192 



CONGRESS. (THE BILL AUTHORIZING ISSUE OF BONDS.) 



already there for any lawful purposes to which the 

 Treasury can devote" them. This provision, there- 

 fore, is not even a suggestion to the Treasury, as 

 the gentleman has said. 'The proceeds thereof 

 are the gold procured on the bonds, and not the 

 notes that may be redeemed with the gold. 



Hut I take a step further. The proviso just 

 quoted, out of abundance of caution, to, save the 

 power to reissue legal-tender notes thus accumu- 

 lated, takes care of that class of these notes which 

 are specified in the act of May 31, 1878, commonly 

 called United States notes, or greenbacks. Let me 

 read it again : 



"'Provided, That nothing in this act shall be 

 construed to repeal or modify the act approved 

 May 31, 1878, entitled "An Act to forbid the 

 further retirement of United States legal-tender 

 notes." ' 



" What, then, becomes of the Sherman notes 

 under the act of 1890, the power to reissue which 

 depends not on the act of 1878, but on the provi- 

 sions of the Sherman act of 1890 ? There is no ref- 

 erence whatever to this latter act. Hence this bill 

 may be construed by the Secretary of the Treasury 

 in accordance with strict law to authorize the re- 

 tirement of the Sherman notes. 



" But first let me say to gentlemen on the other 

 side that, while they may claim that this'measure is 

 a response to the demands of the Treasury and of 

 the Executive, they are sailing under false pre- 

 tenses. 



" In the first place, the bill does not contain a sin- 

 gle provision or a single policy which the Adminis- 

 tration or the Treasury recommends. If gentlemen 

 mean to meet the emergency which the Adminis- 

 tration depicts in urgent messages, why do they not 

 at least allow some of us the poor privilege of offer- 

 ing such provisions as the Administration desires ? 

 Yet we are cut off from that opportunity. 



" The Secretary of the Treasury and the President 

 of the United States believe and there are some 

 of us who believe the same way that there ought 

 to be provision made for the retirement of all our 

 paper money, so called. Gentlemen on the other 

 side, who have now the laboring oar, felt that way 

 at one time, but now they will not even allow us the 

 opportunity to offer such a provision in response to 

 the demand of a Democratic administration. It is 

 also a part of the policy recommended by the Ad- 

 ministration that these bonds which are to be offered 

 on the market shall be made payable in that sort of 

 coin which it receives for the protection of our legal- 

 tender money ; but we are not allowed to offer that 

 amendment. 



' Not a single one of these bonds, whether excheq- 

 uer certificates or 3-per-cent. bonds payable in coin, 

 can be sold at par in any market in this country or 

 anywhere else, in my opinion. Why, sir, on the 26th 

 of the present month United States fours maturing 

 in 192o were bid for at 116, which, when ciphered 

 out, makes a rate of income of over 3 per cent. 

 three and one tenth and a fraction. With the mar- 

 ket in that, condition, with a bond already on the 

 market which is bid for at a rate which would pro- 

 duce a larger rate of interest than the bond you 

 offer, having a much longer time to run, do you sup- 

 pose you can hold up a 3-per-cent. bond at par 

 which is itself an addition to the supply of our 

 bonds ? I believe that you can not dispose of these 

 obligations in a popular way, as this bill presup- 

 poses, in amounts of $20 and" multiples thereof. 



" In the next place, there is at this time a large 

 surplus in the Treasury available for the current 

 expenses of the Government. I regret to have to 

 say that that large surplus itself is a peril. Let us 

 suppose, if you please, that our friends on the other 

 side should, by some inscrutable providence, realize 



their hopes next year, and that they should come 

 into power with a large surplus in the Treasury and 

 an added revenue under the bill which they have 

 just passed. I ask (if we may judge by experience), 

 would they not repeat the budget of the Fifty-first 

 Congress and so make exchequer bills necessary > 

 The power to spend, coupled with the power to su"p- 

 ply deficiencies with these certificates, would be 

 dangerous in the hands of a party devoted to large 

 expenditures." 



Mr. Johnson, of California, said: 



" Mr. Speaker, I desire to state the reasons why I, 

 as a Republican, oppose this bill. I went over my 

 district in California recently, and upon every stump 

 in that district I proclaimed the undying hostility 

 of the Republican party to the issuance of bonds in 

 the time of peace. I proclaimed the undying hostility 

 of the Republican party to the action of the Presi- 

 dent of the United States and the Secretary of the 

 Treasury in issuing bonds in time of profound peace 

 to defray deficiencies in the revenues, caused by 

 their own conduct in making contracts with a bond 

 syndicate that would not bear investigation by a 

 hostile Congress. And I regard this bill as giving 

 the lie to everything we said before the elections in 

 reference to the issuing of bonds; and for one I can 

 never by any act or vote of mine condone what I 

 believe to be an error not merely of the heart, but 

 of the head ; not merely of general policy, but an 

 error arising almost to the dignity of an offense 

 against the commonwealth, of allowing the bonds 

 of the United States Government to be taken and 

 controlled in the manner they were by the Treasury 

 of the United States and a bond syndicate in a time 

 of profound peace. 



"This bill, in my judgment, stamps the seal of 

 approval by the Republican party upon the action 

 of, these officers and upon the issuance of these 

 bonds in the manner I have stated. It continues in 

 force the laws which now authorize the selling of 

 bonds at 4 per cent, and at 5 per cent., and in addi- 

 tion to that gives authority to the Treasury to issue 

 bonds at 3 per cent. 



" I am opposed to it also because it does attempt 

 to retire the greenbacks because it does retire the 

 greenbacks, as I look at the law. I am one of those 

 who believe the greenbacks to be the best currency 

 we have ever had in the United States. I am old 

 enough to remember the days before the war, and I 

 remember that then when you went out of your own 

 town, your own county, or your own State, into any 

 other county or State in the nation, you were obliged 

 to take a Thompson's 'Bank Note Reporter' with 

 you and change it every week in order to know 

 whether you were getting good money or bad. 



" Now, the greenback goes current in any State 

 of this American Union, and it ought to be protected 

 and not injured in the house of its friends, for we 

 Republicans originated it. I believe this bill will 

 retire the greenbacks because of the second section 

 of the bill, which provides that the Secretary of the 

 Treasury shall have the right to issue short-term 

 certificates with which to pay the necessary expenses 

 of the Government. If he issues those certificates 

 to defray the necessary expenses of the Govern- 

 ment, and at the same time if he issues bonds and 

 redeems the greenbacks, as he has a right to do, 

 emphasized and almost demanded by this bill, what, 

 is to become of the greenbacks ? He will not need 

 them to defray the expenses of the Government, lie- 

 cause he will have these short-term certificates, and 

 the greenbacks will remain locked up in the Tivns- 

 nry vaults of the nation, and the currency will be 

 contracted to that extent and nothing given in lieu. 



" Now, to-day we are called upon to undo all the 

 work we did yesterday. To-day we are called upon 

 to contradict" everything that we said, everything 



