166 



CONGRESS, UNITED STATES. 



norm of the provisions of this act thill apply to the re- 

 demption or exchange of any of the bonds issutd to the 

 Jbctfc Ji'tiiliruy Companies. 



SEC. 8. (il) [AuUiority to issue bonds and certifi- 

 cate* to t!u- amount necessary to curry out the |>rvi>- 

 i..n- I't'this act is hiTvliv gnOMd ; MM] The Seen-tary 

 ot' the Treasury is IMNJM authorized ami d'm-cte.l 10 

 make inhabit rules ana regulations to oirry this ai-t 

 into etfoet v-"-) . : 1'rovidcd that;] and the expense of 

 preparing, i . ,', and disposing of the 



'wild.-, and (23) [eertittcates] Treasury note* authorized 

 to be issued slwll not exceed (24) [one quarter] one 

 haifol 1 ji-r 



SKC. 4. That the Secretary of the Treasury is hereby 

 authori/e<l, ii in his opinion it shall becon 

 to use (-' temporarily not exceeding $50.000,000 of 

 the standard gold and silver coin in the Treasury in 

 the redemption of the 5 and per cent bonds oi the 

 United States authorized to be refunded by the pro- 

 visions of this act. (26) which shall from time to time 

 be npaid and replaced out of the proceed* of the sale 

 of the bonds or Treasury notes authorized by this act ; 

 and he may at any time apply the surplus money in 

 the Treasury not otherwise appropriated, or so much 

 thereof as ho inuv consider proper, to the purchase or 

 redemption of United States bonds or (27) [certificates] 

 Treasury notes authorised by this act : J'rovided, That 

 the bonds and (28) [certificates] Treasury notes so 

 purchased or redeemed shall constitute no part of the 

 sinking fund, but shall be canceled. 



SEC. 5. From and alter the 1st day of (29) [May] 

 July, 1881, the 8 per cent bonds authorized by the 

 first section of this act slmll be the only bonds receiv- 

 able as security for national-bank circulation, or as 

 security for the safe-keeping and prompt payment of 

 the public money deposited with such banks; but 

 when any such bonds deposited for the purposes afore- 

 said shall be designated for purchase or redemption 

 by the Secretary of the Treasury, the banking asso- 

 ciation depositing the same shall have the right to 

 substitute other "issues of the bonds of the United 

 States in lieu thereof: Provided, That no bond upon 

 which interest has ceased shall be accepted or shall 

 be continued on deposit as security for circulation or 

 for the safe-keeping of the public money ; and in case 

 bonds so deposited shall not be withdrawn, as pro- 

 vided by law, within thirty days after interest has 

 ceased thereon, the banking association depositing the 

 same shall be subject to the liabilities and proceed imrs 

 on the part of the Comptroller provided for in section 

 5284 or the Revised Statutes of the United States : 

 And provided further. That section 4 of the act of 

 June 20, 1874, entitled " An Act fixing the amount of 

 United States notes, providing for a redistribution of 

 the national-bank currency, and for other purposes," 

 be and the same is hereby repealed; and sections 

 5159 and 5160 of the Revised Statutes of the United 

 States be and the same are hereby re-enacted. 



(80) Sec. 6. That the payment of any of the bonds 

 hereby authorised, after the expiration of five years, 

 shall be made in amounts to be determined from time 

 to time by the Secretary of the Treasury, at his discre- 

 tion, the bonds so to be paid to be distinguished and 

 described by the dates and numbers, beginning for each 

 ntccessite payment with the bonds of each class last 

 dated and numbered ; of the time of which intended 

 payment or redemption the Secretary of the Treasury 

 shall give public notice, and the interest on the particu- 

 lar bonds so selected at any time to be paid shall cease 

 at the expiration of thirty days from the publication 

 of such notice. 



SEC. (81) [6] 7. That this act shall be known as 

 " The funding act of 1881 " ; and all acts and parts of 

 acts inconsistent with this act are hereby repealed. 



The House proceeded to consider the amend- 

 ments. 



Mr. Frye, of Maine : " If the Speaker pleases, 

 the Senate changed May to July. The com- 

 mittee changed July to September. Thea the 



committee retired from the change from July 

 to September in order to allow the gentleman 

 from Michigan to move the September amend- 

 ment with another amendment. Now, if the 

 House concurs in the Senate amendment, will 

 the gentleman still have his right of moving 

 to amend by changing that to September and 

 something else? If not, then the gentleman 

 from Michigan could offer his amendment at 

 this point." 

 The Clerk read as follows: 



in lino twenty-four ; .and by inserting the word " Sep- 

 tember" in the first line in place of the word "July," 

 proposed to be stricken out. 



Mr. Frye : u The amendment which the gen- 

 tleman from Michigan offers is one, in my judg- 

 ment, in the present condition of public sen- 

 timent, of very great importance. Sections 

 6220, 5221, 5222, and 5224 of the Revised 

 Statutes of the United States provide for the 

 voluntary liquidation of banking corporations. 

 In that voluntary liquidation the bank itself, 

 by the action of a certain number of its stock- 

 holders, may, under the law, redeem all its 

 bonds on deposit in the Treasury for its cir- 

 culation in the lawful currency of the United 

 States ; and two of these sections providing 

 for that contingency were the revised acts of 

 June, 1S74, referred to in section 5 of this bill. 



"Now, the bill proposed by the Committee on 

 Ways and Means, in this section now under 

 consideration, and the amendments proposed 

 by the gentleman from Kentucky, provides 

 for a repeal of that law of June, 1874, and the 

 question meeting this House squarely is simply 

 this : Does that repeal of the law of June, 1874, 

 repeal the right of a national bank to go into 

 voluntary liquidation and redeem its bonds by 

 the use of lawful currency ? And, Mr. Speaker, 

 gentlemen are divided, and divided honestly, 

 in their opinion on this subject. Some of the 

 best lawyers in this country to-day are writing 

 to Congress insisting that if the amendment 

 recommended by the gentleman from Kentucky 

 shall prevail, they hold that it will operate as 

 an absolute repeal of all power on the part of 

 the national banks voluntarily to liquidate and 

 redeem their United States bonds deposited 

 with the Secretary of the Treasury as security 

 for circulation by lawful currency. If it does 

 this, if it accomplishes this result, a gross and 

 grave injustice is done to this great interest 

 in this country. If it does not, then the com- 

 plaint is without foundation. But, sir, a ma- 

 jority of the banking people of the country to- 

 day fully believe that it does repeal that right. 



" Mr. Speaker, why should there be any ques- 

 tion about it? Why should it be left open to 

 doubt? Here we are enacting a law touching 

 the most sensitive thing in the world, finance 

 (and gentlemen can see how sensitive a sub- 

 ject it is by observing what has transpired 

 within the last week), and in that enactment 

 we are met with questions of such gravity and 



