CONGRESS, UNITED STATES. 



147 



to Great Britain, where by the long-established 

 laWs of that country they coin money free of 

 charge. This section involved the surrender 

 of about $85,000 a year of revenue ; that is, 

 the Government of the United States re- 

 ceived last year for coining gold coin $85,- 

 000, or one-fifth of one per cent, on forty- 

 five millions of gold coined. The only sac- 

 rifice of revenue, therefore, by the second 

 section of the bill is the sacrifice or surrender 

 of $85,000, which has heretofore been levied 

 upon those who produce gold bullion in order 

 to convert it into coin. In the opinion of 

 many men, among them the Secretary of the 

 Treasury, the Director of the Mint, and per- 

 haps a large number of Senators heretofore, 

 this will tend, in a slight degree at any rate, 

 to prevent the exportation of the gold of our 

 own country into foreign parts, because when 

 the Government of the United States under- 

 takes to put gold bullion in the form of gold 

 coin without additional charge the tendency 

 will inevitably be for the gold bullion to flow 

 into the mints for coinage, and, being put into 

 the form of American coin, it is thought by a 

 great many people that this will tend to pre- 

 vent its exportation. To the extent it does so 

 it prepares us for specie payments. That is 

 the whole of the second section. 



" The third section of the bill contains only 

 two or three affirmative propositions. The 

 first is that after the passage of this act bank- 

 ing shall be free. Perhaps there is no idea 

 stronger in the minds of the American people 

 than a feeling of hostility against a monopoly 

 a privilege that one man or set of men can 

 enjoy which is denied to another man or set 

 of men. Under the law as it now stands, bank- 

 ing is substantially free in the Southern and 

 some of the Western States ; but banking 

 is not free in the great commercial States, in 

 the older States, where wealth has accumulated 

 for ages. This may be a mere sentimental 

 point, but it is well enough to meet it ; and by 

 the operation of this bill banking is made free, 

 so that there will be no difficulty hereafter for 

 any corporation organized as a national bank 

 either to increase its circulation or for banks to 

 be organized under the provisions of existing 

 law to issue circulating notes to any extent 

 within the limits and upon the terms and pro- 

 visions of the banking law. This section, there- 

 fore, by making banking free, provides for an 

 enlargement of the currency in case the busi- 

 ness of the community demands it, and in case 

 any bank in the United States may think it ad- 

 visable or profitable to issue circulating medium 

 in the form of bank-notes under the conditions 

 and limitations of the banking law. Coupled 

 with that is a provision, an undertaking, on the 

 part of the United States, that as banks are or- 

 ganized or as circulating notes are issued, either 

 by old or new' banks, the Government of the 

 United States undertakes to retire eighty per 

 cent, of that amount of United States notes. 

 In other words, it proposes to redeem the 



United States notes to the extent of eighty per 

 cent, on the amount of bank-notes that may be 

 issued ; and here is the first controverted ques- 

 tion that arises on this bill and the first that is 

 settled. It may be asked, if we provide for the 

 issue of circulating notes to banks, why not 

 provide for the retirement of an equal amount 

 of United States notes. The answer is that 

 under the provisions of the banking act by the 

 law as it now stands a bank cannot be organ- 

 ized and maintained in existence unless the re- 

 serve which is in that bank, or required for 

 that bank in the ordinary course of business 

 either on its deposits or circulation, is at least 

 equal to twenty per cent, of the amount of its 

 circulating notes, so that it was believed, ac- 

 cording to the judgment of the best business 

 men of the country, and I may say with the 

 Controller of the Currency, that the retirement 

 of eighty per cent, of the amount of bank-notes 

 is fully equivalent to keeping the amount of 

 circulating medium in actual circulation on the 

 same footing, so that this provision of the bill 

 neither provides for a contraction nor expan- 

 sion of the currency, but leaves the amount to 

 be regulated by the business wants of the com- 

 munity, so that when notes are issued to a bank 

 eighty per cent, of the amount in United States 

 notes is redeemed, and this process continues 

 until United States notes are reduced to three 

 hundred millions. 



"Now, Mr. President, that is all there is in 

 regard to banking in this bill and also in regard 

 to the retirement of the United States notes 

 until the time for the resumption of specie pay- 

 ments comes, when this bill provides for act- 

 ual redemption in coin of all notes presented. 

 It has always been a question in the minds of 

 many people as to whether it is wise to fix a 

 day for specie payments. That matter was 

 discussed at the last session of Congress by 

 many Senators, and the general opinion seemed 

 to be that if we would provide the means by 

 which specie payments would be resumed it 

 might not be necessary to fix the day ; but, on 

 the other hand, it is important to have our 

 laws in regard to the currency fix a probable 

 time, or a certain time, when everybody may 

 know that his contracts will be measured by 

 the coin standard. We also know, by the 

 example of other nations which have found 

 themselves in the condition in which we are 

 now placed, and by some of the States when 

 specie payments were suspended, that they 

 have adopted a specific day for the resumption 

 of specie payments. In England, by the bank 

 act of 1819, they provided for the resumption 

 of specie payments in 1823, making four years. 

 In our own State in New York, in Ohio, in 

 nearly all the States when there has been a 

 temporary suspension of specie payments a 

 time has been fixed when the banks were com- 

 pelled to resume, and this bill simply follows 

 the example that has been set by the States, 

 by England, and by other nations, when they 

 have been involved in a like condition. 



