Year: 1868

The Debt and the Banks.


Extract from n speech Of Hon. Ben.


jamin r. Batter, OF MassaehHseiis,


in the House OF Representatives,


November &c md -, 1867.


THE DEBT.


If the gentleman will tell me why it
is that we are to construe this law diff
ferently from any other law / will be
obliged to him. If he will inform this
House Why tho people of this country
should tax themselves to the amount of
many millions, (S400, 100000 is the diff
ference this day aud this hour whether
these fve-twenties are payable in gold,
as gold stood yesterday, or in green
backs.


The only answer suggested is, why
agitate this now. These loans are not
payable now, and therefore We may
wait until the twenty years are out,
when we all believe greenbacks and
gold will he correlative terms. l be-
lieve SO, too, in twenty years: but in
the meantime the interest on these five
twenties is sinking this country, the
labor, the manufacture, and the COM
merce of this country, to n degree that
even its vitality and its strength Will
hardly be able to meet it.


What is the rate of interest on the
five-twentiesf Six per cent. in gold,
payable semi-annually, gold being at
l40 to 1I5, equal to l5O and upward.
That makes nine per cent; they are ex-
empt from State and municipal taxation,
which makes from two to three per cent.
more. So on these almost two thou
sand million of interest bonds the peo-
pie of this country are paying at this
day and at this hour, either by remis-
81 on of taxes or otherwise, in the cur
rency of the country, from eleven to
twelve per cent. What is the conse-
quencel They could stagger under this
burden of taxes if needed to pay the SOL
diers; they could deal with this burden
of taxes if it even were to be thrown
into the sea; but the difficulty is that
paying this high rate OF interest on
these fve.twenties of from eleven TO
twelve per cent. causes capitalists 10
withdraw from legitimate business and
keep their money in these bonds. See
how it operates. | have my money IN
tive-twenty bonds at eleven per cent,
and am told that am to have gold
at the end of the twenty years for the
principal besides. You cannot tempt
ME, then, to 90 into any enterprise
which shall not promise more than elev-
en- to twelve per cent. must have much
more before / will take my money out
of Government, securities and put IL
at the risk of business. And it is this
high rate of Government interest which
is crushing the life out of the indus
trial pursuits of the people. There can
be no mistake about this. Look at the
market reports of Cincinnati, one of the
greatest marts of the West. No money
can be got there for less than fifteen or
eighteen per cent. Whyf Because our
capitalists get from eleven to twelve
per cent. on five-uwenties, and they are
encouraged to hold on to their bonds
and keep their money out of the busl-
ness of the country; because the gen
tleman from Maine tells them that
the Government will pay the
principal in gold, although they paid
but forty cents on the dollar for them
when they bought them. This is the
reason why this fiye-twenty loan IS
crushing our people, and why we must
get rid of it all hazards consistent Win
national honor ald national faith, and
no man asks that to be broken.


But am told if we undertake to pay
any portion of this debt in greenbacks
we shall depreciate greenbacks so that
they will be worthless; that there will
be an imitation of prices. The gentle
man from Maine riots in Imagination
over the picture OF the payment of $500
for pair of boots if we issue any
more legal-tender notes, that is to say,
nOrcs not bearing interest.


Speaking of greenbacks, l am remind
ed of one thing to which | meant to
have adverted TO on the question: of
the nations being bound by the adver-
tiserhents by which its bonds were sold.
Nv friend says we did not notify capi-
talists that we would claim the right to
pay these tive-twenty bonds in any
other way than in coin. Why we put
it upon S15O,000,000 of United States
notes, and thus advertised everybody
we did not mean to pay them in gold,
This notice was put on the back of
every Creenback. Let me read from
one:


This note is legal tender for all debts, P1b-
lie or private except duties on imports and in
terest Oh the public debt


The common idea is that there will
be initiation when you issue paper
money. 1t is drawn from the old idea
of bank circulation. A bank issued its
notes without any basis except the gold
basis. That gold basis was sometimes
one to four. Letme illustrate: suppose
there were four hundred millions of
bank paper in circulation on one hun
drcd millions of gold as basis, then l
agree it would be an initiation to issue
another one hundred millions, making
the relation of the paper dollar to the
gold dollar as one to five. But what Is
greenback ? Have gentlemen consid-
cred A dollar greenback as it stands
to-day is one twenty-five hundred mil
lionth part of the debt of the United
States, secured by mortgage upon
every dollar of public or private prop
erty in the United States. Is it not
that under my theory or anybody else's
theory of finance Now, suppose We is
sue five hundred millions of greenbacks,
and pay up five hundred millions
of the interest-bearing debt OF the
United States, what is greenback thenf
Why, it is still enc twenty-five hundred
millionth part of the national debt OF
the United States, appreciated, and not
deprecated, by the amount of interest
which we have saved by buying up five
hundred millions of the intercst-bearlng
debt.


! THE BANKS.


When the committee rose | was en-
deavoring to put before it the way in
which the national bank circulation
might be Withdrawn from the banks
and legal tender notes substituted with
out shock to tile business of the country.
l agree, sir, that any proposition of leg
islation is vicious which tends in any
considerable degree to interfere with
the industrial pursuits of the people,
but propose we should enact in some
proper form that the Secretary of the
Treasury should each month retain in
the Treasury all the national bank bills
which have been collected by the col
lactors nf internal revenue, or which