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embarked in reckless speculation, and a wild and eager chase after foolish things.

But, sir, when your United States notes depreciate, they carry down with them United States bonds. Some Senators think we ought to go on issuing these notes until the mere operation of the law of supply and demand will compel the people to convert them into bonds. Why, sir, it is the history of such operations that as the United States notes go down so the bonds go down. Stocks that I know to be worthlessinflated stocks of broken railroad corporations-are now selling in New York for more money than the six per cent. bonds of the United States, with interest payable in gold and silver coin. It is one of the tendencies of the times, and the more you inflate your currency, and derange and disorder matters by the issue of Government paper money, or bank paper money based upon it, the more you derange values, and give an impetus to the speculation now going on. But if, by a wise system, you induce the local banks gradually to assume as- the basis of their circulation the United States notes, and limit the amount of those notes (for that is indispensable), you will furnish a market for your bonds, by which alone you can hope to carry on the operations of this war.

I may be like other men who have thought a great deal on a particular subject. I may give to this question an undue importance; but with me it is all-important. The establishment of a national currency, and of this system as the best that has yet been devised, appears to me all-important. It is more important than the winning of a battle. In comparison with this, the fate of three million negroes held as slaves in the Southern States is utterly insignificant. I would see them slaves for life, as their fathers were before them, if only we could maintain our nationality. I would see them free, disenthralled, enfranchised, on their way to the country from which they came, or settled in our own land in a climate to which they are adapted, or transported anywhere else, rather than to see our nationality overthrown. I regard all those questions as entirely subordinate to this. Sir, we cannot maintain our nationality unless we establish a sound and stable financial system; and as the basis of it we must have a uniform national currency. So it seems to me. I may be wrong; but so strong is my conviction on this subject that I believe the passage of this bill, by which our financial system may be harmonized, and by which we shall have what has always been desired by the statesmen of America, a sound national currency, is more important than any measure that we can pass.

I may say to my political friends that it receives the sanction of every member of the Administration, and particularly the earnest sanction of the gentleman who is placed in charge of the Treasury Department. I will say to my political adversaries that it has no connection with party politics. It has been framed, I believe, without reference to any political dispute, simply to accomplish that which we all desire -to place our national credit on the surest and safest foundation. I ask them, before they record their votes against it, at least to furnish us a better. It is easy to find objections to this, although it has been

carefully prepared, but tell us a better. Shall we go on issuing paper money, disordering and deranging the value of everything? Shall we sell our bonds in the market for what they will bring? That we can do. Great Britain did it; but she established a sound national currency through the agency of the Bank of England before she did it; she removed the restrictions from the Bank of England before she commenced that system of selling her public securities. Then she did it. Unless you can tell me a better system, I appeal to friends and opponents to vote for this bill; because, whatever differences there may be as to the mode of administering the Government, whatever differences there may be as to political questions growing out of the war on the much disputed matter of the condition of the African race in this country, there can be no doubt that we all alike are interested in preserving our national honor, our national credit, our national existence. If these are lost, what a sea of troubles is before us! If our credit is gone, if our nationality is destroyed, who among us now can see the end of the difficulties that loom up in the future? Who can see the difficulties that will arise if a boundary line is attempted to be drawn across this continent between two hostile sections? Who can see the difficulties before us if, by the progress of time, our paper currency becomes what my friend from Kentucky yesterday said it was-"worthless trash"? Then, sir, the Government will be subverted. No people can carry on a long war except with money, and you cannot get money unless you have public faith, unless you have the means of borrowing, and unless the means of paying at least the interest shall by a wise and uniform system be provided.

I believe that if the financial bill reported from the Finance Committee, and this bill, a necessary supplement, together with a just system. establishing a sinking fund, be passed, we can carry on this war even with the enormous burdens that are thrown on our people. Then let us, in addition to this system, practice economy. I know that sometimes Senators have thought I have been very captious on that subject. Perhaps I have been; but I have felt that there was a necessity for it. If I know my own heart, I have not been actuated by any unworthy spirit, but simply by a desire to save and husband the resources of the people of this country, to enable them to meet the great national difficulties that exist. If we can only get through this strait, if we can see our way out of this war upon the basis of a preservation of the Union, there is nothing that can be said too highly of the future of this country. With boundless resources, with an enterprising population, placed in the center of a great continent, in a temperate climate, history does not afford, and cannot furnish, a parallel of our capacity. Our example of success will not only establish our republican form of government, but it will spread the spirit of our republican institutions over lands that are yet living under kings and nobles and despots. Sir, I do therefore press upon the attention of the Senate this important bill.

ON THE GENERAL FINANCIAL POLICY OF THE GOVERNMENT.

IN THE SENATE OF THE UNITED STATES, FEBRUARY 27, 1865.

MR. PRESIDENT: I desire to make some general observations to the Senate in regard to the financial condition of the country, and especially as to the details and merits of this bill. I may as well avail myself of the present occasion to do so.

The late period of the session at which the House of Representatives sent us this bill precludes full discussion upon any of the important questions presented in it. The House is jealous of its exclusive prerogative of originating revenue bills, but it ought at least to give us an opportunity to exercise our undoubted power to amend them. This important measure, affecting every industrial interest of the country, declaring in its title that it is to provide revenue to support the Government and pay interest on the public debt, containing fifty pages of printed matter, every line of which demands an examination of the previous law, was sent to us within two weeks of the close of the session. The Committee on Finance have worked diligently to prepare it for the consideration of the Senate, and now, during the closing week, with all the hurry incident to the closing days of the session, with the appropriation bills still pending between the two Houses, we must urge the Senate to pass judgment upon the numerous provisions of this bill rather than to discuss them.

After the first careful reading of the bill, considering the many important changes proposed in it, I was inclined to recommend that the Senate postpone it until the next session rather than by hasty legislation to run the risk of new errors; but the necessity of the Government for new sources of revenue, the loss of revenue caused by defects in the present law, the construction put upon parts of it by revenue officers, and the palpable failure to enforce the present law, especially as to incomes, induced your Committee to report it back with several important amendments, and especially to provide for such an examination of the whole subject of internal taxation as would enable us to legislate in the future with fuller information. It may expedite our action to submit at the outset a few general remarks as to the necessity which compels us to impose upon our constituents the system of internal taxation provided for by this bill and the act of the last session.

Under the practice of Congress of dividing financial measures into numerous bills, all of which are considered separately, without any connection with each other, there seems no appropriate time to consider the "budget," or the general financial estimates and plans of the Government. Yet it is obvious that since it is the chief duty of Congress to provide ways and means to carry on the Government, some general principles ought to be adopted and applied to all our financial measures. When at peace the United States had an ample source of revenue in a moderate rate of duty on imported goods. This tax was so light as

never to be felt by our people, and its incidental effect in protecting our domestic industry made this tax a blessing rather than a burden. But the rebellion changed all this. We had either to submit to have our existence as a nation destroyed by a haughty, but base, ignorant, and defeated oligarchy, or we had to assume with war its unavoidable incidents, taxation and debt.

The people of the United States having definitely determined to prosecute war, it only remained for Congress to provide the ways and means to carry it on. It is manifest now, as I then urged, that it would have been better at the first session in 1861 to have reduced to the lowest possible standard all expenditures, and to have provided a system of internal taxation. It is easy now to see the errors of the past. None of us appreciated the magnitude of the contest-the enormous armies demanded and the vast sums required for the contest. I still think that with the closest economy and heavy taxes from the beginning, we might have borrowed money enough on a specie basis to have avoided a suspension of specie payments; but when the war came we were without a currency and without a system of taxation.. Gold disappeared and was hoarded by banks and individuals. It flowed in a steady stream from our country. By the Sub-Treasury act we could not use the irredeemable bills of State banks; and, with the terrible lessons of 1815 and 1837 staring us in the face, no one was bold enough to advise us to adopt as a standard of value the issues of fifteen hundred banks, founded upon as many banking systems as there were States. Under these circumstances we had but one resource.

We had to borrow vast sums, and as a means to do it we had to make a currency. This was done by the issue of United States notes. Subsequently, to unite the interests of private capital with the security of the Government as a basis of banking, we established a system of national banks, and upon this currency, as a medium for collecting taxes and borrowing money, have waged a war unexampled in the grandeur of its operations, and, as I trust, soon to be crowned with unconditional

success.

Such a war has not been conducted without vast expenditures. Our actual expenditure during the fiscal year ending June 30, 1864, was $865,234,087. The estimated expenditure for the current fiscal year is $895,729,135, upon the basis of the present laws. Much more than one half of this sum has been already expended. To this amount you must add every dollar you provide for by new laws, and this grim fact must not be overlooked for a single moment when you are making new appropriations. Every dollar of this must be paid in the form of taxes; and that is not the worst of it-it must be paid now.

We must get the money either by making it, by borrowing it, or by collecting it from our people. If we could postpone the borrowing until after the war is over, it would be easy; but we must have it now, and we must devise the means of getting it before we can sympathize with the poor clerk, the brave soldier, or the needy contractor. Until then your sympathy is mockery. Your very measures of relief may add more to the distress of all whose livelihood depends upon a fixed salary.

I repeat that there are but three modes of raising this money: one is by printing notes, calling them money, and compelling the people to take it; another is by issuing bonds or promises to pay in the future; and another is to collect the money by taxation. That all these modes may be resorted to is proven by the history of all modern nations when involved in war. As the first is the easiest, it is apt to be resorted to first; but it is a doubtful expedient at any time, always dangerous, and soon exhausted. If pressed too far, it destroys loans and taxes, and national bankruptcy is the inevitable result. Å limited amount of this money was indispensable to us as a medium of exchange. It is like some medicines, necessary in certain cases and in moderate quantities, but when taken in excess sure death.

Paper money issued by a government is called a loan, but it has none of the elements of a loan except the promise to pay. There can be no loan without a lender, and his act must be voluntary. In the middle ages governments resorted to "forced loans," a contradiction of terms. A forced loan was merely an unjust and unequal tax. I choose to regard United States legal-tender notes not as a loan merely, but as money, lawful money, which the citizen is compelled to receive, and which now fixes the standard of value. Whether the power to issue it is derived from the power to coin money or to borrow money, or whether it is inherent in any government clothed with the attributes of sovereignty, are questions we need not now discuss. We have exercised the power. It is now the currency of the country, the measure of value; and we can only regulate its form and amount, and provide. for its redemption.

While we can make and have made our paper money the measure of value, we can not fix the price or value of any commodity, whether gold, silver, or food. The attempt has been made by many governments in different ages, and has uniformly failed. The standard of value may be fixed by the government, but a higher law fixes the relative value of all commodities as measured by this standard. We may by our tariff or tax law affect the relative value of commodities, but we can not by direct legislation fix the value of any commodity either in gold or paper money. When the attempt has been made, the result has usually been to advance rather than to decrease values. All our efforts to fix the value of gold as measured by our currency have failed. We may make penal the purchase and sale of gold; we may deny the use of our courts to enforce contracts for such purchases or sales; we may prohibit the exportation of gold; we may deter sales of gold by heavy taxation; yet, after all, the price of gold rises or falls as our national credit rises or falls. So far as our legislation produces revenue or strengthens our army, it produces a fall of gold as measured by our standard. So far as it merely discourages trade in gold or any other commodity, it increases its market value. We may as well recognize as an axiom of political economy, proven by the experience of all nations, by every form of government-despotic, monarchic, or republican-that the fixing of the values of commodities is beyond the power of legislation. We may fix the standard of value, we may fix the tax upon the commodity, and there our power ends. And especially is this

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