154 



CONGRESS, UNITED STATES. 



House bill contains what T have spoken of as 

 the compulsory power of the Government pro- 

 posed to compel subscription to its loans. In 

 section 5 of the House bill, which 1ms been 

 stricken out by the Senate Committee, it will 

 be found that the bonds bearing 3 per cent 

 wore to be ' the only ' bonds receivable as secu- 

 rity for national-bank circulation, compelling 

 the banks to exchange any bonds bearing a 

 higher rate of interest for those bearing the 

 lower rate. That was intended to create an 

 involuntary market for some two hundred and 

 sixty-nine million dollars of these bonds. I 

 did object, and do now to this, and the com- 

 mittee have reported against this compulsory 

 feature, and I think they were wise and right 

 in doing so. The exhibition of compulsory 

 power, arbitrary power by a government over 

 matters touching its credit, has never proved 

 of ultimate and permanent value. It has rather 

 suggested distrust, and lack of confidence in 

 its own credit, that you should pass from our 

 voluntary -and free system of government to 

 the involuntary and tyrannical; and there is 

 in this compulsory action proposed toward 

 the stockholders of the banks, created by act of 

 Congress, an interference with their rights of 

 private contract and the spirit, if not the letter 

 of their chartered rights, which is discriminat- 

 ing and, in my opinion, unjust, unwise, and in- 

 expedient. The real strength of this Govern- 

 ment lies at last in the hearts of the people of 

 the country; it can not be created and estab- 

 lished by compulsory statutes; and we must 

 and we ought to leave every class of our citizens, 

 rich and poor, in this land, free to deal with 

 their Government on equal and general terms 

 applied without discrimination to all alike. 

 The bonds under the present act as proposed 

 by the Senate Committee on Finance will be 

 receivable as security for circulation, and will 

 be used as its basis as heretofore provided by 

 law in relation to other interest- bearing bonds 

 of the Government. 



" Mr. President, it is shown that the expenses 

 of the late refunding operations amounted to 

 about three eighths of 1 per cent, and the 

 tables of similar expenses, both in our own his- 

 tory and in the history of other governments, 

 show that such an operation was never before 

 conducted at anything like so low a rate. I do 

 not mean to say that there has been nothing 

 gained by experience, or that we should con- 

 tinue expensive and ancient methods, or that 

 we should test the reasonableness of this ex- 

 pense wholly by the past; but I do mean to 

 say that upon examination no candid American 

 will complain of extravagance in the late ac- 

 complishment of refunding. I do not mean to 

 say that the same rate of three eighths of 1 

 per cent may not fully cover the entire expense 

 of carrying this act into effect ; but I do say 

 that for the matter of one eighth of 1 per cent 

 we ought not to tie the hands of our agents 

 when we compel them to make due return to 

 us of every dollar expended, aud it would be 



both an unwise suspicion and an injurious act 

 which would tend to jeopardize in any degree 

 a transaction so vast and important as this un- 

 der the possibility of restricting the cost by 

 withholding one eighth of 1 per cent. 



"I have not been able, had I been willing, 

 but I would not have been willing, to consider 

 this great question by the narrow light of party. 

 I would not be willing to make cheap reputa- 

 tion out of mere party prejudices in dealing 

 with a question like this, or to gain unthinking 

 applause by suggestions of recklessness, ex- 

 travagance, or something that is worse than 

 either upon the part of high officials charged 

 with a great and important duty to be exer- 

 cised in the light of public examination with 

 returns for every farthing expended under 

 their responsibility. For that reason, while 

 desiring every just economy, while not affect- 

 ing to deal with easy liberality as to moneys I 

 am not to pay myself, and being generous with 

 the means of others, I still am not willing, in 

 contemplating the results as are necessarily 

 embraced in these immense and important 

 operations to the people of this country, of so 

 dealing with a gigantic debt ; I am not willing 

 to treat those who are to be the practical and 

 responsible agents in the adjustment of this 

 matter with undue or unworthy suspicion, or, I 

 may add, to bind them down with undue and 

 improper restrictions. There is a proportion to 

 be observed in all things ; and we are not bar- 

 gainers with mere brokers when we place a 

 moderate discretion as to the expense of this 

 great business in the hands of high officials who 

 are presumably men of self-respect and charac- 

 ter. 



" If in the future practical conduct of this 

 business there should be a check in the smooth 

 and successful operations of this refunding pro- 

 ject because of the withholding of some small 

 eighth of 1 per cent which being paid would 

 secure success, and being withheld would frus- 

 trate it, I mean to say that responsibility shall 

 not rest with me, nor do I envy the man who 

 shall hereafter feel that it rested with him. 

 For that reason, as faithful counselors and 

 trustees of the interests of the American people 

 whom we represent, we may fairly say to the 

 Secretary of the Treasury, If you shall be able 

 to effect this great operation, reducing the rate 

 of our interest and confirming our Government 

 credit at a cost not exceeding one half of 1 

 per cent, to that limit you may go, within that 

 limit stand as far as you can, and go before the 

 people of this country as a faithful adminis- 

 trator mindful of the needs and interests of 

 those whom you represent, and take whatever 

 of shame or glory shall come to you from your 

 performance of that duty." 



Mr. McPherson, of New Jersey : " The ob- 

 ject of the proposed legislation is to complete 

 the refunding of the national debt. Two 

 hundred and two millions of 6 per cent bonds 

 issued at the beginning of the war are about 

 to mature, and four hundred and sixty millions 



