Evening star. [volume] (Washington, D.C.) 1854-1972, 1869-01-28
CONGREssIONAL.
Conclusion Of Yesterdays Prseeedings

the Funding bill being under conssde alton i
MT Sherman proceeded with his able sreecn
ON the finances. He first dwelt upon the gene
raj principle that gold and silver are the only
practical standards CT value. and that paper
money $50 called) Is proper substitute, when
based as values or sound credits in the extreme
necess ities of the nation. such as were precipi-
tated upon rs during the late civil war, and
against the great Napoleon, and then said: What
ever theorists may suggest, however sugar.
coated the remedy may be, there 10 but one test
Of healthy paper currency, and that is its con-
to be the true standard Of money, why shall we
not commence onr financial measures by
restoring It TO its place as a legal standard of
money! Why not allow our citi7ens to base
their future contracts on gold. Why not enforce
Inese contracts In the courts as legal and valid
Inc oaily transactions in gold in New York
oiten amount 10 S100,00O,OIO. On the Pacific
slope gold Is the only standard of value. We
cannot alter this, if we would. Why not rec.
ognlze the fact, legalize these contracts, and
conform our measures 10 the gradual adjust
ment OF existing contracts, including paper
money, TO the standard of goldl Let recog-
nize the general principle that it is wiser and
more In accordance with the spirit Of our Gov
eminent TO leave this adjustment to the voluu-
taIy contracts of the people, rather than under
take IL by the arbitrary rules of'law. If our
people are left free, they can do this without
injury 10 the debtor or creditor, without con-
hscatlon OF property, and without any change
IN the intrinsic value OF property. For these
reasons the Committee Of Finance regard the
first section of this bill, " hich legalizes gold
contracts, as an indispensable preliminary to
any plan for approaching our currency to gold
He then replied TO Senator Morton's objec.
tons to that section of the bill, and referring to
the question as to the legal tender act he said:
ut may be that the Supreme Court will DENY
the validity OF the legal tender act, or limit its
operation TO existing contracts made since its
passage. 1t may subject currency contracts to
enforcement In coin. Is II not wiser to bridge
over this uncertainty by authorizing the adjust.
ment OF this matter between the creditor and
the debtors Again, sir, the law as il now stands
Is productive OF gross injustice. You require
nearly one-ha Of your taxes to be paid in gold,
and yet you Will not enforce a contract by
which the merchant buys the gold for you.
Cargoes Of tea, coffee, ana merchandise can
only be bought in gold, ard vet il property is
delivered upon promise to pay In gold il can.
not be enforced Gross and palpable Injustice
msy De done In multitude of transactions.
necessarily based upon gold, by appealing to
the legal tender act / conclude, then, this
branch Of the subject ny the earnest opinion
mat IT was good policy three years ago, and
supulaie the time and the amount and the
medium of payment, subject to the general
laws OF fraud, usury, and force
Free trade In domestic productions, liberty
10 contract and be contracted with, has peyer
oeen restrained before Let us restore these
rights, and having also provided a paper rep.
resentatlye OF the coin in the Treasury of the
Unltsd States, and a bank currency conyerta.
I bic INTO gold and founded upon the highest Sc
eurltIes, let US now deal with the much more
dlincult questionable appreciation of the
present currency 10 the standard of gold. If
this ques ton affected alone the Government of
the United States, We might resume specie paw.
Inehts very soon: sooner even than the Senator
from Massachusetts (Mr. Sumrer) proposes
BY fnnomg portion of the United States
notes by requiring the banks to maintain their
full reserves In legal tenders; by withdrawing
the three per cent certificates; ana by the use
OF the gold IN the Treasury, we could resume
al once. This process nigh increase the bond
ed Indebtedness OF the United States one hum
dred million dollars, and the interest five mil.
lion DOLLARS but our revenues are ample in
gold 10 pay this inc reased interest and the act.
uai savIng in the current expenses of the Gov.
eILr INT, by the reduction of prices TO the gold
sLtLdaro, would be double and perhaps quad.
rupie the increased interest.
The body OF our expenditures being the in.
teIest OF the public debt is now PAYABLE n
goid, and ITS burden is not increased by specie
payments, while the savings expenditure.
and the palpabie saving by the funding of the
debt al u lower interest, would largely exceed
any interest we would have to pay on notes
WITHDRAWN from circulation. And if the bur.
den OF resumption fell alone upon the national
banks, the task would be an easy one Their
securities deposited with the Treasurer Of the
Unlted States are now nearly co ual in gold to
the amount of their circulation. A call under
the banking act OF ten per centum additional
security could BE- easily met by the great body
OF tnem- and thus enable them TO sumo when
ever the United States is prepared TO resume
Their profiis in the past have been large
Ibose not now strong enough 10 perform the
great OBJECT OF their c<ganization-Iamely, to
Iurnlsh a UNIFORM currency, convertible INTO
gold-may We'll give way to other banks ready
TO take their places.
Merchants, Dealers traders and ban kers will
De anected by an appreciation of the currency,
precisely as their debts and credits bear to each
other. If they owe more than they can
promptly collect on debts due TO them, they
must lose 10 the full extent OF the appreciation,
and they must make their loss good BY a sale
OF part OF their property at reduced prices or
by contracting new debts TO be paid in an ap.
preclafed currency. As q general rule, aLy
appreciation of currency Is injurious TO ali
these classes. for they are generally in debt
and even where enough is due them to paw
Of their debtors, almost always embarrass
ben. COMMERCIAL and banking usage com.
peis promptness, so that a merchant or a
BAN however provldent he may be. is often
compelled 70 sacrifice his assets to meet a sud-
den appreciation OF the currency.
But the distress caused by an appreciation of
the currency falls mainly ne debtor class
OtheIs suffer only by reason Of his in ability TO
Fay. What does specie payment mean TO a
debtor 1t means the ayment of one hun.
dred and thirty-fve dollars where ne has
agreed TO pay one hundred dollars, or, which
Is the came thing, the pay msnt Of one hundred
dollars where be has agreed to pay seventy.
four. Where he has purchased property and
paid one-fourIh of 1t, il means the loss of the
property. IL means the addition OF one. fourth
to all currency debts In the United States. A
measure TO require a debtor now 70 raw hi.
OeDt In gold, or currency equivalent TO gold,
r.qulres him 10 pay one hundred and thirty.
nve bushels OF heat where he agreed to pay
one hundred; and II this appreciation Is ex.
tended through period of three years, il re-
quires him 10 pay an interest of twelve per
cent IN addition TO the rate he has agreed te nav
Wnen we consider the enormous indebted
ness OF new country like ours, where capital
10 scarce. and where credit has been substi.
tuted In the place Of capital, IL presents a diff
Guilty that may well cause us TO pause. We
may see that the chasm must be crossed: hut il
Will make Ms wary Of our footsteps Good
faith and public policy demand that we An.
preciate our currency to gold; but in the nro.
csss we must be careful tat bankruptcv. dis.
Iess, and want DO no. fall upon our fellow.
citizens VINO have based their obligations upon
your broken promises. The debtors of the
country include the active, enterprising ener.
getlc men in all the various emplsyments of
iife IL - serious proposition % change their
contracts so as, in effect to require them to nav
one.fourth more than they agreed to pay
Ihe question then remains what amount of
appreciation Of the value OF greenbacks will
opersfe he least iDjuriOusly to all the sound
business interests OF our constituents! And
upon TINS point, your committee, after the most
careful confederation, came to the conclusion
that the only and best plan was to allow them
to be funded at the pleasure OF the holders in 10
interest bearing bonds Of the United States
In oeslgnafing the bond we have selected that
now familiar 70 the people-the ten forty bond
The market value OF this bend is now but
slightly above that Of the legal tenders, 40 thai
the process OF appreciation Of the notes will h
slow, and Will only advance with the lmprov.
ing credit Of the country
Sucn, SIR, are the general provisions of this