Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the act entitled "An act to provide ways and means to support the Government" approved March third, eighteen hundred and sixty-five, shall be extended and construed to authorize the Secretary of the Treasury, at his discretion, to receive any Treasury notes or other obligations issued under any act of Congress, whether bearing interest or not, in exchange for any description of bonds authorized by the act to which this is an amendment;  and also to dispose of any description of bonds authorized by said act, either in the United States or elsewhere, to such an amount, in such manner, and at such rates as he may think advisable, for lawful money of the United States, or for any Treasury notes, certificates of indebtedness, or certificates of deposit, or other representatives of value, which have been or which may be issued under any act of Congress, the proceeds thereof to be used only for retiring Treasury notes or other obligations issued under any act of Congress;  but nothing herein contained shall be construed to authorize any increase of the public debt:  Provided, That of United States notes not more than ten millions of dollars may be retired and cancelled within six months from the passage of this act, and thereafter not more than four millions of dollars in any one month:  And provided further, That the act to which this is an amendment shall continue in full force in all its provisions, except as modified by this act.

Sec. 2.  And be it further enacted, That the Secretary of the Treasury shall report to Congress at the commencement of the next session the amount of exchanges made or money borrowed under this act, and of whom, and on what terms;  and also the amount and character of indebtedness retired under this act, and the act to which this is an amendment, with a detailed statement of the expense of making such loans and exchanges.

APPROVED, April 12, 1866.

Thirty-Ninth Congress
First Session
December 4, 1865 to July 28, 1866.

House bill No. 207.

Mr. Morrill, from the Committee of Ways and Means, reported back, with amendments, a bill (H.R. No. 207) entitled "An act to amend an act entitled 'An act to provide ways and means to support the Government,' approved March 3, 1865."

Mr. WILSON, of Iowa.  I must object to the consideration of this bill in the House at the present time.

Mr. Morrill.  I think that after the gentleman shall have heard my explanation he will withdraw his objection.  This is the report of the majority of the Committee of Ways and Means.  It is the understanding that the gentleman from Massachusetts [Mr. Hooper] shall be permitted to offer his bill as a substitute, and also that one other member of the committee shall, if he chooses, offer an amendment.  I shall then ask the House to second the demand for the previous question.  I do not propose to occupy, myself, any more time than may be necessary to explain the report of the Committee of Ways and Means.

Mr. WILSON, of Iowa.  I do not withdraw my objection.

Mr. Stevens.  I would like to know how far this bill differs from the bill of the gentleman from Massachusetts, [Mr. Hooper] on which I thought all seemed to agree the other day.

Mr. Thayer.  We should like at least to hear the title of the bill.

The bill was read.

The SPEAKER.  This is neither a tax bill nor an appropriation bill;  and therefore the language of the bill does not require it to have, under the rules, its first consideration in the Committee of the Whole on the state of the Union;  but the rule giving the Committee of Ways and Means the right to report at any time provides it shall be for commitment.  The bill therefore goes to the Committee of the Whole on the state of the Union.

Mr. Morrill moved that the rules be suspended, and the House resolve itself into the Committee of the Whole on the state of the Union;  and pending that motion moved that general debate in the Committee of the Whole on the state of the Union be closed in ten minutes after the committee resumed the consideration of the bill just referred to it.

Mr. Stevens.  I hope the bill will be postponed so that it maybe ordered to be printed.

The House divided on the motion to close debate; and there were— ayes 65, noes 30.

So the motion was agreed to.

Mr. STEVENS.  Is it in order to move that the bill be postponed till it can be printed ?

The SPEAKER.  Not pending the motion to go into committee.

The question recurred on the motion of Mr. Morrill to go into committee.

The House divided;  and there were— ayes 65, noes 33.

So the motion was agreed to.

The House accordingly resolved itself into the Committee of the Whole on the state of the Union, (Mr. Rollins in the chair,) and proceeded to the consideration of House bill No. 207, to amend an act to provide ways and means to support the Government, approved March 3, 1865.

The CHAIRMAN stated that general debate was ordered to be closed in ten minutes.

Mr. Morrill.  Mr. Chairman, it is not necessary for me to trouble the committee with any extended remarks.  The bill was recommitted with sundry amendments to the Committee of Ways and Means without instructions, but the committee did regard the fact of recommitment as instructions to some extent, and in harmony with that idea have reported the bill back with an amendment which provides that the Secretary of the Treasury shall not retire more than ten millions in the first six months after the passage of this act, and not more than four millions per month thereafter.  It will be seen, then, if this law be passed, that it will not limit the Secretary of the Treasury to a period of less than nine years in which to retire the amount of legal tenders now in circulation.  That certainly will not be a very rapid reduction of the currency.  So much for that.

The gentleman from Massachusetts, [Mr. Hooper] I suppose, will offer his proposed amendment as a substitute.  All I have to say is that we have, in the bill now offered to the House, limited the Secretary as much as we believe a large majority of the House would be in favor of doing.  If the views of the Secretary are of any consequence to the House, and I think they should be, I ask to have read a communication from him to-day on the subject, which I send to the Clerk's desk.

The Clerk read, as follows:

Treasury Department, March 23, 1866.

Dear Sir:  Your favor of the 22d instant is received, transmitting to me the following resolution, namely:

"Resolved, That a communication be addressed by this committee to the Secretary of the Treasury, stating that the committee has received, through one of its members, information that the Secretary is of opinion that he is, without further legislation, sufficiently armed with power to carry out the policy announced in his late annual report, and to request the Secretary to inform the committee whether such is his opinion."

In reply, I have to say that I must have failed to make myself clearly understood by the honorable member of the committee to whom reference is made.  I did not intend to say to him that the Secretary is, "without further legislation, sufficiently armed with power to carry out the policy announced in his late annual report;"  but I did intend to say to him that, if it should be found necessary to modify in any important particulars the provisions of the bill reported by the committee, I should prefer that it would not become a law.  It will be, in my opinion, a national calamity if Congress shall fail to grant additional powers to the Secretary;  for it will be very difficult if not impossible to fund the interest-bearing notes under existing laws;  but I do not desire that the committee or myself should become in anyway responsible for a law which is likely to fail in accomplishing its object.

[they do NOT need to be funded, and they should not be removed from circulation]

I regard it a matter of the greatest importance that the power of the Secretary should not be strictly defined.  If, for example, the Secretary should be prohibited from selling bonds below par, it would be easy, as the market in the process of funding must be liberally supplied, for the enemies of the Government to form successful combinations for keeping the bonds at such a price as would prevent the negotiation of them.  On the other hand, if the authority of the Secretary in this respect is not limited, no such combinations would be likely to be formed.  In my opinion, the best way of keeping the bonds at a premium will be to leave the Secretary unrestrained in the sale of them.  Against an undefined power it will be difficult to form successful combinations.  A limitation of the authority of the Secretary in this respect will be very likely to prevent funding.  I do not, therefore, favor such a limitation, and should regret to have the committee responsible for it.

[if you have problem with combination against the Government, send the Police !]

In regard to the other important feature of the bill — the authority to withdraw United States notes — I have merely to remark, that I can conceive it to be of vast importance to the business of the country, the welfare of the people, and the credit of the nation, that such a financial policy shall be adopted by this Congress as will prepare the way for a return to specie payments.  When this can be brought about, will depend upon the condition of national industry and the trade relations between the United States and foreign nations.  It is not desirable that specie payments should be restored until that restoration can be made permanent by increased industry and a proper adjustment of the trade with Europe.  The tendencies now are all in the right direction, and if they shall be assisted by judicious legislation, I shall be hopeful that the currency of the country may be brought up to the specie standard without a large reduction of it.

The apprehension which exists that if power is given to the Secretary to retire United States notes, the circulation of the country will be ruinously contracted, is without any substantial foundation.  If no reliance can be placed upon the discretion and carefulness of the Secretary, the very condition of the finances of the country will prevent such a reduction of the currency as will make either a tight money market or depress business.  Authority to reduce the currency will go very far to prevent the necessity for a reduction.  The battle will be more than half fought when the Government shall adopt a healthy financial policy.

[But that is exactly what you did;  you ruinously contracted the circulation of the country;  in 24 months you retired $1,200 million circulating notes out of 1,600 million, and replaced them with gold-interest bearing long bonds, and left only $400 million greenbacks as currency !]

I am, very truly, your obedient servant,
H. McCulloch,
Secretary of the Treasury.

Hon. Justin S. Morrill.
Chairman Committee of Ways and Means, House of Representatives.

<!—
Representative James A. Johnson in the House, 1868. February 8 (Saturday).

"The majority here, in their insane attempts to perpetuate themselves in power, have ignored the Constitution altogether, and tried to cover the minority with disgrace for professing attachment to its provisions.  All this, too, with a full understanding that without its plain letter and spirit we have no Government other than a despotism limitless as the boundless universe.

"Ignoring its existence entirely, their party has illegally, without accusation or trial, thrown our fellow-citizens into prison for expressing their opinions upon matters pertaining to their own right.  They have made the writ of habeas corpus worse than a mockery.

"Free speech could not be indulged in by any unless they were base enough to sing praises to old John Brown.  Our free presses were thrown out of four-story windows, while Radical major-generals stood at the street corners offering encouragement to the mobs by telling them that in their acts of violence and destruction they had only anticipated the official purpose of vandalism.  They have exalted cowardice and treachery;  they have sought to accomplish great national results by a deliberate, cold-blooded system of bribery and corruption;  they deliberately, in time of profound peace, by military commission, sat in judgment upon the lives of the most unfortunate of our country, and as deliberately those unfortunates were put to death;  and they have denied the right of representation to and questioned the existence of sovereign States of this Union when such States elected Democrats to office;  they have loaded us with an unbearable system of taxation, and they have tried to reduce the white population of this country to a level with the African and other inferior races;  they have pronounced the Democratic party dead, and arraigned the President for declaring the country could never be saved except through the instrumentality of that party;  they have arraigned the President for declaring that peace existed in our war-stricken country;  because they say Congress alone has power to declare war and conclude peace."

---[But, somehow, according to Minister Culloch, this exact same Government is unable to deal with Wall street criminals any other way than giving them bonds and gold !]
—>

Mr. Morrill.  The amendments have been agreed upon and reported by the Committee of Ways and Means in a spirit of compromise;  not to allow, as was reported in the original bill, unlimited power on the part of the Secretary of the Treasury, and on the other hand not trammeling him so that he could not retire a single dollar of legal tenders, nor even look toward a time, however remote, of ultimate specie payments.  I hope and believe it will prove acceptable to this side of the House, and I also hope it will not be a reproach to the bill nor to gentlemen on the other side of the House if they forego party and give it their support.  I think it will be a compliment to the American Congress if we can consider financial questions regardless of party.

Mr. Bingham.  Does this authorize the Secretary to negotiate these bonds abroad ?

Mr. Morrill.  It leaves the bill as it was in that respect.

The amendments reported by the Committee of Ways and Means were read, as follows:

On page 2 of the bill, after the word "debt" in line two, insert those words:

Provided, That of United States notes not more than $10,000,000 may be retired and canceled within six months from the passage of this act, and thereafter not more than $4,000,000 in any one month.

At the end of the bill add the following as an additional section:

Sec. —. And be it further enacted, That the Secretary of the Treasury shall report to Congress at the commencement of the next session the amount of exchange made, or money borrowed under this act, and of whom, and on what terms, and also the amount and character of indebtedness retired under this act and the act to which this is an amendment, with a detailed statement of the expense of making such loans and exchanges.

The CHAIRMAN.  The question is on the first amendment reported by the Committee of Ways and Means.

Mr. Eldridge.  I desire to ask the chairman of the Committee of Ways and Means a question in regard to this matter.  I desire to know how many dollars this bill authorizes the Secretary to retire, and whether, in the retirement of money, he is limited to greenbacks or legal tenders alone, or whether it includes all the currency of the United States.

Mr. MORRILL.  It is limited to the legal tenders, commonly called "greenbacks."

Mr. Eldridge.  Will it not have the effect to limit him in the retirement of interest-bearing notes, as now authorized ?

Mr. Morrill.  Not at all.

Mr. Eggleston.  He has a right to do that by law.

Mr. Eldridge.  I understand this to be a limitation upon the Secretary.

Mr. LAWRENCE, of Ohio.  I do not know whether I understand the effect of this bill or not, and I rise more for the purpose of making an inquiry than of saying anything on the subject.

If I understand this proposition now, it is that the Secretary of the Treasury shall be authorized to fund $180,000,000 of the compound-interest notes within the coming year, and that in addition to that he shall have authority to fund $34,000,000 of United States notes, legal tenders, making in all a reduction of $214,000,000 in the currency of this country within one year, all of which is a legal tender in the payment of debts.

Now, sir, I hold in my hand an extract from the New York Tribune of March 19, [1866] from an article which was devoted to the discussion of this subject, and in favor of the bill;  and here is the effect which the advocates of this measure claim will follow from it.  This, mark you, is the effect of this bill as stated by its friends.

The Clerk read, as follows:

"What is it that people mean who talk of resumption 'crushing the business of the country ?'  Will corn refuse to grow, or farmers to plant it ?  When grown, will it not make pork and boot ?  And will not those who produce more than they consume of either be willing to exchange their surplus for iron, cloth, groceries, or whatever else they need ?  If they will and do, why will there not be business ?

" But let us grant that resumption, accompanied or preceded by contraction, would cause a temporary and very considerable diminution of trade and manufacture — what of it ? Suppose we should shut down the gates of half our mills, close some of our stores, and send a million or so of workers from the forges, furnaces, factories, and stores of the East to help our farmers grow an extra crop and open a hundred thousand new farms in the great West.  Would not this insure a great and healthy trade next winter and thereafter ?  Would not our farmers want fabrics and metals next fall;  and would not our skilled workmen be called back to the factories and furnaces to produce them ?  Might it not be well to let the farmers get a crop ahead, so as to place the trade between city and country on the healthy foundation of pay down, and then keep it there for evermore ?

" ' But the people, whose industry would thus be temporarily deranged, their usual employment cut off, their comforts diminished, and their profits wiped out, would vote us down next fall.'

"Our answer to this is, the people are not fools.  They have stood by us in darker hours and under more trying circumstances than an earnest, fearless attempt to return to specie payments would now produce.  They have shown themselves worthy of trust; we shall show ourselves unworthy of their confidence if we fail to trust them fully.  Let us tell them frankly, 'We are trying to return to a currency based on specie, whereof each dollar shall be worth ten silver dimes everywhere.  To effect this we must all submit to temporary inconvenience and apparent loss.  The laborer must accept lower money wages;  but they will buy him as much food, shelter, and clothing as those he gives up.  So the farmer must sell his grain and meat for fewer dollars;  but these will buy as much, in the average, as his present receipts now do.  The manufacturer may have to hold on a few months;  but he will hire his labor and buy his materials cheaper thereafter, and be able to compete fairly with foreign rivals who are now crowding him out of our markets.  So let us all take hold and make the very best of the matter, assured that the evils of immediate resumption are preferable to the perils of indefinite suspension.'

"As to the talk of waiting to return gradually and naturally to specie payments, it is exactly like the sot's resolve, that he would stop drinking after he got sober.  He must stop in order to get sober.

"But what do you say for people over ears in debt ?

"Only this, that they have had warning enough and time enough."

Mr. Lawrence, of Ohio.  These are the effects which I suppose are to follow if we adopt the proposition now before the House.  It is said that the laborer must accept less wages, but that the amount which he will receive will buy him as many products.  That article, it seems to me, overlooks the fact that if the laborer shall receive less wages for his labor and the farmer less pay for his products, the amount which shall be so received will not pay as much taxes as if the laborer received the same compensation for his labor and the farmer the same pay for his products as now.  And yet I suppose we are to pay within the next year some five hundred million dollars in taxes in various forms, and the wages of the laborers of the country and the price of the products of the great West are to be reduced, when there is to be no reduction in the amount of the national indebtedness or in the amount of the national taxes.

Now, I hope that this measure will not be agreed to, by the House.  I hold that the reasons which are presented by the friends of the measure themselves are such as must convince every gentleman here that we ought not to pass it.

I hold in my hand a letter which I have received from a distinguished gentleman in New York, and I will ask the Clerk to read an extract from it.

The Clerk read, as follows:

"We need no artificial means to break down prices, they will come down this summer fast enough."

* * * * * * * * * *

" If you will keep an accurate account of the gold received monthly from California, and the gold sent to Europe, you will find that for several months past there has been less sent to Europe than we have received from California.  Hence, the supply being greater than the demand, gold is accumulating here, and is consequently slowly falling here.  If there shall continue the same increase here until September or October, the par of gold will be reached.

"Gold has nothing whatever to do with the currency."

Mr. Lawrence, of Ohio.  I am not in favor of an indefinite suspension of specie payments, but a reduction of the legal-tender United States notes is not necessary to resumption.  The question we have to decide is, what is the true policy of the country, not what is the policy of any officer or individual.  It is time we should ask only whether we are supporting the policy of the people and their interests.

The Chairman.  Debate is exhausted on the pending amendment.

Mr. Hooper, of Massachusetts.  I would inquire if it is now in order for me to move a substitute for the bill ?

The CHAIRMAN.  There are two amendments reported from the Committee of Ways and Means now pending.

Mr. Stevens.  Is it in order to move a substitute for the entire bill ?

The CHAIRMAN.  It is in order.

Mr. Washburne, of Illinois.  After the original bill is perfected.

Mr. Hooper, of Massachusetts.  Then I will give notice that at the proper time I will move a substitute for the whole bill.

Mr. Lynch.  I propose to amend the amendment reported by the Committee of Ways and Means by adding the words:

And no United States notes shall be retired and canceled until all the interest-bearing Treasury notes now outstanding are funded.

The Chairman.  To what portion of the amendment of the committee does the gentleman propose to add that ?

Mr. LYNCH.  I will move to insert it at the end of the amendment reported by the committee.

Mr. Chairman, I understand the Secretary of the Treasury does not propose, if we confer upon him the authority, to retire any of the United States legal-tender notes until all the compound-interest notes are funded;  and that he proposes to retire of these not over one hundred million a year.  At this rate it would take nearly two years to fund all the compound-interest notes.  Now, I ask gentlemen, why anticipate beyond that time ?  Why not wait and see the result of retiring one hundred and eighty million of the currency ? and then, if we think it desirable, to continue the experiment, if we find the country can stand up under it, grant additional power upon the Secretary of the Treasury.  The people have a right to know what the financial policy of the country is to be, that they may conform their business to it, and govern themselves accordingly.

I am as anxious to see the country once more on a specie basis as the Secretary of the Treasury, or the Committee of Ways and Means or any member of this House can be;  but I do not believe it necessary to contract the currency beyond the amount of the compound-interest notes in order to reach this result.  Why, sir, since the meeting of this Congress, and without contracting the currency a dollar, the premium on gold has fallen one third.  At this rate we shall reach specie payment in about six months.  Why not let well enough alone ?

Mr. Washburn, of Indiana.  I would ask the gentleman whether, if I hold $20,000 in compound-interest notes, and am disposed to hold on to them for ten years, I can be compelled to fund them ?

Mr. Lynch.  I presume the gentleman would not hold those compound-interest notes for ten years when they have ceased to be a legal tender and to bear interest.

Mr. Price.  Will the gentleman from Maine let me answer that question ?

Mr. LYNCH.  I yield to the gentleman for a moment.

Mr. PRICE.  The gentleman from Indiana [Mr. Washburn] asks the gentleman from Maine whether, if he has $20,000 in compound-interest notes, and is disposed to hold them for ten years, he can be compelled to fund them.  I wish to answer that question in this way:  that he may hold them as long as he pleases, but when they mature they will draw no interest after that time.

Mr. Washburn, of Indiana.  The amendment of the gentleman from Maine [Mr. Lynch] is that no legal-tender notes shall be funded until all the other notes are taken in.

Mr. LYNCH.  That none of the notes not bearing interest, known as legal-tender notes, shall be retired until all the interest-bearing notes are funded.

Mr. Washburn, of Indiana.  Suppose that I should hold $20,000 of these compound-interest notes for ten years, the legal-tender notes cannot be retired while I continue to hold those notes.

Mr. LYNCH.  I do not suppose these compound-interest notes will be held after they mature and cease to draw interest.  The gentleman knows very well that those notes are not legal tender except for their face.  After they mature they will no doubt be promptly presented for payment.

Mr. ALLEY.  Mr. Chairman, I rise to oppose the amendment.  I had not proposed to say anything upon this question;  but having introduced the resolution on the 18th of December so frequently alluded to, which received the almost unanimous vote of this House, and which pledged this House to coöperative action with the Secretary of the Treasury in trying to effect an early resumption of specie payment, I will say a word in explanation of my purpose in introducing that resolution.  The circulation of such vast amounts of irredeemable paper money during the war had stimulated business and enhanced prices to such a degree as to enrich almost everybody engaged in any speculation or business pursuit to any extent;  and the consequence was that everybody expected to part with a very considerable portion of their nominal gains as soon as the war should cease.  Accordingly, as soon as the rebellion was crushed, everybody looked for the commencement of a policy of liquidation and contraction on the part of the Government, and preparations for such a state of things immediately commenced.  Gold declined, property and merchandise of all kinds were compelled to submit to serious reduction in prices, until it was discovered that the Government could not, if it would, contract the currency until it was further out of the woods.  And so far from contraction and depreciation following the close of the war, they found that a slight expansion and consequent increase of values was the result.  Trade was stimulated, speculation ensued, gold advanced materially, and a worse state of things, so far as speculation and high prices were concerned, seemed to be promised than existed during the war.

It was under this state of things that the Fort Wayne speech of the Secretary of the Treasury was made, which produced such a profound sensation throughout the country.  It was welcomed as the harbinger of better days by all those who desired a sound currency, a stable business, and who believed that the only real wealth of a country was in its productive industry and not in irredeemable promises to pay.  But it produced consternation and dismay in the ranks of speculators and advocates of high prices.  That speech was soon followed by the Secretary's able report to Congress;  and then the inquiry arose, will Congress sanction his views and coöperate with him in effecting, as speedily as possible consistent with the true interests of the country, a restoration of the currency to a sound basis ?  If it will, then, said the speculator, my vocation is gone;  and the manufacturer, I must be content with less exorbitant profits;  and the merchant, I must be more prudent in my operations.  Now, it was with a view of determining how far Congress coincided with the Secretary in his views of financial policy, that the country might understand what to expect, that I introduced the resolution alluded to, and I confess the vote surprised me;  but the discussions and action of the House recently have convinced me that they did not comprehend so well as the country did the import of that resolution.

Now all, or nearly all, are agreed that it is important that we should come back to a sound currency as speedily as possible consistent with the true interests of the country.  Now the question arises, how can this best be done ?  And I will say right here, that if you give the Secretary all the power he desires, and coöperate with him as earnestly and fully as you may, and commence the work of contraction to-morrow, such are his wants, and the Government's needs, that it is impossible to accomplish the desired result for two or three years at best;  but every day you defer the commencement of this policy, the harder and more difficult the process.  Contraction eight months ago could have been commenced with much less shock to the business interests of the country than it can to-day, and much better to-day than eight months hence.  Why ?  Because at the conclusion of the war everybody was comparatively well off;  labor was scarce;  merchandise was scarce, and nothing plenty but paper money, and individual indebtedness was small;  consequently a contraction of the currency at that time would not have seriously affected the price of labor or merchandise, and would only have served as a wholesome check to speculation and that over-production in some kind of manufactures which was superinduced by fabulous profits.  Commence to-day and labor is not so plenty, nor our surplus products so great, or individual indebtedness so large as to occasion any serious reaction, such as must inevitably arise if we defer it a year or two longer.  Defer this attempt to contract the currency a year or two longer, and whoever hopes to avert widespread disaster, desolation, and ruin to all the business interests of the country, knows nothing in my opinion of the laws of trade, and the relation which currency bears to those laws.

We can no more get back to a specie basis than England could after twenty years' suspension, without a shock to our monetary and commercial system of greater or less magnitude, in proportion to the length of time it shall be deferred.  At the close of the continental wars, after the battle of Waterloo, in June, 1815, a great impetus was given to trade in England for a year or two, just as with us for the last few months, which was followed by a corresponding depression and stagnation to an extent which reduced values of all kinds to less than forty cents on the dollar of what they were for a year or two preceding, extending to real as well as personal property.  The same result must inevitably follow here, unless we manage our financial matters with great skill and prudence;  and this can only be done by giving the Secretary of the Treasury the power to do everything needful to bring us to specie payments as speedily as practicable;  in other words, to make him "master of the situation."

Just so long as we remain as we are, and until we resume specie payments, all our vast business interests are in the hands of and at the mercy of the Secretary of the Treasury.  His action may, if he chooses, affect values of currency, merchandise, or gold every day in the year.  His power now is gigantic, his responsibility immense, and our peril, in consequence of the necessity of placing so much power in a single person's hands, most terrific.  Nothing connected with the Government troubles me so much, and nothing I would make such sacrifices to avoid;  and the only remedy to be found is in a resumption of specie payments.  Resume specie payments, and that power and that control over the currency and business interests of the country cease in great degree.  Now, while he has so much power for evil I would clothe him with all the necessary power for good that we possess, and put upon him the responsibility of using it properly.  I am aware that it is no argument that the present incumbent is all right financially.  We should legislate not only for probable but possible contingencies.  In the present crisis we have no alternative.  We must take the fearful risk;  but it is a great satisfaction to know that our present Secretary is a prudent, careful financier, of incorruptible integrity.  I wish he was as sound politically as he is financially, but I think he is far from it.  He was not the candidate of my choice.  I urged upon Mr. Lincoln somewhat earnestly the appointment of another distinguished citizen.  One evening he sent a message that he wished to see me.  I called upon him, and he told me that he had quite as exalted an opinion of the person urged by me as I had myself, but for certain reasons he could not nominate him;  and he asked me what I thought of Mr. McCulloch.  I told him I thought he was one of the wisest men, financially, I had met in Washington.  "Well," said he, "it seems to me he is;  and understands that matter thoroughly, if he does not any thing else.  And I have confidence that he will put our finances through, and I am going to appoint him Secretary of the Treasury."  I thought then, and I think now, Mr. Lincoln's estimate of him was right;  and while this power must rest in some man's hands, I think the country is fortunate in having its finances in the hands of Mr. McCulloch.

The country is looking with intense anxiety and interest to Congress for some action in this matter;  and however unwilling Congress may be to give the subject prominent consideration, let me tell gentlemen of the House, this question in the future is going to absorb all other questions;  and mightier contests and fiercer political struggles over these questions are in store for us than were those which distinguished the period which immediately preceded the great financial revulsion of 1837.  To-day an immense majority of the sound and substantial business men of the country are in favor of a reasonable contraction of the currency and an early resumption of specie payments.  Wait a few months, even, before you begin to look in that direction, and you will find the business interests of the country then all against you if you attempt contraction, just as they were a unit almost in 1836 in favor of inflation arid expansion.  If no check is given now expansion is sure to follow, until the business men of the country will find themselves, holding large stocks, with an extended credit system which will make it impossible to contract the currency and reduce prices without overwhelming a large portion of the most enterprising business men in the country in irretrievable ruin.  It is to avert such a calamity that I now plead for action in the right direction by this Government.

But, after all, the great interest to be protected, cherished, and encouraged, is labor.  We cannot produce wealth without labor;  and the only way for Government to protect and give to labor its highest reward is to prevent as much as possible fluctuations in the currency, and protect home industry against foreign competition.  With almost any kind of financial management, if we could induce our people to forego the consumption of useless foreign fabrics, we should soon have our currency sound, and instead of a fictitious we should have a real prosperity unexampled in the history of the world.  It is the professed, and I hope it may be the real mission of our Government, to protect, elevate, and improve the masses.  We see the lobbies of Congress filled by the advocates of a policy adverse to any contraction of the currency.  They are those, mostly, whose personal interest will be greatly injured, they think, by a contraction of the currency, and undoubtedly they are right.

Every large importer, and every heavy manufacturer must suffer, temporarily at least, tremendously by any policy we may adopt looking to contraction and consequent fall in prices.  But where you injure one such — and generally they are the ones that can afford to be injured, for they have reaped immense gains from inflation — you benefit toiling thousands.  I am an importer and manufacturer, and am subjected, as they are, to heavy losses, by contraction and fall of gold, but we must find our consolation in the fact that what is our loss is the country's gain.

Such are my opinions, which I submit with some distrust, I confess, for this subject of finance is so abstruse and difficult to comprehend that there are but few persons whose opinions possess much value with me upon this subject.  Although a matter which has engaged my earnest thought and attention for a quarter of a century, and with a practical experience in the management of financial affairs not very limited, yet when I find those who have given the subject more thought and attention than I have, with a longer and larger experience, and in whose judgment I have great confidence, differing from me, I cannot but feel great diffidence in thus expressing my convictions.

Mr. LYNCH.  I withdraw my amendment.

Mr. Kelley.  I renew it, as follows:

But no United States notes shall be retired and canceled until all the interest-bearing Treasury notes now outstanding are funded.

Mr. Hooper, of Massachusetts.  Will the gentleman from Pennsylvania, [Mr. KELLEY] yield to me to ask my colleague [Mr. ALLEY] a question ?

Mr. KELLEY.  I will, if it does not come out of my time.

The CHAIRMAN.  It will come out of the gentleman's time, except by unanimous consent.

Mr. KELLEY.  Then I must decline to yield, as my time is limited by the rule.

Mr. Chairman, I voted in the earlier days of this session for the resolution of the gentleman from Massachusetts, [Mr. Alley] and I desire to say that I voted for it because I was then under the delusion that he is still under, that contraction of the currency was the way to resumption of specie payment.  But we are to-day on the high road to resumption, and will, if matters are let alone, soon resume.

Gentlemen tell us that the currency is redundant;  and the gentleman from Ohio [Mr. Garfield] told us the other day that the balance of trade was in our favor and the exportation of gold diminishing, so that the volume of currency was expanding and becoming more redundant;  yet we all know, that with this expansion of the currency, prices are daily depreciating;  the price of commodities, the price of labor, the price of gold, is steadily depreciating, showing that we have not sufficient currency to prevent the too rapid depreciation of prices.  Our currency is not expanded, and we are on the successful road to an early resumption of specie payments without a crisis.  I would let well enough alone.

But it is proposed to alarm the business men of the country and to paralyze the business of the country, by announcing that the present Secretary of the Treasury, and whoever may be his successor, shall hold the business of the country in his hand, control the currency by his will, and put all great enterprises at his mercy.  I have confidence in the integrity of the present Secretary of the Treasury;  but I do not know who may be his successor in the event of his death or resignation.  But had I the supremest confidence in him that man can have in man, I would not vote to invest him with the power to expand or contract the currency and so influence the business of the country, to quicken or retard it when and as he pleases.

Again, this bill proposes to empower him to do the absurd thing of taking up the non-interest-bearing debt of the Government by borrowing money at six per cent. for that purpose.  It will close your factories, stop your forges and your furnaces, and paralyze the business of the country, to contract your currency by borrowing money at six per cent. to retire it, or in other words to pay a debt that is carrying no interest, but which on the contrary is paying interest to the Government;  for every dollar note destroyed or lost is a dollar of gain to the country.  But it is not only proposed to borrow money at six per cent. to redeem a non-interest-bearing loan, but there is no limitation upon the price at which the Secretary of the Treasury may sell the bonds of the Government for that purpose.  He may, if he sees fit, sell them below par, and thus bring down the value of all Government securities.  Gentlemen say the Secretary will not do this;  but a less worthy successor may do it, whatever maybe the integrity and ability of the present incumbent.

Sir, this bill is full of peril to the country.  Its tendency will be to retard the resumption of specie payment by producing uncertainty and alarm.  It may bring our laboring people to idleness, reduce the value of farm products, and close our mines and factories.  In that event many of our laboring people who are now liberal consumers of foreign and domestic goods, will be turned into paupers, and all of them be made close economists, as people always become when they cannot see a prospect of daily labor and wages before them.

Mr. Hooper, of Massachusetts.  I desire to ask my colleague [Mr. ALLEY] if his resolution was anything more, or purported to be anything more, than an expression of opinion on the part of this House, that at the earliest suitable opportunity, when the country was in a proper condition for it, specie payments should be resumed ?  Was it anything more than that ?

Mr. ALLEY.  I will state all that it contained.  The gentleman from Maine [Mr. Lynch] offered an amendment the practical effect of which I have stated to be to prevent any contraction of the currency at all.

Mr. HOOPER, of Massachusetts.  My colleague will pardon me for interrupting him.  My inquiry was in reference to the resolution he introduced in the early part of this session.

Mr. ALLEY.  I was going on to say that that resolution merely contemplated the pledging the Congress of the United States to coöperative action with the Secretary of the Treasury in the views he had expressed in his annual report to Congress.  That I think was the language of the resolution:  that so far as it could be done without disaster to the business interests of the country, the policy of Congress should be in favor of an early resumption of specie payments.

Mr. Hooper, of Massachusetts.  It referred to a resumption of specie payment ?

Mr. ALLEY.  It did.

Mr. HOOPER, of Massachusetts.  At the earliest period practicable ?

Mr. Alley.  Yes, sir, without doing violence to the business interests of the country.

Mr. Garfield.  And suggested a contraction of the currency as a means.

Mr. Hooper, of Massachusetts.  [A banker, the man of bankers, supporter of the February 25, 1862, greenback legislation, instrumental in the sneaking through and passing of the February 12th 1873, Mint act which demonetized silver]  I wish to ask my colleague if he intends to convey the impression to this House and to the country that any member who is opposed to withdrawing all the greenback circulation, which cost the country nothing for interest, and substituting for it bonds bearing interest payable in gold, is therefore opposed to the resumption of specie payments at the earliest period possible without derangement of the industry and business of the country;  and if he wishes the contraction of the currency to be conducted so rapidly as to break down all industrial pursuits, and thus benefit large capitalists at the expense of the great body of the people ?

Mr. ALLEY.  I understand the practical effect of the amendment of my colleague will be to prevent the resumption of specie payment, will be to prevent contraction;  and believing, as I most firmly do, that resumption cannot be effected except by contraction to some extent, I am opposed to the amendment of my colleague.

What my colleague's purpose is I do not presume to say.  I know heretofore he and I have gone together on these financial questions, and there has been no man in whose opinion I have had more confidence in the main than in his.  I am glad to bear testimony to my confidence in his judgment on these matters.  But I think in this particular, so far as this amendment goes, he is greatly mistaken.  For some reason I cannot divine, I find he has changed his views, and I can no longer follow his lead on this bill.

The Chairman.  The time of the gentleman from Massachusetts [Mr. Hooper] has expired.

Mr. Hooper, of Massachusetts.  Has all my time been consumed by the gentleman's answer ?

The CHAIRMAN.  Yes, sir.

Mr. WILSON, of Iowa.  I desire to get the views of the gentleman from Massachusetts [Mr. ALLEY] in relation to this fact, whether the laws of trade are not now carrying us a little faster toward the resumption of specie payment than is satisfactory to the Secretary himself;  whether he is not of opinion that gold is falling too fast;  and whether he would not be glad if it would go up ?

Mr. ALLEY.  Perhaps that all may be.

Mr. WILSON, of Iowa.  Is not that so ?

Mr. ALLEY.  I am not here to shield anybody.  I express my honest convictions.  No man will be more glad than I will be to receive information from any quarter, and I will answer the question—-

The Chairman.  Debate is exhausted on the pending amendment.

Mr. Hooper, of Massachusetts.  Can I have the floor to move an amendment ?  All my time was taken up by my colleague.

The CHAIRMAN.  Amendment is not now in order.

Mr. Washburne, of Illinois, moved that the committee rise, to dispense with the night session.

The motion was disagreed to.

The question recurred on Mr. Kelley's amendment, and it was disagreed to.

Mr. Sloan.  I move the following amendment:

Provided, That all bonds or other obligations issued under this act, or the acts to which this is amendatory, shall be payable in the lawful money of the United States.

Mr. Chairman, I offer that amendment for the purpose of calling the attention of the committee to what seems to me to be a very great defect in this bill in allowing the Secretary to send our bonds abroad.  The chairman of the Committee of Ways and Means has asserted that it will be ruinous, and even the Secretary of the Treasury himself says that if our bonds go abroad largely our debt will become an oppression and a curse, and ruinous to the industry of the country;  yet, as far as I have observed, neither the chairman of the Committee of Ways and Means, nor the Secretary of the Treasury, nor any other gentleman, has proposed any remedy for this great and crying evil.  Our bonds are going in large amounts every day to Europe, and as confidence in the stability of our Government and its ability to pay increases, they will go abroad in larger amounts unless something is done to prevent it.  It requires no very great knowledge of business to see that when our bonds are held in Europe to such great extent, and hundreds of millions of coin are annually drained from the country to pay them, that it will be impossible to maintain our credit and prosperity unless we prevent it by providing that they shall be paid in currency.  If this be done our bonds will not continue to go abroad.  To-day our five-twenties can be purchased there at seventy, thus affording an interest of from nine to ten per cent. in gold, whereas the national loans of Europe give only four or five per cent.  There is no means of preventing this evil, so far as I can see, if our bonds are to be paid in coin.  So long as we pay six per cent. interest, while European Governments pay but three or four, if the capitalists or the people of Europe have confidence in the stability of our Government, and in its ability to discharge its obligations, it seems to me by the natural law of finances that our bonds must inevitably go to Europe.

Now, this debt can be taken care of by the American people.  There is abundant ability, and I would much prefer to see the seven-thirty bonds continue in the hands of the people, and be diffused throughout the entire country among the laboring men, those who can own a few hundred dollars' worth, rather than have a large amount of coin-interest-bearing obligations issued.  Now, while this evil is acknowledged, while there is danger impending in regard to our finances and the business of the country, though this amendment may be very inadequate, and may fail to accomplish the purpose desired, yet it is the only means that occurs to me of meeting the danger.  So long as the bonds are payable in lawful money, until we reach the specie basis, there will be no demand for these obligations issued in Europe.

[here the hammer fell.]

Mr. Griswold.  I rise to oppose the amendment.  I concur with the gentleman in the object he seeks to attain, but I differ with him entirely as to the mode of doing it.  In my judgment we are legislating at the wrong end of this question.  If the House of Representatives would take measures with reference to protecting us from the overwhelming, inevitable, and destructive avalanche of foreign importations into this country, we would be legislating to some purpose.

Mr. Wentworth.  I ask if there are not importers in this House now acting for this bill ?

Mr. Griswold.  I say if we should legislate to prohibit these enormous importations we would be doing a much wiser thing than we are doing now.

Mr. Higby.  I rise to a question of order.  It is a disgrace the way this House conducts itself when gentlemen are on the floor.  It is utterly impossible to hear them, there is so much talking in the vicinity of members who are speaking.  I have got tired of this.

The Chairman.  Gentlemen will resume their seats and preserve order.  All business will be suspended until gentlemen resume their seats.

Mr. Griswold.  I was alluding to the enormous importations with which this country is now being flooded, and I appeal to this Congress to put forth its arm and do something to arrest it.  Do we realize the fact that from the 1st of January to the 1st of February of this year the increase of importations over the corresponding period of last year was one hundred and fifty per cent., and that for the last six weeks up to the 1st of March, the importations as compared with the same period of last year, were six times as much ?  Are gentlemen aware that we are to-day being flooded with foreign goods at the rate of $500,000,000 per annum;  that our foreign indebtedness to-day is not less than $1,500,000,000, and that $2,000,000,000 is a small estimate of the amount of our securities that within the next sixty or ninety days will be held abroad ?  Why, sir, it will require an exportation of $120,000,000 a year in gold to pay that interest alone.

I appeal, therefore, to this Congress to commence at the other end in their legislation and protect us from this ruinous flood of foreign importation, and let the currency stand as it is.

Sir, I have been reluctant to oppose any measure that has been recommended by the Secretary of the Treasury or that comes through the distinguished Committee of Ways and Means.  I have the fullest faith in the discretion and integrity of the present incumbent of that office.  But I would clothe no man with the power of crushing the whole business interest of this country at his pleasure, as in my judgment this discretionary power would clothe the Secretary of the Treasury.

Gentlemen talk about contraction.  Are we not contracting sufficiently now ?  Has not the Secretary of the Treasury under the present law ample power to contract as far, ay, much further, than the business interests or the industrial interests of the country require ?

And let me say, further, that there is a great deal of delusion about this idea of an expanded currency.  Of course there is no difference of opinion on one point: every man believes it is our duty, as rapidly as possible, to get back to specie payment.  But there are worse things than the more deferring of the resumption of specie payment.  I am in favor of its resumption, of course, as every man is or should be, but in arriving at that point I am opposed to any policy which shall crash out and destroy the material and industrial interests of this country.  I would clothe no man, not even the present incumbent of the Treasury Department, with that power.

Is there anything unreasonable in insisting that he shall fund the interest-bearing notes before disturbing the circulating medium of the country ?  As I said before, there is a great delusion about this idea of inflation.  Previous to the war we had not less than $560,000,000 of circulation, including bank notes and coin.  Under the present expansion at most it can only reach $750,000,000.

[Here the hammer fell.]

Mr. Wentworth.  Is it in order for me to say a few words against the amendment ?

The CHAIRMAN.  It is not.  Debate is exhausted upon it.

The question being taken on the amendment to the amendment it was disagreed to.

Mr. Farquhar.  I offer the following amendment:

Provided, That the legal-tender notes known as greenbacks shall not be diminished from the amount now in circulation.

I offer this amendment in order that I may state to the House the reasons that induced me to favor the amended bill as reported from the committee.

I voted against the passage of the bill last before the House.  My objection to that bill I had not an opportunity to state at the time.  I objected to it on account of the fact that it gave to the Secretary of the Treasury an unlimited power to retire at pleasure all the outstanding circulation of the United States currency.  To that I was opposed, and I recorded my vote accordingly.  The amount of local indebtedness arising from township and county bounties, and in my State made payable in the next two years, would by too sudden contraction prove disastrous in the extreme to our people.

This amended bill limits the amount at the disposal of the Secretary of the Treasury to such a degree that I think there is no responsibility taken by any member of the House, who is in favor of retaining the greenbacks as a circulating medium, in voting for the measure.

Gentlemen express their unlimited confidence in the present incumbent.  I also have confidence in him, and I am willing to show that confidence by casting a vote that will satisfy the country on the subject.

I do not believe in that kind of profession which declares great confidence in the ability and integrity of that officer, and at the same time holds out to this House and the country that a responsibility is being reposed in him which gentlemen do not place in his hands.

What is the responsibility ?  Gentlemen tell us that under existing laws the Secretary of the Treasury has power to retire $180,000,000 of compound-interest notes.  If he has that power what additional power do you place in his hands ?  It will be but eight months before this Congress will convene again.  Pass this bill and you place in the hands of the Secretary of the Treasury, until you can arrest him by your action eight months hence, the power to do what ?  To issue $18,000,000 of bonds for currency;  that is to say, $10,000,000 in the first six months, and $4,000,000 in each of the two succeeding months.  I ask you, Mr. Chairman and gentlemen of this House, you who have stood up and backed the Administration during the hours of its peril, when the existence of the nation was at stake;  I appeal to you now in the hour of its financial struggle, will you not place in the hands of its Secretary of the Treasury the power of funding the $18,000,000 that this bill proposes ?  How much will it affect the business of the country to retire this $18,000,000 ?

There are yet $50,000,000 of national bank paper unissued, and will doubtless swell the volume of currency that amount during the next year, and with but $18,000,000 of greenbacks withdrawn this year, the actual circulation of the country would be increased in the aggregate rather than diminished.

But I maybe told that this amount of $180,000,000 may be retired.  I take it upon myself to say that it does not constitute a part of the general circulating medium of the country.  It is retired now.  It is held in the pockets of the business men of this country, because of the interest that the notes are bearing.

[Here the hammer fell.]

Mr. Wentworth.  Mr. Chairman, I desire to state to the House, with entire frankness, why I oppose any limitation upon the power of the Secretary of the Treasury.  My reason is that I believe that the Secretary of the Treasury has to yet fight the greatest battle that any one man ever fought.  The conflicts carried on by General Grant and the other prominent military men of our day were of less consequence than this great battle in which the Secretary of the Treasury is to take part, because, if General Grant were overcome, we could fall back upon Sherman;  and if Sherman were unsuccessful, we could fall back upon Sheridan.  But if the present Secretary of the Treasury should be overcome, upon whom can we fall back ?

I desire to say, Mr. Chairman, that I have consented to this bill in committee as a compromise.  As such it has been reported.  In agreeing to the bill I have been influenced mainly by my confidence in the gentleman from Vermont, [Mr. Morrill] the chairman of the committee.  He has been appointed to that position by the Speaker of this House, and the defeat of this bill will be equivalent to declaring a want of confidence not only in the chairman of the committee, but also in the Speaker who appointed him.

There are but two questions before the House at the present time, and those are questions which have divided this country from the origin of our Government.  It is no use to attempt to get up here a cry against this bill on the ground that the trouble all arises from the importers.  I have seen here, I presume, not less than fifty importers during this session.  Some of them have been on this floor to-day, and I endeavored a little while ago to obtain the attention of the Chairman that I might call for the enforcement of the rule in reference to admission on the floor.  Sir, there is not an importer that has come on here to Washington as a lobbyist who is not in favor of the proposition of my friend from Massachusetts, [Mr. Hooper] the antagonist proposition to that now presented by the chairman of the Committee of Ways and Means.  The importers are the natural allies of the brokers, and both are interested in fighting this bill and every similar measure.

Gentlemen express their apprehensions that hard times will come if we adopt this bill.  Why, sir, the question is simply whether we shall cheat the soldiers and others of the humble, hard-working classes of this country out of twenty-five per cent., when we can borrow at six per cent. the money necessary to pay them.  On this question arises the difference between my friend from Massachusetts and my friend from Vermont;  the difference between paper-money men and hard-money men;  the difference between the disciples of Andrew Jackson and those of Alexander Hamilton.  Let us meet this issue squarely, and if those who support the policy of the Secretary of the Treasury be beaten in this House, we will refer the question to the polls, and will fight it out there.

Mr. Farquhar.  I withdraw my amendment.

Mr. Moorhead.  I renew the amendment.

Mr. Chairman, I am not at all surprised that there should be a great deal of excitement on this question, for it is a very important one, and the House appears to be somewhat closely divided upon it.  I regret to say — I believe I can refer to the fact without impropriety, as it is already well understood by the House — that the Committee of Ways and Means were divided upon this question.  I do not wonder that such should be the fact.

I must say, however, that I differ entirely from the remarks of the gentleman from Illinois [Mr. Wentworth] upon the subject of the resumption of specie payments.  I think, sir, that all the members of this House are in favor of resumption.  I know that I am in favor of as early a resumption of specie payments as can be attained without doing violence to the business of the country.  The difference is with regard to the mode of reaching resumption.  I do not believe that it is to be reached by making a stringent currency.  I do not believe that the resumption of specie payments can wisely be attained by creating a scarcity of money throughout the country and thereby causing general distress.  Therefore, when this bill in another form was before the House a few days ago I voted against it.

Mr. Ashley, of Ohio.  I desire to ask the gentleman a question:  under the provisions of the bill as now reported by the committee, how many years would it be before the currency would be reduced in the manner in which the gentleman desires to have it reduced ?

Mr. MOORHEAD.  I have but five minutes, and I cannot permit myself to be drawn aside from the line of my remarks to answer questions.

I was saying that when this bill in a different form was before the House the other day, I voted against it.  I am opposed to reducing the currency to any considerable extent at the present time.  But I believe it to be important, and I may say necessary, that we should agree upon a bill, by the passage of which we shall manifest our confidence in the Secretary of the Treasury, and, so far as may be done, without violating our own convictions of policy and duty, stand by him and support him.

With the view of reconciling so far as possible the differences of opinion on this subject, the Committee of Ways and Means have presented the amendment now before us;  and I trust that gentlemen on both sides of the House can give it their support.  I hope that the bill will be passed.  Its effect will be to reduce the currency in a very moderate measure, and not by any means at a rapid rate.  It will not, as I believe, affect injuriously the interests of the country.

My reason for voting as I did the other day to prevent the reduction of the currency was that I believed, with the gentleman from New York, [Mr. Griswold] that we were beginning at the wrong end.  As I have already remarked, I did not believe that we can safely advance toward a resumption of specie payments by making the currency of the country stringent.  I believe that to insure the prosperity of the country, the money of the country should be abundant.  I believe that if we would adopt some measure to restrain the excessive imports with which our country is being flooded, entailing upon us an intolerable burden of debt, which, unless some remedy be found, must soon involve us in distress and ruin, we should soon have money enough here to float all our present currency, and even more.

I withdraw my amendment.

Mr. Morrill.  In order to terminate debate on the pending amendments, I move that the committee rise.

The motion was agreed to.

So the committee rose and the Speaker having resumed the chair, Mr. Rollins reported that the Committee of the Whole on the state of the Union, having had under consideration the Union generally, and particularly the bill (H.R. No. 207) entitled "An act to amend an act entitled 'An act to provide ways and means to support the Government,' approved March 3, 1865," had come to no resolution thereon.

Mr. Washburne, of Illinois.  I move that the session of this evening be dispensed with.

The motion was agreed to.

Mr. WASHBURNE, of Illinois.  I move that, by unanimous consent, the session of to-morrow be devoted exclusively to debate as in Committee of the Whole upon the President's message.

There was no objection, and it was so ordered.

Loan Bill — Again.

Mr. Morrill.  I move that when the House shall again resolve itself into the Committee of the Whole on the state of the Union on House bill No. 207, all debate upon the bill and pending amendments terminate in one minute.  I desire, however, to give the gentleman from Massachusetts [Mr. Hooper] an opportunity to offer his amendment.

Mr. Farnsworth.  I move to amend the motion so as to provide that debate upon the bill and all amendments thereto shall terminate in ten minutes.

The amendment was agreed to— ayes 66, noes 56.

The Motion of Mr. Morrill, as amended, was adopted.

Mr. Stevens, (at four o'clock and five minutes p.m.)  I move that the House adjourn.

The motion was not agreed to; there being— ayes 60, noes 65.

Mr. Morrill.  I move that the House again resolve itself into the Committee of the Whole on the state of the Union.

The motion was agreed to;  and the House accordingly resolved itself into the Committee of the Whole on the state of the Union.  (Mr. Rollins in the chair,) and resumed the consideration of the bill (H.R. No. 207) entitled "An act to amend an act entitled 'An act to provide ways and means to support the Government,' approved March 3, 1865."

Mr. Hooper, of Massachusetts.  I rise, Mr. Chairman, for the purpose of offering, if in order, a substitute for the bill.

The Chairman.  It is in order.

Mr. Hooper, of Massachusetts.  I wish first to record my protest against the idea which has been urged in the House, that any person who votes against withdrawing "greenbacks"  from circulation, before the interest-bearing notes are withdrawn, is an opponent to the resumption of specie payment.  I claim to be as strongly in favor of the resumption of specie payment at the earliest possible time as any man in this House.

I will state, sir, in regard to the substitute which I propose to offer, that it differs from the bill of the committee mainly in two points.  By the act to which this bill is an amendment the Secretary of the Treasury cannot issue bonds at less than par.  The bill of the committee places no limit to the rate at which he may issue bonds.  I propose that the original limit shall be retained, so that the Secretary cannot issue bonds at less than par.  I think it is due to the holders of the bonds who have taken them at par that they should have this security.

The Secretary expresses fears that if the limitation of par is inserted in the bill, combinations may be made to reduce the price below par and thus prevent their being negotiated.  The danger seems to be that if the power is given to sell below par such combinations may be made to compel him to sell at constantly decreasing rates, and the present holders may become sellers with the view of replacing their bonds afterward at still lower rates and thus produce a panic in regard to the value of the Government securities.

I have as much confidence in the present Secretary of the Treasury as any one, but it does not seem to me desirable to withdraw the security of a limitation of the rate at which the bonds may be sold, and to give the power to issue bonds at any rate he chooses.  We can not tell who may be his successor; and, even if we were willing to give the present Secretary the power, we may not be willing to give it to his successor.

Mr. Farnsworth.  Has there been any such limitation in former bills ?

Mr. Hooper, of Massachusetts.  In the early bills there was a limitation of the market price, but in which it is proposed to amend, as it now stands, the limitation at par exists.

The second difference is in regard to the withdrawal of the United States notes, or legal-tender currency not bearing interest.  This bill provides that the Secretary shall only withdraw interest-bearing obligations.  The Secretary has power now under existing laws to withdraw non-interest-bearing obligations also to issue Treasury notes or interest-bearing legal tenders in place of them.  It was thought unwise to exchange bonds bearing interest for United States notes which cost nothing for interest, and therefore this substitute limits him, so far as he acts under this law, without impairing the power he has under another existing law.  If he sees fit to withdraw non-interest-bearing notes he has that power now.  Those are the only two essential points of difference between the proposition of the committee and the substitute which I offer.

I have added one other provision, to limit the rate of interest on the temporary loans to five per cent.;  the limit now being six per cent.  I think the temporary loans would not be reduced by thus limiting the rate of interest;  that they would be continued at five as well as at six.  Even if it did lessen the amount of the loan, no harm could be done, as the greater the amount the more uncertain it becomes, and therefore less advantageous.

I prepared this substitute after hearing the discussion in the House, believing it conformed to the sentiment of the House on the two points to which I have referred, namely, that bonds should not be issued at less than par, and should not be issued in place of the United States notes, which constitute a loan to the Government without interest.

The Clerk read the substitute, as follows:

That the act entitled "An act to provide ways and means to support the Government," approved March 3, 1865, shall be extended and construed to empower the Secretary of the Treasury to sell any description of bonds authorized by said act, at such rates not less than par as he may think advisable, for lawful money of the United States, or to receive in payment any Treasury notes, compound-interest notes, certificates of indebtedness, or of deposit, with the interest accrued thereon, which have been or which may be issued under any act of Congress;  it shall be the duty of the Secretary of the Treasury to retire and cancel an amount of Treasury notes, certificates, or other obligations bearing interest, equal in amount to the bonds disposed of;  and the public debt shall not hereafter be increased by authority of this or of any previous acts of Congress;  and from and after the 1st day of July next the interest on certificates of deposit for temporary loans shall not exceed the annual rate of five per cent.

Mr. Hooper, of Massachusetts.  I wish to say that in the early part of the session—-

Mr. Morrill.  Have not the gentleman's five minutes expired ?

Mr. Thayer.  The gentleman has ten minutes, and I hope he will not be interrupted.

Mr. Farnsworth.  I make the point that we are under the five minutes' discussion and that the gentleman cannot speak for a longer time.

The CHAIRMAN.  The Chair overrules the point of order, and decides that the gentleman is entitled to ten minutes.

Mr. Hooper, of Massachusetts.  I wish to say that early in the session the Committee of Ways and Means addressed a letter to the Secretary of the Treasury asking him whether he had not, under existing laws, sufficient power to meet all requirements of the Treasury and contraction of currency suggested in his report.  His reply I will send to the Clerk to be read;  and it will be seen that my substitute contains all the power stated therein to be requisite.

The Clerk read, as follows:

Treasury Department, January 22, 1866.

Dear Sir:  Your favor of the 19th instant is received.

The proviso in the act of the 3d of March, 1865, to which you call my attention, simply authorizes the Secretary of the Treasury, with the consent of the holders, to convert Treasury notes or other obligations bearing interest into any description of bonds authorized by that act.

I have been and still am of the opinion that the word "converted" is used synonymously with "exchanged," and that it was the intention of Congress to limit the Secretary to a mere exchange of bonds authorized by that act for other interest-bearing obligations of the United States.

With this view of the provision I have not felt and should not feel at liberty to sell bonds under that act for United States and national currency notes, and use the proceeds in retiring interest-bearing obligations.

It is, in my judgment, of very great importance that the powers of the Secretary of the Treasury should be clearly defined, and that he should avoid the exercise of an authority not expressly given to him by law.

I am, Very truly, yours,
H. McCulloch, Secretary.

Hon. J.S. Morrill, Chairman Committee Ways and Means, House of Representatives.

Mr. Hooper, of Massachusetts.  I wish only to add that my substitute exactly covers the points asked for in that letter.

The Chairman.  The time allowed for debate is exhausted.

Mr. Farnsworth.  I would like to ask the gentleman from Massachusetts—-

[Cries of "Order!"]

The CHAIRMAN.  Debate on this bill is exhausted.

Mr. Farnsworth.  I understand that Congress—-

[Loud and continued shouts of "Order!" "Order!"]

Mr. Morrill.  I desire to ask the Chair, what is the first question before the House ?

The Chairman.  The question before the committee is upon the first amendment reported by the Committee of Ways and Means.

The question was taken on the first amendment reported by the Committee of Ways and Means, and it was agreed to.

The second amendment reported by the Committee of Ways and Means was also agreed to.

Mr. ALLISON.  I move to insert after the word "advisable," in line fourteen of the original bill the words "at not less than par;"  so that it will read:

As he may think advisable, at not less than par, for lawful money of the United States, &c.

Mr. Hooper, of Massachusetts.  I call for tellers on that amendment.

Tellers were ordered;  and Messrs. Morrill and ALLISON were appointed.

The committee divided;  and the tellers reported— ayes 59, noes 73.

So the amendment was not agreed to.

No further amendments being offered to the original bill, the question recurred on the substitute offered by Mr. Hooper, of Massachusetts.

Mr. Stevens.  I demand tellers.

Tellers were ordered.

Mr. Hooper, of Massachusetts.  I wish to ask if by common consent the question may not be taken on this substitute by yeas and nays in the House. [Cries of "No!" "No!"]  Why not let the substitute be reported to the House, and let us have a vote upon it by yeas and nays ?

[Shouts of "Object!" and "No!" "No!"]

Messrs. Morrill, and Hooper of Massachusetts, were appointed tellers.

The committee divided;  and the tellers reported— ayes 60, noes 74.

So Mr. Hooper's substitute was not agreed to.

Mr. MORRILL.  I move that the committee rise, and report the bill to the House, with the recommendation that it pass.

The motion was agreed to.

So the committee rose;  and the Speaker having resumed the chair, Mr. Rollins reported that the Committee of the Whole on the state of the Union, having had under consideration as a special order bill of the House No. 207, to amend an act entitled "An act to provide ways and means to support the Government," approved March 3, 1865, had instructed him to report the same to the House with sundry amendments, and recommend its passage.

Mr. Morrill.  I move the previous question on the engrossment of the bill.

Mr. ALLISON.  I appeal to the gentleman to yield to me for a moment. [Cries of "No!" "No!"]  I desire to put a simple question. [Shouts of "Order!" and "No!" "No!"]

Mr. MORRILL.  I must really decline to yield.

Mr. Stevens.  I move that the House do now adjourn, and on that motion I demand the yeas and nays.

Mr. Farnsworth.  I call for tellers on the yeas and nays.

Tellers were not ordered.

The yeas and nays were ordered.

The question was taken;  and it was decided in the negative— yeas 61, nays 72, not voting 50; as follows: ......

So the House refused to adjourn.

The previous question was seconded, and the main question ordered, being upon the first amendment reported from the Committee of the Whole on the state of the Union, as follows:

On page 2, line two, after the word "debt" insert the following:

Provided, That of United States notes, not more than $10,000,000 may be retired and canceled within six months from the passage of this act, and thereafter not more than $4,000,000 in any one month.

The amendment was agreed to.

Mr. Bingham.  I move to lay the bill upon the table;  and upon that motion I demand the yeas and nays, and I call for tellers on the yeas and nays.

Tellers were not ordered.

The yeas and nays were not ordered.

The question was taken;  and the House refused to lay the bill upon the table.

The question recurred on the second amendment reported from the Committee of the Whole on the state of the Union, to add at the end of the bill the following:

Sec. —. And be it further enacted, That the Secretary of the Treasury shall report to Congress at the commencement of the next session the amount of exchanges made, or money borrowed under this act and of whom and when and on what terms, and also the amount and character of indebtedness retired under this act and the act to which this is an amendment, with a detailed statement of the expenses of making such loans and exchanges.

The amendment was agreed to.

The bill was then ordered to be engrossed and read a third time;  and being engrossed, it was accordingly read the third time.

Mr. MORRILL.  I demand the previous question on the passage of the bill.

The previous question was seconded and the main question ordered.

Mr. WILSON, of Iowa.  I demand the yeas and nays on the passage of the bill.

The yeas and nays were ordered.

The question was taken;  and was decided in the affirmative— yeas 83, nays 53, not voting 47;  as follows:

YEAS— Messrs. Alley(R), Ancona(D), Anderson(R), James Ashley(R), Baldwin(R), Banks(R), Barker(R), Baxter(R), Bergen(D), Bidwell(R), Gillespie Blaine(R), Boye(D), Brooks(D), Conkling(R), Shelby Cullom(R), Darling(R), Dawes(R), Dawson(D), Ignatius Donnelly(R), Eldridge, Eliot(R), Farnsworth(R), Farquhar(R), Finck(D), Garfield(R), Glossbrenner(D), Grider(D), Hale(R), Aaron Harding(D), Hogan(D), Holmes(R), John Hubbard(R), James Humphrey(R), Ebon Ingersoll(R), Jones(D), Kasson(R), Kerr(D), Ketcham(R), Kuykendall(R), Laflin(R), Latham(UU), George Lawrence(R), Le Blond(D), Marshall(D), Marston(R), Marvin(R), Hiram McCullough(D), McRuer(R), Mercur(R), Moorhead(R), Morrill(R), Morris(R), Moulton(R), Myers(R), Nicholson(D), Noell(R), Perham(R), Pike(R), Samuel Randall(D), John Rice(R), Ritter(D), Rogers(D), Rollins(R), Ross(D), Sawyer(R), Glenni Scofield(R), Smith(UU), Spalding(R), Stilwell(R), Strouse(D), Taylor(D), Thornton(D), Upson(R), Burt Van Horn(R), Robert Van Horn(R), Ward, Elihu Washburne(R), Henry Washburn(R), William Washburn(R), Wentworth(R), Windom(R), Winfield(D), and Wright(D) —83;  55 Republican, 26-28 Democrat.
---[In December '67 Mr. Ingersoll will be the first to introduce a bill to stop further reduction; then in January '68 he will introduce a bill to issue $45 million more greenbacks. Years later, Ignatius Donnelly in his book bitterly complained about the reduction of currency, yet here he voted for it]

NAYS— Messrs. Allison(R), Baker(R), Beaman(R), Benjamin(R), Bingham(R), Bromwell(R), Broomall(R), Buckland(R), Bundy(R), Reader Clarke(R), Cook(R), Dixon(R), Driggs(R), Eckley(R), Eggleston(R), Ferry(R), Griswold(R), Abner Harding(R), Hart(R), Birchard Hayes(R), Higby(R), Hill(R), Samuel Hooper(R), Asahel Hubbard(R), Chester Hubbard(UU), Demas Hubbard(R), Edwin Hubbell(D), James Hubbell(R), Julian(R), Kelley(R), Kelso(R), William Lawrence(R), Loan(R), Lynch(R), McClurg(R), McKee(UU), Miller(R), O'Neill(R), Orth(R), Paine(R), Phelps(UU), Price(R), Shellabarger(R), Thaddeus Stevens(R), Thayer(R), Francis Thomas(UU), John Thomas(UU), Trowbridge(R), Van Aernam(R), Welker(R), Williams(R), James Wilson(R), and Stephen Wilson(R) —53.

NOT VOTING— Messrs. Ames, Delos Ashley, Blow, Boutwell(R), Brandegee(R), Chanler(D), Sidney Clarke(R), Cobb, Coffroth, Culver, Davis, Defrees(R), Delano, Deming (R), Denison (D), Dumont, Goodyear, Grinnell(R), Harris, Henderson, Hotchkiss, Hulburd, James Humphrey, Jenckes, Johnson, Longyear, McIndoe, Newell, Niblack, Patterson, Plants, Pomeroy(R), Radford, William Randall, Raymond, Alexander Rice, Rousseau, Schenck(R), Shanklin, Sitgreaves, Sloan, Starr, Taber(D), Trimble(D), Warner(R), Whaley, and Woodbridge —47.

So the bill was passed.

Mr. MORRILL moved to reconsider the vote by which the bill was passed;  and also moved that the motion to reconsider be laid on the table.

The latter motion was agreed to.

In the Senate April 9