unavoidable effect of thus bestowing labor on gold bullion, and putting it in a more convenient shape for exportation, is, at the very first reversal of trade, to cause our coin to flow abroad, instead of other commodities. That is the experience of nations, and has been for more than a hundred years.

But it is said that, notwithstanding all the arguments and opinions of political economists, England has insisted upon free coinage. I have already sufficiently explained the reason of that. They adopted it, I believe, in the reign of King William III.; and, having adopted it, they have kept to it with the natural tenacity of the English people, while their writers have condemned the policy. I read here from Adam Smith, from McCulloch, from Mill, from nearly all those men who are recognized authorities the world over on questions of political economy, who have said over and over again that it was a foolish system. Here is the opinion of the present Chancellor of the Exchequer, a man of great ability, who quotes these authorities, reads them to the British Parliament, and says that England has persisted in this thing too long, and to her injury. It is true also that he said at the time when they were codifying the mint laws, that it was better to postpone a change until the question of international coinage should be settled.

Now, there is one thing to be considered by our friends from the Pacific coast. This is a bill to codify the mintage laws of the United States. It does not adopt new principles; it makes but few changes in the general laws, except in transferring the head of the Minting Bureau to Washington, instead of leaving the system in the incongruous position of making the Director of the Mint in Philadelphia the superintendent of all the mints in the United States. This bill is rather a codification of the existing laws; and the Committee on Finance have therefore refused to ingraft on it many ideas that they have developed and would like very well to see in the form of law. For instance, we are strongly in favor of an international coinage, of assimilating our coinage to that of other nations, and making a common metric standard of international coins by which the gold dollar, the sovereign, and the franc may be interchangeable without recoinage. We have not ventured to put our opinion on that point into this bill, because it is not in the existing law, but would be a radical change.

Now, I ask Senators whether it is wise in this bill to repeal the existing law which, for reasons of political economy, has fixed a mintage charge upon gold coin, and to make an effort to make this codification bill carry such important changes? I agree with the Senator from California, that it is not necessary to look at this matter as a question of tax. The law now levies upon the labor done for the miner of California the trifling charge of one half of one per cent., a little more than the cost. We charge the national banks one per cent. for printing their bank notes; we charge every citizen three cents for carrying letters in the mail; and we levy taxes in every form upon various articles of consumption—on tea, coffee, sugar, and the other necessaries of life. Now, say that even if we were about to throw off these charges, whether you call them taxes or not, we ought not to throw off, first, that which is not a tax at all, but is only a charge for a service actually rendered.

I

I trust that this effort to force through this proposition to abolish the mintage charge, in a bill to codify the mint laws, to simplify and make consistent the laws which regulate the various mints of the United States, will be abandoned; because Senators must perceive that the attempt to make any radical change in the existing system in this bill will only endanger it. It is necessary to pass the bill promptly in the Senate in order that it may receive the necessary attention in the other House before adjournment. It is perfectly manifest that the attempt to make an utter change of our policy on the question of the mintage charge, and to follow the example of Great Britain, would simply defeat the bill, which has already been so long delayed.

The whole debate in England upon this subject, which I now have before me, shows that every person who participated in the discussion, without exception, agreed that the system of free coinage was wrong in principle and in theory, and ought to be abolished; but in the revision of the law-it was then under the charge of Mr. Lowe as Chancellor of the Exchequer-the matter was left as it stood, and the reason, as stated by Mr. Lowe himself, was that it was better to postpone any change as to the rate of seigniorage until the settlement of the question of international coinage, when, as a matter of course, the laws of the different nations would have to conform to it. Mr. Lowe, in his speech advocating his views on the subject, quoted all the authorities from which I read yesterday, and a great many others, showing that experience, political economy, and philosophy had concurred in establishing the necessity of a seigniorage.

Let me state another fact. It is shown, I think, in the debate in Parliament, that while England possesses nearly twice the wealth of France, and certainly nearly twice the commerce, yet the gold and silver coinage in England is only about one fifth of that in France; and this was attributed in a great measure to the fact that, as Great Britain coined gold without charge, therefore gold was the cheapest product to export, while the French coin, which secured a local habitation by a seigniorage of only one fifth of one per cent., remained in France; and so of Germany.

Now, sir, I will add another fact, and that will be all I desire to say in reply to the letter of Mr. Ralston, who is cashier of the Bank of California. I have read that letter. It contains nothing new, except one very remarkable statement, which he did not make with a full knowledge of the facts, or certainly he would not have made it. He says our profit on coinage is four million and some hundred thousand dollars; that is, that the difference between the cost of our nickel or subsidiary coinage and its actual nominal value is $4,000,000. That is very true; but we must redeem that coinage at par, and this bill provides for its redemption. We might just as well say that on the greenbacks which we publish and print we make a profit of $340,000,000, because it costs us only $1,000,000 to print $341,000,000. But we must redeem them at par in gold; so that all the profit from our subsidiary coinage disappears when the day of redemption comes, and that is coming nearer constantly, day by day.

There is one other fact. A great deal of stress was laid by the Sen

ator from California [Mr. Casserly] on the fact that the mint charge in this country was a recent one. Well, sir, up to 1849, I think it was, the Mint of the United States bought gold of foreign countries in the form of bullion, precisely like any other commodity, and coined it at the Mint. Having a monopoly of the coinage, it practically had a monopoly of the bullion trade of this country. The discovery of gold in California changed the whole condition of things, and this country became the great gold-producing country of the world. Then the Congress of the United States first turned its attention to the necessity of establishing a seigniorage charge, and regulating the difference between the value of gold and silver; and I have here the report of the Secretary of the Treasury, Mr. Corwin, under Fillmore's administration, calling attention to the large loss suffered by the United States by this changed condition of affairs, and by the fact that bullion was presented for coinage at the mints, not imported from abroad as a commodity and purchased at the market price, but presented by our own miners, and that the law made no provision at all for the disposition and management of this gold bullion or coinage. He therefore recommended that a change be made in the relative value of gold and silver bullion and coin, so as to conform to the standards adopted in England and in France, and recommended that a seigniorage be put upon gold coinage sufficient to pay the expense of it. That recommendation was referred to the Committee on Finance of this body, of which Mr. Hunter was then chairman. I hold in my hand a very elaborate and interesting report, of many pages, made by Mr. Hunter, in which the subject is fully discussed, giving many tables. The conclusion arrived at after two years' discussion, by the unanimous vote of both Houses, was, first, that on account of the discovery of gold in California it was necessary to change the relative value between gold and silver, by reducing the proportion of silver to gold, and, second, that it was necessary to establish a seigniorage charge on gold. There had always been a seigniorage charge on silver in this country, but as gold was not produced to any considerable extent-I believe nowhere except a little in North Carolina-there was no seigniorage charge upon it. A seigniorage charge was then established of one half of one per cent. Mr. Hunter states the case very strongly. He says: "If we do not establish a seigniorage charge, the United States may be compelled, at an enormous expense, to convert the whole gold produced in this country into coin, merely to enable people to export that coin; and we shall have to go through the same process with other nations." The subject was then fully considered, fully debated and acted upon, and that seigniorage was adopted. The result is that since that time about one half of the gold produced in this country has been converted into coin.

I will allude to a remark made by the Senator from Delaware [Mr. Bayard] a while ago, which shows that upon one point he is mistaken in regard to the relative value between bullion and coin. I have stated the fact that a charge of one half of one per cent. was put upon gold coinage. By the gradual improvement of machinery we find that gold can be coined for less, and the concurring authority of all with whom I have conversed upon the subject is that three tenths of one per cent.

will pay the mere cost of making the requisite assay, refining, and reducing it to standard gold, and stamping it as Government coin. Three tenths is the lowest; and even then there is upon the Government the expense of the officers of the mint, the expense of building mints, and a large amount of other expenses.

But the Senator says it will not be exported in the form of coin, but rather in the form of bullion.

On the contrary, there is no form in which gold can be put so convenient for exportation as in rouleaux of twenty pieces of twenty dollars each, both for purposes of exchange and for purposes of merchandise; because when reduced to gold coin of the standard, it is nine tenths fine precisely, and is in the shape that it is used by every nation in Europe, except England, for recoining, while bullion may be in various forms and conditions, and of various finenesses. The Government of the United States is called upon, without cost, at its own expense, to convert the whole gold product of the United States, at the expense of the people of the United States, into a form most convenient for the goldsmiths and mints of foreign countries. In England, gold coin is ninety-two hundredths fine, and all that is necessary to convert our gold coin into English sovereigns is to add one two-hundredth part of refined gold, melt it in a crucible, and stamp it with the British insignia. The result is that, if the balance of trade should turn against us, the most valuable form in which gold could be exported abroad would be in the form of coin.

The reason why I oppose the abolition of this charge so strenuously is not because it involves the loss of $100,000 a year, although there is no reason why we should put this labor on the gold product of private individuals, at our own cost; but it is because I believe it will have an injurious effect in regulating the balance of trade, and take from us, at the time when it is most needed, the actual coin, the life-blood of the country, instead of bullion. The exportation of bullion has an effect upon our commercial relations very different from the effect of the exportation of our coin.

The immediate result of the abolition of this charge will be to force all the gold produced in this country into the mint at San Francisco, to be there reduced, at the expense of the United States, to nine tenths standard fine in the form of gold coin.

The gold will flow into the nearest mint. Why should it not be left to be governed like the trade in other commodities? This bullion is not the bullion of the United States. It is the property of private persons. Mr. Ralston, whose letter has been read here, handles more of this bullion than probably all the people of two of the greatest States of the Union-I believe he is cashier of the Bank of California. And yet we are required, at the expense of the United States, to reduce all the gold product of this country into a convenient form for exportation, so that the mints of foreign countries may take our gold coin and melt it over without cost, loss, or wastage.

It seems to me that this will be a bad commercial operation. It may be of some benefit in a local way, by building up a large manufacture in one locality, but in its effect upon the commerce of this country

it must be injurious. It has been injurious in England. The opposite policy has been beneficial in France. We have tried the opposite policy for twenty years, and no complaint has been made except as to the rate. Mr. Knox, who sent this bill to us, complained only of the rate of seigniorage as being too high; and I think myself it was too high. As far as I was concerned I was willing to adopt the French standard of one fifth, or the German standard, which, I believe, is one fourth; but the Committee thought it was better to cover the cost, which is three tenths of one per cent.

INCOME TAX.

IN THE SENATE, JANUARY 25, 1871.

THE Senate having under consideration the bill (S. No. 1083) to repeal so much of the act approved July 14, 1870, entitled "An act to reduce internal taxes, and for other purposes," as continues the income tax after the 31st day of December, A. D. 1869, Mr. Sherman said:

MR. PRESIDENT: The proposed repeal of the income tax necessarily involves the consideration of our whole financial policy, and can not be hurried through upon the interested clamor of the comparatively few persons affected by it. Nothing is more pleasing than to repeal taxes, and it would be easy to show that the repeal of any tax now levied would give relief. The income tax is now only levied upon those whose good fortune it is to enjoy large property, or whose salaries or profits lift them far above the pressing wants that rest upon the great mass of our people. The possession of large property and the ability to earn large income necessarily give to those enjoying this income great influence over public opinion. They speak through the daily press, from high official stations, from great corporations, from cities where wealth accumulates, and with the advantage of social, personal, and delegated influence. I know the power of this influence.

Besides, the income tax is subject to some objections which touch the pride and feelings of the influential class upon whom it is levied. From the nature of the tax it must authorize some espionage into the private affairs of individuals, especially if fraud is suspected; but in this respect it has been greatly modified. It now stands as a tax of two and a half per cent. on gross incomes over two thousand dollars. If this income is capitalized at $33,333, which at six per cent. would yield $2,000, it stands as the equivalent of a property tax on one and a half mill on the dollar on property in excess of $33,333. It is the only tax levied by the United States that falls upon property or office, or on brains that yield property, and in this respect is distinguished from other taxes levied by the United States, all of which are upon consumption, the consumption of the rich and the poor, the old and the young. I make this the simplest division of taxes-taxes upon possessions and taxes upon consumption. As the income tax now stands, it is estimated that it will yield $12,833,000 out of an aggre