to this measure. It is only in this way that, with the confused and scattered opinions in the public mind, we can hope to accomplish anything. All these questions will be resolved wisely if we are content to follow the example set by Mr. Lincoln and by Congress during the war, to make haste slowly.

Sir, you and I and many of our associates have been here during all the great events of our civil war. We have seen Senators from their places openly proclaim in safety their intended infamy and perjury. We have seen our only army broken and demolished, filling the streets of this city, and the rebel flag floating within sight of the dome of the Capitol. We have seen a vast section of our country filled with armed men, bold, defiant, and confident, engaged in fierce war for the overthrow of our Government. We were deserted by nearly all the Governments of Christian Europe. We have seen four hundred thousand of our countrymen slain in battle or falling by disease. We have met defection and doubt at home, and suffered disaster again and again. But all this has passed away. The long-vacant seats are nearly all filled, and new States then in wilderness are now represented here. Our flag floats in undisputed authority over every part of our territory. All the questions of debate that have risen from time to time in this Senate chamber have been so decided that authority has been vindicated and liberty been made universal. We are soon to see the great hero of the war clothed with the executive authority of the nation, and bearing with him into his high office the hearty good will of nearly all the people of the United States. But one thing more is to be accomplished, and that is to place our public credit on a firm, enduring foundation, so that the world may say that this republic is not wanting either in valor or honor. We We may then give way to those who are rapidly treading in our footsteps with a consciousness of having performed our full duty to our country.

THE PUBLIC CREDIT.

IN THE SENATE, FEBRUARY 27, 1869.

THE bill to strengthen the public credit being before the Senate, Mr. Sherman said:

I THOUGHT nothing in the world could tempt me at this late hour of the night to say a word upon this bill; but the remarks made by the honorable Senator from Indiana are so extraordinary that I deem it my duty to reply, and if it were night or morning I would do it alike.

The Senator seems to attack with great violence the Committee on Finance ever since it had the misfortune to disagree with him in regard to his plan to promote the public credit and resume specie payments. Not being able to report in favor of his plan, we reported against it, and ever since that time everything that we do seems to meet his disfavor. He says the bill reported by us is dead. I dispute it. The bill is not only not dead, but it liveth and will be the law of the land;

and you here in this bill will make one of its most important and fundamental provisions, the first section of that bill, the law of the land, and I have no doubt that every section of it will be hereafter made so. Now, in justice to the Committee on Finance, let me state what those sections are, because one of the organs of this body can not hear its measures thus arraigned and sit here quietly at any time, in the night or in the morning, without a reply. What are the measures of that bill? The first is that gold contracts shall be legalized. Here it is in this bill. The second is that $140,000,000 shall be set aside to redeem the public debt, and that will be done unquestionably. Now, more than that is already set aside, but it is not applied because the law is not put in force. The third is to tie the fate of the greenbacks to the fate of the bonds. That is done here by the amendment proposed by the Committee on Finance, so as to put the bond and the note on precisely the same footing, both to be paid in gold, both to be treated alike; and I have no doubt whatever that at the next session of Congress the demand of the public as well as the sense of justice of Congress will compel us to authorize the holder of the greenback to receive his bond, dollar for dollar, for his paper money; there is no doubt of it. What else? The other section of the bill, the only material one, is a section which provides for free banking. The Senator himself professed to be in favor of it. He himself desired and voted to withdraw from all the Eastern States more than one half of their circulation with a view to place it in the South, and then to compensate the East by free banking. Those were the provisions of the bill from the Committee on Finance, and there was not one of them that I think the honorable Senator himself would not approve.

But now this bill came to us from the House of Representatives, and I will state very briefly what it is, for I know it is wrong for me to delay the action or vote of the Senate upon it. What is the first section of this bill? It is simply a solemn pledge of the United States that all the obligations of the United States, notes and bonds, shall be paid in gold and silver coin, except only those where the law expressly provides that they shall be paid in lawful money. But my honorable friend says, why the exception? The question shows that he has not examined this matter with his usual care, or he would not have asked it. Why, sir, there are some fifty or sixty million dollars of three per cent. certificates expressly payable in currency. But for this exception they would to-morrow be payable in coin on demand at the Treasury of the United States. There are also bonds issued to the railroads, expressly payable in currency. But for this exception they would be paid principal and interest in gold. The interest on those bonds is semi-annually paid in lawful money. It is necessary to except obligations expressly payable in currency. But we say that with regard to all other obligations, paper money and bonds, they shall be paid in gold and silver coin.

Now, sir, the first part of this section I should like to see the Senate strike out, because it makes the declaration clearer, stronger, and more emphatic than I wish. Why? I do not believe, and I never could reason myself into the belief, that the laws which authorized the issue

of these bonds made a discrimination against the lawful tender money of the United States. I do believe that by a fair and reasonable construction of those laws the bonds of the United States might be paid in lawful money issued within the limits and according to the terms of those laws. But do we propose to pay those bonds in lawful money? Certainly not. We have not the money to pay them. We dare not increase the taxes for this purpose, and so we must postpone the payment of the bonds. I repeat that under the condition of our finances it is impossible to pay any considerable sum of the principal of this public debt either in lawful money or in gold. Our people do not and will not ask us to levy more taxes upon them in order to avail themselves of the legal privilege or right which they have to pay in lawful

money.

They desire to pay of the principal of this public debt not more than one per cent. per annum, a small amount, and to adopt a policy which will in the end pay the whole of it. But what shall we do in the mean time? Shall we suspend specie payment until we can pay the whole of this debt by taxes? Is the payment in specie to be postponed indefinitely? My friend from Indiana says only for two years, and then he would bring it about by hoarding gold and by hoarding greenbacks.

Do our Democratic friends propose to postpone the resumption of specie payments until this debt matures, until we can gather in a sufficient amount of taxes to pay off the principal of the debt in lawful money? No, sir. The honor of the country, the good faith of the nation, the interest of the laborer, of the rich and the poor, and of all classes, demand that we should resume specie payments as early as possible, and place all the obligations of the people of the United States upon the solid basis of gold and silver coin. We can not delay that primary duty; and therefore I look upon this first section as simply a declaration that we will now perform our primary duty of making our notes equal to coin, and I have no doubt that if that policy is pursued and adopted the bondholder will be glad to get the lawful money of the United States in payment of his bond. All that this first section does is to declare as a matter of public policy that the notes and the bonds shall alike be paid in gold; the bonds as they gradually mature, and the notes long before any of the bonds mature. Why, sir, none of these bonds mature until 1881, and we can not get the lawful money to redeem them even at the end of five years, when we have the right to redeem them, except by taxes. We can not draw in the lawful • money of the United States except by taxation. We can not adopt the repudiating scheme of our Democratic fellow citizens of the United States of issuing broadcast in violation of law a large amount of legal tenders, and thus repudiating our debt. I never could see how honest men could propose that. Then, the only way we can get lawful money to pay this debt is by taxation, and our people will endure no more than now exists. They have no desire to assume the burden of paying the public debt at once. They are willing to see a portion of the payment postponed, but in the mean time we can not prolong this suspension of specie payments until we can avail ourselves of that privilege.

I say, then, that the primary duty of the United States is to resume specie payments as quickly as possible, and make the lawful money of the United States equivalent to gold. I look to see the bonds of the United States advancing step by step with the money of the United States until their par value in coin is reached. Sir, it gave me a thrill of pleasure when I saw that the bonds of the United States were worth eighty-nine cents in gold in the markets of London. I do not care who made money by the advance; God knows I did not. I had no interest in it directly or indirectly. I was glad to see our bonds appreciate in the market, and the holders get the benefit of that appreciation; and I trust that in three or four or six months, or a year, these bonds will reach par value in gold.

But it is said, how can you fund the public debt? We will do it just as England and just as every other country did that reduced the rate of interest. Whenever the bonds of the United States rise above par in gold, then we can place in the money market of the world a bond bearing a lower rate of interest. If our bonds this day had reached the par of gold we could put in the market without question or difficulty a bond bearing a lower rate of interest. Sir, I believe that if we would now wisely and persistently, firmly and boldly, march to the resumption of specie payments in such a way as not to distress our people, not by increasing taxes, but by steadily appreciating our public credit until the five per cent. bonds rise to par in gold, the whole of the six per cent. bonds could be paid off. There is now only about fifteen per cent. difference between the market value of the tenforty bonds and gold. If we can wipe out that fifteen per cent. by an appreciation of the public credit, then funding will go on with rapid speed; the whole of the five-twenty bonds will be paid off.

Why, sir, when the bonds of England rose to one hundred and three per cent., then the rate of interest was reduced one per cent. by putting a bond at a lower rate of interest in the money market. That is the only way that you can carry out a process of funding. If we were able to levy upon our people a larger amount of taxes and apply fifty or one hundred million dollars to the payment of the principal of the debt, we could carry on the process of reducing the interest just so much the more rapidly, but we dare not extend our system of taxation for fear of losing the confidence of the people. The only other resort is to advance our public credit, to elevate our bonds from the slough of despond in which they were cast by the burden of the war, to elevate our public credit to where it was before the war, and then the burden of this interest will pass away, and we may hope to see our bonds bearing in the money market of the world, in the hands of the rich and the poor, the foreign and the native, all the credit that now clusters round the three per cent. consolidated debt of England. Then it may be that we will not satisfy ourselves by reducing the rate of interest to five but to four and a half or four per cent.; and probably within twenty or thirty years we may stand as Great Britain does, with our credit such that we can get par for our bonds at three and a half per cent. interest in gold.

But, sir, in the mean time we must not be diverted from the diffi

culties that stand in our way. In my judgment the plan reported at this session by the Committee on Finance is the best, the most rapid, and the most effectual way to bring about this state of affairs. I am not discouraged by the reluctance of the Senate to assume it. I know that such propositions are always of slow growth. But I assure my honorable friend from Indiana that if he supposes that any section or line or word of that currency bill is dead, or even that it sleeps, he is very much mistaken. He will find it either in whole or in part meeting him at every stage of this progress until every word of it is ingrafted in the laws of the United States.

I know that my friend, for whom I have the utmost kindness and the greatest good feeling, did not intend any unkindness in the remarks he made; but when he attacks a committee of this body, and speaks of me as the chairman of that committee, and accuses us of being guilty of vacillation and mutations and changes in our reports and bills, as a matter of course he naturally excites a feeling which will not submit in quiet to such an imputation.

Sir, I myself came with slow reluctance to the declaration made in the first section of this bill. I declare now to you that my construction of the law under which these five-twenties and under which the greenbacks were issued still remains unchanged; but I do assert, as a question of public policy, that it is wise now for us to declare in the language of this bill that the bonds and greenbacks alike shall be paid in gold as rapidly as we can do so; that these greenbacks and these bonds may be linked together in every law that is passed; that every privilege that is given to the bond-holder shall be given to the holder of the greenback; that both together shall rise gradually to par in gold, when the bond-holder may be paid off by bonds bearing a lower rate of interest with a large saving to the people of the United States. I think this question has been fully considered, and I hope, therefore, that without any more debate on the subject to-night we may have a vote upon it.

The bill, after being amended, became the act of March 18, 1869.

NATIONAL BANKS.

IN THE SENATE, MARCH 29, 1869.

LIFORNIA

THE Senate having under consideration the bill supplementary to an act entitled "An act to provide a national currency secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof," approved June 3, 1864, Mr. Sherman said:

IF I can get the attention of the Senate, at the request of several Senators who have become members of the body since the subject was under debate at the last session I will state very briefly the purport of this bill. Although the Senators who listened to the debate at the last session will not need the information, still, as the bill contains several