no limit. As my colleague remarks to me, and I have no doubt he is correct, although I have not examined the official statement, there is no evidence on the files of the Department of State in regard to the amount of the claims, except the ex parte evidence of the claimants themselves.

There is one other point that I submit to Senators: whether we can do this with a just regard to the memory of the men who preceded us on this floor, or who managed the Government from its foundation. This bill, in language which it seems to me is offensive, assumes and declares in so many words that all the acts of the United States Government relating to this controversy before 1800 were wrong. I will read it to you. It goes on and provides for this commission. Remember, the United States Government never acknowledged the binding operation of these treaties during the time these claims accrued, and yet this bill declares that these commissioners, when they pay these claims, "shall be governed in their decisions by the principles of justice, the law of nations, and former treaties between the United States and France, to wit, the treaty of amity and commerce of the 6th of February, 1778, the treaty of alliance of the same date, and the consusular convention of the 14th of November, 1788."

Here this bill, nearly eighty years after the proclamation of neutrality, reverses and overrules the decision of George Washington and his Cabinet and the whole American people. We now declare that we will pay these claims, recognizing those treaties to be in full force; in other words, that the seventeenth and twenty-second articles of the old treaty, which Washington declared to be inoperative, and the guarantee of the West India islands, which was declared by the whole Government to be applicable only to a state of defensive war, shall be enforced.

I am not willing to legislate in any such view. If this $5,000,000 is to be distributed among these people, let it be so. But why should we revive these treaties and do what our Government refused to do over and over again? And yet that is what we do. We declare that this money shall be distributed upon the assumption that those treaties were in force in 1800, and for the distribution of this money we revive all those treaties which our Government always refused to do. In other words, this bill is based upon the French idea of our controversy, and not upon the American idea. It is based upon the assumption that we were wrong and that France was right, and that we are required to pay all the claims that grew out of the violation of the articles of a treaty that was declared to be inoperative upon us, not applicable to the condition of affairs; a treaty that was rejected by the executive authority, by the judicial authority, and by express terms of law by the legislative authority. And yet we revive these treaties in order to distribute this money among our citizens.

These claimants have no equity on another ground. This policy of neutrality was adopted at their instance, for their benefit, for their safety, for their protection, and although they lost in many cases, yet the actual profits during that period of our commerce were greater than ever before in American history. Senators may be surprised when I

tell them that our exports and imports had risen from $31,000,000 in 1793 to $100,000,000 and over in 1800. During this time of detentions, of seizures, of captures, our commerce had sprung into the greatest activity that it had ever had. Profits and fortunes were made that bear no comparison with those that have been made since. Our trade sprung up threefold in seven years. While these people met with large losses by detentions and seizures both by Great Britain and France, because Great Britain also pursued this unlawful foray upon our commerce, yet our flag was the only neutral flag among the commercial and maritime nations, and our merchants made enormous profits. Our commerce increased threefold, and for the first time we appeared among the nations of the earth with the prospect in the speedy future of becoming one of the great commercial nations. Yes, sir, in seven years our commerce, both external and internal, increased wonderfully; our imports rose from thirty-one to one hundred millions, and our exports in the same ratio. Our farmers were all occupied. The wheat and the grain from America fed the soldiers and the citizens of France. They fed Great Britain. They were exported to all the countries of Europe; and although we did suffer some losses, this among the rest, yet the general condition of our country, its general prosperity, the enormous profits made by these merchants more than compensated them for all their losses. I have no doubt these very claimants would have been glad for more spoliation, more wars between the nations of Europe, in order to give them an increased profit from the neutral carrying trade which they then enjoyed.

Now, Mr. President, there is only one other consideration which I desire to present, and then I will relieve the Senate. The passage of this bill, in opening up antiquated claims, will, I think, have a very serious effect in many other directions. If a claim can be persistently urged for seventy long years, under the adverse circumstances that surrounded this one, and finally be crowned with the success of an appropriation of $5,000,000, to be distributed in an indefinite way among unknown or dead claimants, how eager will other men be to revive old claims! They are scattered through our whole history. Why do you not redeem the continental money? Your act of 1792 to sustain the public credit reduced that money to the value of one dollar for a hundred. Why do you not pay the children of the revolutionary soldiers, whose fathers fought and bled and died for us and were paid off in continental money at one dollar for a hundred? You. promised the officers of the army in the revolutionary war to give them half pay for life; in some cases for five years. Did you ever perform that obligation? Why did you not do it? These were worthy subjects for your consideration, and their descendants still live and flourish among you. It is true that we did the best we could in the agreement with the soldiers and officers of the Revolution. In the general bill establishing the public credit we did give the officers in some cases half pay, compounded with them, compromised with them. I might go through our list and name an immense number of such clains. Sir, the success of this claim of seventy-two years' standing will give encouragement to the revival of a great mass of others.

If these claims are just, we ought not to compound with the claimants at twenty-five cents on the dollar, after keeping them out of their money for seventy-two years. Sir, there is no justice in the claims.

Mr. President, who can tell the effect of the passage of this bill upon the public credit? If we open the door to all the multitude of claims that may arise it will very seriously impair it. We have been pursuing the policy since the close of the war of a gradual reduction of taxes. We have now diminished our taxation until it approaches very near to our expenditures. We can not now revive these old claims and pay them. It is no time to do it. It will affect the public credit.

Mr. President, I believe that this claim has no merit either in law or in equity. I believe that the Government of the United States never appropriated these claims, but did all they could to enforce them. They were abandoned for high and justifiable public reasons, and under circumstances that gave the parties no claim whatever upon the Government. They have already received large benefits and great profits from the policy adopted by the Government. This money is to go mainly to a class of people who have no equitable claim. The whole bill is framed with a view to parcel out $5,000,000 among a lot of corporations who have kept up this controversy and continued it year after year by an organization in the city of Washington. I think, therefore, the Senate, where the basis of the claim originated, can not do better than at once to disapprove it. I hardly expect that, because I know a kindly usage has sprung up in the Senate, by which, because one Senate thirty or forty years ago passed a bill, therefore this Senate must do it. That has got to be a general idea, and this French spoliation bill has passed the Senate on something like that idea. It passed the Senate in 1835, and therefore it must pass the Senate in 1892, or 1950, and be sent to the House. But I do think after the lapse of time that has occurred we might at least say, "Let this controversy be buried; let these claims be abandoned; they will be no good precedent."

REISSUE OF NOTES.

IN THE SENATE, JANUARY 14, 1873.

MR. SHERMAN, from the Committee on Finance, submitted the following report. The Committee on Finance, in obedience to the resolution of the Senate of the 6th instant, as follows: "Resolved, That the Committee on Finance be directed to inquire whether the Secretary of the Treasury has power, under existing law, to issue United States notes in lieu of the forty-four million dollars of notes retired and canceled under the act of April 12, 1866,” beg leave to report:

THAT a construction of the act of April 12, 1866, renders necessary the examination of the several acts authorizing legal-tender notes. The power of the Secretary of the Treasury to issue the notes described in the resolution, if it exists, must have been conferred by these acts. The

authority of Congress to authorize their issue has been disputed, but may now be considered as settled by all departments of the Government. It was exercised by Congress only under the most pressing necessity.

As an incident to the powers to borrow money, to coin money, to declare and maintain war, and to provide for the national defense and general welfare, it was first asserted and exercised by Congress February 25, 1862, when to coin the public credit into money seemed the only expedient left to maintain the authority of the Government during a pressing war. This authority was again exercised July 11, 1862, and March 3, 1863. The several acts of these dates declared United States notes to be lawful money, and a legal tender in payment of all debts, public or private, within the United States, except for duties on imports and interest on the public debt; and they were to be issued only if required by the exigency of the public service for the payment of the army and navy and other creditors of the Government. The amount of each issue was carefully limited. The aggregate could not exceed $450,000,000, and in fact never exceeded $433,160,569. The power thus exercised was felt to be a dangerous one, liable to abuse, and was carefully limited and guarded. Though the war continued two years and more after the passage of the act of March 3, 1863, and immense sums were borrowed upon various forms of security, the limit of United States notes was not enlarged. By the proviso in section 2 of the act of June 30, 1864, under which the national debt was largely increased, it was provided, among other limitations, "nor shall the total amount of United States notes issued, or to be issued, ever exceed $400,000,000, and such additional sum not exceeding $50,000,000 as may be temporarily required for the redemption of temporary loan." It is apparent that this provision in a loan act was not only a limitation upon previous acts authorizing United States notes, but was a declaration of public policy and a pledge of the public faith to the national creditors that their securities should not ever thereafter be impaired by any increase in legal-tender notes. The United States notes were regarded as a necessary medium or means to borrow money during war, with full knowledge that in due time they were to be redeemed in coin, and that any increase would impair their value and affect the value of all public securities.

The close of the war was followed with measures by both the executive and legislative branches of the Government to limit and reduce the volume of legal-tender notes still further. All forms of temporary loan, including the legal-tender interest-bearing Treasury notes, were funded into bonds. For this purpose a portion of the $50,000,000 of reserved United States notes under the act of June 30, 1864, was used for the redemption of temporary loan; but these notes were soon redeemed and canceled, with the avowed policy of contracting the cur

rency.

The act of April 12, 1866, referred to in the resolution of the Senate, was passed in approval of and in accordance with the avowed policy of Mr. McCulloch, then Secretary of the Treasury, to retire all short-time liabilities, by funding them into bonds, and to reduce the

volume of United States notes, so that those outstanding should be, from their scarcity, at par with gold. The only limitation made to this power of contraction was by the following proviso:

Provided, That of United States notes not more than ten millions of dollars may be retired and canceled within six months from the passage of this act, and thereafter not more than four millions of dollars in any one month.

It is clear that this act authorized the payment, cancellation, and destruction of "all obligations issued under any act of Congress, whether bearing interest or not," and the issue in lieu thereof of any description of bonds authorized by the act of March 3, 1865. The issue of the bonds necessarily involved the destruction and cancellation of the obligations received in exchange for them; for the act declared that it should not be construed to authorize any increase of the public debt. To hold that any of the obligations, "whether bearing interest or not," received by the United States in exchange for its bonds, can be issued again, is utterly inconsistent with the primary object of the act the funding of the debt-and with the provision that the debt shall not be increased by the exchange. But for the provision limiting the cancellation of United States notes, all of them might have been canceled when received in exchange for bonds.

Subject to this limitation, the act of April 12, 1866, treats United States notes as one of the numerous forms of demand or short-time obligations which it was public policy to fund and retire, with a view to specie payments. The bonds were to be issued solely for the purpose of securing the cancellation and final payment of an equal amount of other indebtedness. United States notes could be issued as a medium of the exchange; but, if so, they were to be used to retire other obligations. To a limited extent they could be canceled and retired, and to that extent their cancellation was as complete a payment and extinguishment as if a compound-interest note was canceled and retired. It was the desire of the Secretary of the Treasury to retire the United States notes or to contract the currency more rapidly than Congress deemed prudent, and the object of the proviso was to limit the contraction, but at the same time to provide for a gradual reduction of the currency, with a view to specie payments.

To construe the act as permitting the reissue of United States notes canceled under it would allow the Secretary to increase the debt in direct violation of the act. To evade the act, he would only have to receive the notes in payment of a bond issued, and then cancel the notes and issue others in their place. In this way both notes and bonds would be outstanding. The plain intent of this act was to reduce and contract the currency. To render this more apparent, we refer briefly to what preceded the passage of the act of the 12th of April, 1866.

In December, 1863, after the passage of the acts authorizing the issue of legal-tender notes, and when the temporary deposits reached $145,720,000, for meeting which $50,000,000 of the $450,000,000 United States notes authorized were to be held as a reserve, Secretary Chase, in his annual report (p. 17), said:

The limit prescribed by law to the issue of United States notes has been reached, and the Secretary thinks it clearly inexpedient to increase the amount.