Year: 1869

Dy d SuI PRISE upOu OuE people, Dy al


once paraIyzing their industry, arrest
ing them in the midst of lawful busi-


ness, and applying a new standard OF


value to their property, without any
reduction of their debts, or giving


them an opportunity TO compound


with their creditors, or distribute their


loss, would be an act of folly, without


example in even modern times. Our
power over the creditor is unlimited.


We may levy taxes upon him to any


amount, bat we have no power to


vary contract or add to the burthen


Of the existing debt. The ques-


tiOn then remains, what amount OF


the appreciation of value of gfeehbacks


Will act the least iniuriOusly to all the
sound business interests of our con-
stituents? ? and upon this point your


committee, after the Most careful con
sideratiOn, came to the conclusion that
the only and best plan was to allow
them to be funded at the pleasure of
the holders into Understanding bonds


Of the United States. In designating
the bonds, we have selected that now
familiar to the people as the 1910


bond. The market value of this bond


is now but slightly above that of the
legal tenders, so that the process of
appreciation of the notes will be slow,
and will only advance with the i'm
proving credit of the country It is a


bond bearing as low rate of interest
as we are likely to negotiate, and yet


Of such intrinsic value that we may
hope. to see it at par with gold within
a short period. It enables US after
ten years to take advantage of the
money Inarket-tO further reduce in
teFest. Its credit is supported by a
permanent appropriation from an am
pie fund, sufficient, without further
act Of Congress, to pay every dollar of
the debt in twenty-five years. The
proposition in this bill to substitute
coin notes for legal tender notes, as the
latter are retired by voluntary cOnver-
sion into bonds, is an attempt of the
Committee on Finance, in Difference
to vote of the Senate, at the last seE-
sion, to effect hesame object, namely,
to guard against q too rapid cOntfac-
tiOn of currency. / must however, in
sist upon my conviction that the
tiFae to guard against both undue ex-
pahsion and contraction while specie
payments are suspended, is to allow
the public creditor, whether note
holder or bOndholder, to freely ex-
change one for the other, without any
limitation, except that the aggre-
gate Of circulation should not exceed
the United States notes now outstand-
ing; and this aggregate fiay be grad
ualIy reduced as specie payments are
resumed. II the Senate shall agree
with this opinion, by adopting this
amendment OF the Senator from New
jersey, Mr.. Cattell, then sohie changes
will have to be made in the fifth sec
ton if, however, the Senate oppose
this mutuality of conversion, then the
substitution of coin notes should pre-
.cede the cancellation of the greenbacks,
or a reserve of legal tenders should be
maintained by the Secretary of the
Treasury, to be issued at his discretion.


After Alluding to several other
plans which had been before this COM
mittee, and which, after consideration,
had been rejected, Mr.. Sherman said:
The plan of the Senator from Indiana
[Mr. Norton supported by an able
speech, was carefully considered by
the Committee 1t rests upon two
leading ideas First, the accumulation
of gold in the Treasury and second,
the fixing a specie day for the re-
sumption of specie payments. Now,
in the most of his speech I heartily
concur. All that he says Of the neces-
sity of resuming specie paymemts-Of
the effects of contraction, and the un-
just discrimination that exists between
the nOtehOlder and the bOndhOldpf-
all this meets my hearty assent It is
the remedy he suggests we have to
deal with. Would not the effect of
his measure be that the Government
would hoard the gold and the people
the greeubacks, and thus make the
contraction he fears2 What more
profitable investment could any man
make than to take this dollar, now
having the purchasing power of sew
enty-fOUr cents in gold, locking it in
his safe, with a certainty that, INF two
years, it must be worth one dollar in
gold, or an ANNUAL advance of seven
teen and One-half per cent Would
not every bank sharply contract its
currency, and hoard greenbdcks as the
best investment it could make p
What prudent man would dare build
a house or a factory, railroad or
barn, with the certain fact before him
that the gteenback he puts into his
improvement will be worth thirty per
cent more, in two years, than his im-
provement then is worth? ? Why not
hold his money for two years, until
his building will cost him Otie-third
less 4? When the day comes, every
man, as the sailor says, will be close
reefed-3H enterprise will be suspend
ed-every bank will have contracted
its currency to the lowest limit; and
the debtor, compelled to meet in coin
a debt contracted In currency, will
find the coin boarded in the Treasury
no representative Of coin in eircula
tion-hls property shrunk, not only
to the extent Of the appreciation of the
currency, but still more by the artifc-
ial scarcity made by the hOaTdefs of
gold.


All the historical precedonts show
that fixing the day for the resumpt-
ton, inevitably led to a contraction
ofthe currency by the banks, so that
when the day came, the actual search
ty ofcurreney prevented demand
for coin; and this process of eontrac-
ton, both in England and the United
States, produced the sOrest distress.
And this distress was only relieved
in England by the Parliamentr requir-I
ing the loan of excheqUer bills and
new issues by the Bank of England.
At the beginning Of our Government,
the Continental bonds were a species
of currency, and as a part Of Che fund
ing system of fAlexander Hamilton be
provided for a new paper currency,
convertible into coin, to be issued by
the Bank of tho United States, and
,r;4bo,,t ,,.Li,b bo JorIYrnd his furd-