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That this bill is not necessary for maintaining the public credit I think is clearly demonstrated. It certainly is not necessary to meet current expenditures. On all hands it is admitted that our receipts are in advance of them, and no possible or probable deduction will make our receipts fall below them; so that the bill is not necessary as a loan bill to enable the Secretary to get money to carry on the expenses of the Government. The honorable Senator from Maine admits substantially that it is not necessary for other purposes. The only debt that is maturing during the coming year is $62,000,000 of certificates of indebtedness. The balance now on hand, as reported and shown by the Treasury books, is $120,000,000; but the actual balance on hand is some twenty or thirty millions more than the reported balance growing out of the manner in which the books of the Treasury are kept.

A draft is drawn here on the Treasurer at New York, and it is immediately put to his credit though the money may not be drawn for some time, so that there is always more money in the Treasury than the books show; and that simple fact led to the controversy, about which a good deal has been said in the newspapers, between the Comptroller of the Currency and the Secretary of the Treasury. Deposits are made in the national banks all over the country, and it may be some time before they are so reported at Washington as to be entered on the books of the Treasury here; while if drafts are drawn here on New Orleans or anywhere else, they are at once entered on the books of the Treasury to the credit of the Treasurer, while the money may not be actually drawn for a month or two months. There is always that discrepancy; there is always more money in the Treasury than is reported by the Treasury Department, not because they intend to deceive anybody, but simply from the nature of the transactions and the manner in which the accounts are kept.

I say there is no necessity for this bill to enable the Secretary of the Treasury to pay the current expenses or to meet accruing indebtedness. The sixty-two millions of certificates of indebtedness can be paid out of the current receipts; or if they are not sufficient, as the Senator knows very well, the Secretary has now power to exchange for those certificates any of the bonds of the United States. He may issue fivetwenties in payment of those certificates under the existing law. There is no necessity for the bill therefore for that purpose.

In regard to the seven-thirties, the honorable Senator agrees with me that it is not expected that they will be paid in money; the holders undoubtedly will avail themselves of their privilege to convert them into five-twenties, so that they are not to burden the Treasury; and that will postpone the payment of the principal of all of them five years more, and give the Government the option of paying them after any time within twenty years. There is, therefore, no object in this bill to provide for the credit of the Government, because the credit of the Government is already provided for, and the Secretary of the Treasury has ample power for that purpose.

What, then, is the purpose of the bill? I think the Senator frankly stated it; it is to declare the policy of the reduction of the non-interestbearing legal tenders. Under the present law, he has power to retire

every dollar of the interest-bearing legal tenders by exchange; he may redeem them when they become due, and no portion of them will be due until August, 1867, and then they mature gradually, and not in bulk. He has power under the existing law to retire them by exchange of any securities for them, and with the present ease in the money market there is no difficulty in retiring them whenever he can get hold of them. Whenever he can get hold of them, he is now retiring them. The trouble is that they are sought for and held by brokers and banks and bankers, and therefore he can not reach them until they become due, when they will fall into the body of the national debt. There is no object in passing this bill except to contract the currency, and the honorable Senator says the Secretary will not do that to an unreasonable extent; but in his annual report he says he will do it. That is the whole theory of his proposition, and he is doing it, and in the very way I have mentioned. The Secretary of the Treasury accumulates large balances on hand. Our friend here on my right [Mr. Fessenden] had no such balance in his hands when he was Secretary there; he was very glad to have a much less balance; and for the ordinary purposes of the Treasury Department, is there any occasion for such an enormous balance? What is it held there for? The balance has been so great that the Secretary actually has retired notes that are not due for two and a half years.

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I would have no objection to conferring on him the power to dispose of bonds to meet bills as they mature. Indeed, I may say that was one of the amendments I proposed, that the power to sell bonds should be only to meet accruing indebtedness. Give him one year, if you choose, to do it in, but no more. I do not think it is wise to confer on the Secretary of the Treasury the power to meet the indebtedness not accruing for a year or two or three years. I do not think it is necessary in our present financial condition to authorize him to go into market now and sell bonds at current market rates with a view to debts that do not mature in a year or two. I have no doubt before the five-twenty loans are due we shall retire every dollar of them at four or five per cent. interest. No one who heeds the rapid developments of new sources of wealth in this country, the enormous yield of gold now, the renewal of industry in the South, the enormous yield of cotton, the growing wealth of this country, and all the favorable prospects that are before us, doubts the ability of this Government before this debt matures to reduce it to four or five per cent. interest. I therefore do not think it wise to place it in the power of the Secretary of the Treasury to sell six per cent. long bonds or any class of bonds, even five per cent. bonds, except to meet accruing indebtedness. This I am perfectly willing to do: the Secretary of the Treasury may sell bonds at any rate to meet debts as they accrue, but that is not the purpose of this bill.

I will state here that I have in my hands a table showing that the Secretary of the Treasury used a portion of the surplus revenue for the purpose of retiring the seven thirties not due for two years and a half to come. He has retired, of the third issue of seven-thirties, $7,769,000; and of the second issue, not due until June and July, 1868,

$4,402,000; making an aggregate of $12,000,000 which he has retired in the very mode provided in this bill. That is the power now given, and he will use the power. He may think it to his interest to retire the whole of the seven-thirties or the ten-forties; but is it wise for us to give him that power now, at the heel of the war and before things. have settled down? I do not think it is.

I repeat, I do not wish to call in question the integrity of the Secretary of the Treasury. The Senator interjects by saying we must look ahead. There is just the difference between him and me. I say the future for this country is hopeful, buoyant, joyous. We shall not have to beg of foreign nations, or even of our own people, money within two or three years. Our national debt will be eagerly sought for, I have no doubt. I take a hopeful view of the future. I do not wish now to cripple the industry of the country by adopting the policy of the Secretary of the Treasury, as he calls it, by reducing the currency, by crippling the operations of the Government, when I think that, under any probability of affairs in the future, all this debt will take care of itself. I believe that if the Secretary of the Treasury would do nothing in the world except simply sit in his chair, meet the accruing indebtedness, and issue his Treasury warrants, this debt will take care of itself, and will fund itself at four or five per cent. before very long.

In my judgment, the amount of legal tenders now outstanding is not too much for the present condition of the country. I expect to come back to specie payments, and I expect to see gold approach the level and standard of our paper money, without any material reduction of our currency. Our currency now is less than the currency of England or France, according to the statistical tables we have. Our whole currency now is $704,000,000, excluding the interest-bearing legal tenders, which do not enter at all into it, and which can not be found, and including bank circulation of every kind. Four hundred and fifty millions of it consist of United States notes and fractional currency. Then, there are over $250,000,000 of bank currency, including the notes of outstanding State banks, which are being rapidly retired. The limit of the national-bank currency is $300,000,000; so that the whole currency can not exceed $750,000,000. I do not consider the compoundinterest notes as anything, because they are not in circulation. The circulation before the war was $207,000,000 in paper, and perhaps $100,000,000 in gold. It is difficult to tell how much gold there was in the country. We are now developing the mining regions. The production of gold is increasing with great rapidity. The amount of gold in the country I believe will in five years approach the amount of our legal-tender currency, so that the one will be convertible into the other. The proportion of gold to that currency at this day is greater than it was at the beginning of the war. Exchange with all countries is in our favor. Bills on England can now be had for 106 in gold. That is two or three per cent. in our favor. We have vast uses for the It is being absorbed in the Southern States and held there. They are glad to sell anything they have got for it. Cotton, which was hardly counted indeed when the war ended, has yielded enormously.

In regard to going back to specie payments, when did ever a nation travel toward specie payment as rapidly as this country has done without a reduction of the currency? Here is a significant fact, that when gold was 280 our currency was $550,000,000; and now, when our currency is over $700,000,000, gold is 130, and going down and down, and no power in this world can prevent its going down. This fact shows that the mere amount of legal tender outstanding does not fix the rate of gold. That is the result of the restored confidence of the people of this country and of all nations in the credit of the United States. I believe that if the Secretary of the Treasury will keep out of the stock market, will just remain in his seat in the Treasury Department, and pay the debts as they become due, the people of the United States will take care of the currency of the country and of the credit of the Government; and it will not be necessary to buy bonds before they mature or do anything else except simply to meet the current indebtedness in order to bring us back to specie payments, and I do not believe any power can prevent it.

I do not wish the Senate to suppose that in these remarks I intend to criticise the conduct of the Secretary of the Treasury. He takes a different view from what I do. I am more hopeful than he is. He probably, like a good banker as he is, wants a very large balance on hand. I have more confidence in the future, and am willing to trust to it. I do not now see any imperative necessity for this bill, but at the same time I would make no opposition to it, no opposition to the vast power to sell bonds, because I think the power would not be abused, if the Secretary would not in this way undertake to carry out what he calls his policy, a contraction of the currency without any specific law. That is what I am afraid of-his interference to contract the currency. The honorable Senator from Maine, however, would seem to think that I impute to him a wrong motive, and therefore I corrected him when he made the remark that I seemed to suppose the Secretary was doing this improperly. I think not. The Secretary of the Treasury informed us that he desired to reduce the currency, and he has been doing it as far as he could. He has been accumulating large balances. He was opposed to the proviso which has been inserted in this bill, and yielded to it only with reluctance. That is admitted on all hands, and he is not precluded either in honor or propriety from carrying out his policy if you give him the power to do it.

This is all I desire to say upon the bill. The only reason why I spoke is because I can not vote for it under the circuinstances; I felt bound to state thus briefly the reasons that actuated me in coming to this conclusion.

The bill was further discussed and passed.

FUNDING THE, NATIONAL DEBT.

IN THE UNITED STATES SENATE, MAY 22, 1866.

THE Senate having under consideration the bill (S. No. 300) to reduce the rate of interest on the national debt, and for funding the same, Mr. Sherman said:

MR. PRESIDENT: This bill came to us in the usual mode from the Secretary of the Treasury, and its purpose is to facilitate the negotiation of a five per cent. loan. I have had an earnest desire during the present session of Congress to see the interest on the debt of the United States reduced to a rate not exceeding five per cent.; but the Secretary of the Treasury, as will be gathered from his public documents, hesitated somewhat as to whether he could negotiate a loan bearing that rate of interest. After full consideration, however, he presented this bill as containing the terms upon which, in his judgment, this loan could be negotiated. It came to us, and by general consent was reported to the Senate, printed for the purpose of attracting attention and criticism, and was subsequently considered by the Committee, and reported. Its history is now known to the Senate.

Before considering the specific terms of the bill, it will be necessary for me to state the condition of the public debt. By the statement laid on our tables on the 1st of May, it appears that the ascertained debt of the United States at that time was $2,827,676,871; and from that may be properly deducted the amount of money (coin and currency) on hand o $137,987,028.82. To this aggregate must necessarily be added quite a number of items, some of which have been acted upon at the present session of Congress, and some of which will be acted upon before our adjournment, the mere statement of which will show the Senate the probable condition of the public debt within the next year or two. The largest sum that will be required is by the bill introduced from the Committee on Military Affairs for the equalization of bounties, which will require, if passed, near $200,000,000. What will be the fate of that measure I have no means of knowing. The Pacific Railroad, now being constructed, will probably cost in the course of the next five years something like $50,000,000.

In the settlements with the States for expenses incurred for the military service in an irregular way, we have already appropriated, I think, about $10,000,000 to the States of Missouri, Kansas, Pennsylvania, and West Virginia; and there are other claims of the same character which will be presented by other States. I am told that Indiana, Kentucky perhaps, and Ohio will have such claims. Ohio has a claim of that kind growing out of the Morgan raid. The probability is that this class of claims, now unadjusted but not disputed, the principle having been settled, will take $20,000,000. The largest yet allowed was to the State of Missouri, which I think amounted to some $7,000,000. Then there is the measure presented by a prominent member of the House of Representatives, which I hope will not pass

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