Payment of Government Bonds.

Mr. Matthews [Thomas Stanley Matthews (July 21, 1824 - March 22, 1889), Glendale Ohio, R; studied law, admitted to the bar;  railway lawyer, attorney to Jay Gould; participated in the vote-fraud of installing Hayes as president].  I submit a concurrent resolution with a view of having it read for the information of the Senate and laid upon the table to be printed.

The resolution was read, as follows:

Whereas by the act entitled "An act to strengthen the public credit," approved March 18, 1869, it was provided and declared that the faith of the United States was thereby solemnly pledged to the payment in coin or its equivalent of all the interest-bearing obligations of the United States, except in cases where the law authorizing the issue of such obligations had expressly provided that the same might be paid in lawful money or other currency than gold and silver;  and

Whereas all the bonds of the United States authorized to be issued by the act entitled "An act to authorize the refunding of the national debt," approved July 14, 1870, by the terms of said act, were declared to be redeemable in coin of the then present standard value, bearing interest payable semi-annually in such coin;

Whereas all bonds of the United States authorized to be issued under the act entitled "An act to provide for the resumption of specie payments," approved January 14, 1875, are required to be of the description of bonds of the United States described in the said act of Congress approved July 14, 1870, entitled "An act to authorize the refunding of the national debt;"  and

Whereas at the date of the passage of said act of Congress last aforesaid, to wit, the 14th day of July, 1870, the coin of the United States of standard value of that date included silver dollars of the weight of 412½ grains each, as declared by the act approved January 18, 1837, entitled "An act supplementary to the act entitled 'An act establishing a mint and regulating the coins of the United States,'" to be a legal tender of payment according to their nominal value for any sums whatever:  Therefore,

Be it resolved by the Senate, (the House of Representatives concurring therein,) That all the bonds of the United States issued or authorized to be issued under the said acts of Congress hereinbefore recited, and payable, principal and interest, at the option of the Government of the United States, in silver dollars, of the coinage of the United States, containing 412½ grains each, of standard silver;  and that to restore to its coinage such silver coins as a legal tender in payment of said bonds, principal and interest, is not in violation of the public faith, nor in derogation of the rights of the public creditor.

Mr. Matthews.  I want that laid on the table and printed.

The Vice-President.  That order will be taken.

Mr. Dawes.  I think the Senator means a joint resolution.

Mr. Matthews.  No, sir, I mean a concurrent resolution, exactly as it states.

The Vice-President [William Wheeler].  There comes over as unfinished business of yesterday a resolution, which will be read.

Mr. Kernan.  I understand that the unfinished business is the resolution offered by the Senator from Ohio, [Mr. Matthews.]

The Vice-President.  It is about to be laid before the Senate.  It will be read by the Secretary.

Mr. Kernan.  I was going to ask the Clerk to report the resolution.

The Chief Clerk read the resolution submitted by Mr. Matthews on the 6th instant, as follows:

Whereas by the act entitled "An act to strengthen the public credit," approved March 18, 1869, it was provided and declared that the faith of the United States was thereby solemnly pledged to the payment in coin or its equivalent of all the interest-bearing obligations of the United States, except in cases where the law authorizing the issue of such obligations had expressly provided that the same might be paid in lawful money or other currency than gold and silver;  and

Whereas all the bonds of the United States authorized to be issued by the act entitled "An act to authorize the refunding of the national debt," approved July 14, 1870, by the terms of said act, were declared to be redeemable in coin of the then present standard value, bearing interest payable semi-annually in such coin;

Whereas all bonds of the United States authorized to be issued under the act entitled "An act to provide for the resumption of specie payments," approved January 14, 1875, are required to be of the description of bonds of the United States described in the said act of Congress approved July 14, 1870, entitled "An act to authorize the refunding of the national debt;"  and

Whereas at the date of the passage of said act of Congress last aforesaid, to wit, the 14th day of July, 1870, the coin of the United States of standard value of that date included silver dollars of the weight of 412½ grains each, as declared by the act approved January 18, 1837, entitled "An act supplementary to the act entitled 'An act establishing a mint and regulating the coins of the United States,'" to be a legal tender of payment according to their nominal value for any sums whatever:  Therefore,

Be it resolved by the Senate, (the House of Representatives concurring therein,) That all the bonds of the United States issued or authorized to be issued under the said acts of Congress hereinbefore recited, and payable, principal and interest, at the option of the Government of the United States, in silver dollars, of the coinage of the United States, containing 412½ grains each, of standard silver;  and that to restore to its coinage such silver coins as a legal tender in payment of said bonds, principal and interest, is not in violation of the public faith, nor in derogation of the rights of the public creditor.

The Vice-President.  The pending question is on the motion refer the resolution with the amendment offered by the Senator from New York [Mr. Conkling] to the Committee on the Judiciary.

Mr. Kernan.  Mr. President, in my judgment the subject covered by this resolution and our action upon it are of very great importance to the Government and people of the United States.  They touch the character and credit of the Government and the welfare of our country.  The subject should be considered carefully, calmly, and with a sole view of doing that which Congress shall be satisfied is for the best interest of our people and which will preserve the high character of our Government.  No government can wisely for its people act otherwise than with entire justice and good faith toward its creditors.  A government which so acts that its character for good faith with its creditors may be justly questioned does that which is very injurious for all time to that government as well as to the people whom its represents.  Therefore I trust and believe that this subject will be discussed, not in any spirit of asperity, or as though there were sectional or class differences in reference to it, but in a spirit of patriotism, with a desire that there shall result from our discussion and consideration such action as shall be for the best interests of our Government and our people.

The preamble of this resolution states that an act of Congress was passed in 1869, by which the Government solemnly pledged its faith to pay its bonded debt in coin, except where the law authorizing it expressly otherwise provided.  The word "coin" in this act meant the legal-tender coin of this Government;  it meant the legal-tender coin of the United States then prescribed by the United States laws.  We then pledged ourselves to pay the bonds which had been theretofore issued in this legal-tender coin.  The preamble of the resolution further states that in July, 1870, a law was passed, known as the refunding act, by which we pledged ourselves to pay the bonds issued under that act in coin of the then standard value.  Another law was passed in January, 1875, providing for the issue of the description of bonds authorized by the act of Congress of July, 1870, above referred to.

Mr. President, since those laws were passed, bonds have been issued under these acts of 1870 and 1875 to a large amount, at various times prior to February 12, 1873, and since February 12, 1873;  and if there had been no legislation by the Government on the subject of coin other than that recited in this preamble, it could be very forcibly urged that all these bonds might justly be paid in the coin which was the legal-tender coin of the United States when the above-mentioned laws for the issue of bonds were enacted.  This coin, prior to February 12, 1873, was, by the statute, gold coin and the silver dollar of 412½ grains.  But permit me, in this connection, to call attention to a fact which we should not forget in this discussion.  In 1869 and all the time down to February 12, 1873, what practically was the legal-tender coin of the United States ?  I admit that by the law either gold coin or the silver dollar mentioned in this resolution was a legal tender in payment of all debts;  but practically what amount of this silver dollar had ever been used or even coined in the United States ?  This is important when we are discussing what coin was contemplated as payment of bonds for more than a thousand millions of dollars.

Sir, the entire amount of silver dollars of the weight and fineness described in this resolution, which were coined by the United States from the organization of the Government to this time was $8,045,838.  I get this from a book published during this year by Mr. Linderman, the Director of the Mint, entitled "Money and Legal Tender."  He gives the amounts coined each year in a table, and the above is the total sum.

Mr. Allison.  Will it trouble the Senator if I ask him a question there ?

Mr. Kernan.  I would rather not yield unless the question is very short.

Mr. Eaton.  If my friend from New York will permit me, I should like to correct him.  Up to 1870 there had been but 4,709,495 silver dollars coined.  Down to 1877 he adds about $3,000,000 more.

Mr. Kernan.  The Senator may be correct.  I am giving the entire silver coinage of dollars of 412½ grains during the whole time.  What was the other legal-tender coin of this Government during that time ?  The Government coined during that same period, from 1792 to 1877, of double eagles, $809,598,440;  of eagles, $56,707,220;  of half eagles, $69,412,815;  of quarter eagles, 26,795,750;  of three-dollar pieces, $1,300,032, and of gold dollars, $19,345,438.  I get the amount of the gold coinage from this same book by Mr. Linderman.  The amount coined in each year is given in the table;   and by examining the table you will see that the gold coinage was to a large amount over $20,000,000 a year for years prior to 1869 and in each subsequent year.

Now I ask the citizen, the legislator, the creditor, what was the coin mentioned and referred to in the law of 1869 and in the law of 1870 referred to in the preamble to this resolution ?  Was it not the gold coin of the United States ?  The Government had been and was coining this in large amounts.  It had never coined but 8,045,000 of the silver dollars ?  The party who advanced money and took our bonds, whether he was a citizen of this country or a foreigner, in view of these facts, in view of the fact that this silver dollar was not and never had been practically a coin in use in this country to any considerable amount, did not understand that the coin mentioned in these statutes was this silver dollar.  He did not believe and had no good reason to believe that the bonds were to be paid in this silver coin.

I am not now referring to the act of Congress of February 12, 1873, or the effect of this law.  Under the law as it stood before the passage of this act of 1873, would any party purchasing in the market or from the Government any of these bonds, suppose for a moment that whether silver depreciated or not the Government would change its entire practice during its entire existence and coin silver dollars in large amounts and compel its creditors to receive them in large sums ?  A party who had to receive fifty thousand of these silver dollars would require a team which could draw a ton in weight to take away his money.  I am told by those informed that every $5,000 of the silver dollars weigh more than two hundred pounds.

I do not say that we may not, according to the letter of the statutes of 1869 and 1870, pay the bonds issued before 1873 in the silver dollar.  It was included in the word coin used in these laws;  but practically it had never been the legal-tender money of the United States for large payments, and I submit that even had the law of 1873 demonetizing silver never been passed, we should not, as a Government, now when silver is depreciated, commence to coin this dollar and force it upon our creditors.  This would hardly be acting with that good faith which a government should observe.  A government, to preserve a high character for honor and honesty, should fulfill its obligations according to the spirit of the contract.  Did the parties who subscribed to loans to the Government for bonds issued under the act of 1870 understand or suspect that if silver became depreciated the Government would commence and coin the silver dollar by the hundred millions and force it upon parties in payment of these bonds, when during nearly one hundred years the Government had coined but eight millions ?

Mr. Thurman.  Does the Senator mean that ?

Mr. Kernan.  That statement is what comes from the Mint.

Mr. Thuhman.  It does not come from any such source.

Mr. Kernan.  Allow me to justify myself.

Mr. Thurman.  That statement leaves out all the half dollars which before the act of 1837 were largely coined.

Mr. Kernan.  My friend from Ohio did not pay attention to what I stated.  I took great pains to say that of the silver dollar, "the dollar of the fathers," the dollar mentioned in this resolution, as the honest coin to pay the public creditors, we never coined but eight millions.

Mr. Beck.  I should like to ask the Senator if it would not be fair to say that we coined sixteen and a half millions of the trade-dollars in the last few years ?

Mr. Kernan.  They were not and are not money or a legal tender.  The trade-dollar was 420 grains, not 412½, and it was not money, but a mere token coin.  It was coined for parties to be used in trade with China and Japan, and the Government was asked to coin it for that purpose.  It was never a legal tender for a larger sum than $5.

I insist that, in view of these facts, it can hardly be claimed that the parties to the contract, the Government on the one side and the loaner of money to it on its bonds on the other, understood even before the act of February 12, 1873, that the term "coin" in the acts of 1869 and 1870 imported that the bonds were to be paid in the silver dollar which had really never been in practical use as currency in the country and of which only a few millions had ever been coined.  I think my friend from Connecticut [Mr. Barnum] once wittily said, in private conversation, he would be willing to make it a legal tender to some amount, but he would not to an amount large enough to require a cart and horse to draw the sum tendered.

Mr. President, this resolution of the honorable Senator from Ohio [Mr. Matthews] affirms in language, (and he interprets it, as I understood him, as I do:)

That all the bonds of the United States issued or authorized to be issued, under the said acts of Congress hereinbefore recited, are payable, principal and interest, at the option of the Government of the United States, in silver dollars, of the coinage of the United States, containing 412½ grains each, of standard silver;  and that to restore to its coinage such silver coins as a legal tender in payment of said bonds, principal and interest, is not in violation of the public faith, nor in derogation of the rights of the public creditor.

In a word, it affirms that this country may rightfully, honestly, and honorably pay every bond that it has heretofore issued, in this silver dollar of 412½ grains.  I respectfully but most earnestly dissent from the proposition.  I submit most respectfully to the intelligent judgment and the right-mindedness of every Senator whether this resolution is keeping the pledge we made in 1869, to pay our bonds in coin.  I admit that there is a distinction between those and other bonds issued before 1873 and those issued since 1873, and I shall treat of each separately.  I first submit that in view of the fact that the Government had been going on from 1793 coining gold coin by the thousand million and its silver dollar only to the extent of $8,045,000.  Whether parties who had taken from the Government or bought the bonds in the market after the law of 1869, by which the Government pledged its faith to pay them in coin, had not a right to believe that the Government would pay them in the current legal-tender gold coin which alone had been issued by the Government and used in the country for the payment of large sums.  Might not the man who held bonds and saw that law of 1869 rightfully rely on the good faith of the Government that it would not go to coining silver if it became cheap and pay him in silver dollars, saying "these are within the letter of the statute-they are coin ?"

Again, conceding that the Government at its option, under those laws, might pay in the one coin or the other, gold or silver, that it might elect which the creditor might take, I insist that the Government did elect in 1873 which should be the coin of payment.  It made its option then to pay the bonds in gold coin, not in silver.  Why ?  By the original laws of 1869 and 1870 the bonds were to be paid in coin, and that meant the legal-tender coin of the United States, and they could be paid in nothing else.  Therefore before the law of 1873 the creditor was entitled to payment justly in that which was the legal-tender coin of the United States Government.

The Government by the law of February 12, 1873, enacted that the gold coin only should be a legal-tender coin, should be money to pay all debts within the United States.  The silver dollar was then abolished as money by the Government itself, by the Government that made this contract, which I concede for the purpose of the argument might legally pay either in gold or silver at its option.  Did it not, in 1873, elect to pay in gold coin when it abolished the silver dollar and made gold coin the only legal-tender money for the payment of all debts in the United States exceeding $5 in amount ?  I say, then, the Government elected to pay in gold coin.  This election was declared to the world by a public statute, one of the most solemn declarations which a government can make.  It was done by an act passed February 12, 1873, "revising and amending the laws relative to the mints, assay offices, and coinage of the United States."  We were to pay in legal-tender money of this Government, and in 1873 we elected to make gold coin the only legal-tender money of this Government.  For greater convenience I read the law from the Revised Statutes.  After declaring what the gold coins of the United States shall be, the law declares---

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, &c. (See Revised Statutes of the United States, page 700.)

What else did that same law do ?  It enacted that gold alone should be the legal-tender money in this country.  I read from the same act as it is in the Revised Statutes, page 712:

The gold coins of the United States shall be a legal tender in all payments at their nominal value when not below the standard weight and limit of tolerance provided by law for the single piece.

The silver coins of the United States shall be a legal tender at their nominal value for any amount not exceeding $5 in any one payment.

Thus the United States Government in February, 1873, made by law gold coin the only legal-tender money for the payment of all debts in the United States.  The other silver coins of the United States ceased to be a legal tender except for small sums.  This has continued to be the law to the present time.  It is conceded that the bonds were to be paid in coin;  this clearly meant coin of the United States Government.  Concede for the argument that the Government prior to 1873, at its option or election, might pay the bonds in gold or silver coin.  In 1873, long before the bonds are due, while the bonds are selling in the market and circulating from hand to hand, the Government, by law, makes the gold coin the only legal-tender coin of the United States and abolishes the silver dollar.

Now, after the Government thus elected and legislated in 1873, we are asked to declare by this resolution as against the parties who took these bonds issued under the law which said "they shall be paid in coin," meaning, as everybody will concede, the legal-tender money coin of the country, the Government can do what ?  If they find that they made a mistake and that silver has become a depreciated metal, the Government may revoke the election made nearly five years ago, restore the silver dollar, and pay the bonds in this coin.  Sir, this would not be acting justly and in good faith toward the parties who held our bonds in 1869 and hold them still.  Even as to these parties, the good faith and high honor which should characterize a Government forbid, that it should now, in 1877, after silver has become depreciated in the market, change its coin back to silver, and force this depreciated coin upon its creditors.  These parties have a right to rely on the law of 1873, which made the gold coin the only legal coin of the United States.  They had a right to assume, after the law of 1873, that the gold coin was the coin in which their contract would be paid;  that the United States would not, because silver should become depreciated, revoke its election made in 1873, and recoin silver and make that the coin of payment and compel the creditor to receive it.

Have these bondholders not a right to respond, "Is that fair to me ?  These were bonds that passed in the market when you made gold your standard and elected that that should be the only legal-tender coin of your country by a solemn law in 1873.  I relied upon your good faith;  I did not sell these bonds as I might if I had supposed you would have elected back to silver."  I am sure if a creditor would come to one of you, being the debtor in the place of the Government, you would say, "I admit that in good faith I ought to pay you in that coin upon the faith of receiving which you held the bonds, and in which, upon my solemn statement, you relied that I would pay them."  I am now speaking of the men who have held the bonds since before the law of 1869.  But take another class of men.  They may have been sharp.  They may have read the law, and said "These bonds may be paid either in gold or in silver coin.  The law says that the Government will pay them in coin, and it may pay them in one or the other, and I will not keep them.  I will sell them in the market;"  and after the law of 1873 was passed they did sell them in the market to parties who relied upon the fact that the Government had abolished the silver dollar and made gold coin our sole coin and legal tender of our country.  These parties had a right to assume that we would not change our laws after having made that election by the law of 1873.  They relied upon it that this great Government after the law of 1873 passed by both Houses of Congress and signed by the President would not change back to silver coin, even should it turn out that they could pay cheaper in that coin.  Therefore I say the people who have become the owners of the bonds by purchase from the holders who took them before 1873, have a right to say it is not in good faith for us now, four or five years after 1873, to turn around and insist that we will make a secure election and pay in silver coin.

The Government having made the legal-tender coin of the country gold coin, thus making this the only coin in which its bonds could be paid while that law was in force, and parties relying upon that law purchased bonds in the market, it is not dealing with these parties with that fairness and justice and good faith which should characterize individuals, and which I believe always will characterize this Government, to repeal the law and pay in the silver dollar.  We should not say "We were mistaken;  we find we can make 8 or 10 per cent. on our bonded debt by going back to silver, and although you relied fully upon the law of 1873 and believed the law adopted a gold standard and gold coin as our money, and that the Government would receive payments and pay its debts only in that coin, nevertheless we will now change back to silver dollars of 412½ grains as a coin to pay you."

I do not say this in an offensive sense to the gentlemen who differ honestly from me;  but I say it earnestly, because it seems to me that is the way I would feel if I were the creditor or if I were the debtor.  I would not think that it was treating the creditor with good faith or equity or justice to act as is proposed by this resolution.  I say therefore, that if we adhere to this resolution we violate the faith of this Government toward all the men who purchased these bonds after we made the sole coin money of this country the gold coinage of double eagles, eagles, half eagles, and dollars.

But, Mr. President, this resolution covers the bonds issued by the Government since February 12, 1873.  There have been issued by the Government under these laws, pledging to pay in coin, bonds to the amount of hundreds of millions since the 12th of February, 1873, when the coinage act demonetizing silver and making gold coin the standard legal tender of the United States was passed.  Knowing this resolution was coming up I stopped at the Treasury yesterday morning and asked for and got a memorandum of the amount of bonds at 5 per cent., 4.5 per cent., and 4 per cent., issued since the 12th of February, 1873.  Are you going to pay these bonds in silver ?  They were issued after you had demonetized silver and had made the only legal-tender coin the gold coin, and these parties bought on the faith of it, invested their money on the strength of your law and your pledge and your promise that "coin" meant gold by your law, as it always had meant practically.  I requested and there was given me a statement of the United States bonds sold and issued by the Government since February 12, 1873, namely:

Five per cent. $317,494,150
Four and a half per cent. 200,000,000
Four per cent. 75,496,550
Making. 592,990,700

Since 1873 the Government, when it agreed to pay coin, according to the laws of 1870, meant gold coin.  There was no legal-tender coin, no coined money known to our laws beyond the small change and the token coinage except gold coin.  The purchasers of these bonds issued since 1873, whether the stranger from abroad or our own citizens, supposed they had made a good investment and had aided the Government by taking our bonds at these reduced rates of interest, relying upon our Government that they would get the coin which by law was the only legal tender when the bonds were issued and the contract made;  and yet we now turn round and say, "Oh, we were sharper than you.  By close technical reasoning we satisfy ourselves that legally you must take that which was theoretically by law the legal-tender coin in 1769 and 1870, when those laws were passed.  Although you relied upon our electing to pay in the gold coin, and relied upon our making gold coin only a legal tender in payment of all debts in our country, we will now go back and under a sharp construction of the law satisfy ourselves that we can pay you in silver, which has depreciated below the purchasing price of gold;  and we will do it."

Mr. Wallace.  Will the Senator inform me how many of those bonds were sold in 1877 ?

Mr. Kernan.  I cannot from this memorandum;  but I infer from the Secretary's report that there were taken during the latter part of 1876 and in 1877 these last two items of $200,000,000 and $75,000,000.

Mr. Wallace.  Since the silver agitation commenced in 1876 and 1877, and of this $592,000,000 all except $103,000,000 or $104,000,000 were taken in 1876 and 1877.

Mr. Kernan.  Very likely, and I want to come to that.  The bonds were in the market.  Our executive officers wanted to relieve the people from taxation.  We asked holders to give up the six per cents. and take bonds at 5 and 4.5 and 4 per cent. interest, and in 1876 and 1877 they came forward, relying upon our law, and did so.  They came forward, I may say, relying also upon the letter this last summer of the Secretary of the Treasury that we would be honest and pay gold, the only coin known to our laws.  They have taken these bonds at these reduced rates of interest, and now the Government is going to say, and this meets the suggestion of my friend:  "You should not have believed that we would keep good faith;  you should have believed that there was rising up a cry here to pay our debt in cheaper money, and you should not have trusted the honor or honesty of the Government;  you should not have relied upon the Government of the United States to pay in the coin which alone by their own laws was legal money when they issued the bonds."  The men who subscribed for the loans in 1873, 1874, 1875, 1876, and 1877 agreed to take so many bonds, payable in United States coin.  By the law of the land we could have sued them on their subscriptions and made them pay gold coin to the Government for these bonds.  The fact that there was some clamor or agitation as to silver somewhere would not help them.  We would say, "Gentlemen, you agreed to pay in coin.  We have by law declared what is the legal-tender coin of the United States, and that is gold coin;  and we will compel you to pay your subscriptions for bonds in this coin."  These subscribers for bonds could not have set up successfully as a defense that our Government might try to cheat them by thereafter paying the bonds in a depreciated silver coin;  that the remonetizing of silver was agitated in some sections of the country.  No;  I think the suggestion of my friend that all these parties who subscribed under our laws were bound to pay us gold, and did pay us gold, for these bonds greatly strengthens the argument against this resolution.  They contracted with our Government to take so many bonds and pay for them in coin, and that meant our gold coin, and they paid us for the bonds in gold coin.  Now we are asked to declare by this resolution that we will change our laws as to coin and pay the bonds to them in depreciated silver coin.  Is this the honor and good faith that should characterize a Government of a great people ?

Mr. Wallace.  Will the Senator tell me whether they did practically pay in coin, or exchange bonds bearing a higher rate of interest for bonds bearing a lower ?

Mr. Kernan. As to these last, the $200,000,000 and the $75,000,000, though I have not gone to seek this information officially, I understood they did pay in gold or its equivalent, and I suppose they did pay all in gold or its equivalent;  and when they subscribed for and contracted to take our bonds payable in coin ---since 1873 I am talking about--- they would be compelled to pay us gold coin of this country or its equivalent;  and can we now turn around and say we borrowed under our laws, gold coin only was paid for the bonds we issued, and now we will change our law and pay you off in depreciated silver.

My colleague most kindly suggests to me in answer to the question put, suppose the holders gave up bonds at 6 per cent. at their value in gold at that time.

Mr. Wallace.  That was not coin.

Mr. Kernan.  It was an article worth so much in gold coin at that time.  They gave up a piece of property worth so much in gold coin, reckoned at its worth in gold coin, and took our bonds in pay at par, payable in coin;  and do you say we can honestly change our laws and not only pay them a lower rate of interest, but make them take a depreciated piece of metal, never used in large transactions, and pay them off, and say we can hope that just-minded, dispassionate, impartial men will say we have taken care of the honor and credit of our Government as a man would care and should care for the purity and character of his wife or mother ?  I assure you that the outside world and fair men at home looking at these laws will say that to pass this resolution is to declare that the very gold we have received for our bonds or its equivalent at this day shall not be paid back in gold coin although our bonds have been negotiated and taken at a lower rate of interest to the great advantage of our people.  It would be cheating the bondholders --for that is the word as it seems to me-- by paying these bonds in another coin depreciated in value, not having the purchasing value of gold, not being a coin known to our law for the last five years.  We borrowed coin according to our own gold standard of value, and then change our standard and coin to depreciated silver, and pay the creditor in this coin.

I trust that we shall consider this and come to a conclusion that we cannot either honorably or honestly, as man deals with man and keeps his contract as it was understood by both at the time, now change our laws and make a cheaper metal coin and put it off upon our creditors.

The effect of passing this resolution now, whether in the form of a declaration or in the form of a law, would be disastrous to confidence and credit in this Government.  I agree with my colleague, if we pass it at all, let it not be a sort of expression of opinion, but let us amend it, make it a law in form, so that at least the parties who deal with us hereafter shall not be cheated or deceived as to the intention of our Government.  This resolution affirms that all the bonds issued or authorized, all issued up to this day under these laws promising to pay in coin, may be paid in silver dollars.  Nearly five years ago we changed our law and made our gold coin alone our legal-tender coin, and since then have borrowed $600,000,000.  I do not care whether borrowed this year or last year or any other year since 1873.  I deny that we can now either honestly or justly to that good faith and high-toned morality which every government should practice, change our law and say to the holder "sell your bonds for what you can get;  we are going to return to the silver standard and silver coin;  this will depreciate the value of the bonds, the property we sold for gold and made you pay for in gold, which you contracted to pay for in gold, because there was no other coin at that time."  I submit that it would be in violation of public faith and in derogation of the just rights of the public creditor to make any such declaration, to make any such law indicating that our Government is capable of doing any such thing.

I know it is said often in public addresses that the law of 1873 was a fraud. Let us test that cry before the people of this country, of whom I am one, whose interests are to me dear, whom I would desire in every just way to act justly by and for the benefit of.  It is said that this law was a fraud.  If so, who perpetrated the fraud ?  The agent of the people of this Republic --their authorized, accredited agent.  Assuming that there was a fraud --I do not say there was, for I am not familiar with the facts-- who perpetrated it ?  Who changed the law by the act of February 12,1873 ?  Was it the men who loaned the money to our Government on these bonds since that time ?  They were not the agents of the people;  but the two Houses of Congress and the President were, and they changed the law, and as it was fixed in 1873 it stands unaltered to this day.  If there has been a wrong, the people of the United States must deal with their agents, not with the persons who on the faith of the acts of their accredited agents loaned money to the Government and took bonds.  We cannot escape under that claim.  An individual cannot, much less can the Government, authorize an agent to do business, and if he by fraud against his principal does an act within the scope of his authority but really in violation of his duty, the principal must suffer, but the party with whom he deals as agent must not suffer.  It is not good morality to say that the United States Government can now avoid the effect of the law of 1873, on its contracts heretofore made, by charging or proving that the Congress and President of 1873 violated their duty in enacting the law of February 12, 1873.  Every people must recognize and carry out the contracts and laws made by its authorized government, if they will preserve the character of a high-toned people among the nations of the Earth.  Much more must we stand up to the obligations incurred by us by the acts of our Government, our agents acting here before our eyes, and acting at the time without the slightest hint that there was to be any attempt to insist that it was not proper action by them.

Now, Mr. President, if we were willing to put this question on the narrow ground of self-interest, can we afford to do this for the 8 or 10 per cent., if that be the sum which we should make by paying the amount of our bonded debt in silver dollars ?  I am not now speaking of the amount we should lose by preventing the funding of our debt at a lower rate of interest by this action, I am talking of the character, the credit of a country which should be preserved, and I am asking Senators whether, if we could be tempted at all, as I trust and believe no such body ever can be, into dealing sharply and inequitably with the creditor to make money for the Government of the people, can we afford to do this act ?  We cannot afford to do it for 6 or 8 or 10 per cent. on $1,600,000,000 or $1,700,000,000.  No, not for any sum of silver or gold.  I do not discuss it in that view.  No amount of money should ever tempt the Government to show a want of that good faith which should ever characterize a government in carrying out its laws and contracts in reference to loans, upon which laws people have relied and acted.  I trust therefore, Mr. President, that this matter will be examined and this resolution defeated.  I shall listen with great attention to those who differ and differ honestly with me;  but I shall hope and believe, for the sake of this Government, for the sake of our suffering people, that some seem to think will be benefited by this act, that we shall pass no resolution, we shall pass no law which says to those who have dealt with our Government and relied on our laws to pay them in coin, and we by law, at our own option, elected to make that coin gold coin as the only money of our country, and agreed that we would pay in that.  I trust we shall not be tempted to pass any resolution or law that would say to the world we are capable at any time in view of these facts and these laws of changing our laws, and recoining silver dollars of 412.5 grains by the hundred millions, that we may pay them to our creditors instead of the gold dollar that our creditors expected to receive, and which have been our only legal dollar since February 12, 1873.

The best interest of our people and their Government will be promoted by preserving that uberrima fides which every government should exercise in all its dealings.  This you can only do as to contracts by performing them according to their spirit;  by living up to our laws and contracts as they were fairly understood by the creditors when they took the bonds and paid us gold coin or its equivalent for them and expected gold coin in repayment.  Our duty is to deal justly and wisely with the character of our own Government and its good name, and doing this we will deal justly and for the best permanent interest of all our people.  The amount that would be saved by the doctrine of this resolution is nothing compared with the evils which would come from having a credit that would be shaken so that we can no longer fund our bonds as we should do and have been doing.  At a lower rate of interest our bonds would come from abroad to be sold here in consequence of the alarm as to what we may do.  Let us avoid all this, and let us do that which will restore confidence, which will make men of capital and men of enterprise have confidence in business, and then that confidence being restored which is shaken by these discussions in the halls of Congress, as I fear very much, you will have again industries reviving, manufactures and all the other branches of industry will again be prosecuted and prosperous.  In my judgment what the country needs to-day is not more money or cheaper money, but we need that confidence in a sound, stable, unfluctuating currency, which will bring out capital, restore confidence to men of energy and enterprise, and encourage the mill-owner and other manufacturers to invest capital in business because of their confidence that they will get for what they invest at least aa good a currency as they invest.

Mr. Wallace.  Mr. President, I shall not attempt to-day to enter into an elaborate argument of this question---

Mr. Beck.  The Senator from Pennsylvania yields to me for a moment, and I thank him for allowing me to make an explanation of a question I put to the Senator from New York.  I do not propose to make a speech on this subject.  I am too new a man here to hope either to convince the Senate of the correctness of my views or to change or influence a single vote.  But I asked the Senator from New York a question which he seemed to think had nothing in it, as to the amount of silver coinage of the United States.  He stated the fact to be that there had been only $8,045,000 coined, when I suggested to him---

Mr. Kernan.  Silver dollars I said.

Mr. Beck.  I meant silver dollars when I suggested to him that there had been coined since 1874, from 1874 to 1877, sixteen and one-half millions of what were known as trade dollars, which I thought it was fair to suggest was part of the silver coinage.

Mr. Kernan.  No, they were not legal-tenders, but mere tokens.

Mr. Beck.  I understand; and therefore the suggestion was regarded as being worth nothing.  Now, I assert that it is evidence of the fact that but for the circumstance that silver was demonetized in 1873, we should not only have issued over twenty-four and a half millions of silver dollars as we have done, but the chances are that we should have doubled that amount of silver coinage but for the demonetizing act.  Why do I say so ?  Because Congress made the trade-dollar contain 420 grains, and the legal-tender dollar only contained 412½ grains;  and if with 420 grains required to make the trade-dollar we still coined 16.5 millions since 1873, it is fair to assume that if we had been allowed to coin the old dollar at 412.5 grains we should have coined a great deal more.  That, together with the immense coinage of half dollars, which up to 1873 reached one hundred and eighteen millions, and the half dollars, were till 1853 full legal-tenders, shows that there was something in the suggestion I made which the Senator from New York seemed to regard as being of no value, which was that but for the demonetization of silver the coinage of silver would have been greatly increased.

While I am on the floor I want to say one thing, and I say it with all respect to the Senator from New York, that it is the first time that I ever heard a democrat on this floor, or on the floor of the other House, rise and defend all the acts that have been done by the republican majority relative to coinage and relative to money, and clamor that the faith of the nation was involved in the maintenance of every act they have done.  There have been many acts done that I deny that the people of the country are obliged to maintain longer than till they have the power to reverse them;  and many of those acts that have been done have been done against the protest of the whole democratic party.

Mr. Allison.  Will the Senator yield to me for a moment ?

Mr. Beck.  Yes, sir.

Mr. Allison.  Do I understand the Senator to intimate that the democratic party opposed, as a political organization, the demonetization of silver in 1873 ?  Was that a party question ?

Mr. Beck.  I have no doubt they did, so far as they understood it.

Mr. Allison.  I have not the slightest knowledge that the democrats opposed it.

Mr. Beck. When the silver bill is taken up for discussion I hope to be heard upon this question as to how it was demonetized;  but I say this now in answer to the question --and the records of Congress show-- that when the bill demonetizing silver was pending in the House of Representatives, on the 28th of May, 1872, and the gentleman who then had charge of it brought it up within two days of the final adjournment as a substitute for a previous bill which had been partly but never fully read, that bill having been up on the 9th day of April, 1872, when the question was put to him by divers gentlemen, (and the Record will bear me out,) he said that it made no change in the coinage, and relying on his statement that bill never was read, but was passed in the House of Representatives without any man not privately advised knowing what it contained.

Mr. Allison. Yes; but, Mr. President, that bill was debated in this body, and there was no partisan division with reference to that bill in this body.

Mr. Beck. Let me say, in answer to that, that the bill was debated at the third session of the Forty-second Congress in this body, brought up by the present Secretary of the Treasury. The debate will be found at the close of the first part and the beginning of the second part of the Congressional Globe for the third session of the Forty-second Congress, and the whole debate was upon the coinage charge.  Not one word was said in that debate as to the demonetization of silver.  Senators will, I hope, read it for themselves, and they will find the fact to be as I state it.  Mr. Casserly, of California, insisted that we were to have an immense silver coinage;  he stated that Nevada was then producing $20,000,000 annually;  and the present Secretary of the Treasury insisted on having "In God we trust" inserted on the face of the coins instead of the eagle, which was there before and which he said foreigners did not understand.  He thought such a dollar would float as far as the silver coin of the foreign nations known as the Latin Union would that was all over the world.  Was there a word said as to demonetizing silver in that debate ?  Not one, unless I have overlooked it, and I have read it with some care.

Mr. Allison.  That is not the point I make.  That bill was pending in the Senate for a considerable time.  It was printed in the Senate.  If it had been objected to by democratic Senators, a full and complete opportunity was given to democratic Senators to object to it.  Therefore it was passed without partisan division and without partisan debate.

Mr. Beck. I say that debate shows that no man claimed that that bill sought the demonetization of silver, and the Record will show the fact that the present Secretary of the Treasury avowed that the object was to make a silver dollar that would float, to use his own expression, all over the world coextensive with the silver dollar of France, of Switzerland, and of the nations composing the Latin Union.  Therefore I insist that it was not demonetized by the intelligent action of the representatives of the people.

Mr. Kernan.  It was distinctly charged by the Senator that I acted in some way improperly---

Mr. Beck.  Oh, no !

Mr. Kernan.  In referring to the demonetization of silver.  Now allow me to say a word in justice.  I was not discussing the silver coinage question.  I was discussing a resolution which declares that it is right to pay these bonds in the dollar of 412.5 grains of silver, and I called attention to all of them that had ever been coined.  One other thing. I have not said one word which could make my friend think one way or the other as to whether I approve these laws or not.  I argued on the acts of our Government, the authorized Government;  whether it was done by both parties or by either party makes no difference to the outsider.  I said the Government had made certain laws and the honor and the necessity of that Government and this American people, whether their Government was in charge of the same party or any other, was bound, as against the men that trusted to our agents and our Government, to keep faith with them.  I said nothing about what was wise or not wise.  I said that the Government having taken certain action by its laws and said to the world so and so, we cannot now declare that we will undo that, even if it were wrong, and thus wrong the creditors 6 or 8 or 10 per cent. of the face of their bonds.

Mr. Beck.  I do not propose to deprive the Senator from New York of the benefit of his statement, for whatever it is worth, and therefore do not propose to reply to it.  He knows what he said, and let it stand.  But I say that all the legislation of this country for the last twelve years has been absolutely in favor of the rich against the poor, in favor of dead capital against active industry, and that the effort now made to prevent us from restoring what was the legal coin of the country at the time the great bulk of the debt was contracted is anti-democratic.  To go back a little, I say that when the 5/20 bonds were issued in 1862 they were made payable upon their face in the legal-tender notes of the country.  Every legal-tender note had written across its back the statement that "this note is receivable at its face-value for all debts, public and private, except interest upon the public debt and custom dues;"  and when the republican party in 1869, which the gentleman says the faith of the United States is pledged to maintain --I think I quote his exact language there-- undertook to say that the principal of these bonds was payable in gold, they undertook to do what no legislative body had a right to do.  It was the duty of the courts and in the power of the courts alone to construe what the meaning of the existing laws on this subject was.  Chancellor Kent, Judge Cooley, every writer on constitutional law, so holds.  When that act was passed it converted a domestic debt into a foreign debt, added over $500,000,000 to the burden of the taxpayers of this country;  and when silver is now 8 per cent., as it is said to be, below gold, the act of demonetizing it not only added 8 per cent. to the bonded debt of the country, but it added 8 per cent. to all the debts of the country:  Federal, State, corporate, municipal, and private.  The Government of the United States to-day owes over $2,000,000,000.  Poore's Railroad Manual, issued not long ago, shows that the railroad bonds outstanding are over $2,000,000,000.  The debts of States and of the cities within the States are over 1,000,000,000.  The debts of the other corporations and individual debts amount to over $2,000,000,0000 more, to say nothing of the debts of national banks, making over $7,000,000,000, half of which is held in foreign countries.

Eight per cent. on our indebtedness is $560,000,000;  and when the bonds of the United States (to go back a little further) were bought, as they were, with the legal-tender notes of the country at par and bonds bearing 6 per cent. interest in gold were given to the men who bought them, and they were authorized as national bankers to issue 10 per cent. of what passed as money in their own names, which depreciated the legal-tender notes of the country as much as that many more legal-tender notes would, it entailed a burden of at least $22,000,000 a year more on the taxpayers of the country, making in the last ten years $220,000,000.  I repeat $500,000,000 were wrongfully imposed upon the country by the act of 1866.  Five hundred and sixty millions, being 8 per cent. difference between silver and gold by the demonetizing act, and $220,000,000 in the last ten years, by the amount of taxation added by allowing the national bankers to use the credit of the Government in issuing their notes instead of the Government doing it itself, make $1,280,000,000, a sum many millions larger than was required to pay all the expenditures of the Government from the day Washington was inaugurated up to and including the year 1856, embracing the expenditures for the wars with Great Britain and Mexico and all the pensions that were paid in consequence of both of them.

And now we are told that the faith of the country is pledged to stand by every one of these and similar things. I deny it. The meager minority on this side of the Chamber has swelled to its present proportions and the power in the other House has passed to the democratic side because they have pledged themselves in their platforms and everywhere else, whenever they shall have power, to legislate no longer in the interest of bondholders and capitalists, but to arrange the taxation of the country so that its wealth shall bear its proper proportion of burdens, instead of the poverty and labor being as now taxed almost exclusively.

I am of those who believe this resolution is right, because it is true. I believe that it is a step in the right direction. I feel assured that to force resumption in January, 1879, without making preparation for it by relieving burdens and restoring commerce is calculated and intended to still further depress the industries of the country for the benefit of the men who hold the bonds and other obligations of the people, that the present system of tariff taxation is now so adjusted as to put the money derived from taxation into the pockets of the few and to keep it out of the Treasury. I am convinced that there must be a readjustment of all these things and that legal-tender notes must be received for all purposes before resumption is possible.

I ask the Senate if the silver dollar had not been demonetized, with over seven thousand millions of debt hanging upon this country, with all its industries depressed, with the property of the people reduced, because of contraction and the approach to specie resumption, from 25 to 33 per cent., if there is a man in this Senate who would to-day, because silver was lower than gold, vote to demonetize silver ?  I answer, not one.  No man would dare to go before the people who had so voted and ask re-election in the face of the laws recited in this resolution, which show that even by the act of 1869 gold and silver coin of the then standard value were put upon an equality;  that by the act of 1870 it was declared that the bonds then issued might be paid in the then silver coin of its then standard value;  and the act of 1875 recited the same fact upon its face.  In view of these laws, who, I ask, would now propose that the people of this country should be deprived of the right of paying their debts in either the gold or silver coin of the standard value existing at this time ?  I assert, no Senator would dare to go before his people to-day and ask re-election after he had voted to demonetize silver under existing circumstances;  and as he would not, and as that was the coin on which the great portion of these bonds were issued, in which all the railroad debts were contracted, in which the debts of corporations were contracted, in which nine-tenths of the debts now outstanding all over the country, State, Federal, municipal, corporate, and private were contracted, there is no injustice in declaring that we have the right to pay in that same standard silver coin.

But I beg pardon of my friend from Pennsylvania.  I rose to make an explanation and have been drawn off a little further than I expected.  I will reserve what I may say till the silver bill comes up.  I had no idea when I rose that I would occupy more than a minute or two, and I have not pretended to speak to the merits of the question further than to deny that we are in any manner bound, either by good faith or otherwise, to support past legislation in the interest of bondholders against the interest of the great mass of the people.

Mr. Wallace.  Mr. President---

Mr. Dawes.  Will the Senator permit me to say a few words in reference to the manner in which the bill of 1873 was passed ?

Mr. Wallace.  I shall occupy the floor but a very few minutes, if the Senator from Massachusetts will pardon me.

Mr. Dawes.  I should like now to reply to what has fallen from the Senator from Kentucky, if it will not disoblige the Senator from Pennsylvania.

Mr. Wallace.  The Senator may proceed.

Mr. Dawes [Henry Laurens Dawes (October 30, 1816 - February 5, 1903) Pittsfield Massachusetts, R; studied law, admitted to the bar.].  The Senator from Kentucky [Mr. Beck] has taken up a charge which has frequently been made in the country, and I have no doubt is believed by some, that there was something wrong about the passage of the bill which demonetized silver in 1873, that by some improper action of the gentleman having charge of that bill, without the law-making power either in the House or the Senate understanding its real meaning, and without any intent on their part, he had effected the demonetization of the silver dollar without their being aware of it, and that that fact was not discovered until recently.  I have heard it said that a foreigner, whose name was given, [Ernest Seyd] came over here with some $500,000 of money to use (as the phrase goes) where it would do the most good and in the interest of the demonetization of silver.  The name of this foreigner, who was here at that time and has been here since, was given for the purpose of adding strength to the charge that this law as it now stands upon the statute-book was put there by some improper means.  As the member in the House of Representatives [Mr. Hooper], to whose door this charge is laid, was a Representative from my own State, and is now dead and cannot defend his own memory, perhaps the Senator from Pennsylvania will bear with me while I say a few words upon that point.

There never was a charge so void of foundation and so exhibiting the want of examination on the part of those who make it as the charge that, without knowing what was in that bill and with the purpose and with the idea that the bill still continued the silver dollar of 412½ grains as the dollar of the currency of the country, it was passed by Congress, unless it be the charge, equally groundless, that that man came over here with money to induce Congress to pass that bill.  The man whose name is used in that connection is a man who was then and has ever been in favor of the silver dollar and of the bimetallic system, and has been delivering lectures in this country in favor of the very object that this bill when it became a law controverted;  and yet I saw within three days the name of this man who in England and in this country is spending his time trying to convince the business public that the silver dollar ought to be restored, and never ought to have been extinguished as a part of our currency, used in connection with a statement that he came over here and with money in his pocket exercised undue influence over the legislation of Congress in order to effect the very opposite of that for which he is now and was then striving.

The bill that demonetized the silver dollar was drawn in the Treasury Department in 1870.  It did not become a law till 1873.  It was reported in this branch in the winter of 1870 from the Finance Committee, and in the very first report and in the very first print of the bill the old silver dollar was demonetized and reduced to a subsidiary coin containing only 384 grains.  It was in pursuance of a report from the Comptroller of the Currency in which he recommended precisely that same thing in print.  It went through various stages in that Congress, and in every stage it was reprinted, and in every reprint of it was contained the provision demonetizing the silver dollar.  It did not become a law during that Congress.  It was reported in the next Congress, containing that very same provision demonetizing or reducing to a subsidiary coin the old silver dollar of 412½ grains;  and when it passed this branch and went to the other House, it was reprinted again.  In all, it was reprinted twelve times, and I submit to the Senator from Kentucky that in every one of those twelve reprints of that bill, the old dollar that had been theretofore coined was demonetized and extinguished.  The Comptroller of the Currency in his second report upon the subject called attention to the fact and gave the reason.  When the bill was reported in the other branch for consideration there it was first introduced by a distinguished member from Pennsylvania [Mr. Kelley].  Upon that occasion that member called the attention of the House to the fact that it demonetized the silver dollar.  It went to the proper committee in the House and was in due time reported and reprinted, and in that reprint was contained the provision that extinguished this dollar.

Mr. Hereford.  Will the Senator from Massachusetts allow me to interrupt him ?  Is he not aware of the fact that in the House of Representatives, of which we were both members at the time when the committee having charge of that bill reported it, they reported a substitute, and that although it was demanded that the substitute should be read, the Speaker announced that the previous question having been demanded it could not be read;  and although Mr. Holman, of Indiana, and Mr. Brooks, of New York, demanded that the substitute should be read, the Speaker of the House announced that it could not be read;  and it never was read, and was passed without any member of the House knowing a line or a word in it, without its ever being read or printed ?

Mr. Dawes.  There is nothing so commendable in this world as patience;  it relieves us of a great deal of trouble;  and when I get to the last day of the consideration of the bill, if I omit to state what was done then, the Senator from West Virginia shall have an opportunity to call my attention to it.

Mr. Hereford.  Will the Senator allow me to interrupt him for about three minutes to read from the Congressional Globe what did take place ?

Mr. Dawes.  I propose to read from the Congressional Globe myself.  If the Senator prefers now to address the Senate---

Mr. Hereford.  No, sir.

Mr. Dawes.  My purpose is to state the fact that every man who had a desire to know what was in that bill had more than the usual opportunity to know what was in it;  and it is more than can be said of almost any bill that has become a law that had, as I have said, twelve reprints, and in every one of them the old silver dollar of the currency and of the legal tender was extinguished and reduced to a subsidiary coin of 384 grains.  Upon the day that the bill was considered in the House, my then colleague, (Mr. Hooper,) in discussing section by section the provisions of the bill, used this language [on April 9, 1872.]:

Thus far the section [Sec. 14.] is a reënactment of existing laws.

I read his words---

In addition, it declares the gold dollar of twenty-five and eight tenths grains of standard gold to be the unit of value, gold practically having been in this country for many years the standard or measure of value, as it is legally in Great Britain and most of the European countries.  The silver dollar, which by law is now the legally declared unit of value, does not bear a correct relative proportion to the gold dollar.  Being worth intrinsically about one dollar and three cents in gold, it cannot circulate concurrently with the gold coins.  The law of 1792, now in force, provided for the coinage of "dollars or units, each to be of the value of a Spanish milled dollar, as the same is now current, and to contain three hundred and seventy-one and four sixteenths grains of pure, or four hundred and sixteen grains of standard silver."

The Spanish dollar of full weight then in circulation contained three hundred and seventy-four and seven eighths grains of pure silver, but the variation or error in fixing the weight of the American dollar is said to have arisen from assuming the average instead of the highest weight of any one of the number of pieces assayed for that purpose.  As the value of the silver dollar depends on the market price of silver, which varies according to the demand and supply, it is now intrinsically worth, as before stated, about three cents more than the gold dollar.  By the act of January 18, 1837, the standard of the silver coins was increased to nine hundred thousandths fine, which reduced the weight of the dollar from four hundred and sixteen to four hundred and twelve and a half grains;  the amount of pure silver, however, remained the same, namely, three hundred and seventy-one and one fourth grains.  The committee, after careful consideration, concluded that twenty-five and eight tenths grains of standard gold constituting the gold dollar should be declared the money unit or metallic representative of the dollar of account.

Again, he said:

Section sixteen reënacts the provisions of existing laws defining the silver coins and their weights respectively, except in relation to the silver dollar, which is reduced in weight from 412½ to 384 grains;  thus making it---

I am giving you the language addressed to the House of Representatives by the man who is charged with having obtained legislation extinguishing the dollar of 412½ grains without the knowledge of the House---

thus making it a subsidiary coin in harmony with the silver coins of less denomination, to secure its concurrent circulation with them.  The silver dollar of 412½ grains, by reason of its bullion or intrinsic value being greater than its nominal value, long since ceased to be a coin of circulation, and is melted by manufacturers of silverware.  It does not circulate now in commercial transactions with any country, and the convenience of those manufacturers in this respect can better be met by supplying small stamped bars of the same standard, avoiding the useless expense of coining the dollar for that purpose.

Here, sir, he discussed the silver dollar with the bill before him;  told the House just exactly where it had been placed in all the twelve prints of that bill;  and the gentleman from Pennsylvania upon the committee, who reported the bill in the first place, and turned it over to my then colleague to be managed in the House --I mean a Representative of one of the Philadelphia districts, the oldest member of the present House, [Mr. Kelley]-- called attention to the same fact, and said that he wanted to go further than that bill;  said that he wanted to follow the example of England and make the gold dollar, as in England, the absolute and only unit.  I will read what that gentleman said [on January 9, 1872.]:

This bill is a mere codification.  There are one or two things in this bill, I will say to the gentleman from New York [Mr. Potter], with his permission, which I personally would like to modify;  that is to say, I would like to follow the example of England, and make a wide difference between our silver and gold coinage.  But as I was charged with a bill that looked only to the codification of the mint laws, or mainly that, I did not feel it well to interject into that bill any of my own peculiar ideas.  I would have liked to have made the gold dollar uniform with the French system of weights, taking the gramme as the unit.  I have expressed myself very earnestly on that subject, but I did not feel that I could impress my personal views on a general law, and therefore I preferred, as I introduced yesterday a resolution touching the silver coin, to have this question come up as an independent question.

Mr. Beck.  Will the Senator from Massachusetts allow me to say a word ?  The Senator from Massachusetts will recollect that I have not said a word about the history of the demonetizing bill, except in response to questions from the Senator from Iowa.  When he asked me certain questions, I answered them according to my recollection of the Record;  but when the silver bill comes up I hope to be able to show by the Record that the bill as passed never was read in the House and that the gentleman having charge of it distinctly avowed that it made no change in the law.  Now, will the Senator from Massachusetts answer me who that distinguished gentleman was that he referred to as some Englishman who had taken part in this bill and who was opposed to this thing ?

Mr. Dawes.  The distinguished Englishman to whom I referred, who was charged with having come over here to do precisely the opposite of what he did, was Ernest Seyd.

Mr. Beck.  I observe, if the gentleman will allow me, that on the 9th day of April, 1872, when the bill was read up to its sixth section and laid aside and never taken up again, the gentleman from Massachusetts (Mr. Hooper) remarked:

The bill was prepared two years ago, and has been submitted to careful and deliberate examination.  It has the approval of nearly all the mint experts of the country, and the sanction of the Secretary of the Treasury.  Mr. Ernest Seyd, of London, a distinguished writer, who has given great attention to the subject of mints and coinage, after examining the first draft of the bill, furnished many valuable suggestions which have been incorporated in this bill.

I suppose he is the same person.

Mr. Dawes.  There is no doubt about that fact;  but that does not quite go to the point that he approved of the demonetization of the silver dollar in face of the fact that he was at the same time earnestly, openly, publicly protesting and urging against it.

Mr. President, my desire was to show to the Senate that this bill in the beginning and throughout all its stages was intended to demonetize the silver dollar;  that the discussion of the question of the silver dollar in the bill and what the bill provided in respect to the silver dollar was open, free.  Another member of the same committee, from Michigan, whose name has now escaped me, called attention more explicitly than either of these members to the actual condition of the silver dollar in that bill.

Mr. Beck.  Mr. Stoughton.

Mr. Dawes.  Mr. Stoughton.  Now, it is true, Mr. President, that after this discussion to which I have alluded, upon the next day a substitute with the sanction of the committee was offered by my then colleague, and that passed without being read.

Mr. Beck.  Not the next day;  six weeks afterward.

Mr. Dawes.  The next day that the bill was under discussion the bill was recommitted to the committee;  and it was brought back from the committee;  and on the very day on which it was brought back, just at the close of the session, it was brought back as a substitute for the original bill, and the difference between the substitute and original bill was just this:  The subsidiary dollar of 384 grains was left out of the bill which finally passed.  The old dollar of 412½ grains was never in the bill, unless I have been misinformed and have examined the records to no purpose.  The reasons for the design of the bill to extinguish that old dollar were given;  whether sound or not I am not going to trespass further on the indulgence of the Senator from Pennsylvania to discuss for a moment;  but the reasons were given.  Everybody that cared to listen to the bill knew that if the bill passed in that shape the old dollar of 412½ grains would cease to exist.  When the bill came back, the committee thought that a subsidiary dollar reduced in value to 384 grains was of no use, and they left it out.  The charge that the old dollar thus passed out of the currency of the country by any artifice or without the knowledge of those who passed the bill, is a mistake, and does great injustice to those, living and dead, who managed the bill and presented it to both branches of Congress and by whose efforts it became a law.  I am very much obliged to the Senator from Pennsylvania.

Mr. Wallace.  Mr. President, I shall not trespass upon the time of the Senate to-night so far as to go into the general argument that bears upon the silver bill, but shall confine myself as directly as I may to the real question at issue in this resolution, which is whether the bonds of the Government are, legally and morally, payable in the silver dollar.

We are to remember, when we attempt to enter upon the consideration of this question, that the Government had a double standard of coinage from 1792 to 1873.  There can be no question about that.  There were both silver and gold coins.  The silver dollar was by law the unit of value and the money of account.  The law bases all Treasury accounts upon this.  As late as 1849 the gold dollar was given place as a coin of the Government.  With this legal and practical situation, we come to the period of the war during which the Government issued a large number of the bonds upon which this issue arises and for which the faith of the Government was pledged to pay that indebtedness in coin.

That pledge was to pay in the coin of the Government of the United States.  That coin was both gold and silver coin.  There can be no question about these propositions.  The Government held for itself in every statute the option to pay in either coin.  From 1853 to 1873 silver was practically driven out of the country by the fact that it was undervalued in the coinage laws as compared with gold.  It stood here at a higher rate than gold;  and in the markets of the world, in London, it stood at a higher rate than gold;  that is, during all those years one hundred cents in gold would not buy one hundred cents in silver.  This fact is found by reference to the tables.  Hence when silver is named or implied from the word "coin" in the bonds and in the laws authorizing them from 1861 forward it was a more valuable metal than the gold coin, which was in fact the money used, so far as any metallic coin was used, in governmental transactions.

That silver was not in use in all those years was not by reason of its cheapness, but because that it was more valuable than gold both here and in England, and it continued so until 1873.  We thus had "coin" named in the law and the bonds.  We had the practical fact that gold, a cheaper metal, had driven out silver, the dearer metal, and that when the word coin was used it meant both gold and silver coin.

Now we come to the effect of this upon the bonds issued.  It seems to me both a legal and a logical result that the bonds thus issued by the Federal Government, payable in coin, were payable at our option either in gold or silver coin, and that if silver had appreciated and gold depreciated we might have exercised and could still exercise our option to pay in gold.  If this be true, where is the immorality of exercising our option now to pay those bonds in silver.  As to those bonds, there was no act of demonetization to base an argument upon.

We come now to the re-funding act of July 14,1870.  What were its provisions ?  They are expressed in terms as distinct and emphatic as anything can be.  It provides:

That the Secretary of the Treasury is hereby authorized to issue, in a sum or sums not exceeding in the aggregate $200,000,000, coupons or registered bonds of the United States, in such form as he may prescribe, and of denominations of $50 or some multiple of that sum, redeemable in coin of the present standard value, at the pleasure of the United States, after ten years from the date of their issue, and bearing interest, payable semi-annually in such coin, at the rate of 5 per cent. per annum.

Also $300,000,000 of four and a half per cents and a thousand million of four per cents, all of which were to be payable in coin of the then present standard value.  Then we find that the law at that time fixed the standard value of the gold dollar at 25.8 grains and the standard value of the silver dollar at 412½ grains and that the silver dollar was then the undisputed unit of value, and upon this basis of law and fact the Government took the option in the act of 1870 that then existed in every bond which was then outstanding bearing the seal of the United States upon it, in our own country or in Europe, to pay either in silver dollars of 412½ grains or in gold dollars of 25.8 grains.  It is inevitable that this conclusion must be reached from a consideration of this statute and of the then existing facts.

Now we find what else ?  In that very section this:

And the said bonds shall have set forth and expressed upon their face the above specified conditions.

What conditions ?  The conditions that they are payable in coin of the standard value of 1870, both principal and interest.  These words and conditions are set forth and expressed upon the face of the bond itself.  I have one here.  I read from it.  It is dated July 18, 1877, and it is a 4 per cent. bond and reads:

The United States of America are indebted to the bearer in the sum of $50.  This bond is issued in accordance with the provisions of an act of Congress entitled "An act to authorize the refunding of the national debt," approved July 14, 1870, as amended by an act approved January 20, 1871, and is redeemable at the pleasure of the United States, after the 1st day of July, 1907, in coin of the standard value of the United States on said July 14, 1870, with interest in such coin from the day of the date hereof at the rate of 4 per cent. per annum, payable quarterly on the 1st day of October, January, April, and July in each year.  The principal and interest are exempt from the payment of all taxes or duties of the United States, as well as from taxation in any form by or under State, municipal, or local authority.  Washington, July 1, 1877.

Here is the contract written in the law and printed in the bond.  In every one of the bonds that my friend from New York referred to, of the $592,000,000 issued since February 12, 1873, is found the express provision that the contract is that we may pay these bonds in silver dollars of 412½ grains, or in gold dollars of 25.8 grains, and not only these but all others issued under the act of 1870, and yet, in the face of the law and of the express contract that these men made with the Government --men who are not simple, men who know what they are about, men who handle millions of money-- in the face of this, their plain contract, these gentlemen who own the debt say to those who are to pay it, you are repudiators;  you are attempting to cheat;  you will destroy the morality of the Republic.

The public press teems with assaults on all who in their representative capacity differ with them and dare to say "Here is the letter of the law;  here is your contract;  the rights of our people are involved in this question, and we demand that you shall stand by the letter of the contract."  We who say we abide by the contract are termed repudiators, cheats, and immoral people, who pay in cheap money.  Upon whose shoulders ought to fall these epithets ?  We simply say, "Sir, you made a contract with the Government of the United States when silver was above one hundred cents on the dollar, and when legal-tender notes were far below the gold dollar in value, and you paid for your bond under that contract in those legal-tender notes, and now we propose to pay you in the coin that by that contract you gave us the option to pay in, in silver coin of the standard value that the contract provided we might pay."  Is there anything wrong in this ?  Is there a want of public morality in this ?  Is there a want of common honesty in it ?  Why, sir, it seems to me that such statements are utter perversions of terms and an unwarranted attack upon those who seek only to take care of the rights of the Government and of the people under a contract unambiguous on its face.

But, says the Senator from New York [Kernan], in 1873 came a statute which changed the terms of the contract, which provided that the unit of value should henceforth be a gold dollar, and that the Government having changed its standard and made a gold dollar the unit of value, that notwithstanding the fact that we had a contract outstanding which gave the Government the option to pay and the bondholder the right to demand silver dollars of 412½ grains, yet that one of the parties to the contract could and had changed that contract.  Not so, sir.  On the contrary, there is no new contract;  there is the letter of the law and there are the words of the contract and the bond, and we must abide by them.  But, in 1873 the Government of the United States, a sovereign with power to coin money and regulate the value thereof, with gold and silver as the only legal-tender coin of the country, as I believe and always have believed, the sovereign, possessed of undoubted sovereignty in this regard, undertakes to change its measure of value.  Assume that the law was proper, that there was no wrong or impropriety in its passage, the standard of value was changed by that law.

Now, how does that affect these gentlemen who held their bonds prior thereto or subsequently ?  I turn again to the statute of 1870, and I find that the first of these bonds, the five percents, mature in ten years after their date;  the next, the four-and-a-half percents, in fifteen years, and the next, the four percents, in thirty years, and yet the gentlemen who hold these bonds, who have this contract by the law and the bond payable ten, fifteen, or thirty years after date, say that we shall cross the bridge before we get to the river.  They say they have the right to say to us that it is a want of public morality to say you will not pay your bonds due in 1907 in the coin named therein.  How absurd is such a proposition.  What standing has a creditor of a solvent debtor to make such an attack ?  Let us take care that our sovereignty is not impaired in this matter.  We have the right to change the standard of value and make the unit of value gold or silver alternately two or three times between this and that time.  It is our right and our power, and it does not lie in the mouths of those who hold these bonds to say a word on the subject until their day of payment comes.  It is for us, the sovereign, to declare what shall be the measure of values, and if we do it to-day, five years before their first bond matures, it is not for them to charge us with lax morality.  If they get their money when their bond matures in the kind of coin or in the standard of value that it was in 1870 they must be content;  that is their right, no more and no less.

But, sir, is all this cry about repudiation worth anything ?  Within a year silver has stood in the markets in London at 99¼.  In December last the Director of the Mint in his report shows you that it stood there at 99¼;  in January at 98½.  It has tended downward a part of this year and upward the other part of the year and is now appreciating;  and yet, because to-day it is below the rate that these gentlemen say it ought to be at when they are to get their money, twenty years after this, if you please, therefore the people of the United States through their representatives cannot say, "We can and we will change our standard of value and we may and we ought to declare that the silver dollar of 412½ grains is justly, morally, and legally payable upon this indebtedness !"

Mr. President, I had not intended to go into the general subject.  I have said all I propose to say on this question.  My only purpose was to assert the proposition that the contract was, and is written in the bond, that the holders thereof are to take coin of the standard value of 1870;  therefore that the law and the bond themselves both speak directly and emphatically this legal result. They agreed to it and they cannot now evade that contract.  It is not for them to say that it is a want of public morality to declare that the metal which in 1870, when their contract was made, was worth more than one hundred cents in gold shall not be paid to them when their bond matures. I can say to the Senator from Ohio [Mr. Matthews], however, in regard to this resolution, that it seems to me it ought not to be passed until a full discussion is had of this question by every one who may seek or desire to discuss it.  It seems to me that our attitude upon this whole question is capable of full, perfect, and complete vindication, and that we ought to give to the country from our places here all the light we can before making the declaration, which I think is the logical result of the law and of the contract and of the rights and the wants of this people.