294 



CONGKESS, U. S. 



and the interest on the $90,000 amounts to 

 $9,400. Deducting the one from the other, it 

 leaves $5,600. Now, what did it make that 

 on ? On the $100,000 put in, and the $22,500 

 which was kept on hand. The investment 

 was $122,500, and the profit is $5,600 ; that is, 

 about four per cent. That is all that can be 

 made under it. They are to run the risk in 

 their loans of all the leanings of $90,000, and 

 getting it out and in, and cannot make five 

 per cent., if all works smoothly and there are 

 no losses at all. I say that is not a matter of 

 speculation; that is a matter of certainty. 

 Those figures which I have given in this in- 

 stance cannot lie." 



Mr. Sherman, of Ohio, followed in defence 

 of the bill. " That bankers can make a rea- 

 sonable profit under this bill I have no doubt. 

 They have the benefit of four per cent, on the 

 bonds deposited by them. They have the bene- 

 fit of interest on the notes given them for cir- 

 culation. They have the benefit of exchange ; 

 not the rates of exchange formerly paid, but 

 that incidental exchange which every bank 

 charges in drawing a draft, probably a quarter 

 or a half of one per cent. They have the prof- 

 its they can make from deposits. They have 

 other profits from the ordinary incidents of 

 banking. I have no doubt from all these va- 

 rious profits they will make what banks in or- 

 dinary times under specie payments could make, 

 that is, seven or eight per cent, a year. 



"But, sir, the principal point made by the 

 honorable senator, and one most likely to in- 

 fluence the judgment of senators, is this : he 

 asks what benefit the United States derives 

 from this arrangement, and he endeavors by 

 argument to show that the United States de- 

 rives no benefit. I would put to him this sim- 

 ple proposition : there are now $167,000,000 

 of local bank circulation in the country. Sup- 

 pose we can induce through their interests 

 I do not propose to do it by any arbitrary 

 mode the retirement of $100,000,000 of this 

 circulation, taking the smallest sum that will 

 probably be used in the course of a year ; sup- 

 pose we can induce the banks to withdraw 

 $100,000,000 of their circulation, is it no bene- 

 fit to the United States? Now, the United 

 States gets no benefit whatever from their circu- 

 lation. The United States cannot receive it in 

 their ordinary business transactions. It fills the 

 channels of circulation to the exclusion of the 

 greenbacks. Suppose we can induce the banks 

 to withdraw $100,000,000 of their circulation, 

 and invest that much money in our bonds, and 

 receive United States circulation, does not the 

 honorable senator see that we should derive a 

 great advantage from it? That is the object 

 of this bill. The object is, by appealing to the 

 patriotism and the interest of the people and 

 the banks, to induce the banks to withdraw 

 their local circulation and convert it into a na- 

 tional circulation. If it fails, as a matter of 

 course it does no harm. But suppose it suc- 

 ceeds, does not the United States derive a 



benefit from it? Certainly; because at once 

 a demand is created for the purchase of $100,- 

 000,000 of United States bonds. We are anx- 

 ious to sell these bonds. They are now below 

 the par of gold. The creation of a demand 

 for $100,000,000 will, as I showed yesterday, 

 by the well-known and recognized laws of 

 trade, probably create a demand for $500,000- 

 000. There is the benefit, there is the advan- 

 tage we seek to derive. We shall make a mar- 

 ket at once for the sale of $100,000,000 worth 

 of our bonds, and the additional market which 

 is always created by making a demand for a 

 particular commodity, which is equivalent at 

 least to five tunes the amount of the real de- 

 mand. The Government of the United States 

 is willing to borrow money from the honorable 

 senator at six per cent, and pay the interest 

 in gold coin. Any person who desires to loan 

 money to the United States may receive six per 

 cent, interest on it, and we are very glad to 

 sell our bonds at that rate in this time of war ; 

 but to those who avail themselves of the privi- 

 leges of this law we only pay four per cent., 

 so that we save one third of the interest on the 

 amount of our bonds used for banking ; and 

 more than that, we get a circulation which by 

 the laws of the United States may be used in 

 the collection of our dues ; and in the ordinary 

 operations of our Government these banking 

 agencies may be made useful and beneficial as 

 depositories. There is the answer. The bene- 

 fit derived to the Government is by making a 

 market for its bonds, by having fiscal agencies 

 throughout the United States, so that it may 

 the more readily collect its debts, and by saving 

 one third of the interest on the payment of its 

 bonds, and by securing to the people of the 

 country a uniform national currency which can 

 be passed from hand to hand in all parts of the 

 country without loss by exchange, or deterio- 

 ration, or alteration. 



"But the honorable senator says that the 

 power granted by this bill would render the Sec- 

 retary of the Treasury a very dangerous person, 

 or a very powerful person ; probably that is the 

 meaning. He says that this bill would create 

 a dangerous political power. According to all 

 experience, if you invest in any particular per- 

 son the power to appoint men to office, or the 

 power to manage banks or control a scheme of 

 this kind, it rather weakens him. Sir, it will 

 be a dangerous power in one sense ; not to the 

 American people, but it will be dangerous to 

 the individual who exercises the power. Any 

 man in this country who is clothed with the 

 power of appointing men to office or selecting 

 certain persons to have certain privileges, loses 

 more than he makes, by the well-known law 

 that he disappoints more than he benefits. And 

 if you confer upon the Secretary of War or the 

 Secretary of the Treasury the power to appoint 

 twenty clerks, as we did the other day, there 

 are five hundred applicants at once ; and you 

 disappoint four hundred and eighty, and make 

 them enemies, for the sake of gaining twenty 



