CONGRESS, UNITED STATES. 



149 



identical point. Now, what I am after is, to 

 understand whether the provisions of this bill 

 will in their practical operation work in the 

 direction of specie payments or not, and for 

 that it is a very essential question whether the 

 greenbacks so retired shall be destroyed never 

 to be reissued again, or whether they shall be 

 held as a reserve, as the forty-four millions 

 were, certainly to be put into the market again." 



Mr. Sherman: "The Honorable Senator 

 from Missouri and I agreed perfectly some 

 years ago when the question about the $44,- 

 000,000 reserve came up. I should rather put 

 that question to him. At all events I say to 

 him frankly that we do not propose to decide 

 that question in this bill. I have no doubt that, 

 when the time arrives when the question be- 

 comes material, it will be met. Undoubtedly 

 until the reduction of the United States notes 

 to $300,000,000 they cannot be reissued. The 

 process must go on paripassu until the amount 

 of legal-tender notes is reduced to $300,000,000. 

 Before that time will probably arrive in the 

 course of human affairs, at least one or two 

 Congresses will have met and disappeared, and 

 we may leave to the future these questions that 

 tend to divide us and distract us, rather than 

 undertake to thrust them into this bill and thus 

 divide us and prevent us from doing something 

 in the direction at which we aim." 



Mr. Schurz: "Mr. President, I do not want 

 to go into an argument upon this bill now, be- 

 cause I confess I am not sufficiently informed 

 about the meaning of the provisions of the 

 bill ; and in order to inform myself I should 

 like to put some questions to the Senator from 

 Ohio. 



"I see a pledge in this bill to resume specie 



Eayments on the 1st of January, 1879. So 

 ir, so well. Better late than never. We 

 shall, voting for this bill, consider ourselves 

 honorably bound to fulfill that pledge, and I 

 think we personally intend to do so. That is 

 worth something. But the question is whether 

 the machinery provided for by the bill is such 

 as to bring about a condition of things which 

 will render the performance of that pledge 

 possible ; and in order to clear up this impor- 

 tant point I asked the Senator what were the 

 provisions of the bill calculated to give us the 

 necessary preparation for the resumption of 

 specie payments. Aside from this pledge, I 

 find in the bill two things: first, free bank- 

 ing ; secondly, the retirement of legal tenders 

 amounting to eighty per cent. ' of the sum of 

 national-bank notes so issued to any such 

 banking association. ' That is, as far as I can 

 see, all the provision that is made to prepare 

 the way for specie payments. I would ask 

 the Senator from Ohio whether he thinks that 

 free banking that is to say, the removal of 

 all the restrictions which at present surround 

 the organization of banks and the issuing of 

 bank currency, and coupled with that the 

 withdrawal of eighty per cent, in greenbacks 

 of the amount of national-bank notes so is- 



sued is all that in his opinion is required ? I 

 must confess that to my mind it is by no means 

 clear that these provisions are sufficient to ren- 

 der the resumption of specie payments on the 

 1st of January, 1879, possible. The question 

 I ask the Senator is whether he thinks they 

 are not sufficient, and how they are to oper- 

 ate?" 



Mr. Sherman : " I will answer." 



Mr. Schurz : "If the Senator will permit 

 me to make it perfectly clear, does he think 

 that the removal of all the restrictions sur- 

 rounding our banking system will result in the 

 establishment of many more national banks 

 and in the issuing of large quantities of addi- 

 tional currency? and does he think that in 

 consequence thereof the quantity of greenbacks 

 will be materially reduced ? Or does he think 

 that free banking will result in the establish- 

 ment of but few new banks, and so on ? In 

 one word, what does he think that the practi- 

 cal effect of this measure will be in paving the 

 way for the resumption of specie payments? " 



Mr. Sherman : " As to whether more banks 

 will be organized, or whether old banks will 

 issue more circulating notes with the certainty 

 that they must in four years redeem them in 

 coin, every Senator must form his opinion. I 

 have no doubt some banks will be organized 

 here and there ; I have no doubt existing banks 

 will increase their circulation; but to what 

 extent I will not undertake to say ; no man 

 can undertake to say. If this be not done, we 

 are no worse off; but, if it be done, we retire 

 eighty per cent, of that amount in United 

 States notes, and that does not only lead us 

 toward specie payment, but lessens the vol- 

 ume which we are bound to redeem when the 

 time comes for final redemption." 



Mr. Thurman, of Ohio, said: "Mr. Presi- 

 dent, the first two sections, so far as my opin- 

 ion is concerned, are perfectly right ; but now 

 we come to the third and last section, and 

 what is it? But, first, let me premise that 

 the first two sections do very little toward the 

 resumption of specie payments, for when you 

 shall have paid the fractional currency in sil- 

 ver, you will have paid it in something that is 

 no more valuable than the greenbacks in which 

 it is now redeemable. So that is but a very 

 slight step toward the resumption of specie 

 payment. And when you shall have done 

 away with the coinage charge, as provided in 

 the second section, you will have done a lit- 

 tle, it is true, toward increasing the amount of 

 gold coinage and that is all an almost infini- 

 tesimal step toward specie payments. There- 

 fore, if there is any thing in this bill that 

 looks toward specie payments, it must be in 

 the third section. Now, let us look at that. 



" It proposes that there shall be free bank- 

 ing, and then for every $100 of bank-notes 

 that shall be issued there shall be redeemed 

 $80 of legal tenders, and that that process 

 shall go on until the amount of legal tenders 

 outstanding shall be $300,000,000 and no more. 



