Sir, I have been struck by the absolute poverty of invention of those who in our day seek to dispense with the gold standard. Every plan proposed, every idea suggested, is but the repetition of plans and ideas proposed in the American colonies, in Great Britain, in China, and by George Law. Their schemes have been tried and exploded over and over again for four thousand years; and yet gold and silver now measure every article of property, and will measure the daily fluctuations of the contrivances they invent.

And now, sir, let us turn from the main point, and briefly examine the third question: Are the agencies and measures prescribed by the act of 1875 sufficient for the purpose?

I need not remind this Senate and Senators around me how reluctantly I came to the support of this bill, because it does not contain provisions that for years I have struggled to secure. Still, sir, I feel bound to say that it embodies ample agencies and powers to carry it into a full execution, without the addition of a single provision by Congress. The first section of the bill is limited to the redemption of fractional currency. This, as I have shown, can now be fully executed, and the only criticism is that it has not been sooner executed. Not only can the notes be redeemed in silver without loss, but the actual cost of coining the silver, strange as it may seem, is less than the printing of the fractional currency.

The cost of coining subsidiary silver coin is shown by the Director of the Mint to be from one and a half to two per cent.; and it is much less when the mints are running to their full capacity.

The actual profits of seigniorage will not only pay this cost, but more than the interest on the bonds we may sell to procure the bullion.

On the other hand, the cost of the fractional currency is three and a half per cent. of the amount issued; or, to be exact, the expense of preparing and redeeming the fractional currency for the year 1875 was $1,410,746.95. The amount issued was $40,365,145. And what is worse, the average life of these notes is less than one year, so that this expense is an annual one almost equal to the interest on the whole sum. Thus the stopping of the issue of fractional currency will save us $1,400,000. The silver coin pays a debt when issued, while the fractional currency only renews it, and it must be replaced by another note within a year. Sir, the wisdom of this provision is now so demonstrated that a committee of the House unanimously refuse to print the currency and demand the issue of the silver coin, while two months ago the scheme was pronounced visionary, impracticable, and a sham. We are now at a specie basis for our fractional currency; and yet when the law was enacted we were told it would be hoarded, bought up by money-changers, or exported. We are now told "Nobody wants the silver; they prefer the fractional notes." So it is; and so also it will be when we approach the gold standard. Nobody will want to give up the United States notes for gold when the note will buy fully as much as gold.

But it is said we can only buy the silver bullion by issuing bonds. That is true now, because our surplus revenue is not large; but how will the United States ever pay its notes at a cheaper rate? One mil

lion of dollars of five per cent. bonds will, to-day, buy sufficient silver bullion to make $1,200,000 in subsidiary silver coin. When and how can this operation of paying our debts be better commenced, unless we mean to postpone payment indefinitely? It has been said that the five per cent. bonds authorized have been exhausted? Not so. The law is plain and express, and was designed and intended to authorize the Secretary of the Treasury, not only to use any surplus revenue, but "to issue, sell, and dispose of, at not less than par in coin, either of the descriptions of bonds of the United States described in the act" for refunding the public debt. The refunding act is only referred to for the "description " of the bonds authorized. But to make this construction more clear, it is provided "that all provisions of law inconsistent with this act are hereby repealed." Thus, not only the public faith, but all the surplus revenue and the public credit, as represented by either of three kinds of bonds, to wit, those bearing four, four and a half, and five per cent. interest in gold, is granted to the Secretary to enable him to execute this trust. The only limit in amount is the amount that will enable him to execute the law. The only limit of price at which he can sell the bonds is "not less than par in coin."

The second section is only material as it tends to induce the coining of gold by repealing the mint charge.

So much of the third section as relates to national banks is not material, except as it provides a way by which circulating notes may be issued; but if issued it will be with full knowledge that in due time they must be redeemed in coin at the pleasure of the holder.

Then comes the provision-the vital provision-of the law: "And on and after the 1st day of January, A. D. 1879, the Secretary of the Treasury shall redeem in coin the United States legal-tender notes then outstanding on their presentation for redemption. Then follows the ample power already quoted: "And to enable the Secretary of the Treasury to prepare and provide for the redemption in this act authorized or required, he is authorized to use any surplus revenue from time to time in the Treasury not otherwise appropriated, and to issue, sell, and dispose of," at not less than par in coin, either of the bonds already referred to. Such are the duties enjoined, and such are the powers

conferred.

Sir, in this respect, both the powers and duties of this act are clearer and stronger than in the acts under which Great Britain resumed and France is now resuming. Who can doubt that with or without further legislation the work can be accomplished by a Secretary who will obey and execute the law? The power to "prepare " for resumption is a broad discretion that commences with the passage of the act and continues during every hour and day of its existence, but is one to be exercised with exceeding caution and moderation.

But, sir, this is not all. When Congress passes an act imposing a duty upon a public officer, it implies an obligation that it will furnish all the aid and auxiliary legislation necessary to carry it into execution. The extent and nature of this is within the discretion of Congress; but when the power conferred upon him is ample, and the duty imposed

is clear, he must act even though Congress neglect its duty to support him by auxiliary legislation.

And this brings me to the last proposition I propose to discuss, and

that is

What additional legislation ought Congress now to adopt in aid of the law?

The Secretary of the Treasury recommends, first, that the legaltender quality of the United States note be taken from it before 1879. I can not agree to this, for the United States note is as much a contract to pay money as a bond; and we can not take from that note any quality that gives it value, until we are prepared to redeem it in coin. The proposition is too much like the act of March, 1863, already referred to, which stripped the note of its quality of convertibility into bonds.

His second recommendation is

That authority be given for funding legal-tender notes into bonds bearing a low rate of interest. . . It seems probable that a bond bearing interest at the rate of four per cent. would invite the funding of a sufficient amount of legal-tender notes to lessen materially the sum of gold which, in the absence of such provision, must be accumulated in the Treasury by the 1st of January, 1879, to carry out the imperative requirements of the act of January 14, 1875. If it be apprehended that authority to the Secretary to fund an unlimited amount of notes might lead to too sudden contraction of the currency, Congress could limit the amount to be funded in any given period of time. The process being in no sense compulsory as to the holders of United States notes, and the rate of interest on the bonds being made low, it is not probable that currency which could find profitable employment would be presented for redemption in such bonds. Only the excess of notes above the needs of business would seek such conversion. Authority to the Secretary of the Treasury to redeem and cancel two million of legal-tender notes per month by this process would greatly facilitate redemption at the time now fixed by law, and besides would have the advantage of publicity as to the exact amount to be withdrawn in any given month. Bonds issued for this purpose should be of the denomination of fifty and one hundred dollars, and any multiple thereof, in order to meet the convenience of all classes of holders of United States notes.

The President in his annual message recommends

That the Secretary of the Treasury be authorized to redeem, say, not to exceed $2,000,000 monthly of legal-tender notes, by issuing in their stead a long bond bearing interest at the rate of 3.65 per cent. per annuin, of denominations ranging from $50 to $1,000 each. This would in time reduce the legal-tender notes to a volume that could be kept afloat without demanding redemption in large sums suddenly.

3. That additional power be given to the Secretary of the Treasury to accumulate gold for final redemption, either by increasing revenue, curtailing expenses, or both-it is preferable to do both; and I recommend that reduction of expenditures be made wherever it can be done without impairing Government obligations or crippling the due execution thereof.

These recommendations, substantially concurring, are wise, and would be efficient; and to secure them ample means are provided by the application of the sinking fund for two or three years without additional taxation. Indeed it is neither wise nor prudent to apply the sinking fund to the purchase of bonds not due, at a high premium, when it may be applied, according to the act creating it, to the purchase of notes already due.

The honorable Senator from Vermont [Mr. Morrill] has introduced

a bill, and a number of other bills and propositions relating to this subject have been referred to the Committee on Finance; and the elaborate resolutions of the Chamber of Commerce of New York are now before us.

I will not anticipate the provisions of these various propositions, except so far as to say that I will cheerfully support any measure of wise economy, proposed to strengthen the public Treasury; that I will cheerfully vote for a moderate tax on tea and coffee, because this will increase our revenue without adding to the cost of the articles, and will enable us to repeal other taxes that are both a burden and an inconvenience, and will also strengthen the Treasury; that I will gladly vote for the voluntary conversion of a limited amount of United States notes into bonds, as each of those measures will tend to "prepare" us for a specie standard. But, sir, each of these measures, and others that may be proper, are not, in my judgment, indispensable to the full and complete execution of the law of 1875 on or before the 1st day of January, 1879.

Indeed it may well be questioned whether all of them may not be properly postponed until the next session, when the deliberate judg ment of Congress, guided by the sense of the people, can be rendered. I would gladly vote for them now; but we have acted together thus far, and I will not unduly press upon my associates measures they do not fully approve.

Sir, I have a confident belief that if Congress will now hold fast to the law as it stands, the drift of events and the practical operation of the law will not only vindicate its wisdom, but will secure in due time every proper auxiliary legislation to carry it into full execution. The duty of the hour demands firmness and faith. There are times in the lives of nations and individuals when the temptation is strong to turn from the path of honor, to shrink from and evade the performance of obligation. Then it is more than ever that the old adage should be remembered that "honesty is the best policy." For one I feel that my course is as clear as the sunlight of heaven; and I trust that the great party to which I belong may now, as in sterner times and under greater difficulties, stand fast to the national honor pledged by it in the act of 1875; and when the difficulties inseparable from a great duty have passed away, we will be as proud of our position now, as we are of the firmness and faith with which we prosecuted a great war, and secured to the people of our day and of future generations the blessings of national union and universal liberty.

I move that the memorial of the New York Chamber of Commerce be referred to the Committee on Finance.

The motion was agreed to.

FRACTIONAL CURRENCY-SILVER COINAGE.

IN THE SENATE, APRIL 11, 1876.

THE bill to provide for a deficiency in the Printing and Engraving Bureau of the Treasury Department, and for the issue of silver coin of the United States in place of fractional currency, being before the Senate, Mr. Sherman said:

MR. PRESIDENT: I was in hopes that the Senate would be willing to act upon this bill without much discussion; but, as Senators desire it, it is due to the Senate that I should state in behalf of the Finance Committee the reasons for the passage of the bill and for the amendments proposed by the Committee.

The first section of the bill contains simply an appropriation of $163,000 to provide for engraving and printing and other expenses of making and issuing United States notes; and it is plainly unobjectionable, unless the Committee on Appropriations desire to change the

amount.

The second section directs the Secretary of the Treasury to issue silver coins of the United States of certain denominations in redemption of an equal amount of fractional currency, and is, in substance, the provision of the existing law, but is inserted by the House of Representatives for the purpose of making the law mandatory.

The third section of the bill, however, presents the most difficult question in political science. This section, as sent to us by the House of Representatives, provides:

That the silver coins of the United States of the denomination of $1 shall be a legal tender at their nominal value for any amount not exceeding $50 in any one payment, and silver coins of the United States of denominations of less than $1 shall be a legal tender at their nominal value for any amount not exceeding $25 in any one payment.

This presents the question of the single or double standard, which has probably been the occasion of more pamphlets, books, and documents than any other question whatever in political science. As a general rule, the English authors have favored a single standard of gold; the French writers have generally favored a double standard of gold and silver; while there are writers without number who have advocated, some the single gold standard, some the single silver standard, and very many the double standard. I might state the argument briefly, without going into details, in the language of a recent author, in which the arguments in favor of the single gold standard are concentrated into three:

The advocates of the gold valuation say: "There is a constant liability to fluctuations in the standards of value. It is better therefore that, in order to secure unity, there should be but one standard, and this standard should be gold."

The second argument brought forward by the advocates of gold valuation is, that silver is too heavy for the present purposes of commerce; that its carriage and handling are inconvenient, and that gold, being so much lighter, is more suitable. The third argument or allegation is that all civilized nations either have adopted, or show the disposition to adopt, the gold valuation.-(Seyd, "Metallic Currency of the United States," page 39.)