National Finances -- Specie Payments.

Mr. Sherman.  I now move that the Senate proceed to the consideration of the motion to refer the resolutions of the Chamber of Commerce of the State of New York, relative to the national finances and in favor of the resumption of specie payments at the time now provided by law.

The President pro tempore.  The Senator from Ohio moves that the Senate proceed to consider the motion to refer the resolutions of the Chamber of Commerce of New York.

The motion was agreed to.

Duties on Imports.

Mr. Bogy [Lewis Vital Bogy (April 9, 1813 - September 20, 1877); Saint Louis Missouri, D; studied law, admitted to the bar].  Mr. President, I gave notice on Friday that I should call up to-day the bill which I introduced early in the session, so that I might speak on that bill.  I am prepared to do so, and would rather go on now, though I am unwell.

Mr. Morton.  Does the Senator desire to go on now ?

Mr. Bogy.  I would rather not to-day, unless the Senate prefers that I should speak.

The President pro tempore.  The Chair did not desire to interrupt the Senator from Ohio to announce that the morning hour had expired.  He takes this occasion to announce that the morning hour has expired, and to lay before the Senate the unfinished business of Friday last, which is the resolution submitted by the Senator from Indiana [Mr. Morton] on the 5th of March, 1875, for the admission of Mr. Pinchback as a Senator from Louisiana.

Mr. Morton.  I dislike to interfere with the convenience of my friend from Missouri, but I yielded to the solicitation of my friend from Ohio with the understanding that he would take only an hour and a half, and if my friend from Missouri goes on now it will postpone the unfinished business until to-morrow.  I am sure everybody is anxious to have it disposed of.

Mr. Bogy.  I am somewhat unwell to-day and would rather not speak;  but I will go on, as I understand it is desirable that I should do so.

Mr. Morton.  I cannot very well resist an appeal of courtesy;  but I will ask the Senate to proceed to the consideration of the unfinished business as soon as the Senator from Missouri is through, and ask the Senate to remain to-morrow and dispose of it by a final vote.

The President pro tempore.  The Senator from Missouri moves to postpone the consideration of prior orders for the purpose of taking up the bill he has named.

Mr. Morton.  I hope the motion will not be agreed to.  I will give away informally, however.

Mr. Edmunds.  Let it be laid aside informally, to be called up at the adjournment, so that it shall be the unfinished business for tomorrow.

The President pro tempore.  It will be necessary to call it up at that time.  The Senator from Indiana asks that it be the unfinished business for to-morrow.  The Chair hears no objection to that arrangement, and the Senator from Missouri moves to proceed to the consideration of Senate bill No. 57.

The motion was agreed to;  and the Senate, as in Committee of the Whole, proceeded to consider the bill (S. No. 57) authorizing the payment of duties on imports in legal-tenders and national-bank notes.

Mr. Bogy.  Mr. President, the bill under consideration provides for the payment of duties on importations in legal-tenders and national-bank notes or coin, at the option of the importer.  And believing it to be not only a most important question, but the most efficient, if not the only, way by which the paper money now in circulation can be made equal to gold, and consequently in that way bring about specie resumption, I will ask the indulgence of the Senate to give as briefly as I can the reasons for this conviction.  I say conviction, and not opinion, because long reflection on this subject has brought my mind to the condition of conviction, whatever may be thought by others.

I am aware of the many different views entertained on the question of resumption, and in my opinion there is more or less truth and correctness in all of them in relation to the object to be attained, excepting in the law passed on the 14th of January, 1875, providing for resumption on the 1st of January, 1879.  This law I believe to be founded in error from beginning to end, and of course it will not accomplish the object desired, but, on the contrary, will defeat this object, and will, if not repealed, involve the country in great financial distress.  So believing, it will be my duty on this occasion to show this, if in my power, and also to establish my position:  that is, the way to resume is to give value to the paper money, which I contend would be effected by receiving it for duties on importations.

I am aware of the difficulty of the task which I here assume, and also of my poor abilities to grapple with so great and also so intricate a subject.

The question of finance cannot be treated as an isolated or abstract question in a discussion of this character.  Authors, or persons who write books or essays, may do so, and such publications may, and do generally, contain a very large amount of truth, and to read and to study them is not only very advantageous, but absolutely necessary.  But, for the legislator, the subject must be discussed in a practical way.  He must examine into the condition of the country, its foreign and domestic trade, its productive capacities for creating values, and indeed many other subjects should be considered.  As a discussion of this subject on this scale would lead me to too great length, I will necessarily be compelled to confine myself to the condition of the country as it is affected by its foreign commerce.

By the act of the 14th of January, 1875, we are required to resume specie payment on the 1st of January, 1879, upon all the paper money issued by the Government;  that is, the fractional currency and the legal-tender notes, amounting in the aggregate to 417,205,989.66.  To effect this the Secretary of the Treasury is authorized to sell bonds for coin, so as to have it ready on hand when resumption day comes.  I hold this to be impossible;  and to sustain this I will first quote from the report of the Secretary of the Treasury made to us at the beginning of this session.  He says:

It may perhaps be doubted whether the process of accumulating a large amount of gold by a given time could go on without meeting opposition from the financial powers of the world.

He further says:

It is safe to say that so large an amount of gold as would be required to carry out this purpose and direction of the act cannot suddenly be acquired.  It can be done only by gradual processes and by taking advantage of favorable conditions from time to time.

Taking this view of the Secretary to be correct, (and it undoubtedly is,) it is very clear that no sudden accumulation can be made.  It has to be gradual if at all.  And, if gradual, how can it be done ?  Can this be effected with the revenue derived through the custom-house and the internal revenue ?  It is not certainly worth while to discuss this, for we all know that the entire revenues are now absolutely required to pay the expenses of the Government.  The coin, whether gold or silver, annually furnished by the mines of Nevada, Utah, Colorado, and California, certainly cannot be used for this purpose, for the simple reason that this product belongs to individuals, and can be obtained by the Government only by way of purchase.  There is, indeed, no way in the world by which this amount of coin can be realized except by the selling of bonds.  Then the question comes up right square, can the bonds be sold, and this amount of coin realized ?  Where can this amount be sold ?  Surely not at home, for the coin is not here.  Can this be done abroad ? in the countries where bonds have heretofore been sold ?  That is, in France, Germany, or England.  Would the capitalists of either or all of these countries be willing to part with this amount of coin for an equal amount of our bonds ?  Would they agree to this gold depletion, which would be certain to involve them in a financial panic ?  I say, surely not.  I hold this is beyond any doubt an impossibility.  The relations of the commercial world are at this day of telegraph and rapid communication so intimate, particularly between this country and Europe, that any great financial convulsion in any one is immediately felt in all.  With no captious spirit but, on the contrary, with a sincere and honest purpose to find out if this could be done in the way proposed, I am compelled to say that I look upon this as utterly impracticable.  To do this gradually in the way proposed by the Secretary would involve us in as great trouble.  We need $400,000,000.  Could this amount be withdrawn from the circulation of the world and be gradually accumulated so as to be ready for the day of resumption ?

At this period of the world's history, and of such vast and extended commercial transactions, every dollar in coin is needed and has to be actively employed to fulfill its mission.  Although paper exists in large quantities both in France and England, yet in both of these countries this paper is based upon coin, ready and on hand in case it is required to maintain the regular value of the paper.  To gradually accumulate coin and lock it up in the vaults of our sub-Treasury would lead to the most serious and disastrous consequences.  In saying this I am sustained by the Secretary of the Treasury.  He says:

Such an amount can be procured with difficulty, and not without embarrassing effect upon the trade and commerce of our own and other countries.

The effect, indeed, would be so embarrassing as to render this an utter impossibility.  Resumption in the way I have spoken I look upon as impossible.  This view, I think, is sustained by the Secretary, and hence he proposes the issue of a bond at 4 per cent. with which to gradually redeem and cancel the legal-tender notes;  and this he proposes to do gradually.  This proposition, in the main, coincides with the view of the President as contained in his last annual message, and also with the bill offered by the Senator from Vermont.  [Mr. Morrill.]  In accordance with this, the legal-tenders are gradually to disappear from circulation, and the amount now outstanding to be represented by an equal amount of bonds, say $400,000,000.  Grant that this can be done, the question then necessarily presents itself, in what condition would it place the country ?  With all the legal-tender notes out of existence, and our bonded debt increased the large amount of $400 000,000, with no gold in the country more than we have now, there would be nothing left with which to carry on the business of the country but national-bank notes.  Grant again that the amount of this character of paper would increase as the demand for it required;  and grant further that this amount would be equal to the wants of trade.  I take it as an accepted fact that no one believes that the trade and commerce of this country can be done with a fair degree of prosperity with less than $400,000,000, whether this amount be coin or paper.  We have, it is said, $150,000,000 of coin in this country, (my own belief is that we have not by many millions this amount) but let that be as it may, I will concede that we have.  The question is again squarely presented, how could these national banks sustain themselves ?  Their notes would not be received in payment of duties, nor be legal tenders;  and yet resumption day having come and past, the banks would necessarily be required to redeem their notes in coin or be depreciated to a ruinous degree.  Under these circumstances would we be nearer specie payment than we are now ?  According to my view of this mode of bringing about specie resumption, to attempt it would not only be a failure, but would involve this country in distress and ruin, and specie payment would be postponed indefinitely.

We read that the Argonauts sent Jason in the ship Argo to the coast of Colchis to secure and bring back to his country the golden fleece.  Now, Mr. President, if we could send to Ophir or Golconda or Australia a vessel for a cargo of gold, and the gold procured and brought safely to New York and deposited in the sub-Treasury and with it the legal-tender notes all paid and canceled, yet resumption, in my opinion, would not be permanent;  and even this operation, splendid and dazzling as it appears to be, would really be disastrous.  I cannot believe that permanent resumption can be effected by any sudden effort of this character.  When it does come, it must be in the way of a gradual growth, the consequence and reflex of the trade and commerce of the country, and only when this trade and commerce are prosperous.  There is no healthy sudden growth in nature.  Everything around us, both in the vegetable and animal world, is of gradual growth, and when not gradual is unhealthy, and is like a boil on the human body.  With the exception of Minerva, who sprang full-grown and armed cap-a-pie from the broad brain of Jupiter, everything else has had a birth and gradual growth.

I will now say a few words about our foreign commerce, and our indebtedness abroad.  The balance of trade (not including coin) against us, as per report of the Secretary of the Treasury in 1875, was $19,562,725.  Bonded debt of the United States on November 1, 1875, $1,765,198,812;  the interest on these bonds annually, $99,339,101.  It will be admitted that fully one-half of these bonds are held abroad, the interest on which is $49, 669,550.  The railroads of this country owe a debt of $2,230,766,108, of which $2,000,000,000 are in bonds.  From the best information which can be had on this subject, one half of these bonds are held abroad, but so as to be within bounds I will say only 40 per cent., or $800,000,000, at 7 per cent. $56,000,000.  The different States were owing in November last $382,970,517, almost exclusively of State bonds.  It is believed that more than one-half of these are held abroad, but we will only assume one-half at 6 per cent. $11,489,115.  The debt of cities and towns is estimated at $550,000,000.  I will assume that only one-fourth of this is held abroad at an interest of 7 per cent. $9,625,000.  Making a total of $146,346,390.

To this large sum of $146,346,390 might well be added the debt created by the fact that about 70 per cent. of our imports are received in foreign vessels, the gross tonnage of which is 8,000,000;  but I will assume only one-half, or 4,000,000 tons, at $15 per ton, is $60,000,000.  It is also a fact that Europeans have large investments in this country in our railroads, banks, manufacturing companies, mining, &c.  The dividends from these amount to many millions a year.  To these might be added the millions expended by Americans traveling in Europe.  It is therefore reasonable to say that we have to provide fully $200,000,000 as the balance against us every year.  The product of our mines last year was 74,401,000.  After sending abroad all the product of these mines we will yet be owing to foreigners fully $130,000,000.  This large balance has heretofore been met with bonds, and in that way our foreign indebtedness has for years been all the time increasing many millions, and that every year.  This has been stopped and is one of the great reasons of the hard times throughout this country.  Under these circumstances, I say that resumption in the way provided by the present law is an impossibility, and if we did resume it could continue but a short time, as the necessity to pay this foreign debt would take out the gold, it being the only thing with which we can possibly pay.

Then are we never to resume ?  I would regret to answer this question in the affirmative, for I believe resumption is possible, provided we do not diminish the paper money, now a legal tender, but, on the contrary, appreciate its value, and this can be done by taking it for all debts due the Government, including duties on imports.  Coin will remain, as it should and must, the measure of value.  It certainly would not go out any faster to foreign countries if paper was received in payment of duties than it does now.  Indeed it can be demonstrated from official data that our coin is diminishing, having lost in the last year perhaps $25,000,000.  This I say can be proven, but I will not detain the Senate at this time to do so.  While we all admit that resumption is most desirable, and, I am satisfied, desired by a large portion of the country East and West, nevertheless it would not be wise to bring this about at the expense of the prosperity of the country;  for it is only through prosperity that permanent resumption can take place.  Nations in this respect do not differ from individuals.  The man in debt can never pay unless he makes money, and he cannot make money unless he be prosperous.

According to the report of the Secretary of the Treasury, there was a great decrease of exports last year in many of the leading articles, namely: Agricultural implements, $464,381;  hogs, $886,622;  bacon and hams, $4,771,295;  Indian corn, $313,014, corn-meal, $238,866; rye, $1,363,772;  wheat, $41,813,596.  I could enumerate many other articles, but it is sufficient to say that last year our exports of domestic goods decreased $70,149,321, while during the same period the exportation of specie and bullion was greater than that for the preceding year by $25,501,737.  The condition of our foreign trade is deplorable, and here lies the lion in the path of resumption.  This has to change before you can under the present law resume;  for if there is no change the coin will not remain here in sufficient quantities unless you appreciate your paper money in the way I have already stated;  but, if you do appreciate it, resumption is possible, as it will take but very little coin with good credit to sustain it.

I will here very briefly reply to a portion of the speech of the Senator from Ohio as to the balance of trade.  He states that it is one of the errors of the day to argue against a balance of trade, and quotes the economist, Mr. McCulloch, and furthermore states that the balance of trade is now and has been for many years against England.  Although the publications do apparently sustain such a statement, yet when the subject is properly analyzed, it will be found not to be correct.  The balance of trade is not now and has never been against England.  It would require but a very brief moment to decide the question.  The population of England is limited, and is less than 30,000,000.  It has great productive capacity in itself, and it carries a commerce with the world.

The publications which are made annually apparently sustain this idea;  but this is easily explained.  It is what is called the apparent balance of trade;  that is, you put down the exports at what they are worth at home and not what is realized abroad at an advance of from 25 to 50 per cent., while the value of the importations is calculated in the port of entry with all the charges added.  The question of imports and exports must also always be examined with reference to the coin or bullion, and it will be found that a large amount of the so-cal1ed imports consists of coin or bullion and not of raw materials or merchandise.

England to-day is the creditor nation of the world, and that fact is at the bottom and underlies all her systems of tariffs.  The fact that she is a creditor nation is the reason why she has changed her legal standard from gold and silver to gold alone, so as to become the recipient of gold.  It is not possible for any nation to maintain its coin at home so long as the balance of trade is against it.  For this balance has to be paid, and it can only be settled and liquidated with coin or bullion.  For the words "balance of trade" simply mean that amount which remains due after all the exports (besides coin) have been accounted for.

Now, sir, the balance of trade is against us;  and I hold this to be not a chimera, not a figment of the brain, but a great fact;  and, until we fully appreciate it, we are not in a position to examine very correctly the financial problem.  The time has come when we must open our eyes and see our condition and understand our commercial relations with the balance of the world.  We must begin to realize the fact that we are the only nation on earth which offers a market for all other nations.  We must export more and import less, and until we do it resumption is impossible.

Paper money is a necessity in modern times.  It is indispensable to commerce, but it must be paper whose value is regulated by coin, and be at all times convertible, and as long as it is convertible, conversion practically is not required, excepting to a limited extent, as the paper is in fact more convenient, excepting to pay foreign debts.  Therefore our policy should be to diminish as much as possible this foreign debt.  This can only be done in two ways:  export more or import less.  If you import less and your consumption remains the same, it will give employment to your own operatives, who will not, like the foreign, require coin for their pay, but will take paper, not from necessity, but as being truly better for them.  If your importations were decreased, the small amount of $50,000,000, and exports increased the same amount annually, we would be in a healthy condition.  Our exports cannot be much increased for very obvious reasons, excepting it be with South America.

I have often heard our condition compared to that of France, and I have also heard that, as France was able to resume, we should be able to do so likewise.  The comparison is not correct.  While the balance of trade is against us, and consequently our coin all the time going away from us, it is largely in favor of France, and coin consequently all the time flowing to her shores.  Hence, although the indemnity of $1,000,000,000 was paid by her to Prussia in coin, the derangement was only temporary;  and why ?  For the reason that soon after the payment of the coin it began to return to France and to leave Prussia.  The result was that with the increase of coin in France prosperity was daily restored, while as it left Prussia it produced a daily strain and depression, which has resulted in a state of unparalleled embarrassment and hard times in that country.  The period provided by law for resumption in France has not yet come, yet virtually resumption has taken place.

The Senator from Vermont the other day advanced two other arguments why my bill should not pass.  One was the effect it would have on the tariff, and the other that it was a violation of the faith of the nation, by which we gave a pledge to collect duties in coin to pay interest on our bonds, and also to keep up the sinking fund.  Having already spoken at some length, I am compelled to leave the argument in relation to the tariff unanswered.  And as to the other reason, I will say that while it is true that our contract is to pay coin, it is of no consequence whether we get that coin in one way or another.  The credit of this nation is high and deservedly so, and it is not necessary, as it might be with a small and weak nation, to pledge any particular fund;  it will be sufficient if we do the thing.  If we pay regularly and do it in coin, our credit will not suffer because we choose to change this law.

I have great objection to increase our already very large bonded debt, and this for several reasons.  First, bonds go abroad, and the consequence is our debt is held by foreigners, and the semi-annual interest which has to be sent across the ocean makes us poor now and will keep us poor as long as this debt remains unpaid.  Second, it pays no tax;  the consequence is that the richest men in this country, those having large sums invested in this kind of security, do not contribute anything toward supporting the Government, building in this way a privileged class;  and in proportion as this class is relieved from tax, the burden of the other is increased.  Neither France nor England could exist for a year in the condition of only reasonable prosperity if their debt was not all owned at home.  Neither of these nations are impoverished, as nations, by their large debt.  But Spain, Portugal, Italy, and Turkey are kept down by their debt, which is owned abroad.  It was one of the great efforts made by Cavour, one of the greatest statesmen of modern times, to keep the debt then being rapidly created for the new kingdom of Italy, at home and to be held by its own citizens;  and had he not died, I had that faith in his great abilities and mental resources, I think it very likely that he would have succeeded.  I therefore think that the interest on all new bonds should be made payable at home.  This, it is true, will not prevent them from being owned abroad, but it will be one step in the right direction.

Recognizing as I do, and have always done, coin as the only measure of value, I am desirous to see the day when it will be used for that purpose, and not, as it is now, as merchandise.  Paper money is a necessity of modern times, and grows out of the limitless amount of commercial transactions between citizens of the same State and between citizens of different States.  To carry on these immense transactions there is not coin enough in the world, however much it has increased within a few year.  The estimated amount at the time Columbus first landed on the shores of the New World was $170,000,000.  The exclusive use of coin is rendered still more difficult by the fact that while formerly silver and coin were used by all the leading commercial nations of the world, now in most of these countries gold alone is recognized.  It is but recently that silver was demonetized in Germany;  this being caused by the large amount of gold brought there by the payment of the French indemnity.  The German statesmen believed that this large amount of gold would remain there;  while the French statesmen, being more practical and I think better financiers, believed it would soon be returning to their country, as in fact it did.  The consequence is, their silver being demonetized and the gold having gone back to France, Germany is left with a very small amount of coin, and the country is thereby forced into a state of financial depression without a precedent, while France is very prosperous.

While the tendency among the principal nations is unmistakably to the adoption of gold as the measure and standard of value, yet I am impressed with the conviction that, as our mines produce annually a very large amount of silver, we might very wisely return to the double standard of gold and silver to a limited amount.  Gold is now the exclusive standard in Great Britain and Ireland, Australian colonies, and indeed most of the colonies of the British Empire;  as also is Portugal, Turkey, Egypt, and a few of the South American states --as Chile and Brazil.  As already stated, it has recently been established in the German Empire, as also in the Scandinavian kingdoms of Denmark, Sweden and Norway.  The double standard is still maintained in France, Italy, Belgium, Switzerland, Spain, Greece, Austria, Russia, all the numerous Asiatic people, and in some of the South American republics, as Peru, Ecuador, and New Granada.

Formerly in most of countries silver was the only coin, and gold circulated as a sort of commercial money.  Until 1853 the silver dollar of the United States Mint was a standard coin of unrestricted legal tender, concurrently with the gold coinage of eagles and their fractions.  The legal ratio of silver to gold was 16 to 1, while in France the ratio was 15½ to 1, which caused the exportation of silver from this country to that.  This was however remedied in 1853 by reducing the half dollar and smaller pieces to the condition of token coins, and the dollar was practically suppressed.  Our coinage act came into operation on the 1st of April, 1873, and constituted the gold one-dollar piece the sole unit of value, while it restricted the legal tender of the new silver trade-dollar and the half dollar and subdivisions to an amount not exceeding $5 in one payment.  Thus the double standard previously existing was finally abolished, and the United States, as usual, was influenced by Great Britain in making gold coin the only standard.  This suits England, but does not suit us.  I think with our large silver-producing capacity we should return to the double standard, at least in part, and this will constitute one of the means by which we will be enabled to resume specie payments.

I feel that I have detained the Senate already too long, and I will therefore now as briefly as possible give my views how to bring about resumption.  The corner-stone of my argument will be, to restore as soon as possible the prosperity of the country, holding that without prosperity in every branch of business, commercial, manufacturing, farming, domestic and foreign trade, to attempt to resume would not only not be successful, but would involve the country in great financial trouble.  We must adopt a system which the mind of the country will look upon as permanent, so as to justify capital and capitalists to seek investments without the constant danger standing before their eyes that a change in the financial policy by Congress might involve them in ruin.

I would, therefore, let it be understood that the present laws in relation to the legal-tender notes and national-bank notes would remain permanent and under no circumstances any contraction of the former, and an increase of the latter as the business wants of the country might call for.  Then I would receive in payment of duties on importations the legal-tender notes, although my bill provides for taking of both, my object being at the time I introduced it to elicit the views of others on the proposition.  It may be thought that if we take one kind of paper, and not the other, the one not taken will depreciate.  This I answer would not be the case, as the one not taken is by law convertible in the other.  And there being about the same quantity outstanding of both, this conversion would not be difficult to make if desired.  I would then take as security for the circulation of the national banks a bond of 4 or 4½ per cent., and in that way release the bonds now deposited, worth from sixty to eighty millions premium or that amount more than their face.  I would then increase the legal-tender character of silver to the sum of $1,000 in one payment, thereby giving to this metal, which we are now producing in our mines in such large quantities;  the largest capacity of usefulness, without at the same time driving out of the country the gold coin.  I would then require the national banks to set aside as a part of their reserve the gold interest received on these bonds, which would emancipate an equal amount of paper now held as a reserve.  One year after the passage of the act, I would require the banks to redeem in silver their notes presented in sums not exceeding $100, and after two years to redeem in gold in sums of like amount.

By doing away with the large demand for gold to pay duties, amounting annually to between one hundred and fifty and one hundred and sixty millions of dollars, and creating a demand for precisely of like amount for legal-tenders, the difference between the two would soon disappear;  that being so --that is, gold not worth a premium-- it would be an easy thing for the Government to procure the fifty millions needed to pay the home-due interest coupons, as the coupons due abroad are provided for by the purchase of exchange, as is always done, and not by the shipment of coin;  this exchange can be bought with legal-tenders.  There is now, or was on 1st of December, as per report of the Secretary, in the Treasury, over and above all liabilities for coin certificates or certificates of deposit, almost forty millions of dollars, within ten millions of enough to pay the home-due interest for one year to come.  But in the worse possible view, even if the Government had to buy the coin necessary to pay the interest, it would be better to do it than to keep all the paper now in circulation depreciated from 12 to 15 per cent. all the time.

I am aware of the argument which is always advanced by the party which is all the time professing the greatest regard for the maintenance of the public faith, but which, while always professing, does nothing to maintain it:  that to discontinue the collection of duties on imports in coin would be a violation of law and of our plighted faith.  Surely this is not correct.  Our contract, as I have already said, is to pay our interest in coin;  and it is of no consequence to the holders of our bonds how we get the money, provided we get it honestly.

The argument is advanced by the Senator from Vermont [Mr. Morrill] that, if you do away with any demand for coin, it will not remain here, but will naturally go to the countries where it is needed.  This, to my mind, is the only argument advanced in opposition to the taking of legal-tenders in payment of duties which is at all maintainable.  But will the facts sustain the argument, for I admit, if there was a country where coin was not in use at all, either as a measure of value or a circulating medium;  that none would be found in that country.  But in this case the Government would require not less than fifty millions to pay the home-due coupons.  And as it is a legal tender for all debts to any amount, there would always be some very considerable demand for it.  In addition to this, the Government will need annually 1 per cent. of the entire debt for the sinking fund.  The demand for gold coin would still be very large, fully as large as the supply, for this supply cannot be large with this large balance standing against us, and for which we have to remit every year.

This country at this time is terribly depressed;  every branch of business is in a state of paralysis;  and my honest conviction is that much of this paralysis is owing to the present resumption law.  However important I believe it to be for the prosperity of this country that we should at some day or other, no matter how distant, resume specie payment, nevertheless, between the two evils of making no provision looking to that end and the continuance of this law, I would unhesitatingly say, repeal the law immediately.  Without any law for providing for resumption we could get along, but if this law remains unrepealed I believe the country will be driven into universal and wide-spread bankruptcy.

I will now briefly recapitulate what I have said.  I hold it would be of the greatest importance to the prosperity of the country that a condition of status quo be maintained;  that is, that as we have at this day some $383,000,000 of legal tenders authorized by law, I would let that amount remain as permanent;  so that the capital of the country may know and rely on this as a fixed fact, as I believe the legal-tender notes of this country, with resumption at some future day, to be the best paper money in the world.

Without on this occasion advocating the system of national banks as being a good one, I accept the fact of their existence and that they have now in circulation some $350,000,000 of notes.  These notes are found in every part of the country, and permeate every channel of trade and commerce, and are paid and received by everybody and for every transaction that takes place between man and man in the United States.  In addition to this, these banks have now a discount-list amounting to a thousand million of dollars.  I hold, therefore, that to disturb this state of things, and compel them to contract either their issue or their discounts, would bring about a great catastrophe, and be ruinous to the debtor class.  Hence, without advocating the system of national banks, I accept the fact and legislate accordingly;  and when the democratic party gets into power, as I think it will very soon, we will, I hope, be able to inaugurate a better policy.  The national banks are unpopular in my section of the country.  In my own State, and throughout the West and South, they are far from being popular.  I believe, however, that a good deal of this unpopularity is owing to a misconception of the system, while the one which they desire to be substituted in lieu of it would prove perhaps a snare, and instead of being a benefit would be very destructive.  But I repeat, let this be as it may, I only look to the fact that these banks are now in existence;  and, as the country is in a state of great financial depression, I would not just now advocate any change.  The future will take care of this;  we are now dealing with the present.

The balance of trade being in favor of England, it became the policy of that country to make gold the exclusive standard, so that it should become the recipient of the gold of the world, and this to a great extent is the fact at this day.  Year by year the increase of gold coin in that country has been very great, and this has existed for many years;  but for the last twenty years this increase has been very rapid, being the result of this policy of making gold the exclusive standard.  But we, instead of being a creditor nation, are a debtor people.  We ought to be the creditor, but I am sorry to say we are not.  Instead of gold flowing to our shores, it is from day to day leaving us, to go not only to England, but to nearly every other portion of the globe;  and, although we produced last year some $70,000,000 of bullion from our mines, we now have $25,000,000 less coin than we had a year ago, while England has many millions more.

I have heard it said, not once but frequently, that the best thing to pay our foreign debt with was coin or bullion.  But this, in my opinion, is not correct.  It will pay a debt, it is true;  but if you can imagine a nation that would do nothing else but dig from the bowels of the earth the precious metals, it would soon become a poor people indeed.

We are producing in this country this year, as estimated by Dr. Linderman, some $40,000,000 in silver bullion.  He estimates the total production at $80,000,000, of which 40,800,000 will be silver.  Why not utilize this silver as a legal tender ?  I admit that if it is made a legal tender equal to gold, it being a metal not so valuable, it would immediately drive the gold from the country and the silver alone would remain here.  By limiting it to a thousand dollars in one payment, ninety-nine transactions out of every hundred will be transacted with it.  And all business between individuals not bankers, and between the mechanic and employer, between farmers and their merchants, and all wages, and indeed thousands of transactions which underlie society broad and deep, would be in this coin.  The large transactions between bankers and those between this and foreign nations would continue to be in gold, but the silver would remain here as the coin of the people and the laboring man as well as of the small dealer, and indeed of all those persons who do not deal in millions at a clip.

I therefore, Mr. President, look upon this as one of the great steps toward resumption.  It is by utilizing the silver which we produce in large amounts in this country and making it a legal tender as it was heretofore.  It remains a legal tender in France, and it is there successful as the coin of the people.  It is also a legal tender in many other parts of Europe.  France is one of the great commercial nations, and there they have retained the double standard;  and from my reading I believe if Germany could go back to the double standard it would do it most readily and cheerfully.  They believed that the large amount of French gold which had been brought there in a day would remain, and so believing they demonetized all the millions of silver that had been coined in all the little principalities and duchies of Germany for ages before and substituted gold exclusively, recoining the French coin so as to make it the coin of the empire.  But this imperial coin went back to its former home;  and, as I said a while ago, it has left that country in a condition of paralysis and prostration not surpassed by its sad condition during the Napoleonic wars.  It should be received as a fundamental fact, so as to guide the statesmen of this country, that the reverse of what suits England always suits us.  And as the exclusive gold standard undoubtedly suits her, the double standard suits us.

Mr. Morrill, of Vermont.  Will the Senator allow me to ask a single question ?  I understood the Senator to say that he would regard the policy to be pursued here as exactly the opposite of that to be pursued by Great Britain.  I would like to inquire of the Senator what he would say in regard to the doctrines of free trade, which are so much advocated by British statesmen ?

Mr. Bogy.  I understand the question, and also the motive of the Senator.  He desires to commit me on that subject, and I have no objection.  I look upon free trade as the legitimate child of England, begotten for the particular benefit of that country, but which through English intellect and English energy, with English money, has been impressed on the world, including our own country.

Mr. Morrill, of Vermont.  I am glad to say that I find the Senator at least sound on one point.

Mr. Bogy.  Yet what the Senator may consider sound for Vermont, may not be so understood in Missouri without explanation.  The question of a tariff at this day as a pure party question should not exist.  The wants of this country are so great, amounting to three hundred millions a year, that revenue is a matter of necessity;  and the only way to get this is through the custom-house.  Whether that revenue be obtained by a high protective tariff, or an ad valorem or revenue tariff, are points of discussion on which we might very well not agree, and upon which I presume I would disagree with my friend from Vermont.  Nevertheless this I will say, that the present tariff is unjust to the West.  Within my day I remember well when we did not raise food enough to supply the large emigration yearly coming into the valley of the Mississippi, and now we have a great surplus.  Hence these questions have all got to be re-examined and re-investigated;  and without being a protective-tariff man I am free to say that I am not a free-trade man.  When England saw the necessity for her to become the manufacturing nation for the world, it was evidently her policy to strike down and destroy all the manufactures of the other nations so that she might supply the demand.  And as she could not do without cheap food for her operatives, she advocated its importation free of duty.

In conclusion, I will say that I am in favor of resumption, but my idea of effecting this is not by sending a vessel abroad to get gold, or by selling of bonds, but by making the paper as valuable as coin, and thus rendering conversion unnecessary;  and unless we do this, in the condition we are now in, as regards our foreign trade, and in view of the fact that we are owing millions abroad of Federal bonds, State bonds, railroad bonds, city bonds, and county bonds, and as a large amount of coin cannot be kept here, resumption as proposed is utterly out of the question.  Gold will go, and must go, to pay these debts.  The only way then, as I have already said, is to appreciate the paper money.

The Senator from Ohio [Mr. Sherman]  spoke in eloquent terms of the duty of the Government to redeem its plighted faith as regards the bonds, and also its duty to pay these notes in coin.  Sir;  it is still more the duty of the Government not to depreciate its own issue while it compels you and me and all the people of the United States to take it nolens volens.  The Government itself discredits its own issue, and so long as it remains thus discredited it will necessarily be below par;  but receive it for all dues and the day will not be distant when no man will give up a twenty-dollar greenback for a twenty-dollar gold coin.  The argument that it will affect the tariff is not legitimate, as we are not adjusting a tariff but trying to make the paper in circulation equal to coin.  That we are breaking faith with the world, as is said by the opponents of this bill, is not founded in reason or truth, because the essence of our contract is to pay coin;  and if we shall continue to pay in coin we maintain our contract, finally protect the banks so that they will not be compelled to contract their issues or curtail their discounts and enlarge the legal-tender capacity of silver to the amount of $1,000 in one payment, and I believe we will have laid the foundation for resumption on a broad and healthy scale which will lead to the early prosperity of the country.