. • I inquired of the Senator if, in his jud~ment, the difference between 

gold and United States notes was wholly owing to an excess in the 

volume of the currency. I understand his answer to be in the affirmative, and his whole argument is based upon this assumption, as was the argument of the Senator from 1\fissouri yesterday. I do not think 

this can be shown, and yet it is the basis upon which the argument 

against any proposed increa e of bank circulation must rest. There are many elements that enter into this difference. I will not now discuss them, but will say tha.t I do not believe the proposed increase 

will advance the price of gold. 

We have many times increased largely the volume of the United 

States notes without such effect. Very l'ecently we have increased 

the volume of O'reenbacks to t.he extent of 26,000,000 without much 

effect on the goid market, as gold to-day is only about lt or 2 per cent. higher than when the increase began, and other things have also contributed to this advance of price. l.lr. SCHURZ. It has gone up over 6 per cent. from the lowest 

point. 

Mr. ALLISON. Since the 1st of November! 

Mr. SCHURZ. Not since the 1st of November. 

Mr. ALLISON. I trust the Senator will not quote the price of gold 

in New York during the sea on of the panic, when nothing coula be 

sold, when the boards were practically closed, and all cla ses were ho::trding gold, greenbacks, and national-bank notes. I allude to the 

price of gold after busine s was p::trtially restored at the beginning 

and durinO' the month of November. • Mr. SCHURZ. If the Senator will permit me, gold, at the begin- nin~ of November, I think, was about 7 or 8 per cent. premium. 1\lr. ALLISON. I do not remember the price at the beginning of 

November. 

Mr. SCHURZ. I think it was 7 or 8 per cent. 

Mr. ALL!. ON. I have in my desk a statement of the price of gold 

during November, I will not take the time to recur to it. But I am sure it was as high as lOt per cent. premium by the middle of N ovem- ber, and if I mist:lke.not it was about that figure in December. But 

I only caHed attention to the fa-ct that although very recently we have had added to the greenback circulation, which we all know is 

the character of issue that affects the price of gold, to the extent of 

26,000,000, we have had an adva.nce of the premium only from lt 

to 2 per cent. This advance was also stimulated and induced by the 

fact that it has been stated on this floor and in some of the prominent 

newspapers that a majority of Congress was in favor of a large inflation of paper money, and also by the fact that at the end of the year we axe likely to have a large deficit in the Treasury as comp:rred with one year ago. 

Several times we have had large fluctuations in the voln,me of 

pa-per money without affecting the prico of gold. . These fluctmttions often occur on a specie. basis in other COlmtries. The Bank of England, on a specie basis, has several times largely con- tracted and expanded its issues, without disturbing the business or affecting values materially. The Bank of England and the country banks of England, after 

the act of 1819, did not materially reduce their circulation, but re- sumed specie payments a year in advance of the time fixed on a large 

volume of circulation; which volume was increased until it reached 

almost the highest figure in 18'26. • I do not think, therefore, it is at all safe to say that the gold premium to-clay measm·es the excess in volume of our paper money. That 

premium is dependent upon many other and equally important ele- mbnts, in my judgment; some of which were well stated yesterday by 

the Sen·ator from Indiana, [1\fr. MORTON.] I do not believe therefore 

that the proposed increase will materially affect values. I should hesitate long before I would vote for a measure which would suddenly, or at any time, have the effect to materially change the relation of 

debtor and creditor, or suddenly increase or diminish the normal 

values of thirty-two thousand millions of property. If we would 

have permanent prosperity we must have stability of laws and of 

values. 

As I believe a sudden diminution of the paper cmrency of the 

country, now or at any time, would destroy the business interests of 

the country, and involve all in bankruptcy and ruin, so I believe 

that a large and rapid increase of lJaper currency would increase 

prices of commodities and induce speculation, which in turn would 

prove equally disastrous. I do not believe thi~:~ measure would have 

any such effect. 

The Senator from Ohio has often told ns that the South and West 

would require at least two years to absorb 25,000,000 of bank cir- culation. If that be true it will take three years at least to take up 

the $46,000,000; so that it would be taken up at the rate of about 

$15,000,000 per annum. It has taken four years to absorb the 

54,000,000 provided for by the act of 1870. 

Mr. MORRILL, of Vermont . . May I ask the Senator from Iowa a question Y 

1\lr. ALLISON. Yes, sir. 

Mr. MORRILL, of Vermont. Tho Senator from Iowa underst:mds 

very well that the whole of the $26,000,000 to which he has refcned, 

and more, has been accumulated in the banks of New York, and now lies there idle. I de ire to ask the Senator whether be believes, if it was the faith of tho banks oro£ the community that this $26,000,000 

and the whole 44,000,000 of the so-called reserve were to r main per- manently in circulation, it woultl not affect prices more than 2 per 

cent., and whether gold would not go up more than 2 per cent. if that was t.he conviction of the public. 

Mr. ALLISON. That isaprettylongquestion. The banks inNew 

York at theU: last statement had about 20,000,000 of greenbacks in excess of tberr reserves. They usually have a large surplus; I believe 

at this season of the year above the amount required by law. Tltis 

26,000,000, as business requires, will flow out of New York and go 

into general circulation as heretofore. It has alreacly had its effect 

upon the price of gold, and I think the general belief is that this . 26,000,000 will not be materially affected by any legislation we may 

propose her~ one way or the other. But I am not considering the 

effect that this 26,000,000 has, except as it illustrates what I say as to the price of gold. We all know that an increase of bank circulation redeemed in greenbacks is a very different tiling from an increase 

of legal-tender notes. But I do not believe that this $26,000,000 if 

left in circulation will very much enhance the price of gold· that 

advance has been made already. 

All the arguments against increase of bank circulation as ume that we now have excessive is ues of paper money. I think this an error. On the 4th February, 186 , we re tricted by law the legal-tenders 

to $356,000,000, unless the provision as to the reserve, so called, author- ized an increase. Thus six years ago we placed a limit on the circulation, which has not been enlarged since the $54,000,000 of additional 

bank circulation, "4Jring the place of the 3 per cent. certificates, which were counted as currency by the banks. During thi interval we have 

had an unprecedented growth in every part of the country. We hn. ve been expanding rapidly in every avenue of business and industry from 

that time until the present, or until the panic of September last year. 

A single illustration will show the vast growth of which I speak. We 

have added to our postal service in that time twenty-five thousand 

miles of new railway, opening up new localities reCJuiring a large amount of additional circulation as compared with 1868. Can it be 

said that we have just enough now, and that any audition will illcrease the price of commodities and change the relation of debtor and 

~llimf - Mr. SHERMAN. I would ask my friend whether, in the last four 

years, it has not been considered that the policy of the country would 

lead us to specie pa.yments, and whether that has not been the thevry on which we h:we been acting! 

1\lr. ALLISON. Undoubtedly that has been the theory, and no one that I know of propo es to change that theory, unle s the Senn.tor's 

theory of converting legal-tenders into bonds would have that effect. 

Mr. SHERMAN. Let me ask this, then: Suppose we increase the 

volume of cunency 3:8 we increa e in population, should we not lo e the benefit of that gradual appreciation f 

.Mr . .ALLISON. If we should increase the volume of the Government paper to a large extent, I. agree that that would be the effect of 

it. If we had a total issue of five or ix hundred millions of United 

States notes to pay, I have no doubt that that would.be th effect. 

But an increase of bank circulation is a different thing from increa - ing t}(e i ue of irredeemable paper notes by the Government of the 

United States. 

Mr. SHERMAN. Is there any difference between is u.ing green- backs and notes which are payable only in greenbacks f I cannot see it. Mr. ALLISON. I can see a vast difference. The mea-sure of gold 

depends on the volume of greenbacks, because they, fur the time 

being, represent gold as compared with national-bank notes; and I 

think there is much weight in the argument made by the Chicago 

Tribtme, read yesterday by the Senator from 1\lissou.ri, [:Mr. ScrruRz,] 

that you might increase the national-bank notes without limit, a.nd as long as they were redeemed in greenbacks, and the volume of the 

greenba.cks remained the same, it would not increa e the price of gold. And I believe that the Senator from Missouri in his argument ye ter- day almost became a convert to free banking, because I understood 

him to state that if some amendments were made to the banking law 

he did not know but that he might vote for free banking. I am not 

willin~ to go so far. I am not willing to enter on any experiment 

that will involve a large increa e of the circulating medium. I de he 

to stand as nearly aa we can upon the existing circulation, having due 

regru:·cl to the increased wants of certain portions of the country now without banking facilities. )believe the proposed increase is requir d 

by the growing wants of business in the South and West as an induce- ment to carry there and localize bank capital with the profits on circulation enjoyed by other sections of the country. Therefore I voted 

for the 46,000,000. I have no fear that it will unsettle values or re- tard specie payments, when specie payments become possible. But 

if free banking would not increa e the gold premium, the greenback 

circulation remaining the same, how can the addition of only 

46,000,000 do it 
1874. CONGRESSIONAL RECORD. 1773 

I shall be ready in good time to vote for free banking, and am ready 

liOW, with a limit pl:1ced on the circulation. But we who vote for this increase of the circulating medium of the 

national banks are charged witl1 a. violat.ion of the spirit of the resolve 

of 18 ·g. I stand for that resolve to-day as I did then. I voted for it 

then in the other House. I am in favor of a return to specie pay- ments at the earliest practicable period. We all know that we eLmnot return to specie payments now, or make positive provisions for 

such retlll'n at this time. 

We kuow that we can only get back to specie payments by one of 

two methods. One is a. contraction of the greenback currency, and 

the other is waiting until the exchanges of the country aau the lmsi- n~!:!S of the country will bring the greenbacks up to gold. We can lerrislate in that direction in various way\), but the country is not pr~pared for it. The Senator fi·om Ohio says that we have disgraced 

the ~;.reen back. When did we first disgrace the greenba.ck 'I If at all, we did it by the act of 1870, and never before. By the refunding act 

of 1870 for the first time in our loan laws we provided that gold ouly 

should be received in payment for loans. By every act prior to that 

time, by the act of .Mareh 3, 1865 ; _by the act of April 12, 1866, 

which the Senator from Ohlo, in his speech made some time ago, declared to be in violation of the spirit of the promise of the Government with reference to the legal-tender notes- by each and all these 

acts we provicled that the greenbacks should be ta,ken at par for in- terest-bearing bonds of the United States, and it never Wft.S in!:!erted 

in any law that greenbacks should be disgraced or placed below par 

until the refunding act of 1870 whlch provided tha.t gold alone should 

be taken. So that the greenback has thus far, with that single ex- ception, been cared for by our legislation. We have done nothing to 

discredit or d.isrrmce it ; and we only increase the office or function or purpose of this greenback when we increase the bank circulation. 

Mr. BAYARD. ·wm my friend from Iowa permit me to refresh his 

historical recollection of the discredit first put by the Uniteu States 

upou their own paper money 7 It was when they declared that gold 

alone should be received for duties upon imports. That was the discrimination, and the first, which I think was in 1862. 1\fr. ALLISON. I of course did not mean toincludethatprovision; 

but the great body of our greenback circulation was provided for after 

the act.of 1862 was passed. 

Mr. BAYARD. 0, no; the first discredit to the Treasury notes of 

the United States Government was in declaring that while they should 

be a. legal tender for all debts, public and private, they should not be 

received in payment for duties on imports. Mr. ALLISON. I believe the same act that provided for the issue 

of $150,000,000 . of United States notes originally also provided for a large loan) the amount of which I do not remember, and also pledged 

tho duties on imports for the payment of the interest a.nd as a. sinking 

fuml for the ultimate redemption of the debt. • · Mr. SHERl\fAl~. The act of February 25, 1862, provided not only 

for the greenbacks, but for loans, and also for gold payment. :Mr. BAYARD. There were three genera.l acts providing for the 

issue ·of Treasury notes lrnown as greenbacks; and every one of those 

acts discriminated against the note by declaring that while it should 

be a legal tender for all other debts, public and private, it should not 

be receivable for public duties on imports. 

:Mr. ALLISON. I a,w.·ee to that. Therefore to that extent the green- back never was pla.ced, or intended to be placed, upon a par with gold 

until after the war we should have again 1·esumed specie payments. 

1\Ir. MORTON. That was its original character. 

Mr. ALLISON. That was the original character of the greenback, a.s the Senator from Indiana very properly says. What I mean to 

say is, that there wa-s no act ilisgracing the greenback until 1870. Yon cannot say that the act of 1863, which simply provided that the 

greenback should not be converted into a 6 per cent. bond, was really 

disgracing the greenback; because at that time, and ever afterward 

up to 1870, we always provided that the greenback should be taken 

at par for loans; aud that was one of the pledges made in reference 

to it, tha.t it should always be receivable at par for loans made by the 

United State!i. Yet the fact is- and I only f?peak of this now in order 

to call attention to the fact-that we have been legislating for the 

bonds, not for the greenbacks, these last six years. We were not 

willing that the bondholder shoul(l take at least partial chances with us on tho greenback note; but we provided in our refunding act of 

1870 that gold alone should be taken for the loan of 18i0. 

1\Ir. BOUT\VELL. I wish to r emind the Senator from Iowa that 

tho a.ct of 1870 did not properly touch the quality of greenbacks at 

all. The object of the law was to raise means with which to redeem 

outstanding bon(ls bearing a higher rat-e of interest, and we sold 5 

per cent. bonds at. par payable in coin, and with that coin we redeemed 

t.he outstanding 6 per cent. bonds. Therefore that act, in my opinion, 

ilid not in any sense touch the character of greenb:teks or affect them one way or the other. It wa-s not so designed; I think it had no such efl:'ect; a.nd I respectfully submit to the Sena,tor from Iowa that 

it cannot properly bo quoted eitlJer in exaltation or derogation of the 

policy of the Government in that particular. Mr. ALLISON. I agree with the Senator t.hat we said nothing 

about the greenbacks in the act of 1870. I only say that that was tlte rlrst loan act in which we introduced a distinction between green- b·wks and gold with r eference to the public loans; and if the Senator 

st·:-.tes that we are bound by that resolution of 1869--

Mr. SHERMAN. The act of .April12, 1866, first introduced it; and 

then, .in 18G8, when we stopped_ the contractioll of the currency, we practH a.Uy stopped the conve.rswn. The act of 1836 was the first. Mr. ALLISON. I do not agree with tho Senator as to the effect of 

the act of 1866. That act distinctly recognized the right to convert 

the United States notes into any of the bonds authorized by the act 

of 1.'335. Mr. SHERMAN. It limited the power t o destroy them to the 

amount of four millions a month. . Mr. ALLISON. It limited the power to destroy to fonr millions a month, namely, he could not reduc~ the then existing volume more rapidly than four millions a month. The real object of the act of 1836 was to include the funding of non-interest-bearing obligations as well as interest-bearing obligations. But in all these StCts we allowed the green backs to be taken at par 

for the interest-bearing bonds, if we had a loan to place on the mar- ket up to the act of 1B70 ; and I agree with the Senator from Massachusetts that that act was simply a refunding act, to conv~n·t a 6 p er cent. bonu into a 5 per cent. bond; and I only introduced it here for 

the purpose of showing that while we are severely criticised for not 

complying with the spirit of the act of 1869, pledging the faith of 

the Goverruuent to IIL.'tke the greenbacks equal to par, the Senators 

who introduced a.nd voted for the proposition called the refunding 

act of 1870, als.o, for the first time, introduced a provision by which 

the greenbacks were excluded from the United States lon,ns, and that 

the effect of that exclusion was to depreciate the greenback. That 

is all I meant to say. Now, .Mr. President, I have said really more than I intended to say 

when I rose. I should not have spoken at all but for the fact that 

the Senator fi·om Ohio charged me, among others, with voting for an inflation of the currency by the issue of irredeema.ble paper money 

in such manner and in such method as will affect values in this coun- try. I insist that the effect of this additional issue of $46,000,000 

will not be as suggested by the Senator; and no better argument 

could be made to show it than the very fact that during these past 

two or three weeks the price of gold in New York has maintained 

itself practically at the sa.me rate, notwithstanding it has been understood that there would be an increase of bank circulation. When we come to the discussion of an increase of the greenback currency we will approach a very different question and a. very different proposition, on which I do not now express a conviction. 

Mr. MORTON. Mr. President, for some time I haYe been tired of 

this discussion, and should not"have t:J>ken part in it but for the fact 

that there seems to have been a purpose on the part of seveml Se.nators that I should. Yesterday the Senator from MissoUl'i [Mr. ScHURZ] 

made his speech personal to me, and he was about as offensive 

in his matt-er and in his manner · as he could make it to be parliamentary. It drew forth some reply; and to-day my fi·iend from Ohio 

[Mr. SHEIU:IAN] bas had occcasion to review what I have said· h ere- tofore upon this subject, with a view of placing me in an inconsistent 

position. I submit that the effort of my friend from Ohio has not 

been an unqualified success. I have not changed my view of the 

character of the greenback. I think I can defy him to point out any 

word I have said this whole winter contradicting in the least what I sa.id in 18Gi:l in regard to the character of the greenback and the obligation of the Government. I have changed my views somewhat in 

regard to the feasibility of a speedy return to specie payments, a.nd 

perhaps as to the time at which it should be attempted. In 1870 I 

thought that the :fifty-fom millions would be sufficient t hen, with the 

twenty-five millions, to give to the West and the South all the cur- rency they required. But I know now, as we all know, that it came very far short, and that more currency is required in the West and in 

t.he South to equalize the distribution and to meet the wants of those 

sections. If that is inconsistency, I freely confess to it; but my inconsistency goes no further; and although the Senator from :Missouri 

said I bad entirely changed, he cannot show it, nor can anybody elije, 

fmther than the matters that I h ave pointed out. 

While my opinions have bad some occasion to undergo a. change in 

regard to economic questions- and I have changed my views sev- eral times in the course of my life on important questions, but huve 

been, I think, consistent in the main, always endeaYoring to be right, 

and always endeuvoring to do right-while I may ha.ve had occasion 

to change my views in regard to the expecliency or the feasibility of retmning to specie payments inagiven time, I think my friend from 

Ohio 4as also had occasion to do the same thing, and that his depart- ure has been more extensive than mine. While my friend was reading 

from my record, he forgot t.hat he had one. He smiles now hecause he remembers it. I will refresh his recollection. My friend has chan~ed his views upon several very important matters in connection 

with our finances, particularly in reference to the right of t he Gov- ernment to eJDploy the original greenbacks in the payment of the 

five-twenty bonds. The first argument that I ever read in favor of 

that unqualified right ana power on the part of the Government 

was made by the Senator from Ohio; it was before I was a. member 

of this body. I was entirely convinced n,t tha.t time, a,nd I am yet ; 

but my friend changeil his mind. .In 1868, being a very y<>ung Senator, and comparatively inexveri- enced in legislation, I hau tue temerity to bring forward in this hocly a plan for returning to specie payments. It prpvided in effect that 

the Government should reserve the surplus golcl, instead of selling 
1774 CONG-RESSIONAL RECORD. FEBRUARY 25, 

it, uutil such time a.s a sufficient quantity had been accumulated to 

justify us in beginning the redemption of the legal-tender notes in 

coin; not redeeming them in n. bond, another paper promise, but 

r redeeming them in what we orio'inally promised to redeem them in, 

coin. I put the time off nearly t~·ee years, I believe, from the period 

when I first brought forward my proposition/to give the Government 

time to acquire the gold :wd the country to prepare for it. At the 

time when I brought forward my proposition I think the premium on gold was about thirty-four cents on the dollal·. Now I tbink it is 

about eleven. But my friend from Ohio at that time thought it would 

not do at all to fix a time for resuming specie pn.yments, and· that to 

make a ch.'l.nge of 34 per cent. in the value of the currency in orne- thing less than three years would bring about general disaster, bankruptcy, and ruin, and break up nearly everybody in the country. Last -winter my friencl brought forward :1 bill from his committee authorizing the funding of the greenbacks into 5 per cent. bonds, which are at par in gold, and that conversion was to take place on the 1st day 

of January, 1874, about ten months from the time he brought the bill 

forward. He said the effect of it would be at onco to brin15 the greenbacks to par, to make them equal to gold, which would maKe a change 

of 11 per cent. in their value in about ten months' time. He him elf 

ha,s brought forward a bill, without the authority of the committee, 

tbis wjnter .to the same effect, to convert the greenbacks into 5 per 

cent. bonds on the 1st of January, 1875, and that bill is now on onr table. 'My friend .opposed my plan, because, he said; it would nqt do to~ any time for :1 return to specie payments; that that must come about gradually; it must work out its own salvation; that to fix a time for resumption would be attendecl with the mo:st dreadful re- sults. _ Now I will ask the Secretary to read. the pa sage that I have 

marked, and we will see what a change the vi ws of my friend have 

undergone o-n that subject. This was in reply to my plan. The Chief Clerk read as 'follows: 

All tho historical precedents show that fixing the day for resumption inevitably 

led to a contraction of tho cur1·ency by tho banks, so that when the day came the actual scarcity of currency prevented a demand for coin; and this proces. of 

contraction both in England and the United SL'\tes produced the sorest distrc s; a.ncl 

this distress was·only relieved in England by the Parliament requirin..,. the loan of 

exchequer bills and new issues by the Bank of England. At the begii'i.uing of our Government the continental bonus were a species of currency, and as a part. oNhe 

fuptling syst~m of Alexander Hamilton, he provided for a. ne1v paper currency, con- vertible into coin, to be issued by the Bank of the United tates, :mel without which 

bo declared his funding system would be a failure. So, sir, after the war of 1812 

the sore distress caused by the failure of tho State banks \"I' as only roliovcc.l by a now paper currency issued by the second Bank of the United States, which :Mr. Mailison, yielding his constitutional objection approved. \Vo, therefore, think 

thltt the general objects sought for by the Senat-or from In liana. [Mr. MonTO:.] can be better attained Ily legalizing specJ.e contra{lts, by utilizing the coin in the Treas- my, by the gradual substitution of coin, United States ·nltes, and ·bank bills for 

the present currency, rather than accumulating ~old and fixing a dav for resump- tion.- Congresaional Glebe, part 1, third session, }fortieth Congress, iSGS-'69, page 630. 

Mr. MORTON. My·friend said that all t-he historic precedents then were against fixing a. time for resumption. He had his "little plan" 

just as he has now- no; I will not call it a litt e plan, a big one-but 

he bad his pln.n then of resuming spef·ie parments by authorizing 

people to make contracts to pay in coin, looring entirely into the 

future, until all the contracts should become coin contract , so that 

resumption would ha.ve no effect upon past contracts, n.nd of courso it would take some years for the old contract to pass out of exist- ence. My friend has now come to the conclusion that we can fix JJ 

time, aml we can fix it a.s early a.s the 1st of January, 1875, aud he 

thought last winter a.s early a.s the 1st· of January, 1874. When he 

brought forward his plnn last winter I undertook to make an m·cru- ment against it; and I had drawn my idea-s, as I had in regard to gre~n­ backs, from his speech of 1869. He had shown to me what would be 

the effect of the sudden a,ppreciation of tho cunency. I bore that 

speech in mind. I did not quote it on him. I knew he had the right 

to change his mind. I knew he had a right to do it, because he had 

done it on several occasions. I did not quote his olcl speech. I 

thought that was n. lame sort of argument to re ort to ; but still I had some of his ideas in my mind; and now, as he thought that appreciating the cunency 34 per cent. in three years would be absolut~ desh·uction, we mn.y get from his argument some idea of what the effect 

of tbe a,ppreciation of it 11 per cent. would be in ten months; and I 

ask the Secretary to read it. 

The Chief Clerk read a-s follows : · 

Persons of fixe(l salaries and incomes are be.nefited by an appreciation of the currency to the full extent of the appreciation. Their incomes have increased pur. chnsin~ power, and they are enabled to e.ll..'tend their purchases, supply new wants • IJltl ad~ to their !!apital. ~he O)lposite effect during the war, when the currencl' wns bemg deprcmat,ed, earned d1stress and want ana poverty into many cornfor 

able homes. It fell "'?-th severe effect upon preachers and widows anii old men, who saw the purchasmg power of their annuities molt away, aml a comlition of 

independence changed to poverty and want. The• will by an appreciation of the currency, .be restored to their own again. v ' • 

Merchants, de:1lers, tratlers, and bankers will be a.ffectcd by an appreciation of 

the currency precisely as their debts and credits bear to each other. If they owe more than they c.'l.n promptly collect on debts clue to them, they must lose to the 

full extent of the appreciation ; and they must make tl.illl loss g_ootl by o. sale of n. pnrt of fh.eil· J>roperty at reduced prices, or by contra{lting new u bts to be paid in 

?-11. n-p_PrCClated currency. .A.s a general rule, any appreciation of the currency is 

mJunou_s l,o all these classes; for they a.ro generally in uebt ; and even where 

enough 1s due to them to pay with, yet tho delay in payment or the fnilure of their 

debtors almost always embarrasses them. Commercial and banlrin,.,. usaae com- pels promptness, so that a merchant 01' a banker, ho;wever prudent 'he mny be, is 

often compelled to sacrifice his assets to meet a sudden appreciation of the cur- rency. 

But the distress C.'l.nsed by :m appreciation of the currency falls mainly on tl1e 

debtor class; others suffer only by reason of his inability to pay. Whatc.lo R sp cio 

payment mean to a dobtod It means the payment of ono hnndred ancl thirty-five 

dollars where he has agreed to pay one hnndred, or, which is th.osnmo thing, tho 

payment of one hnndreil dollars whore be has agreed to pay seventy-four. Wh<>re 

be has purchased prope:ty and paiu one-fourth of it, it means the ioss of tho prop- erty. It means tho a.Uthtionof one-fonrth to all ctUTency debts in the United Sta ~. 

A mea ure to require a debtor now to pay his debt in gold, or currency equivaknt to gold, requires him to pay one hundred. and thirty-five bu hels of wheat when he 

agreed to PR;Y one J;tnnW.:ed; and if thi~ appreciation is o~tended through a period of 

tliree years 1t reqwr shim to pay an mtorest of 12 per cent. in addition to the rn.te he has a~reed to pay. When we consitlf:'.r the enormous ill(lebtedne of a new country like Olll"S, wbere capital is scarce, and whore Cl"(l{lit has been substituted 

in tlte place of capital, it pre cnt a difficulty that may well canso us to pau. . We may see. that the ch~m ~ust be crosse~l, but it will n:ake us wary of onr foot teps. GOOd fatth and public policy demand that we appremato our currency to gold but 

in the process we must be careful that bankruptcy, distress, ancl want clo not fall 

!1-POn our fellow-citizens :who have I?a· ed their obli~ations upon your broken prom- ~ses. The d~btors of th1s conn try _mcludo _the ac~ve, entorpi:i· _ing, energetic men m all the varwus employments of life. It 1s a senous propos1tion to chan"'O t.heir contracts so as in effect to require them to pay one-third more than they a~recd to 

pay. They have not pause~ in their busine s t{) study questions of poiiti~l econ- omy. They have ba ed thCll' operations upou·this money, which you have declared to be lawfUl money. You may .change it relative value, but in doing so you should 

giYe them a. reasonable opportunity to change their contracts so as t-o atlapt them to the new. stand:rrds of value yon may prescribe for them. ~ore iliscussl?g tho measure propo. cd by the connnittce, which Senators may con 1tlernot specific enou$,h, or not rap1d enough, let us look to hi~:~ tory for lio·hts to guille us in a. !''~st diffi.crut and dangerous passa_g~. . "' The appremation of tho currency 1s a far more ilistressmg operation than Senators ma.y suppo e.. Our own and _other nation h_aYe gone through this process before, 

and always With tho sorest d1stress. Sometimes they have rcputliatocl tho depr . ciated currency, and, from the necessity of the case, fallen back upon barter and 

gold. Such, as_I have alrc:~.<ly stated, was the ca;>e with the continentlli money, with 

the French asS'Ignats, and Wlth confederate scn.p. All these revolutionary move- ments were accompanied with the utter destruction of cre(lit and trade. We have 

al o to guide us several exampl of fue appreciation of a deba etl currency. At the revolution of 1688 in En"land, tho silver coin, then a le"'al tender ha.d 

become so depreciaro<l by -wear aull by clippincr aE to be worth onl{75 per celtt. of 

tho mint standard, and this was practically the only currency. It b came n('cesil<'try to appreciate this currency to tho mint standard. As all p1ices and oblicra,. 

tiona of debt had become _acljnsted to tho lowered value of tho existing coin, it ~as - proposed to retluco the mmt standard to the current standard or to is. ue new shil· lin~ at one and one-fourth shillings. This was opposed by I aac Newton a.ncl John 

Loc.ke, tho ~vo "forcmo t men of all the wdfld," who contentlefl thnt if the lo~s of 

rocoinage was thrown upon t.he mint. it would not affect tho in eli Yiclua.ls at :111 This 

view was stron.,.ly oppo~:~cd ~.v practical merchants, but now shillin~s were issuotl 

and exch:J?~ed f'or ~e oltl s~lings at par. As Letwe~n tho mint a.ncl tho holder of 

the ol~ shillings th1s was n_ llnght; but the ~U:ect was rmmediately disa truus u pou all pnces. It took one-third more commoditles to get the new shillin"S but the 

ol<l number .of shillings was required to pa,v a d~b~. ¥erchants, trat.lors~ ~ncl debt- ors wero rmned. The Bank of Eng:lanc.l, then m1ts infancy onlr escaped failure 

by issuin~ its. not-es payable in inst:a.ll~ents. A rival bank ~as utt('rlv wrecked. 

Small capitalist found themselves rumed and laborers and artisans ii.eprivecl of 

-emplo;vment. Hen?O th~ unl?opula.rity of William ill, and the prevalence of gen- eral dlScontent dmmg his rc1g11. A similar conclitiou of curroncy to our own existecl in Great Britain after t.he 

general peace of 1815. For eighteen years the notes of the Bank of En,.,.land were practically a lo~al tender, and upon them. as upon our greenba-ck 'was based a currency 1 ucd by the country banks. Though the ag-gre,.,.ate of all this paper circulation never amountecl to $250,000,000, yet it at times ifepreciated from 20 to 30 per cent. below par. 

:Mr. MORTON. At that point I wi h to call attention to a L'tct thn.t 

is referred to there by my friend, and which is overlooked in the arO'ument here. At tbe time of the suspension of specie pa,ymentsbin 

England the country banks, joint-stock banks, were· only required to 

redeem in notes of the Ba,nk of Enqlaud, just ao na,tional bauks now are required to redeem in the greennacks. The notes of the Bank of En~land were not depreciated, and were not injured by the increase 

of tne joint-stock banks that were required to redeem in the notes of 

the Bank of England. On the contrary, it is a, matter of public hi - tory that the increase of that circulation of the joint-stock banks a,t 

that time furnished great relief to England, although they were only 

required to redeem in the notes of the Bauk of England that were themselves a. legal tender n.nd.at a large discount. The Chief Clerk resumed the reading of the extract from Mr. SHERMAN's speech, as follows: 

!Vhen tho war was over measures were slowly adopted for the appreci..'lotion of 

thld currency to the gold st.'l.ntlard. Those mea urcs resulted in a reduction of tho paper cmTency from 231,000,000 in 1815 to 152,000,000 in 1821. Commercial paper discounted at the B3.11k of England, fell from 75,000,000 in 1815 to. 13 000 000 i.r{ 

1821. It is only n ces. ary to appeal to the histories of the time to show 'the' disas- trous effect. The protluctive value of capital wa.q increased 50 per cent. A thousand dollars in 1821 -woulll buy more than 1,800 in 1815. Small traders debtors 

ancll.:tborers were reduced to t.lle s~rest distress. The loss to them was fur grcate; 

tlmn the actual depreciation of the currency, for all confidence ancl trust were lost. 

Mr. MORTON. I do not ca1·e about. taking time to read :my further. There is much good reading in that speech besides what we·haYe 

had;. and there are one or two other speeches of my fi·iend,.if I bad 

time to look them up, that I think run Rtrongly in the same direction . It shows that my friend, like others, is fallible; and that the spirit of 

change sometimes comes upon hlm as well as upon others. 

Now, Mr. President, one word in regard to the remark of the Semitor from Mi'3 ouri a little while ago. As I had occa8ion to say ye terday, the Senator in his speech devoted :1 very considerable part of it 

to me; and it was made quite as personal and as offensive, not anly in 

ma.tter but in manner as it could well be to be parlia.m.entary. When 

I said I thought the Senator did not understand this country, I did 

not mean by that to say that all of our foreiO'n-born citizens do not u~derstand this country- no s~ch thing. The S~nator has no right to 

g1ve the remark that constructiOn. He has no I'lght t.o make himself 

the representative of all om foreign-born citizens in that way. I think 
'1874. CONGRESSIONAL RECORD. 1775 

my-friend tried t.be experiment some two or three years ago of putting 

himself forward as the representative of citizens of foreign birth, and 

attempted in that way to lead them out of one party and use them 

in the formation of a new one. I think his experience was not very 

satisfactory, and it would hardly be worth his while to try the experi- ment again. 

He says that I have changed my opinions oftep.er than any other 

public man. I think that remark will require some qualification, 

especia.lly at his hands. I have had occasion to change my mind several 

times during my life upon questions, and I shall do it again whenever 

I think I am in the wrong. I started with the republican party in 

1854, and I never have changed my mind to that extent that I was required to get out of the party. I have never betrayed my principles. I have never betrayed my friends. I have never betrayed those 

who elevated me to power, and sought to use that power for their 

destruction. If I have changed my mind upon this question or upon 

that, I think that is what happens to all men who hold themselves 

amenable to instructJon and to learning from experience and observation. 

Mr. SCHURZ. I expected from the Senator from Indiana exactly 

the reply that he has just made. I want him· to poini out in my record a single principle that! ever betrayed. I want him to show, in the platforms of policy I have supported, a single contradiction. He will not 

find one. He has never left his party. I have never betmyed my principles. There is the difference between him and me. I alluded to thefa.ct 

that yesterday, when we happened to differ in opinion, one of the first 

things be threw :1t me was that I did not tmderstand this country; 

he spoke of Germany as "his own country," meaning mine. I tmderstand the meaning of that very well ; and I repeat again that I think 

it betrays very little appreciation of the rights of the foreign-horn 

citizen if be is only recognized as an equal when he happens to coincide with your views and serves your interests. I maintain that I 

have just as much right t.o differ with the Senator from Indiana as he 

has to differ with me, wherever I may have been born; and I shall 

always claim that privilege. But now, in·conclusion, I will say to him that if my remarks yesterday were offensive to him I am free to say I regret it. I am sure that I made my remarks very general, and when I addressed them to 

him I combated his arguments and not llis person. But I cannot 

refrain from saying, also, that in the reply he made I found a jumble 

of misstatements so atrocious and so willful that I c:m hardly think 

they were made unwittingly. 

The PRESIDENT pro tempore. The Chair thinks that is transgress- ing parliamentary rules. bfl:. SCHURZ. Then I retract the expression I have used and say I 

found misstatements which, if the Senator from Indiana had listened 

to me with a desire to understand me, he could not possibly bn.ve 

m:1de. I did not reply to him on the spot as I at first attempted-! 

bad, without being permitted to do so, tried to interrupt him- for 

when misstatements become so gross and manifold, then n.t ln.st even your desire to refute them mn,y give way. 

Mr. MORTON. Mr. President, my speech is in the hands of the 

Public Printer. It U"ill appear whenever that of the Senator appears, 

following it immediately; and if there are misstatement-s in that 

speech, the Senn,tor will have an opportunity and the means of point- ing them out; and if he can show-substantially that I have made a misstatement, I think I will have tbe magnanimity to confess it. 

I did not intend to do t.he Senator 1Lny injustice. He did not offend 

me; I did uot feel hurt at 'vbat he said; but he is not ingenuous, I 

think, when he says thn.t be did not aim his speech particula,rly at me. The PRESIDENT pro tempore. The Chair thinks it is out of order 

to charge another Senator with being disingenuous. · Mr. SCHURZ. Now, 1\Ir. President, if you will permit me a single 

moment. If the Senator from Indiana knows anything, he must 

know--

ThePRESIDENTpl·o tempo're. Has the Senator from Indiann, yielded 

the floor' _ Mr. MORTON. I had not; I was called to order. But if the Senator from Missouri wants to speak, I will yield t-o him. 

Mr. SCHURZ. Thank you. If the Senator :from lndiann, 1.."11ows 

anythjng, and he knows a great ma-ny things, he must be aware that 

I do not entertain :.my personal unkindness to him. He knows also 

that he is a very stmng debater, and that in combating his skill we must summon n,ll the resources that we can command. It was against 

his theories I was fighting, and not against his person; and as long as lle carries on his warfare in the same spirit I do not think . there 

will ev~r be occasion for personal unfriendliness between us, as I 

hope there is not now. When I say that his allusion to my foreign 

birth yesterday_. in the connection n.nd in the manner in which he made 

it, was a little offensive, I suppose he cannot find that surprising; not 

that I am ashamed of the place in which I was horn, for surely I am not, as I have no reason to be; but because I think, standing as I do 

here as a representative of one of the States, and having been sent 

here by Americans to represent them as an American citizen, enjoying the full right to express my own views, that right ought not to be 

slighted by any one who is my equal hut not my superior, although I 

happened to be born upon foreign soil. 

Mr. MORTON. Mr. President there is a little assumption in the 

remarks of my friend-but as he makes them good-nature<liy I shall receive them in the same way- that I intended t.o refer to the fact of 

his :foreign birth as an objection, or as an argument against him. Those who know me, and who know my political life, know there can he no foundation for that. Among many of my earliest and most 

earnest friends in Indiana have been men of foreign birth, and they are to-day; and I think I may s:iy to my friend, without offense, that 

I have represented them as truly and I am as good a friend to them 

to-day as himself. I spoke of Germany a "his country," becn,use he came from Germn.ny. I <lid not speak of it or intend to mean that it was his country now. He is an American by adoption, an American 

by naturalization. But I was r eferring to the country from which 

he came, and of which he spoke repeatedly, and of which he often 

speaks to us. He had just come :hom that country, and he spoke of 

it repeatedly, I believe, in his speech; and I referred to it naturally a.s his country, not mealii.ng to impute to him that he was not faithful to his obligations as an American citizen. 

Mr. SCHURZ. To put an end to this whole controversy, d9 I un- derstand the Senator from Indiana to say that he used that expression 

only in a Pickwickian sense' If hP, does that, then I will say that 

I used mine in a Pickwickian sense, too. Mr. :MORTON. Well, Mr. President, I was not exactly in a Pickwickian mood yes~rda.y. I do not often debate in a Pickwickia-n sense. I used the expression very naturally, and in reply to the Senator, who had referred to Germany and referred to his visit there. I 

knew that he had just gone to his home, which was a very natural 

thing, and be was extremely sensitive when he seized upon the ex- pression, and in his remarks a little while ago attempted to make the 

expression as applicable to men of foreign birth, wllen it was not. · My friend is partial to his country-! cannot blame him for thatbecause I remember some two or three years ago my friend arraigned our Government upon this floor for having violated om· neutrality with 

Germany in the sale of arms to France, and insisted that we had been 

guilty of a breach of internat.iona.l la.w that was even cause of war. Mr. SCHURZ. I did not insist upon anything of the kind. 

Mr. MORTON. I excuse my friend because of that Iiat~al feeling 

that every man must have for the fatherland. 

Now, Mr. President, if my friend says he did not intend yesterda.y 

to be personal, I do not intend to be personai ; and if he insiqts that 

he was speaking in a Pickwiekian .sense, I will say tliat I was also. Mr. SHERMAN. Mr. Pre ident, these two honorable belligerents 

have settled the matter to their satisfaction, I have no doubt. There 

is no occasion certainly for any controversy between them. They seem to esteem each other so highly, that there cannot he anything 

but love ~etween them. There has only been a. difference of opinion 

between them. Now, I desire to state to my honorable friend from Indiana that 

every word that he has had read at the desk I heartily approve of. 

I never have sought to avoid the dangers and the difficulties that come to us from specie pn.yments. There is not a single word in that 

speech that I would not utter again if I bad occasion. They are my 

sentiments. I do believe, however, that we are in a difi'erent condi-

-tion now from what we were in 1868. Then we had a Q'I'eater volume 

of currency. We had also had a contraction of $44,008,ooo. We had 

also a · controversy as to whether the bonds could not be paid in green- hacks; and we were under quite different circumstances. I did then 

oppose any immediate plan for the resumption of specie payments; 

hnt it seems to me we are now in different condition. As the Senator 

says, there is really hut 10 per cent. difference between currency and 

gold. There is no difficulty about resumption. The only hardship in 

the way is just exactly what I point-ed out in that speech fonr years 

ago; that is, the effect it may have upon debtors. But for that ques- tion there would he no trouble in a prompt resumption of specie payments, and, as a matter of course, any provision that is made, to use the language I used then, must b e made with careful considemtion of 

the rights of debtors and creditors. That is the only difficulty in the 

way. But I do believe, as the clift"erence now bas come down to he a difference of one year's interest, the time ha.s arrived when we slloulcl 

fix a date for the resumption of specie payments, and adopt measm·es to promote it. Therefore I do not plead guilty to the charge of 

inconsistency that my honorable friend makes against me; nor did 

I quote his remarks made in 1868 in any unkind sense. I used his remarks then simply as an answer to his remarks now. It is the right 

of every Senator to change his mind. The Senator acknowledges 

that he has exercised that right; and I have no doubt that I have 

exercised the same right, only he has not convicted me of it by the reading of those extracts. That is all I desireto say. 

1\Ir. CAMERON. These general explanations do not amount to 

much, for to-moiTow we shall forget all about them. I therefore move that the Senate proceed to the consideration of executive 

business. The PRESIDENT p1·o tempore. Before putting the question on that 

motion, wi~h the permission of the Senate, the Chair will lay before 

the Senate certain Honse hills for reference. 

HOUSE BILLS REFERRED. 

The :following bills from the House of Representatives were sever- ally read twice by their titles, and referred as indicate« below : A bill (H. R. No. 919) to provide for the issuing and recording of 

commissions to postmasters appointed by the President by a.nd with 

the advice and consent of the Senate-to the Committee on PostOffices and Post-Roa-ds. 
1776 CONGRESSIONAL RECORD . . FEBRUARY 25, 

A. bill (H. R. No. 2081) to fa,cilitate the exportation of distilled 

spirits, ancl amendatory of the :wts in relation thereto-to the Committee on Finance. 

r A bill (H. R. No. 2186) granting::sn Americanregistryto the American-built Peruvian steamship Rayo, now rebuilt in the United States ~nd converted into a sailing-vessel-to the Committee on Commerce. 

A bill (H. R. No. 2191) in relation to the customs duties on imported 

fruits-to the Committee on Finance. 

CENTENNIAL EXHIBITION. 

The PRESIDENT pro tempore. The Chair will also lay before the 

Senate a message from the President of the United States. 

The message was read, as follows : 

To the Senate and House of Representatives: 

I have the honor herewith to submit the report of the centennial commissioners, 

aDfl to add a word in the way of recommendation. There have now been international expositions held by three of the great powers of Europe. It seems fitting that the one hundredth anniversary of our Independ- ence should be marked by an event t.hat will displa.y to the world the growth and progress of a nation devoted to freedom, aml to the pursuit of fame, fortune, and honors by the lowest citizen as well as the highest. A iailure in this enterprise 

would be deplorable. Success can be assureu by arousing public opinion to the importance of the occasion. · To secure this end, in my ,indgment, congressionallel{islation is necessary to make the exposition both na.tional and international. The benefits to be deri "ed from a successful international exposition are manifold. 

It will necessarily be accompanied by expenses beyond the r!,'ceipts 1'rom tho expo- sition itself, but they will be compensate-d for many-fol::l by the commingling of people from all sections of our own country; by bringing toaether the people of dif- f erent nationalities; by bringing into juxtaposition, for read'y e-¥tmination, our own ancl foreign skill and progress in manufactures, agriculture, art, science, and civilization. 

The selection of the site for the exposition seems to me appropriate, from the fact that one hundred years l1efore the datQ fix:ed for tho Qxposition tho Declaration of Independence, which laUTlched us into the galaxy of nations as an independent peo- ple. emanated from the same spot. We have much in our varied climate, soil, mineral products, and skill, of which 

advantage can be taken by other nationalities to their profit. In return they mll bring to ollr shores works of their skill, and familiarize our people with them, to the mutual advantage of all parties. L et us have a complete success in our centennial exposition, or suppress it in its infancy, acknowledging our inability to give it the international character to which our self-esteem aspires. - U.S. GRANT. EXECUTIVE MANSION, 

Washington, l?ebrttary 25, 1874. 

Mr. CAMERON. Mr. President--

The PRESIDENT pro tempore. Accompanying this message of the 

President is the annual report of the centennial commissioners, so c!1lled. 

Mr. SUI\f~ER. I move that it be printed andl:1id on the table with 

the message. 

The PRESIDENT JYrO tempore. If 'there be no objection that order 

will be maue. -

Mr. CAMERON. I addressed the Chair, and intended to say that 

that was a very sensible and very opportune message, and I move now to-take up the bill from the House of Representatives in rega.rd to the 

centennial exhibition. I make the motion with a view of letting it 

lie over until to-morrow. 

The PRESIDENT 11ro tempore. The Senator from Pennsylvania 

witbrlraws the motion for an executive session, and moves that the 

pending and all prior orders be postponed and the centennial bill, so called, be taken up for consideration. 

Mr. CHANDLER. I renew the motion for an executive session. 

The PRESIDENT pro tempm·e. Penlling which the Senator from 

:Michigan moves that the Senate proceed totheconsidemtionof execu- tive business. 

The motion was agreed to; and the Senate proceeded to the considerat.ion of executive business. After ten minutes spent in executive 

session, the doon3 were reopened and (at four o'clock and thirty minutes p.m.) the Senate adjourned. 

HOUSE OF REPRESENTATIVES. 

WEDNESDAY, February 25, 1874. 

The House met at twelve o'clock m. Prayer by the Chapluin, Rev. 

J. G. BUTLER, D. D. 

The Journal of yesterday was read and approve~ 

ESTU.IATES OF DEFICIE~ClES. 

The SPEAKER laid before the House a letter from the Secretary of 

the Treasury, transmitting estimates of the deficiencies in appropriations required to complete the service of the fiscal year en <ling June 

30, 1874, anu prior years; which was referred to the Committee on Appropriations, and ordered to be printed. 

SHASTA COUNTY INDIANS, CALIFORNIA. 

The SPEAKER also laid before the House a letter from the Secretary of the Interior, in relation to an appropriation to aid tho Indians 

in Shasta Com1ty, California; w-hich was referred to the Committee on .Appropriations, and ordered to be printed. 

LEAVE OF ABSE~CE OF OFFICERS ON FRONTIER SERVICE. 

The SPEAKER also laid before the House a letter from the Secre- tary of War, transmitting to the House a petition of officers of tho Sixth Infantry, asking that troops serving on the frontier be placed 

upon a better footing with regard to leave of absence; which was referred to the Committee on Military Affairs, and ordered to be 

printed. Dfi>ROVEMENT OF COLORADO RIVER. 

The SPEAKER also laid before the House a letter from the Secretary of War, in relation to a project for the protection of the banks 

of the Colorado River at Yuma depot; which wa-s referred to the 

Committee on Commerce, and ordered to be printed. 

NEW YORK INDIANS. 

The SPEA.KER also laid before the House a letter from the Secretary of the Interior, in relation to :;t memorial of the Indians on the 

Cattaraugus and Allegany reservations in New York; which was re- ferred to the Committee on Indian Affairs, and ordered to be printed. 

IMPROVEMENT OF THE MOUTH OF THE MISSISSIPPI. 

The SPEAKER also laid before the House a letter from the Secretary of War, in relation to an appropriation for the improvement of 

the mouth o~ the Missl!>sippi River; which was referred to the Committee on Commerce, anu ordered to be printed. 

INDIANS IN 1\TEV ADA, CALIFORNIA, ETC. 

The SPEAKER also laid before the House a letter from the actincr 

Secretary of the Interior, in relation to the co11dition and wants of tb~ Ute Indians of Utah, the Pi-Utes of Utah, Northern 4fl_zona, Southem 

Nevada, and Southeastern California; the Go-si Utes of Utah and 

Nevada; the Northwestern Shoshones of Idaho and Utah, and the 

·western Shosh~nes of Nevada; which was referred to the Committee on Indian Affairs, and ordered to be printed.. 

MISSION INDIANS IN CALIFOR::t\"'IA. 

The SPEAKER also laid before the House a letter from the Secretary of the Interior, transmitting a report showing the necessity that 

exists for legislation in behalf of tho Mission Indians of California; 

which was referred to the Committee on Indian Affairs, anu ordered 

to be printed. PROTECTION OF THE RIO GRA IDE. 

The SPEAKER also laid before the House a letter from the Secre- ta.ry of War, in relation to an appropriation for the protection of the 

river banks of the Rio Grande, from the site of Fort Brown.; Texas; 

which was referred to the Committee on Military Affairs, a.nd. Ol'dered 

to be printed. IMPROVEMENT OF THE OIDO RIVER. 

The SPEAKER also laid before the House a letter from the Secretary of War, transmitting a. further report on the improvement of the 

Ohio River below the Falls; which was referred to the Committee on Commerce, and ordered to be printed.. 

CULTIVATION OF Til\ffiER. 

The SPEAKER also bid before the House the following message 

from tho President; 

The Clerk read. as follows: 

To the &nate and House of Represe,;tatives: 

1 have the honor to t.ransmit herewith a memorial upon the "cultivation of tim- ' ber a.nd the preservation of forests," and au rnu ght of a joint resolution prcparOtt by the American Association for the Ad v:mcemcnt of Sci en co, together with a commu- nication from the Genera.l Land Office upon the same subject. · U. S. GRANT. EXECUTIVE MANSION, 

Washington, February 19, 1874. 

The message was referred to the Committee on the Public Lands, 

and ordered to be printed. · 

RESTORATION OF LA::t\'DS TO 1\L:\RKET. · 

Mr. BRADLEY, by unanimous consent, from the Committee on tho 

Public Lands, reported back a bill (H. R. No.1700) to amontl the act 

entitled "An act for the restoration to market of certain lands in 

:Michigan," appro-ved July 10, 1872; which was referred to the Committee of the Whole on the stat-e of the Union, and, with the accom- panying report, ordered to be printed. 

THE 1\IORNING HOUR. 

The SPEAKER. The morning hour begins _at ei&hteen minutes past 

twelve o'clock, and reports are in order from the Committee onNaval 

Affairs. REAR-ADMIRAL B. F. SA::t\'DS. 

Mr. SCOFIELD, from the Committee on Naval .Affairs, reported 

back adversely a bill (H. R. No. 1418) to retain Rear-Admiral B. F. 

Sands on the active list of the Navy; and the same was laid on the 

table. JOHN HOLROYD. 

Mr. SCOFIELD also, from the same committee, reported back a bill (H. R. No. 816) for the payment of John Holroyd, for the use of 

his patent anu inventions by t.he Government; and moved that the same be referred to the Committee on Claims. 

The motion was agreed to.