CONGRESS, UNITED STATES. 



169 



the average from 15 to 20 per cent annually 

 upon the franchise derived from the United 

 States,' should be required to contribute their 

 just proportion to the general welfare by re- 

 ceiving and using as a basis for their circulation 

 public securities bearing at least as low a rate 

 of interest as the Government proposed to 

 allow the savings-banks and the trustees and 

 guardians of dependent widows and orphans 

 throughout the country. But, sir, the national 

 banks resisted the reasonable demands of the 

 Government then as they are resisting them 

 now, and the result was that the eighth sec- 

 tion of Mr. Sherman's bill was defeated iu this 

 House. A committee of conference was ap- 

 pointed, and in lieu of that section it reported 

 the following : 



"'And be it further enacted, That from and after 

 the passage of this act the Treasurer of the United 

 States shall receive no other than registered bonds 

 issued under the provisions of this act as security for 

 the circulating notes of national-banking associations 

 issued under the act entitled " An act to provide a 

 national currency secured by a pledge or United 

 States bonds, and to provide for the circulation and 

 redemption thereof," approved June 3, 1864, or any 

 act supplementary or amendatory thereof.' 



" This report was signed by Hon. Robert 0. 

 Schenck and Hon. Samuel Hooper on the part 

 of the House, and by Hon. John Sherman, 

 Hon. Charles Sumner, and Hon. Garrett Davis 

 on the part of the Senate. The section in this 

 form requiring the banks to deposit the new 

 bonds from and after the passage of the act, 

 and not giving them time, as the fifth section 

 of this bill does received the votes of eighty- 

 eight members of this House, and among them 

 were the gentleman from Michigan [Mr. Con- 

 ger], the gentleman from Indiana [Mr. Orth], 

 and two gentlemen from Pennsylvania [Mr. 

 Kelley and Mr. O'Neill], all of whom are still 

 members of this body, and all of whom, except 

 one [Mr. Kelley], are now opposing this feature 

 of the bill. The conference report, however, 

 was not agreed to here, and the Senate was 

 compelled at last to recede from its position 

 and allow the bill to become a law without the 

 eighth section or any equivalent provision. 

 When this result became inevitable, by reason 

 of the active and determined opposition of the 

 national banks, Mr. Sherman, who had been 

 from the beginning an earnest and consistent 

 advocate of the justice and policy of the com- 

 pulsory clause, announced the fact to the Sen- 

 ate in a speech which I commend to the serious 

 consideration of gentlemen who are opposing 

 this clause of the fifth section. After stating 

 that there was ' a very unreasonable and un- 

 necessary clamor raised by the banks against 

 that provision,' he said: 



" I wish now to record my deliberate judgment that 

 in this conclusion to which we have been compelled 

 to arrive by the action of the House we are doing the 

 national banks a great injury, which will impair their 

 influence and power among the people, and that the 

 opposition of the national banks to this provision 

 which would have required them to aid in the funding 

 of the public debt will tend more to weaken and de- 



stroy them than anything that has transpired since 

 their organization. I do not see how we can go before 

 the people of the United States and ask them to lend 

 us gold at par for our bonds, when we refuse to 

 require agencies of our own creation to take them ; 

 when we even refuse to require new banks not yet 

 organized to tuke these new bonds, and when we re- 

 fuse to require old banks, which have made on the 

 average from 15 to 20 per cent annually upon the 

 franchise derived from the United States, to aid us to 

 this extent in funding the national debt. 



'' But, sir, the vote of the House shows the power 

 of the national banks. It is so great, at least in the 

 House, that in order to secure a funding bill we have 

 been compelled to abandon all provisions in regard 

 to the national banks ; but I give notice that in the 

 future I for one shall be prepared at all times to re- 

 quire the national banks to take that class of bonds 

 which wo propose in this bill, and I have no doubt 

 this will be the result. But for the present, in defer- 

 ence to the wishes of the House, we have withdrawn 

 the section in regard to national banks. 



" Now, sir, for the second time since the 

 organization of these institutions the repre- 

 sentatives of the people find themselves com- 

 pelled in the discharge of their public duties to 

 encounter the almost united opposition of more 

 than two thousand corporations of their own 

 creation opposition to a financial policy al- 

 ready approved by both branches of the leg- 

 islative department and thus we are again 

 confronted with the naked question whether 

 Congress or the banks shall finally determine 

 what that policy shall be. What was the 

 primary purpose of the Government in estab- 

 lishing this system in the first instance? If 

 any gentleman entertains a doubt upon this 

 subject, let him read the reports in which Mr. 

 Chase, then Secretary of the Treasury, sug- 

 gested and recommended the passage of the 

 original national-bank act, and he will be con- 

 vinced that the principal purpose of that emi- 

 nent financier was to create a certain demand 

 and reliable market for Government securities. 

 Considered with reference to that purpose, it 

 was unquestionably a wise stroke of financial 

 policy, and it justly won for its author the 

 highest encomiums from ministers of finance 

 in all parts of the world. In fact, the con- 

 stitutional power of Congress to create these 

 corporations can not be maintained except upon 

 the ground that they were to constitute, when 

 organized, agencies of the Government for cer- 

 tain public purposes. 



"Since the celebrated judgment of Chief- 

 Justice Marshall in the case of the United 

 States Bank, no one has ventured to affirm that 

 Congress possesses power under the Constitu- 

 tion to create corporations for the transaction 

 of purely private business or for the sole benefit 

 of private individuals. In order to come within 

 the scope of congressional power they must be 

 created as means or instrumentalities for the 

 execution of some principal power delegated 

 by the Constitution. They must be public 

 agencies, and not mere private associations. 

 The language of the court in the case alluded 

 to is so clear and comprehensive that it is im- 

 possible to mistake its meaning. It defines 



