188 



CONGRESS, UNITED STATES. 



per which the Government has paid and not yet 

 found time to carry into account and cancel. 



" Where are we to obtain an adequate amount 

 of sold? Who has it to spare? By what means 

 are we to get it ? When London, or rather Eng- 

 land, on a commercial transaction made with 

 the syndicate, owed us $21,000,000, while Mr. 

 George 8. Boutwell was still Secretary of the 

 Treasury, the bank and the business men of 

 England became alarmed at the possibility of 

 the withdrawal of so large an amount of bul- 

 lion from that country ; and Secretary Bout- 

 well, having subsequently become a Senator 

 from Massachusetts, stated the facts on the 

 floor of the Senate, and showed that the Bank 

 of England interfered and threatened destruc- 

 tion to American credit if a contract was not 

 made to bring the paltry sum of $21,000,000, 

 a little over 4,000,000 sterling, home in Gov- 

 ernment bonds bought in London. And Mr. 

 Boutwell concluded his statement with the ex- 

 clamation, ' We were compelled to submit.' 



" But, sir, the United States Government had 

 a judgment awarded it by a tribunal more au- 

 gust than any which ever adjudicated the claim 

 of a suitor. The high joint commission, repre- 

 senting the two most powerful nations of the 

 earth, the sovereignty of England and that of 

 the United States, after due deliberation at Ge- 

 neva, found that we were entitled to $15,500,- 



000 in gold. Such was the judgment of that 

 august tribunal. What was the sequel? Did 

 we, on settlement, bring $15.500,000 of metal 

 to replenish our exhausted supply? Oh, no. 



1 speak again upon the authority of him who 

 was then Secretary of the Treasury, Mr. Bout- 

 well. The Government of England induced our 

 own State Department to suggest to our Trea- 

 sury Department that to bring home that award 

 as the court had adjudged it to us, in gold, 

 would produce a financial crisis, and that we 

 should therefore, in the same spirit of amity 

 which had submitted to arbitration the great 

 issues between us, accept payment in our 

 own bonds. And again we were compelled to 

 submit. 



"But later still, sir, within three months the 

 Government of British India advertised in Lon- 

 don for a loan of 8,000,000 sterling, $15,000,- 

 000; and the 'Economist,' the 'Times,' and 

 all tho leading journals of England announced 

 that the proposed loan was producing pertur- 

 bation in business circles, because if the pro- 

 ceeds were to be sent to India in money it 

 might produce a financial crisis. Why produce 

 a financial crisis? If sent in the money of In- 

 dia, it would be silver, which is not money in 

 England. Yes, that fact was recognized ; but 

 it was also^remembered that Germany needed 

 gold ; and if that loan was to be sent to India 

 in money, Germany, it was said, would supply 

 the silver and take in exchange therefor Eng- 

 land's gold money to the amount of 3,000,000 

 sterling. 



" Yet gentlemen talk on this floor and else- 

 where as flippantly about selling $200,000,000 



of 4 per cent, bonds for gold, and bringing the 

 proceeds home, as though gold were one of the 

 products of the shops of Birmingham or Shef- 

 field which British manufacturers would be 

 glad to sell. The amount of gold necessary to 

 enable us to maintain specie payments is not in 

 the possession, with power to dispose thereof 

 to a foreign nation, of any government or peo- 

 ple on the face of the globe ; and such amounts 

 as can be spared by any of them will not be 

 permitted to come to a debtor nation whose 

 bonds may be sent home in settlement of inter- 

 national balances. 



"I have here (for gentlemen may doubt my 

 judgment on the last point) the great financial 

 authority of England, the 'Economist,' of Oc- 

 tober 28, 1877. The editor discusses the balance 

 of trade between this country and England ; 

 and I am sorry my venerable friend from New 

 York (Mr. Townsend), who yesterday talked 

 so luminously about the balance of trade and 

 how it was to bring us money, is not here to 

 learn the opinion of so widely acknowledged 

 an authority. The writer says : 



And so we find that while the balance of trade is 

 turning less favorable to the States, the bullion move- 

 ments are moving strongly in their favor. The the- 

 ory is thus seen to be erroneous ; and it errs because 

 it overlooks two important items which, though they 

 do not appear in the trade accounts, materially af- 

 fect the balance. In the first place ? there are other 

 than trade debts which a country like America has 

 to settle. She has to export either goods or specie 

 as interest upon the money which she has borrowed 

 abroad and for services rendered to her by foreign- 

 ers ; and as the amount of this tribute is not known, 

 it is impossible to say from the trade returns alone 

 on which side the balance really lies. And in the 

 second place, even if the balance should in the end 

 be favorable, it maybe liquidated without the move- 

 ment of bullion. Stock-exchange securities have 

 now become a kind of international money, and to a 

 large and increasing extent these are supplementing 

 gold or silver as a medium for settling international 

 debts. These points are worth remembering now 

 when the possibility of gold shipments to America 

 in payment of our imports of grain is attracting so 

 much attention. 



" Why, of course, gentlemen, England will 

 allow the gold to come over here for $200,- 

 000,000 of 4 per cent, bonds. She will not 

 send over for conversion any of our overdue 

 bonds. She will hold them, and allow you to 

 produce a financial convulsion by withdrawing 

 all the bullion the Bank of England now holds, 

 which is less than $115,000,000. No ! you can 

 resort to the exclusive use of irredeemable bank 

 notes on the 1st of January, 1879, but you can 

 not resume gold payments. 



"An engineer, Mr. Speaker, who, having 

 been employed to remove a great structure, 

 should begin by digging away the foundation, 

 would soon find himself restrained by injunc- 

 tion sued out by his neighbors ; or, being where 

 a court was not accessible, physical force would 

 restrain him from bringing the superstructure 

 upon the heads of his neighbors. Yet what 

 do you propose to do with that great and com- 

 plicated structure, the currency, production, 



