The Lancaster gazette. [volume] (Lancaster, Ohio) 1863-1886, 1868-08-06
OR making regu!atlons Tor its paY.

tnS law mdhInR power, WHICH
promise must be in the form of a
law. The Constitution declares
that Congress shall have power to
borrow money, from which il must
boAferred that Congress and Con.
gress only can prescribe the terms,
limits and conditions of the loan.
The attempt, therefore TO erect a
standard Of good faith for the ma.
ton, not only outside of the law,
but in violation Of its express pro.
visions, docs the nation great in
Justice BY contributing to place it
in a false position before the pco.
pie Of other countries.
That is all l baye to say on tha.
question. If you prove that the
Government is bound to pay the
bonds in coin, you do it in the face
of four as direct and plain statutes
as any statutes that ever were writ.
ten.
There is the statute, plain, direct,
even pathological upon this sub.
ject, declaring in not less than six
or seven places that these notes
shall be received in payment, and
as q legal tender, in discharge OF
every claim and demand Of whatso.
ever kind against tho United
States except interest upon notes
and upon bonds, and then going
ON TO say as | remarked before,
tautologicalIy that those notes shall
be received as lawful money and
as legal tender in payment of all
debts, public or private in the
United States, except the interest
upon notes or bonds as aforesaid.
And yet in the face of language so
plain, that it can not be misunder-
stood ii is argued from day to day
in this Senate that the Government
is bound to pay the five twcniies
in coin.
Now, Mr.. President, this qucs.
tion is important or unimportant as
Congress sha Il make it SO. When
we return TO specie payments it is
unimportant; as long as We fail 10
return to specie payments it is i'm
portant. AS | took occasion to say
some weeks ago in the Senate, the
first duty of Congress and tho first
great thing to do, in my opinion,
is to take some direct step toward
the return to specie payments.
| will say further, that tits in
the existing legal tender notes that
the Government has a right to pay
those fivc.twcnty bonds. There
was a limit of S4OO, 100000 fixed by
law to the issue CT those notes. l
believe to pass that limit would be
a violation of public faith, but that
the Government has the right 10
pay the five twenty bonds out of the
existing legal tender notes is as
clear in my opinion, as any right
that is defined by any statute OF the
United States.
Mr.. Wilson, should like to ask
the Senator what practical impor.
tance thero is in maintaining that
doctrine if We have no green
backs to pay the bonds with? |
take it there is not anybody here
who supposes, if we are limited to
the present amount of greenbacks,
that We have got any grccnbacks
to redeem the bonds with. There.
fore the question is not u practical
one in any sense of the word, it
seems 10 me.
Mr.. Morton-I think / can an.
swer that question. The Senator
has kindly called my attention to
a point that had forgotten for the
moment, and that in connection
with this funding bill. Four hun.
1rcd million dollars Of currency is
enough 10 invest all the bonds au-
thorized by this bill. 1t is not
done AZ once. The Government
sells fifty million dollars of these
bonds to day and receives pay in
existing legal tender notes. Those
notes are paid out tomorrow in the
redemption of an equal number Of
existing tive.twenty bonds; and SO
the process goes ON. The Govern.
ment can redeem tho FIVE twenty
bonds in the existing legal tondOr
notes without issuing q new note,
simply by selling the new bonds
for legal tender notes in tho re-.
demption OF the existing five TWEEN
ty bonds.
That comes right down to this
funding bin. This bill provides
that the proceeds of the sale of these
bonds shall be used exclusively for
tho redemption, payment, or pur-
chase of, or exchange for, an equal
amo1nt'-that is q very important
phrase right thereof tho present
interest bearing debt of the United
States Ifyou exchange them, it
must be done for par. If you sell
these new bonds you must sell thom
for par. Then you can not buy up
tho five-twenty bonds in the mar
ket. You can not buy them unless
you buy them fol par, because you
make the proceeds of these bonds
take up and cancel an equal a.
mount of tho outstanding bonds
We will suppose thai the Secrota-
ry of the Treasury has sold $780,.
100000 of these five per cent. bonds
at par. He has got 500, 100000 of
grcenbacks in the Treasury OF the
United States. How is he going
to apply that to the extinguishmenu
of an equal amount Of the outstand-
ing debt2 The holders Of tho FIVE.
twenty bonds will not sell them to
the Government on the market for
par, because they are commanding
a largo premium. He cannot ex-
change bend for bond, because the
honda IN be exchnnped for com.