CONGRESS, UNITED STATES. 



145 



legal tenders represent the non-interest-bear- 

 ing debt of the Government. Upon the $382,- 

 000,000 of legal-tender notes the Government 

 is paying no interest whatever. Upon the 

 $356,000,000 of national-bank circulation the 

 Government is paying, by way of interest upon 

 the bonds deposited as security, between twen- 

 ty and twenty-one million dollars in gold every 

 year. 



" I do not think that the substitution of 

 national-bank currency, for the purpose of 

 driving out the circulation of legal tenders, is 

 thrifty statesmanship. I am quite aware that 

 these national banks pay taxes to the Govern- 

 ment, which in part compensates for the inter- 

 est which the Government pays upon that cir- 

 culation, but it is only in part. 



u In the next place, I am opposed to driving 

 greenbacks out of circulation, for the reason 

 that they are legal tenders, and that in the 

 future even more than in the past they will be 

 of signal service to the finances of our coun- 

 try. Now, in place of any extended argument 

 to demonstrate this proposition, let me cite 

 an illustration. In 1857, if at the distance of 

 nearly twenty years my recollection is correct, 

 the Ohio Life Insurance and Trust Company 

 failed. Certain banks in New York City were 

 involved with this company. There were runs 

 upon those banks for specie payments, and 

 they were compelled to suspend. Other banks 

 were so far complicated with them that they 

 suspended also, and nearly every bank in the 

 country had suspended specie payments within 

 the space of ten days. They shut up like oys- 

 ters, throwing out the paper of solvent cus- 

 tomers, who went to protest, and the conse- 

 quence was, wellnigh universal financial ruin 

 and devastation. 



" Now, suppose that in 1857 there had been 

 in circulation, or in the Treasury, $382,000,000 

 of legal tenders, and that they could have been 

 had in exchange for Government bonds at par 

 with gold, that disaster to the country which 

 happened from public fright, because of the 

 inability of the banks to redeem their notes, 

 would never have happened. And in the 

 future, when the Government shall have re- 

 sumed specie payments, in times of public 

 panic, if your legal tenders are in existence, 

 to be had for Government bonds at pac with 

 gold, they will be worth more to the com- 

 merce and the finances of the country than 

 their face in gold, because they cannot be ex- 

 ported ; while your gold, in a sufficient amount 

 to bear the strain of a general panic, cannot 

 be kept in the country. For this reason they 

 will prove to be a handy thing to have in the 

 house. And when resumption of specie pay- 

 ments by the Government is sufficient to meet 

 and overcome the financial evils which we 

 now encounter, are we willing recklessly and 

 madly to throw away the legal tenders, which 

 could be made of infinite value to the com- 

 merce of the country in the future ? And let 

 me add that, in my humble judgment, in any 

 VOL. xv. -10 A 



issue before the people, between greenbacks 

 and bank-notes, the greenbacks will win, and, 

 brought to par, they ought to win. 



"Now, I desire not to be misunderstood. 

 I would consent to the continuance of these 

 legal tenders in circulation only upon condi- 

 tion that they shall be exchangeable for gold 

 at the Treasury of the United States. Before 

 you compel the people to resume specie pay- 

 ments, set them the example. Resume your- 

 selves. Pay gold for your greenbacks at the 

 Treasury. I am unalterably opposed to driving 

 them out of circulation in the interest of na- 

 tional-bank notes. I will vote to make them 

 receivable for customs dues in part. If need 

 be, I will vote to retire them gradually until 

 they come to par, with liberty to reissue them 

 when they are at par. And I will vote with 

 peculiar satisfaction for the measure suggested 

 by the gentleman from Massachusetts (Mr. 

 Dawes), to fund them in a gold-bearing bond 

 which is worth par. 



" Now, while there are in the bill of the gen- 

 tleman from Pennsylvania (Mr. Kelley) some 

 features which impress me very favorably, I 

 think there are very grave objections to it. 



"It has been said in this debate that there 

 is no expansion in it, and that allegation has 

 gone unchallenged. Mr. Chairman, it seems 

 to me that there is expansion in this bill ; that 

 there is illimitable expansion in it ; for this 

 reason : these 3.65 per cent, bonds, it is pro- 

 vided in this bill, may be issued of the denomi- 

 nation of fifty dollars. The $382,000,000 of 

 greenbacks may be returned to the Treasury, 

 and in exchange for them there may be issued 

 $382,000,000, in fifty-dollar Government bonds 

 bearing 3.65 per cent, interest. Now, what is 

 to prevent those 3.65 per cent, bonds from being 

 circulated as currency ? Why, sir, it was said 

 here last winter by the gentleman from Massa- 

 chusetts (Mr. Butler), if I mistake not, that the 

 very object of making this interest 3.65 per 

 cent, was that it might be easy of computation, 

 being one cent per day upon $100, so that they 

 might readily pass from hand to hand, with 

 the interest added. Not only would those 

 Government bonds be circulated as currency, 

 and thereby expand the currency, but they 

 would be sought for with avidity precisely as 

 the interest-bearing Treasury-notes were sought 

 after some years ago when they were in circu- 

 lation. Now, what would be the result ? If 

 the $382,000,000 of greenbacks were returned 

 and exchanged for Government bonds, and 

 three-fourths of the greenbacks received by 

 the Government were reissued to buy gold for 

 the purpose of taking up our bonds abroad, 

 precisely as is contemplated by this bill, then 

 the greenbacks thus reissued would be put into 

 circulation again, so that after the first ex- 

 change there would be in circulation, counting 

 those greenbacks and the Government bonds* 

 issued for them, $668,000,000, and that pro- 

 cess would be repeated ad infinitum. Thus- 

 the amount of paper circulating as currency 



