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CONGRESS, UNITED STATES. 



again, equal to them in experience, ability, and 

 opportunities of judgment, have told us there 

 would be risk in the attempt. Speaking for 

 myself and for the majority of the committee, 

 we believe that the weight of authority is in 

 favor of running no risk, and that the rate of 

 3J per cent per annum is that which under all 

 the circumstances it is wiser and better for the 

 United States to adopt in order to obtain free- 

 ly the desired loans from the public. 



" Consider for a moment the experience of 

 other nations in this regard. At the head of 

 the commercial world is the Empire of Great 

 Britain. Nowhere has government been more 

 permanent or its institutions more stable, or 

 the certainty of the repayment of loans and 

 indebtedness secured by law more perfectly. 

 The conditions, therefore, of low interest have 

 been as perfect there as human institutions 

 have ever been able to procure ; and yet what 

 is the result? When, in the last half century, 

 the especial period of her progress and suc- 

 cess, have the consols of Great Britain not paid 

 more than 3 per cent to the investor? Yet 

 those bonds have a feature which is denied to 

 our own, and for my own part I can not regret 

 it, and that is, the creation of a permanent 

 debt. During the last fifty years the loans ot 

 Great Britain have touched par, I believe, but 

 twice. 



" It may be stated in regard to the rate of 

 interest returned upon the investment of Eng- 

 lish consols that it has varied between 4 and 

 3i per cent. I am speaking now of the return 

 upon the cost of the British consols to the 

 investor. Sometimes it has paid more than 4, 

 and sometimes even less than 3 per cent, but 

 those have been the extremes of depression 

 and exaltation of price. It may be said upon 

 authority that the investor in British consols 

 has during the last quarter of a century re- 

 ceived on an average rather more than 3 per 

 cent income. 



" At page 5 of a pamphlet containing the 

 report of an interview between the Secretary 

 of the Treasury, the Comptroller of the Treas- 

 ury, and the Treasurer, with the Committee on 

 Finance, will be found a statement taken from 

 the London 'Economist' of the 6th of No- 

 vember, 1880, to which I invite the attention 

 of the Senate as corroborating the statement I 

 have made. 



" I have drawn the attention of the Senate 

 to the fact that the consols of Great Britain 

 offered to investors permanence and absolute 

 security, not simply ultimate security, but that 

 security which can be availed of at almost any 

 day ; and with these two elements so favorable 

 to a low rate of interest they have not been 

 able to maintain at par a loan at a rate of in- 

 terest which it is proposed now to issue and 

 maintain at par in this country. I shall ask 

 the Senate to consider the difference of condi- 

 tions in this country and Great Britain as af- 

 fecting GUI: bonded debt, and to show that we 

 can not safely permit that fluctuation in prices 



which to their government, under a system of 

 permanent indebtedness, is a matter of absolute 

 indifference. There are conditions in this 

 country which render it imperative to main- 

 tain our bonds at par or over par. The Sec- 

 retary of the Treasury has spoken of the tradi- 

 tions of the country and its policy to maintain 

 our bonds at par. That statement has the au- 

 thority of the country's history, but there is 

 something more practical and practicable than 

 mere tradition and policy. There is sin abso- 

 lute necessity for us to see to it that as we 

 have tied our systems of banking and currency 

 to the fate of our national bonds, they must 

 ptand or fall together. The currency of this 

 country, upon which the main part of its busi- 

 ness is conducted, and to which it has been 

 made essential, is based upon the national 

 credit. That currency is obtainable only by 

 the deposit of national bonds, 90 per cent of 

 currency being issued for 100 per cent of bonds 

 upon their face value, and the sense of security 

 so absolutely found in the excess of value of 

 the pledge, the responsibility of the share- 

 holder, and the reserve established by law, 

 have made this credit money of the Govern- 

 ment national-bank notes receivable with ab- 

 solute and unshaken confidence. Senators, 

 that confidence existing almost solely upon 

 credit, must not be disturbed. We have to- 

 day what is called a resumption of specie pay- 

 ments, but, to speak more accurately, we should 

 call it a redemption of notes that are at once 

 reissued at the will of the debtor. How is 

 that resumption assured ? It can not be said to 

 be assured by the coin in the Treasury. "We 

 had at last accounts in gold coin and bullion 

 $140,952,837, and of standard silver money 

 $47,084,459 ; and that is to answer for $346.- 

 000,000 of demand notes, and ultimately for 

 the $350,000,000 of notes issued by the Gov- 

 ernment through the national banks. "What, 

 then, is to-day our security that resumption can 

 be maintained ? Not the coin in the Treasury, 

 surely ; but the existence of the power secured 

 by the act of January 14, 1875, that gives to 

 the Secretary of the Treasury the right to sell 

 Government bonds bearing 4, 4, or 5 per cent 

 interest, to any amount necessary to buy gold 

 and pay the United States notes whenever pre- 

 sented at the Treasury. It is, therefore, this 

 potentiality standing in impressive and power- 

 ful reserve that overshadows any attempt to 

 make what is called ' a run upon the Treas- 

 ury ' or endanger the permanence of resump- 

 tion ; and yet, bear in mind, those bonds, 

 which under law are to be sold in order to 

 supply the exigencies and meet the demand for 

 gold, can not be sold at less than par. There- 

 fore I say that we should permit nothing to go 

 upon the statute-book, and take no step in the 

 management of our finances, that even tends 

 to send our bonds below par, because the par 

 value of those bonds is essential to the abso- 

 lute maintenance and security of specie re- 

 sumption. It is the power to sell those bonds 



