Year: 1867

The Senate Committee on Finance. In
their report made on the 18th instant, re
mark that it should be the effort of Con-
gress not merely to declare and obey the
existing law, but to adopt 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 the people, if il is un-
happily drawn into the arena of party.
Financial matters ought not to be in any
sense partisan, but they may become so
unless Congress can adopt a policy TO meet
the emergency. The contest on this most
delicate and difficult question may be trans
ferred to the hustings, where the heat of
party strife may lead to dangerous results.
The committee examined at length the
provisions of the bill, the state and condi-
tion of the public debt, and then taking up
the question as 10 whether the five-twen-
ties are redeemable In any other money
than in the coin of the United States, say
the duties on imported goods and the in
terest on the public debt are by law ex-
cepted from 'he legal-tender clause; this
implies that the principal of the debt is not
excepted. The construction drawn from
the paymentof previous loans in gold is an
swered by the act under which these bonds
were issued which expressly declares that
note shall be lawful money as well as
gold, and shall be receivable in payment Of
public debts. The argument that different
construction was put on the law by agents
of the United States Is answered by the fact
that this was not a mutual construction
recognized by both pa5;ies as part of the
contract, but was rather an opinion, based
upon The .upposiiion of a state of facts
which, when The five years had expired
did not actually exist. 1t is clear, if the
bonds are payable when due in legal tend
ers,-ihey are redeemable five years after
date in the same kind Of money. The word
payable implies duty or obligation
which must be performed at the time stlp-
ulaied. The word ''redeemable" implies
discretionary power which may or may
not be exercised, but the same kind of mo-
ney in the same mode rendered will re-
deem note or pay note. The commit
tee have deemed it their duty to present
the argument in favor Of redeeming the
government bonds in legal tender notes,
for it cannot but be concluded that the
construction has been adopted by many
who disciaim all purpose TO evade public
engagements, still the admitted fact re-
ken upon the supposition that this was
expressly declared by authorized agents of
the government in negotiating the loan
that such declarations must have been
known by Congress that it was sanction
cd by the Secretary Of The Treasury; that
upon the faith of il the bonds have been
continually higher in market value than
notes and public sentiment both in this
country and Europe would regard a differ
mode of payment as breach of public
faith. Public credit is so sensitive quail
ity that time cannot restore 1t when i'm
paired Ii is far better to forego doubt
ful privilege. In the judgment of impair
tial men We have no right to exercise il,
but the doubt should be promptly removed.


The discussion of the question manifest
ly impairs the public credit. Until it is
settled no new loan can be negotiated. The
public mind becomes accustomed 70 the
idea of repudiation, and the widest schemes
of paper money worthy Of the days Of
George Law. Tie foundation of the pub
lie and private credit, the committee says.
has been provided for by Congress by join
resolutions, which declare that the five
twenty bonds are redeemable yearly in
gold. This instead of settling the ques-
ton will only create divisions of parties,
and the resolutions, when passed, will be
the subjects of agitation and repeal.


These considerations induced the CON-
mittee, without deciding the question, to
propose substitute of new bonds, clear
and explicitsin their terms, for the five





This exchange must depend upon the vol
untary consent of the holder, but il is be-
lieved that tie great body of them will
readily make the exchange, and that the
Government will be able to sell the new
bonds at a rate that will redeem or
purchase an equal amount of fve-twenty
bonds. 1t is the manifest interest of
the bond holder as well as the tax payer
TO have his rights clearly defined; that
Congress, after full consideration, should
so settle them that they will not be affect
cd by any uncertainty as 10 the manner
of their payment. If this change is TT
fused by the bondholder, il will be time
enough to determine whether, by the con-
diiion of his bond, he may not be paid in
lawful money. The plan proposed estab-
fishes the maximum OF currency by law,
and it may be diminished by payments or
taxes and its conversion into bonds. This
process would, it is believed, restore our
currency to the standard of gold without
severe disturbance and uncertainty caused
by the present system. When the restored
condition of the government advances ma
terially the market value Of our bonds to a
gold standard specie payments may be re-
sumed and maintained This plan is in
accordance with the uniform practice of
our government prior TO 1868, and of Great
Britain during the long suspension of spe-
rtie payments from 1897 TO 1928. The
holders Of paper money paid out was al
lowed at any time to convert into bond
or annuity.


The rates forced apon the people, du-
ring the suspension of specie payments,
were never allowed to be of less value than
other securities held by the public credit
H.r 4.