Demand Notes.

Mr. Stevens.  I move that the rules be suspended, and that the House resolve itself into the Committee of the Whole on the state of the Union.

The motion was agreed to.

So the House resolved itself into the Committee of the Whole on the state of the Union, (Mr. KELLOGG, of Illinois, in the chair.)

The CHAIRMAN.  The question in order is the special order, being House bill No. 240, to authorize the issue of United States notes, and for the redemption or funding thereof, and for funding the floating debt of the United States, on which the gentleman from Ohio [Mr. Pendleton] is entitled to the floor.

Mr. PENDLETON.
[George Hunt Pendleton (July 19, 1825 – November 24, 1889) Ohio (D);  studied law, admitted to the bar;  in 1868 leading opponent of paying these 5/20 bonds in gold;  in 1869 became president of the Kentucky Central Railroad]
Mr. Chairman, I was glad to hear the announcements made by the gentleman from Vermont, [Mr. MORRILL,] a member of the Committee of Ways and Means, by my colleague, [Mr. Vallandigham,] by the gentleman from New York, [Mr. Roscoe Conkling,] and by the gentleman from Pennsylvania, [Mr. Stevens,] that they each intended to propose to the House to make changes in this bill, either by way of amendment or substitute.  I do not know what those changes may be;  but from the language in which these announcements were made, I infer that they will be radical, touching not only the provisions of this bill, but all the financial questions which so gravely complicate the difficulties pressing upon the country.  I shall therefore, sir, postpone whatever I might desire to say in reference to the general subject until these amendments are proposed, and confine myself this morning somewhat strictly to the special provisions of the bill before the committee.  That bill provides for the issue of $100,000,000 of Treasury notes of the character and description therein mentioned.  It provides that they shall not bear interest;  that they shall be payable, at the pleasure of the Government, to bearer at the Treasury of the United States, or at the office of the Assistant Treasurer in the city of New York;  they shall be receivable for all debts and demands due to the Government, and for all debts and demands due from the Government;  and, in the language of the bill,

"They shall be lawful money and a legal tender in payment of all debts, public and private, within the United States."

I have examined, Mr. Chairman, with some care, every law authorizing the issue of Treasury notes which has been passed from the foundation of the Government up to this hour, and I find that this bill differs from all of them in several essential particulars.  Every other law authorizing the issue of Treasury notes provided that they should bear some rate of interest, whereas these are to bear none;  that they should be payable at a fixed time prescribed in the note, whereas these are only to be payable at the pleasure of the United States;  that the notes thereby authorized should be receivable in payment of public debts only by those who were willing to receive them at par, while these notes are to be received by every public creditor who is not willing to forfeit his right to payment at all.  These notes are to be made lawful money, and a legal tender in discharge of all pecuniary obligations, either by the Government or by individuals, a characteristic which has never been given to any note of the United States or any note of the Bank of the United States by any law ever passed.  Not only, sir, was such a law never passed, but such a law was never voted on, never proposed, never introduced, never recommended by any Department of the Government;  the measure was never seriously entertained in debate in either branch of Congress.

Mr. Roscoe Conkling.  Will the gentleman allow me to ask him a question ?

Mr. Pendleton.  Certainly, sir.

Mr. Roscoe Conkling.  I understand the gentleman to say that no measure like that he is about to discuss was ever entertained in debate, or, if I understand him, ever recommended by any Department of the Government;  and I would like to inquire of the gentleman front Ohio [Mr. Pendleton] whether he is prepared to answer, and if not, of the chairman of the Committee of Ways and Means, or the gentleman who reported this bill, whether the present Secretary of the Treasury is in favor of making paper a legal tender;  and also whether he is prepared to recommend to Congress the adoption of that measure ?  I will say, with the permission of the gentleman, that, for one, I should like very much to know what is the opinion of the Secretary of the Treasury, embracing not only the extent of the constitutional power, which the gentleman is now going to discuss, but the economic and political extent, if that is involved in the proposed measure, of making paper a legal tender in payment of debt.

Mr. SPAULDING.  In reply to the question of my colleague, I will say that the Secretary of the Treasury has been called upon for his opinion in regard to this bill.  We were assured that his reply would be sent to us yesterday, but we did not receive it.  We expect his answer every hour.

Mr. Roscoe Conkling.  I am not certain that I understood what my colleague said.  Does he expect a letter from the Secretary of the Treasury which will contain his views on the financial question, and also on the legal question ?

Mr. SPAULDING.  Upon this bill specifically?

Mr. Roscoe Conkling.  Containing the legal tender clause ?

Mr. SPAULDING.  Yes, sir.

Mr. PENDLETON.  I cannot answer the question of the gentleman, so far as the opinions of the present Secretary of the Treasury are concerned.  I affirm again the statement I have made, that a proposition of this kind has never been recommended to either House of Congress by any Department of this Government from its organization.  The report of the Secretary of the Treasury, made at the opening of the session, contains no such recommendation.  It is obvious, from the comparison which I have drawn between the bill before us and the laws heretofore passed, that if this bill shall pass, we are about to take a departure from the settled financial policy of the Government.  We are about to launch ourselves, with sails all set, upon an ocean of experiment, upon which the wise men who administered the Government before we came into power, warned by the example of other nations, would not permit it even to enter.  I believe that this Government has reached a crisis in its history.  I believe that it is approaching a period in the history of its legislation which may determine the question of its continuance.  By wisdom it may overcome the evils of secession;  by its great powers and resources it may be able to defend itself against those in arms against it;  but I firmly believe that it cannot maintain itself against the shock of the accumulated and manifold dangers which follow inevitably, closely in the wake of an illegal, unsound, and depreciated Government paper currency.  The feature of this bill which first strikes every thinking man even in these days of novelties, is the proposition that these notes shall be made a legal tender in discharge of all pecuniary obligations, as well those which have accrued in virtue of contracts already made as those which are yet to accrue in pursuance of contracts which shall here after be made.  Do gentlemen appreciate the full import and meaning of that clause ?  Do they realize the full extent to which it will carry them ?  Every contract for the payment of money is in legal contemplation a contract for the payment of gold and silver coin.  Every promissory note, every bill of exchange, every lease reserving rent, every loan of money reserving interest, every bond issued by this Government, is a contract to which the faith of the obligor is pledged that the amount, whether rent, interest, or principal, shall be paid in the gold and silver coin of the country.  Every contract for the performance of some other thing than the payment of money carries with it, as the penalty of its infraction, that damages shall be assessed, and that these damages shall be paid, even if necessary at the end of an execution, in the gold and silver coin of the country.  Every verdict which has been rendered, every judgment which has been entered up, every decree for the payment of money, has been made upon that hypothesis.  That is the measure of the obligation of the one party, and of the right of the other.

The provisions of this bill contemplate impairing the obligation of every contract of that kind, and disturbing the basis upon which every judgment and decree and verdict has been entered.  It proposes to say to a party who has entered into a contract, "You shall be discharged from the obligations of that contract by doing something else than that which you have agreed to do."  It proposes to say to every party with whom a contract has been made, "Though you are entitled to demand one thing, you shall, perforce, remain satisfied with the doing of another."  It proposes to say, "Although, you have agreed to pay gold and silver, you shall be discharged upon the payment of these notes;  although you are entitled to demand gold and silver, you shall rest content with the reception of this paper."  It proposes, in one word, to release the one party from the obligation of his contract, and to divest the other party of the right which has been vested in him by that contract.  Sir, I am sure I need only state the proposition to shock the mind of the legal profession of the country, so thoroughly has it been imbued with the idea of the sanctity of the obligation of contracts by those who have taught it the beneficent maxims of constitutional law.

As for the rest, this bill provides that it shall be illegal to make a contract for dealing in gold and silver coin;  or, to state it more exactly, it provides that whatever executory contracts parties may make concerning the gold and silver coin of the country, they shall be discharged upon the performance of another and different duty — by the delivery of an equivalent number of dollars in these notes.  Where, sir, does Congress get this power ?  Where is the grant to be found ?  One would suppose that a power like that — a power which involves the impairing of the obligations of such a vast class of contracts, which proposes to disturb vested rights to such an immense extent — would be worthy of a place in the express grants of the Constitution.

Mr. Hickman.  I desire to ask the gentleman from Ohio whether there would be any objection to this bill, provided it allowed these notes to be a legal tender in the payment of debts on all contracts hereafter arising, where there was no provision in the contract itself to the contrary ?

Mr. PENDLETON.  I shall answer that question in the course of the argument which I intend to make, and I prefer to answer it in that way.

I was saying that a power whose extent was so great as this was worthy to find a place in the express grants of the Constitution.  I had expected to hear the gentleman from New York, [Mr. Spaulding,] in his argument upon this subject yesterday, derive this power from the power to "coin money."  I am glad he did not, for I think that no stress of financial difficulties could excite the honest imagination of any gentleman, even though upon the Committee of Ways and Means, to such a degree that he could, even in its wildest flights, fancy this power involved in those words.  I expected to hear him derive it from the power "to regulate commerce;"  in this I was agreeably disappointed.  I know that clause is the stalking horse which is made to carry almost every conceivable power which any gentleman has thought it desirable at any time that Congress should exercise;  and yet I know that Mr. Webster, who attributed to the Government of the United States more power by reason of that clause than any other American statesman of whom I have any knowledge, expressly, and upon divers occasions, scouted the idea that by virtue of it, or of any other clause in the Constitution, such power was given.  I know it is extremely difficult to define with exactitude all the powers which Congress may have by virtue of that provision;  but, sir, I think it might be left to any fair-minded man to say whether a law, which provides that a certain note issued by the Treasury of the United States shall be a legal tender in discharge of debts already accrued, is a fair and legitimate exercise of a power to regulate the interchange of commodities, and their barter and sale.

The gentleman from New York, [Mr. Spaulding,] in his argument yesterday, deduced this power from the general powers of the Government.  He told us that Congress had power to lay and collect taxes;  to raise and support armies;  to provide and maintain a navy;  and that all power necessary to effectuate these purposes was expressly given by the general grant of the Constitution.  If I should admit his statement in the very language in which he has made it, am I not entitled to ask whether he has shown us any legitimate connection between making these notes a legal tender and the power to raise an army ?  Might I not ask whether the repudiation of the obligations of the Government to pay its interest is a legitimate means for providing and sustaining a navy ?  Whether impairing the obligations of contracts between private individuals throughout the country will, in any degree, assist the Government in its great duty of laying and collecting taxes ?  We had no demonstration of the necessity or propriety of these means to accomplish those ends.

The gentleman spoke quite at large in reference to the sovereign power of the Government.  He told us that this power was not prohibited in the Constitution.  He told us that in times of great emergency everything may be done except that which is prohibited;  and he read an argument from the Attorney General, which concludes as it began, with the proposition that such a power is not prohibited to Congress.  Sir, I repudiate this whole idea.  I think it has no solid foundation in the Constitution.  In all its external relations, standing among the nations of the earth, the Government of the United States is sovereign, and is invested with all the attributes of sovereignty;  but in its relations to its own citizens, in its relations to the States, in its relations to its own constituents, it has no power except that which is granted.  It has no original power;  its powers are all delegated, and delegated by the terms of the Constitution itself.  I repudiate the idea that all the the sovereign power which rightfully resides in the nation must necessarily find expression in any department of the Government, whether it be national or State.  I stand upon the provision of the Constitution, that all power which is not delegated to the Federal Government is reserved from it;  and that all power which is not delegated to it, and thereby reserved from it, resides either in the States or the people.  There are many powers which are denied by the Constitution to the States, and yet not delegated to the General Government.  They find their proper repository in the people.

I would call the attention of the gentleman, in this connection, and in reference to the argument which he has made, to the fact that under the Articles of Confederation the Government of the United States had the power to raise armies, to provide a navy, to borrow money, and to emit bills of credit, upon the faith of the United States.  And yet the statesmen of that day never, even in all the distress and pressure of the financial difficulties of the Revolution, supposed that they possessed any such power as this.  They desired that the bills emitted by the Government should be a legal tender, and they passed resolutions that they ought to be so considered, but they never deemed that they had the power to make them such, or sought to exercise it.

Judge Story says:

"Other emissions were subsequently made.  The depreciation was natural, and indeed a necessary consequence of the fact that there was no fund to redeem them.  Congress endeavored to give them additional credit by declaring that they ought to be a tender in payment of all private and public debts, and that a refusal to receive the tender ought to be an extinguishment of the debt, and recommending the States to pass such tender laws.  They went even further, and thought proper to declare that whoever should refuse to receive this paper in exchange for any property, as gold and silver, should be deemed an enemy of the liberties of these United States.  This course of violence and terror, so far from aiding the circulation of the paper, led on to still further depreciation.  New issues continued to be made, until, in September, 1779, the whole emission exceeded one hundred and sixty millions of dollars." —2 Commentaries on the Constitution, sec. 1359.

It seems that in those days they indulged in the same hallucinations to which some gentlemen upon this floor, and many financiers in the country, seem even yet to be subject — that a paper-money system is the best that can be devised.  So thought these gentlemen of the Continental Congress, as they were indulging in all the luxury of $300,000,000 of paper money.

"They indignantly repelled the idea, in a circular address, that there could be any violation of the public faith pledged for their redemption, or that there did not exist ample funds to redeem them.  They indulged in still more extraordinary delusions, and ventured to recommend paper money as of peculiar value.  'Let it be remembered,' said they, 'that paper money is the only kind of money which cannot make to itself wings s and fly away.' " —2 Story on Constitution, see. 1359.

When I come to examine the powers of Congress, according to the principles of interpretation to which I have said I adhere, I look to the grants of the Constitution.  I find no grant of this power in direct terms, or, as I think, by fair implication.  It is not an accidental omission;  it is not an omission through inadvertency;  it was intentionally left out of the Constitution, because it was designed that the power should not reside in the Federal Government.

Prior to the adoption of the Constitution the States had nearly all — perhaps all — emitted paper money, and had made it a legal tender in the payment of debts.  It was designed originally to forbid to the States the exercise of that power, and to delegate it to the Federal Government;  and, accordingly, the first draft of the Constitution reported by the committee of revision contained a clause prohibiting this power to the States, and another clause granting to the Federal Government the right "to borrow money and emit bills on the credit of the United States."  When that clause came up for discussion, as it appears from page 1343 of the third volume of the Madison Papers—

"Mr. Gourveneur Morris moved to strike out 'and emit bills on the credit of the United States.'  He said if the United States had credit, such bills would be unnecessary;  if they had not, unjust and useless.

"Mr. Butler seconded the motion."

Mr. Madison thought it was advisable to leave in the Constitution the provision that Congress might emit bills of credit, and to deprive Congress of the power of making them a legal tender.  He suggested—

"Will it not be sufficient to prohibit the making them a tender ?  This will remove the temptation to emit them with unjust views.  And promissory notes, in that shape, may in some emergencies be best."

A very sharp debate followed upon the proposition to strike out from the Constitution the clause conferring that power:

"Mr. Ellsworth thought this a favorable moment to shut and bar the door against paper money.  The mischiefs of the various experiments which had been made were now fresh in the public mind, and had excited the disgust of all the respectable part of America.  By withholding the power from the new Government, more friends of influence would be gained to it than by almost anything else.  Paper money can in no case be necessary.  Give the Government credit, and other resources will offer.  The power may do harm, never good." * * * * * *

"Mr. Butler remarked, that paper was a legal tender in no country in Europe.  He was urgent for disarming the Government of such a power."

"Mr. Read thought the words, if not struck out, would be as alarming as the mark of the beast in Revelation."

"Mr. Langdon had rather reject the whole plan than return the three word, 'and emit bills.' "

And on the motion to strike out those words from the Constitution, it was decided by a vote of nine States "aye," and two States "no".  The following was the vote:

AYES— New Hampshire, Massachusetts, Connecticut, Pennsylvania, Delaware, Virginia, North Carolina, South Carolina, and Georgia —9.
NOES— New Jersey and Maryland —2.

Mr. Madison has appended a note which I desire to read:

"This vote in the affirmative by Virginia was occasioned by the acquiescence of Mr. Madison, who became satisfied that striking out the words would not disable the Government from the use of public notes, as far as they could be safe and proper, and would only cut off the pretext for a paper currency, and particularly for making the bills a tender either for public or private debts."

And so thoroughly was that understood to be the meaning and policy of the Government that none of the early Statesmen of the country, either those who had been present at the time of the making of the Constitution or those who followed so closely after as that they were familiar with those who did make it, even suggested that such a power existed.

Mr. Hamilton, certainly, a gentleman who was in favor of enlarging to the utmost the powers of the Government, in his very first report to Congress upon the subject of a national bank, takes a distinction between the emission of bills by the Government and the creation of a bank with power to emit its own bills.  In that famous report on a national bank, in 1790, he uses this language:

"The emitting of paper money by the authority of the Government is wisely prohibited to the individual States by the national Constitution;  and the spirit of that prohibition ought not to be disregarded by the Government of the United States.  Though paper emissions, under a general authority, might have some advantages not applicable, and free from some disadvantages which are applicable to the like emissions by the States separately, yet they are of a nature so liable to abuse — and, it may even be affirmed, so certain of being abused — that the wisdom of the Government will be shown in never trusting itself with the use of so seducing and dangerous an expedient.  In times of tranquillity it might have no ill consequence;  it might even perhaps be managed in a way to be productive of good;  but, in great and trying emergencies, there is almost a moral certainty of its becoming mischievous.  The stamping of paper is an operation so much easier than the laying of taxes that a Government in the practice of paper emissions would rarely fail, in any such emergency, to indulge itself too far in the employment of that resource to avoid, as much as possible, one less auspicious to present popularity." — Hamilton's Works, vol. 3, p. 124.

And Mr. Webster, who followed closely the principles of government and of finance laid down by Mr. Hamilton, sought occasion several times in his speeches in Congress to express his decided and firm convictions upon this subject.  In his speech upon the renewal of the charter of the United States Bank, made in 1832 — perhaps the gentleman from Kentucky [Mr. Crittenden] will remember it, as he was a member of the Senate at that time — Mr. Webster says:

"Congress can alone coin money.  Congress can alone fix the value of foreign coin.  No State can coin money.  No state can fix the value of foreign coin.  No State, not even Congress itself, can make anything a tender but gold and silver in payment of debts." —Webster's Speeches, vol. 2, page 8l.

And again, sir, in 1836, when Mr. Webster was at the very height of his intellectual power, and when by the financial condition of the country he was led to apply all his power to develop the true meaning of the Constitution in this regard, and to devise legislation suited to the evils then existing, in his speech upon the specie circular, says:

"But if we understand by currency the legal money of the country, and that which constitutes a lawful tender for debts, and is the statute measure of value, then, undoubtedly, nothing is included but gold and silver.  Most unquestionably there is no legal tender in this country under the authority of this Government, or any other, but gold and silver, either the coinage of our own mints, or foreign coins, at rates regulated by Congress.  This is a constitutional principle, perfectly plain, and of the very highest importance.  The States are expressly prohibited from making any thing but gold and silver a tender in payment of debts;  and although no such express prohibition is applied to Congress, yet, as Congress has no power granted to it, in this respect, but to coin money and to regulate the value of foreign coins, it clearly has no power to substitute paper, or anything else, for coin, as a tender in payment of debts and in discharge of contracts.  Congress has exercised this power, fully, in both of its branches.  It has coined money, and still coins it;  it has regulated the value of foreign coins, and still regulates their value.  The legal tender, therefore, the constitutional standard of value, is established and cannot be overthrown." —Webster's Works, vol. 4, page 271.

And again, in the same speech, he says:

"I am certainly of opinion, then, that gold and silver, at rates fixed by Congress, constitute the legal standard of value in this country;  and that neither Congress nor any State has authority to establish any other standard, or to displace this."

And Mr. Calhoun, in his speech on the bill authorizing the issue of Treasury notes, in 1837, assumes, as indisputable, that Congress possesses no such power. (3 Calhoun's Works, p. 102.)

Sir, it seems to me that if the language of the Constitution, and the weight of authority can settle any proposition, it is that Congress has not the power to do that which it is proposed shall be done by the provisions of this bill.

Now, sir, the argument which I have made in reference to the constitutional power of Congress does not depend in any degree upon the question whether or not these notes can maintain their par value in gold and silver.  But it may give point to the argument to show the effect which will be produced by the provisions of the bill itself in that respect.

This bill, after providing that these $100,000,000 of Treasury notes shall be payable to all creditors of the United States, and in the discharge of all private debts, provides also that they shall be funded in twenty year bonds of the United States at six per cent.;  and, in order to induce the funding, that when any person shall accumulate $2,500 of these notes he may require that bonds shall be issued in the denomination of the currency of a foreign country, payable, principal and interest, in that country.

The effect of this provision is intended to be that he shall there receive his interest in gold and silver.  Congress thus fixes the value of these notes;  fixes it to-day;  fixes it at the hour of their emission.  They shall be equivalent to an equal number of dollars expressed in the twenty years' bonds of the United States, carrying six per cent. interest.  That is their value fixed by the law — fixed by the money markets of the country.  What are these bonds worth to-day ?  Sir, I read in the New York papers that last Saturday they were selling at eighty-nine cents in the dollar.  The quotations of last week were never higher than ninety cents.  Yet you propose to send out these notes as a legal tender, stamped as they are here to-day, at a value of ninety cents in the dollar.  You compel every man to whom $1,000 are due to take, in satisfaction of his claim, that which is only worth $900.  You confiscate, wickedly and unnecessarily, one tenth — even at the present rates — of all the indebtedness of the country.  Sir, it is a monstrous proposition, which I hope will not be tolerated by this House.

But, Mr. Chairman, I go a step further.  I doubt whether there is any power in the Federal Government to issue the notes described in this bill, whether they are made a legal tender or not.  I have shown to you that the power to "emit bills of credit" was expressly withheld by the convention which framed the Constitution.  I have shown that it was withheld because they did not intend that this power should be vested in Congress.  Now, what is a bill of credit ?  Chief Justice Marshall, in the case of Craig against the State of Missouri, (4 Peters's Reports,) defines it.  He says:

"To emit bills of credit conveys to the mind the idea of issuing paper intended to circulate through the community as money, which paper is redeemable at a future day.  This is the sense in which the terms have been always understood.  The term has acquired an appropriate meaning;  and "bills of credit" signify a paper medium intended to circulate between individuals, and between Government and individuals, for the ordinary purposes or society."

Mr. Webster defines a bill of credit thus:

"The object of them was to create a paper circulation and any paper issued on the credit of the State, and intended for circulation from hand to hand, is a bill of credit whether made a tender for debts or not, or whether carrying interest or not.  Is it issued with intent that it shall circulate as money from hand to band, and with intent that it shall so circulate on the credit of the State ?  If it is, it is a bill of credit."

Judge Story, in his dissenting opinion in the case of the Bank of the Commonwealth of Kentucky, defines them in the same way.  What are these notes ?  They are made, by the very language — it is their chief purpose — of the bill, lawful money.  They are intended to circulate as currency.  The argument on which this bill is sustained is, that these notes should supply a circulating medium to the country.  They come within the definition of "bills of credit."  I have shown that if they do come within the definition of "bills of credit," the power to emit them was expressly, designedly withheld from Congress.  I do not deny the power of Congress to borrow money and to issue notes in evidence of the indebtedness;  I limit my objection strictly to the notes described in this bill.

But, even if I believed this bill to be constitutional in both aspects, I yet see enough in it to merit, as I think, the hearty condemnation of the House.  It provides that these notes shall be redeemable only at the pleasure of the United States.  The gentleman from New York [Mr. Spaulding] called them "demand notes."  They have been so called throughout the country.  They do not bear a single characteristic of a demand note.  There is no time, from the hour when they shall pass into the hands of the holder, when he can by their terms demand that they shall be redeemed.  There is no time when the faith of the Government is pledged to their payment.  The holder may present them, and he is told that the time has not arrived at which, by the face of the bill, they are to be paid.  They will inevitably depreciate.  The wit of man has never discovered a means by which paper currency can be kept at par value, except by its speedy, cheap, certain convertibility into gold and silver.  I need not cite gentlemen to history or to authorities — writers on political economy — to prove it.  Unless convertible they have always depreciated;  they always will depreciate;  they ought to depreciate, because they are only valuable as the representatives of gold and silver;  and if they are not convertible into that of which they are the representative, they must necessarily lose their value.  You send these notes out into the world stamped with irredeemability.  You put on them the mark of Cain, and, like Cain, they will go forth to be vagabonds and fugitives on the earth.  What then will be the consequence ?  It requires no prophet to tell what will be their history.  The currency will be expanded;  prices will be inflated;  fixed values will depreciate;  incomes will be diminished;  the savings of the poor will vanish;  the hoardings of the widow will melt away;  bonds, mortgages, and notes, everything of fixed value, will lose their value;  everything of changeable value will be appreciated; the necessaries of life will rise in value;  the Government will pay twofold — certainly largely more than it ought — for everything that it goes into the market to buy;  gold and silver will be driven out of the country.  What then ?  The day of reckoning must come.  Contraction will follow, private ruin and public bankruptcy, either with or without REPUDIATION, will inevitably follow.

The gentleman from New York cited to me yesterday the authority of General Hamilton.  General Hamilton, certainly no enemy of a sound paper currency, describing the effects of a policy like this, said:

"The loss which America has sustained since the peace from the pestilent effects of paper money on the necessary confidence between man and man, on the necessary confidence in the public councils, on the industry and morals of the people, and on the character of republican government, constitute an enormous debt against the States chargeable with this unadvised measure, which must long remain unsatisfied;  or, rather, an accumulation of guilt, which can be expiated no otherwise than by a voluntary sacrifice on the altar of justice of the power which has been the instrument of it." —Federalist, No. 44.

Mr. Webster has painted most felicitously the disastrous results to follow from this same course of conduct:

"A disordered currency is one of the greatest of political evils.  It undermines the virtues necessary for the support of the social system, and encourages propensities destructive of its happiness.  It wars against industry, frugality, and economy;  and it foster the evil spirits of extravagance and speculation.  Of all contrivances for cheating the laboring classes of mankind, none has been more effectual than that which deluded them with paper money.  Ordinary tyranny, oppression, excessive taxation, these bear lightly on the happiness of the mass of the community, compared with fraudulent currencies, and the robberies committed by depreciated paper.  Our own history has recorded for our instruction enough, and more than enough, of the demoralizing tendency, the injustice, and the intolerable oppression, on the virtuous and well-disposed, of a degraded paper currency, authorized by law, or in anyway countenanced by Government." —Webster's Speeches, vol. 2, p. 81.

Can we not learn something from the early experience of our own country ?  Can we not learn something from the overthrow of the revolutionary Government of France by this very over-issue of depreciated paper ?  Can we not learn something from those throes which the society of England endured during the long suspension of, and at its return to, specie currency in 1822 ?  Can we not now rise to a wisdom of statesmanship which shall control the financial necessities of the country without plunging it into that gulf from which there is, with honor and safety, no recovery ?

Sir, I beg gentlemen to permit me to read, in closing what I have to say, one more lesson of wisdom from that statesman of New England to whom I have had occasion so often already to refer.  I read it with the hope that it will be engraven on the memory of every man here, and that it will enable us to avoid the evils of which he has spoken by adhering to the course which he has wisely marked out:

No nation had a better currency than the United States.  There was no nation which had guarded its currency with more care, for the framers of the Constitution and those who had enacted the early statutes on the subject were hard money men.  They had felt and duly appreciated the evils of a paper medium;  they therefore sedulously guarded the currency of the United States from debasement.  The legal currency of the United States was gold and silver coin.  This was a subject in regard to which Congress had run into no folly.  Gold and silver currency was the law of the land at home, the law of the world abroad;  there could, in the present condition of the world, be no other currency."

Let gentlemen heed this lesson of wisdom.  Let them, if need be, tax the energies and wealth of the country sufficiently to restore the credit of the Government.  Let them borrow whatever money in addition may be necessary — borrow it to the full extent that may be necessary — and let us adhere rigidly, firmly, consistently, persistently, and to the end, to the principle of refusing to surrender that currency which the Constitution has given us, and in the maintenance of which this Government has never, as yet, for one moment wavered.

Mr. Stevens.  I move that the committee rise.

The motion was agreed to.

So the committee rose;  and the Speaker having resumed the chair, Mr. KELLOGG, of Illinois, reported that the Committee of the Whole on the state of the Union had, according to order, had the Union generally under consideration, and particularly the bill (H.R. No. 240) to authorize the issue of United States notes, and for the redemption or funding thereof, and for funding the floating debt of the United States, and had come to no conclusion thereon.

Postponement of Special Order.

Mr. Stevens.  I move that the special order —which is the Treasury note bill— be postponed until to-morrow.  I want to go into the Committee of the Whole on the state of the Union on the Army bill.  It is very essential that it should be passed.

The motion was agreed to.

Loan Bill.

Mr. Stevens.  If there be no objection, I will move to go into the Committee of the Whole on the state of the Union for the purpose of considering public business.  I make that motion.

The motion was agreed to.

So the rules were suspended; and the House accordingly resolved itself into the Committee of the Whole on the state of the Union, (Mr. Kellogg, of Illinois, in the chair,) and resumed the consideration, as a special order, of the bill of the House (No. 240) to authorize the issue of United States notes, and for the redemption or funding thereof, and for funding the floating debt of the United States; the question being upon the amendment submitted by Mr. Vallandigham.

Mr. Vallandigham.  I wish to ask the gentleman from New York, who reported this bill, a question in regard to the proper interpretation of a clause of the first section of this bill.  There is a dispute in regard to its meaning, and I presume the gentleman who represents the Committee of Ways and Means upon this measure can inform the House what the proper construction is.  The clause to which I refer is this:

"Authorized to issue on the credit of the United States $100,000,000 of United States notes, not bearing interest, payable to bearer at the Treasury of the United States, or at the office of the Assistant Treasurer in New York, at the pleasure of the United States."

The question is, whether the words "at the pleasure of the United States" refer to the time when or the place where these notes are payable ?

Mr. SPAULDING.  I will say that that clause is misplaced in the sentence.  It should be made to the time of payment of the notes.

Mr. VALLANDIGHAM.  Then the bill is more monstrous than I supposed.  Mr. Chairman, I am not prepared at this time to address the committee either upon the substitute or the original bill.  The questions involved are of the greatest importance at the present time and for the future, and I desire some further time for consideration.  If any other gentleman is prepared to discuss the bill, I will yield to him; otherwise, I would be glad if the chairman of the Committee of Ways and Means, would consent to its further postponement.  I do not desire a vote to be taken upon the substitute without an opportunity to explain it fully to the committee.

Mr. Stevens.  I had supposed the gentleman from Ohio desired to speak to-day.  Understanding now that he does not, if no other gentleman desires to address the committee, I will move that the committee rise.

The motion was agreed to.

So the committee rose; and the Speaker having resumed the chair, Mr. KELLOGG, of Illinois, reported that the Committee of the Whole on the state of the Union had, according to order, had the Union generally under consideration, and particularly House bill No. 240, and had come to no resolution thereon.

Mr. Stevens.  I move to postpone the consideration of the special order in committee until Monday.

Mr. Vallandigham.  I hope the gentlemen will extend the time until Tuesday.

Mr. STEVENS.  I presume some other gentleman will be ready to address the committee, if the gentleman from Ohio is not.  I prefer to adhere to my motion.

The motion was agreed to.