190 



CONGRESS. (TuE BILL AUTHORIZING ISSUE OF BONDS.) 



expenditure. The committee have provided that 

 these certificates of indebtedness shall be used only 

 for that purpose. Our object in so limiting their 

 use is to separate as far as possible in the accounts 

 the cash in the Treasury available for current ex- 

 penses and the reserve that is retained for redemp- 

 tion purposes. 



" One great difficulty we have had in maintain- 

 ing the redemption fund in the past, as I suggested 

 yesterday, arises from the fact that the reserve or 

 redemption fund has been used not exclusively for 

 the purpose for which it was established, but in 

 part to meet the deficiency in the revenue ; and 

 therefore it seemed to the Committee on Ways 

 and Means desirable that there should be two 

 forms of obligations one temporary in the form 

 of certificates of indebtedness to meet merely tem- 

 porary deficiencies, and to be set aside and to be 

 devoted to that purpose entirely; and another to 

 maintain the redemption fund, with a provision 

 that the proceeds of that obligation should be set 

 aside as a reserve and so maintained, in order that 

 if we are to continue to use circulating notes of the 

 Government as currency as we have been doing 

 for thirty years we may maintain the same finan- 

 cial condition that a bank does in permanently 

 maintaining its reserve and not allowing it to be 

 encroached upon for merely current expenditures. 



" This section, as I have said, is intended to pre- 

 sent a remedy not simply for present exigencies, but 

 for any possible exigencies that may arise in the 

 future, and in the judgment of the Committee on 

 Ways and means it ought to be on the statute books 

 without reference to the existing situation. 



" Passing now, Mr. Speaker, to section 1 of the 

 bill, it simply proposes to add another description 

 of bonds to those already authorized by existing 

 law for the maintenance of the redemption fund. 

 Under the resumption act of 1875 two descriptions 

 of bonds are authorized, namely, ten-year bonds 

 bearing 5 per cent, interest, and thirty-year bonds 

 bearing 4 per cent, interest. These are the only 

 two descriptions of bonds authorized and that have 

 been issued under the resumption act. 



" Under that act the Secretary of the Treasury 

 during the past two years has issued one hundred 

 millions of 5-per-cent. ten-year bonds and sixty-two 

 and one third millions of 4-per-cent. thirty-year 

 bonds, realizing from the sale about $182,000,000 

 in gold. He has the authority to continue to issue 

 such bonds for the purpose of maintaining the re- 

 demption fund under the resumption act to-day. 

 He has been exercising that authority, and has in- 

 dicated in his report that if there is no further au- 

 thority given to him no other description of bonds 

 authorized if the exigency arises, which it will, 

 evidently, in a very short time, he will proceed to 

 issue, sell, and dispose of additional bonds bearing 

 interest at 4 per cent., with thirty years to run, or 

 bonds bearing interest at the rate of 5 per cent., 

 with ten years to run. With that authority on the 

 statute books to-day, this bill simply provides for 

 the authorization of the issuance of another de- 

 scription of bonds for the same purpose, and that 

 is a 3-per-cent. bond, redeemable five years after 

 date and payable after fifteen years from date. 



"The only practical question involved, then, in 

 this first section of the bill is simply this, shall we, 

 in the interest of the Treasury in the interest of 

 economy authorize the issuance of bonds bearing 

 a lower rate of interest, to wit, 8 per cent., when we 

 know that if we have no legislation the Secretary of 

 the Treasury will proceed to issue either a ten-year 

 5-per-cent. bond or a thirty-year 4-per-cent. bond ? 



'Now, it. semis to me that in this situation, as 

 practical men representing the interests of the tax- 

 payers of this country, when the simple question is 



presented whether or not we will issue the lower- 

 rate bonds, in the face of the fact that the Secre- 

 tary of the Treasury has the right to issue a higher 

 rate of bonds, we ought to act as legislators here 

 precisely as we would act in our own business, and 

 to that extent defend and protect the interests of 

 the people, and authorize the lower-rate bond. 



" There are two points of legislation presented in 

 the first section of the bill that relate not only to 

 the proposed issuance of 3-per-cent. bonds, "but 

 which also relate to any other issue that may be 

 made hereafter under the resumption act of 1875 of 

 either of the other descriptions of bonds that I have 

 referred to. The first provision is that whatever 

 bonds are sold, or offered for sale, whether they are 

 the bonds authorized under the resumption act of 

 1875 or those to be authorized by the bill now pend- 

 ing, they shall be first offered to the people of the 

 United States by advertisement, and that our own 

 people shall have an opportunity to purchase such 

 bonds if they so desire. It seems to me that some 

 such provision ought to accompany this legislation, 

 and not only that it should accompany this legisla- 

 tion, but it ought to also apply to the resumption 

 act of 1875. The loans, whether issued under the 

 resumption act or under this bill, should be of a 

 character ; for I believe that when a 3-per-cent. 

 bond of this character shall be offered, as is pro- 

 posed by this bill, to the people of the United 

 States, they will respond from the Atlantic to the 

 Pacific and from the Great Lakes to the Gulf. 



" Second. There is another provision of legisla- 

 tion in this first section, and that is that the pro- 

 ceeds of the bonds thus sold under this act and 

 under the resumption act of 1875 shall be devoted, 

 as was intended when the act was passed, and as 

 ought to be made clear, exclusively to redemption 

 purposes. 



" It was supposed that in using that language it 

 would not be understood that it authorized in any 

 way the retirement and cancellation of the United 

 States legal-tender notes ; but to make that clear, 

 to put it beyond dispute, carrying out precisely the 

 object that the committee had when they first 

 drafted this bill, the committee have placed in the 

 bill itself, immediately after this direction that the 

 proceeds shall be used for this one purpose, a pro- 

 viso that nothing in this act shall be construed to 

 repeal or to modify the act of May 31, 1878, which 

 forbids the further retirement and cancellation of 

 United States legal-tender notes. 



" If the second section of this bill should become 

 a law, then only the proceeds of the certificates of 

 indebtedness can be used to meet deficiencies of 

 revenue, and the proceeds of bonds sold for the re- 

 demption fund can not be used to meet such 

 deficiencies. When there is no deficiency few 

 greenbacks will be presented for redemption, and 

 those that are so presented can be used, just as they 

 were from 1879 to 1893, to redeem and pay the in- 

 terest-bearing ' debt. The intention, of course, is 

 not to have any permanent deficiency of revenue. 

 The second section is intended to apply only to 

 temporary conditions which may arise and which 

 do arise in all governments ; it is not intended to 

 apply to a permanent, chronic deficiency that shall 

 run two years and a half, as the present one has 

 done. The purpose is simply to do what other 

 governments do under like circumstances. The 

 intention is to avoid deficiencies by providing rev- 

 enue. That is the normal condition of every gov- 

 ernment. That is the policy which is contemplated 

 by the legislation which we have already inaugu- 

 rated in this House. But accidentally, through 

 some unforeseen condition, there may bo for a short 

 time, when Congress is not in session, a deficiency 

 of revenue, and at such a time the Secretary of the 



