The House being in Committee of the Whole to consider House bill 8518 making appropriations for sundry civil expenses of the Government.

Mr. Sayers.  Now, Mr. Chairman, I offer the amendment which I send to the Clerk's desk.  It is one amendment to two clauses of the section under consideration.  I offer this in order to test the sense of the House upon the proposition.

The Clerk read as follows:

On page 20, at the end of line 8, insert the following:

Provided, That no portion of this sum shall be expended for printing United States notes of a larger denomination than those that may be canceled or retired.

On page 20, at the end of line 15, insert the following:

Provided, That no portion of this sum shall be expended for printing United States notes of a larger denomination than those that may be canceled or retired.

Mr. Coombs.  I ask that my amendment be read.

The Clerk read as follows:

On page 20, after line 15, insert the following proviso:

Provided, That no part of the appropriation made by this and the preceding paragraph shall be used for printing gold certificates, and that so much of section 12 of the act approved July 12, 1882, entitled "An act to enable national banking associations to extend their corporate existence, and for other purposes," as authorizes and directs the Secretary of the Treasury to receive deposits of gold coin with the Treasurer or assistant treasurer of the United States, and to issue certificates thereon, be, and the same is hereby, repealed; and all such certificates, after received into the Treasury, shall be canceled.

Mr. Coffeen.  Mr. Chairman, there are two or three points involved in this amendment and this discussion that I believe are not yet sufficiently noticed and developed.

In reply to the gentleman from New York [Mr. Coombs], who has just introduced a substitute amendment providing that no part of this fund shall be used for the issuance or preparation of gold certificates, my conviction is that the gentleman is speaking under a misapprehension.  The law already provides that when the gold reserve is less than $100,000,000 no issue of gold certificates shall take place.

Mr. Coombs.  I said that;  but when our gold reserve went up to $110,000,000 or $115,000,000 then the Secretary had to issue more.

Mr. Bland.  The proposition now is not to issue them at all ?

Mr. Coffeen.  As far as that part of the amendment is concerned, taking away from the Secretary all power to issue gold certificates, I have no objection to it, for at all times I am in favor of reducing the mongrel and manifold system of currency in circulation to the simplest possible form.

Mr. Van Voorhis.  Will the gentleman please tell us what is the gold reserve, where it is, in what form it is, and how it is to be got at ?

Mr. Coffeen.  If the gentleman needs information on that point, I have a document here that will give the gentleman all the information necessary, and I will hand it to him and proceed with the other matters, as I have only five minutes.

Mr. Van Voorhis.  Is there any gold reserve, except as a matter of bookkeeping ?

Mr. Coffeen.  Will the gentleman be kind enough to look over the report of gold reserve and other matters pertaining to circulation in yesterday's report of the Secretary of the Treasury ?  I will go on now with my remarks.

I want to say that it has been clear to this House for some time that there is a general movement on the part of the associated monetary influences to retire the legal tenders from circulation, and from the reach of the common people in their retail trade.  The very bill that has lately been defeated, sent "glimmering down the slope" a few days ago, had this provision in the very heart and core of it, to retire the greenback circulation.  One way in which that can be accomplished, since the Secretary of the Treasury and those who favor his policy have failed to accomplish the passage of the currency bill, is to have a discretionary power to change the denominations of these legal-tender notes in circulation into what are called "bank money," or bills of large denomination.  That will practically take these notes out of circulation.

I am, therefore, in favor of the amendment of the gentleman from Texas that was first offered, providing against the change from the smaller to larger denominations, and am opposed to giving the Secretary of the Treasury any discretionary power on this matter.  All the way through, the Secretaries of the Treasury, for twenty to thirty years, by some influence or other, by some fatality that I can not or, at least, shall not take time now to explain, have been forever construing every doubtful clause and every regulation possible against the circulation of the greenbacks, and in favor of that which best suits the national banks of the larger cities whose circulation comes in competition with the small notes of the greenback and Government currency.

Mr. Chairman, it has been clear to all who are carefully watching the maneuvers of the banking interests on this money question that they are doing all they can to cancel, convert into interest-bearing gold bonds, or otherwise retire all of our forms of legal-tender money;  and failing to accomplish the destruction, they are doing all they can now to discredit our legal tenders, lock them up in the Treasury, in bank vaults, in bank reserves, and in every way possible to get them out of general circulation.

The strong power of these banking influences has for many years manifested itself in warping and perverting the administration of financial affairs at our Treasury here in Washington.  This has been the case through several Administrations and is the case to-day to too great a degree.

Why should our honorable Secretary of the Treasury at this time and under a Democratic Administration join in or at least give way to the clamor of the banks of Wall street against the general circulation of our legal-tender greenbacks and Treasury notes ?  I shall not undertake to answer why it is so, why our Treasury Department has constantly listened to the seductive influences of the monetary syndicates for the last twenty-five years, and turned a deaf ear to the voice and pleading of the laboring and industrial classes for a convenient and abundant retail currency for their own use.

But that our present Secretary is following, in part at least, the demands for the retirement or impairment of the circulation of legal tenders is sufficiently evidenced in his efforts to secure the passage of a bill contemplating the locking up and retirement from circulation of our legal-tender paper money, in his bill for permitting both State and national banks to supply bank money instead.  Therefore I must stand against the passage of any law or the negative action by omission (as in the case now before us) of any law that would give the Secretary of the Treasury any discretionary power over the denominations of our greenback and Treasury note legal tenders now in circulation.

We know sufficiently well how that power will be used.  We know that by changing the small and convenient denominations of these notes into large and inconvenient denominations he can get them largely out of circulation and under the control of the banks, and accomplish by this flank movement what he has failed to accomplish in behalf of the money and bank powers in his currency bill for the deposit and retirement of this same legal-tender Government paper.

This greenback legal-tender money is the favorite money of the people to-day, and has been for over twenty years.  It becomes the duty of this House to prevent the accomplishment of the money dealers' designs against the general circulation of greenbacks and treasury notes.  Let us then insist on carrying this amendment that compels unfriendly administrative powers to reissue and keep out the small denominations suitable for the retail and general trade of the country.

Does any member need be told that the retirement of small denominations of our legal tenders means to make more room for the circulation of non-legal tenders ?  Does anyone need to be told that it will have the effect of removing, for the benefit of banks, that much of the competition between their bank-note circulation and legal-tender notes of the Government ?

It is not sufficient reply to this that silver certificates can be issued in small denominations instead.  Silver certificates are not full legal tender.  Besides this there is nothing compulsory on the Secretary of the Treasury requiring the issue of a greater amount of small denominations of silver certificates than are already issued.

The entire amount of silver certificates in circulation last Monday, January 19, shown by the Treasury statement, was only $337,784,277.  Of this we have no very recent authoritative statement at hand showing the different denominations, but it does not vary greatly from the condition given by Maurice L. Muhleman in his hand-book on the Money of the United States.  He was cashier of the sub-treasury at New York.  On page 51, in table giving entire stock of paper money by denominations, we find that there were, in 1893, only $39,000,000 of one and two dollar silver certificates, $94,000,000 of fives, $107,000,000 of tens, $56,000,000 of twenties, $35,000,000 of higher denominations.  If the entire amount of silver certificates was in small denominations it would not make over one-third enough for the needs of the country.  Muhleman well says:

The proportion of the entire stock of paper issue in small denominations fluctuated between 79.5 per cent and 66.1 per cent, with an average of 73.5 per cent.

This is the average showing of twenty-one years, from 1873 to 1893.  The total of small denominations in paper money given by him in 1893 is $844,000,000.  He then says --and remember this is a most valuable witness:

In view of the fact that even in 1893, when the proportion of small notes appears to have been nearly 77 per cent, the supply of the smallest denominations was not equal to the demand, it is not an unreasonable conclusion that an average of 75 per cent of our paper issues might be in denominations not exceeding $20.

Now, since $844,000,000 in small denominations of various kinds of paper money, being about $13 per capita, were not sufficient in 1893, as has been shown and as is generally known, how can you supply the needs for small denominations to-day by using silver certificates when there is only $327,000,000 of them in circulation ?  This is not half enough, if all of them were used.

Then add all of the national-bank notes now in circulation, and suppose they were all in small denominations, still the supply is insufficient by $300,000,000.

This will require about three-fifths of all of our legal tenders in circulation also;  and we must therefore, to protect the people in their right to small denominations, insist that none of the legal-tenders shall be converted by the Secretary of the Treasury into larger denominations, or into "bank money," as the larger denominations are called.

The bankers are already sufficiently favored with "bank money" denominations of United States notes and Treasury notes to raid our Treasury and carry away gold out of our gold reserves.  Why give them any more advantages ?  They also tie up a great amount of the small denominations in legal tenders by deposit of them and taking out currency certificates instead in denominations of $5,000 and $10,000 only, and these are very large denominations;  and further, let me say that only the $10,000 denomination of these has been recently issued.

In 1893, to obtain supply of smaller denominations so imperatively demanded in times of panic, the banks, as shown by Muhleman's tables, page 50, suddenly returned about $60,000,000 in gold certificates of large denominations, $55,000,000 of these being in denominations of $500 and over, and they returned also $18,000,000 in currency certificates to the Treasury.  It was found that there was not a sufficient supply of small denominations to stand the test of the great "object-lesson panic."

It should be observed that the law of May 31, 1878, which repealed the law for the cancellation of the greenbacks and ordered them reissued when this kind of money came into the Treasury, also made it mandatory on the Secretary to reissue same denominations for all mutilated notes.  When they are not mutilated they should and must be reissued as they are.  This law is still in force, and the retention or preservation of these United States legal-tender notes rests on this law of May 31, 1878.  The last clause of that beneficent law reads as follows:

Provided, That nothing herein shall prohibit the cancellation and destruction of mutilated notes and the issue of other notes of like denominations in their stead, as now provided by law.

Now, under the compulsory laws as they exist regarding the reissue of same denominations in United States notes as those that come into the Treasury, and with some discretion left with the Secretary as to denominations in issuing and reissuing other kinds of paper currency, still the amount of all kinds of money now existing in the Treasury and out of it in small denominations is not so large to-day as the needs of the country require.  And we base the needs of the country for the purpose of this statement and comparison on the statement of the cashier of the sub-treasury at New York.  In 1893 by his tables, to which we have referred, there were $844,000,000 in circulation.  This was then insufficient.

About sixty to eighty millions of larger denominations were sent in for exchange into small bills and silver.  Silver even was selling at a good premium over gold and all large denominations in New York for the purpose of securing smaller denominations for cash payments, and yet the sum then proven to be so far inadequate was greater than the sum reported recently by the Treasurer of the United States as in existence to-day.  Why then, we ask, permit an insufficient supply of small denominations to be changed into larger ones by the Secretary or any other power ?

The honorable Secretary himself says that then, in 1893, small currency was at a premium, in his testimony before the Committee on Appropriations, and yet the report of the Treasurer shows still less in his last annual statement existing now.

But those who oppose the amendment and the maintenance of these convenient retail denominations of our legal-tender money say that they desire to assist the Secretary to prevent the raids on the gold reserve of the Treasury.  How anxious they are to help the Secretary to protect the gold.  This has been the cry during this entire Congress when the money power wanted to secure any advantages.  We heard it, when the repeal bill was being crowded through, on both sides of this Chamber.  We heard it when the Carlisle currency bill was brought forward.  We have heard it frequently as an excuse for selling bonds.  We hear it now again.  Is there one on this floor that recognizes any sincerity in that cry ?

The way to stop the holders of our coin obligations from raiding our undefended Treasury is to pay out silver, as every other nation of any consequence on the face of the Earth exercises the right to do, except England, and in that country the same result is accomplished by raising rates of discount.  Paying out silver in due proportions under the option and right that Congress has always reserved to the people in redemption of coin obligations will stop these raids instantly.

On gold certificates, to be sure, we must pay out gold, but I shall support that portion of the amendment of the gentleman from New York [Mr. Coombs] that forbids further issue of these.  Our nation is the only one that has, to any great extent, issued gold obligations instead of coin obligations.  Before the Committee on Appropriations, in answering the following questions, notice Mr. Carlisle's own testimony against other than coin obligations:

Mr. Coombs.  I would like to ask in this connection, do European countries have gold certificates ?

Secretary Carlisle.  Not that I am aware of.  I do not at this moment think of any Government except the United States which issues a certificate based specifically upon any particular coin.

Mr. Coombs.  Are we not, by the use of these gold certificates furnishing a facility for the obtaining of gold from the Treasury, making it easier ?

Secretary Carlisle.  I have just stated, in my opinion if the holders of gold coin could not put it in the Treasury and use that institution substantially as a warehouse, taking out the paper representative of it, the gold itself would come in and stay there.  The banks and other institutions do not like to hold gold coin;  it does not circulate from hand to hand among the people, but the gold certificate does, and that is the most convenient form in which they can put their gold for circulation;  we simply take care of the coin for them.

And yet the honorable Secretary insists on paying out gold on coin notes and greenbacks as well as on gold certificates.  So, Mr. Chairman, I protest against the Secretary leaving the door of the gold vaults open to holders of greenbacks, Treasury notes, and all other obligations in which coin instead of gold is specified, and then clamaing that he desires to stop the raid on gold reserves.

Outside gold contracts that we are told exists to the amount of $5,000,000,0000 is practically that much gold sold for future delivery.  This condition is growing more dangerous and ought to be remedied by law.  I will here read the Stanley Matthews resolution passed by an overwhelming majority in both branches of Congress in 1878.

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

This is the position of our people on the payment of silver and other money to prevent gold raids.  John Sherman himself, while Secretary of the Treasury, bore testimony as follows, just following the howl of Wall street in 1878 against silver:

On the other hand I will give the favorable effects.  In the first place, the silver bill satisfied a strong public demand for bimetallic money, and that demand is, no doubt, largely sectional.  No doubt there is a difference of opinion between the West and South and the East on this subject, but the desire for remonetization of silver was almost universal.  In a Government like ours it is always good to obey the popular current, and that has been done, I think, by the passage of the silver bill.  Resumption can be maintained more easily upon a double standard than upon a single standard.  The bulky character of silver would prevent payments in it, while gold, being more portable, would be more freely demanded, and I think resumption can be maintained with a less amount of silver than of gold alone. * * *

Senator Jones.  Would the fact that they (our bonds held in Europe) come back enable us to maintain resumption much easier ?

Secretary Sherman.  Undoubtedly.

Senator Bayard.  You speak of resumption upon a bimetallic basis being easier.  Do you make that proposition irrespective of the readjustment of the relative values of the two metals as we have declared them ?

Secretary Sherman.  I think so.  Our mere right to pay in silver would deter a great many people from presenting notes for redemption who would readily do so if they could get the lighter and more portable coin in exchange.  Besides, gold coin can be exported, while silver coin could not be exported, because its market value is less than its coin value.

Senator Bayard.  I understand that it works practically very well.  So long as the silver is less in value than the paper you will have no trouble in redeeming your paper.  When a paper dollar is worth 98 cents nobody is going to take it to the Treasury and get 93 cents in silver;  but what are you to do as your silver coin is minted ?  By the 1st of July next or the 1st of January next you have eighteen or twenty millions of silver dollars which are in circulation and payable for duties, and how long do you suppose this short supply of silver and your control of it by your coinage will keep it equivalent to gold --when one is worth 10 cents less than the other ?

Secretary Sherman.  Just so long as it can be used for anything that gold is used for.  It will be worth in this country the par of gold until it becomes so abundant and bulky that people will become tired of carrying it about; but in our country that can be avoided by depositing it for coin certificates.

We, too, are in favor of stopping the raid on our gold reserves and know that the quickest and best way to do so is to assert at once the right and option of the Government to pay all coin obligations in silver.  Changing the denominations of greenbacks from small to large denominations that go at once into the banks do not prevent but actually facilitate the raid by those banks on our gold so long as silver is held back and not applied.  I am disgusted with this sham cry and pretense.  Let the law be obeyed and the rights of the people outside of the monetary circles be respected and the raids on our gold will cease forever.