45th Congress, 2nd Session
Birchard Hayes, President by vote-fraud
Almon Wheeler, vice-president
John Sherman, Secretary of the Treasury

Remonetization and Free Coinage of Silver.

Mr. Bright [John Morgan Bright (January 20, 1817 -- October 2, 1911) Fayetteville Tennessee, D (1871-1881);  studied law, admitted to the bar].  Mr. Speaker, I propose to offer some remarks upon the subject of the remonetization and free coinage of the silver dollar and the legal tender thereof.  I do not propose to indulge in the platitudes and the clap-trap of financial theorists, because the question is too intensely practical to justify any one in attempting to allay or mislead the minds of the country with such philosophical disquisitions.  The question is so vitally practical that it pushes its fibers into every man's pocket and sends its roots into all the channels of industry.

I feel deeply interested in this measure.  I believe I can say without vanity that I was the first person to call the attention of this body and of the country, in January, 1875, to the remonetization of the silver dollar.  I followed it up in the Forty-fourth Congress and pressed it with zeal upon the attention of the democratic party and of this House.  I am here to-day to follow it up with equal zeal, and to press it still further upon the consideration of this body and of the country.

Mr. Speaker, it is very proper to know what is the gist of the question before the country.  The question is not whether we shall have a bimetallic currency;  that question has been settled by the Constitution of our country.  It is no longer an open question, being imbedded in the Constitution, the organic law of the country.  Why, sir, it is idle for us to consume the time of this body and that of the country in such a discussion.  Beyond question the right was reserved to the States to make gold and silver a legal tender.  In consideration of that reserved power to the States, the power was conferred by the States on the General Government to coin money and to regulate the value of foreign coins, clearly showing that the General Government had assumed the obligation of domestic coinage, and also guaranteed the inflow of foreign coins.  By these provisions the people supposed that they would be secure in all their money facilities.

In addition to that, Mr. Speaker, the important question arises out of these constitutional provisions, that the people as well as the States should have the power to make gold or silver a legal tender in the solution of the debts of the States and in solution of the debts of private individuals.  What was to be the extent of this tender ?  It was to be commensurate with the wants either of the States or of the individuals;  and if such right existed I should like to know why it is that the question is agitated now and the right arrogated under the Constitution of the United States to demonetize silver at the expense of the Constitution and the rights of the people ?

Sir, it is not an open question;  it is a question settled;  and whenever the Congress of the United States attempts to disturb that well-settled principle it overleaps the barriers of the Constitution and runs riot over the rights of the people and the States.  I am supported in this.  Here is the argument of Mr. Thomas H. Benton, who was considered the father of the hard-money doctrine and called "Old Bullion."  If gentlemen are interested enough in the question here is his argument, and I shall only read a paragraph from it.  I read from volume 1, page 444 of his Thirty Years' View:

Mr. Benton believed that  it was the intention and declared meaning of the constitution, that foreign coins should pass currently as money, and at their full value, within the United States;  that it was the duty of Congress to promote the circulation of these coins by giving them their full value;  that this was the design of the States in conferring upon Congress the exclusive power of regulating the value of these coins;  that all the laws of Congress for preventing the circulation of foreign coins, and underrating their value, were so many breaches of the constitution, and so many mischiefs inflicted upon the States;  and that it was the bounden duty of Congress to repeal all such laws;  and to restore foreign coins to the same free and favored circulation which they possessed when the federal constitution was adopted.

If the fact be so, Mr. Speaker, I come to the important question and announce that the demonetization of the silver dollar was a breach of the Constitution, that it was destructive of the rights of the States, that it was an invasion of the rights of the people, that it was striking down one of the elements of legal tender for the solution of contracts in the United States.  I, sir, stand here and propose to meet the question precisely as it is.  I say, sir, that the demonetization of the silver dollar was a fraud upon the people of the United States by depriving them of one of their constitutional coins;  that it was a fraud on the General and State Governments by lopping off one of their financial arms;  that it was a fraud on the legislation of the country by an undue advantage in cutting off legislative consideration;  that it was a fraud on the President of the United States, from whom the fraud was concealed by the artful phraseology of the law, as shown by his Cowdry letter;  that it was a fraud on the mining resources of the country by depreciating the value of our vast silver mines;  that it was a fraud on posterity by an attempt to double the value of the public debt which goes to them by inheritance.

I happened to be a member of Congress at the time of the passage of that bill.  Its passage is not susceptible of vindication, notwithstanding the puerile apologies in its behalf.  It was passed by fraud in the House, never having been printed in advance, being a substitute for the printed bill;  never having been read at the Clerks desk, the reading having been dispensed with by an impression that the bill made no material alteration in the coinage laws;  it was passed without discussion, debate being cut off by operation of the previous question.  It was passed to my certain information under such circumstances that the fraud escaped the attention of some of the most watchful as well as the ablest statesmen in Congress at the time.  It was passed near the closing days of the session, when in the bustle and precipitate rush of business it was most favorable for the concealment of fraud.  It was passed without previous discussion or agitation before the people and without having been voted upon by the people.  Ay, sir, it was a fraud that "smells to heaven."  It was a fraud that will stink in the nose of posterity and for which some persons must give account in the day of retribution, and God grant "that no guilty man may escape !"

I state furthermore, Mr. Speaker, that the attempt to hold the fraudulent advantage which has been secured by that legislation is indefensible, in my opinion, upon any principle of either law or morality.

But, sir, we will notice now an apology or two for the passage of this act.  We are told, sir, that under the law of 1834 gold was overvalued and forced silver out of the country.  Then, sir, if gold had been overvalued it ought to have been reduced in value by appropriate legislation which would bring it to the equation of silver so that both metals should harmonize as a currency in the country without resorting to the unphilosophic, unconstitutional mode of banishing the unoffending metal from the country.  The error of the former legislating ought to have been corrected.  To show the evils of that legislation I call the attention of the House to an extract from Mr. Seyd's valuable work on Metallic Currency in America:

The American silver coinage was always liable to exportation, for the simple reason that it contained an undue proportion of silver.  In all countries where the double valuation prevails, the relative proportion of value between gold and silver stands at 1 to 15½, and the market value of silver in countries where it is not a standard give on the average the same result.  In the United States alone the rate taken was 1 part of gold to 16 of silver, (15,988.37,) the proportion resulting from the Eagle at 258 and the silver dollar at 412½ grains.  The dollar, therefore, contained 3.29 per cent. more silver than it ought to have contained according to its nominal value.  No wonder, then, that the dollar was rapidly exported and that no one found inducement to bring silver to the mints for coinage.  And let it be understood that the supply of gold had little or nothing to do with this.  Long before the discovery of gold in California, ever since 1837, has the effect of this premium on the United States silver dollar made itself manifest.  In exchange for it the foreigner need not have supplied gold;  other commodities served the purpose of realizing elsewhere the large profit which the United States gave to the exporter of her silver coin.  Much that has been doubtful, peculiar, and unsatisfactory in the history of the United States currency between 1837 and 1850 owes its origin to this astounding mistake on the part of the Government, which must, as every one can see, have given rise to general disorganization of the currency and to disappointment in the capacity of the country to retain metallic currency.  I go farther and say that it was the cause why America was obliged to make so large a use of paper money, with all its evils of unequal interests, extravagant habits and expenditure. ---Seyd on Metallic Currency, pages 52, 53.

In addition to that, Mr. Speaker, they tell us that the old dollar was dead.  Dead !  Why, Mr. Speaker, if dead, it needed no enactment.  But if it was not for the time needed, the dormant right to it remained in the Constitution, as many dormant powers remain there to be called up and exercised as occasion may demand;  therefore the argument is without reason, and I shall proceed to notice another.  If it was dead then I suppose they enacted that it should be buried, and the funeral ceremonies were performed here under the act of 1873, which was the winding-sheet of the old silver dollar --the old dollar of the fathers, with all its historic memories.  Sir, they bore it away as in the case of a burial of old under circumstances which are familiar to every one:

Not a drum was heard, not a funeral note, As his corpse to the rampart we hurried.
We carved not a line, and we raised not a stone, But left him alone with his glory.

But, Mr. Speaker, it ought to have been sufficient for those who were apologizing for the demonetization of the old silver dollar to have told the truth about the old veteran that had stood and battled with all the financial storms of the Government from 1792 down to 1873.  Investigation shows it was not dead, but that it was alive.  From the report of the Director of the Mint in 1876, pages 33 and 34, it appears --and I have the table here-- that for the last two years before its demonetization there was more of the old silver dollar coined at the American Mint than in any five years before that time.  Here is the evidence:

The following statement shows the silver dollars coined in the United States from 1792 till 1873;  and that in 1872 and 1873 more silver dollars were coined at the United States Mint than in any five years from the commencement of the Government.  It will be seen, then, that these reasons assigned for the demonetization of the silver dollar are pure fabrications.

The true reason, Mr. Speaker, was to be found in another fact.  Germany was attempting the demonetization of her silver.  She thought she was becoming affluent in gold by reason of the Franco-German indemnity, and commenced the project;  and it was supposed that the apprehended engorgement of America with silver might result in the depreciation of the American bonds.  Hence we find the movement commences abroad and reaches to this country, and we have the foreign bondholder uniting with the American bondholder and beseeching the Congress of the United States in a clandestine manner;  and the project for the solution of the difficulty was in the demonetization of the silver dollar, because the bonds were payable in that coin.  That would make gold higher and would make silver cheaper;  it would make our bonds, if they succeeded in the demonetization of the silver dollar, 1.20 to 1 of the face value of the bond.  The American statesman sees the bondholder sitting "like a pale Mammon" amid his boxes of gold and bonds;  he listens to his siren song of national honor and his heart melts and the boon is granted, and the old silver dollar is buried out of sight for the time, and the people, the hard-handed people, upon whose broad backs all the industries of this country rest for their prosperity, get only the copper and the nickel and the subsidiary silver coins 7 per cent. light !  Unparalleled American smartness !

Now, Mr. Speaker, I propose to offer some reasons why the silver dollar should be recoined.  In the first place, the obligations of the Constitution require that it should be remonetized.

Second.  It is needed for general circulation to pay the debts, the taxes, and the judgments which may be rendered against private individuals.  California, we are told, can consume and utilize $100,000,000 herself.

Third.  It is needed by the States for revenues to pay their bonds and other debts.  The General Government has taxed State banks out of existence, expelled foreign coins, and deprived the States of facilities which they had from the foundation of the Government in the discharge of their obligations.  Hence it is right that we see that this currency is restored to them.

Fourth.  It is needed by the banks for reserves, for deposits, and for a ballast against inflation, and for specie resumption if they ever reach that point.

Fifth.  It is needed for foreign trade with Mexico, South America, Canada, China, and all the other specie-using nations of the globe, forming two-thirds of the population of the globe.

Sixth.  It is needed to utilize our vast silver mines, to employ our mining labor, and to turn the silver streams into the channels of trade.  It is needed for the encouragement of our languishing industries and the employment of our starving laborers.

Seventh.  It is needed for national revenues, and to pay the national debt according to contract.

The act of 1869 provides "for the payment in coin or its equivalent" of the notes, "and of all the interest-bearing obligations of the United States, except in cases where the law authorizing the issue of any such obligations has expressly provided that the same may be paid in lawful money or other currency than gold and silver."

Here the law defines that the word "coin" as used means "gold and silver."

The act of 1870 provides that the bonds issued under it shall be payable in coin, at its (then) standard value.  Both gold and silver had their legal standard value at the time, and the coin mentioned could have referred only to the legal standard coins of the United States, gold and silver.

Then if it be lawful to pay in silver, there is no reason why it should not be done, though it were as plenty "as the stones in the street."  And it would be unjust to a distressed people to throw away the poor advantage of paying the public debt in silver as well as gold.  Mr. Seyd, in his excellent treatise on Metallic Currency in the United States, page 55, says:

I am convinced that if America again introduced the free coinage of silver she would be enabled to retain many millions per annum, would be able to resume specie payments, and pay off her national debt much sooner.

It is needed, in the eighth place, for the resumption of specie payments, as General Grant said, to aid in paving the way to it, and he was right for once.  He was in favor of hoarding three or four hundred millions of dollars by the people, and the people must always have coin to sustain the solid specie payments of the country as I will demonstrate in another connection.

Ninth.  I propose to show that resumption, in its proper sense, is impossible in gold in the United States.  Mr. Speaker, what are the requisites of specie resumption for a nation ?  I apprehend there is much disagreement upon this point;  I apprehend that there is much misunderstanding upon this subject.  Now, sir, what is the rule ? but before I enter upon the rule, I will make a statement with reference to the amount of outstanding currency and obligations that have to be met in order to put the country on what might be called a solid specie basis.

The attention of the House is respectfully invited to a few figures:

National-bank notes in circulation November 1, 1877, as per report Comptroller Currency ..... $315,881,990
United States notes, same date ...................... 354,490,892
Deposits in national banks, same date .............. 691,900,000
Deposits in State and saving-banks .......... 1,377,520,000
Total .............. 2,719,792,882.

These large figures confront us in our road to resumption.  Now, Mr. Speaker, the point to which I wish to call the attention of this body particularly is this, that the rule of resumption, as has been supposed by many and as has been adopted by the United States, should be considered as 3 to 1;  but, according to Amasa Walker, the rule in fact has been an average of about 4 to 1 and even greater in the United States.  But this rule of 3 to 1 has been supposed only to apply to the circulation of the banks of the United States.  It is borrowed or pretended to be borrowed from the English rule upon the subject.  I propose to call the attention of the House to the English rule so that America as she has been indulging her imitative faculty will be disposed to give due consideration to the English rule which has been made imperative by statute as to specie payments.  I call the attention of the House to the work of Mr. Benton, volume 2, pages 128, 129, who explains and quotes the English rule.  Here is the rule:

[From Benton's Thirty Years' View]

This is a point of great moment --one on which the public mind has not been sufficiently awakened in this country, though well understood and duly valued in England.  The charters of banks in the United States are usually drawn on this principle, that a certain proportion of the capital, and sometimes the whole of if, shall be paid up in gold or Silver before the charter shall take effect.  This is the usual provision, without any obligation on the bank to retain any part of this specie after it gets into operation;  and this provision has too often proved to be illusory and deceptive.  In many cases the banks have borrowed the requisite amount for a day and then returned it;  in many other cases the proportion of specie, though paid up in good faith, is immediately lent out or parted with.  The result to the public is about the same in both cases;  the bank has little or no specie and its place is supplied by the notes of other banks.  The great vice of the banking system of tbe United States is in banking upon paper, upon the paper of each other, and treating this paper as cash.  This may be safe among the banks themselves;  it may enable them to settle with one another and to liquidate reciprocal balances;  but to the public it is nothing.  In the event of a run upon a bank or a general run upon all banks, it is specie and not paper that is wanted.  It is specie and not paper which the public want and must have.

The true proportion is one-third, and this to apply to all the circulation and deposits, except those which are special.  This proportion has been fixed for a hundred years at the Bank of England;  and just so often as that bank has fallen below this proportion, mischief has occurred.  This is the sworn opinion of the present governor of the Bank of England and of the directors of that institution.  Before Lord Althorpe's committee in 1812, Mr. Horsley Palmer, the governor of the bank, testified in these words:

"The average proportion, as already observed, of coin and bullion, which the bank thinks it prudent to keep on hand, is at the rate of a third of the total amount of all her liabilities, including deposits as well as issues."

Mr. George Ward Norman, a director of the bank, states the same thing in a different form of words.  He says:

"For a full state of the circulation and the deposits, say twenty-one millions of notes and six millions of deposits, making in the whole twenty-seven millions of liabilities, the proper sum in coin and bullion for the bank to retain is nine millions.  Thus, the average proportion of one-third between the specie on hand and the circulation and deposits must be considered as an established principle at that bank, which is quite the largest and among the oldest --probably the very oldest bank of circulation in the world."

The Bank of England is not merely required to keep on hand, in bullion, the one-third of its immediate liabilities;  it is bound also to let the country see that it has or has not that proportion on hand.  By an act of the third year of William IV, it is required to make quarterly publications of the average of the weekly liabilities of the bank, that the public may see whenever it descends below the point of safety.  Here is the last of these publications, which is a full exemplification of the rule and the policy which now govern that bank:

"Quarterly average of the weekly liabilities and assets of the Bank of England from the 12th December, 1837, to the 6th of March, 1838, both inclusive, published pursuant to the act 3 William IV, cap. 98."

Liabilities:
Circulation .............. £18,600,000
Deposits .................. 11,535,000
30,135,000
Assets:
Securities .................... 22,792,900
Bullion ................ 10,015,000
32,807,900

The proportion in England is one-third.  The bank relies upon its debts and other resources for the other two-thirds in the event of a run upon it.

So you find, Mr. Speaker, that the role adopted by the Bank of England, or rather under the act of Parliament, was that one-third of the liability in coin and bullion should always be in the bank, and that when a run was made on the bank by the time it had exhausted that one-third it could, from its loans, collect the two-thirds remainder in coin from the country, so that it might be prepared to pay off all its liabilities to every individual who had a claim against the bank.  That is the rule, and I propose now to apply that rule to the currency of the United States and the currency and deposits of the banks, to see whether we can compass the much-coveted object of specie resumption, as it is called.

Now, sir, what are the facts as to the amount necessary to start the resumption machinery ?  Let us see.  Here are the outstanding United States Treasury notes in full, amounting to $354,490,892;  one-third of the circulation of the national banks, $101,960,663;  one-third of the deposits of the national banks, $230,633,000;  one-third of the State and savings-banks deposits, $455,560,666;  to pay the annual interest and sinking fund, $130,000,000;  making $1,272,645,554, that is, to pay the outstanding Treasury notes of the United States in full and to pay one-third of the liabilities of banks, national and State.  But it does not stop there, Mr. Speaker;  but suppose by the English rule that the people hold two-thirds of the bank circulation and deposits in gold which may be collected from loans while paying out one-third while a run is made on these institutions.  Then the people in the United States, to support the Government and banks, ought to have in circulation two-thirds of the bank circulation, deposits, and annual interest on the bonds and sinking fund in gold, which would make in the hands of the people $1,656,877,992.  Add to that $1,272,645,554, which is supposed to be held by the banks, and you have the grand total of $2,929,523,546 required to put the United States upon the specie basis of the English government.

France has $1,200,000,000 of metal in her banks and in the country, and $520,000,000 of currency besides her deposits.  Yet she cannot venture to become specie-paying without detriment to herself.  Instead of resumption on the 1st of January,1878, as contemplated, she has instead recently issued $50,000,000 more paper currency.  Germany has $300,000,000 of gold, and she is making an effort to get to a gold specie basis.  But the coveted goal is far before her.

Let us apply the facts and see how far the United States is from this specie resumption, as it is called.  According to the report of the Director of the Mint, we have in coin and bullion in this country $185,000,000 of gold.  Understand that the proposition is to resume.  Of this amount of gold the Government holds $32,595,000 and the banks hold $5,000,000;  so that the Government and the banks are far behind.

Now let us take this $185,000,000 and subtract it from $2,929,000,000, and we still have $2,744,000,000 to be provided in gold to enable us to reach the English specie basis.  Whence is this to come ?  The Director of the Mint, in his report for 1874, page 20, uses the following language.  Will gentlemen now give me their attention ?  I am using the argument and testimony of an adversary.  Let us see what he says upon the subject of gold supply in the world and in the United States.  Here is his language:

[From Report of the Director of the Mint, June 30, 1874, page 20.]

The opinion has often been advanced that the large amount of gold yielded by the mines of the United States and Australia has produced an engorgement in the markets of the world.  That such was the effect during the first five years after these mines were opened and during which time the maximum production was reached, and that a general advance in prices followed, may be safely admitted;  but the undeniable fact that leading countries, like the United States, Russia, Austria, France and Italy, are compelled to use inconvertible paper-money, not from choice, but because they have not sufficient coin for a specie basis, would appear to show conclusively that there is not too much gold, and especially as no one country appears to possess a redundancy.  This fact, and particularly when it is considered that the annual production of gold is gradually decreasing, should dispel any fears which may be entertained of its future decline in value relatively to land, labor, and commodities.

That is the testimony of a witness who is a gold bullionist, a man who is in favor of the demonetization of the silver dollar.  We find, therefore, that there is no engorgement of gold, no redundancy of gold in Europe or America, and gold is on the decrease.  The United States, Russia, Austria, France, and Italy are compelled to use inconvertible money for the want of gold.  Then, what is the conclusion of the argument ?

Where will you go in quest of your gold ?  Will you go to Europe ?  The countries there are in a scramble for it;  it is not there.  Will you go to your own mines ?  From them the flow of gold, like the fabled stream of Pactolus, flows only to bear the golden treasure to other shores, leaving but a little sediment in your own country as it flows through.

An effort was made to introduce the gold standard into India;  but Mr. Bagehot, an English writer and a gold bullionist, argued that it was impolitic and impossible.

Our Government has found it impossible to introduce foreign gold into our country through the powerful medium of our national bonds with their large rate of interest.  If anything can attract the gold from Europe it is the American bond.  It is not to be introduced through the skill and management of the syndicate.  But what is this syndicate ?  It is part English and part American --might be styled a compound of the British lion and the American eagle.  Its prototype was a fabulous monster of the ancient Greeks, called a griffin, which had the head and wings of an eagle and the body of a lion, and was supposed to "watch over mines of gold."  Its image was sometimes stamped on ancient coins.  At present it is not active, but it is watching the issue of the silver bill.  In plain English it is an association formed for the purpose of practicing a feat in financial hocus-pocus, by which they extract coin-interest-bearing bonds of the United States, under the acts of 1870 and 1875, in exchange for non-interest-bearing Treasury notes, without increasing the gold coin of the country a single dollar.  But how can that be done ?  The Secretary of the Treasury gives notice that on a certain day he will sell five millions of bonds for gold for the purpose of redeeming legal-tender notes under the act of 1875.

We will say that there are fifty banks and gold brokers, English and American, that have five millions of gold on deposit in the vaults of the banks.  They have also hoarded five millions of Treasury notes.  On the day appointed they appear before the Secretary of the Treasury and they propose to buy five millions of bonds if he will take checks for that amount of gold on deposit in the vaults of the banks.  The Secretary accepts the proposition, knowing that the gold is never moved in large transactions.  The bonds are exchanged for the gold checks;  but just here the syndicate presents $5,000,000 of legal-tenders for redemption, and the Secretary exchanges the gold checks for the legal tenders.  The result of the transaction is the syndicate has the interest-bearing bonds and the gold unmoved in the vaults of the banks;  the Secretary has the legal-tenders, which are carried to the destruction account and burned up;  the people have lost their money from circulation and have gained a new burden in the interest on the bonds.

The syndicate only repeats the process at as many calls as the Secretary may choose to make.  The gold remains in the banks, the syndicate holds the interest-bearing bonds, and the legal-tenders are absorbed, and so the process is continued until the whole legal-tenders of the United States are "wiped out," and $5,000,000 have done the whole work.

Well, Mr. Speaker, will the House permit me to tell a little anecdote in illustration of this matter, which is said to have occurred to a western forester, a man of celebrity in his day, the well-known Colonel Davy Crockett.  Silence gives consent, and I will tell it.  He went on one occasion, with a number of his jolly friends, to a grocery.  He had a single coon-skin, which was currency in that day, with which he wished to buy a quart of whisky.  He laid his coon-skin on the counter and got his whisky.  He asked what he should do with it, and was told to throw it into the loft, which he did.  After they drank their whisky, the colonel went around and twisted the coonskin out of the loft with his ramrod, and, bringing it back to the counter, bought another quart of whisky.  The coon-skin was again thrown into the loft and again the colonel twisted it out and again he brought it back and bought another quart of whisky.  So he repeated the process and they drank whisky the whole day upon a single coon-skin, just as the syndicate are consuming the legal-tenders of the United States with the sum of $5,000,000 of gold which remains in the vaults of the banks.  [Laughter.]  But, Mr. Speaker, I have not time to dwell longer on that subject to-day.

Again, the gold cannot be introduced through our commerce.  There is a reported gold balance against us of $15,000,000, and to this should be added the carrying trade of the United States, which paid to foreign vessels, according to Mr. Grosvenor, $60,000,000, and, according to the same authority, for smuggling, $50,000,000, making the true balance of currency against the United States $125,000,000.

Now, Mr. Speaker, while all Europe is in a scramble for gold, I inquire, whence is it to come, to put this country upon a specie basis ?  All the orifices are open for outflow from the United States, through interest upon our bonds held abroad, through interest upon State bonds, and through the private indebtedness of our people.  And, sir, Mr. McCulloch, in 1866, thought be could reach it in 1869.  He pursued the golden phantom.  So with Mr. Richardson, so with Mr. Boutwell, and so with Mr. Bristow.  All pursued the phantom, and failed in the effort.

Now, to change the figure, the present Secretary of the Treasury takes it up, and is going to force the camel through the eye of the needle, though he may crush every bone in the body-politic.  No, Mr. Speaker, we will need all our mountains, both of gold and silver, to pay the interest upon our bonded debt, to pay the debt itself, and to furnish a coin-currency for the people.  Therefore resumption is impossible in gold.  It will take ages to recover us from the Serbonian bog into which we have marched and to reach the solid-road through a specie basis for our country.  The little we collect of gold as it percolates from our foreign commerce, the little sediment left from the outflow of our mines, will never furnish us with that metal while the continent stands, unless there is some other resource.

Mr. Speaker, our country is in distress and staggering under the burden of its public debt.  If we look for relief by payment in gold, the debt will cling to us like the curse to the wandering Jew.  While Germany and the Scandinavian states are demonetizing silver and our silver mines are unmeasured in their resources, now is our opportunity.  Now is the time to take the tide at the flood which "leads on to fortune."  If the occasion is lost, I here leave it on record for the eye of posterity that our public debt will not be paid in gold in the next half century.

We are told, Mr. Speaker, that we ought not to remonetize the silver dollar, because it is too fluctuating in value.  That argument has often been made before;  but is it truthful ?  I maintain that it is not, and I am supported in my judgment by the facts of history.  I have an extract from Mr. Benton's speech, who gave the history of currency in 1837 when it was under discussion.  They arrayed all the facts from the time of the Roman emperors down to the present time, and it resolved itself into the practical question, as he states in the extract --which I will not read but will furnish-- that the silver dollar maintained its relation to gold for over three hundred years in silver countries, in Mexico, Spain, and South America.  [From Benton's Thirty Years' View]

Revival of the Gold Currency

A measure of relief was now at hand before which the machinery of distress was to balk and cease its long and cruel labors;  it was the passage of the bill for equalizing the value of gold and silver and legalizing the tender of foreign coins of both metals. The bills were brought foreward in the House by Mr. Campbell P. White of New-York, and passed after an animated contest, in which the chief question was as to the true relative value of the two metals, varied by some into a preference for national bank paper.  Fifteen and five-eighths to one was the ratio of nearly all who seemed best calculated, from their pursuits, to understand the subject.  The thick array of speakers was on that side;  and the eighteen banks of the city of New-York, with Mr. Gallatin at their head, favored that proportion.  The difficulty of adjusting this value so that neither metal should expel the other had been the stumbling block for a great many years;  and now this difficulty seemed to be as formidable as ever.  Refined calculations were gone into, scientific light was sought, history was rummaged back to the times of the Roman empire, and there seemed to be no way of getting to a concord of opinion either from the lights of science, the voice of history, or the result of calculations.  The author of this View had (in his speeches on the subject) taken up the question in a practical point of view, regardless of history, and calculations, and the opinions of bank officers, and, looking to the actual and equal circulation of the two metals in different countries, he saw that this equality and actuality of circulation had existed for above three hundred years in the Spanish dominions of Mexico and South America, where the proportion was 16 to 1.  Taking his stand upon this single fact as the practical test which solved the question, all the real friends of the gold currency soon rallied to it. .....

The good effects of the bill were immediately seen.  Gold began to flow into the country through all the channels of commerce;  old chests gave up their hoards;  the mint was busy, and in a few months, and as if by magic, a currency banished from the country for thirty years overspread the land and gave joy and confidence to all the pursuits of industry.  But this joy was not universal.  A large interest connected with the Bank of the United States, and its subsidiary and subaltern institutions, and the whole paper system, vehemently opposed it;  and spared neither pains nor expense to check its circulation, and to bring odium upon its supporters.  People were alarmed with counterfeits.  Gilt counters were exhibited in the markets, to alarm the ignorant.  The coin itself was burlesqued, in mock imitations of brass or copper, with grotesque figures, and ludicrous inscriptions --the "whole hog" and the "better currency," being the favorite devices.  Many newspapers expended their daily wit in its stale depreciation.  The most exalted of the paper-money party, would recoil a step when it was offered to them, and beg for paper.  The name of "Gold humbug" was fastened upon the person supposed to have been chiefly instrumental in bringing the derided coin into existence;  and he, not to be abashed, made its eulogy a standing theme --vaunting its excellence, boasting its coming abundance, to spread over the land, flow up the Mississippi, shine through the interstices of the long silken purse, and to be locked up safely in the farmer's trusty oaken chest.  For a year there was a real war of the paper against gold.  But there was something that was an overmatch for the arts, or power, of the paper system in this particular, and which needed no persuasions to guide it when it had its choice:  it was the instinctive feeling of the masses ! which told them that money which would jingle in the pocket was the right money for them --that hard money was the right money for hard hands-- that gold was the true currency for every man that had any thing true to give for it, either in labor or property;  and upon these instinctive feelings gold became the avidious demand of the vast operative and producing classes.

But I do not stop there, Mr. Speaker.  We have the testimony furnished by the Director of the Mint from his own tables and in a statement here compiled in decades, showing that the general average for the one hundred and fourteen years from 1760 to 1873 is 15.18;  being 15 and nearly one-fifth instead of the present standard which we have adopted, the ratio of 1 to 16.  During the above period the ratio of the highest monthly average in the United States was 1 to 15, in July, 1859, at which rate a silver dollar of 412½ grains was worth 1.05 in gold

During this period there were but three years in which the ratio fell below 1 to 16;  in 1809, when it was 16.25;  in 1810, 16.15 and in 1815, at the close of the British war, when it was 16.30.  The ratio for the lowest monthly average in July, 1876, after it was demonetized, was 1 to 19.19, at which rate the dollar was worth 83 cents.

Thus, Mr. Speaker, you find from Mr. Benton and the testimony of the Director of the Mint that we have shown by unquestioned authority that silver has maintained its uniform relation to gold for four hundred years;  and having maintained this relation, the charge is untrue that it is too variable in its value.  Then, sir, if that argument be answered, why the main argument is taken away from them.  Besides all that, Mr. Speaker, its value did not fall until it was demonetized.  It did not cease to be coin until it was demonetized and until the prohibition was made by the Government itself.  It was a direct assassination by national legislation, instigated by the conspiracy of European bondholders.  So, then, this was only an apparent depreciation of it, superinduced by the means I have indicated.

Another objection is that if remonetized it should be made of equal value to gold.  Why, Mr. Speaker, I answer that the parties who aided in the demonetization are estopped from interposing an argument of that description.  They will not be permitted to take advantage of their own wrong.  But the true answer is:  Whenever it is remonetized, when the work which they undid is restored, it will be restored to the equation with gold itself.  Ay, sir, the value was fixed in 1792 at 371¼ grains of fine silver, and it was made only 3.5 grains light in the alloy in 1837.  It has not only held its own, but was worth 5 per cent. in 1860.  Even the ¼ per cent. of fine silver that was added to it in 1792 withstood all the financial vicissitudes and storms down to 1873.

It was too fine to stay in the country.  Our average was about 16 to 1.  In other countries the average was 15.5 to 1, ours being 3.5 per cent. more according to Mr. Seyd, to whose statement of this point I call the attention of the House as giving the true reason why American silver in part had left the country.

[Here the hammer fell.]

The Speaker pro tempore.  The gentleman's hour has expired.

Mr. Ewing.  I ask unanimous consent that the time of the gentleman be extended.

Mr. Deering.  For how long ?

Mr. Bright.  I would rather not be limited, because I would thereby be forced out of the channel in which I am following out my line of thought.

Mr. Deering.  I object.

Mr. Ewing.  I ask unanimous consent that the time of the gentleman from Tennessee be extended for half an hour.

There was no objection.

Mr. Bright.  I will not trouble the House with reading the opinion of Mr. Seyd in relation to the high value of silver and the occasion for its leaving the country in part, but will embody it in my remarks:

The plea that no silver bullion was brought to the United States, and that an actual stoppage in the coining of silver dollars took place, advanced as a reason to prove the indisposition of the Americans to use silver money, is quite false, for who indeed, I repeat, would bring silver to the United States mints when he could obtain 3 per cent. more for it elsewhere ?  I maintain that these incongruities in the American silver currency have done much harm to the country.  Besides the silver produced in the States, or which came from abroad and could not maintain itself, the vast treasures of Mexico have passed by instead of flowing in part into the United States for the development of her interior commerce, and for the formation of a solid basis to her international trade.  And now the United States are in this remarkable position, that the richest silver deposits are opened in their own territories, producing vast sums of solid precious metal, which instead of serving herself as money all go abroad to swell the currencies of other nations, while the great Republic herself labors painfully under the weight of a depreciated paper currency.

But, Mr. Speaker, our contract was for standard value of 1870.  Hence we were not bound to keep it at an equation with gold so that we kept it within the limits of the contract.

"But," it will be said, "it does not matter much, for if we send away all this silver we get something else in return for it, either gold or goods;  we pay with it, and it thus turns the exchange in our favor."  I deny the truth of the mathematical meaning of this saying.  Supposing the silver was not produced, would not the United States import less, or rather be compelled to import less luxuries ?  And so, if by the operation of the present laws silver were not driven away from the country but were to some extent permitted or encouraged to remain in it, this result would follow:  the benefit of its present production would take two directions;  one portion of it would go abroad, another portion would remain in the country for the encouragement and development of the home industry.  The direct unfavorable law of tenders, amounting practically to a forbidding of the proper use of silver, creates an inequality whose influence is irresistibly strong, destructive of neutrality, and therefore most injurious.

The third objection is, we ought not to fix a value to operate twenty years hence.  Why, Mr. Speaker, our obligation runs with the contract.  As we maintain, these bonds were payable in silver and some of them were running forty years hence, and the holders have a right to claim the standard value under the act of 1870.  And they may run for centuries yet to come.  Hence to restore the silver dollar is only providing one of the means for the deferred payment of the bonds.

The fourth objection is, that we ought not to add to our depreciated currency.  This was depreciated by law.  It was not the depreciation of commercial considerations alone.  We propose to appreciate it by law and restore it to its original position.  By making it a full legal tender it will spring at once to a par with gold.

The fifth objection is, that England, Germany, and the Scandinavian states have adopted gold as a sole legal tender, and we ought to follow their example.  I answer they have no right to impose an obligation upon us to change our Constitution or to change our contracts, for we change our contracts when we contract our currency and destroy our silver.  And whenever we adopt the example which has been inaugurated we cripple all our industries that they may reap the profit.  I suppose they will want us to have a king next, in imitation of their example.

The legal-tender coins of the United States are fixed by the Constitution.  In Europe they are fixed by statutory law or the will of the sovereign.  It is impossible, sir, to abolish silver.  Three-fourths of the nations of the Earth use it --two-thirds of the population of the globe.  If it could be done, it would increase the value of gold more than two-fold and the taxes and debts in proportion;  and after it had done its perfect work of contraction, desolation, and destruction of industries, and inaugurated an unparalleled reign of poverty and distress, it would be succeeded by a deluge of paper currency throughout the world to supply the deficiency occasioned by the destruction of one of the great coins of the Earth.  So says Mr. Bagehot, the English writer on the subject, and who shows conclusively that there is not gold enough in the world for a currency.

Again, we need the money at home.  We do not need money to circulate in foreign countries.  We deal in exchange with foreign countries.  Our coins when they go abroad go to the mints of the European nations.  When we regulate the operations of our mint, let it be done to the advantage and interest of our own people.  It is not only wise but profitable to take care of ourselves.  Every nation ought to have and maintain a home currency with its stability secured by constitutional law.

The sixth objection is that it should be only made a partial legal tender limited in the collection of debts.  I answer this would demonetize it in part, would make it a subject of speculation, and would cripple the United States and the State governments and the people in the collection of taxes and in the payment of debts and in all the commercial uses of money.

Mr. Speaker, I will now call the attention of the House to another matter of grave consideration --the subject of the free coinage of the silver dollar.  The operations of the Mint at present are with oppressive discriminations against the people.  I maintain, first, that there ought to be free coinage of the silver dollar, because such was the policy of the Government from 1792 to 1853, a period of about sixty years.  From 1853 to 1873 there was a charge of ½ per cent;  from 1873 to 1875 the charge for gold was 0.2 per cent.  The act of 1875 made the coinage of gold free of charge.  In the second place I maintain, not only the policy of the Government, that it should be free, but because the expense ought to be borne by the country and not by the depositor.  The Director of the Mint, in his report for 1873, gives the reasons why gold should be coined free, and his argument is equally applicable to the free coinage of silver.

[From report of the Director of the Mint, June 30, 1873, pages 13 and 14.]
Earnings and Expenditures.

With respect to the expenses of the mints, it should be stated that it never was intended that they should be self-sustaining, and that prior to 1853 no charge for the coinage of either gold or silver was imposed;  the evident intention of the framers of the original mint law having been to invite foreign bullion and coin to the mint for coinage.  In the year above stated, a law was enacted authorizing and requiring a coinage charge of one half per cent to be imposed, which continued in force down to the 1st of April, 1873, when the new coinage act took effect, reducing the charge to one-fifth of 1 per cent.

The reasons for a free coinage of gold are simple and direct, and are briefly stated as follows:

First.  By throwing the cost of coinage on the depositor the cost of production is correspondingly increased.

Second.  The coining value of gold is lowered, which tends to repel it from the mint and encourage its export.  For the same reason it repels foreign gold.

Third.  It is unjust to the depositor, as he pays the entire expense of coinage, in which the whole public are as much interested as himself.  Coinage of the standard metal is indispensable to the public, and the expense should accordingly be contributed by all.

It should also be stated that, under the coinage act, the melting of the bullion to bring it to a condition for determining by essay the proportion of gold and silver contained, or the "fineness," as it is termed in mint language, is made a subject of charge to the depositor, and will bring to the Treasury a sum approximating somewhat to that accruing from the coinage charge.  The imposition of this new charge should be considered an additional argument for abolishing the coinage charge.  It is not subject to the same objection for the reason that a charge for melting is made in London.

Again, the coinage of silver ought to be free because the coinage of gold is free and silver is the most used by the people.  The discrimination is unjust and oppressive upon the people.  It is a tax to pay the expenses of the coinage on gold, as Mr. Sherman calls it "the money of the rich," and is throwing a burden on the people.  I say it is unjust, and to show the prostitution of the mint in this particular, first, we purchased under the act of 1875 silver bullion with which to coin fractional silver to supersede the fractional paper currency.  We purchased it with gold-interest-bearing bonds.  The people of the United States are paying now about $2,000,000 annual interest on these bonds for a subsidiary coinage.

No only so, but according to the report of the Secretary of the Treasury the seigniorage which was collected for the coinage of silver for the last year, and covered into the Treasury, was $3,273,239, as also appears from the report of the Director of the Mint, making $5,273,239, which was thrown as a burden and tax upon the people to pay for the expense of coining "the money of the rich," as stated by the Secretary of the Treasury.  Sir, it is a burning shame upon the legislation of the country !  Why will you do it ?  England does it !  What does Mr. Seyd say on the subject ?  I will call attention to a few paragraphs:

The expenditure of the Mint falls on the taxation;  the expense for coining gold is consequently borne by all classes, although gold is used principally by the smaller number, the wealthier portions of the community.  The mere assertion that the coining of gold is intended for the benefit of all classes does not, in face of the patent fact that the poor use it but rarely, meet the justice of the case.  In England the extreme injustice of this matter becomes all the more glaring when it is borne in mind that the British silver coinage, that upon which more than three-quarters of the nation are dependent for their intercourse with each other, is charged with a heavy seigniorage of from 8 to 10 per cent., a profit which serves the mint as a set off against the free coinage of gold.  Gold, it may be said, is coined in England gratuitously for the higher classes at the cost of the lower classes, which deal in silver.  Moreover, while the coinage of gold is thus of full value, open and free to all, and the supply unrestricted within the natural boundaries of commerce, the silver coinage is debased;  the mint refuses to coin it for the public;  it has but a strictly limited legal-tender value, and the amount in circulation thus becomes restricted within narrow and unnatural boundaries.

Let any member who votes to tax the coinage of the silver go and tell his constituents that he did it to pay the expenses of coining gold, "the money of the rich;"  let him tell them that he did it to raise revenues from the people by the clandestine means of a mint tax on their money;  let him go and tell them, by way of apology, that England does it and thus grinds the faces of the poor for the benefit of the rich.  That is the reason you have the silver taxed on your mints for the advantage of the rich of the country, while $5,000,000 are ground out of the poor and laboring men of the country per annum to favor the gold-mongers who get their coinage free of expense.  Sir, that measure had a double object.  It was not only to favor the gold, but it was to drive silver out of the country, and a tax upon it always has this tendency.  But what should be the policy of our country ?  Why, sir, instead of driving it out of the country, our policy ought to be that which was intended by the fathers of the country, to throw our ports open as wide as the gates of heaven and admit it from the four quarters of the globe, and give our own people the advantage of coinage and placing our currency upon the terra firma of a specie basis.  Sir, the Constitution of our country has been violated by the policy that has been forced on and is ruining this country.

Oh, but they tell us there is to be an Atlantic flood of silver in consequence of its demonetization in Germany.  Sir, in the language of a distinguished orator of the Revolution, "Let it come.  I repeat it, Let it come," and we will roll back the silver billows upon them in payment of our national debt.

Why, sir, we have a debt redeemable now of $660,000,000, and by the 1st day of January, 1881, we shall have a debt of $1,452,000,000, according to the report of the Secretary of the Treasury.  And if we adopt proper measures in this era, they will galvanize our trade, our industries will spring from the dust, and again the march of prosperity will begin.  Sir, France is not so delicate as the United States.  When her obligations in part were payable in silver to Germany she did not scruple upon the point of honor when she fell short to go into Germany and purchase $20,000,000 of silver there and take it to her own mints for coinage to pay her own obligation with.  France did not scruple to do that.  It is time we were getting down from our stilts and showing some dint of pity for the bond-ridden, bank-ridden, monopoly-ridden, mortgage-ridden, tax-ridden, and poverty-ridden people.

And yet, sir, still we are told about bad faith.  When they talk about bad faith we hurl the slander back into the teeth of the slanderers.  We propose to pay according to contract.  The bondholder shall have his pound of flesh, but we do not intend that his victim shall be bled to death in addition to that pound which the law gives him.

Why, sir, the bondholders have no right to complain.  In the first place, we funded their debt and gave a double value to them in this way, we gave a double rate of interest upon it and paid the interest in gold, making it now equal to 15 per cent. of the original value of the bonds.  In addition to that, under the act of 1869, at a time when the five-twenties and other bonds were payable in legal-tenders, they prevailed upon Congress to bullionize the debt and thus we gave them $500,000,000 more in value.  They prevailed upon us to pass the act of 1870 to secure coin at its then standard value and prevent its alloy or depreciation by the act of the Government.  And by an amendment in 1871 they required the quarterly payment of the interest, making at this time a difference in their favor of $5,000,000 per annum, the difference between the semi-annual and quarterly interest.  In addition to that we passed the act of 1873 for their accommodation, demonetizing silver and giving a contraction to the currency and an addition to the purchasing power of their capital which is now distressing the country.

Congress passed the resumption act of 1875 to contract the currency and at the same time to avoid a stipulation in the act of 1869, which provided for the payment of the bonds in "coin or its equivalent."  That term "equivalent" meant that whenever the legal-tender notes should be equal with coin, gold or silver, then the 5/20 bonds should be payable in such notes.  And these bonds are now payable in legal-tender notes, because they are now "equivalent" to silver coin --even admitting, for the sake of the argument only, that they were not originally payable in legal-tenders.  This explains the reason of the merciless war which is waged against the legal-tender notes.  With a heart as hard as the adamant of the desert, the foreign bondholder would rather see every industry of our country strangled in the tightening folds of contraction and the whole land blasted with mildew than have his bonds paid in legal-tender notes.  The bondholders are moving heaven and earth to get to gold resumption.  Conscious of their power, they have become insolent, intolerant, and abusive.  They denounce all as financial dunderheads who dare to thwart their policy and defend the people against their boundless rapacity.

Mr. Speaker, there is no enlightened financier that will contend that a forced resumption of specie payments can be of any practical advantage to the country.  It will bring desolation and ruin in its wake.  It will bring every industry of this country to its crutches.  It is already making our great commercial cities financial graveyards.  It is emptying our shops and mills and blasting our fields.  Millions of laborers are this day rolling in shoals from one side of the country to the other, praying for wages and for bread.  And after vainly trying every avenue of escape from misery and wretchedness, they wail out their despair in the language of Milton's fallen angel:  Which way I fly is hell !

Resumption, so called, is tearing the very heart of this nation to pieces and throwing it to the vultures.  When the bondholders are made to tremble on their throne of gold and bonds by the earthquake of popular discontent, they have no language of relief except "Give them the bayonet!"  They would re-enact the appalling tragedy of English resumption from 1819 to 1823, when one hundred and sixty thousand landholders were reduced to thirty thousand, the description of whose horrors baffled the eloquence of the British Parliament and defied the graphic pen of England's most eloquent historians.

But there is another startling fact which lies in the path of resumption.  When we reach resumption we will reach another conclusion:  the national debt will never be paid;  not because it will be repudiated, but because the nation cannot pay it.  It will be an inheritable burden, under which posterity will grown and swelter for ages.  Such is the fate of England.

A recent able English financial writer uses the following language:

To us (says the author of The Bank Charter Act and the Rate of Interest) it is indeed a melancholy reflection and one withal worthy of grave pondering, that when the United States shall return again to a convertible currency the liquidation of this national debt must cease.  Our own sinking fund, devised for a similar object, we know ceased to receive any important payments after the abrogation of the bank-restriction act.  No currency, doubtless, but one that was able to sustain a great war need be expected to liquidate its cost.

Then, sir, when we reach resumption this country must pass under the yoke and be perpetually enslaved to the money oligarchy.  For them our commerce will climb the liquid mountains of every sea to gather gold from every coast, to bring it back and empty it into the lap of the bondholder.  Then will our Government reach for the "Midas fingers" of taxation to rob the nests of the people's earnings to fill the coffers of the bondholder;  then, sir, will the shops and mills ply the spindle and the loom for the benefit of the bondholder;  then will the farmer, converted into the vassal tenant, pursue his rugged toil and the fields yield their golden harvests for the benefit of the bondholder;  then will the miners delve like slaves to tear the golden bowels from the earth to enrich the nation's lords;  then will our Mint, prostituted from the common good, coin gold, free of charge, "the money of the rich;"  and lastly, for them our armies will move to overawe and quell the outbreaks of plundered and starving labor.

Let the nation's creditors beware and moderate their extortions.  They have already heard one roar of maddened labor sound like a trumpet-blast of prophecy.  Endurance has its extremity.  Let them remember that the snowflake is the nucleus around which congeals the avalanche of the Alps, which a sunbeam may loosen and send it plunging like mad thunder on the plains.  Let them remember that their accumulating wrongs may rise mountain-high and stand out like Ebal, the Jewish mount of cursing, on which some avenging prophet may stand and loosen the nation's curses on the authors of the people's wrongs.

But let us hope in the triumph of equity and justice.  Let us inaugurate an era of relief and reform by remonetizing the old silver dollar of our fathers;  repeal the resumption act and loosen up the coagulated currency in the money centers, and send it like vital blood into all the arteries and veins of commerce.  Then will the land again smile with contentment and plenty, and the oceans blossom with our sails.

The Finances.

Mr. Bright, by unanimous consent, obtained leave to print in the Record some remarks on the financial situation.  On the Senate Finance bill, (S. 1044) to provide for resumption of specie payment, (which, by this time, had been passed and approved)

Mr. John Morgan Bright, of Fayetteville, Tennessee.  Mr. Speaker, I propose to give some reasons why I cannot vote for the Senate finance bill now pending before the House.  It seems to be a dish cooked to suit the taste of the President [Ulysses Grant], as it is but the embodiment of the views expressed in his financial veto message of last session.

The present bill provide, first, for the coinage of fractional silver to redeem the outstanding fractional currency;  second, for the repeal of the charge of 1/5 of 1 per cent. for coinage;  third, for the removal of restrictions on the amount of national-bank circulation;  fourth, for the repeal of that clause of the finance bill of last session which required the redistribution of 55,000,000 of national-bank currency;  fifth, for the redemption of legal-tender notes in excess of $300,000,000, amounting to 80 per cent. of the new national-bank notes, to be issued in their place;  sixth, for the redemption in coin of the legal-tender notes outstanding after the 1st of January, 1879;  seventh, for raising the coin for the redemption of the notes by the use of any funds in the Treasury not otherwise appropriated, or by the sale of bonds payable in coin under the act of July 14, 1870, and eighth, for the repeal of all laws inconsistent with the provisions of the bill.

Senate bill 1044 as it was introduced on December 22, 1874.

Be it enacted, &c., That the Secretary of the Treasury is hereby authorized and required, as rapidly as practicable, to cause to be coined at the mints of the United States silver coins of the denominations of ten, twenty-five, and fifty cents, of standard value, and to issue them in redemption of an equal number and amount of fractional currency of similar denominations, or, at his discretion, he may issue such silver coins through the mints, the sub-treasuries, public depositaries, and post-offices of the United States;  and, upon such issne, he is hereby authorized and required to redeem an equal amount of such fractional currency, until the whole amount of such fractional currency outstanding shall be redeemed.

Sec. 2.  That so much of section 3524 of the Revised Statutes of the United States as provides for a charge of 1-5 of 1 per cent. for converting standard gold bullion into coin is hereby repealed, and hereafter no charge shall be made for that service.

Sec. 3.  That section 5177 of the Revised Statutes of the United States, limiting the aggregate amount of circulating notes of national banking associations, be, and is hereby, repealed;  and each existing banking association may increase its circulating notes in accordance with existing law without respect to said aggregate limit and new banking associations may be organized in accordance with existing law without respect to said aggregate limit;  and the provisions of law for the withdrawal and redistribution of national-bank currency among the several States and Territories are hereby repealed.  And whenever and so often as circulating notes shall be issued to any such banking association, so increasing its capital or circulating notes, or so newly organized as aforesaid, it shall be the duty of the Secretary of the Treasury to redeem the legal-tender United States notes in excess only of $300,000,000 to the amount of 80 per cent. of the sum of national-bank notes so issued to any such banking association as aforesaid and to continue such redemption as such circulating notes are issued until there shall be outstanding the sum of $300,000,000 of such legal-tender United States notes, and no more.  And on and after the 1st day of January A.D., 1879 the Secretary of the Treasury shall redeem in coin the United States legal-tender notes then outstanding on their presentation for redemption at the office of the assistant treasurer of the United States in the city of New York, in sums of not less than fifty dollars.  And to enable the Secretary of the Treasury to prepare and provide for the redemptions in this act authorized or required, he is authorized to use any surplus revenues, from time to time, in the Treasury not otherwise appropriated, and to issue, sell, and dispose of, at not less than par, in coin, either of the descriptions of bonds of the United States described in the act of Congress approved July 14, 1870, entitled "An act to authorize the refunding of the national debt," with like qualities, privileges, and exemptions, to the extent necessary to call this act into full effect, and to use the proceeds thereof for the purposes aforesaid.  And all provisions of law inconsistent with the provisions of this act are hereby repealed.

As to that clause of the bill which provides for the repeal of the charge on coinage, I make no point.  It would have a tendency to encourage the home coinage of the precious metals.  England has authorized free coinage since 18 Charles II.

That clause of the bill which provides for the repeal of the law of last session requiring the redistribution of $55,000,000 of national currency among the States according to wealth and population is intended to take immediate effect and prevent the redistribution and to secure and perpetuate a financial advantage to certain States to the injustice and prejudice of others.  The report of the Comptroller of the Currency to the present session shows that the unequal distribution still exists.

The six New England States have an excess of $69,905,101;  the five Middle States have an excess of $7,861,239;  the fourteen Southern and Southwestern States have a deficiency of $52,467,842;  the nine Western States have a deficiency of $23,063,966;  and the nine Pacific States and three Territories have a deficiency of $7,972,619.  The Eastern and Middle States have an excess of 78,295,579.

The same report shows the following per capita circulation:  The six New England States have $31.45, the Middle have $12.66, the fourteen Southern and Southwestern have $2.81, the nine Western have $6.86, and the eleven Pacific and Territories have $2.

The act of last session ordering the redistribution of the currency conceded the justice of the measure.  Now it is proposed to go back and revive the iniquity.  Free-banking will be no compensation for the injustice to the destitute States, as I will show in another connection.  It is only a contrivance to direct all the trade winds and gulf streams to the favored sections.  A large part of the productions of the South and West is diverted from the natural commercial channels and are thrown thousands of miles across the interior at ruinous rates of transportation.  Our one-sided financial condition, sanctioned by law, has thrown our whole commercial gravitation out of course.  In the one section where money is plenty, labor is rewarded and productions in the vicinity command a fair price.  The reverse is true where the money is scarce.  Look to New Orleans, that beautiful city of the sun, at whose feet the din of commerce used to roar day and night, with money exchanges in her favor, and with a commercial outlook equal to that of ancient Tyre, but now despoiled of her trade and wasting in decay.  She is now without money to pay for the great staples sugar and cotton, but the stranger generally pays for them with checks on the great money centers of the East, and the checks are applied to the payment of merchants' accounts, or used in the purchase of goods at high prices, which are to be consumed at the South.  So the revolution of the wheel of commerce empties but little money into her lap.  In the mean time she is devoured with taxation. Other sections may read their commercial fate in Louisiana with a continuation of our present financial policy.

I would injure none, but have all our sections march abreast in the race of improvement.  But I do protest against the consolidation of a great money power in this country, which, unchecked, sooner or later, will subjugate both the Government and the people.

But to pass on.  That clause of the bill which provides for the redemption of fractional currency with fractional silver coin is unnecessary, expensive, and in the interests of the money power.  The facts will prove my position.  The report of the Treasurer of the United States for 1874 shows the amount of fractional currency outstanding to be $45,880,002.34.  Our Government has no silver which can be used for coinage to redeem the fractional currency.  The existing law pledges our duties, first, to the payment of interest on the public debt;  second, to the payment of 1 per cent. of the sinking fund;  third, the residue to be paid into the Treasury.

In proof that the silver cannot be raised from duties, the report of the Secretary of the Treasury in his estimates for 1875 shows a deficiency in the sinking fund of $22,093,748.43, and the deficiency for 1876, 11,920,914.

The report of the Treasurer for 1874 shows a falling off in the customs for last year $24,985,685.01, and a falling off in internal revenue $11,920,914, making a total decrease of revenue $36,349,218.25.  So there is no "surplus" nor "residue" now in the Treasury, nor the promise of any, out of which the silver can be raised.  Then the only alternative is to raise it by the sale of coin bonds under the act of July 14, 1870.  Humiliating spectacle, to see the Government a suppliant at the feet of the money power to borrow silver to redeem her fractional currency !

But let us see something of the cost of converting the fractional currency into fractional silver.  The act of July 14, 1870, amended by the act of January 20, 1871, under which the bonds are to be issued, provides that the bonds shall bear 5 per cent. interest payable quarterly, and the principal payable in ten years.  The quarterly interest makes it about equal to 6 per cent. per annum.  If these bonds are payable in gold, as the friends of the bill contend they are, then they are to be sold at par for silver.  The gold is now worth 6 per cent. more than silver.  This would make a difference in the value of silver to be raised and the gold bonds of 2,902,800.  But this is not all.  The annual interest on these bonds is $2,900,000, and in ten years the interest will amount to $29,000,000, making exchange and interest for ten years $31,902,800;  and still the principal, 45,880,002, not paid.

This is a little financial stroke which plays handsomely into the hands of the money power;  whereas the fractional currency costs but little more than the paper and printing, is more portable than silver, and being the symbol of the national credit it is used as a medium for the exchange of our property and productions and the payment of our debts and taxes, is a legal tender in sums under five dollars and exchangeable for legal-tender notes at the Treasury of the United States.

The fractional silver could have no greater use, for it would not be a legal tender for any sum over five dollars.  The people are not demanding such a measure.  It would be paying too much for the whistle.  But this is not the worst;  it is only the child out of which the giant is yet to grow.

The bill next provides for the redemption in coin of $82,000,000 of legal-tender notes, being the amount in excess of $300,000,000.  If there was no surplus in the Treasury to raise silver, there would be none to raise gold.  Then the gold must be raised by the sale of more gold bonds.  Gold is now worth 12 per cent. more than legal-tender notes.  The difference in the value of $82,000,000 legal-tender notes and gold would be $9,800,000.  The annual interest on the gold bonds would be $4,920,000 and the interest for ten years would be $49,200,000, which added to the exchange would make $59,000,000;  and still at the end of ten years the principal would be unpaid.  On the other hand, the legal-tender notes cost but a trifle, bear no interest, and answer all the purposes for the exchange of commerce and the payment of taxes and debts, except interest on the public debt and duties on foreign goods.

Again, the bill provides that $100,000,000 new national-bank notes shall be issued in the place of the $82,000,000 legal-tender notes redeemed.  This would not increase the volume of currency, as $20,000,000 of the outstanding legal-tender notes would be withdrawn from circulation to be held as a reserve for deposits in the national banks.

So far as the people are concerned, the practical result of the transaction would be the swapping off of $82,000,000 of legal-tender notes for national-bank notes at a cost of $59,000,000, exchange and interest for ten years.  It is all for the bondholders and nothing for the people.  A guardian would be removed from office who would change his ward's debt from a non-interest to an interest-bearing debt.

Again, the bill provides for the redemption of the $300,000,000 legal-tender notes outstanding, after the 1st of January 1879.  For the reasons stated before, the Government will be compelled to resort to the sale of more bonds to raise the coin.  The gold being worth 12 per cent. more than Treasury notes, it would make a difference in the value of the notes and bonds of 36,000,000.  The annual interest on these bonds would be 18,000,000, and the interest for ten years would amount to $180,000,000, making a total for exchange and interest for ten years of $216,000,000;  and still the principal due and unpaid.

As it is contemplated, suppose the national banks issue $300,000,000 of their notes in the place of the $300,000,000 legal-tender notes redeemed, and that they should make an estimated gross profit of 15 per cent. per annum for ten years, it would give an aggregate of $450,000,000.

Then sum up the result of converting the fractional currency and legal-tender notes into coin bonds, we have the following:

Exchange for fractional currency ............ $2,902,800
Exchange of $382,000,000 legal-tender notes ............... 45,840,000
Interest on bonds exchanged for fractional currency and legal-tender notes for ten years ........... 252,028,000
Gross profits of national banks on $382,000,000 for ten years at 15 percent. ............ 450,000,000
Total ........................ 750,770,800

To say the least of it, a large proportion of this amount would be ground out of the people in ten years by the stupendous extortions of the bill.  Whatever may be said in palliation of the items of exchange and bank profits, there can be no question that the interest on the bonds to raise coin for the redemption of fractional currency and legal-tender notes would cost $252,028,000 in ten years, which would have to be raised by taxation.  And at the end of the time the people would have to face the principal of the bonds, amounting to $427,880,000, due and unpaid, and no doubt with an empty Treasury, if the logic of this policy is pursued to its conclusion. And at the time these bonds fall due there perhaps will be due $1,000,000,000 of other bonds, and the holders demanding payment, or to have their bonds refunded, and the revenues of the country farmed out to them for another term of years.

I warn the country now of the "dismal swamp" which lies ahead of this wicked policy, a policy which builds up the money power on the distress of the people.  I protest against yielding the country a prey to such a system of usury and plunder.

I propose now to show that the bill is hollow with delusion, and that its proposed gold basis is like the boy's phantom gold at the end of the rainbow.  After a course of financial tribulation, it will end in disappointment and disaster.  Our financial system has a foreign as well as domestic relation.  Financial theories may be certain in their normal application, but they become as treacherous as the faithful compass when swayed by foreign influence.

Among the great nations of Earth ours is the richest in mines but poorest in coins.  The golden Pactolus sweeps through our land but to bear its treasures to other shores.  With mountains of gold and silver, we cannot command a home coin to purchase the new bonds which the bill would put upon the market.  Like the victim already fastened in the toils of the usurer, we look to Europe in our emergency.

And now to the. facts.  The Director of the Mint, in his report for 1874, estimates our present supply of gold and silver coin at $166,846,228;  but at the time of his report he perhaps was not aware of the fact, as shown by the report of the Secretary of the Treasury for 1874, page vi, that there was due to the sinking fund $22,093,748;  and, as shown by the same report, page 24, there was a balance due for interest on the public debt of $5,636,995.  These amounts together make $27,730,743, which, if it had been paid, would for the most part have been exported and applied to our foreign debt, and being taken from the $166,846,228, would leave only 139,730,743 as the true proximate amount of gold and silver coin in the United States.  Both the Director of the Mint and the Chief of the Bureau of Statistics last year estimated our coin at $140,000,000.  So in fact there has been no increase.  The Secretary of the Treasury, in his report for 1874, page xxv, says that our present annual demands "cannot be safely stated at less than $160,000,000 in gold, besides the receipts from internal revenue and other sources."

So it must be apparent that our new supply must come from Europe.  The result will be an increase of our foreign debt $427,880,000, and an increase of our annual interest $25,672,800.  Another result is the repeal of the legal-tender act of 1862 by the artful phraseology of the bill, in the clause repealing all laws inconsistent with its provisions.  The legal-tender notes being all redeemed, nothing but gold and silver then would be a legal tender.  No doubt the draughtsman thought it a handsome feat of cunning;  but the result of such cunning would prove a terrible calamity to the country.  To make nothing but gold now a legal tender, as I said in a former speech, June 13, 1874---

Would give an additional value to the demands of the creditor of 12½ per cent., and subtract a corresponding value from the productions and property of the debtor.  The public and private debt of our country amounts to about $8,160,469,000.  To pay it in gold it would require a premium of about $1,000,000,000, and a corresponding increase of the value of the interest on the debt by making it payable in gold.  The aggregate annual taxation of our country amounts to about $611,180,320;  it would add an annual value of about $80,000,000 if paid in gold.  The result--- $1,000,000,000 profit to the creditor, $1,000,000,000 confiscation to the debtor, $80,000,000 additional annual taxation to the people !  Comforting pictures for a distressed people !

All our State bonds which were contracted in contemplation of payment in legal-tender notes would then become payable in gold, which would not only create a new burden of taxation, but it would engender political discontent under a sense of outrage and injustice.

But this is not all.  The bill provides that the legal-tender notes shall be redeemed "at the office of the assistant treasurer of the United States in the city of New York."  This would make this great financial center a mighty maelstrom to swallow down three hundred millions from circulation in the country, there to be hoarded by banks, brokers, and gold rings, and aggravating the evils of an already consolidated money power.

But this would not be the end of the "Iliad of our woes."  I come now to the most remarkable, as it is the most alarming and mischievous feature of the bill.  After converting a non-interest-bearing debt into an interest-bearing one ---after juggling the gold for the redemption of the legal-tender notes into the hands of the money kings in the city of New York--- and though the bill wears upon its front an imposing title, like the phylactery of the Pharisee, "AN ACT to provide for the resumption of specie payment," it slips the bridle and abandons the whole field of currency to the national banks, without a single provision for the redemption of their notes in coin, or for making their notes a legal-tender for the payment of debts or taxes among the people and States.

O, for a forty-parson power To sing thy praise, Hypocrisy !

Perhaps the proper construction of the bill would require the banks to keep their reserves as a security for deposits in coin, 5 per cent. of which is required to be kept in the Treasury of the United States for the redemption of their notes.  But I have said that the bill abandons the field of currency to the national banks.  The gold coin used for the redemption of legal-tender notes will soon be spirited away. The States and other corporations are prohibited by a tax of 10 per cent. from issuing bank-notes.  Thus the absence of other currency will make the national-bank notes a forced currency on the people.  And still they cannot be used in the payment of individual debts and taxes to the States without their consent.  It is true that the national banking act provides that the notes of the national banks shall be received by the United States in payment of taxes and dues to the United States, except for duties on imports and for debts owed by the United States and interest on the public debt;  but this only shows that the Federal Government has placed itself in the power of the national banks to furnish a currency for the payment of internal taxes and dues to the Government.  Hence it will appear that both Government and people are placed in the power of the national banks.

Under the control of bank speculators the prices of productions and property would be as variable as the wind.  Like other banks, they contract and expand, suspend and break.  They will all be in financial sympathy and commercial connection.  One shock will send a financial paralysis to the whole, as it did in 1873.  They bank largely on deposits, for which there is no security except an average reserve of about 20 per cent., 15 per cent. of which is required to be kept in their own vaults and 5 per cent. in the Treasury of the United States for the redemption of their notes.  Jay Cooke has taught them all how to break.  Let one financial gale sweep the country, and the Government and people might wake up some morning and find themselves without a currency.  These national-bank notes would not even have the legal-tender quality of the notes of the old United States Bank, which provided that---

The bills and notes of the bank shall be receivable in all payments to the United States.

Viewed from my stand-point, it would be a political crime to abandon the Government and people to the national banks.  Whenever it is done, I warn the country that "Black Fridays," financial convulsions, commercial prostration, bankruptcy, and political corruption all lie ahead.  Each financial panic costs the country not less than $1,000,000,000.

The banks, once rooted in their power, will aspire to make Presidents and to control the legislation of the country.  They would hold their national conventions to mature their measures and plan their campaigns.  There are now 2,028 national banks.  State banks being taxed out of existence, they would have undisputed sway.  Suppose each bank had one hundred necessitous debtors, it would give an aggregate of 202,800.  Then suppose the bank directors wanted votes, petitions signed, or measures advocated, what fearful havoc it would make with the freedom of elections and the virtue of legislation !  Speaking of the political influence of banks, Mr. Madison, in a letter to Thomas Jefferson, April 23, 1796, wrote:

The banks have been powerfully felt in the progress of the petitions in the cities for the treaty.  Scarce a merchant or a trader but what depends on discounts, and at this moment there is a general pinch for money.  Under such circumstances a bank director soliciting subscriptions is like a highwayman with a pistol demanding the purse.

The old United States Bank, in its desperate struggle for its recharter, made every industry quail before its supremacy.  The financial bulletins of Nicholas Biddle were as potential as the ukase of Nicholas the Autocrat.  By collecting loans, refusing discounts, and undermining State banks, he brought the nation a suppliant at his feet.  The country cried out with the pains of financial contraction, and the tables of Congress groaned with distress-petitions.

Mr. Benton, in his Thirty Years' View, says the power of the bank was "exemplified in her capacity to have Jackson condemned, the Government directors and a Secretary of the Treasury rejected, a committee of the House of Representatives repulsed, and the country convulsed and agonized."  It only succumbed to Jackson and the veto.

Let us pause to inquire what possible gain there can be in superseding the legal-tender notes.  The use of money gives it its chief significance.  These notes are used as a medium of exchange for all our productions and property and for the payment of all our debts and taxes, except interest on the public debt and duties on imports.  It floats our entire home commerce, which is 1,000 per cent. greater than our foreign commerce.  We have annual productions of all industries about $9,000,000,000, while we have only about $600,000,000 foreign imports.  It is not needed as an exchange for our foreign commerce, as our exports about cancel our imports.  Our legal-tender notes are not intended for a foreign circulation, and as they are answering all the demands of our home circulation I cannot see the reason, the justice, or the economy in paying $732,000,000, which I have shown it will cost, directly and indirectly, in ten years' to effect the exchange of the fractional and legal-tender notes into gold bonds, and at the end of the time have the principal of the bonds to pay amounting to $427,880,000.

It is time for the Government to call a halt in its reckless extravagance.  It is time the people were overhauling the cash account and liabilities of the Government.

The report of the Secretary of the Treasury for 1874 shows that the net ordinary receipts of the Government (excluding receipts from loans and Treasury notes) from 1865 to 1874, were $4,366,366,321;  net ordinary expenditures for the same time, $4,347,995,093.  Out of the amount collected, the Government has reduced the public debt $521,545,705, leaving a balance of $3,826,449,386.  Out of this balance the Government has in the same time paid interest in gold to the bondholders $1,211,403,003.  The remaining balance $2,615,046,383, has been applied to the necessary expenses of the Government and a large portion squandered in subsidies and other extravagancies.

With proper economy $1,000,000,000 of the last balance might have been applied to the payment of the public debt.  And still we have an outstanding public debt of $2,251,690,468, as appears from the same report of the Secretary of the Treasury, a part of which, say $1,800,000,000, is bearing interest, while we have the cry to have $428,000,000 non-interest-bearing currency transmuted into interest-bearing gold bonds ---calling for $26,000,000 additional annual taxation.  Is our Government to remain deaf to the cry of distress which comes up from our toiling millions, or is it to lend its ear to and lavish its compassion upon the money-leeches of Europe who are crying for a new gorge from our already depleted veins ?

But, independent of all this, the Secretary of the Treasury calls for more money to meet existing liabilities.  He showed the deficiency in the revenue to be $36,349,218.25.  Therefore his "voice is still for war" ---a war of taxation on the people.  He calls for a tax on tea and coffee, which happily blend in them the character of necessaries and luxuries to the laboring millions.  Neither I, nor the country will stop to argue with the Secretary the exploded fallacy that a tax on tea and coffee will not commercially enhance the price.  Let Congress heed his voice in the face of the enormous expenditures of the Government and the distress of the people, and "the tempest in the tea-pot" will gather into a national tornado.

But we are told that gold coin will take the place of the legal-tender notes, which will be exchanged for gold bonds.  Yes, it may come, and it will almost as quickly go.  What is poured in at the bung, will soon run out at the spigot.  Let us see.  The report of the Director of the Mint for 1874 estimates the products of our gold mines since 1849 at $1,240,750,000;  products of our silver mines for same time $189,000,000, making together $1,429,750,000.  Deduct from this $140,000,000, amount of gold coin on hand, and we have $1,269,750,000 which has disappeared from the country.  Poor husbandry of gold !  But see how the Government, not the people, has opened the arteries for its outflow from the country.

Our foreign debt, at the least estimate by the Chief of Statistics, is $1,200,000,000.  And now we propose to increase it $428,000,000, making together $1,628,000,000.  The annual interest on this amount, including expenses of collecting, will amount to $100,000,000.  The average products of our gold mines for the last five years as per last report of the Director of the Mint, amount to $40,000,000;  so it is apparent the annual interest on the foreign debt will exhaust our annual gold products and require $60,000,000 of the newly-imported coin to pay it off.  So that in about seven years the borrowed $428,000,000 would be drawn off on the interest account alone.

If the foreign interest is payable in silver as well as in gold, then the average of our silver mines, 23,000,000, for the last five years, should be added to the annual product of gold, and together they would make the average $63,000,000 per annum.  This sum the foreign interest would exhaust, and require annually $37,000,000 of the loan coin to pay it off.  So in about twelve years the foreign interest alone, after exhausting the joint products of our gold and silver mines, would absorb all the loan, and leave the principal unpaid.

In connection with our coinage I will develop another grievous outrage upon the people of the country.  The act of 1837 made all silver coins, from a half-dime to one dollar, a legal tender for all sums.  The act of 1853, however, made all fractional silver coins from a half-dime to a half-dollar a legal tender only to the extent of five dollars, leaving the silver dollar a legal tender for all sums.  The act of June 25, 1834, made the silver dollar, of not less than 415 grains, of Mexico, Peru, Chile, Central America, and Brazil, a legal tender.

The act of May, 1846, made nearly all the foreign moneys of account, at fixed values, of European nations, a legal tender.  These acts all remained unrepealed until the act of February 12, 1813, which enacted---

That the silver coins of the United States shall be a trade-dollar, a half-dollar, or fifty-cent piece, a quarter-dollar, or twenty-five-cent piece, a dime, or ten-cent piece;  and the weight of the trade-dollar shall be four hundred and twenty grains troy;  the weight of the half-dollar shall be twelve grams and one-half of a gram;  the quarter-dollar and the dime shall be, respectively, one-half and one-fifth of the weight of said half-dollar;  and said coins shall be a legal tender at their nominal value for any amount not exceeding five dollars in any one payment.

The act of July 14, 1870, authorizing the refunding of our national bonds, provides that the bonds issued under it shall be redeemable "in coin at its then standard value," which stipulation is inserted in the bonds and forms a part of the original contract.  This is the only class of bonds payable in coin by express stipulation.  Twelve other different classes of bonds were issued since February, 1861, and prior to the refunding act of 1870, all of which express on their face to pay dollars, with interest at a rate stated.

The point which I make is this, that the bonds, principal and interest, were payable in gold or silver coin up to the passage of the act of February 14, 1873.  I waive the question at present whether the bonds payable in dollars were solvable in legal-tender notes.  If they were payable in silver coin, in dollar pieces, why did the financial ministers of the Government pay in gold, or its equivalent, interest amounting to $1,211,403,003 and principal amounting to $521,545,705, making together $1,732,948,708, when the gold was worth 6 per cent. more than silver, making a loss to the Government and people of $103,976,922.48 ?

But this is not all.  The act of 1793 provided that "the proportional value of gold to silver * * * shall be as 15 to 1, according to quantity in weight."  This act remains unrepealed.  In Mexico, South America, Spain, Portugal, and in the West Indies generally, the value of gold is 16 to 1 over silver, and in Cuba said to be as high as 17 to 1.  If the financial ministers had been as shrewd in protecting the people as the bond-holders were as calculating to turn profits into their coffers, why did they not take the gold and exchange it for silver in other countries when it was worth 16 for 1 in value, and bring it home and pay the debts 15 to 1, and save one dollar out of every sixteen, or 6 per cent. on the amount paid ?  By this process $100,000,000 could have been saved on the payments already made.  The silver was abundant and could have been easily obtained.  The American silver mines were turning out an annual average of $23,000,000, and on the increase.  The Director of the Mint in his last report, speaking of the quantity of gold and silver coin and bullion in the world, says:

The world's stock of precious metals is generally estimated at from ten to twelve thousand million dollars, nearly equally divided as to the two metals.

All the bonds of the United States which by their terms are payable in coin at its then standard value may be paid in silver one-dollar pieces, which were a legal tender for any amount at the time, as much so as gold;  and they ought yet to be paid in silver coin, for the double reason that it would meet the contract, and be to the advantage of the people 6 per cent. of the amount, being the difference in the value of gold and silver.

In like manner all the bonds payable in dollars may, and should be, discharged in legal-tender notes, for the same reasons, that they meet the contract and it would be to the advantage of the people 12 per cent. of the amount, being the difference between gold and legal-tender notes.  But of this in another connection.

The country has been laid under usury and extortion and flayed and victimized long enough.  The Government, instead of being animated by a sense of paternal fairness and justice to the people, has been obsequious in its concessions to the bondholders, many of whom are citizens of foreign governments.  To appease their clamor it gave them bonds bearing a coin interest, worth at the time $1,000,000,000 more in value than the depreciated currency paid for the bonds.  It passed a declaratory act in 1869 saying that the principal of the bonds should be paid in coin or its equivalent, when the bonds by the terms were payable in dollars.  It authorized by the act of 1870 the refunding of the bonds payable in dollars, into 5 per cent. bonds payable in coin, with the interest payable semi-annually, and by the amended act of 1871 it made the interest on these payable quarterly, thereby making the 5 per cent. interest equivalent to 6 per cent. per annum.  And the Government is at present paying the holders of these 5 per cent. bonds annually $4,934,386, the difference between the semi-annual and quarterly interest on $315,800,750, the amount of the outstanding 5 per cent. bonds.

It has paid in gold since 1865, as I have shown, in interest and part of the principal of the public debt, 1,732,948,708, when it might have been paid, to say the least, in silver coin, and by proper financial skill have saved $200,000,000 to the people.  It changed our coinage by the act of 1873 so as to destroy the legal-tender quality of silver coin except in sums under five dollars, and thus in the main to expel it as a currency from the country and leave the bondholders masters of the gold fields.

And it now proposes to make our bonded debt permanent and to multiply the pernicious fecundity of the bonds by continuing them as an indispensable capital of the national banks.  The whole design seems to have been to turn the people, property, and productions of the country over a lawful prey for the rapacity and speculation of the money power.  And still the Government has no cure for these evils except more gold bonds and the increased taxation of the people.  And the people might reply to the Government in the terrible irony of Patrick Henry:

Shall we fill the pocket of the spendthrift with money to cure him of his prodigality ?

For all these evils judgment is with the people.

But to return to the Senate bill.  It provides for a financial system so loosely and clumsily fabricated that it will be undermined by its own operation.  I assume that after the legal-tender notes are all redeemed ---and it is impossible for the banks to prevent their redemption--- the banks would be compelled to substitute as their reserves in their place gold coin, the gold being the only "lawful money" above five dollars.  Then they would have to keep 5 per cent. of their deposits in gold in the Treasury of the United States for the redemption of their notes.  To show how it would operate:  The present amount of reserves in the national banks, as per last report of the Comptroller of the Currency, amount to $87,473,895, and the reserves in the Treasury amount to $17,054,108.  Suppose this reserve in the Treasury to be in gold, it would be more valuable than national-bank notes, the European gold-mongers would draw it off at the Treasury faucet as fast as the banks could fill up the cask.  Thus the banks in a few months could be drained of their gold.  The only way to arrest it would be to cease to keep deposits.  Having no deposits, they would be required to keep no reserves.  Then they would be limited to banking on such national-bank notes as they might own.  The result would be that they would not be required to keep any gold to redeem their notes at their own counter or at the Treasury.

And here is the end of the gold logic of the bill ---free banks without coin;  gold bonds and increased taxation in the place of free currency.  The whole scheme seems to have been concocted in the interest of the money power.  Perhaps the President and his Cabinet officers, members of Congress, and other Government officials would draw their pay in gold if the bill should go into operation.  The Government seems to have been so mucn in the habit of plundering the people that it is willing to keep up the habit for the benefit of the foreign bondholder.

But the bill is singularly defective in this, that it provides no tax to pay the interest on the bonds which are to be raised under it.  The bonds will find slow sale without some tax being pledged to pay the interest.  If this Congress has courage to pass the bill, it ought to have courage to levy the tax to pay the interest.  But it shrewdly plays off from the tax question, hoping, perhaps, to make another Congress responsible for its levy.

I think I have said enough to uncover to the eyes of the American people the monstrous iniquity of the bill.  I turn now to present briefly another and more hopeful aspect of our financial affairs.

It is true that our financial affairs at this time are deplorable, but not desperate.  The Government has taken charge of the national currency, has deprived the States of a local currency by taxing State banks out of existence, and the States and people are now lying at the feet of the Government, like Lazarus at the gate of the rich man, waiting for the crumbs to fall from the table.  The Government by a few more turns of the contraction screws can bankrupt the mass of the people, and break down the State governments for the want of money to administer them.  The Government having taken the charge and responsibility of the national finances, it can and ought to furnish a safe currency, a cheap currency, and an abundant currency.

A safe currency can be furnished in the legal-tender notes.  They are as safe as the credit of the Government, safe as the bonds, and safe as the Government itself.  These notes were proof against the violence of the tempest which recently swept the financial sea.  Commerce howled for help through Wall street in vain.  The national banks were congealed and powerless in the panic.  The national Treasury was besieged by frantic suppliants to procure, contrary to law, the launch of a new installment of Treasury notes as the only life-boat to which they could cling to outride the storm.  President Grant, proud of the triumph of the national credit, in his annual message to Congress for 1873, uses the following exultant language:

The experience of the present panic has proven that the currency of the country, based as it is upon the credit of the country, is the best that has ever been devised.

This ought to be sufficient proof of the safety of the Treasury notes.  That these notes are the cheapest currency no one can deny.  They bear no interest.  They pay for all the expenses of their manufacture in their use.  Interest has been the bane of nearly all money systems, the cormorant which preys upon the fruits of human labor.  It is the heaviest curse now resting on American industries.  Its removal is the greatest measure of relief, and is to be one of the greatest questions of the day.  The Treasury notes pass from the Government to the people without passing through the banks and being subject to bank rates of interest.  They are more democratic than any other currency, if to subserve the great interest of the people be a test of democracy.  They are the people's money, and their freedom from interest brings them into antagonism with our existing bond and bank monopolies which are the hardest masters over the people.

If Thomas Jefferson is good authority for democracy, he might be adduced as a witness in favor of Treasury notes over all other paper currency.  In volume 6, pages 139 and 140 of his Correspondence, letter to John W. Epps, June 24, 1813, he says:

And so the nation may continue to issue its bills as far as its wants require, and the limits of the circulation will admit.  Those limits are understood to extend with us at present, to two hundred millions of dollars, a greater sum than would be necessary for any war.  But this, the only resource which the government could command with certainty, the States have unfortunately fooled away, nay corruptly alienated to swindlers and shavers, under the cover of private banks.  Say, too, as an additional evil, that the disposal funds of individuals, to this great amount, have thus been withdrawn from improvement and useful enterprise, and employed in the useless, usurious and demoralizing practices of bank directors and their accomplices.

In the war of 1755, our State availed itself of this fund by issuing a paper money, bottomed on a specific tax for its redemption, and, to insure its credit, bearing an interest of five per cent.  Within a very short time, not a bill of this emission was to be found in circulation.  It was locked up in the chests of executors, guardians, widows, farmers, &c.  We then issued bills bottomed on a redeeming tax, but bearing no interest.  These were readily received, and never depreciated a single farthing.  In the revolutionary war, the old Congress and the States issued bills without interest, and without tax.  They occupied the channels of circulation very freely, till those channels were overflowed by an excess beyond all the calls of circulation.  But although we have so improvidently suffered the field of circulating medium to be filched from us by private individuals, yet I think we may recover it in part, and even in the whole, if the States will co-operate with us.  If treasury bills are emitted on a tax appropriated for their redemption in fifteen years, and (to insure preference in the first moments of competition) bearing an interest of six per cent. there is no one who would not take them in preference to the bank paper now afloat, on a principle of patriotism as well as interest;  and they would be withdrawn from circulation into private hoards to a considerable amount.  Their credit once established, others might be emitted, bottomed also on a tax, but not bearing interest; and if ever their credit faltered, open public loans, on which these bills alone should be received as specie.  These, operating as a sinking fund, would reduce the quantity in circulation, so as to maintain that in an equilibrium with specie.  It is not easy to estimate the obstacles which, in the beginning, we should encounter in ousting the banks from their possession of the circulation;  but a steady and judicious alternation of emissions and loans, would reduce them in time.  But while this is going on, another measure should be pressed, to recover ultimately our right to the circulation.  The States should be applied to, to transfer the right of issuing circulating paper to Congress exclusively, in perpetuum, if possible, but during the war at least, with a saving of charter rights.  I believe that every State west and South of Connecticut river, except Delaware, would immediately do it;  and the others would follow in time.  Congress would, of course, begin by obliging unchartered banks to wind up their affairs within a short time, and the others as their charters expired, forbidding the subsequent circulation of their paper.  This they would supply with their own, bottomed, every emission, on an adequate tax, and bearing or not bearing interest, as the state of the public pulse should indicate.  Even in the non-complying States, these bills would make their way, and supplant the unfunded paper of their banks, by their solidity, by the universality of their currency, and by their receivability for customs and taxes.  It would be in their power, too, to curtail those banks to the amount of their actual specie, by gathering up their paper, and running it constantly on them.  The national paper might thus take place even in the non-complying States.  In this way, I am not without a hope, that this great, this sole resource for loans in an agricultural country, might yet be recovered for the use of the nation during war; and, if obtained in perpetuum, it would always be sufficient to carry us through any war;  provided, that in the interval between war and war, all the outstanding paper should be called in, coin be permitted to flow in again, and to hold the field of circulation until another war should require its yielding place again to the national medium.

But it will be asked, are we to have no banks ?  Are merchants and others to be deprived of the resource of short accommodations, found so convenient?  I answer, let us have banks;  but let them be such as are alone to be found in any country on earth, except Great Britain.  There is not a bank of discount on the continent of Europe, (at least there was not one when I was there,) which offers anything but cash in exchange for discounted bills.  No one has a natural right to the trade of a money lender, but he who has the money to lend.  Let those then among us, who have a monied capital, and who prefer employing it in loans rather than otherwise, set up banks, and give cash or national bills for the notes they discount.

So it will be seen that Mr. Jefferson's leading idea was that national Treasury notes should form the currency of the country.  I do not see how any democrat, upon due consideration, can be an advocate of national banks, which fire with a double-barrel monopoly on the people's interest on their bonds and interest on their loans.  As suggested by Mr. Jefferson, every citizen, upon a principle of patriotism and national pride, would feel an interest in supporting his national currency.  Every one would feel himself liable for it, and to distrust it would be to throw discredit on his own solvency and integrity.  The Treasury notes would be uniform in value, and a convenient medium for all purposes and in all the States.  They had their origin in war, and they should at least be used to work off the financial consequences of the war, if not to become a perpetual currency.  Then our legal-tender currency would be cheap, safe, and democratic.

But our Government should furnish an abundant currency;  that is, a supply commensurate with all its uses.  We have not money enough.  In a speech made in this House, March 29, 1874, [March 29 was a Sunday!!!] I showed from carefully-prepared statistics from official documents that the paper used as currency in the United States on the 31st of August, 1865, amounted to $2,192,395,627, and that the total amount in actual circulation on the 1st of July, 1873, was $631,488,676, making a reduction in eight years of $1,560,906,851, which was swallowed up in the bonded debt of the country.  Here was almost a vertical fall of the currency from its appalling height of expansion down to the inadequate sum of $631,488,676, since increased to about $660,000,000 by the release of a part of the reserves under the act of June, 1874.  And as I said in the same speech, this sum is to answer what purpose ?

To spread over illimitable territory;  to distribute among forty-five million people;  to furnish money for the sales of capital or wealth, amounting now to about $40,000,000,000;  to pay national, State, county, city, corporation, and individual indebtedness amounting to $9,000,000,000;  to pay for the marketable proportion of annual productions of all sorts, $10,000,000,000;  to pay annual taxation, United States, State, county, and town, $611,000,000;  to pay interest on the public debt and private debt, $500,000,000;  to pay for the annual construction and operation of railroads in the United States, $1,000,000,000;  to pay for annual imports into the United States, $642,000,000;  to pay for the support of schools, colleges, churches, book-concerns, newspapers, for building houses and towns, founding new States, and to pay for the personal expenses of the millions that move every day upon the railroads and public thoroughfares, $500,000,000.

The currency outstanding is entirely insufficient to float these almost fabulous demands.  The Government contracted its currency, but did not contract its debt, so that it now requires three times the quantity of productions to pay the debts of the State and Federal Governments and the debts and taxes of individuals that it did before the contraction.  It was the absolute perversion of all economic rules to run down the contraction-screws upon a debt-burdened and tax-ridden people.  The result is a wide-spread financial distress, without the fault of the people, but by the act of the Government.  It was not a financial calamity which follows as a punishment for uncalculating recklessness in bubble speculations.  The people have been made "to reap the whirlwind" of financial folly which the Government has turned loose upon them.

What would have been thought of the justice or equity which would have compelled the payment in greenbacks of debts contracted in contemplation of payment in confederate treasury notes which were not worth one-tenth of their value ?  The Supreme Court of the United States in the case of Thorington vs. Smith declared against such unconscionable iniquity.  The same objection would obtain to compel the payment in gold of debts contracted in contemplation of payment in greenbacks.  This is what the Government has been striving with "might and main" to do.  As a result, every impartial observer can see that every industry has become stagnant, our prosperity has been blighted, our progress retarded, and our people distressed.

The people want more money, they demand more money, and sooner or later they will have it.  Give them $500,000,000 more in reasonable installments in legal-tender notes, and it will not be more than enough to make our dormant industries heave and move with new vitality.  Add $500,000,000 to our present currency, and it will not make more than half as much circulation as we had in 1865, and it will not make more than the people are owing the national banks at this time.  Our currency should increase with the ratio of our national development.

But how shall we get an increase of our currency ?  How did we lose it ?  It was sunk in five-twenty and other bonds.  Let the bonds payable in "dollars" give back the currency.  Let these bonds be paid off in legal-tender notes according to contract.  The currency, once turned loose, would flow into the channels of industry like water emptied from the clouds.  This would answer the double purpose of furnishing an increase of currency and arresting interest on the public debt ---a double measure of relief.  And why not pay these bonds in legal-tender notes ?  They are made a legal tender, and say so on their face, for all debts, public and private, "except duties on imports and interest on the public debt," and the principal of the bond is neither.  Besides, the holders of the bonds have already received over $1,200,000,000 interest in gold.

These notes were good enough to pay off all the soldiers and seamen who fought the battles of the country;  good enough to pay the farmer for his productions, which fed the Army;  good enough to pay the manufacturer for the fabrics which clothed the Army;  good enough for the mechanic who furnished wagons and implements for the use of the Army;  good enough for the people to pay their debts and internal taxes;  good enough for the States to pay their bonds and their officers who administer their governments;  good enough to pay the President and all other officers of the United States;  good enough to pay the pensions of the maimed and crippled soldiers who gave their missing legs and arms and eye-balls to their country ---and they ought to be good enough to pay the bondholder according to contract, particularly as the original consideration of those bonds was a depreciated currency.  Why should he be fed upon a different "meat" from others, and be permitted to convert our national calamities into a luxury for himself ?

Such distinguished favors will be a temptation to the money kings in the future to stir up civil and foreign wars that they may amass wealth at the expense of enslaving the people with taxation.  The blaze of war will be only as Aladdin's lamp, to lead them on to fabulous treasures.  It is by the logic of taxation that they teach the people the blessing of a public debt.  They manage to throw the national debt on the consumption of the country, while they escape with their property from the burden.  In Great Britain, as in our own country, it is not the tax on property which pays the national debt, but four-fifths of it are paid by the toiling millions in the consumption of goods charged with customs and excises.

What aggravates the curse of our public debt is that a large portion of it is a foreign debt;  and it is now proposed to accumulate the curse by making the debt larger.  We should cut loose from it as from a "body of death."  As I have already shown, it will be a disturbing element to our financial system and national prosperity as long as it exists.  The interest on it will soon eat up our mountains of gold.  We may arrest the evil by paying the bonds not calling for coin in their terms, in legal-tender notes.  Then we can keep our gold at home, and in gold redeem our legal-tender notes.  This would be the solution of the perplexing problem of equating the value of currency and coin, without placing the country under the golden yoke of a bond aristocracy.

But we are told by the Secretary of the Treasury [Benjamin Bristow] "that there is a large amount of currency in excess of the legitimate needs of business;"  and as proof he points to the interest rates in the city of New York, being "3.8 per cent. on call loans and 6.4 per cent. on commercial paper."  The Secretary does himself and the country great injustice.  He seems to think that the whole country is dropsical with money because it is apoplectic in New York.  If he had looked truly into the matter, he would have discovered that while that great financial head was gorged, the body and limbs were wasting with "pining atrophy."  He could see our great financial question as only embracing in its outlines "call loans and commercial paper."  The country admits and complains of the unfair and illegitimate concentration of the currency in New York.  The chill of the panic of 1873 was still on the city, and it was afraid to let its money flow out of sight lest it could not be commanded in the twinkling of an eye.

If the Secretary had crossed the river into New Jersey, my information is that he would have found that money could be lent on good real estate security at from 10 to 15 per cent. per annum.  If he had gone through the fourteen Southern and Southwestern States, he would have found that money could have been readily taken at from 10 to 25 per cent. on good security.  He would have found a shrinkage in the price of property in those States from 50 to 500 per cent. compared with prices in 1860.  He would have found, upon a just estimate, one hundred thousand houses and lots and parcels of land within twelve months had been levied on for distress sales to pay taxes within those States.  He would have found a dead lock to nearly all improvements, public and private.  He should have known that the debts of the country, public and private, and the taxes of the Federal and State Governments are five-fold greater than they ever were before, and there is not money to pay them.  His own report shows a deficiency in the sinking fund and balance of interest due on the public debt, making together nearly $30,000,000.  He must have known that there was a falling off in the customs duties last year of $24,985,689.01, and the Treasurer of the United States in his report said in relation to the falling off:

The people, in consequence of the stringency in the money market, became more economical in their expenditures for foreign goods.

He must have known the opinion of President Grant declared in his message to the last session of Congress:

In view of the great actual contraction which has taken place in the currency, and the comparative contraction continuously going on, due to the increase of population, increase of manufactories, and all the industries, I do not believe there is too much of it now for the dullest period of the year.

The Secretary should have known that "hard times" were on the rampage, and a million of witnesses would have testified that such money stringency had not been known "within the recollection of the oldest inhabitants."

The interest on money in New York will tumble still lower, unless the currency becomes more abundant in the country.  For the want of money the people cannot buy the usual supplies of merchandise.  This cuts down the sales, and is followed by a reduction of stock by the jobbing and importing merchants, who could not pay a high rate of interest to support a declining business.  The cry of distress will yet ring louder through the land and thunder for relief at the doors of Congress, unless appeased with a timely supply of money.

But I must draw my protracted remarks to a close.  Our country is prophetic of a marvelous development.  Within thirty years nearly one hundred millions of people will be sheltered under the canopy of the American Constitution.  He has a puerile conception of the use of money who would confine it to the exchange and purchase of merchandise.  Money is a most powerful factor in working out our national destiny.  Money is not only a medium of exchange, but it is a tool in the hands of labor and the harness of our national industries by which they toil up to the grandeur of national prosperity.  Money is also reproductive in its qualities.  Hear a little of the mother wisdom of Benjamin Franklin:

Remember that money is of a prolific, generating nature.  Money can beget money, and its offspring can beget more and so on.  Five shillings turned is six;  turned again it is seven and threepence;  and so on till it becomes a hundred pounds.  The more there is of it, the more it produces every turning, so that the profits rise quicker and quicker.  He that kills a breeding sow destroys all her offspring to the thousandth generation.  He that murders a crown destroys all that it might have produced, even scores of pounds.

Scarcity of money will give the accidental money power control over the labor, property, and industries of the country.  The bondholder, who sunk his money in the public debt of the country and deprived it of its powers of increase, is as culpable as the unfaithful servant who hid his lord's money in the earth.  His money should have been brought out to work among our thousand industries, and if it could not have found employment on the land, it would have found ample vent in our commerce upon the seas.  There is no danger of our country being afflicted with financial elephantiasis with a boundless continent to subdue, to populate, to improve, and to adorn.

We have yet worked out only a small fraction of our development.  The whole country has yet to be filled with permanent capital, which must be accumulated by the use of money as the product of labor and other capital. Lands have to be purchased and prepared for cultivation ---houses built, work-beasts, breeding stock, and farming implements provided--- towns, cities, railroads, canals, mills, public buildings, schools, colleges, churches, and all other improvements have to be constructed and form a part of our national capital.  Our annual productions then would baffle all our calculations.  When our country is thus filled with capital, abounding with labor, and burdened with productions, still let the money accumulate, flow into, and fill every channel of industry until it brims with repletion, and still the money tide must rise until it overflows the national limits, if we would reach the climax of national prosperity.

Estimate of silver product of the United States.
From 1849 to 1858, $50,000 per annum .............. $500,000
1859. ................ 100,000
1860. ................ 150,000
1861. ............ 2,000,000
1862. .............. 4,500,000
1863. ............. 8,500,000
1864. ........... 11,000,000
1865. .......... 11,250,000
1866. .......... 10,000,000
1867. .......... 13,500,000
1868. .......... 12,000,000
1869. .......... 12,000,000
1870. .......... 16,000,000
1871. .......... 23,000,000
1872. .......... 28,750,000
1873. .......... 35,750,000

Total silver ..................... 189,000,000
Total gold. ...................... 1,240,750,000
Grand total, 1849 to 1873, inclusive ............................ 1,429,750,000

The committee of conference on the disagreeing votes of the two Houses on the bill (H.R. No. 1572) to amend the several acts providing a national currency and to establish free banking, and for other purposes.

Mr. Marshall, Mr. Phillips and Mr. Bright were, by unanimous consent, granted leave to print in the Record, as part of the debates, remarks on the currency question. (See Appendix.)

Mr. Bright.  Mr. Speaker, I have heretofore spoken on the insufficiency of our currency, its unequal distribution, the way it should be increased, and its equilibrium restored.  I shall not repeat those arguments.  I propose now to speak on the quality of our currency, which is a different thing from the quantity, the unwise policy of the Government in relation to it, and the true road to financial prosperity and relief.

Before proceeding to the work laid out, I shall notice several fallacies and misconceptions on which the President's recent veto message seems to have been based.  The pith of the veto was that the financial bill was against the interest of creditors, and that there was a sufficiency of currency, because there were about four millions not taken of the fifty-four millions authorized by the act of 1870 for banking purposes.  So far from sanctioning an increase of currency, he demanded an increase of taxation to pay Government expenses and provide a surplus of gold in the Treasury to redeem the Government currency.

---[Senate bill 617, to fix the amount of United States notes and the circulation of national banks, passed both Houses, that was vetoed by Ulysses Grant on April 22, 1874 (pdf.266):

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the maximum amount of United States notes is hereby fixed at $400,000,000.

Sec. 2.  That forty-six millions in notes for circulation, in addition to such circulation now allowed by law, shall be issued to national banking associations now organized and which may be organized hereafter;  and such increased circulation shall be distributed among the several States as provided in section 1 of the act entitled "An act to provide for the redemption of the 3 per cent. temporary-loan certificates, and for an increase of national-bank notes," approved July 12, 1870;  and each national banking association, now organized or hereafter to be organized, shall keep and maintain, as a part of its reserve required by law, one-fourth part of the coin received by it as interest on bonds of the United States deposited as security for circulating notes or Government deposits;  and that hereafter only one-fourth of the reserve now prescribed by law for national banking associations shall consist of balances due to an association available for the redemption of its circulating notes from associations in cities of redemption, and upon which balances no interest shall be paid.

]

The newspapers and people understood the President to mean that the four millions "not taken" had not been "called for."  The statement fell short of the truth, and was made in the face of the fact that there were one hundred and twenty-nine applications for national-bank charters then on file in the office of the Comptroller of the Currency.  Some of these applications had been on file more than a year before the veto of the President.

Hear the proof:

Treasury Department,
Office of Comptroller of the Currency,
Washington, April 16, 1874.

Sir:  In reply to your letter of the 15th instant, you are informed that the whole amount of the $54,000,000 authorized by act of Congress of July 12, 1870, remaining to be issued to banking associations is $4,315,528.  The whole number of applications on file awaiting action of Congress is one hundred and twenty-nine.

Very respectfully,
John Jay Knox,
Comptroller of the Currency.

Hon. John M. Bright,
House of Representatives, Washington.

This letter of the Comptroller is subversive of the President's veto.  Doubtless other applications for banking privileges would have been made if they had not been forestalled by the assurance that they could not be granted without "the action of Congress."  The excuse of the Comptroller for not issuing the balance of the fifty-four millions cannot avail him;  that is, that the 3 per cent. certificates should be canceled in equal amounts to the national-bank notes issued.  No fair construction of the law can make the redemption of the 3 per cent. certificates a limitation upon the issue of the fifty-four millions.  Their redemption was only incidental to the issue of the fifty-four millions, and was but a process for their retirement;  and when they were retired the law was imperative to proceed with issue of the national currency;  and when the fifty-four millions were exhausted, then it was his duty to have called in the twenty-five millions from those States having more than their proportion and to have given them to those States having less than their quotas.  But a long as there remained any part of the fifty-four millions unissued, the Comptroller could not call for the return of the twenty-five millions.  And here he stuck, with one set clamoring for more currency and another set secure in the possession of their twenty-five millions excess, at the same time furnishing a stumbling-block to precipitate the President on his financial blunders.

The people asked for bread and the President gave them a stone;  they asked for more currency, and he demands more taxation.  He proposes to stop the people's complaints of "the whips" with the scourge of "the scorpions."  After heading off this mischievous statement of the President, I shall make a passing remark upon a currency fallacy.

It has been argued that because gold is worth from 12 to 15 per cent. more than United States currency, there is a superabundance of currency.  This is not true.  The value of money is determined by the use which the law may assign to it, as well as by its quantity.  We have two legal-tender acts;  the coinage acts of 1837 and 1849, making gold and silver a legal tender for all purposes, and the act of February 25, 1862, making Treasury notes a legal tender for all purposes except duties on imports and interest on the public debt.

With these two laws in force no amount of contraction of legal-tender notes will bring them to a par value with gold.  The contraction may be extended until there shall be only two dollars, the one gold, the other a legal-tender note, and still the merchant and the Government being compelled to have the gold dollar, the one to pay the duty, and the other to pay the interest, would give the same premium for the gold that is now paid.  I feel confident in asserting that if all the money in the United States were converted into gold, it would not be sufficient to float our vast and varied industries, to pay our enormous debts and taxes, and to meet the ever-increasing demands of trade and commerce.  In my former speech on the currency I presented authentic statistics which would verify this assertion.

In this connection, perhaps it would be well to bring home to the American people a sober, practical question ---the power of the Government over its own currency directly through its laws, or indirectly through its banking corporations.  The Government may control the quantity, regulate the value, and prescribe the use of its currency.  Let us take an example growing out of our recent civil war.  In the Legal-tender cases, (12 Wallace, 540,) Justice Strong tells us that---

The entire amount of coin in the country, including that in private hands as well as that in banking institutions, was insufficient to supply the Government three months.  Foreign credit we had none.

The demand for money was immeasurably beyond the supply of gold.  Besides, gold was too great a coward to mingle in the robust diversions of war, but it fled from the strife, hid itself in vaults, burrowed in the ground, and sought security in foreign lands.  The Government was forced to anticipate its resources and "to coin its credit."  Treasury notes were employed, but the first issues were defective in not being made a legal tender.  Justice Strong, in the same opinion, says:

It is a historical fact that many persons and institutions refused to receive and pay these notes. * * * The vast body of men in the military service was composed of citizens who had left their farms, their workshops, and their business with their families to be provided for.

Congress met the exigency by making the next issues of Treasury notes legal tenders.  The effect was galvanic to the paralyzed industries and magical to the Army and Navy.  Although it has been said that "a nation may almost as well go to war with paper guns as a paper currency" yet we know that the whole national machinery, civil and military, was moved under the propelling power of legal-tender notes.  The Government, however, was forced to change its unit of value from the gold dollar to the legal-tender Treasury note, and to run up its paper obligations to about $2,700,000,000.  Besides, all money contracts and property values were changed, and were represented by the legal-tender note as the money of account.

But the war came to an end, and then came the greatest financial blunder of the age.  I proved in a former speech that there was circulating as currency in different varieties on the 31st of August, 1865, $2,192,395,627;  and from that date to the 1st of November, 1873, that the Government reduced that amount to a total available currency of $631,488,676, making a reduction of $1,560,906,851.  The Government was seized with a contraction mania and attempted to tumble the whole financial system from the appalling precipice of expansion, with almost unbroken fall, crushing down upon an imaginary gold level, instead of descending with slow and cautious steps safely along the shelving declivities.  There were financial advantages to be obtained even in the financial calamity.  The New England and Middle States managed to float their industries by securing a lobsided volume of the remaining currency.  The property of the Southern and Southwestern States has been shriveling up from a fair commercial value to a distress value, while the debtor classes have been postponing the day of retribution by loans and mortgages.  The bondholder and the money capitalist, while they delude the Government with the specious arguments of prosperity, gloat upon the harvest of speculation which is already ripe for their sickles.

Our country is not without experience in being lifted upon the flood of expansion and then stranded by the sudden ebb of contraction.  Hear Mr. Jefferson on the subject in his letter to Hugh Nelson, March 12, 1820:

This State [Virginia] is in a condition of unparalleled distress.  The sudden reduction of the circulating medium from a plethora to all but annihilation is producing an entire revolution of fortune.  In other places I have known lands sold by the sheriff for one year's rent;  beyond the mountain we hear of good slaves selling for one hundred dollars, good horses for five dollars, and the sheriffs generally the purchasers.  Our produce is now selling at market for one-third of its price before this commercial catastrophe, say flour at three and a quarter and three and a half dollars the barrel.  We should have less right to expect relief from our legislators if they had been the establishers of the unwise system of banks.  A remedy to a certain degree was practicable, that of reducing the quantum of circulation gradually to a level with that of the countries with which we have commerce, and an eternal abjuration of paper.  But they have adjourned without doing anything.  I fear local insurrections against these horrible sacrifices of property.

"Contraction" and "gold" are the shibboleths of the money oligarchs.  No matter what the financial distress, we must contract our currency and debts to the gold basis.  They appealed to the supreme judiciary of the United States to pull down the pillars of our national currency.  Hear the rebuff of the court:

The debts which have been contracted since February 25, 1862, constitute, doubtless, by far the greatest portion of the indebtedness of the country.  They have been contracted in view of the act of Congress declaring Treasury notes a legal tender, and in reliance upon that declaration.  Men have bought and sold, borrowed and lent, and assumed every variety of obligations, contemplating that such payments might be made in such notes.  Indeed legal-tender Treasury notes have become the universal measure of values.  If now, by our decision, it be established that these debts and obligations can be discharged only by gold coin;  if, contrary to the expectations of all parties to these contracts, legal-tender notes are rendered unavailable, the Government has become an instrument of the grossest injustice;  all debtors are loaded with an obligation it was never contemplated they should assume;  a large percentage is added to every debt, and such must become the demand for gold to satisfy contracts that ruinous sacrifices, general distress and bankruptcy, may be expected.  These consequences are too obvious to admit of question. (12 Wallace, 529, 530.)

Baffled by the courts, the contractionists laid siege to Congress;  repulsed by Congress, they appealed to the President, whose views are singularly in accord with theirs, to bar the gap of legislation with his veto, except a plastic Congress shall mold a finance bill which shall be in agreement with his manifesto.  Heaven defend the country from such additional calamity !  He drives a tilt at the Supreme Court, at Congress, and a prostrate and imploring people.  He would have the legal-tender clause of the act of 1862 repealed, to take effect on the 1st July, 1875, being within about one year.  He would have the currency issued by the United States redeemed in coin on the 1st July, 1876, within two years.  And to raise the gold he would issue more bonds, payable in gold, principal and interest.  He would have all taxes, after resumption begins, paid in coin or United States notes.  And with these preliminaries he would authorize free banking without limit.

The President's plan is like a sea which conceals the treacherous rocks beneath its smiling surface.  Let us sound it before we launch upon it.  He [Ulysses Grant] would repeal the legal-tender act.  This would leave the coinage acts of 1837 and 1849 in force, and nothing but gold and silver would be a legal tender after one year.  Hence after that date all the five-twenty bonds and other bonds stipulated in the bonds to be payable in "lawful money," all State and corporation bonds, and all private debts must then of necessity be payable in gold.  This would give an additional value to the demands of the creditor of 12½ per cent., and subtract a corresponding value from the productions and property of the debtor.  The public and private debt of our country amounts to about $8,160,469,000.  To pay it in gold it would require a premium of about $1,000,000,000, and a corresponding increase of the value of the interest on the debt by making it payable in gold.  The aggregate annual taxation of our country amounts to about $611,180,320;  it would add an annual value of about $80,000,000 if paid in gold.  The result--- $1,000,000,000 profit to the creditor, $1,000,000,000 confiscation to the debtor, $80,000,000 additional annual taxation to the people !  Comforting pictures for a distressed people !

But this is not all.  The President would have the legal-tender notes redeemed in gold at the end of two years.  The result would be that their increasing value would equal the interest of a gold-bearing bond, and many of them would be withdrawn from circulation and hoarded with the bonds.  This would operate as another tightening cord on the property and industries of the country.

Again, to provide gold to redeem the legal-tender notes, the President would crowd more gold bonds bearing gold interest on the market.  To get out of debt he would get deeper in.  He would pay gold interest on the bond, when he pays no interest now on the legal-tender note.  He would increase instead of lightening the burden of taxation.

And this is not all.  Let us give a turn or two to the big gold wheel in the President's financial machinery and see how it will operate.  The American bondholders would have undisputed sway over the gold which is fortunate enough to remain in the country.  They would become gold brokers, buy up the currency, make it scarce, and force the people to pay high premiums on gold to pay debts and taxes.  These taxes in part would return to the bondholders in payment of interest on their bonds, and be used in repeating the process of forced sales of gold to a circumvented people.  The first revolution of the wheel shows that it cuts like a dredging-machine into the finances of the country.

But this is not all.  After packing down our financial system under the weight of such a gold pressure, the President thinks that free-banking will give the country ease.  Let us try a little logic upon this.  The national bonds constitute the exclusive primary capital of the national banks.  The deposit of these bonds in the national Treasury is a preliminary condition to the grant of the bank charter.  The trump cards are in the hands of the bondholders.  In addition to filling the office of gold brokers, they are prepared to be installed national bankers and thus complete their supremacy over the national finances.

The national banks, now freed from the competition of legal-tender notes ---our only free currency--- would have the power to control the quantity of our currency, regulate the rates of interest, and fix the prices of labor, commodities, and property.

Look at the fearful consummation !  The Government would be the tributary slave of the bondholders, and the people the victims of the broker-shops and the banks.  Our country once abandoned to the juggling cupidity of the bond rings, the gold rings, and the bank-rings which would be born with a nexus out of the President's policy, they would form a financial trium virate which in time would grow to equal the rapacity and spoliation of the old Roman triumvirate headed by Cresar, Crassus, and Pompey.  A money oligarchy is the most odious and merciless of all others.  Bearing only a financial relation to the people, it regards them only as fit subjects of extortion.  It goes for the last dollar of the poor and helpless.  As tersely said by another:

To an aristocracy existing on the annual interest of a national debt, the people are only of value in proportion to their docility and power of patiently bleeding golden blood under the tax-gatherer's thumb-screws.

The bondholder may now say that he is not---

A dog, that he should do this great thing.

He has not yet taken the gradations to the extremities of avarice.

No man ever reached the heights of vice at first;
By just degrees we mount from crime to crime,
And perfect villain is the work of time.

But all this would not end our chapter of financial woes.  We can endure great evils when we know that they soon will have an end.  But the President's gold policy, once fastened on the back of the people, will make them swelter under the burden for ages.  The gold will be dug out of the mountains, perhaps a century hence, to pay the last of our public debt.  To aggravate our evils, our country is under the double curse of a foreign debt as well as a home debt.  Our great national foreign debt was not only a political blunder but a political crime.  It was the folly of the general who marched his army into the Sarbonean bog.  But what is the amount of this foreign debt, and what are its demands upon our gold resources ?  Hon. D.A. Wells, Special Commissioner of the Revenue, in his last report (1869) estimated our foreign debt as follows:

National securities ........... $1,000,000,000
State, railway, municipal, and other securities ..................    465,500,000
Total .................................. 1,465,500,000

Hon. E. Young, Chief of the United States Bureau of Statistics, in an article published in The Independent (New York) April 9, 1874, says:

Although there were no national securities held abroad at the commencement of our late war, yet some of the bonds of the Commonwealth of Pennsylvania, and probably of Massachusetts and other States, as well as railroad shares and securities, were owned in Europe.  In the absence of accurate data on the subject, it is believed that fifty million is an ample estimate for these ante-bellum securities.  With this addition our aggregate foreign debt amounts to about $1,200,000,000, and our annual interest charge to nearly $72,000,000.

What is our gold capacity to meet even the $72,000,000 annual interest on our foreign debt ?  The Statesman's Year Book, 1874, page 590, gives the following statistics:

The yield of the precious metals in the United States in the year 1871 was estimated at $66,663,000.  Nevada produced the largest amount, $22,500,000;  and after it came California, $20,000,000;  Montana, $8,050,000;  Idaho, $5,000,000;  and Colorado, $4,663,000.  Oregon, Washington, Utah, New Mexico, and Arizona Territories produced smaller amounts.

This shows that the annual productions of our gold fields are not equal to our annual foreign interest.  When the interest has the odds against us, what will we do when we come to wrestle with the debt ?  To show that our country is already squeezed and sucked of its gold like an orange by our foreign debt, I refer to the following table, furnished in the same Year Book, page 588, showing the total value of the gold and silver bullion and specie imported and exported from the United States in each of the six fiscal years ending June 30, from 1868 to 1873:

For 1873, $84,608,574 were exported and $21,480,937 imported.  These figures show that the drain upon our gold has been equal to the productions of our mines.  Let us look to a few facts in verification of this statement.  Since the creation of our foreign debt the most wonderful activity and increase in the coinage of the precious metals has taken place in England, France, and Germany.  Mr. Freemantle, deputy master of the royal mint of England, says:

The gold coinage of 1872 has exceeded $75,000,000, as against $52,500,000 coined in 1871, the average annual coinage before the latter year having been $25,000,000 only.

In his report for 1872 he adds:

No less than 672 tons of metal have passed through the melting department during the year, and this pressure of work has so fully engaged the attention of officers and men as to leave no time for the prosecution of experiments.

Again he says:

The coinage of gold in Germany has been carried on with energy during the year 1872, and the total amount of coin already struck is understood to exceed $155,000,000.

A large part of the German coinage was from bullion and coin lately transmitted by France on account of the indemnity to Germany.  While our country did not furnish all the material to swell the coinage of the European mints, yet it did contribute a large portion.  My design has been to show that our foreign debt has made Europe the reservoir of American gold.

England, after her last French and American wars, was sinking under the burden of her debts and had been so depleted of her gold by foreign exportation that it required the omnipotence of Parliament to lift her out of the bog.  Parliament prohibited the melting and exportation of the coin until the country was replenished by importation, and when the Bank of England was authorized to pay out coin for its notes it was only in sums under five pounds.

France, though recently prostrated by a terrible military disaster and burdened with the vast expenses of her own armies, was forced to submit to a foreign debt of five milliard francs, equal to one billion dollars.  Yet she was not forsaken of political wisdom.  Her first thought was to get out of the financial clutches of her German conqueror.  Her policy was to make it a home debt, and to pay the gold interest to her own people and keep it at home.  Her call for the loan was like a resurrecting trump.  All the private burial-places of her gold gave up their treasures and her people hastened with it, in sums small and great, in bags and stockings, to pour it at the feet of the government.  Thus she was enabled to anticipate a part of the German indemnity and to wipe out the balance at maturity.  Long will her "stocking-loan" be memorable in the annals of finance.

Russia has tried the experiment of a foreign debt.  In 1873 her foreign loans aggregated $550,059,000.  Although her mines yielded annually 20,000,000, yet she was so drained of her gold in the payment of foreign interest that she was compelled to give her own people a forced paper currency of seven hundred and fifty millions, which for many years has been at a discount varying from 10 to 15 per cent.  But she has changed her policy and is now cleaning out her foreign debt as fast as practicable.

But to recur to our own country.  We see our financial life-blood ebbing away through our foreign debt without any efficient plan to arrest it.  Our Constitution allows the free export of all commodities; therefore Congress, like the British Parliament, cannot prohibit the citizen from exporting gold.  But were it otherwise, Congress has voluntarily pursued the opposite policy by creating the foreign debt, thereby giving free vent to the outflow of om gold.  The gold which goes out to pay the Government debt goes out not to return;  but it is run through foreign mints and is stamped with regal dies.  It is not like the commercial debt of the citizen contracted abroad, for he brings in return valuable commodities as the consideration to combine with the labor and natural resources of the country, and in this way makes his debt a producing capital.  The gold interest paid on our foreign debt is not only without compensating advantage, but it is a positive commercial and financial evil as I have already shown.

And this is not all.  This foreign debt, as it is our curse in peace it will be our weakness in war.  It may tie up the sword-arm of our nation when justice and honor would require that it should trike.  In war, muscle and money are in close alliance.  If the nation has not the money it must have its substitute, credit;  and the larger its debt the weaker will be its credit.  Among the great nations our country stands the richest in mines but the poorest in coins.

It is not practicable for our Government to overcome the large export balance of gold against her in the exchange of merchandise with other nations.  The trade balance has been against us for a number of years.  For the year 1873 our imports stood $642,030,539 against export $626,595,077.  But time will not permit me to dwell further on the foreign aspect of our finances.

Then it will be seen that the obligation of our foreign debt will have a controlling influence on our finances at home.  After our large annual export of gold, as I have shown, whence will we derive the gold to pay interest and sinking fund to the American bondholders, to redeem the legal-tender notes, to provide for specie payments by the banks, and to furnish sums under ten dollars to circulate among the people ?  When tested by the facts, the theory of the President and those of his mode of thinking will turn out to be a "beautiful impossibility."  It is estimated by Mr. Young, Chief of the Bureau of Statistics, that $140,000,000 will cover the aggregate gold and silver coin in the United States, to wit:

In the Treasury of the United States, ....... $88,145,324.22
Held by national banks, ............... $19,868,469.45
Total gold and silver coin .............. $140,000,000.00

Of this sum the Government require $127,918,856, according to last estimates of the Secretary of the Treasury, to pay interest and sinking fund.  The President confesses that we have not gold enough, because he calls for more gold bonds and more taxation.  The Treasurer of the United States in his last report, November 1, 1873, says:

There has been a large falling off in the receipts, amounting to $28,280,764.07 on customs, (gold,) and to $16,912,863.58 on internal revenue.

He adds:

Either taxation must be increased, an expedient that can hardly be thought of or appropriations must be kept largely below the receipts.  Otherwise the rapid reduction of the public debt will be arrested, if not abandoned.

So it will be seen that the Treasurer is already pushed to the wall.  He can see but two alternatives for escape--- taxation, or retrenchment.  The Treasurer inclines to retrenchment, the President to taxation and bonds.  It cannot be disguised that all the tendons of our revenue and financial systems are now strained until they are ready to snap.  As things now stand, our Government can do nothing but nibble off the excrescent interest of the public debt, and to do this it has to push the fibers of its revenue system into the pockets of all the people in the land, except the bondholders who must be protected.

Now we are prepared to assert that if the quality of our legal-tender notes is not equal to gold, the fault does not lie at the door of the people.  If our currency departed from its former unit of value ---the gold dollar--- it was done by the force of law.  If it was increased or contracted in quantity, it was by the act of the Government.  If gold has become scarce by leaving the country, it was not expelled by the inferior paper currency as some may think, but it went at the bidding of the Government.  Nor was it depreciated by any distrust of the public credit, for the legal-tenders stand on the same credit with the public bonds, which are the equal of gold in the market.  So that our legal-tender notes were a necessity, and not enough of them at that by a large amount, as I think I demonstrated in my former speech.  The only difference between them and the bonds is that the Government pays a semi-annual gold interest on the bonds and none on the notes.  If they were made to bear an equal interest with the bonds, they would instantly spring to the bond value and disappear from circulation and be hoarded with the bonds.  Or if they should be made convertible into bonds bearing a like rate of interest, for the same cause, they would disappear from circulation.  The only way to keep them in free circulation is to pay no interest on them, nor to make them convertible into interest-bearing bonds to tempt the cupidity of the money-hoarder.

To the extent of our legal-tender notes the people would be sure of a currency and without taxation for its use.  On the contrary, to have them absorbed in gold-bearing interest bonds, it would not only aid in shrinking the whole value of the property and productions of the country to a gold basis, but it would require an annual tax of $20,000,000 in gold to pay the interest alone on the bonds substituted in their place.  What imaginable profit can it be to the people to get rid of the present difference between gold and greenbacks, if it not only costs them a general loss on all their productions and property, but the payment of $20,000,000 annual taxes in gold for years to come ?  In fifteen years the interest alone would cost the people $300,000,000 in gold.  And to add to the injustice and folly of such a scheme, it would, perhaps, open another financial orifice for the outflow of our gold to foreign countries.  To convert them into gold bonds it would not only shrink the whole value of the property and productions of the country, to that extent, to the gold basis, but it would also require an annual tax of twenty millions in gold to pay the interest on the bonds substituted in their place.

If, then, the Government has not been able to raise more than enough gold from its revenue laws to pay the interest and 1 per cent. per annum sinking fund on the public debt, and now, for the want of gold to redeem the legal-tender notes according to the proposed plan, would be forced to make gold bonds to raise it at the expense of $20,000,000 per annum interest, it becomes too plain for argument that after the Government has thus taken the lion's share there would be no gold left for circulation among the people, and not enough left to furnish a pretext for specie payment by our national banks.  Should the banks attempt it, the experiment would be as pitiable as the specie resumption of Secretary Richardson.

Then what means the clamor of the President and the contractionists for reducing our currency to a gold basis ?  It means that the legal-tender notes shall be converted into gold interest bearing bonds;  it means more debt and more taxation.  Such is the drift of the currency bill which recently passed the House, as well as the amendments to it reported by the conference of the two Houses.  Sections 7 and 8 of the amendments proposed by this conference report show the manner in which the legal-tender notes were to be disposed of.

Sec. 7.  That the entire amount of United States notes outstanding and in circulation at any one time shall not exceed the sum of 382,000,000, which shall be retired and reduced in the following manner only, to wit:  within 30 days after circulating notes to the amount of $1,000,000 shall, from time to time, be issued to national banking associations under this act in excess of the highest outstanding volume thereof at any time prior to such issue, it shall be the duty of the Secretary of the Treasury to retire an amount of United States notes equal to three-eighths of the circulating notes so issued, which shall be in reduction of the maximum amount of $382,000,000 fixed by this section;  and such reduction shall continue until the maximum amount of United States notes outstanding shall be $300,000,000;  and the United States notes so retired shall be canceled and carried to the account of the sinking fund provided for by the second clause of section 5 of the act approved on the 25th of February, 1862, entitled "An act to authorize the issue of United States notes and for the redemption and funding thereof and for funding the floating debt of the United States," and shall constitute a portion of said sinking fund.  And the interest thereon, computed at the rate of 5 per cent., shall be added annually to said sinking fund.  But if the surplus revenue be not sufficient for this purpose, the Secretary of the Treasury is hereby authorized to issue and sell at public sale after ten days' notice of the time and place of sale, a sufficient amount of the bonds of the United States of the character and description prescribed in this act for United States notes to be then retired and canceled.

Sec. 8.  That on and after the 1st day of January, 1878, any holder of United States notes to the amount of $50, or any multiple thereof, may present them for payment at the office of the Treasurer of the United States, or at the office of the assistant treasurer at the city of New York;  and thereupon he shall be entitled to receive, at his option, from the Secretary of the Treasury, who is authorized and required to issue, in exchange for said notes, an equal amount of either class of the coupon or registered bonds of the United States provided for in the first section of the act approved on the 14th of July, 1870, entitled "An act to authorize the refunding of the national debt," and the act amendatory thereof, approved the 20th day of January, 1871, which bonds shall continue to be exempt from taxation as provided in said act:  Provided, however, That the Secretary of the Treasury, in lieu of such bonds, may redeem said notes in the gold coin of the United States.  And the Secretary of the Treasury shall reissue the United States notes so received either in exchange for coin at par, or, with the consent of the holder, in the redemption of bonds then redeemable at par, or in the purchase of bonds at not less than par, or to meet the current payments for the public service;  and when used to meet current payments an equal amount of the gold in the Treasury shall be applied in redemption of the bonds known as five-twenty bonds.

Now, permit me to uncover one of the most cunning devices for additional taxation hidden beneath the artful phraseology of the seventh section.  Eighty-two millions of legal-tender notes are to be retired and canceled and carried to the account of the sinking fund provided for by section 5, act 25th February, 1862, "and shall constitute a portion of said sinking fund.  And the interest thereon, computed at the rate of 5 per cent., shall be added annually to said sinking fund."  Now, to understand the meaning of this language, we must refer to section 5 of act 25th February, 1862, which is as follows:

§ 5.  And be it further enacted, That all duties on imported goods which shall be paid in coin, or in notes payable on demand, heretofor authorized, to be received and by law receivable in payment of public dues, and the coin so paid shall be set apart as a special fund, and applies as follows :—

First—To the payment in coin of the interest on the bonds and notes of the United States.

Second—To the purchase or payment of one per centum of the entire debt of the United States, to be made within each fiscal year after the firs day of July, 1862 ;  which is to be set apart as a sinking fund ;  and this interest of which shall in like manner be applied to the purchase or payment of the public debt, as the Secretary of the Treasury shall from time to time direct.

Third—The residue thereof to be paid into the Treasury of the Unite States.

The sinking fund was commenced by Secretary Boutwell in 1869.  Secretary of the Treasury Richardson, in his Public Debt and National Banking Laws, page 83, gives us the operation of the funding system, as follows:

Within each fiscal year, which ends June 30, the Secretary applies coin received from duties to the purchase of bonds to the amount of 1 per cent. of the entire debt of the United States.  The bonds so purchased were all registered in the name of the Treasurer of the United States in trust for the Government, and were stamped with the words "Sinking fund" on the face of each bond.  The interest thereon was regularly collected in coin semi-annually and applied to the purchase of other bonds, which, in like manner, were added to the same fund.

So that it will be seen that the eighty-two millions legal-tender notes proposed to be "retired and canceled," instead of being carried to the "destruction account" in the Treasurer's office and an end made of them, are to be carried to the account of the sinking fund and stamped "Sinking fund," and 5 per cent. interest in gold collected on them annually out of customs duties until the whole of the public debt shall be extinguished;  and the interest upon these canceled notes would require an increase of four millions annual taxation to pay it.

This is an ingenious specimen of the hocus-pocus science of taxation ---to take the free currency from the people and at the same time tax them under the guise of retiring it.

The eighth section disposes of the remaining $300,000,000 legal-tender notes by providing for their exchange into coupon or registered gold bonds.  Here we reach the bottom of this so-called specie basis.  It means contraction, gold bonds, and taxation, leaving a distressed people to contend as best they can with the rapacity of the national banks, which have superseded all other banks of issue.

Let the country understand its financial position and its financial relations.  The money monopolists, with a skill equal to that of the successful military leader, have been advancing under blinds and gaining position after position until they have reached an eminence of power from which they can rake all the resources of the people.

The present Administration has reached a financial extremity.  It could not, if it would, give the people a currency based on coin.  It has not increased the gold coin of the country one gold dollar in five years.  Its bewildered financiers are like mariners in strange waters making experimental soundings to escape from the reefs.  The people need not look to them for any permanent relief.  It will not come.  The wretched sons of toil, who go out with the opening of the day to make their bread in the sweat of their brow, may look in vain for a season of respite.  Thousands of them have put the last strain upon the virtues of industry and economy and have failed to save their shelters from the inexorable grip of the tax-gatherer.

But the people are to be turned over to free national banks.  If these banks were required by law to begin specie payments after the Government sequesters nearly all the gold for its own use, they would wind up and leave the country without a currency.  They do not rest on a gold basis.  To the extent of their issues they rest on the credit of the Government, and the Government rests its credit on the productions and property of the people.

The deposit creditors of the banks rest upon the personal credit of the stockholders to the amount of their respective stock.  When the banks break their bonds held by the Government stand as security for their notes, while the depositors are left to work for anything they can find amidst the detritus of the remaining assets in a court of bankruptcy.  Let not the people cherish the illusion that the national banks are to usher the golden era upon the country.  The past history of American banking is by no means prophetic of golden realities.  According to Mr. Walker, in his Science of Wealth, the average proportion of specie to currency has been only one dollar to five dollars from the existence of our Government.

About once in every nine years since 1784, coincident bank panics in England and the United States have rocked the lands with financial convulsions.  They have become historic as the panics of 1784, 1793, 1810, 1819, 1826, 1837, 1847, 1857, 1873, passing over "Black Friday" ---each one leaving an attendant loss to the respective countries of at least $1,000,000,000.

But I have said enough to show that the financial policy of the Government is a failure.  Its inexcusable blunder was in converting its floating debt into a funded debt.  This floating debt would have been much easier to pay, and could have been paid in a shorter time than the funded debt, and paid, too, without material damage to contracts and shrinkage in the value of property.  To have applied our gold receipts from customs, say at the rate of $150,000,000 per annum, in the payment of this debt, it would have resulted in keeping the gold in the country, diminishing the public debt, making more valuable the remaining portion of the debt by contraction, encouraging it to combine with the industries, and giving to it all the multiplying powers of production and reproduction.  This would have been no injustice to the holders of the floating debt.  Three-fourths of it were used as currency, and a part of it was already bearing interest.  The annual contraction would have been equal in value to a paying interest on the deferred balance of the debt.  And besides it could have been lent out as money and received interest for the use.  But suppose at times it might have lain idle and unproductive;  this is nothing more than nearly every farmer has to submit to in carrying over his idle capital through the unproductive seasons.  His lands, his implements of husbandry, and work beasts are of but little value, but more often an expense, to him during the winter months.  This process of paying off the floating debt would have filled the land with gold, which would have added to the permanent wealth of the country and furnished the best of all currency to the people.

The only way that I see open now to repair the blunder is to reverse the policy of the Government.  As the currency was swallowed up in the bonds;  let the bonds give back the currency.  Let the five-twenty bonds be paid off in legal-tender notes.  This would loosen the bands of contraction on the country and the country would "breathe freer and deeper;"  it would appreciate the value of lands and furnish a currency for their purchase, so that the distressed debtor might sell off a part and save a part for his home, and we might say enable hundreds of thousands of tax-ridden debtors to redeem their homes which have been sold for taxes.  Then let the legal-tender notes be redeemed in gold as fast as financial prudence will dictate ---redeemed in the same gold collected from customs and which is now applied to the payment of interest and sinking fund to the foreign and home bondholders.  This would turn the tide of the gold flow.  It would bring it home from abroad and keep at home a due share of the products of our mines.

I know that it is a disputed legal problem whether the five-twenty bonds, which are by their terms payable in "lawful money," are solvable in legal-tender notes.  I affirm that they are by principles decided by the Supreme Court of the United States, which court in part was created by the present Administration.  Time will not permit me to discuss the question now;  but I should not fear to meet it before any judicial tribunal in any of its aspects of law, equity, or national faith.

The bondholders should remember that they received bonds worth about $2,500,000,000 for about $1,250,000,000 in true value.  They should remember also, that their bonds acquired a three-fold purchasing power by the contraction of the currency consequent upon funding it in the same bonds.  They should remember that the bonded debt constitutes about one-seventh of the assessed value of all the property in the United States, and by the grace of the Government this debt has sanctuary against taxation.  They should remember that they made gain and "waxed fat" out of the calamities of their country.  They should remember that while they lent a depreciated currency, the toil-worn and battle-scarred soldiers gave blood, the last, best gift, to their country's cause.  And let them remember that, while they are insolent and dictatorial in the conscious supremacy of their money power, and stimulate the Government remorselessly to wring tribute from the poor and toiling millions, yet they have a slumbering power which will, sooner or later, be aroused to wield the ballot for the reform of the Government and their own vindication.

The House met at twelve o'clock m.

Currency -- Free Banking.

The Speaker pro tempore.  By order of the House, the session of to-day is for debate only on the bill (H.R. No. 1572) to amend the several acts providing a national currency and to establish free banking, and for other purposes.  The gentleman from Tennessee [Mr. Bright] is entitled to the floor for one hour.

Mr. John Morgan Bright, of Fayetteville, Tennessee.  Mr. Speaker, much has been said upon the subject of the currency, but owing to the various interests of the country which are involved I do not deem it inappropriate to trespass further upon the patience of this House.  The views which I have heard expressed have been various, as various as the standing points from which the question has been viewed.  Without further preface, Mr. Speaker, I propose to address myself to four propositions:  first, that the currency of the United States is unequally and unjustly distributed according to the population and wealth;  secondly, that it is insufficient in volume;  thirdly, the probable quantity needed;  fourthly, the way in which it may be supplied.

Upon the first proposition, as to the unequal and unjust apportionment of the currency, I would remark that the figures to substantiate that proposition are not new to this body;  but the country is not as familiar with these figures as these Representatives, who have heard them repeated from day to day, and have read them for themselves.  In support of that first proposition, I beg leave to call the attention of this body to the report of the Comptroller of the Curency, December 1, 1873, which shows that the six Eastern States have an excess of $70,690,046;  the five Middle States have an excess of $9,416,503;  the District of Columbia has an excess of $182,131;  the fourteen Southern and Southwestern States have a deficiency of $51,271,034;  the nine Western States have a deficiency of $21,423,811;  the Pacific States and the Territories have a deficiency of $7,926,648.  The Eastern and Middle States together have an excess of $80,589,742.  The deficiency of Tennessee, my own State, is $5,373,382.

Mr. Maynard.  I call my colleague's attention to the fact that in the Comptroller's tables the District of Columbia is classed with the Southern States, very improperly, I think;  and in the enumeration I made I placed it with the Middle States, to which I thought it geographically belonged.

Mr. Bright.  I am obliged to the gentleman for the suggestion.

Mr. Maynard.  I will say further, if my colleague will allow me, that I placed Ohio also with the Middle States, with which in point of fact she is connected by her commercial relations more than with the Western States.

Mr. Bright.  I observe to the House that I have followed the classification of the Comptroller of the Currency.  But to proceed.  These figures are conclusive of the proposition as I have stated it.  But in further support of the proposition permit me to call the attention of the House to another tabular statement of the Comptroller of the Currency, showing the per capita circulation.  The six Eastern States have a per capita of $31.68;  the five Middle States $12.82;  the fourteen Southern and Southwestern States, including the District of Columbia, $2.91;  the eight Western States $7.07;  the per capita of Tennessee, my own State, being $2.66.  Accompanying these I have the tabular statements which I shall not trouble this House with repeating.  Suffice it to say, then, that the first proposition is arithmetically established.

Now, as to the second branch of the first proposition, that this distribution of the currency is unjustly made.  Let us examine for a moment and see the effect of this ill-adjustment of the currency.  Take it in the New England States where it is abundant, where they assert it is sufficient, and what is the law of money or of finance ?  It is that the prices of commodities are appreciated in proportion to the quantity.  What is the consequence following that ?  Where the manufacturing industries have the currency to pay high prices for labor, there are high prices for production.  But what is the result of the appreciated value of these productions in the immediate vicinity ?  They are added to the cost of manufacture, and with this accumulated cost, in addition to transportation and insurance, they are sent broadcast over the land and sold to the consumers who have not the advantage of those who live in the immediate vicinity of the manufacture.  Hence labor is high, productions are high, where the currency is abundant;  and productions are cheap and labor is cheap where the currency is scarce.  That is one of the evils under which the section of country from which I come is at present laboring.

But I have not time, Mr. Speaker, to elaborate, but only to suggest the principle of the operation of the thing.

But you say these parties must indemnify themselves by increasing the price of their own production.  This is impossible, because the manufacturing interests have a protective tariff as a shield to them and are not affected by foreign competition;  and in fact, by operation of law, the people are coerced to pay the high prices which may be fixed upon them with a diminished currency.  So, Mr. Speaker, you can see the grinding and oppressive character of the adjustment of the currency, superinduced in the first place by operation of law, and augmented, in the second place, by the commercial contrivances of those who seek, not only to consolidate the currency, but to consolidate the trade of the country.

In the southern section of the country, to a very great extent, the productions are bought through the instrumentality of factors.  The crops themselves are pledged.  They pass into the hands of the factor and from the factors to the commercial monopolists in New York and other great eastern cities, where the price of the productions is applied to the payment of the merchant's account, and where the currency is not distributed, but kept flowing in the immediate circle, except small balances which find their way South.  There is the injustice of it, and there is no remedy without Congress shall interpose to relieve, as it has interposed to disturb, the financial harmony.  I propose to show how that may be done hereafter.  So they are left powerless, left without the indemnity of law;  and while this is so, you find one section of the country wearing the mantling glow and smile of health and prosperity;  and looking upon the other picture, you see the grim, gorgon features of bankruptcy.

I do not propose, Mr. Speaker, to break down any industry of the country.  I propose simply they should all march abreast in the great advance of improvement.  Without dwelling further on that proposition I proceed to the second, that the outstanding currency, if equally distributed, is not equal to the national wants, present and prospective.  This is a matter of figures.  The inquiry confronts us, Mr. Speaker, how much currency is needed in the country ?  I say candidly no gentleman can undertake to answer the question with arithmetical correctness.  We cannot tell how much currency exactly is in the country, nor can we tell exactly how much currency the country needs;  but we can approximate to the necessities of the country, and by that approximation the statesman must regulate his conduct.  I would state, Mr. Speaker, we cannot tell it from any law of territory of the country.  We cannot tell it from any law of population.  We cannot tell it from the quantity of the productions of the country.  We cannot tell it from the commerce of the country.  We cannot tell it from the nature and character of the indebtedness of the Government.  We cannot tell it by either one of these taken by itself, but we must determine it by combination and consolidation of the whole of these interests, and that statesman who attempts to examine this question without combining and consolidating the whole, as stated by Mr. Caldwell in his Credit System, proves that he knows nothing at all about it.  I will state further, Mr. Speaker, we cannot tell the quantity of currency needed by comparison with foreign countries.  Why, we hear arguments based on European finances here every day.  There is nothing, sir, more fallacious in their application to American finances and American statesmanship.  Why so ?  Take, for example, Great Britain.  An allusion has been made to the Bank of England, and the amount of currency per capita that is used for the necessities of the people of that nation.  You find what ?  That four-fifths of the population of Great Britain live within cities and towns.  In France from two-fifths to three-fifths live in cities and towns.  The smaller the territory and the more dense the population, the more rapid is the circulation of the currency, and less in proportion to territory and population is needed there than in the United States.

But, in addition to that, those people live cheaper and fight cheaper and labor cheaper, besides their confined territory and their dense population, than they can in the United States.  Hence, they are a different people, differently situated.  And besides all this they are subject to the monopolies and prescriptive rights and privileged orders and grinding despotisms of that country, of which we see the incipient outgrowth and outcropping in the United States.  So that I maintain that it has no application to this country.  We find that the rights of property are all established there.  The doctrine of primogeniture locks up estates and prevents their alienable character.  The doctrine of dower, the doctrine of entail, have also restricted the alienation of estates.  The rights of property there are so settled that they need but little currency to answer the purpose of sale in that country.

But, Mr. Speaker, when we come to our own country let us examine something of its character.  We find an extent of territory here stretching from the Saint John, on the one hand, to the Rio Grande upon the other, and then from ocean to ocean in breadth, and with a population not only now reaching forty-odd millions, but rapidly increasing by the normal law, and by immigration, the artificial mode.  So far, then, as the question of territory and population is concerned, we have a different state of things here from what exists in the Old World.  So far as the wants of our people are concerned, they are different from those of the Old World.  As I have said, they live cheaper over there, they labor cheaper, they fight cheaper than we do in the United States.

Now, in verification of that, Mr. Speaker, I call the attention of the House to a statistical table to be found in the report of the Special Commissioner of the Revenue of the United States for the year 1869, being a comparative table showing the weekly expenses of families of workingmen in the United States and in Belgium, with this result:  The expenses for two adults and three children in the United States per week, are $15.02 and in Belgium $4.55.  Without amplifying any further upon that, I call attention also to a statistical table taken from the American Encyclopedia for 1863, showing that the whole of the European armies, amounting to 3,815,217 men, expended $644,283,888;  while according to the report of the Secretary of the Treasury of the United States for 1863 we find that the United States expended for the Army $747,359,822, and for the Navy $82,177,510, making a total expenditure for the Army and Navy, of $829,532,338;  being 38 per cent. more than all the war expenditures of Europe for that year.  So that the statistics show that they live three times as cheap and fight three times as cheap as they can or do in the United States.  Hence, the comparison as to the quantity of currency in the two countries, the old and the new, must fail.  We are a different people, with different ideas and under different circumstances.

And let me here make another suggestion which will help to free this question from the embarrassment of the comparison.  While we should avoid European finances, we should avoid those European practices which keep the population in the condition I have indicated.  There would be very little European fighting if the wealth of those countries had to pay the taxes.  There perhaps would be little fighting in this country if the wealth of the country had to pay the taxes.  But by their financial contrivances they throw the burden of the taxes and the national debt upon the consumption of the country.  By the consumption of the country they pay three-fourths of the revenues of Great Britain at this day;  and perhaps it is the same in France.  The burden falls upon those who have no property.  It falls upon the bone and the sinew and the sweat of the toiling millions of those countries;  and to escape it, while their property is locked up at extraordinary prices and bound in the fetters of primogeniture and dower and entail, these thousands and millions are seeking relief in this western land of ours, and arriving here from the old country they are as unreturning as if they had gone out into eternity.  We do not propose to imitate those examples, dangerous in the extreme;  and I hope we will have no more of it by American statesmen in their comparison of finances and character of governments between the two.

But to return to our own country.  I have described the territory, I have alluded to the population.  Now, as to the character of the property, we have no law of primogeniture here;  everything is free and alienable, and exchange of property is stimulated almost to a passion in America.  This exchange cannot be effected without currency to a certain extent.  We are not a people that are confined to barter and to that alone.  That would be impossible in the nature of things.  But then, in addition to that, Mr. Speaker, we have diversified industries.  And not only does the currency flow more sluggishly in a vast territory and in a more sparse population, but in proportion to the increase of its industries and the diversification of these industries, it takes longer to hunt up the channels and flow through them, than if there was only one grand sweeping commercial tide to draw everything into, as into a vast maelstrom of financial power.  The case is entirely different.

Then, Mr. Speaker, permit me to call the attention of the House not only to our diversified interests, but to our national wealth.  The assessed valuation, according to official returns, in 1870, was as follows:  personal property, $4,264,205,000;  real estate, $9,914,000,000;  total assessed valuation, $14,178,205,000.  The total valuation in 1870, according to official returns of the wealth of the country, was $30,608,518,570.  That was the valuation of 1869.  And taking the increase since, according to the ratio adopted by the Special Commissioner ---13.4 percent. per annum--- we have the present aggregate wealth of the country, $42,000,000,000, all alienable, all perhaps in the market in one form or other;  and it requires some currency, I suppose, to effect an exchange in the property of the United States.

But then what are the annual productions ?  I have here a table showing approximately the resources and wealth of the country, and I find that the agricultural products, including stock, &c., amounted in value, according to official returns of 1870, to 2,447,000,000;  manufacturing industries, $4,232,000,000;  mining industries, $152,000,000; the gentleman from Pennsylvania [Mr. Townsend] that those issues of which he speaks were engraved and prepared in a form to circulate as money;  and as a matter of fact they did so circulate until the interest accumulated so as to make them superior to the ordinary class of currency, and they formed part of the reserve of the national banks.

Mr. Townsend. I must remind the distinguished chairman of the Committee on Banking and Currency [Mr. Maynard] that Mr. McCulloch in his report of 1865, speaking of a large portion of this currency drawing interest, stated that only $30,000,000 of it were performing the functions of currency, although several hundred millions of it were afloat.

Mr. Maynard.  Well, that was his opinion.

Mr. Bright.  Mr. Speaker, I state the amount of that currency as reported in the table which is before me ---money which was used as currency and treated as currency.  The Secretary [McCulloch] tells us that he contracted in 1866 and 1867, by funding it in bonds, $686,584,800;  in round numbers, $340,000,000 per annum.  Such a contraction, I venture to say, was never before witnessed upon the face of the globe by the ordinary operations of government.  In two years $686,000,000 were taken out of the circulation of the country !

But I do not stop there.  I shall not follow the reduction of the currency for the different years, but I will look to the reduction as it appears from the report of the Comptroller of the Currency, December 1, 1873, wherein he shows of national-bank currency, $300,000,000; of legal-tender notes, $366,000,000;  of fractional currency, $47,000,000; making altogether $759,000,000;  from which deduct the reserve, $128,000,000, leaving $631,020,512 as the only available circulating medium in the United States;  I mean Government circulation.

On page 8 of the same report the same officer shows the amount of outstanding State-bank notes, $174,714.  Page 59 of the report of the Treasurer of the United States shows, outstanding of seven-thirty notes on the 1st of July, 1873, $293,450.  Now I beg attention to the summary:

National-bank notes, legal-tender notes, and fractional currency, as per report of the Comptroller of the Currency ....... $631,020,512
State-bank notes ............... 174,714
Seven-thirty notes .......... 293,450
Total available currency in the United States, (gold excepted, which was a commodity) ......... 631,488,676

The reserves, being held by the Treasury and by the banks, are not added, because they were held as security and not as circulation.  Now, let us see the summary of the reduction.  On the 31st of August, 1865, we had $2,193,395,627 of currency.  On the 1st of November, 1873, we had $631,488,677, making a reduction of $1,560,906,851, or an annual reduction, during eight years, of $195,113,356.  Where did it go ?  It was swallowed up in the bonded debt of the United States.  Where is the proof ?  Look to the destruction account of the Treasurer, which is before me.  It shows an actual destruction of upward of $1,900,000,000 of this circulation.  I do not mean the statistical destruction, but the destruction of the currency.  In addition to that, you have driven out of circulation the notes of the State banks, leaving only $631,488,000 of currency in the United States ---to answer what purpose ?  To spread over illimitable territory;  to distribute among forty-five million people;  to furnish money for the sales of capital or wealth, amounting now to about $40,000,000,000;  to pay national, State, county, city, corporation, and individual indebtedness amounting to $9,000,000,000;  to pay for the marketable proportion of annual productions of all sorts, $10,000,000,000;  to pay annual taxation, United States, State, county, and town, $611,000,000;  to pay interest on the public debt and private debt, $500,000,000;  to pay for the annual construction and opration of railroads in the United States, $1,000,000,000;  to pay for annual imports into the United States, $642,000,000;  to pay for the support of schools, colleges, churches, book-concerns, newspapers, for building houses and towns, founding new States, and to pay for the personal expenses of the millions that move every day upon the railroads and public thoroughfares, $500,000,000.

Ah! where is your money to float, and keep afloat, these vast interests ?  The outstanding amount is altogether insufficient, as is proven by the vast body of demands against it which I have recited.  It is proven by the Eastern States objecting to a reduction, though some of them have as high as sixty-one dollars per capita;  by the deficiency of the fourteen Southern and Southwestern States, they having only $2.91 per capita;  by the deficiency of the Western States, they having only $7.09 per capita;  by the comparison of currency, by which it appears that the Southern and Southwestern States in 1862 had of paper currency $71,000,000;  while in 1873 they had only $38,000,000;  by a comparison of productions, the gross productions of the Southern and Southwestern States being, in 1873, according to a tabular statement which I have here, $2,038,000,000, more than half of which is thrown upon the market;  while in 1860, so far as can be ascertained from the census report, the amount was less than half;  by comparison of prices of merchandise and mechanical implements, which, it appears, were, in 1870, 50 per cent. higher than in 1860, though the fourteen Southern and Southwestern States had twice the amount of currency in 1860, while they have twice the annual productions now;  by the great increase in national wealth and resources;  by the twenty-fold increase in debt and taxation;  by the reduction in prices of land, amounting to from 50 to 500 per cent. all through the southern section of country;  by the dead-lock of trade;  by the wrecks of fortunes