If the Senator means by this illustration that yard-sticks represent coin, and rolls of carpet the business of the world, the answer palpably is, that if there were but as many rolls of carpet in length equal to all the yard-sticks of the world, or could the total carpet await the measurement of the yard-sticks extant, the simile would be sound;  but, unfortunately for his argument, and for the world, there are vastly more rolls of carpet than yard-sticks, and all the carpet presses for measurement at the same time.  Here lies the difficulty with our own country, which has more "rolls" than "sticks," and which lack of supply the Senator is not for his country inclined to avow, but indirectly admits in his reference to some of the European powers.  He said what I now read:

"We have heard it asserted that an irredeemable currency must be a good thing after all, because there are three countries in Europe --Austria, Russia, and Italy-- whose economic development has been somewhat rapid of late, while those countries have an irredeemable paper currency.  Nobody who knows anything about those countries can be ignorant of the fact that the sudden development referred to has been brought about by great and beneficent changes in their political and social organization, setting free and putting to work all the productive forces of society, and that the leading statesmen of those countries are day and night racking their brains to find means by which to get rid of that curse of an irredeemable paper money, which is here represented as the very source of prosperity."

Verily, Mr. President, it has been the incalculable services of our currency, and which the Senator seems determined not directly to admit, that has wonderfully been "setting free and putting to work all the productive forces of society" of this nation, as well, and which fortifies the advocates of expansion of this beneficent agency, to meet the demands for its good offices, so enriching the country with the rewards of its mission.  The present bondage and inutility of dormant forces of society, painfully witnessed, intensify the zeal of the upholders of a medium which has shed blessings instead of curses upon the land.  To restore the activity that sets to work the productive forces of society is the simple end sought by an adequate increase of the animating means.

It is the misfortune of our day, Mr. President, that, like those European states, so prosperous, we are afflicted with kindred statesmen who, as they, "are day and night racking their brains to find means by which to get rid of" what they please to term "the curse of an irredeemable paper money," but which the people value and bless as the "very source of their prosperity."

Hear from one of these statesmen racking his brain for solace tendered to the lacerated and impoverished South and West --one section suffering from its losses, the other from its contributions and enterprises.  The comfort tendered is in these words of the honorable Senator, [Mr. Schurz:]

"If they want to regain their former wealth they must adopt the same methods by which wealth is created elsewhere;  they must produce more, much more than they spend, and they must carefully husband and gradually accumulate their surplus earnings.  That is the way to create wealth and capital available for future production.  It is a somewhat slow and painful process, but it is the only effective process that will be really effective.  This applies more or less to the people of the whole country.  This is a hard fact."

Truly a very "hard fact;"  but not so hard as the unrelenting exaction of contraction and resumption, entailing more destruction of capital and more misery.

Increase of currency based upon the solid bonds of the Government is no watering "trick," but a valuable means of developing capital.  Capital cannot create itself without the aid of somebody, or some agency, whose good offices of development aggregate into capital.  The Government seeks to step in and perform this welcome trust, but the honorable Senator from Missouri, [Mr. Schurz,] with his coadjutors, rather than give currency to such a Government medium, prefers to have the people suffer the "painful process" longer.  It is, as he says, "slow but effective;"  and adds, "this applies more or less to the people of the whole country."

To the people of the whole country, then, the rigid Senator replies, rather than longer suffer the "disgrace" of a currency which he has defined "as founded on the secure basis of Government bonds payable principal and interest in gold," specie resumption must be declared, though it prove a "painful process" and a "hard fact."

This is to deny the means of relief and pity the sad results !  The nation will tell the honorable Senator to contract his tears, and instead, to expand the money.  The honorable Senator further attempted to prove that prices under currency were more prejudicial to the producer.  If there is anything in "inflation," it must be general and applicable to all values;  and the producer who was able to produce more than he consumed on a gold basis, must as well on a currency basis produce more than he consumes --the relation, of the income and outgo on the two bases, necessarily equals.  His benefits are, greater on a currency basis in this particular, his net gains are nominally larger, and such surplus increases in value in just the proportion that currency and gold approach to an equivalent, for the shrinkage is then his gain.  But here is the honorable Senator's logic:

"The Senator from Massachusetts on my left [Mr. Boutwell] said that the influence of a depreciated currency does not raise general prices more than the amount of gold premium if the depreciation of the currency remains steady at the same point.  But the difficulty is that the depreciation of the currency does not remain steady at the same point.  You might just as well say that when we have a heavy fall of snow late in the winter or early in the spring there will be no freshets in the rivers, for if the snow does not melt it will not increase the volume of the water.  That is perfectly correct;  but the difficulty is that the snow will melt, just as an irredeemable and inflated currency will fluctuate and will depreciate."

All know that the fall or increase of snow of itself does not cause the freshet, any more than the increase of money causes its depreciation.  Heat, rain, or like element, applied to the fallen snow, converts it into the freshet, just as the heat of distrust or kindred element of weakness, depreciates any commercial or financial exchange or value.  Let the credit of the source of money be maintained, and any increase within the measure of undiminished credit, will work no depreciation of the value of such money, be it currency or of a different nature.  In other words, other conditions being equal, an increase of volume causes no decline in the exchangeable value of currency.

An increase of our currency to the extent of forty-six millions, as proposed by the instructions to the committee, certainly no sane mind will contend, can weaken public confidence in the nation's ability eventually to redeem, and therefore cannot work a depreciation of the value of the currency dollar.

The honorable Senator from Missouri [Mr. Schurz] did not materially differ as to the causes of depreciation of our currency when he said in another part of his speech--

"What are the causes which produce the disturbance of values through an irredeemable currency ?  There are two:  first, lack of popular confidence in the issuer of that currency;  and, secondly, the relation the quantity of the currency bears to the actual requirements of the business of the country.  The first of these causes, the lack of confidence in the issuer, operated during the war, while the stability of our Government was still in question, and hence the fact that the fluctuations of the currency went far beyond the fluctuations that would have been caused by the relation of the quantity of the currency to the actual requirements of the business of the country.  That cause, lack of confidence in the issuer, has not operated since the Government showed that it could maintain itself, and also demonstrated its ability to work in the direction of a redemption of its liabilities.  But, sir --and I wish the Senate to mark this-- that cause will commence to operate again as soon as the quantity of the currency has increased to such an extent as to render the ability or willingness of the Government, or of the banks ultimately, to redeem their promises in public opinion doubtful."

Admit this;  is there to-day any lack of popular confidence in the issuer of that currency ?  The best answer is that during the panic, when people, if at any time, would doubt the value of their possessions, that currency was hoarded as carefully as gold.

To the second test, "the relation the quantity of the currency bears to the actual requirements of the business of the country," I may say that our greatest prosperity was when we had a greater volume of currency than we have to-day.  Our national growth is in proportion to the development of our resources, and the volume of business bounds this development and consequent growth.  Were it possible, under free banking, to induce all of the home and abroad holders of our outstanding $1,600,000,000 of bonds to deposit them with the Secretary of the Treasury and receive thereon $1,440,000,000 of currency, it would not equal the volume of various forms of circulation we had at the close of 1866, for we then had $1,571,787,780.

The direct reply may justly be to "the actual requirements of the business of the country" --the Senator's test-- that no more currency for bonds would exchange than the business could make more profitable than the bonds, with equal safety;  and this legitimate business demand would be no such implied increase of volume as could discredit the security of a currency whose value was every day enhanced by its immediate stimulus to national production and increased national wealth.

The honorable Senator from Missouri [Mr. Schurz] had occasion some days since to criticise the statement I made, that the rate of interest upon money was regulated by the law of supply and demand --that a redundant circulation gave lower rates, and a stringent circulation caused higher rates of interest.  He since admits the statement substantially in what I quote from his late speech.  He said:

"The other day I received a letter from Omaha, in Nebraska, complaining very much that interest ranges there at 12 to 24 per cent., while in Boston and New York, as the letter stated, it ranged only from 6 to 8.  That is undoubtedly true.  In New York and Boston we can hear exactly the same complaint, that interest ranges there from 6 to 8 per cent., while in London and Amsterdam it ranges from two to three;  and the reason of the difference between Omaha and Boston, and between Boston and Amsterdam, is exactly the same.  In London and Amsterdam there are large accumulations of loanable capital;  centuries have been spent in piling it up;  larger accumulations of loanable capital than in New York and Boston.  And in New York and Boston there are larger accumulations of loanable capital, also the growth of centuries, than in Omaba in Nebraska, or in Hannibal in Missouri.  Now, if we could transport the accumulation of wealth existing in Amsterdam and London bodily to New York and Boston, then the rate of interest at the latter places would not be any longer 6 and 8 per cent., but it would be 2 to 3 per cent.;  and if we could transport all the accumulated wealth of New York and Boston to Omaha and Hannibal, then, in all probability, the rate of interest there would cease to be 12 to 24 per cent., and it would range at 6 to 8."

Precisely this effect wherever the loanable money is in greater supply than the demand.  Where the demand, as now, for loanable capital is greater than the supply, the necessities of debtors are at the mercy of creditors, and rates then fluctuate with the pressure of each case.  When the supply is in excess of the active demands of business, debtors then share with creditors the stipulation of terms, and the rates are more moderate.  If we are to wade through the sorrows and ruin of fortunes, with poverty broadcast over the land, in order to reach specie resumption, before the nation can begin to acquire the loanable capital to supply the demands of business, what capital remains, when specie is thus resumed, will be centered in the few and the business will have departed from the many.  It would be a contraction of both business and capital, far worse for the country than all the gain of contraction of the currency for resumption can possibly be to those who are so clamorous for it.  The profit to the few would be small compared to the great loss to the body of the people.

There are but two compulsory ways to resume.  One is by an increase of the coin of the country, and the other by the decrease of the volume of currency;  one involves more burdens of debt, the other more losses of fortune.  I cannot assume the responsibility to advise either.  There is a practical way to resume, encouraged by the progress made, the prosperity enjoyed, and wealth attained by the past years of national growth and gradual approach toward resumption since the war ended.  England took twenty-six years of suspension, from 1797 to 1823, to relieve herself of her continental war.  We have not yet taken half that time with a war of vaster magnitude.  Why precipitate the natural approach to resumption ?  Why not yield the needed increase of means to restore and quicken the prosperity that advanced us toward resumption from 144, the price of gold when Lee surrendered, to 111, the price at the breaking out of the panic ?  It should constantly be kept in mind that among the essential achievements of this derided and worthless currency, the escape of this great nation from overthrow, stands as the living memorial of the service rendered to the American people and to the cause of civilization by this vilified, berated, and scouted national medium of exchange.  The nation lives as the trophy of this denounced instrument, and will outlive all of its detractors or defamers, under whatever metaphor they may seek to enshrine themselves.

The irredeemability of the currency is the bane of the system, in the judgment of the Senator.  What is his remedy ?  Not redemption in coin, for he admits the impossibility of redeeming seven hundred and fifty millions of notes with but forty millions of available coin in the Treasury, and but one hundred millions besides in the whole country.  To redeem, the two must in one way or the other meet.  The Senator would avail himself of the opportunity of the present prostration of business, by further impoverishment and misery, in order to reach the solution of our difficulties through specie resumption.  He would break down more of the enterprises, prostrate more of our business men, throw more of the people out of employment, and carry desolation and starvation into more of the households of the land, that the finances of the nation may be brought to a specie standard.

It is in vain that the Senator from Massachusetts, [Mr. Boutwell,] late from the financial chair of the Administration, deprecates the ruin to follow any attempt to contract the currency to reach specie resumption.  It matters little that financial minds of ripe experience protest against the fatal step of proximate resumption.  The Senator from Missouri [Mr. Schurz] demands, in behalf of foreign capitalists, an early return to specie payment, that the nation may no longer be disgraced by an irredeemable currency, nor foreign money seeking American investment longer be jeopardized.  The honorable Senator, to further magnify the mortifying condition of the country, introduced as argument a letter from some foreign capitalist seeking the Senator's advice about the safety of American investment, which I read as the Senator gave it:

"A few days ago I received from a friend in Europe a most significant letter, to which an answer was requested.  The writer is a merchant who desires to retire from business.  He writes to me to this effect:  'I can realize out of my business several hundred thousand dollars, and should like to invest my money at a good rate of interest.  I have thought of investing it in the United States on mortgage security, which, as I am informed, bears from 8 to 10 percent.;  but I learn also that you are likely to inflate the currency in the United States, which, of course, will result in depreciation.  I would now ask whether it would be safe for me to make such an investment in mortgage loans in the United States while there is a chance that your legal-tender money may depreciate so that I would lose money by the depreciation of capital invested than I would gain by the interest I might get.'

"I shall tell that gentleman:  'Send your money here and tell all your friends to send theirs as soon as we enter upon a policy that will be directed toward specie payments,' for then I shall know that the value of the capital so invested will be safe;  but I should not consider it honest advice, did I tell him to convert his gold into our paper money, as long as there is danger that the paper money might be depreciated by inflation."

This is his estimate of United States securities:

"If I were worth $10,000,000 and had it all to invest in loans, I would ask for no better security than mortgages on real estate in the United States.  The question is this: whether a man investing a certain sum in mortgages, when he retires his capital two or three years hence, will not by the depreciation of the currency lose 20 or 30 or 40 per cent. of the value of his capital;  whether the dollar that he invests now will be worth just as much when that dollar will be returned to him.  That is the question."

Here it appears that a foreigner seeks American investment upon United States real estate security, which the Senator says is as good security as he wants.  This is certainly a queer way to sustain the credit of one's country, to forecast a very improbable contingency of a depreciation of our currency, 20, 30, or 40 per cent.;  to make out that a foreign friend may lose more by the depreciation of capital invested than he would gain by the interest he might get !  Very singular contingency to cast against an adopted country !  Any one conversant with the business of loaning on real estate, or with the negotiation of any permanent loan, knows well that the longer the loan has to run the more desirable it is to the capitalist.  Frequent replacements are avoided.  Foreigners understand this well, and always choose a longer running bond, at lower rate of interest, as the better investment.  The Senator's foreign friend would doubtless stipulate for as long a loan as possible for his surplus capital.

The chances, judging from the past years, would be that our currency would then be nearer par than it now is;  but if not, the foreign friend could as well reinvest his loan on such unquestioned security as real estate, until the currency became equal to coin and thus realize the extra profit of the premium he received for his gold when he made the first loan.  In this scrupulous regard for the interest of a foreign capitalist it may not be out of place to remind the honorable Senator, if it escaped his notice, that while his foreign friends were taking our bonds at thirty-six cents and upward in coin --the value of currency then, in the throes of our struggle-- and for which purchases we were thankful and showed our gratitude by paying them promptly at one hundred cents in gold, when many maintained they should be paid at their face in currency;  it is worthy of his remembrance, I may say, that at the same time there were other German friends of ours who proved their loyalty to their adopted country by risking not only fortune but life, and such as survived the war, returned to their homes to find body and estate sadly shattered.  They took their pay in currency, instead of gold.  They have willingly and uncomplainingly suffered the loss of change of values.  No murmur comes from them.  They upheld the honor of the Government in the shock of battle.  They have lost no faith in the nation in the trials of panic.  They cheerfully meet, with other citizens of the United States, the fluctuations incident to any system in the natural course of business, for their faith has been tried and not found wanting in the nation, which has pledged itself for the integrity of its authorized money.  These friends, I would remind the honorable Senator, have greater claims for his forbearance, to drive them to more losses by early resumption, in order to please a foreign friend and aid him to increase the profits of his loans.

Why not advise all his foreign friends to bring their coin here and hasten resumption without contraction ?  But he insists, not a dollar of investment here till a policy is adopted of resumption, but with it, they should come with hundreds of thousands of capital.  Why, sir, if the honorable Senator's advice were so potent as to move such a mountain to Mahomet, the sum of his highest hopes --the return to specie payment-- could at once be effected by the deportation of coin from Germany to America, and I beg of him in behalf of a country so "dishonored" with "irredeemable currency," to address himself at once to the herculean task of his eventful life.  Such a solution would be the signal for a grateful people to pay hommage to the masterly achievement.

In his great undertaking I would remind the Senator of two facts which may mitigate his distress.

German capitalists abroad hold largely of our national bonds.  They have witnessed the funding of a part of them into lower rates of interest, maintaining meanwhile their value at par in coin.  That they understand that our national currency is based upon these coin par value bonds, with but 90 per cent. of currency issued for each 100 per cent. of bonds, and the bonds pledged for the redemption of the currency;  and as the highest evidence of this security and value, in the midst of a panic the people of the United States hoarded their currency, and cared not to exchange it for gold even at a small premium.

The other fact is, that Europeans seem to understand their interests so well that they interpose obstacles to the transfer of coin to our borders.  The honorable Senator from Massachusetts [Mr. Boutwell] in his recent speech gave his experience while Secretary of the Treasury, and stated the fact that even the Geneva award of fifteen and a half millions of coin could not be transferred, but was adjusted by an exchange for our bonds in European markets;  with the further statement that if necessary, foreign official interposition would follow any attempt to move coin in any substantial quantity from Europe to America.

Now, sir, in the face of these two facts to which I have called the Senator's attention, my answer to his foreign friend;  questioning an investment in the United States, with United States bonds at par in coin and its currency based upon this pledge of the whole wealth of the nation;  with Europe ingeniously and inflexibly withholding its coin from our vaults;  and all this forcing a query and causing such a discredit of American security as to lead this foreign friend to hesitate about placing money here, my answer to him would be, hesitate forever.  The credit, the faith, and the honor, of the United States are beyond question with the American people, and they are growing wiser than further to enrich other nations at the expense of their own.  I tell the Senator that the tribute we are now paying for foreign faith costs this nation over one hundred millions of money annually, and the quicker we supply the people with adequate means to develop and husband their own resources, the greater will be our wealth and our credit and our independence.  Europe wants us to check our enterprises and cripple our resources by forced resumption, for she is envious of our growth and jealous of our power.  To make the New World tributary to the Old is the gist of the financial theories of the books.  To make the New independent of the Old World is the financial problem of American aim.

The honorable Senator studies the books of the past, with the dim lamp of speculation;  we open the volume of the present under the sunlight of experience.  We revere the theories of olden time, just as we venerate the ages, but prefer business sense for a new era of finance, and choose to follow practical minds for the active necessities of the nineteenth century.  The honorable Senator from Missouri, holding a seat in the Senate of the United States, denounces the money which the people have issued as a disgrace, and which the people cherish and value as no currency was ever valued before, and assumes from a European stand-point to shape a financial policy for the people who have so highly honored him.  Not satisfied to deride and undervalue, in terms, the currency of the nation, he classifies it with the illimitable paper money of China, and the assignats of France, all without substantial security, while that of the United States is so valuable that the notes of any suspended bank are worth a premium of 5 per cent. for reissue under a new organization --the demand for banking currency to meet the unsupplied business wants causing this enhanced value.  Not a dollar of any bank in liquidation since the national currency was issued but has borne a premium, I would remind the Senator.  To cast further ridicule upon such a circulation, in the climax of his derision, the Senator exclaimed:

"Let every man issue his note for all his debts--past, present, and prospective--and then let us enact a law making that note legal tender."

Driven to such straits to advocate and fortify a policy of resumption, which prudent financiers unhesitatingly declare would be ruinous to the country, it is not strange that, to the appeal of prostrate industry suffering for more currency, the Senator should respond, by an increase of our bonds.  Ruin of our industries is well understood to be an increased sale of foreign products, and more impoverishment of our people by such increased foreign indebtedness.  To the demand for more money to save our industries, his answer is more foreign debt.  Less paper money without interest, and more paper bonds with interest, is the financial policy of the astute Senator.

He tells the country that but one million of the twenty-five millions already issued of the greenback reserve has found its way out of New York and New England, and in the face of this inequality refuses to end the monopoly of banking by opening it to all.

Speculators, he adds, are the ones who ask for more money, and still he declines to break the power of those speculators, who hold in Wall street the lever of national disturbance, through the instrumentality of banking monopoly.

The honorable Senator has frequently quoted from the Chicago Tribune during this debate to fortify his stand against an increase of currency or free banking.  In his late speech, however, to anticipate the force of a very recent editorial in that paper, favoring free banking, he had it read as a part of his speech, and garnished it with an ingenious application, which the editor will hardly thank him for, nor the public be cheated, by the rhetorical disguise.

I may add, in passing, that while the Senator finds comfort and pleasure in berating and discrediting the circulation of the people's government and the people's money, he will have occasion to learn by suggestive experience that the people will not idly tolerate senatorial flourishes to brand the country with national dishonor.

The honorable Senator from Ohio [Mr. Sherman] holding the distinguished position of head of the financial organ of the Senate, submitted his views some days since upon the monetary situation in a speech of remarkable ability.  Charged as he is with the responsible duty of devising ways and means for the financial demands of the country, and bringing to his aid many years of thought and experience, he stands before the country as the exponent of a matured judgment upon questions of finance.  Notwithstanding, the situation in which the country finds itself, extorts from the able Senator doubts upon the feasibility of any suggested plan for relief and stability.  Regarded as the financial oracle of this body, his official utterances demand, and are given to invite, the broadest scrutiny.

Let me, therefore, quote from his speech, delivered [Friday] January 16, 1874, on page 24, which I ask the Secretary to read.

The Secretary read as follows:

"Now, I have only to say, very briefly, that there are various modes, to none of which do I intend to commit myself until the whole subject is finally discussed, by which this can easily, without trouble, without difficulty, be accomplished.  There are three modes that have been proposed in debate in the Senate, and a multitude come to us from the people, but I will group them into three classes.

"There is, first, the proposition to accumulate gold in the Treasury with a view to the actual redemption of our notes in coin.  That is supported by two bills now before the committee;  one introduced by the Senator from Vermont, [Mr. Morrill,] and the other by the Senator form New Jersey, [Mr. Frelinghuysen.]  What are the objections to this plan ?  They seem to me to be these:  In the first place any attempt to accumulate large masses of gold in the Treasury, lying idle to await some future event not fixed by act of Congress, would not be a wise use of the public moneys.  In the next place, I entirely object to conferring upon the Secretary of the Treasury the power of issuing one hundred millions or any lesser sum of 6 per cent. bonds with a view to buy gold to hoard in the Treasury to maintain resumption.  I believe that it is impossible, in the very nature of things, to maintain the resumption of specie payments at all times and under all circumstances;  and if anything has been established by modern experience, it is that all a nation can do that issues paper money is to maintain it at a specie standard in ordinary times;  but, in times of panic, such as by periodical revulsions come over every country, specie payments cannot be maintained.  They can scarcely be maintained in England, and are not now maintained in France, although they approach them.  Therefore, every plan for specie payments ought to have some provision for the temporary suspension of specie payments, or some means by which in times of great panic and financial distress there may be a temporary departure from the specie standard.  I say this not that it ought to be so, but simply as a matter of demonstrated experience shown by the history of almost all commercial nations of Europe.

"The second plan is the actual payment of the United States notes and their cancellation;  in other words the plan of contraction.  In the first place, this plan, while it operates, does so with such severity as, in a popular government like ours, to cause its suspension and repeal.  Undoubtedly, the most certain way to produce specie payments is by retiring the notes that are dishonored, paying them off, taking them out of circulation.  But the trouble is, the process of contraction is itself so severe upon the ordinary current business of the country that the people will not stand it;  and in this country the people rule.  The policy of Mr. McCulloch, already commented upon, if it had been continued farther, would have undoubtedly brought us to a specie standard;  but with great distress, great impoverishment, and with more difficulty than was really necessary to accomplish the object in view.

"These are the difficulties that occur to me as against these two policies.

"There is a third plan.  This plan, which in my judgment presents the easiest and best mode of attaining specie payments, is by taking some bond of the United States which in ordinary times, by current events, is shown to be worth par in gold in the money markets of the world, where specie alone is the standard of value, and authorize the conversion of notes into that bond.

"I do not intend to consume much time upon the discussion of these different plans, because they are all open for debate, and I do not intend to commit myself."

Mr. President, the advocates of resumption are all driven to some expedient for gold to warrant any advance toward specie payment.  The fact that the average annual product of gold of the country for the past five years has been but forty-two millions;  that the excess of our exports over our imports of coin and bullion for the same time has been, two hundred and seventy-five millions --an annual average of fifty-five millions-- reducing the total gold in the land to one hundred and forty millions, and but forty-five millions of that available in the Treasury, as exhibited by the February statement of the public debt;  with these facts, it is the sheerest folly for them to contend for practical resumption of seven hundred and fifty millions of currency with such a petty moiety as forty-five millions controllable by the Government, and the unavailable one hundred millions in works of art and other forms in the possession of the people.

Worse than this.  Our imports of merchandise and other industrial products, last fiscal year, were one hundred and sixteen millions in excess of our exports, and to supply an approximation of coin for what would be needed for an effective resumption, this balance, or whatever the balance might be against us, in foreign exchanges, must be included in the total of coin necessary to maintain specie resumption.  None know this better than the honorable chairman of the Committee on Finance.

If resumption can be effected it must be by the people surrendering what coin they individually hold, and by a sale of bonds for gold to make up the requisite amount.  How is the gold to be secured if the bonds can be sold ?  The honorable Senator from Massachusetts [Mr. Boutwell] stated in the hearing of the honorable chairman that even the Geneva award of fifteen and a half millions could not be transferred to our shores, and that Europeans would either place obstacles in the way of a transfer of coin to America, or drive our bonds out of their markets.  What alternative, then, is to be employed ?  If it be gradual accumulation of coin in the Government vaults, this seems injudicious in the judgment of the honorable chairman.  He very wisely concluded, as he has stated, that not only would the "attempt to accumulate large amasses of gold in the Treasury, lying idle to await some future event not fixed by act of Congress, would not be a wise use of the public moneys," but, with equal clearness of conviction, stated the impossibility of maintaining specie payments at all times, enforcing this truth by the experience of foreign countries, when he says specie payments "can scarcely be maintained in England, and are not now maintained in France."

Notwithstanding all this, the honorable chairman lifts this impracticable theory of the gold dollar above the practical one of the currency dollar, for he declared in another paragraph of his speech that "we have rejected the true god (gold) and set up an idol (currency) of our own."  Devoted as he is to that glittering image, he proposes, so far as he has expressed his preference, as the curative expedient, the conversion of currency into United States bonds.  He proposes that the false god, currency, be transmuted into the motley god, bonds.  How currency, consisting of 100 per cent. national credit is rejected as "false," and bonds composed of 100 per cent. national credit and 5 per cent. interest also in promise, is embraced as the "true god" is such a revelation of polemic divinity as surpasses all my ingenuity and comprehension.  Let us for a moment consider how true and how false these respective measures of values are, and how great their claims to unchangeability, as their merit for devotion, are.  The best form of a standard of value is perhaps put in the words of the honorable chairman in his speech, page 1, as follows:

"The most obvious of these axioms, which lies at the foundation of the argument I wish to make to-day, is that a specie standard is the best and the only true standard of all values, recognized as such by all civilized nations of our generation, and established as such by the experience of all commercial nations that have existed from the earliest period of recorded time.

And on page 5:

"Of late years much difficulty has grown out of the slightly varying value of silver and gold, as compared with each other, and the tendency of opinion has been to adopt gold alone as the standard of value.  The United States has twice changed the relative value of these metals, and other modern nations have been driven to similar expedients.  At the Paris monetary conference, held in 1867, which I had the honor to attend, the delegates of twenty nations represented agreed to recommend gold alone as the standard of value."

Then on page 27:

"Why, sir, this is not the first time we have chanced the standard.  We did it in 1835;  and we have changed the value of our gold coin twice within my recollection.  We have changed the value of silver two or three times.  The monthly fluctuations that happen in the city of New York sometimes are greater than all the amount of difference between our paper money and gold now."

It will be borne in mind that this infallible gold-god was, in 1835, adulterated with alloy, and depreciated in value 6 per cent.  In the midst of the late panic --the very crucial test of our greenbacks-- they stood but 6 per cent. below par in gold, precisely the percentage of depreciation in 1873;  that was made in the gold standard in 1835.

The honorable chairman attempts a solution of the difficulty in what he says on page 5:

"The failure to distinguish between the standard of value and the medium of exchanges occasions many of the errors into which so many fall, and nearly every Senator who has spoken on one side of the question has fallen into this error."

That this clearness of discrimination between standard of value and medium of exchange, may be made apparent by this assumed non-interchangeability of terms, let me read a paragraph from the distinguished Senator's speech made in 1862 when he was advocating the issue of the legal-tenders or greenbacks.  I read from the Congressional Globe, second session, Thirty-seventh Congress, part 1, page 790.  The Senator then said:

Congress is not prohibited from emitting bills of credit or from making a standard of value, nor are these powers expressly conferred.  Congress has repeatedly issued bills of credit;  it has fixed gold and silver as the standard of value, and made them a legal tender.  Certainly gold and silver coin is the best standard of value, for it has inherent value in all commercial countries;  but if, in the course of events, gold and silver cannot be had in quantities sufficient to form a medium or exchange for the increased wants of the country, then Congress may establish another medium of exchange — another standard of value.  This was twice done by establishing a Bank of the United States.  I much prefer the credit of the United States, based, as it is, upon all the productions and property of the United States, to the issues of any corporation, however well guarded and managed.

Mr. President, the advocates of expansion, or free banking, and an increase of the volume of currency to meet the expanding wants of the people, stand now as the honorable Senator from Ohio --then also of the Committee on Finace-- stood, when he thus spoke;  and we only seek, as he then sought, to "establish another medium of exchange, another standard of value."

In that same debate, in 1862, on page 763 of same volume, the very distingguished Senator from Maine, Mr. Fessenden, then the chairman of the Committee on Finance of the Senate, gave, in another form, his commentary on the instability of gold as a standard, in these sagacious words:

"Money in the market is always worth what it will sell for.  It is an article of merchandise like anything else, and the Government has no reason to suppose, unless it can offer much better security, that it should get money at a better rate than anybody else."

Taking these two eminent statesmen, Sherman and Fessenden, of 1862 as the standard, I had not departed far from financial orthodoxy when in my remarks on the fourth day of this session, while speaking on the subject of the conventionality of a monetary standard, I said:

"The idea that gold, as such, without Government authentication, is money is a figment.  It has its value with other precious metals, and like silver, copper, iron, lead, cotton, and wheat, is a commodity, worth just what it will sell for in market.  It can, no more than the other articles named, become a circulating medium, until made so by the nation using it.  Its form, quality, and value as a currency must be approved and stamped upon it by the Government, before it becomes a medium of exchange.  The monetary standard, whatever it be, is conventional."

May I not add the reasons given in Parliament, when the Bank of England suspended in 1797, upon the instability of coin as a standard ?  It was then said--

"That specie payments were of no benefit to England, as the specie when drawn from the bank went abroad.  That it was better to stop specie payments while specie and bullion could be kept in the country by that means."

How could the wisdom of this, I ask, be advanced by the conversion of our currency into 5 per cent. coin interest-bearing bonds, and so establish a system of manipulation by which currency would run to the Treasury and there be transformed into bonds to float abroad and swell our public debt ?  We already pay annually over one hundred millions of coin interest on obligations now outstanding.  This conversion system is to increase this large annual outlay of coin interest, and sooner or later draw on our resources further for the payment at maturity of these additional bonds.  No, sir;  it is the constitutional duty of the Government to supply a safe and ample medium of exchanges at the least possible cost to the people.  In doing this in the form of currency without interest the Government is but emphasizing the advice of the honorable Senator from Ohio [Mr. Sherman,] when he said in 1862:

"I much prefer the credit of the United States, based as it is upon all the productions and property of the United States."

If this could be said and urged with force in 1862, in the opening years of the war, and amid disaster to our arms and a creeping distrust over the certainty of our success, how much more sound and potent is it to-day, after complete triumph, and years of peace and prosperity !

Doubt then pervaded the financial circles at home and especially abroad, and our credit suffered in consequence.  Faith now enters into all of the money centers of the globe, and the credit of the nation is beyond question.  I do not overstate this, for the honorable chairman, [Mr. Sherman,] last December, as will appear in the Congressional Record of the 12th of that month, remarked that--

"Our credit is so good that we do not have to induce anybody, by any provisions of law, to buy our bonds."

With the admitted impossibility of resumption for lack of coin;  with the declared necessity for use of currency as the national medium of exchanges, it logically follows that the needed volume for the business of the country should be supplied.  This will be provided for by an increase, or under free banking, with the quantity properly regulated by the law of supply and demand.  Based upon the nation's wealth and faith, and issuable only upon the unquestioned bonds of the Government, not a doubt can creep in to affect the credit of bonds or currency, and the expansion of circulation will run parallel with the expanding wants of the country.

That more currency is really needed is indirectly recognized by what the honorable chairman stated in his speech on page 29, while contending for his process of specie resumption.  He said:

"Why, sir, I do honestly believe that if now there was a plan of redemption agreed upon by which notes could be converted into coin or bonds at the pleasure of the holder, all restrictions upon the amount of currency were repealed, the amount of currency thus at par with gold would be greater than it is at present, and its purchasing power would be just exactly 11 per cent. more."

If the amount of currency then, with all restrictions removed, would necessarily be greater to meet current demands of business, the same unanswerable demands plead to-day for the removal of restrictions to quantity, that the business necessities may be satisfied.

In this connection I may be permitted to refer to what I expressed in the first week of the session;  and I read what I then said:

"In defiance of moderate expansion, United States notes have gradually worked up to nearly the value of gold.  It is no just conclusion that a further moderate increase will widen the marketable space between the two.  The fact of our experience is against such conclusion.  Excess of currency did not cause the present depression in business.  As long as business prospered, stimulated by enough circulation to supply the ordinary wants, currency and gold approached each other.  When the business of the country outgrew the volume, stagnation followed and the further appreciation of currency ceased.  Were we on a gold basis this natural business demand for an increase would be met by our annual forty million coin product.  Upon a currency basis this necessity and fact are ignored, and a reasonable increase denied.  Over the ruin of industries and the prostration and pauperization of the people some would enforce contraction to effect resumption.  Not even to restore the country to its condition before the panic would they yield to a judicious increase.  Former prosperity gave us a natural and certain appreciation of our currency.  They seek an unnatural precipitation, by contraction, to resume even at the expense of that prosperity.  The let-alone policy is to let business stagnate and let the people suffer rather than depart a step from the kindred and more dangerous plea of contraction."

We are not without experience upon the policy of contraction, whether through the conversion of currency into 6 per cent. interest bonds or, by retiring gradually a portion of the circulation.

The three hundred millions of greenbacks issued under acts of February and July, 1862, were made convertible into 6 per cent. coin interest-bearing five-twenty bonds;  and in the act of March, 1863, authorizing one hundred and fifty millions more, it was provided that the convertibility of the greenbacks into bonds should cease July 1, 1863.  Thus convertibility was authorized, but allowed for about a year, and prohibited upon less than four months' notice to the holders, who now hold many of those notes bearing upon their reverse side the express promise of conversion, while the fact stands that that promise continues to be practically broken.

What has been our experience under the policy of direct contraction ?  This policy urged by the then Secretary of the Treasury, known as the McCulloch policy, was embodied in the act of April 12, 1866, directing that not more than ten millions of greenbacks should be retired within the six months following the act, and that thereafter not more than four millions in any one month should be retired.  Gold at the date of this act stood at 128;  the next month of May it had advanced to an average for the month, of 131, and continued to advance.  February 4, 1868, an act was passed suspending further contraction when it was found that forty-four millions had been retired, leaving the volume of greenbacks in circulation three hundred and fifty-six millions, instead of four hundred millions, the volume outstanding April 12, 1866;  and gold had risen fourteen cents, an advance under contraction, from 128 to 142.

Indirect contraction by conversion into 6 per cent. bonds, and direct contraction by retiring gradually the currency, having been after trial abandoned, and the policy of masterly inactivity declared perilous and ruinous, what alternative is there left but the wiser one of an adequate currency to give activity to labor, profit to industry, and prosperity throughout the country.  Europe has pursued this judicious course by providing for its people circulation, whether of gold, currency, or both, a ranch larger per capita of its population than the United States.

From the Bureau of Statistics the following facts and estimates are drawn, showing the real, active circulation, on a gold basis, of the respective countries named.  The bank reserves in each country, it will be observed, are deducted:

This criterion has been disputed as being an arbitrary ratio, and in no way a legitimate, basis upon which to adjust the circulation of any country.  The honorable chairman so assumed when he said in his speech:

"Sir, area and population are not the things that demand currency;  it is business, wealth, production."

The honorable Senator from Massachusetts [Mr. Boutwell] negatively asserts as much when the obstacle in the way of adjusting a proper ratio is, as he stated, national poverty.  His words were:

"The difficulty in the way of resumption can be expressed in one word which I have never yet had the courage in this connection to use.  That word is poverty;  not individual, but national poverty."

The honorable Senator from Missouri [Mr. Schurz] disagrees with his distinguished supporters severally, but agrees with them combined.  He said:

"But I ask what are the circumstances determining the volume of currency necessary for the real requirements of the business of a country ? * * * It cannot be extent of territory alone.  It cannot be population alone.  I ask, then, is it the amount of productions, the number of exchanges, and of values involved ? * * * * Neither of these elements alone, therefore, will determine the amount of currency which is necessary for the business of a country, but all of them combined will."

Answering these honorable Senators as to an adequate currency, fixed by the wealth, poverty, area, population, and production, or by all of them combined, I give the national growth, volume of circulation, ratio of circulation to wealth, for past years, as well as a table of population, and percentage of increase or decrease, for years obtainable from official sources;  together with area in square miles;  length of railroads and telegraph lines, in miles, of four of the great powers of the world, and let the public pronounce upon the relative inadequacy of our circulation by a just comparison.

In 1850 the real and personal wealth of the United States was $7,135,780,228;  the volume of circulation was $203,800,000; the ratio of circulation to wealth as $1 to $35.

In 1860 the real and personal wealth of the United States was $16,150,616,608;  the volume of circulation was $461,000,000;  the ratio of circulation to wealth as $1 to $35.

In 1864 the real and personal wealth of the United States was $20,000,000,000;  the volume of circulation was $750,000,000;  the ratio of circulation to wealth as $1 to $27.

In 1870 the real and personal wealth of the United States was $30,068,518,507; with $859,000,000 as the volume of circulation, $1 to $35 would be the ratio of circulation to wealth -- the ratio of 1850.

In 1870 the real and personal wealth of the United States was $30,088,518,507;  with $1,111,000,000 as the volume of circulation, $1 to $27 would be the ratio of circulation to wealth -- the ratio of 1864.

In 1874 the real and personal wealth of the United States is $35,000,000,000;  with $1,000,000,000 as the volume of circulation, the ratio of circulation to wealth would be as $1 to $35 --the ratio of 1850.

In 1874 the real and personal wealth of the United States is $35,000,000,000;  with $1,296,000,000 as the volume of circulation, $1 to $27 would be the ratio of circulation to wealth --the ratio of 1864.

In 1874 the real and personal wealth of the United States is $35,000,000,000;  we have $750,000,000 as the volume of circulation, which is but $1 to $47 as the ratio of circulation to wealth.

It is thus seen that on the basis of the ratio of circulation to wealth on a coin standard in 1850 and 1860, namely, that of $1 circulation to $35 of wealth, the volume of circulation in 1874, on a coin standard, should be $1,000,000,000;  and as compared to the ratio of 1864, of $1 to $27 of wealth, the volume of circulation of the country in 1874 would be $1,295,000,000 of currency, instead of $750,000,000, the present volume.

I now submit a table of population and increase or decrease for respective years, being the latest comparison officially obtainable:

With this relative extent of territory of the several countries, the vaster area of the United States in comparison is illustrated with significant force in the great system of railways and electric wires creeping apace with the development of the territorial and commercial demands of the nation.  With 6,427 miles of road constructed in 1872, and 4,005 miles in 1873, in these two years building nearly as much as the whole railway system of France, and but little less than the whole of Germany, the financial wants of a nation like this find no adequate measure by the comparative needs of compact nations, covering less than one-eighteenth part the territory of the United States.

With such rapidly increasing wealth as the late census has revealed, and the constant increase of our population in far greater ratio than that of European nations;  with the multiplied enterprises necessitated by such development, this growth must either be facilitated by sufficient means, or be dwarfed by a policy looking more to contraction, than to expansion, of the riches and prosperity of the nation.  Every intelligent observer knows well that the broader the country the greater the time consumed in making exchanges, and of necessity the greater volume of circulation needed to carry on the same total of labor and business.

The honorable Senator from Missouri [Mr. Schurz] expressed this when he said:

"But the same amount of production, the same number of exchanges, the same values involved, will require far less currency where there are superior facilities of rapid communication, of banking and clearing-house systems, than where they do not exist."

And further he said:

"Let us in this light compare England with the United States.  In England, as well as in all European countries, the number of persons receiving salaries and wages is far greater in proportion than in the United States, and every one who is acquainted with those countries knows it.  There are large armies there, large navies, which we have not.  The number of private servants is much larger than here.  The number of operatives and daily laborers is still greater.  Now, although the population of the United Kingdom is only thirty-two millions, while ours is forty millions, yet the number of persons receiving salaries and wages is not only in proportion, but actually greater, much greater in England than here;  and although wages rule higher here than they do there, yet I think I do not venture much when I say that the aggregate amount paid in wages and salaries in England is much larger than it is in the United States."

Mr. President, the avowal is here formally made by an honorable Senator, whose early days were spent in Europe, and who has the past season revisited the scenes of his nativity, confirming his earlier impressions by recent observation, by comparatively declaring the currency of his adopted country a disgrace to the American name, because it does not bear the sovereign character of European countries.  He especially draws comparison between the United States and the United Kingdom of Great Britain.  His words are significant and invite apprehensive criticism.  Let me repeat.  He said:

"Now, although the population of the United Kingdom is only thirty-two millions, while ours is forty millions, yet the number of persons receiving salaries and wages is not only in proportion, but actually greater, much greater in England than here;  and although wages rule higher here than they do there, yet I think I do not venture much when I say that the aggregate amount paid in wages and salaries in England is much larger than it is in the United States."

Then because more men are employed at lower wages there than here, but for the reason "that the aggregate amount paid in wages and salaries in England is much larger than it is in the United States," we must imitate England and Europe, and study her writers upon finance, and adopt her policy of industry and her system of monetary exchanges.

We know that wages are lower in Europe than in America.  We know that more men are compelled there to work for low wages than are here employed.  We know that that vast force of low-paid operatives are also the dependents of a formidable array of salaried dignitaries, and commercial princes, with titles of dukes, marquises, earls, counts, lords, and barons.  We know that the feudal system, so long in vogue there, is the boon of aristocracy and the bane of the masses.  We know that its policy is to make the rich, richer, and the poor, poorer.  We know that around every merchant prince, moneyed aristocrat, and landed lord, cluster numberless tenants, serving the purposes of their exacting masters, like so many serfs doing the bidding of their unrelenting chiefs.  That this mass of toilers are poorly paid and provided for by weekly, monthly, or yearly stipend, with no thought but work and pay, and the supply of both provided by the credit of employers, who are the financial centers of those laboring retinues, and use vastly less money than credit, is also well known.

Here in a free Republic: fewer men work for wages, and at great deal higher rates.  Fewer live on salaries.  The large majority of the people are their own operators.  They think, devise, and arrange their own pursuits;  dependent upon themselves and not upon others.  They control and provide for no large dependent communities, and therefore have a restricted credit, and use more money daily, than credit.  Such an enterprising and active people, are made up of nearly as many centers of operation as there are men;  are educated to individual thought and action by the sovereignty of citizenship and the responsibilities of a free republic, with no one, from the President down to tide-waiter, wearing any other title but American gentleman, which nothing can dispossess but conduct of self-election.

To compare the wants of such an independent, industrial, intelligent, enterprising, well-paid, and inventive people, spreading over a still unoccupied extent, and developing resources of yet untold riches;  with nations massed within unyielding boundaries, of limited resources, whose wealth is determined by the products of subsidized nations, and cheapened industry;  whose people are divided between dependent toil and titled aristocracy -- to make a comparison between two such peoples, for the purpose of fixing the character and volume of the money needed for one, thriving under republican freedom;  by enforcing for such the nature and amount of money required by the other, moving under monarchial forms of limited powers and benefits, is such a reversal of the spirit and scope of modern progress as to evoke my unqualified repudiation.

Europe's feudal system of "capital owning labor," bequeathed to America in the relic of industrial slavery, was, in a war of sections, effectually and forever disposed of in that form.  The restored Union of the States has been constructed upon that grave.  If that system is to reappear in the form of financial bondage, in another section, and the irrepressible conflict is to marshal the South and West against the East, let it come, for the issue will be as inevitable and emphatic, as the late contest, and upon the grave of this bondage, will be constructed the American system of, labor owning capital.

In Europe, with the facilities of compact nations --wherein commer­cial exchanges between extreme boundaries are made daily;  where low wages and abundance of money cheapen all modes of travel and traffic and all means of living;  where, by wise foresight and sagacious statesmanship, its money centers have become the clearing-houses of the world and all the nations of the earth made tributary to European wealth-- bills of credit of various forms are the greater share of the financial volume of its circulation.

The United States, with less money than muscle and more brains than capital;  whose broad area requires thirty days instead of one to make its commercial exchanges between productive extremes;  wherein high wages and scarcity of money enhance modes of travel and tran­sit, and increase the cost of living;  where, by following the theories of a past age, when steam and electricity were not known as wonder­ful industrial elements;  and by trusting too implicitly to foreign statesmen, who planned for America to plod for European riches;  this nation finds that a larger share of its industry and exchanges is made up of money, and less of credit.

America is younger, and has not yet acquired the enormous credit of the older states of Europe.  She hopefully bides her time, and meanwhile plies her energies and resources with a currency of her own.  Has there been enough ?  Shall there be more ?

From this exhibit and comparison, very well and generally understood by the people, it must he conceded that the general impression that the volume of currency was inadequate had much to do with the extent and character of the panic.  The public judgment is as well grounded today that the currency is insufficient to answer the a necessary demands of the country.  Notwithstanding this, an attempt to meet this just demand for an increase of currency is assailed with exaggerated deprecations and alarming forebodings of consequent ruin to the land.  The honorable chairman has indulged in this when saying --I read from his speech, page 15:

"I say to Senators that if now, in this time of temporary panic, a great part of which, as I shall show you, has already passed over, we yield one single inch to the desire for paper money in this country, we shall pass the Rubicon, and there will be no power in Congress to check the issue. * * * And when you have passed the Rubicon and have fulfilled the pledges you have already made to the people of the United States, where can you stop ?  Where our ancestors stopped at the close of the Revolution;  where the French people stopped in the midst of their revolutionary fervor !"

The honorable Senator from New Jersey, [Mr. Frelinghuysen,] on the 17th of last month, sketched the frightful apparition of French assignats as a warning to an increase of our own currency.  Assignats were mere assignments of sequestered lands, which could not be possessed till formally put up for sale.  Thus based and thus obstructed, with no national security, and an issue of 45,000,000,000 francs, equal to $9,000,000,000 of our money, can this be a worthy or noticeable parallel to our national-bank issue, based upon 90 per cent. of bonds of the nation, secured by the total wealth and honor of the country, and necessarily limited at the utmost by the outstanding bonds of the United States ?  There are less of these bonds than we had of different forms of circulation in 1866, and still the supposititious issue of the possible maximum of what we once endured is made the occasion of invoking the specter of $9,000,000,000 of French assignats!  Poor substitute, indeed, for argument upon a grave national subject.  When in February, 1863, it was proposed by the House of Representatives to add to the volume of currency, an issue, under a national banking system, of three hundred millions of national-bank notes, the honorable chairman, then a member of the Finance Committee, seemed possessed with like alarm, which found expression as follows, as I read it from the Globe of the third session of the Thirty-seventh Congress, part 1, page 842:

"We must check it;  we must put a stop to it.  Whatever may be the hazards, we must check this over-expansion and over-issue.  If you authorize that issue of United States notes it will be at once followed by an issue of more bank paper, and then we shall have the wildest speculation.  Hitherto the inflation has not extended to many articles.  Clothing is somewhat higher;  but most articles of provisions still maintain their equilibrium.  Real estate has not yet been much affected by the inflation;  but if you go on adding to your currency, depreciating the standard of values, you will have our people within one year from this time embarked in a wild series of speculations.  The wild lands of the West, which in 1837 were worth from fifteen to twenty dollars an acre, were one year afterwards reduced to Government prices.  They will again become inflated, and every kind of business will be damaged and disorganized.  I say it is a danger before which a lost battle sinks into insignificance;  and if we permit this inflation to go on we shall do our country a greater harm than the confederates can possibly do by defeating any one of our armies.

This vain terror was substantially repeated by the honorable Senator recently with zeal and fervor.  We had, in 1863, three hundred million of greenbacks and one hundred and sixty millions of State-bank issues, making four hundred and sixty millions, and the proposition was to add three hundred millions of national-bank issue, to make a total of seven hundred and sixty millions of circulation, and evils of such terrific character were to befall the nation !  Did they follow ?  Gold was then 154.  We had in December, 1864 --the following year-- seven hundred and ninety-five millions of currency;  in December, 1865, nine hundred and forty-six millions, with gold at 145;  in December, 1866, the volume in various forms of circulation reached $1,571,000,000, and gold declined to 134;  and in December, 1867, there was $1,022,000,000 in circulation, with gold at 133 --a decline of twenty-one cents on gold upon an increase of circulation of $262,000,000 over that in 1863, when such fearful prognostications were uttered, while the country prospered in spite of those ominous utterances.

The evil omens predicted to-day, to follow expansion, will equally prove to be the morbid speculations of a timid policy, and find as little fulfillment as they did before.  But we hear further from the honorable chairman that--

"We are bound by public faith and good policy to bring our currency to the gold standard;  that such a result was provided for by the financial policy adopted when the currency was authorized;  that a departure from this policy was adopted after the war was over and after the necessity for a depreciated currency ceased, and that we have only to restore the old policy to bring us safely, surely, and easily to a specie standard."

The war ended substantially by the surrender of Lee to Grant, April 9, 1865, and gold stood then 144.  To-day it is 111.  Has this proven a departure from the faith and policy to bring our currency toward a gold standard ?

But more.  The honorable chairman has called attention to the solemn pledge the nation has made;  and the honorable Senator from New Jersey [Mr. Frelinghuysen] urged this with renewed force.  What was the pledge which stands as a lion in the pathway of an expansion of the currency ?  First, it is asserted that if the expansion is sought through an increase of the greenbacks, it is a violation of public faith.  It is thus stated by the honorable chairman:

"An increase of paper money beyond four hundred millions would be a clear and palpable violation of the public faith. * * * It was a solemn promise that, under no circumstances, never, would we issue more than four hundred millions of paper money, and an additional reserve of fifty millions pledged to pay a debt then existing and which has since been paid."

The act of June 30, 1864, [the act authorizing the issue of 7.30s] is the one which it is claimed made the promise.  What did it provide ?  Let me read:

"That the Secretary of the Treasury be, and he is hereby, authorized to borrow, from time to time, on the credit of the United States, $400,000,000, and to issue therefor coupon or registered bonds of the United States, redeemable at the pleasure of the Government, after any period not less than five nor more than thirty years, or, if deemed expedient, made payable at any period not more than forty years from date."

Then came the second section:

"That the Secretary of the Treasury may issue on the credit of the United States, and in lieu of an equal amount of bonds authorized by the preceding section, and as a part of said loan, not exceeding $200,000,000, in Treasury notes of any denomination not less than ten dollars, payable at any time not exceeding three years from date, or, if thought more expedient, redeemable at any time after three years from date, and bearing interest not exceeding the rate of 7.3 per cent., payable in lawful money at maturity, or, at the discretion of the Secretary, semi-annually.  And the said Treasury notes may be disposed of by the Secretary of the Treasury, on the best terms that can be obtained, for lawful money;  and such of them as shall be made payable, principal and interest, at maturity, shall be a legal tender to the same extent as United States notes, for their face value, excluding interest;  and may be paid to any creditor of the United States at their face value, excluding interest, or to any creditor willing to receive them at par, including interest."

And then comes the proviso:

"That the total amount of bonds and Treasury notes authorized by the first and second sections of this act shall not exceed $400,000,000, in addition to the amounts heretofore issued;  nor shall the total amount of United States notes, issued or to be issued, ever exceed $400,000,000, and such additional sum, not exceeding $50,000,000, as may be temporarily required for the redemption of temporary loan."

It is thus seen that at the very time this limit was fixed by "solemn promise," that no more than four hundred millions of United States notes should be issued, two hundred million Treasury notes were then already authorized, so that the promise covered really six hundred millions legal-tenders;  and we have but four hundred millions to-day.  That is stating it less than it was.  We actually had at that time an authorized issue of legal-tenders of four hundred and fifty millions, old demand notes sixty millions, and legal-tender Treasury notes two hundred millions, making a total of seven hundred and ten millions.  That I am not mistaken, let me refer to a debate in the Senate April 1, 1866, when the honorable chairman then stated the whole issue of legal-tenders of various forms, after the old demands and part of the greenbacks were retired, to be $602,973,048, and the total volume of circulation to be $913,665,947.

When this "solemn promise" of June 30, 1864, referred to, was made, gold was 250, on a total volume of circulation of about eight hundred millions, and a bonded debt of $1,766,408,291.  April 1, 1866, when we had a total circulation of, $913,665,947 and a bonded debt of $2,624,889,891, gold stood at 128.  How much, under such an array of currency and bonded debt, the public faith was violated, the fall of the gold barometer is the most fitting answer.

If scruples still linger in the breast of any as to the letter, if not the spirit of the promise, standing in the way of the needed increase of circulation, I may point to the way for removal by repeal, in the language of the honorable Senator from Ohio, uttered January 9, 1868.  (I read from the Congressional Globe, Fortieth Congress, second session, page 407:)

Mr. Sherman.  The act of June 30, 1864, limits the amount of United States legal-tender notes to $400,000,000.  That act contains a provision in the nature of a compact by which it is provided that in no event shall the amount of United States notes issued or to be issued ever exceed $400,000,000.  That is made a part of the loan act of that date, and is in the nature of a compact so far as a provision, which is repealable like any other act of Congress, can be called a compact.

In emergencies, expedients any more than blessings, never go single.  As another insuperable barrier in the way of any further increase of the currency, the pledge of March 18, 1869, is quoted and pressed.  The honorable chairman has scarcely spoken without ringing the changes of this solemn pledge.  What is that pledge ?

Be it enacted by the Senate and House of Representatives of the United States of America, in Congress assembled, That in order to remove any doubt as to the purpose of the government to discharge all just obligations to the public creditors, and to settle conflicting questions and interpretations of the laws by virtue of which such obligations have been contracted, it is hereby provided and declared that the faith of the United States is solemnly pledged to the payment in coin or its equivalent of all the obligations of the United States not bearing interest, known as United States notes, and of all the interest-bearing obligations of the United States, except in cases where the law authorizing the issue of any such obligation has expressly provided that the same may be paid in lawful money or other currency than gold and silver.  But none of said interest-bearing obligations not already due shall be redeemed or paid before maturity unless at such time United States notes shall be convertible into coin at the option of the holder, or unless at such time bonds of the United States bearing a lower rate of interest than the bonds to be redeemed can be sold at par in coin.  And the United States also solemnly pledges its faith to make provision at the earliest practicable period for the redemption of the United States notes in coin.

It will be observed that the pledge does not determine the time of fulfillment.  The honorable chairman, however, enforces it thus in his speech:

"I rest upon this pledge of the public faith.  Under what circumstances was it made ?  The condition of our currency, the obligation of our bonds, the nature of our promises, had been discussed before the people of the United States in the campaign of 1868;  various theories had been advanced;  and the result was that those who regarded the faith of the nation as pledged to pay not only the bonds of the United States, but the notes also, in coin prevailed, and General Grant was elected President of the United States.  On the eastern portico of the Capitol on the 4th of March, 1869, he made this declaration:

"A great debt has been contracted in securing to us and our posterity the Union.  The payment of this, principal and interest, as well as the return to a specie basis, as soon as it can be accomplished without material detriment to the debtor class or to the country at large, must be provided for.  To protect the national honor every dollar of Government indebtedness should be paid in gold, unless otherwise expressly stipulated in the contract.  Let it be understood that no repudiator of one farthing of our public debt will be trusted in public place, and it will go far toward strengthening a credit which ought to be the best in the world, and will ultimately enable us to replace the debt with bonds bearing less interest than we now pay.'

* * * "Congress made this promise five years ago.  The people believed it and business men believed it.  Four years have passed away since then, and your dollar in greenbacks is worth no more to-day than it was on the 18th of March, 1869, and no act of yours has even tended to advance the value of that greenback to par in gold, while every affirmative act of yours since that time has tended to depreciate its value and to violate your promise.

"It is the promise of a great, proud, and rich people, who mean what they say, that every practicable means shall be used to that end."

What does "practicable means" import ?  The lexicographer defines "practicable" in this wise:

"That may be done, effected, or performed by human means or by powers that can be applied.  It was possible for Archimedes to lift the world, but it was not practicable."

Hence, it was not so much the declaration of good faith as it was the acts of good faith.

It has not passed from the memory of Senators that during the campaign of 1868 doubts were often expressed by opposition partisans in respect of the payment of the national obligations, whether in coin or currency.

To settle this doubt, so far as words could do it, the President in his first inaugural, and Congress in its first act presented for the signature of President Grant, declared the intention of the Government to pay its obligations in coin.  At that date, March 18, 1869, the volume of circulation was seven hundred millions, and the total debt of the nation was $2,525,463,269.  The five-twenty 6 per cent. bonds of 1862 stood in market at 89, and the ten-forty 5 per cent. bonds of 1864 were at 81, and gold was 132.

The average prices of gold in the following months were, April, 133;  May, 139;  June, 138;  July, 136;  August, 134;  September, 136;  showing an advancing rate upon this official and legislative declaration of good faith.  When, however, by October, 1869, $56,968,187 of the public debt had been paid, gold declined to 130.  December 31, 1869, $76,716,306 of the public debt had been paid, gold fell to 121.  On July 1, 1870, when $139,000,000 of the public debt was canceled, gold had dropped to 112.  The total amount thus paid of the public debt was $272,684,493.  Our five-twenty 6 per cent. bonds then reached par from 89, their value in March, 1869, and gold had declined from 132 to 112.  In the face of this decrease of public debt, and price of gold, and the appreciation of our bonds from 89 to 100, in coin, is it a just reflection upon the practical good faith and execution of a solemn promise to say, as the honorable chairman did in his speech--

"Congress made this promise five years ago.  The people believed it and business men believed it.  Four years have passed away since then, and your dollar in greenbacks is worth no more to-day than it was on the 18th of March, 1869;  and no act of yours has even tended to advance the value of that greenback to par in gold, while every affirmative act of yours since that time has tended to depreciate its value and to violate your promise."

Let the public judge, with the facts, of the national fidelity.

Furthermore, the pledge of the act of 1869 exacted that--

"None of said interest-bearing obligations not already due shall be redeemed or paid before maturity, unless at such time United States notes shall be convertible into coin at the option of the holder."

As United States notes are not yet "convertible into coin," have we not rather violated the solemn promise in this respect ?  Let the honorable chairman answer.  I read from his speech:

"Sir, let us see what has been done.  We have paid $400,000,000 of the public debt, and we boast of it --of debt not due for years.  We have paid to redeem that debt a premium of $40,000,000.  In other words, we have paid $440,000,000 to redeem four hundred millions of debt not yet due, and we have not redeemed a single debt that was due in March, 1869;  but, on the contrary, we have increased the kind of debts then due more in proportion than the increase of our population."

Again:

"But this promise to pay in coin extended to the bondholder.  We promised to pay the bondholder gold for his bond and the people gold for their greenbacks.  We have fulfilled our promise to the bondholder.  We have paid him in gold.  We have bought the gold.  We have paid him at a premium of 10 per cent. on our currency.

"Sir, I regard it as the proudest achievement of the American people that so soon after the war they so faithfully and honorably redeemed their obligation to the bondholder.  I demand the same honorable fulfillment of your promise to the noteholder."

Having violated our solemn promise in paying unmatured public debt to the extent of four hundred millions;  having faithfully "fulfilled our promise to the bondholder," it is hardly with sober grace that the demand is made for a fulfillment of promise to the noteholder.  The people make no demand that greenbacks should be paid in gold.  In the midst of the panic, when gold could be obtained for greenbacks at 2 per cent. premium, the people cared not to convert into coin.  In the worst days of the panic gold stood at 6 per cent. and greenbacks 4 per cent. premium.

There may be such a thing as sticking in the bark on this plea of public faith.  Some have the art of putting things;  the people have a way of applying things.

The honorable chairman in his speech referred to the proposition once urged, of paying our obligations in greenbacks, as follows:

"If the old idea of Mr. Pendleton had prevailed, that these bonds should be paid in Greenbacks, then there would be a motive for us to depreciate the greenbacks in order to pay off our bonds at the cheapest rate."

And, by the way, I would add, supported in 1867 by the honorable Senator from Ohio, [Mr. Thurman,] when he said:

"The principal (bonds) was payable in whatever was the legal tender of the country."

These remind me of a singular counterpart, occurring in the debate on the bill for the contraction of the currency, January 15, 1868, contained in the Congressional Globe, second session Fortieth Congress, page 522.  House bill No. 213, to suspend further reduction of the currency, being under consideration--

"Mr. Sprague.  A word in reference to the holders of the different securities, who now demand that they shall be paid in gold, and to that end the whole attention of Congress and of the Government of the country has been directed.  What injustice, may I ask, is there in paying the holders of these bonds seventy dollars in gold when they took them at fifty dollars in gold ?

Mr. Sherman.  There is none in the world, and we have the right now to go into the markets in New York and buy the different bonds for seventy, or seventy-two in gold, or whatever the market price is, if we have the gold with which to do it.  There is no difficulty in that;  the trouble is that we have not the gold."

When no prudent business man ever permits himself to buy his own payable paper at a discount, it is, in behalf of a Government contending for acts of good faith, suggested by one of its financial organs that it is right to pay redeemable obligations at 28 to 30 per cent. discount in coin, and wrong to pay such obligations at their face in greenbacks --the equivalent of the coin price.  I call only say, in answer to the scrupulous prating for "inviolate public faith," that I commit the art of fixing the point where bad faith ends and where good faith begins to the domain of commercial ethics, and let the public pronounce judgment upon these two samples.  The honorable chairman has not always indulged in this morbid tenacity for constitutional scruples.  When the lamented Mr. Fessenden was chairman of the Committee on Finance, the honorable Senator, who was then a member, but who now graces its head, antagonized the then chairman on his scruples.  I read from the Congressional Globe, Thirty-seventh Congress, second session, page 790:

"The chairman of the Committee on Finance gave us a very handsome lecture;  a very able discourse upon the importance of preserving the public faith;  and he desired to impress upon us --and did impress upon me-- the necessity of not affecting the obligation of contracts.  We must not in any emergency, under any stress of circumstances, affect the obligation of contracts between private individuals.  Did that Senator overlook the first contract, the contract between the Government and the soldier, the Government and the men who feed and clothe your armies ?  We must pay the soldier in money;  we must pay the contractor in money.  There is a contract, an obligation between the contractor and the soldier and the Government, that must be observed.  The same obligation of good faith rests upon us to pay every dollar that is due from us to our own creditors, as well as not to impair the obligation of contracts between others.  How can you do it ? * * * I have shown that you cannot do it in gold. * * * There is no other way except to issue to your creditor the note of the United States, in such form, with such sanctions, as will enable him to use it as money.  If we can believe the testimony of others and the light of reason, the only way we can do this is by stamping them with the same national sanctions with which you stamp your gold and silver coin. * * *

"If we can compel one citizen to take this paper money, why not another and another ?  Is it any less the violation of contract in the one case than in another ?  Do not all citizens hold their property subject to our unlimited power of taxation ?  Do not all share in the blessings of Government, and should not all share in its burdens ?  Shall we inflict a loss only on those who trust, labor for the Government, and relieve the selfish, avaricious, idle, unpatriotic citizen who will neither fight for, lend to, nor aid the Government ?  Sir, to make all these share in the burden of the war, and to relieve those who risk life and property in its defense, I would waive a constitutional doubt."

From these idle deprecations, lest the public faith be violated, in supplying the people with sufficient means to enable themselves to vindicate and maintain their credit and the public faith, let me pass to another form of intimidation and entreaty.  It is in memorial guise, and best formulated in the language of the honorable chairman, which I read from his speech, page 37:

"But, sir, there is one other reason why all these plans and all these schemes of more paper money ought not even to be debated here.  An increase of paper money beyond four hundred millions would be a clear and palpable violation of the public faith.  In the darkest hours of the war, when every patriot trembled, when our fate hung in the balance, when our armies were before Richmond, when our armies were on the march through Georgia to the sea, when everybody felt that the danger of inconvertible paper money was likely to strike us from the list of nations, when our paper money then outstanding had fallen so that it took $2.80 to buy one dollar in gold, gold being at a premium of 280, then it was that we entered into a stipulation with the public creditor, which is a part of the act of 1864, a part of the act under which we borrowed money and pledged the public faith."

Although, as I have already quoted, in this same speech it is declared as of world-wide congratulation that it is regarded "as the proudest achievement of the American people, that so soon after the war they so faithfully and honorably redeemed their obligations to the bondholder," nevertheless it is implied in the quoted allusion to the "darkest hours of the war," that it was the danger of inconvertible paper money that threatened "to strike us from the list of nations," and it was so fallen in value "that it took $2.80 to buy one dollar in gold;"  and that the "stipulation with the public creditor" in the act of 1864, was the solemn pledge that rescued the nation from annihilation, and recovered the value of our greenbacks.

It is no disparagement to the distinguished chairman of the Committee on Finance to remind him that it was not mainly his valuable aid in framing this "stipulation with the public creditor," but really the triumph of our arms, which solved the doubt resting upon the unity of the nation, and was the immediate cause of the rapid decline in gold.

Then, again, it is bruited that the people protest against increase of currency and demand resumption, and actions of boards of trade and chambers of commerce are invoked to affirm this report.

The Senator from Vermont [Mr. Morrill] in his last speech told us:

"Therefore Senators need not hug that pleasant idea to the soul that they are benefiting the great agricultural community by continuing paper money;  and if they are not benefiting the agriculturists, see what evidence that nobody is benefited we have in the meetings of those engaged in active business throughout the country, representing all portions of the country, in boards of trade, especially that one recently held at Baltimore, the National Board of Trade, which voted on the question of resumption, as we have seen by their memorial, and out of forty-four representatives, only nine were opposed to resumption, and of these, there were a majority even from the Western States in favor of it.  Take the question in New York;  take it in Baltimore;  take it in Philadelphia, or in Boston;  they all speak with but one sentiment;  they are overwhelmingly in favor of a return at an early day to specie payments;  and if these men cannot speak for the business interests of the country, who can ?"

This organized pressure is no new embodiment of convenient public sentiment.  Similar bodies with like assumption and pressure appeared in 1862, and representing sentiment then in favor of making greenbacks a legal tender for customs and other public and private dues, then in accord with Senators who now hold opposite sentiments upon the nature of Government issues.  I read from the Congressional Globe, second session Thirty-seventh Congress, part 1, page 789:

---[Senator Sherman speaking:]

In the first place, I will say, every organ of financial opinion — if that is a correct expression — in this country agrees that there is such a necessity in case we authorize the issue of demand notes.  You commence with the Secretary of the Treasury who has given this subject the most ample consideration.  He declares not only in his official communications here, but in his private intercourse with the members of the committee, that this clause is indispensably necessary to the security and negotiability of these demand notes.  We all know from his antecedents, from his peculiar opinions, that he would be probably the last man among the leading politicians of our country to yield to the necessity of substituting paper money for coin.  He has examined this question in all its length and breadth.  He is in a position where he feels the necessity.  He is a statesman of admitted ability, and distinguished in his high position.  He informs us that without this clause the attempt to circulate as money the proposed amount of demand notes of the United States will prove a fatal experiment.

In addition to his opinion we have the concurring opinion of the Chamber of Commerce of the city of New York.  With almost entire unanimity they have passed a resolution on the subject after full debate and consideration.  That resolution has been read by your Secretary.  You have also the opinion of the Committee on Public Safety of the city of New York, composed of distinguished gentlemen, nearly all of whom are good financiers, who agree fully in the same opinion.  I may say the same in regard to the Chambers of Commerce of the city of Boston, of the city of Philadelphia, and of almost every recognized organ of financial opinion in this country.  They have said to us in the most solemn form that this measure was indispensably necessary to maintain the credit of the Government, and to keep these notes anywhere near par.  In addition, we have the deliberate judgment and vote of the House of Representatives.  After a full debate, in which the constitutionality, expediency, and necessity of this measure were discussed, in which all the objections that have been made here and many more, were urged, the House of Representatives, by a large vote, declared that it was necessary to issue demand notes, and that this clause was indispensable to their negotiation and credit.

---[unfortunately, Mr. Sherman did not stop there, and he also explained why greenbacks were needed and asked for by the largest bank(s) of the United States]

I have read this from the Globe merely to show the views then held as to the duty of Government to make its currency of the highest type and above depreciation.  Chambers of commerce and Boards of trade were then invoked to make greenbacks lawfull money for all purposes, which would have made them equivalent to coin, as the old demand notes were, and as French currency, under suspension, now is, and have removed all possible objections of Senators to free banking.  Now like bodies are brought to bear against increase of currency, or free banking, and they would as loudly protest against a proposition to make greenbacks to-day a full tender for public and private uses, which would, in my judgment, cut the gordian knot of depreciated currency.

It matters little to call attention to the unjust inequality of the present distribution of currency.  Congress, recognizing this, passed an act in 1870 providing for the withdrawal of twenty-five millions from the Eastern States, and its redistribution in the remaining States of the Union, but the law is practically a nullity.  The Comptroller of the Currency has reported the practical difficulty in enforcing the statute.

The pending bill, looking to the execution of that law, meets a formal protest from Rhode Island, and one of its distinguished Senators ably presses that protest with an argument against the injustice and peril of such withdrawal.  He declared that Rhode Island had no more currency than she needed.  What has New England of the national-bank currency ?  The Comptroller of the Currency reports the per capita of circulation in the named sections as follows:  New England, $31.15;  Middle States, $12.80;  South and Southwestern States, $2.98;  Western States, 7.11.  The United States on an equal distribution would have $9.18.

New England, then, has per capita $21.97 more than the national average;  the Middle States, $3.62 more;  the Southern States, $6.20 less than that average, and the Western States, $2.07 less.

What is needed for New England ought to be the measure of other States.  This illustrates the great inequality.

When we propose to repeal the statute of withdrawal, and let New England have all of her $31.15 per capita, and modestly ask for forty-six millions for the defficient States, under the substitute of the honorable Senator from North Carolina, [Mr. Merrimon,] that is stoutly antagonized by the East.

This seems a very poor appreciation of and response to the generosity the West and South exhibited only two years since upon no valid claims whatever.  It will be remembered that after the act of February 2, 1872, passed for the apportionment of Representatives to Congress among the several States, according to the ninth census, Vermont especially, through her able chairman of the Committee on the Judiciary, now absent, striving, I am glad to say, to recuperate an overtaxed system --Vermont, New Hampshire, and New York plead for additional Representatives, and each with less than half a ratio unrepresented by the act of February 2.  A supplemental act was passed May 30, 1872, to enlarge their representation, even under a declining population compared with the West.

To exhibit the increase of population of New England and New York, now combined against the West and South on the financial question, and the increase of the rest of the States and Territories, that the relative increase of population between the two sections may be appreciated, I give the population of 1860 and 1870, according to the census of each year, as follows:

I also subjoin a table, which I ask may be printed, and which will show how generously the West and South acted toward the East then, in the matter of apportionment of Representatives, and now that we ask for rights under an equal apportionment of circulation that generosity is negatived.

Table showing the deficit and excess of population in different States below and above the Representative ratio of 135,239, (basis of first apportionment, census of 1870,) and also showing the nine States to each of which an additional Representative was assigned by act of May 30, 1872.

Moreover, if we heed the suggestion that inasmuch as the present banking system cramps the capital of the country, by, first, a premium of 10 per cent. paid on bonds pledged for security of circulation;  then a margin of 10 per cent. additional security by receiving but ninety dollars currency for each one hundred of bonds;  next 15 or 25 per cent. of the circulation held as reserve, making in all 35 to 45, per cent. idle capital, leaving only 65 or 55 per cent. of bank capital active to transact the national banking business of the country, and join by saying there ought not to be opposition to the national banks, then we are commended.  But when it is proposed, through the substitute of the honorable Senator from Pennsylvania, [Mr. Cameron,] to relieve this close corporation of banking of this idle capital burden, by sharing it, under free banking, with the whole people, commendation turns into denunciation, and a majority of the Senate defeats it.

If we appeal to the generosity of bankers and point to their extraordinary profits --many of the banks, in their declared dividends and surplus carried to the capital stock, averaging annually profits of from 15 to 20 per cent.-- and ask that the privilege of such lucrative business be extended to others, New York and New England capitalists and gold-brokers appear in force to defeat the slightest concession.  They surround this Capitol with the cry of "Money plenty in New York;"  "The crisis is ended," and assume to say that the country wants resumption, no matter what the destruction is to the industrial pursuits of the land or the disasters to private or corporate fortunes.

The people, who in the main are debtors, held to their employments to save themselves from ruin, have no time nor means to spare to make themselves heard by confronting creditors and capitalists at this Capitol.

The proportion of creditors to debtors of the country is as 1 to 9.  Against the interests of nine-tenths of the population, it is proposed to frame legislation for the interests of one-tenth.  Resumption is gain of the shrinkage of value between currency and gold to the one-tenth and loss of it to the nine-tenths.

This same spirit of monopoly is graphically portrayed editorially in the Chronicle of 29th of last January, under comments upon opposition to needed appropriations involving employment to the many about this District, who go "hungry to bed," or "hear their children cry for food."  I read from this article, descriptive of like monopolists:

"If they can only succeed in defeating the passage of relief bills, money will remain 'tight,' note-shaving will continue to be lucrative, and these marvels, in their own eyes, of public probity will rejoice in their assured victory over those whom they have ruined;  and unless 'saved by grace' will certainly go where such note-shavers ought to go."

Tightness of money increases the opportunities for exaction, and enhances to a ruinous extent the rates of interest.  Prostration of industry, check in manufactures, arrest of traffic and travel, are the results of hostility to an adequate currency, and are the fragments lying along the perilous way of resumption.

When we reflect that the annual increase of national wealth is but 3½ per cent., and rates of interest for business now range from 10 to 24 per cent., it needs no gift to foresee how the borrowers of the land are being pressed into the meshes of the lenders.  The producers fast bend under their burdens to the feet of the non-producers.  General stagnation of industry is foreseen if not yet foreknown;  while the fewer money-mongers, like undertakers, thrive most when commercial death abounds.

The product of national wealth in 1860 was $4,000,000,000;  in 1870 over $8,000,000,000.  It must have been last fiscal year $10,000,000,000.  Commercial credit is indispensable to the industries of so growing a nation.  It must be individual if not national credit.  When money was adequate, enterprise quickened, business thrived, resources developed, and wealth augmented.  Prosperity smiled upon our land the past years succeeding the war.  My worthy colleague, [Mr. Chandler,] who, however, differs with me upon the policy to be pursued, spoke justly upon this point, when he said in his speech on the 20th of last month --and I read front the Record of that day's proceedings.

In speaking of 1865, following the war, he said:

"The people were out of debt all over the country.  They had obtained high prices for everything they had to sell during the war.  The farmers were out of debt, the business of the country was transacted for cash, and the whole country was comparatively out of debt, but the Government was not."

How much better for individual interests and for the general prosperity it was for the nation to extend its credit, and thus put means into the hands of its people to pay as they went, we have the gratifying record of past experience to assure.  It has been tried and is worthy of immitation.  It were better that the discount or depreciation of 10 per cent. upon our circulation be recognized by the people in the multifarious transactions of the country, and that a sufficient volume be provided for their wants, to stimulate industry and ingenuity, and for the benefit of all, than to contract the means and subject the people to the ruinous rates of interest, of an individual credit system.  When money is adequate, rates of interest, decline;  when stringent, interest advances.  In the summer months, when money accumulates largely in New York, rates are quite nominal;  at other seasons the rates are seriously prejudicial.

To-day it is boastfully reported that the crisis and consequences are over, because money is plenty in New York.  Plenty it may be on call simply, but not to save even New York merchants, much less borrowers out of the city.  What is commercially termed gilt-edged paper goes begging even now in Wall street at 10 to 15 per cent.

The startling proof that former years of prosperity, under a better supply of currency for the wants of the country, is giving way to gradual but inevitable disaster, is seen in the record of business failures throughout the States, given by the mercantile agency for the four years past.

In 1870 and 1871 the volume of currency, increased by the fifty-four millions of 1870, was to the extent of business demands of those years a fairer ratio than the volume is now to the wants of the present.

The failures given for 1870 are 3,551, with liabilities of $88,242,000 those of 1871 are 2,915, and liabilities $85,252,000;  in 1872 they were 4,069, and liabilities $121,056,000;  and last year (1873) the number of failures was 5,183, and the liabilities $228,499,000.  There were more failures in 1873 than in 1872 by 1,100, and with an increase of liabilities of $107,443,000.

This gives us the total results of the prevailing conviction that the currency of the country was falling below the necessities of the people.  It grew into brooding apprehension that measurably checked industry and trade and broke out into the disasters of panic and its cruel effects.  Who would add to this ruin by apathy or contraction ?  Let the record tell.

The Comptroller of the Currency in his report, as I have already noticed, states that the national-bank currency is divided, per head, as follows:  New England, $31.15;  Middle States, $12.80;  South and South-western States, $2.98;  Western States, $7.11.

The volume of Treasury notes or greenbacks is larger than the national-bank currency;  therefore like division of that would give, per head, in round numbers of both currencies, to New England, $62;  Middle States, $26;  South and South-western States, $6;  and Western States, $14.

New England enjoying $62 per capita of circulation has not been heard to ask for a contraction of this for fear of "inflation;"  nay, Rhode Island protests against any contraction of New England's quota.

What would this per capita be for the whole country ?  Twenty-four hundred and eighty millions.  If it is no inflation for New England, by parity of reason, it should be none for the whole country.

Under free banking, if all the outstanding bonds of the Government were held at home and deposited with the Secretary of the Treasury for national currency, 90 per cent. would be but fourteen hundred and forty millions of currency, as the whole possible volume.  New England's present quota of currency would for like quota to the whole nation give a volume of twenty-four hundred and eighty millions.  The absurdity of the cry of "inflation" is rendered more deceptive when it is used to defeat an increase of only forty-six millions on the plea of resumption.

New England is solid for resumption, except the honorable Senator from Rhode Island, [Mr. Sprague,] whose mammoth business enterprises have not been the least of his honors, and whose wise forecast supports expansion;  New York is solid also.  The East then, with its centralization of capital, aided by ancillary money-centers in different States, and supported by the Golden Slope, holds its grasp, and will not relax, even to equalize the unequal supply of circulation in the South and West.

A section, class, and capitalists, may conspire and combine to dictate the monetary basis of a free country;  but in behalf of the multitude --the mass of business and industrial architects of the country's fortune-- we shall continue to protest and act.

If defeated now, time will add to our ranks.  The example of a combination against us of capitalists, class, and section, will make apt scholars in causing the reappearance in this Chamber and yonder Hall, of Representatives of toilers, classes, and sections, in union, and holding party subordinate to country, that the interest of the whole, above that of a part, may be respected.

The people then will boldly put, as they now quietly hint, the question, "Why, if bonds are deemed a good conversion for currency as a step toward specie resumption, why can like bonds, fortified by 10 per cent. margin, possibly jeopardize the needed volume of currency for which they are pledged ?  The people will need to know why the difference is made between the two, and the question, though here adversely taken, must yet pass the tribunal of public judgment, whether the monopoly of banking shall still be tolerated to enrich the few, or be ended by opening its privileges and benefits to the many.