Year: 1867

Senbte OOuhhAhtsecs


The Senate Committee on Finance,
in their report remark 1t should be
the effort of Congress, not merely to
declare and obey the existing law, but
to adopta comprehensive policy that
will preserve the public faith, restore
confidence to the people, stability to
our business interests, and yet will ap-
peal to the sense of justice of the peo-
pie. If it is unhappily drawn into
the arena Of party financial matters it
ought not be in any sense partizan, but
may become so. Unless Congress can
adopt a policy meeting the requisites,
the contest on these most delicate and
Neutrality-suspicious. may be transferred to
the Hastings, where the heat Of party
strife may lead to dangerous results.


The Committee examine at length
the provisions of the bill reported,
state the condition of the public debt,
and then, take up the question as to
whether the 500 bonds areredeemablc
in any other money than in coin of the
United States, say The duties on i'm
ported goods, and the interest on the
public debt, are, by law, exceptional
from the legal tender clause. This
implies that the principal of the debt
is not excepted. The construction
drawn from the payment of previous
loans in gold is answered by the fact
that that the act under which these
bonds were issued expressly declares
that a note shall be lawful money as
well as gold, and shall be receivable in
payment of public debt. The argu-
ment that a construction was put upon
the law by the agents of the United
States, is answered by the fact that
this was not mutual construction,
recognized by both parties as part of
the contract, but was rather an opinion
based upon supposition of the state
of facts, which, when the five years
expired, did not actually exist. 1t is
clear that if the bonds are payable
when due in legal tenders, they are
redeemable after five years from date
in the same kind of money. The
word payable implies duty or obli-
cation, which must be performed at the
time stipulated. The word "redeem-
able" implies discretionary power,
which may or may not be exercised,
but the same kind of money, in the
same mode rendered, will redeem 4
note or pay note.


The Committee have deemed it their
duty to present the agreement in favor
of rcdeeming bonds in legal tender
notes, for it cannot be concealed that
this construction has been adopted by
many who disclaim all purposes to
evade public engagements. Still, the
admitted fact remains, that tthese bonds
were generally taken up on the suppo-
sition that they would be paid in coin !;
that this was expressly declared by
authorized agents of the Government
in negotiating the loan, that such dec
laratlon must have been known by
Congress and was not negatived /;
that it was sanctioned by three
successive Secretaries of the Treas
: ury that upon the faith of it the
bonds have been continually higher in
market value than the notes, and
public sentiment, both in this coun-
try and in Europe, would regard it as
a breach of public faith. Public credit
is of so sensitive quality that time
cannot restore it when impaired. 1t
is better far to forego doubtful privi-
lege. Ifin the judgment of impartial
men we have no right to exercise it,
the doubt should be removed. The
discussion ofthe question manifcstly
impairs public credit. Until it is set
tied no new loan can be negotiated.
The public mind becomes accustomed
to the idea of reputation, and the
widest schemes of paper money
worthy of the days Of George Law.


1t has, the Committee, says, been
provided by Congress by joint resolu-
ton that the Five-Twenty bonds arc
redeemable only in gold. This is
stead of settling the question will
only create divisions and parties, and
the resolution when passed will be
subject of agitation and repeal.


These considerations induce the Com
mittee, without deciding the question
to propose asubstitution of new bonds,
clear and explicit in their terms, for the
Five-twenty bonds as they become re-
deemable. This exchange must de-
pend upon the voluntary consent Oft
holder, but it is believed that the great
body of them will readily make theex-
change and the government will be
able to sell the new bonds at rate that
will redeem Or purchase an equal
amount Of the 500 Don1c. 1t is the
manifest interest of the bondholder, as
we'll as of the tax payer, to have rights
cleared defined. That Congress after
full. consideration, should SO settle
them that they will not be effected by
any uncertainty as to the manner Of
their payment. If this exchange is re-
fused by the bondholder, it will be
time enough to determine whether, by
the condition of his bond, he may not
be paid in lawful money. The plan
proposed establishes the maximum Of
currency at an amount fixed by law,
and it may be diminished by payment
for taxes and its conversion into bonds.
This process would,it is believed, rap
idly restore our currency to the STAN
dard of gold, without the severe dis
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