History of the Legal Tender Paper Money

POSTPONEMENT OF THE SPECIAL ORDER.

On Thursday, the 30th inst., MR. STEVENS moved to postpone the special order—the Treasury note bill—until to-morrow, for the purpose of going into the Committee of the Whole on the Army bill.  The motion was agreed to.  And on Friday, the 31st inst., he again moved to postpone the Treasury note bill until Monday, the 3rd of February, which was agreed to by the House.

On Monday, the 3rd of February, Mr. Vallandigham offered a modification of his substitute for the bill, for the purpose of having it printed for examination.  This substitute will be found printed at length in the Congressional Globe, page 614.

MR. ROSCOE CONKLING—With the permission of the gentleman from Ohio, I desire to submit for the same purpose, the following, which I propose to offer, at the proper time, as a substitute for the whole bill.  Congressional Globe, page 615.

MR. VALLANDIGHAM’S SPEECH.

MR. VALLANDIGHAM being entitled to the floor, addressed the Committee of the whole House for one hour, in favor of his substitute, and in opposition to the legal tender clause in the original bill.  His speech will be found reported at length in the appendix to the Congressional Globe, pages 42, 43, 44 and 45.

He commenced by saying :

“ It has been my habit, Mr. Chairman, to premeditate, whenever premeditation was possible, whatever I have had to say in this House ;  for no man has a right, in my judgment, to obtrude his immature thoughts and opinions upon a deliberative assembly.* * * * * * * * *

“ I propose to-day to discuss the subjects involved in this bill to the best of my ability, and with becoming candor and freedom, and I may add earnestness too ;  for I have the profoundest conviction of their incalculable importance to the interests, present and future, of the United States, and of the people of this whole continent.  Nor am I to be deterred from a faithful discharge of my duty by the consciousness that my voice may not be hearkened to here, or in the country, because of the continued, persistent, but most causeless and malignant assaults and misrepresentations, to which for months past, I have been subjected.  Sir, I am not here to reply to them to-day.  Neither am I to be driven from the line of duty by them.  “Strike—but hear.”  Whatever a silenced or mendacious press, outside of this House may choose to withhold, or to say, no man who is fit to be a member of this House, will allow his speech or his votes, or his public conduct here, to be controlled by his personal hates or prejudices.  Sir, I recant nothing, and would expunge nothing from the record of the past, so far as I am concerned.  But my path of duty now, as a Representative, is as clear as the sun at broad-noon.  THE SHIP OF STATE IS UPON THE ROCKS.  I was not the helmsman who drove her there ;  not had I part or lot in directing her course.  But now, when the sole question is, how shall she be rescued ?  I will not any longer, or at least just now enquire who has done the mischief.

* * * * I do not agree, Mr. Chairman, with the gentleman who has opened this debate, (Mr. Spaulding,) that this bill is a war measure.  Certainly, sir, it has been forced upon us by the war, but if peace were restored to-morrow, these $100,000,000 would be just as essential to the “public credit as they are to-day.”

Mr. Vallandigham continued his argument at great length.  He insisted that the legal tender clause was unconstitutional, that it was a forced loan, and that it would be disastrous and unjust.  He said no scheme of loan or taxation, or national bank, or currency, or other similar contrivance, could be devised, and put into operation in time to avert ruin and disaster.  The Government has no money, no gold and silver coin, which is the only money in the world.  He advocated Treasury notes, without any promise to pay money, and without the legal tender clause, which should pass as currency from hand to hand, between the Government and its creditors and debtors, and be supported by a nearly equal amount of taxes—such taxes to be received by the Government in these notes.

He urged that the experiment of forcing a paper currency upon the country, was a dangerous experiment, that it would lead to other enormous issues, gold and silver would be banished from circulation, an immense inflation would take place, “ cheap in materials, easy of issue, worked by steam, signed by machinery, there would be no end to the legion of paper devils which shall pour forth from the loins of the Secretary.”  That inevitably there would follow bloated currency, high prices, extravagant speculation, enormous sudden fortunes, immense factitious wealth, and general insanity.

He objected to their being called “United States notes” instead of “ Treasury notes,” as they had always heretofore been called, and deprecated the idea that they were likely to be a permanent currency, or at least until the Secretary’s grand fiscal machine, “ his magnificent National Paper Mill, founded upon the very stock provided for in this bill can be put into operation.”  He insisted that these notes were not money, that they would not circulate as currency, would not be taken as legal tenders, and in discharge of judgments, and contracts, and state debts, or private debts, “ though you should send them forth bearing ten times the image and superscription—the fair face and form of ABRAHAM LINCOLN, now president and CÆSAR of the American Republic.”

He urged the substitute presented by him as follows :

“ The fundamental idea of this substitute is to support and float these $150,000,000, by nearly an equal amount of taxation and revenue, payable of course in these notes.  The Government owe the people and the people owe the Government, each $150,000,000, and these notes are primarily to be used as a common medium of payment between them. * * * * I do not propose or pretend that these notes are to be convertible into gold and silver.  They are not payable on demand ;  they are not payable to bearer, nor payable at all.  They are not to be paid, but to circulate as currency receivable in Government dues, and finally to be funded in twenty year’s stocks.  They are not promises to pay, and are not therefore paper money.  They do not represent gold and silver, of which the Government has none. * * * * * * The United States are to cease in part, for a time, to be a specie paying hard money Government, I deplore it profoundly.  But imperious necessity demands it.  There is no alternative, no matter what evils may follow.

But I utterly deny, sir, the right of the Federal Government to provide a paper currency, intended primarily to circulate as money, and meet the demands of business and commercial transactions, and to the exclusion of all other paper.  It is not the intent or object of the substitute to furnish such a currency for the country.* * * * * *

Such, Mr. Chairman, is the substitute which I have submitted.  It differs essentially from the bill.  The one relies on force, the other upon credit ;  the one looks to the direct and despotic coercion of law and arms, and the other to the indirect and ordinary coercion of taxes. * * * * *

To my political friends let me now appeal for support, not only for this substitute, but of the taxation which must follow it, as essential to the maintainance of the good faith and credit of the Government.”

At the conclusion of Mr. Vallandigham’s speech, Mr. Hooper, of Mass., obtained the floor.

MR. HOOPER’S SPEECH.

MR. HOOPER—“ The unusual exigencies of this country require that we should look for other and deeper sources of revenue than any to which we have heretofore been accustomed.  We are contending for the maintainance of the Government, for the preservation of the Union, and for the enforcement of the laws, on which depend the existence, as well as the security of property.

To insure our success in this contest, great and unusual exertions have already been made.  An enormous army, a powerful navy, with vast stores of artillery and ammunition, have been created.  In providing for the sustenance, comfort, and equipment of the Army and Navy, the Government have been obliged to incur expenses far exceeding in magnitude any which have been hitherto known in our history.  To continue them in their present state of efficiency, large additional sums must be expended ;  and it now becomes the duty of Congress to devise methods by which these sums can be obtained with the least hardship to the people, and the least risk to the credit of the Government.  In considering the means by which this is to be effected, it must be remembered that it is hardly possible for the Government to raise money for any purpose without occasioning some inconvenience to individuals.  To oppose necessary measures, therefore, simply upon the ground that it will injuriously affect this class or that class of the people, is unreasonable.  Parties interested may endeavor to show that the same objects can be effected with less hardship than by the methods proposed, or may endeavor to obviate any objectionable features, so far as may be consistent with the attainment of the desired end ;  but they should always remember that the end aimed at must be attained ;  that its attainment will require individual sacrifices in some form, and that it is the part of wisdom, of patriotism, and of discretion, to submit to such necessary sacrifices cheerfully when called upon, and not by their opposition attempt to excite popular clamour, and weaken the public confidence in the Government, to which they are indebted for the safety of their persons, and the security of their possessions.  Every step which tends to weaken the public credit has the effect of rendering private property more insecure, because it obstructs the Government in procuring its necessary funds in the ordinary way, and may oblige it to resort to the arbitrary modes of forced loans and heavier rates of taxation.  At this moment, therefore, when for the time every hope of aid from foreign capital is idle, when the country is compelled to look to her own resources for the means with which to maintain her integrity and subdue the rebellion, not only does every dictate of patriotism, and every enobling sentiment of humanity, call upon the capitalists of the country to rally in defence of the Government, but the meaner instincts of self-preservation admonishes them to submit to slight sacrifices now, that they may secure and preserve their property.

Three measures have been considered in the Committee, which are, to some extent, connected together, and form a comprehensive system by which, it is believed, the Government will be enabled to procure the sums necessary to the successful prosecution of the war ;  while, at the same time, the burden upon the capital of the country will be light, and the public will be benefited in some important particulars.

The first of these measures is the one now before the House, by which the Secretary of the Treasury is authorized to issue United States notes, not to exceed $150.000,000 in amount (including those authorized by previous laws), of denominations not less than five dollars.  They are not to bear interest, but are to be issued and received as money, convertible, at the option of the holder, into six per cent. stock of the United States, the principal and interest being payable either here or abroad, and these notes are to be a legal tender.

The second measure consists of a tax bill, which shall, with the tariff on imports, insure an annual revenue of at least $150,000,000.

The third is a national banking law, which will require the deposit of United States stock as security for the bank notes now circulated as currency.

In order more fully to understand and more easily to meet any objections which may be urged against the first of these measures, being the one now occupying the attention of the House, it will be desirable to notice the other two, which are designed to be more permanent in their character., and upon the expected results of which the present measure is in some degree based.”

MR. HOOPER here explained the various modes of the proposed taxation, by which the credit of the government was to be supported, and also went into a full explanation of the National Currency Bank bill which had been prepared, and the manner in which the government bonds would be absorbed by the banks, as soon as the bill should go into operation.  He then proceeded as follows :

“ The levying of the contemplated tax, the proper inauguration of the new banking scheme, and the successful negotiation of a new loan, are matters that will require time.  In the meanwhile, the Treasury is comparatively empty, and the demands upon the government are numerous and pressing.  To enable the government to support itself during this interval of time, and to facilitate the negotiation of their loans, the committee have decided to recommend the issue of government notes.

There is a necessity for money, and the object of the authority to issue $150,000,000 U.S. notes, not bearing interest and made legal tender, is to pay the creditors of the United States, and enable them to discharge their debts. * * * * * The propositions of committees from Boards of Trade and banks, which recently visited Washington, submitted to the Secretary of the Treasury and declined by him, differed from the theory of this bill so far, as to require that instead of the issue of the United States notes the banks should be relied upon to furnish the amount needed.  The effect of this would be that the government bonds must first be disposed of, and the money received for them paid to the contractors ;  in other words, that the government should go into the money market and negotiate their bonds, without restriction as to the rate or terms, at a time when the government is discredited by the delay and the difficulties that have occurred in paying contractors and others ;  taking the notes of suspended banks in payment of these bonds, and with these bank notes, thus obtained, pay off the contractors.  The obvious effect of such an arrangement would be to put the reins of our national finances in the hands of the banks, leaving to them the direction of our path, with little opportunity for the government to exercise any influence on the subject.  Exactly upon what terms the government bonds could be negotiated now, under such circumstances, no one can say ;  but last Summer, when the banks made their negotiation with the Secretary of the Treasury for $100,000,000, they at first refused to do anything, because the Secretary was restricted by law to taking par for seven per cent. bonds payable in twenty years, and for seven and three-tenths Treasury notes payable in three years.  They finally decided, though with great reluctance—influenced by patriotic regard for the public interest as well as wisely consulting their own—to take $100,000,000 of the latter ;  though at that time, as now, money was not worth for commercial purposes more than five per cent.  It is proposed in this bill to limit the Secretary to par for six per cent. bonds, the principal and interest to be payable in specie or its equivalent.  It is believed that there can be nothing more secure than these bonds, which thus become, as it were, a standard of value in reference to the currency.

In the war of 1812 the Government paid for its supplies with funds obtained from the banks in the same manner as proposed in the plan recently submitted to the Secretary by those committees.  The bonds of the United States were then negotiated in some instances at twenty per cent. less than their par value, and paid for in bank currency of different degrees of depreciation, according to locality, but averaging from twenty to twenty-five per cent. discount, as compared with coin.  To render the government financially more independent, it is necessary to make the United States notes a legal tender.  It is possible that they would become a practical tender, like bank notes, without providing for them to be a legal tender.  If this were a foreign war there would be no doubt of it ;  but in this present emergency, when those who are openly or secretly disloyal to the government are found everywhere to suggest obstacles that may embarrass the government, nothing should be omitted that will add to their efficiency.  I am, therefore, in favor of making the notes a legal tender, believing the Secretary of the Treasury, who alone has the power to issue them, can and will use the power with his well known discretion, and that it will assist him in his endeavor to keep the notes at par with coin.  We shall probably be told that England, in her great struggle, while specie payments were suspended, never made paper money a legal tender.  But in this respect her example should serve us as a warning rather than a guide, because instead of it she did what was much worse, by suspending the laws to enforce the payment of debts in cases where the paper money had been refused as a tender.

* * * * * * * * * *

It is important in this great struggle to show the superiority of the principles of freedom, of education, of the elevation of mankind, upon which society at the North is based, over those of slavery, which doom men to hopeless ignorance in order to insure abject obedience.  To do this our resources of every kind are abundant, both in men and in means ;  and it is only necessary to draw them out in order to be successful.

To fail, would not be because the nation was so poorly endowed as to be without the means of success, but because it refused to make use of them.  Such a result, if it were possible, would not weaken the truth of the great principles for which we are contending ;  but would simply demonstrate that we, of this generation, were faithless in guarding those principles ;  faithless to ourselves ;  faithless to our country ;  faithless to good government throughout the world ;  and, since such infidelity is a violation of unquestionable duty, faithless to God.”

MR. ROSCOE CONKLING obtained the floor.

Mr. MORRILL, of Vermont—“ I ask the gentleman from New York to yield the floor.  Two members of the majority of the Committee of Ways and Means have spoken on this question, and if the gentleman will permit me now to express the views of the minority of the Committee against the pending bill, I will be obliged to him.”

MR. ROSCOE CONKLING—“ I yield to the gentleman from Vermont.”

MR. STEVENS—“ I feel it my duty to state that the Treasury Department is urgent for the passage of this bill, and I trust, therefore, that the vote on it will not be put off longer than Thursday next.”

MR. SPAULDING—“ I desire to call the attention of the House to a letter which I have just received from the Secretary of the Treasury.  It is a note to me urging the immediate passage of this bill without further delay.  For the purpose of letting the House understand the necessities of the Treasury, I ask the Clerk to read an extract from that letter.”

The Clerk read as follows :

“ Immediate action is of great importance.  The Treasury is nearly empty, I have been obliged to draw for the last installment of the November loan.  So soon as it is paid, I fear the banks generally will refuse to receive the United States notes, unless made a legal tender.  You will see the necessity of urging the bill through without more delay.” * * *

Mr. THOMAS, of Massachusetts—“Has the gentleman any further communication that has been received from the Secretary of the Treasury with reference to this bill ?  If there has been any received I hope he will be kind enough to have it read to the House.”

MR. SPAULDING—“ A communication has been addressed by the Secretary of the Treasury to the Committee of Ways and Means, and I have no objection to its being read.”

Mr. ROSCOE CONKLING—“ I would like to know whether the gentleman intends to have the whole of the communication read, or only extracts ?”

MR. SPAULDING—“ I ask the Clerk to read what I send to him.  The balance of the communication is in relation merely to formal amendments.  What the Clerk will read is all of the communication that refers to the principle of the bill.” MR. VALLANDIGHAM—“ Has the Committee of Ways and Means received the letter it was expecting from the Secretary of the Treasury ?”

MR. SPAULDING—“ This is the one.”

(The Clerk here read the letter of the Secretary of the Treasury, dated January 29, 1862, as published on page 45.)

MR. ROSCOE CONKLING—“ I now call for the reading of the rest of that letter.”

MR. SPAULDING—“ There is not the least objection to its being read.  It is, however, in the committee room.  I will state what the remainder of the letter is.  The Secretary of the Treasury suggests some amendments to the bill.  He proposes two new sections to the bill, one relating to counterfeiting and the other in regard to the manner in which the notes shall be executed.  He proposes instead of having them signed by clerks that there shall be a seal or die engraved upon them, which will indicate the authority under which they are issued.”

MR. ROSCOE CONKLING—“ Are those the only amendments ?”

Mr. SPAULDING—“ There are two or three smaller amendments not affecting the principle of the bill, however, in any way.  We propose in the committee to act on those amendments to-morrow morning.  If the letter were here I would not have the slightest objection to its being read.”

MR. LOVEJOY—“ I want to ask the gentleman of the Committee of Ways and Means whether they intend to propose to have action on this bill before action is taken on the tax bill ?”

MR. SPAULDING—“ I have been anxious to have the tax bill brought in to be first considered ;  but the gentleman from Vermont (Mr. Morrill), who is chairman of the sub-committee on the Tariff and Tax bills, informs us that the sub-committee having that matter in charge will not be able to report to the Committee of Ways and Means for several days yet.  The necessities of the Treasury, therefore, will compel us to act on this bill, however reluctantly, before the Tax bill can be introduced.”

MR. ROSCOE CONKLING—“ I hope that the remaining portion of the letter of the Secretary of the Treasury will be printed in the Globe.”

MR. SPAULDING—“ I have no objection to that.”

MR. ROSCOE CONKLING—“ The gentleman has read the whole letter, and I ask him to state whether the Secretary is for or against this bill with the legal tender provision in it.”

MR. SPAULDING—“ He is for it.  I have another letter from him in which he states that he is anxious to have it passed in that form.”

Mr. ROSCOE CONKLING—“ Let us have that read.”

MR. SPAULDING—“ It is a letter to myself.”

MR. MAYNARD—“ I ask my colleague on the Committee of Ways and Means whether the portion of the Secretary’s letter which has been read is not all of it that appertains to the principle of the bill ;  and whether the balance does not relate merely to matters of detail.”

Mr. SPAULDING—“ Yes, Sir.  I will read a paragraph of the letter written by the Secretary to myself this afternoon :

“ I came with reluctance to the conclusion that the legal tender clause is a necessity ;  but I came to it decidedly, and support it earnestly.  I do not hesitate since I have made up my mind. * * * * * The conclusion I have arrived at has convinced me that it is important to the success of the measure.”

And then, on motion of Mr. Wright, the House (at half-past four o’clock P.M.) adjourned.

The following is a copy of the letter of Secretary Chase referred to in the foregoing proceedings of the House, and from which extracts were read :

LITTER FROM HON. S. P. CHASE.

MONDAY, 3d February, 1862.

MY DEAR SIR :—Mr. Seward said to me on yesterday that you observed to him, that my hesitation in coming up to the legal tender proposition embarrassed you, and I am very sorry to observe it, for my anxious wish is to support you in all respects.

It is true that I came with reluctance to the conclusion that the legal tender clause is a necessity, but I came to it decidedly, and I support it earnestly.  I do not hesitate when I have made up my mind, however much regret I may feel over the necessity of the conclusion to which I come.

I have just sent a note to Mr. Stevens, with two sections (penal) instead of one.  You will, I think, see the necessity of them.  The one I have already sent I fear is not quite strong enough.  What has the Committee done about the amendments suggested ?  I thought them important.

Immediate action is of great importance.  The Treasury is nearly empty.  I have been obliged to draw for the last installment of the November loan ;  so soon as it is paid, I fear the banks generally will refuse to receive the United Stales notes.  You will see the necessity of urging the bill through without more delay.

Very sincerely yours,
S. P. CHASE.

HON. E. G. SPAULDING.

On the 4th of February, the House gave consent to Mr. Morrill to have printed a substitute having the sanction of one-half the Committee of Ways and Means, which he proposed to offer at the proper time in place of the original bill.  Mr. Stratton, one of the Committee, changed his mind, and now favors the substitute instead of the bill first reported, leaving the Committee of Ways and Means equally divided.

MR. MORRILL’S SPEECH.

Mr. Morrill, of Vermont—“ Mr. Chairman :  Engaged as I have been upon other matters of at least equal importance, I have not had the time to prepare an elaborate speech ;  but the subject of issuing $150,000,000 of paper currency and making it a legal tender by the Government at a single bound—the precursor, as I fear, of a prolific brood of promises, no one of which is to be redeemed in the constitutional standard of the country—could not but arrest my attention, and having strong convictions of the impolicy of the measure, I should feel that I utterly failed to discharge my duty if I did not attempt to find a stronger prop for our country to bear upon than this bill—a measure not blessed by one sound precedent and damned by all.

I know the gentlemen who have had the latter in charge have bestowed upon it much time and perplexing thought, and from their thorough knowledge of the subject and large acquaintance with the monetary circles of the country, their opinions will have great weight in this Committee—deservedly so—and I shall only claim a candid hearing in behalf of the substitute of the minority of the Committee of Ways and Means, well knowing that we are all inflamed by the same zeal for the triumphant success of our arms, the same solicitude for the honor and welfare of the people, who mean to live and die under the flag of our Union, and that we can have but one wish, which is, that the best plan shall be adopted.

* * * * * * * * * * * *

We are urged by the gentleman from New York (Mr. Spaulding) to pass this bill as “a war measure”—“a measure of necessity,” and to enforce this idea he gives you the figures of our probable requirements, if the war should be prolonged until July 1, 1863.  Sir, I have no expectation of being required to support a war for that length of time.  The ice that chokes the Mississippi is not more sure to melt and disappear with the approaching vernal season, than are the rebellious armies upon its banks when our western army shall break from its moorings and rush with the current to the Gulf, and baptise as it goes, in blood, the people to a fresher allegiance.  At the same time, the men of the East will only ask for an opportunity to cross bayonets with the chivalry—to leave epithets and try what virtue there is in steel !  That hour is approaching, and I have no fear of the result.

‘ Fly swiftly round, ye wheels of time ! ’

We can close this war by the 30th day of July next as well as in thirty years.  Let us second general McClellan for a ‘short and sharp’ conflict.  By so doing we shall economise both blood and Treasury notes.

If this paper money is ‘a war measure,’ it is not waged against the enemy, but one that may well make him grin with delight.  I would as soon provide Chinese wooden guns for the army as paper money alone for the army.* * * * * * * *

If, by the provisions of this bill, we cut ourselves off from all other resources, it is to be considered how much could be realized from this, in my judgment, the weakest resource within our grasp, which is the power of a hank issue, without any capital, and not even specie enough to tender the odd change.  It is an experiment to inject, by a governmental force pump, into the arteries of commerce a new currency, when the arteries are already filled.  The whole bank circulation of the United States in 1860 was $207,102,477 ;  that of the rebel States was $50,647,028, leaving for the loyal States $156,566,419.  But at this time, in consequence of the diminution of all business, except that nourished by the war, the bank circulation is over $20,000,000 less, or about $136,000,000.  I admit that we can drive a considerable share of this home upon the banks, and substitute that of the notes of the United States in its place.* * * * *

It is thus apparent that $20,000,000 is about all that would be absorbed by this country, or kept afloat in the present condition of monetary affairs without the intervention of Congressional omnipotence in making them a legal tender.  If so made, they would, to the extent they are tendered for public dues, be a forced loan ;  and to the extent of the difference between their current value and that of standard coin, it would be a breach of public faith.  It is true that the measure might be hailed with delight by bankrupts ;  and if the bill passes, my friend from New York (Mr. Conkling) no longer need press his bankrupt law, for they would have no occasion to go into Chancery in order to scale and settle off with their creditors, as “legal tenders” would soon be offered at rates entirely within their means.  The Government can flood the country with 150,000,000 paper dollars, but from that moment you would vastly increase the cost of carrying on the war ;  prices would go up, and the addition we should pile upon our national debt would prove that it might have been even wiser to have burnt our paper dollars before they were issued.  The inflation of the currency would be inevitable.  In ordinary times few comprehend the Archimedean leverage of a few millions added to or subtracted from the currency of a nation actively engaged in the affairs of the world.* * * * * *

No one here contemplates but that at some future time the banks and the Government shall resume specie payments—the banks depending entirely upon whether the Government does so or not—and if so, I invite them to calculate the cost of the descent from that basis, the cost of the return, the expiratory pains to be suffered, and then determine whether we shall carry on this war on a specie basis, or on a ceaseless flood of paper, bartered at discordant prices in every city, town and hamlet of the country, bearing in mind, however cheaply obtained, every dollar is to be and will be ultimately repaid in gold and silver coin raised by taxation.

That I am not wrong in supposing if we launch this measure that we have nothing else to put afloat, is quite apparent in the able speech of my friend from New York (Mr. Spaulding), who plainly occupied his ground reluctantly ;  for besides the 150,000,000 of notes he now proposes to authorize, he more than hints at the possibility of “a further issue of demand notes, if Congress shall hereafter deem it necessary.”  I maintain that the bill, as reported by the Committee of Ways and Means, should not pass, because it will infinitely damage the national credit ;  because it will cut off all other chance of supplies ;  because it will reduce our standard of legal tender, already sufficiently debased ;  because it will inflate the currency and increase manyfold the cost of the war ;  because it would slide into the place proper for taxation ;  because, as a resource, it must ultimately fail, and tend to a premature peace ;  because it is a question of doubtful constitutionality ;  because it is an export facto law, immoral, and a breach of the public faith ;  because it will at once banish all specie from circulation ;  because it will dampen the ardor of our men at home, as well as soldiers in the field ;  because it will degrade us in the estimation of other nations ;  because it will cripple American labor, and throw at least larger wealth into the hands of the rich ;  and because there is no necessity calling for such a desperate remedy.  I agree with the gentleman from New York (Mr. Spaulding) in one thing most cordially ;  our finances stand in need of the tonic of decided military success.  Without that our stocks will continue to be quoted flat.  And yet I am no chronic grumbler.  Standing at zero, our army rose as if by a magical wand and illumined the whole heavens by its magnificent sweep.  Do not let it be said we rose like the rocket and fell like the stick.

Mr. Chairman—It will be seen from the substitute, as proposed on the part of one-half of the Committee of Ways and Means, that I do not object to the issue of United States notes to a limited extent, to circulate as currency.  It is both convenient and proper.  But I wish to have this issue marked by metes and bounds, saying at the outset, ‘ thus far shalt thou go and no further.’  Then, let them be based on as solid a foundation as the everlasting hills that they shall be the full equivalent of standard coin.  This can be done by fixing the amount ample, but reasonable, that no more than the fixed amount shall at any time be put in circulation, and by providing taxation sufficient at all times to retire them or to maintain their full value.  But, with all the earnestness I possess, I do protest against making anything a legal tender but gold and silver, as calculated to undermine all confidence in the Republic, whose reputation should be clearer to statesmen, as well as to soldiers, than life itself.* * * * * * *

We propose no new issue of Treasury notes, but leave the fifty millions already authorized to be issued and re-issued as may be found necessary or convenient.  This will secure us against an inflated currency.

Then it is proposed to issue $100,000,000 in United States notes, bearing interest at the rate of three and sixty-five hundredths per cent., payable at the pleasure of the United States, and allowing them with accumulated interest to be received for all debts and demands (taxes included) due to the United States, except duties on imports, and exchangeable at the will of the holder, whenever presented in sums not less than fifty dollars, for United States seven and three-tenths per cent. coupon or registered stock.  They are also to be received at par, with accumulated interest, for any bonds the Government may hereafter issue.  These are to be paid out for all salaries, debts and demands due to individuals and corporations, at their option within the United States.  In substance this is very like English Exchequer notes issued in anticipation of revenue.  It is most probable these notes would maintain their credit at or near par ;  and if there should be any difference between these and gold, it would be an honest difference, visible to all men.  As they accumulate they will be funded and retired, or re-issued, as the exigencies of the Government may require.  They equip the Treasury as well as any legal tender paper could do, while bearing interest they would not pass into the general volume of the currency, and they afford the only possible channel of obtaining any considerable sums to be consolidated into stocks.  They cannot exceed the amount of internal duties that will be levied, which will create a sure and constant demand for these notes, and sustain their credit in every State and Territory in the country.

We do not propose to receive these notes for duties on imports, for the reason that it is desirable to leave the tariff stable amid all fluctuations, and also that we may secure the coin we promise to pay out as interest on the bonds.

It is then proposed, in order to perfect this plan in all its parts, to issue $200,000,000 in coupon or registered bonds, payable in ten years, with interest semi-annually in coin, at the rate of seven and three-tenths per cent. per annum.  This is comparatively a high rate of interest, and it may be necessary that it should be so, in order to get the stock taken up by capitalists ;  but the time the bonds are to run is limited to ten years, because it would be much against the interest of the United States to engage to pay a high rate of interest for a long period of time.  We think there can be no doubt that these bonds will all be taken, commencing as soon as the tax bill shall be passed.  Unless the credit of the United States shall be utterly shattered, which is not for a moment to be apprehended, these bonds must be considered a most desirable investment, both in large and small sums.

It is proposed to issue $300,000,000 in coupon or registered bonds, payable in twenty-five years, with interest at six per cent., payable semi-annually in coin.  Usually, government bonds running for the longest time command the highest price, and for permanent investment are most eagerly sought after, at home and abroad.  As we emerge from our present embarrassments, the other forms of debts due by the United States will naturally be funded in such stock.

We promise coin for all interest on bonds, as it is indispensable that all engagements assuming this solemn form should in no instance repudiate the standard of the Constitution.

We strike out all words in relation to any foreign loan, as during this war we expect to fight our own battles, furnish our own means, without any foreign aid or assistance ;  and if we can be permitted to do that we shall ask no favors.

The substitute avoids all the material, and, we might say, fatal objections to the original bill ;  is entirely practical and feasible in its character, and will not only relieve the Treasury from its present necessities, but do something toward making provision for the future wants.  It is a question that will mark for weal or for woe an important page of our history ;  and I invoke the courage and judgment of the Committee to meet the question with that cool deliberation its high moment demands.”

ROSCOE CONKLING’S SPEECH.

“ Mr. CHAIRMAN—The member of the Committee of Ways and Means (Mr. Spaulding), by whom this bill was reported, was well warranted in all he said of its great magnitude, and of the thoughtful, serious, courageous attention due to its consideration.  It concerns the life of the nation—the means whereby it lives.  The credit of the government, like the credit of an individual, consists of the ability and integrity to pay all debts and perform all promises with scrupulous exactness and punctuality.  This ability and integrity, this untarnished public faith and unquestioned pecuniary solvency is that without which no Government can long survive.  Public credit alone cannot confer national immortality or national longevity, but the loss of public credit will be inevitably and swiftly followed by national decrepitude and national death.  This is true in peace, when wars and rumors of wars are hushed throughout the earth ;  it is true in uneventful times, in periods barren of action and prolific of repose ;  but what shall be said of its urgent, warning truth, as applicable to us in this dark hour of trial and of danger ?  Immediate and adequate financial facilities constitute, beyond all question, the overtopping, overmastering subjects with which we have the power to deal.

Gentlemen have longed for victories to re-invigorate the languishing energies of finance.  Victory, no doubt, would exert a potent influence ;  but, sir, the Treasury will control and decide the war, not the war the Treasury.  Indeed, the question of money and credit is all there is before us ;  it is practically the only unsettled question of the war.  Armies and navies may perish, and a public credit, well preserved, can replace them ;  but if the public credit perishes, the army and navy can only increase the disaster and deepen the dishonor.* * * * * *

I deny that any necessity is upon us to take the case out of settled rules.  We need money—large sums of money—and the whole resources and property of the nation are liable to pay tribute to raise it.  We owe debts—large debts—and the whole property of the country is holden to pay them.  Does anybody suppose that the security is not ample, or the re sources not abundant ?  My colleague from the Erie District (Mr. Spaulding) told us that the taxable property of the nation amounts to sixteen thousand millions of dollars ;  and he produced a statement from the Census Bureau to prove it.  In reality it is vastly more than that, because he gave us a self-fixed valuation—the valuation fixed by proprietors themselves, leaving an interest in reducing and covering up the amount.

According to my colleague, at the end of this fiscal year our debt will be only $650,000,000.  One would think here was margin enough for Wall street, State street, or Chestnut street.  Sir, it is margin enough, properly husbanded from first to last, to enable us to raise all the money we want at five per cent., and history proves it.

Now, sir, what does this plea of necessity mean—this plea upon which we are invited to leave the trodden paths of safety, and seek new methods of ‘ winning false moneys from the crucible called debt ?’  What is the necessity which prevents adherence to the old and approved methods of raising money ?  The arguments must be two-fold :  first, that the people will be better ready at some other time than the present to pay what, in the end, they must pay, with interest ;  and second, that necessary and legitimate taxation will be unpopular, and bring denunciation upon those who vote it.  Sir, I take issue upon both proposition.  I say the country is rich and ready.  Money is abundant—very abundant.  There is in the loyal States $250,000,000 of gold—the gentleman from Massachusetts (Mr. Alley) said the other day $300,000,000—more than ever before, and if we deserve it, we can have it.  The whole country is full of wealth.  The enormous expenditures of this home war have been made among ourselves, and the money has remained here and not gone into the channel which foreign war prescribes for currency.  The harvest has been abundant ;  materials and productions, raw and wrought, have been in great demand ;  and nearly every loyal State teems with the elements of material prosperity.  From a very extravagant, we have lately become a very economical people, and thus the percentage, as well as the aggregate of savings of earnings, is unusually great.  We are able to pay now, and we never can pay better than now. * * * * * *

There is one thing, however, about the proposed banking scheme, and about the bill before us, intended probably to attract votes, which seems of very questionable policy and very doubtful ethics.  I mean hostility to the existing banks of the country.  And inasmuch as I own not a farthing in the stock of any bank, and have not the slightest connection with one, perhaps a word in behalf of banks in loyal States will be borne with from me.

The present troubles, or rather their own patriotic action, have broken the banks ;  for every commercial man in this House knows that the banks were never stronger than when the Secretary of the Treasury appealed to them for loans.  They allowed the Government to carry of their specie, their capital from their vaults, and if that did not break them, they at all events might have adopted a policy which world have saved them.  But they had to suspend, and the design of this bill would seem to be to prevent their resumption of specie payment.  At all events, it is obviously the policy in some quarters to preach a crusade against the present banks, and array prejudices and votes on that issue.* * * * * *

I propose to assign my reasons briefly for voting against the attempt by legislation to make paper a legal tender.  The proposition is a new one.  No precedent can be urged in its favor ;  no suggestion of the existence of such a power can be found in the legislative history of the country ;  and I submit to my colleague, as a lawyer, the proposition that this amounts to affirmative authority of the highest kind against it.  Had such a power lurked in the Constitution, as construed by those who ordained and administered it, we should find it so recorded.  The occasion for resorting to it, or at least referring to it, has, we know, repeatedly arisen ;  and had such a power existed, it would have been recognized and acted on.  It is hardly too much to say, therefore, that the uniform and universal judgment of statesmen, jurists and lawyers has denied the constitutional right of Congress to make paper a legal tender for debts to any extent whatever.  But more is claimed here than the right to create a legal tender heretofore unknown.  The provision is not confined to transactions in future, but is retroactive in its scope.  It reaches back and strikes at every existing pecuniary obligation.  This was well put by the gentleman from Ohio (Mr. Pendleton), and I concur with him that substituting anything for gold and silver in payment of debts, and still more of precedent debts, is of very doubtful constitutionality.* * * * *

But, sir, passing, as I see I must, from the constitutional objections to the bill, it seems to me that its moral imperfections are equally serious.  It will, of course, proclaim throughout the country a saturnalia of fraud—a carnival for rogues.  Every agent, attorney, treasurer, trustee, guardian, executor, administrator, consignee, commission merchant, and every debtor of a fiduciary character who has received for others money, hard money, worth a hundred cents in the dollar, will forever release himself from liability by buying up for that knavish purpose, at its depreciated value, the spurious currency which we shall have put afloat.  Everybody will do it except those who are more honest than the American Congress advises them to be.  Think of savings banks entrusted with enormous aggregates of the pittances of the poor, the hungry, and the homeless, the stranger, the needlewoman, the widow and the orphan, and we are arranging for a robbery of ten, if not of fifty, per cent. of the entire amount, and that by a contrivance so new as never to have been discovered under the administration of Monroe Edwards or James Buchanan. To reverse the picture :  after the act shall have gone into effect, honest men undertake transactions based upon the spurious tender at its then value.  By and by comes a repeal, and they are driven to ruin in multitudes by the inevitable loss incident to a return to metallic currency.

* * * * * * * * * * *

The whole scheme pre-supposes that the notes to be emitted will be lepers in the commercial world from the hour they are brought into it ;  that they will be shunned and condemned by the laws of trade and value.  If this is not to be their fate, what is the sense, as was said in the Federal Constitutional Convention, in attempting to legislate their value up.  Now, sir, I do not believe that you can legislate up the value of a thing any more than you can make generals heroes by legislation.

* * * * * * * * * *

Mr. Chairman—I believe all the money needed can be provided in season by means of unquestionable legality and safety.  The substitute I have offered will, I believe, without essential alteration, effect that result.”

MR. CONKLING estimated the national debt up to July 1, 1862, at $806,000,000, and concluded as follows :

“ There has been no such occasion presented to a nation, no such demand made upon a nation during the lifetime of the human race.  The history of America, the history of free government, the history of constitutional liberty begins or ends now.  We have our career and our traditions as a nation ;  they are safe ;  but our history is yet to be made.  Our destiny is without an ally in the world, with nations banded against us, to hold fast a continent in the midst of the greatest, guiltiest revolution the world has ever seen.”

Mr. Bingham, of Ohio, obtained the floor.

Mr. STEVENS offered a substitute for the original bill, which he asked to have printed.  After Mr. Bingham had concluded his speech, the substitute thus offered by Mr. Stevens was ordered to be printed.

MR. BINGHAM’S SPEECH.

MR. BINGHAM—“ It was far from my purpose, when I came early to the House to-day to attend a meeting of the Committee on the Judiciary, to enter upon any discussion of the important question which now commands the attention of the Representatives of the people ;  and but for some remarks which have been made to-day by the honorable gentleman from New York (Mr. Roscoe Conkling), I would not feel disposed now to address the Committee.  But, sir, as a Representative of the people, I cannot keep silent when I see efforts made upon this side of the House and upon that to lay the power of the American people to control their currency—a power essential to their interests—at the feet of brokers and of city bankers, who have not a title of authority, save by the assent or forbearance of the people, to deal in their paper issued as money.

I am here to-day to assert the rightful authority of the American people, as a nationality, sovereignty, under and by virtue of their Constitution.  In saying that the people of this Republic are one people, a sovereignty, I do not feel that I shall be confronted by any of the great names of the illustrious dead who have suddenly found favor with gentlemen upon the other side of the House.  Living, there was no epithet in our language too severe in its condemnation, or too much uncharitable in its import, for the fit denunciation by certain parties of the alleged political heresies of the illustrious man, Alexander Hamilton, and that other illustrious man, Daniel Webster, who for strength of intellect stood alone among the living ;  and now dead, in his honored grave, sleeps alone by the sounding sea.  I am not myself of that class of admirers who persecute men while living and heap tuns of granite and pour empty adulation upon their ashes when dead.  I prefer to respect them and their authority while they stand among the living men of to-day.  These great names have been invoked in this debate.  For what purpose ?  For the purpose of denationalizing the people ;  for the purpose of stripping the American people of the attributes of sovereignty ;  for the purpose of laying, as I said before, at the feet and at the mercy of brokers and hawkers on ’Change the power of the people over their monetary interests in this hour of national exigency.

Sir, there is nothing in the records of these illustrious men that justifies any such base use of their utterances, which were made not only for the instruction of the men of their own day, but for the guidance of all that were to come after them.  I venture to affirm—without having recently had the opportunity to read much of what he said upon that subject—that Alexander Hamilton, peerless almost among the founders of the Constitution, never intimated in any paper of his that the Government of the United States could not, at its pleasure, issue Treasury notes, either payable upon demand or payable upon time.  There was much said by my respected colleague (Mr. Pendleton) with which I entirely and altogether agree ;  but, sir, when my colleague seemed to intimate in his argument that he found any warrant in the elaborate papers of Alexander Hamilton against this authority or power of the Congress of the United States to authorize the issue of Treasury notes, either payable upon time or upon demand, he greatly mistook the spirit of all he has written, and which has been transmitted to us.  My colleague was adroit in the handling of the papers of Hamilton, which will live as long as our language lives.  He was one of those men upon whom it pleased God to confer those extraordinary gifts which command the homage and admiration of men, whether they agreed with him or not.  The passage which my colleague quoted from his work was an argument in which he showed the propriety of establishing a national bank, authorized to issue currency, and he gave certain reasons therefor.  My colleague is a most excellent lawyer.  He knows well, and so did Hamilton know well when he made that argument, that what the Government does by another it does by itself.”

Mr. BINGHAM argued at great length that Congress had the power under the Constitution to authorize the issue of Treasury notes, payable on demand or payable on time, redeemable in gold and silver, or other legalized coin, and make them a legal tender ;  and that the present bill did not contemplate any other issue.  He insisted that Congress, by the Constitution, was invested with certain powers, and as to the objects, and within the scope of those powers, it was sovereign.  That the Constitution contained no words giving to Congress the power to make gold or silver coin, either foreign or domestic, a legal tender.  It has the power to coin money, and regulate the value thereof and of foreign coins, but the Constitution does not contain any words declaring that these coins shall be a legal tender.  The point I make is this :  Congress has power by the Constitution to fix the standard value of foreign coin and of domestic coin, and the power to declare a legal tender, and that these powers are distinct.  It may declare what shall be a legal tender, either foreign coin or domestic coin, or paper representing coin.  It is done by act of Congress.  Nothing ever was a legal tender under the Constitution in discharge of debt but by express provision of an act of Congress.  That the power “to regulate commerce” confers on Congress the power to declare what should be received in payment of debt.  It is not restricted to gold and silver, but the Government may issue Treasury notes, redeemable in gold and silver, and declare them a legal tender in payment of debts.  He denied that this bill would “impair the obligation of contracts.”  There is no such limitation as that imposed by the Constitution upon the power of Congress.  It is a limitation upon the States, and not upon the United States.  It was not by inadvertence that the framers of the Constitution omitted to impose upon Congress this express restriction upon the States against impairing the obligation of contracts.  They proclaimed in the absence of such limitations that whoever, within the jurisdiction of the United States, enters into any mere money contract, either public or private, enters into it subject to the sovereign power of the people, to determine at any time, by legislative enactment, what shall discharge it.  It is of the essence of the contract.

He did not share in any of the fears entertained or intimated that the people will revolt at this measure.  He had an abiding faith in their loyalty, in their love of law, in their settled purpose to suffer and strive, to labor and sacrifice, that they may maintain their Government and transmit it unimpaired to their children.

MR. SHEFFIELD, of Rhode Island, followed Mr. Bingham in a lengthy speech in opposition to the legal tender clause in the bill.  He insisted that it was unconstitutional, and an odious feature.  The fact that you propose to force these notes upon the public against the will of the people implies that force is necessary, in your judgment, to induce people to take them.  He said that if the legal tender clause was stricken out he would vote for the bill, notwithstanding it was objectionable in other respects.  (Mr. Sheffield’s speech will be found reported in the Congressional Globe, page 640-1.)

On Wednesday, February 5th, several speeches were made for and against the bill, all of which are fully reported in the Congressional Globe, but the limits of this narrative will not admit of their being published here.  Only a brief sketch can be given at this time.

Mr. Chrisfield, of Maryland, spoke for one hour in opposition to the legal tender clause in the bill.

“ He admitted that the accustomed currency was wholly inadequate to meet the exigencies of the war.  The Government has for many years used gold and silver, and it is deeply to be regretted that it is obliged to depart from this desirable standard.  But we are left no option.  The supply of the precious metals is inadequate to our wants.  If all the gold and silver in the country was placed at the control of the Government, it would be received and paid out twice in one year.  It is, therefore, impossible for the Government to pay in coin.  The business of the country and the business of the Government require some substitute for coin.  We must therefore create a new or vastly enlarge the existing currency.  We must therefore create a public debt, establish a currency, and impose new taxes.  This necessity being admitted, the only question is how can these objects be accomplished with the least prejudice to the people, and the greatest convenience to the Government ?  This is a grave question—the gravest which these times present.  It is the question which lies at the foundation of all other questions ;  and on its solution depends success in every other enterprise.”

He argued at great length that the legal tender clause was unconstitutional, and that it would not be just to the creditor class of the community.  He moved to strike out this clause in the bill, and also the clause which compelled persons in the employ of the government to receive the notes for “ salaries, debts and demands owing by the United States,” so as to make them only “ receivable for all debts and demands due the United States.”  He urged heavy taxation, and was generally favorable to the bill, if the amendments were made which he proposed, but could not vote for the bill with the legal tender clause retained.  (Appendix to Congressional Globe, page 47-48.)

Mr. PIKE, of Maine, spoke for one hour in favor of the bill.

“ He argued that the plan was expedient as well as Constitutional.  Upon the clause in the bill providing that the notes shall be a legal tender there has been much discussion here and elsewhere.  Its importance to the measure cannot be overestimated.  He regarded it as the life of the plan.  Strike it out and we are but duplicating notes already at a discount.  It is really the specie clause, and no hard money man—and he claimed to be one—should vote for the issue of these notes without it.  It is well known that Mr. Clay rested his support of the second bank upon the clause granting Congress “the power to make all laws which shall be necessary and proper for carrying into effect the powers,” expressly granted by the eighteenth section of the first article.  The great patriot of the West, in time of profound peace, was disposed to consider the financial question of such magnitude as to plan a law calling into being a fiscal agent among those which were “necessary and proper.”  With how much more force can we, situated is it were, among the dying agonies of the republic of our fathers, acting as many wise men believe, as the last Congress which, under the Constitution, shall represent the whole country, claim that all power which, under any circumstances, could be exercised by the Representatives of the people, should be used now.”

Mr. ALLEY, of Massachusetts, made a well-considered speech of one hour in favor of the bill.

“ The measure before the House received the approbation of his judgment.  He could see clearly that under its provisions the rights of all will be protected, the prosperity of the whole people promoted, the credit of the Government revived and its power and dignity maintained.  Beneficent as this measure is, as one of relief, nothing could induce him to give it his sanction but uncontrolable necessity.  While he had always believed it to be the duty of Congress to regulate and control the currency by such legislation as would make it of uniform value throughout the country, he had never regarded it as politic or wise for the Government to make issues of paper at any time, except for temporary emergencies.  Disguise it as you may, everybody knows that knows anything of the laws of trade, that to carry this people through this crisis, collect $150,000,000 tax, maintain these vast expenditures, and conduct the legitimate and necessary business of the country, you must increase the volume of the currency to such an amount as to make it impossible, under the present banking system, to give it confidence upon the ground of its immediate convertibility into specie.  The question then for Congress to decide, is whether the Government shall share with the banks—and keep them in check—this circulation, or purchase their irredeemable bills at ruinous rates.  If you do not adopt this measure you will see the country flooded with irredeemable bank currency, a great deal of which will be found, as after the war of 1812, utterly worthless.  At that time Government securities were exchanged at eighty cents on the dollar for worthless bank promises, not worth the paper upon which they were written.”

Mr. Alley concluded his remarks as follows :

“ Why, I ask, are government securities worth in the market to-day but ninety cents on the dollar in exchange for irredeemable bank paper ?  Is it because they have confidence in bank paper, or because it will command specie ?  Not at all ;  but because the bank paper will liquidate the obligations of debtors.  It is for you to determine whether government obligations shall be as good as irredeemable bank notes ;  and whether you will allow these irredeemable issues to be preferred and take precedence of national currency issued by a Government that never repudiated a dollar of its indebtedness ;  and a nation whose fabulous growth, immense interests and exhaustless resources, have excited the wonder and admiration of an astonished world.  I confess that when I reflect upon our condition, and the misery and suffering which such a policy inflicts upon the business interests of the country, I can have no toleration for such suicidal action.  Congress has the power to inaugurate to-day a system of financial policy, both for Government and people, which will establish our prosperity upon a firm foundation, and give strength and stability to all our institutions ;  and I conjure you, by all the memories of the past and every hope in the future, not to disappoint in this moment of peril the just expectations of the American people.”

While Mr. Alley was making his speech, Mr. Spaulding received from Secretary Chase a private note, urging the importance of having the vote taken on the bill that day.  It was known that Mr. Horton, a prominent member of the Committee of Ways and Means, desired to speak in opposition to the bill, and that several other members desired to express their views of the measure before the vote was taken.

The Treasury was nearly empty.  Money, or other available means must be had right off.  The pressing demands made upon the Treasury could not be put off much longer without ruin to the credit of the Government.  The Secretary had authority under the Loan Act, passed at the extra session in July, still remaining, to issue $46,000,000 of Treasury notes bearing 3-65 per cent. interest, or, at his option, to issue 7-30 notes ;  but was unable to put out either class of this paper without a discount.  The 7-30 notes could not be paid out from the Treasury except at a discount of two per cent., and he could not pay out the 3-65 notes at all, because they would not pass as currency, except at a still greater discount—the rate of interest was so low that they were not desirable as an investment, and not being a legal tender they could not be made available at par as a currency.

The following is a copy of the note received from Secretary Chase at this time :

“ Such men as Nathaniel Thayer, of Boston ;  Alexander Duncan, of Duncan, Sherman & Co.;  Shepard Knapp and John D. Wolf, and numerous able and leading financial men, have told me within two days that you were perfectly right, and they are deeply anxious that the legal tender clause should stand in the bill.  They say the country is lost without it.”

TREASURY DEPARTMENT, February 5, 1862.

MY DEAR SIR—I make the above extract from a letter received from the Collector of New York this morning.  It is very important the bill should go through to-day, and through the Senate this week.  The public exigencies do not admit of delay.

Yours truly,
S. P. CHASE.

HON. E. G. SPAULDING.

After receiving this note from the Secretary, Mr. Spaulding thought it desirable that a time should be fixed for closing the debate on the bill.  He thought it desirable that Mr. Horton and Mr. Stevens, members of the Committee of Ways and Means, should speak, and such others as were prepared, and that the vote should be taken the next day.

The following proceedings took place in the house.

MR. WRIGHT obtained the floor.

MR. SPAULDING—“ I move that the Committee rise with a view of closing this debate.”

Mr. CAMPBELL—“ I hope this motion will be agreed to, and that this bill will be pressed to a vote to-day.”

MR. SPAULDING—“ I desire to say, in connection with this motion, that I have within the last two or three hours received a note from the Secretary of the Treasury informing me that it is absolutely necessary that we should press this measure to a vote without further delay.  Therefore I move that the Committee rise, with a view of closing debate.”

MR. HORTON—“ I wish to say that the Committee of Ways and Means do not make this motion, and I hope it will be voted down.”  (“Good !”  “Good !”)

The CHAIRMAN—“ The Chair would state that this question is not debatable.”

Mr. ENGLISH—“ I move to lay the motion upon the table.”

THE CHAIRMAN—“ That motion is not in order in committee.”

The question being upon the motion that the Committee rise.

MR. ROSCOE CONKLING demanded tellers.

Tellers were ordered, and Messrs. Blair, of Missouri, and Thomas, of Massachusetts, were appointed.

The Committee divided, and the tellers reported—yeas, 52 ;  nays, 62.

So the motion was not agreed to.

MR. SPAULDING—“ With the permission of the gentleman from Pennsylvania, I wish to make one word of explanation in reference to the motion I made.  The object of the motion was simply that we should limit this debate, with a view that we might take a vote upon the bill to-morrow, say at one o’clock.  I expected to go immediately back into committee to allow the gentleman from Pennsylvania to make his speech, and then to allow Mr. Morton to speak, and then Mr. Stevens to close the debate.  After that the vote would be taken.”

MR. THOMAS, of Massachusetts—“ Then you arrange the manner in which speeches shall be made on this floor.”

MR. LOVEJOY—“ I would like to know whether the gentleman from New York has any right to farm out the floor ?”

MR. SPAULDING—“ I make this explanation with a view to show the House that I have no disposition to cut off any member of the Committee or to force a vote unduly.  The motion was made under the necessity which, the Secretary of the Treasury assures us, exists for passing this bill.  I did not make it with a view to cut off those who are entitled to speak, by courtesy or otherwise.  I think this explanation will satisfy the House that there was no effort upon my part to force a vote improperly.  I did not expect to have a vote until to-morrow at one or two o’clock.  After the debate is closed, we proceed to voting upon amendments which are pending, and which may be offered, and then five-minute speeches will be in order, as upon other bills.  Those speeches can be continued until amendments are exhausted.”

MR. WRIGHT, of Pennsylvania, spoke for half an hour in opposition to the legal tender clause of the bill.

“ He was willing to do almost anything that he considered constitutional to aid in putting down the rebellion, but he did not feel justified in going so far as to vote any such measure as the legal tender bill.  He concurred in the views of Mr. Pendleton that it was unconstitutional, that nothing but gold and silver could be made a legal tender in payment of debts.  The people have means enough in their possession, and he was willing to go for taxation to the uttermost limit, but the time had not yet arrived when we should resort to such an extreme measure as to make these notes a legal tender.” * * * * * * * * *

MR. MORTON, of Ohio, a prominent member of the Committee of Ways and Means, made a lengthy speech in opposition to the legal tender clause in the bill.

“ He thought we were taking a dangerous departure from the financial system of the country.  If this bill passes, as he hoped it would not, this will be a point from which we shall date a new financial system for the United States.  “Old things will have been done away ;  all things will have become new.”  He thought the Loan bill and the Tax bill should have been passed through this House side by side.  The Committee of Ways and Means were convinced of the importance of this, and were desirous that it should be done.  (Mr. Morton was one of the sub-committee on the Tax bill.)  It is from no neglect of the Committee of Ways and Means, or of the sub-committee which has had the preparation of the Tax bill in charge, that the Tax bill and Loan bill have not been brought forward side by side.  The sub-committee on the Tax bill have worked night and day ;  and although they do not get much credit for being industrious, still substantial progress had been made.
    There were two measures before the House, and he proposed to discuss them.  One was the proposition of the gentleman from New York (Mr. Spaulding) and the other that of the gentleman from Vermont (Mr. Morrill).  He insisted that the three-sixty-five hundredths per cent. notes, proposed in Mr. Morrill’s plan, possessed “all the characteristics for circulation which the Treasury notes of Mr. Spaulding’s bill will have (save the legal tender clause), and have the important advantage of earning interest, and being fundable in a more desirable stock for the holder, because bearing a higher rate of interest, and more advantageous to the Government, because having only half the time to run, the Government can redeem them at an earlier day.”  The Committee of Ways and Means are equally divided in regard to the two bills.  He was for the substitute of Mr. Morrill, and decidedly opposed to the legal tender scheme.  He thought we had not yet reached the point when the Government, exercising its high prerogatives, as Mr. Spaulding called them, can take for its use the property of the citizen without pay.  Necessity for this measure has been asserted, but not proved.  The Secretary of the Treasury thinks it is necessary, but he thought he was mistaken.”

Mr. Horton argued at great length against the injustice and inexpediency of making the notes a legal tender, and concluded as follows :

“Mr. Chairman—I thank the Committee for listening to me so long.  You know that I am unaccustomed to speaking in the House, and my remarks of course have been very desultory.  But I wish to impress upon the Committee that these opinions of mine are not merely opinions superinduced by a hopeful temperament.  I have, according to the best of my knowledge, examined this whole question in all its bearings, and I am willing to take the responsibility of voting against this legal tender clause of the bill for the reasons that I have given, and for divers and sundry reasons which I have not given.  I ask the Committee to pause before they take a step which, once taken, will be irrevocable.  When you have once broken a pitcher it never becomes whole again ;  and this fair fabric of our untarnished faith and unbounded wealth and credit ought not to be destroyed, simply because our leaders—men that we have faith in—have become alarmed, and have told us that there is a necessity for it.  When there is danger, Mr. Chairman, then is the time to be cool and look about you, and to see that you take no false step.  Now is that time, and if you take this step, it is a step downwards, and you will find that to regain the high eminence from which we shall have descended is a labor very difficult to accomplish.”

MR. KELLOGG, of Illinois, obtained the floor.

MR. SPAULDING—“ I ask the gentleman to give way to me for a few moments, and then I will move that the Committee rise,”

MR. KELLOGG, of Illinois—“ I yield for that purpose.”

MR. SPAULDING—“I wish to make one statement in reference to the condition of the Treasury, which I presume all will be anxious to know before we adjourn.  The Secretary of the Treasury has yet unexpended of the loan of last July $46,000,000.  He has a right to issue this sum in three and sixty-five hundredths per cent. notes, or in seven and three-tenths per cent notes ;  but he is unable to put out either of these classes of paper without a discount.  He cannot pay out the seven and three-tenths per cent. notes without a discount of two per cent., and he cannot pay out the three and sixty-five one hundredths per cent notes because they will not be taken as currency.  This bill of Mr. Morrill proposes simply to repeat the authority to issue the same kind of notes, which cannot be issued advantageously by the Secretary of the Treasury at this time.  I move that the Committee do now rise.”

The motion was agreed to. * * * * * * *

MR. SPAULDING—“ I move that all debate on House bill No. 240 be closed in one hour after its consideration shall have been resumed in the Committee of the Whole on the state of the Union.”

MR. THOMAS, of Massachusetts—“ I suggest to the gentleman to modify his motion, so as to make it read two hours.”

MR. SPAULDING—“ The exigencies of the country are such that I cannot consent to do so unless the House so order it.”

MR. VALLANDIGHAM—“ I move to amend the motion by striking out ‘one hour’ and inserting ‘two hours.’ ”

The amendment was adopted, and the motion as amended was agreed to.

PASSAGE OF THE BILL IN THE HOUSE.

Thursday, February 6, 1802, was an exciting and important day in the House.  The final vote on the legal tender note bill was to be taken, and in anticipation of the vote there was a very full house.  In pursuance of the order passed last night, general debate was to be closed in two hours after the bill should be taken up in Committee of the Whole.  The House on meeting and disposing of a little preliminary business, immediately resolved itself into Committee of the Whole, and resumed the consideration of the bill.  The Chairman announced that general debate on the bill would close at ten minutes past two o’clock P.M.  While debate was continued, Mr. Frank and Mr. Colfax, who were friendly to the bill, passed around the House with a list, making a canvass of how the different members would vote on the legal tender clause.  Upon footing up the list, it was ascertained that there was a large majority in favor of making the notes a legal tender.

MR. KELLOGG, of Illinois, being entitled to the floor, spoke for over half an hour in favor of the bill, not as a peace measure, but as a war measure.  He said :

“ I intend to detain the Committee but a little while.  I should not have sought the floor for the purpose of offering any remarks, but for the consideration that, in my ,judgment, this bill was being considered and discussed as it might with propriety have been discussed and considered in time of peace, and when there was no pressing necessity for the action of Congress in placing the Government in possession of all the means and powers that can be safely gathered and exercised under the Constitution.  If this question came up in ordinary times, I am frank to confess, that I might, perhaps, have had some doubt of its constitutionality sufficient to induce me to oppose it.  I mean by that only to say that in time of peace, when the integrity of the Government is not threatened, I would be more careful and cautious ;  and if I doubted the constitutionality of the measure I would not vote for it.  But, sir, in this our extremity, while we are struggling to perpetuate our Government, I am willing to go to the very verge of the Constitution.  I will go as far as I feel that the Constitution will permit me, to gather up the power and means to carry on the Government to that great consummation which the fathers contemplated when they established it.  But while I might have some doubt in time of peace, when the monetary fairs of the country might safely be left to work out their own level and settlement, of the policy of this measure, I have none now.  What may be policy in the one case may be vastly different in, the other.

I treat this, Mr. Chairman, as emphatically and clearly a war measure.  It may appear strange that a money bill should be considered a war measure, and yet it is ;  for it is necessary in order to raise means to carry on the Government in a war direction—a direction in which all our measures are or should be tending.  Sir, we should not disguise the fact of our complications.  We should not deceive ourselves.  The worst deception that men ever practice is that practiced on themselves.  We should not allow ourselves to be deluded, now that we have a mighty rebellion—nay, revolution—before us, and that the Powers of the Old World, who have looked with a jealous eye on the mighty progress of the Western Continent, are seeking occasion to cripple our onward and upward career.  Talk not of their sympathy for us.  Our Government antagonizes theirs.  The principles are different.  We must gird up our loins ;  we must take all the power we have ;  we must throw every energy, all the means of our Government, in the direction of the war power, for the purpose of self-preservation and perpetuation.

Mr. Chairman, we must look this matter in the face, not only of this continent, but in the face of surrounding nations.  We must come to the conclusion that although the world shall rise against us, this Republic must and shall be preserved.  All the energy of the country, all the blood and treasure of the country, if need be, must be summoned in from every part of the land to accomplish that object.  Sir, we must give to this Government arms of iron and muscles of steel.  We must think as with fire and strike as with spears.  It is necessary, sir, it must be ;  and if we now meet this emergency as true men should meet it, we shall succeed.  The money of the country must come to its aid, the powers of the Government must come to the aid of the Administration, as well as the strong hands and warm hearts of our people.

Mr. Chairman, I am pained when I sit in my place in the House and hear members talk about the sacredness of capital ;  that the interests of money must not be touched.  Yes, sir, they will vote six hundred thousand of the flower of the American youth for the Army, to be sacrificed, without a blush ;  but the great interests of capital, of currency, must not be touched.  We have summoned the youth ;  they have come.  I would summon the capital ;  and if it does not come voluntarily, before this Republic shall go down, or one star be lost, I would take every cent from the treasury of the States, from the treasury of capitalists, from the treasury of individuals, and press it into the use of the Government.

What is capital worth without a Government ?  Gentlemen must understand me, when I indulge in this strain and speak in this strain and speak of this talk and quibble about capital, that I do not charge it upon the real capitalists of the country, for they do not hold back.  The true capitalists of the country are patriotic ;  they have furnished their means liberally ;  but there is a class of huckstering capitalists, there is a class of bankers proper, there is a class of brokers, who would make merchandise of the hopes and fears of the Republic. * * * * * * * * * *

It is said there is no power to make these notes a legal tender, and that that is not a legitimate way of expressing their value.  If gentlemen are sure upon that subject, they would do well to run back a little further and ascertain whether there is any power under the Constitution vested in Congress to issue the notes at all.  And I confess the argument of the gentleman from Ohio (Mr. Pendleton) ran back legitimately to that proposition.  At least it carried my mind back to that proposition so fairly and certainly, that if I found no power to issue these notes, I would have voted against this bill.  To that my mind has turned with every argument that has been made.  I may have been obtuse, but I confess that I have come to the conclusion that we have the constitutional power to issue these notes ;  and having that constitutional power we have, as an incident to that power, the power also to make them of value by making them a legal tender.  The gentleman has voted more than once for the issue of Treasury notes to pay debts owing by the Government, which were payable in coin.  If we have power to issue Treasury notes, we have the power to fix the value of the issue.  It is an incident to the power of issuance.  Let them be issued as money, to take the place of money.  Let there be no deception ;  let the creditors of the Government know whether we are to palm off a spurious depreciated currency under the guise of money.  If we have the right to issue it, and impress with the denomination of five dollars, why not stamp upon its face that it is five dollars everywhere ? ”

MR. THOMAS, of Massachusetts, made a speech against the legal tender clause in the bill.

“ He regarded this clause as unconstitutional, unjust, and inexpedient.  The question had never been settled by judicial authority, but the weight of reasoning by Webster, Madison, and others, was strongly against the validity of this clause in the bill.  He argued that nothing but coined money could be made a legal tender in payments of debts ;  that a matured debt could not be paid by another promise.  He regarded this clause in the bill in the nature of a forced loan, in itself a confession of weakness.  The friends of this feature of the bill admit the reluctance with which they assent to it.  The only ground of defence is its necessity, that no alternative is left to us.  He deeply respected their motives, but could not himself see the necessity.”

MR. EDWARDS, of New Hampshire, made a speech in favor of the bill.

“ We find ourselves confronted by an exhausted Treasury, and without the means of meeting its existing, or its constantly accruing liabilities.  The amount of floating liability now due is $100,000,000.  The figures presented in the opening speech of this debate are immense—almost appalling.  Funded and floating it is now $400,000,000 ;  on the first of July next it will be $650,000,000, and if the war continues $1,200,000,000 in one year from that time.  He was in favor of taxation to pay ordinary expenses and interest, and ultimately a sinking fund, but he was in favor of the issue of Treasury notes for the purpose of meeting immediate expenditures, and all parties seemed to concede that Treasury notes in some form must be issued.  The bill reported by the Committee of Ways and Means and the substitute offered by Mr. Morrill, may be regarded as the only propositions now before the House.  It is understood that the other propositions will be withdrawn, and that the dissenters from the bill will concentrate on this substitute.  They agree in the main features of the plan, and differ only in details.  He thought the notes proposed by Mr. Morrill’s Plan would not pass current, among the people or the banks, but would necessarily depreciate.  The army and navy might be compelled to receive them at par, because the Government had nothing else to give them, but they could not afterwards pass them without a large discount, which would be unjust to the men fighting our battles.  He thought that would be a lack of faith of the most flagrant description—more objectionable by far than the legal tender clause.  He also objected to the high rates of interest proposed for the bonds to be issued in funding the notes.

The substitute provides for a depreciated currency and a high rate of interest.  He thought the currency proposed by the substitute would demoralize tho country as much, or more, than the legal tender notes, and would not possess as many advantages to the Government.

The legal tender notes would give instant means to the Treasury, so much needed at this time, without looking to intermediate negotiation to furnish them.  The original bill was the one in all material respects to be preferred to the substitute, one of which it is distinctly understood will be adopted.”

MR. RIDDLE, of Ohio, made a speech against the propriety and expediency of issuing the legal tender notes.

“ He doubted the constitutionality of the measure.  He thought there was no real money, except the metals coined in pursuance of law and a fixed standard.  Can money be made of paper ?  Clearly not, by calling it money or by stamping it as money by the Government.  It would not stand the commercial test.  Paper has no appreciable intrinsic value, and its exchangeable value is of the lowest possible grade.  The only high degree of value it can ever attain is that which may be imparted to it by that which is written or printed upon it.  It is apparent that the whole quantity of the circulating medium must be materially increased, for obviously that which was only equal to the demands of commerce and the ordinary wants of the Government, is wholly inadequate now to the same demands and the extraordinary wants of the Government.  He was opposed to the legal tender clause, and would vote to strike it out ;  if that fails, I will choose between the bill and its defeat.”  (He voted for the bill on its final passage.)

MR. BLAKE, of Ohio, spoke in favor of the bill.

“ At no time in the history of our country was the peril to our free institutions greater than now.  The bill is brought forward as a war measure, to meet the pressing demands now on the Treasury.  He argued that it was constitutional to issue Treasury notes and make them a legal tender.  He insisted that it was a necessary and proper means of carrying into effect the war powers—to raise and support armies and to provide and maintain a navy.  We are now in the midst of a great National exigency, and one, too, that we must provide for ;  and one that in the application of the means there must of necessity be great latitude of discretion, and denied that legal tender paper money was prohibited.”  (He read from the debates on the formation of the Constitution, Vol. 5, page 435.)

MR. MASON—“He was unwilling to tie the hands of the Legislature.  He observed that the late war could not have been carried on had such a prohibition existed.”

MR. BUTLER—“That paper was a legal tender in no country in Europe.”

MR MASON—“Was still averse to tying the hands of the Legislature altogether.  If there was no example in Europe, as just remarked, it might be observed, on the other side, that there was none in which the Government was restrained on this head.”

MR. BLAKE continued his argument, insisting “that the Convention which framed the Constitution did not attempt any prohibition, but left it to Congress to make Treasury notes a legal tender whenever the exigency should arise to make it necessary.  It was denied in express terms to the States, and permitted in implied terms to Congress.  It being constitutional, is it necessary to make Treasury notes a legal tender ?  By these notes we are enabled to pay our soldiers, and it is the only means we have to pay them.  Does not every gentleman know that if these notes were paid to our soldiers without making them a legal tender, they will immediately be sold at a loss to the soldiers of from four to twenty per cent.?  This is not conjecture :  this very thing was done here only last month ;  soldiers were shaved by the money-shavers of this District from four to twenty per cent. on the demand Treasury notes they had received from the Government.  We are not legislating for the money-shavers, who oppose this bill, but for the people, the soldiers, and laboring classes.”

MR. CAMPBELL, of Pennsylvania, spoke in favor of the bill.

“ He said, it is proper that each member of this House should, however briefly, express his views on the pending bill—one of the most, if not the most, important bills of this season.  To support our armies in the field and navies on the seas is a plain, patriotic and necessary duty ;  to do this with prudence, economy and foresight, is the highest evidence of statesmanship.  That we have vast National resources, all admit ;  that the public debt has for its security the whole property of the nation, is equally plain.  The powers of the Government are ample—they extend to life and property.  He would fall short of his duty in this tremendous issue, in which free government is on its final trial, who would not, if necessary, vote the last man and the last dollar to defend and perpetuate the priceless inheritance of our fathers.

I humbly conceive my duty to be a plain one.  The path I have marked out for myself I will follow, let it lead where it may.  Whatever measure is now or hereafter may become necessary to adopt in order to maintain the Union and perpetuate free Government, that will I support.  Speak not to me of “objections” and “scruples” and “dangers,” of “Constitutional objections” and “conservative influences.”  Sophistry is ever plausible, and opposition to a just and necessary measure generally wears the mask of a “Constitutional objection.”  The highest duty of every member is to maintain the Union—to sustain the Constitution against this causeless and wicked rebellion ;  and in doing this, let us bear in mind that the Constitution was made for the people—to secure to them and their posterity the blessings of free government.  Therefore, with me the primary inquiry is, is this measure necessary to suppress the rebellion ?  If it is, here am I ready to sustain it.  It will be found the Constitution gives ample power to sustain this view.

The bill now before the Committee is necessary to sustain the credit of the country, and to carry on the war.  It is with reluctance that I have come to this conclusion.  I do not like the necessity which exists for the legal tender clause ;  still less do I like to place the issues of the Government in the hands of the brokers and money-lenders of the country.  Depreciated now, let the legal tender clause fail, and mark the result to-morrow.  The Treasury notes in fall from four per cent. to fifteen and twenty-five below par, and the Government will have to pay that percentage additional for every article they purchase.  Your soldiers will be shaved that amount on their blood-bought wages, and the country, flooded with a vast amount of depreciated paper, will grow restless and discontented under so fatal a mistake.  If we make the Government issues a legal tender, the demand for specie will be so limited that they will maintain their value.”

CLOSING THE DEBATE ON THE BILL.

By order of the House general debate was now closed.  The standing rules of the House, however, provide that the member introducing the measure shall have the right, after general debate is closed, to speak one hour in reply to adverse speeches, in finally closing the debate.  Mr. Spaulding, having introduced the bill, was entitled to the floor to close the debate.  Mr. Stevens, who had not yet spoken, was desirous of expressing his views on the measure, and Mr. Spaulding was willing to give him most of the hour to which he was entitled, and intended to yield the floor to him for that purpose.

MR. SPAULDING, in closing, summed up, on his part, as follows :

“ I have listened with a great deal of attention to the arguments and propositions which have been submitted by the various gentlemen who have addressed the House, but I shall not now make the concluding speech.  I shall leave it to the able Chairman of the Committee of Ways and Means to close the debate.  If I may be indulged, however, for a few moments, I desire to say, summing up, first :  that all agree that taxation, in various forms, must be imposed to the amount of at least $150,000,000 on which to rest the credit of these notes and bonds, a sum sufficient to pay the ordinary expenses of Government on a peace footing, the interest on all the war debt, and a sinking fund to liquidate annually a portion of the principal.  Second :  we all agree that hereafter the war must be carried on principally upon the credit of the Government, and that paper in the form of notes and bonds must be issued to an equally large amount, whichever plan is adopted.  After deducting the sum raised by internal revenue, by direct taxation, and duties on imports, the amount of paper to be issued can only be limited by the actual expenses of the Government.  The respective plans of Messrs. Vallandigham, Conkling, and Morrill, require the same amount of paper to be issued as the legal tender bill proposed by the Committee of Ways and Means, and supported by the Secretary of the Treasury.  Third :  the main difference between the several plans is, that the legal tender bill stamps demand notes as money, with the highest sanction of the Government to circulate as a National currency, the same as bank notes, in all the channels of trade and business among all the people of the United States ;  whilst all the other plans proposed contemplate the issue of an inferior currency that will not, in my opinion, circulate as money either among the banks or the people, but will, on the contrary, be depreciated and sold at a large discount by all officers, soldiers, and others that are compelled to receive it from the Government in payment for services and supplies furnished.  For myself, I prefer to issue the demand notes, based on adequate taxation, and with the highest legal sanction that can be given to them by the Government, placing the soldiers and capitalists all on the same footing in regard to these notes.”

Mr. SPAULDING then yielded the floor to Mr. Stevens.

Mr. LOVEJOY objected to the gentleman yielding the floor.

THE CHAIRMAN—“ If objection is made, the gentleman from Pennsylvania cannot occupy the floor.  The gentleman from New York cannot yield the floor to him, except by unanimous consent.”

Mr. MORRILL—“ I trust no objection will be made ;  only the same time will be consumed.”

Mr. LOVEJOY—“ Well, I will withdraw the objection.”

MR. STEVENS’ ADDRESS.

“MR. CHAIRMAN—This bill is a measure of necessity, not of choice.  No one would willingly issue paper currency not redeemable on demand, and make it a legal tender.  It is never desirable to depart from the circulating medium which, by the common consent of civilized nations, forms the standard value.  But it is not a fearful measure, and when rendered necessary by exigencies it ought to produce no alarm.

The late administration left us a debt of about $100,000,000, and bequeathed to us also an expensive and formidable rebellion.  This compelled Congress, at the extra session, to authorize a loan of $250,000,000 ;  $100,000,000 of these were taken at 7 3-10 per cent., and $50,000,000 six per cent. bonds at a discount of over $5,000,000 ;  $50,000,000 were used in demand notes, payable in coin, leaving $50,000,000 undisposed of.  Before the Banks had paid much of the last loan they broke down under it and suspended specie payment.  They have continued to pay that loan, not in coin, but in demand notes of the Government ;  that has kept them at par, but this last of the loan was paid yesterday, and on the same day the banks refused to receive them.  They must now sink to a depreciated currency.  The remaining $50,000,000 the Secretary of the Treasury has been unable to negotiate.  A small portion of it, say $10,000,000, has been issued at 7 3-10 per cent. in payment of debts.

He estimated the present floating debt at $180,000,000 ;  daily expenses, $2,000,000 ;  to carry us to next meeting of Congress, $600,000,000 more.  That if sufficient six per cent. bonds were forced on the market to pay our expenses up to December, or $700,000,000, as the money should be wanted, he thought they would sell as low as sixty per cent., as in the last English war ;  and even then it would be impossible to find payment in coin.  A large part of it must be accepted in depreciated notes of suspended banks, for no one expects the resumption of specie payments until the close of the war.

Without the legal tender clause the notes could not be kept at par.  Brokers, bankers, and others would depreciate them.  The National Bank scheme recommended by the Secretary might, in ordinary times, be very useful, but while the banks are under suspension it was not easy to see, how it would relieve the Government.  They would have the circulation without interest, and at the same time would draw interest on the bonds, and afford no immediate relief.  He thought the Government should have the benefit of the circulation of legal tender notes, and did not see how we could get along in any other way.

He argued in favor of the constitutionality of the legal tender clause, and that it was a necessary and proper measure at this time.  In short, whenever any law is necessary and proper to carry into execution any delegated power, such law is valid.  That necessity need not be absolute, inevitable, and overwhelming if it be useful, expedient, profitable, the necessity is within the constitutional meaning.  Whether such necessity exists is solely for the decision of Congress.  Their judgment is absolute and conclusive.  If Congress should decide this measure to be necessary to a granted power, no department of the Government can rejudge it.  The Supreme Court might think the judgment of Congress erroneous, but they could not review it.  Now, it is for Congress to determine whether this bill is necessary “to raise and support armies aird navies, to borrow money, and provide for the general welfare.”  They are all granted powers.  It is for those who think that it is not “necessary, useful and proper,” to propose some better means, and vote against this ;  if a majority think otherwise, its constitutionality is established.

If constitutional, is it expedient ?  It is objected by the gentleman from Ohio, that the legal tender clause would depreciate the notes.  All admit the necessity of the issue ;  but some object to their being made money.  It is not easy to perceive how notes issued without being made immediately payable in specie, can be made any worse by making them a legal tender.  And yet that is the whole argument, so far as expediency is concerned.  Other gentlemen argued that this would impair contracts, by making a debt payable in other money than that which existed at the time of the contract, and would so be unconstitutional.  Where do gentlemen find any prohibition on Congress against passing laws impairing contracts ?  There is none, though it would be unjust to do it.  But this impairs no contract.  All contracts are made not only with a view to present laws, but subject to the future legislation of the country.  We have more than once changed the value of coin.  Neither our gold nor our silver coin is as valuable as it was fifty years ago.  Congress in 1853, I believe, regulated the weight and value of silver.  They debased it over seven per cent., and made it a legal tender.  Who ever pretended that that was unconstitutional ?  The gentlemen from Vermont (Mr. Morrill), and Ohio (Mr. Pendleton);  think it an ex port facto law.  It is not wonderful that my distinguished colleague, not being a professional lawyer, should not be aware that the ex port facto laws prohibited by the Constitution refer only to crimes and misdemeanors, and not to civil contracts.  The gentleman from Ohio no doubt knew, but forgot it. * * * * * * * * * * * * *

Gentlemen are clamorous in favor of those who have debts due them, lest the debtor should the more easily pay his debt.  I do not much sympathize with such importunate money-lenders.  But widows and orphans are interested and in tears, lest their estates should be badly invested.  I pity no one who has his money invested in United States bonds, payable in gold in twenty years, with interest semi-annually.  But while these men have agonized bowels over the rich man’s case, they have no pity for the poor widow, the suffering soldier, the wounded martyr to his country’s good, who must receive these notes without legal tender or nothing, and who must give half of it to the Shylocks to get the necessaries of life.  Sir, I wish no injury to any, nor with our bill could any happen ;  but if any must lose, let it not be the soldier, the mechanic, the laborer or the farmer.

Let me relate the various projects.  Ours proposes United States notes, secured at the end of twenty years to be paid in coin, and the interest raised by taxation semi-annually ;  such notes to be money, and of uniform value through out the Union.  No better investment, in my judgment, can be had ;  no better currency can be invented.  The amendment of the gentleman from Ohio (Mr. Vallandigham) proposes the same issue of notes, but objects to a legal tender ;  but does not provide for their redemption on demand in coin.  He fears our notes would depreciate.  Let him who is sharp enough to see it instruct me how notes that every man must take are worth less than the same notes that no man need take, and few would, being irredeemable on demand.  But he doubts its constitutionality.  He who admits our power to emit bills of credit, nowhere expressly authorized by the Constitution, is a sharp and unreasonable doubter when he denies the power to make them a legal tender.

The proposition from the gentleman from New York (Mr. Roscoe Conkling) authorizes the issuing of seven per cent. bonds, payable in thirty-one years, to be sold ($250,000,000 of it) or exchanged for the currency of the banks of Boston, New York and Philadelphia.

Sir, this proposition seems to me to lack every element of wise legislation.  Make a loan payable in irredeemable currency, and pay that in its depreciated condition to our contractors, soldiers and creditors generally !  The banks would issue unlimited amounts of what would become trash, and buy good hard-money bonds of the nation.  Was there ever such a temptation to swindle ?

He further proposes to issue $200,000,000 United States notes, redeemable in coin in one year.  Does not the gentleman know that such notes must be dishonored, and the plighted faith of the Government broken ?  No one believes that we could then pay them, and it would run down at once.  If we are to use suspended notes to pay our expenses, why not use our own ?  Are they not as safe as bank notes ?  During the suspension, the Government would have the benefit of the whole circulation, without interest, until they were funded—that is, the interest of all we could keep out would accrue to the Government.  If the $150,000,000 were constantly afloat, it would be a loan to the Government, without interest, to that amount, $9,000,000 a year.  But if we used the suspended paper of the banks our bonds would bear interest from the instant we got their notes—a good thing for suspended banks.  Besides, the Government would have the benefit of all the lost and destroyed notes—a considerable item.

Last comes the substitute of the minority of the Committee (introduced by Mr. Morrill).  I look upon it as a curiosity.  It proposes to issue United States notes, not a legal tender, bearing an interest of three and sixty-five hundredths per cent., and fundable into seven and three-tenths per cent. bonds, but not payable on demand, but at the pleasure of the United States.  This gives one and three-tenths per cent. higher interest than our loan, and not being redeemable on demand, would share the fate of all non-specie-paying notes not a legal tender.  But the ingenious minority have invented a kind of currency never before known—a circulation bearing interest.  Bonds or notes intended for investments bear interest, but no one expects they will be used as currency ;  whether in the shape of bonds or notes, they will be used only as investments, or as pledges on which to procure loans.  Suppose a tailor, shoemaker, or other mechanic, or laborer, were to take one of these bills, and in a week he should wish to use it in market or store, or elsewhere, he must sit down and calculate the interest on the days he has had it to find its value.  This would be rather inconvenient on a frosty day.  This currency would make it necessary for every man to carry an arithmetic or interest table with which to gauge the value of the circulating medium.  Gentlemen must see how ridiculous, if not impracticable, this scheme is.

Here, then, in a few words, lies your choice.  Throw bonds at six or seven per cent. on the market between this and December, enough to raise at least $600,000,000—about this sum is already appropriated, $557,000,000—or issue United States notes, not redeemable in coin, but fundable in specie paying bonds at twenty years ;  such notes either to be made a legal tender, or to take their chance of circulation by the voluntary act of the people.

I maintain that the highest sum you could sell your bonds at would be seventy-five per cent., payable in currency itself at a discount.  That would produce a loss which no nation or individual doing a large business could stand a year.

I contend that I have shown that such issue, without being made money, must immediately depreciate, and would go on from bad to worse.  I flatter myself that I have demonstrated, both from reason and undoubted authority, that such notes, made a legal tender and not issued in excess o the demand, will remain at par and pass in all transactions, great and small, at the full value of their face ;  that we shall have one currency for all sections of the country and for every class of people, the poor as well as the rich.

Some gentlemen are as much frightened as if this were an unwonted apparition, for the first time prowling forth to swallow the rich creditor and smouse the poor debtor.  No nation, it is said, has ever tried anything like it.

Let us look at the greatest and wisest commercial nation in the world.  In 1797 England was struggling for existence against armed Europe.  She needed money, as we do now.  She found it impossible to borrow.  Gold was likely to leave the country.  She passed a law prohibiting the Bank of England from paying coin for her notes until six months after the final ratification of peace.  That law remained in force till 1823.  It is said she did not make those notes a legal tender.  She provided that whoever refused to take them for a debt should have no remedy for its collection ;  and that a plea of such tender should be a bar to the action.  This, I think, is the most stringent legal tender ;  yet those notes never depreciated to any great extent.”

Mr. VALLANDIGHAM—“ Did they not depreciate twenty per cent. ?”

Mr. STEVENS—“No, sir ;  at no time after they were made a legal tender did they depreciate twenty per cent.”

Mr. VALLANDIGHAM—“ I have the authority of Mr. Canning, which I think is quite as good as that of Mr. McCulloch.  They were receivable all the time for Government dues.”

Mr. STEVENS—“Yes, sir ;  but they still run down until they were made a legal tender, and after that they never depreciated a single dollar.  Had they been made an absolute tender, they would not have depreciated a farthing.  But now, in times of peace, the notes of the Bank of England are a legal tender in all the vast business of that nation, and in every place, except at the counter of the bank.  What else are Bank of England notes than bills of credit of the Government ?  Her whole capital consists of Government securities, and her issues are based on that alone.  Prussia holds the currency in paper issueable by Government alone, and is always at par.  What becomes of the fine-spun theories of the opponents of this bill ?  I think they have distressed themselves very unnecessarily ;  and yet, gentlemen have shown all the contortions, if not the inspirations, of the Sibyl, lest Government should make these notes a uniform currency, rather than leave them to be regulated by sharks and brokers.  I look upon the immediate passage of the bill as essential to the very existence of the Government.  Reject it, and the financial credit, not only of the Government, but of all the great interests of the country, will be prostrated.”

MR. CHAIRMAN—“ Let me say in conclusion, that unless this bill is to pass with the legal tender clause in it, it is not desirable to its friends, or to the Administration, that it should pass at all, and those who think as I do will have to vote against it, if it should be thus mutilated and emasculated.  If it is to be defeated, I should be glad if we had the power which they have in the British Parliament—to resign our places on the Committee of Ways and Means, and leave it to those who oppose this bill to mature some other measure.  So far as I am concerned, I shall be modest enough not to attempt any other scheme.  The Committee of Ways and Means have labored in the preparation of this measure anxiously, and to the best of their poor abilities.  We are not infallible.  We do not come near it.  I am but poorly qualified for anything of this kind.  But we have given it our most anxious consideration, and have consulted those whom we believed to be the best qualified to advise us.  We have sought to harmonize conflicting views in the substitute which the majority of the Committee have prepared, and we hope it will pass.  We believe that the credit of the country will be sustained by it, that under it all classes will be paid in money which all classes can use, and that it will confer no advantage on the capitalist over the poor laboring man.  If this bill shall pass, I shall hail it as the most auspicious measure of this Congress ;  if it should fail, the result will be more deplorable than any disaster which could befall us.”

At the conclusion of Mr. Stevens’ speech the Chair announced that general debate was closed.  Amendments were now in order, and under the rules of the House, five-minute speeches could be made in favor of, or in opposition to, each amendment proposed.  Under this rule, several short speeches were made by members who had not an opportunity to speak during the general debate.

Mr. F.A. CONKLING, who opposed the legal tender clause in the bill, read an extract from an eminent citizen of New York, as follows :

“ The advocates of a paper substitute may find an argument in the necessities of the crisis, but are certainly not guided by the light of experience, if they recur to the fact that in 1814 a Boston bank note was capable of buying twice its nominal value in Treasury notes (not a legal tender).

I had some little experience of the working of ‘paper vs. gold,’ in Denmark, in 1813, when their currency, which was printed on blue paper, depreciated to such an extent that the King, to remedy the evil, issued a new currency, printed on white paper, accompanied by an edict that one rix dollar of the new emission should be regarded in all transactions as worth six of the old, and taken as a legal tender, which required an amount of faith equal to that which was exacted by Lord Peter of Martin and Jack :  that they should believe ‘ a loaf of brown bread to be a shoulder of mutton,’ or suffer for their incredulity.

This arbitrary edict led to the ruin of many creditors, especially mortgagees, who were thus compelled to receive ‘rags and lampblack’ in satisfaction of debts contracted in gold and silver.

At that time I had bargained with the King’s painter, in Copenhagen, to take my portrait (a half length, still in my possession), for three hundred and six dollars, the frame included.  Such was the rapid decline in the paper currency of the Government, that when it was completed I purchased with nine Spanish milled dollars the three hundred and six dollars to pay for the portrait and frame ;  and such was the faith and loyalty of the painter, that he believed, or was bound by law to believe, that the one currency was just as good as the other !  Being in London during the same year, I was guilty of the felonious act of selling my gold guineas for twenty-seven shillings in paper, while honest, patriotic and credulous John Bull insisted that in theory their value was the same ;  and Right Honorable the Chancellor of the Exchequer could cause the transportation to Botany Bay of any man who practically proved the contrary.”

Mr. HUTCHINGS—“ I would like to inquire as to the occupation of the gentleman who wrote that letter ? ”

[Here the hammer fell.]

Mr. CRISFIELD—“In order to accommodate what seems to be the wish of the Committee, or some members of it, I propose to modify my amendment by confining the motion to strike out to the words, ‘and shall also be lawful money and a legal tender in payment of all debts, public and private, within the United States.’ ”

Mr. SHELLABARGER—“ Mr. Chairman, I rise to oppose the pending amendment.  I did desire to submit to the Committee some views touching this measure when we were in general debate, but omitted to do so in deference to the more matured views which other members of the Committee desired to submit.  I propose to occupy the few minutes I have, in making some statements in relation to the charges of bad faith and injustice which have been so persistently, earnestly, and, doubtlessly, sincerely made by the opponents of the bill.

Now, sir, I think it must be plain, beyond all cavil, that if these notes, proposed to be issued under this bill, are made of the value imposed upon them by law, so that they will be to the citizen the true and real representatives of that amount of the intrinsic wealth of the country, which is stamped by law upon them as their nominal value, then there can be no practical injury, injustice, or bad faith in the law which makes them pay a debt precisely equal to that real value or wealth of the country, which that note, so made a tender, represents.  It is, of course, not my purpose now either to discuss or state those views by which others see in this measure—as distinguished from those they advocate—only disaster, in the shape of ‘ destruction of all standards of value;’  in the ‘ inflation of the business and the prices of the country;’  in disordering the ‘ operations of trade and commerce;’  and in the ultimate ‘bankruptcy’ of the Government and of the people.  I have no doubt this cry is made sincerely by many, and perhaps it is believed by all who make it.  I do not discuss the sources and reasonableness of this cry of alarm, but only wish to present a parallel to it, and say that this cry is, to my mind, as unreasonable as that other to which I allude.  I find that parallel in the history of the growth of the debt of England ;  and in the light of that history, I declare that this cry of ‘bankruptcy’ and national disaster and ruin is utterly unreasonable, and just now most pernicious.

Sir, the history of the growth of that debt, which one of the great Commoners of England calls ‘ the greatest prodigy that ever perplexed the sagacity and confounded the pride of statesmen and philosophers,’ furnishes as conclusive refutations of the theories and predictions of our alarmists of this House, as it did in the past of other Parliaments.

Sir, at the end of the war of England with Louis XIV, in 1713, the debt of England was, in round numbers, $250,000,000.  But, sir, at that period, not pot-house politicians merely, but profound thinkers, declared the Government permanently crippled.  But while these were engaged in proving the nation ruined, the nation was growing richer and richer.  Soon came that war which was ended by the peace of Aix la Chapelle ;  and the national debt had come to be $400,000,000 in 1748.  Now, again, historians, statesmen and economists concurred in declaring that the case of England was certainly now desperate ;  but now again the nation persisted, although demonstrated by the books to be a bankrupt, in becoming far richer than in any period of her history.  Soon the nation became again involved in the continental wars of the reign of George II, and at the end of Chatham’s administration, at the period of 1760, the national debt came to be $700,000,000.  Then, again, it is declared that both men of theory and of business united in declaring that now, at all events, the fatal day had certainly arrived.  Adam Smith, the father of politico-economical science, thought the limit had been reached, and an increase of the debt would be fatal.  David Hume, the profoundest man of his age, declared it would have been better that England had been conquered and crushed by Prussia and Austria, than by debts for which all the revenues of the Kingdom north of Trent and west of Reading were mortgaged.  He said the madness of England exceeded that of the crusaders.  Richard Cœur de Lion and St. Louis had not gone in the face of arithmetic, England had.  You could not prove that the road to Paradise was not through the Holy Land ;  but you could prove that the road to national ruin was through a national debt.  But still, in defiance of Hume and Smith, and even Burke, the nation would live and grow richer, and pay the interest on its public debt.

Then came George Grenville’s policy to tax the colonies of America to help pay the interest on this debt, and brought on our war of the Revolution.  In that England lost the colonies, and found an addition to her public debt of $500,000,000—making the aggregate, at the time of the treaty of peace, $1,200,000,000.  Again England was pronounced hopeless ;  but again she continued to be more prosperous than ever before.

Then came the wars growing out of the French Revolution ;  and the debt of England ran up to $4,000,000,000.  Again the cry of despair and of bankruptcy was louder than ever ;  but also again the cry was false as ever ;  and the interest on the debt of England not only continued to be paid to the day at the bank, but such was her prosperity that at the close of these French wars, her people expended for railroads in the island, in a few years, more than $1,200,000,000 !

Such is a sketch of the history of the debt of England, and such the refutation furnished by the logic of history to the logic of abstract reasoning, however profound.

A great historian and a great commoner of England declares that all these cries of bankruptcy and ruin were based on a double fallacy.  They who raised these cries imagined that there was an exact analogy between the case of an individual who is in debt to another, and the case of a society which is in debt to itself ;  and they also forget that other things grew as well as the debt.

Sir, I do not make this allusion to the debt of England to show that ‘a national debt is a national blessing,’ nor to indicate that this nation ought permanently to depart from its old and traditional policies of avoiding public debt and direct taxation.  I do not think we either ought to or will.  But, sir, this parallel between the alarms of this day and this country, and those of the past in another country, is only introduced to indicate the strange infirmities of vision in all these prophets of evil, and to indicate how unjust and cruel it is to weaken, by these refuted cries of ruin and bankruptcy, the faith of the people in the Government, which now, in its day of peril, so preeminently rests upon the faith of her children.

Sir, all these obligations of this Government go out to the people borne up by all the faith and all the property of the people; and they have all the value which that faith untarnished, and that property unestimable, can give them.  It is not because they lack intrinsic value that they need the quality of ‘ lawful tender,’ but it is to secure to the Government in their issue their true value, and to retain for them that true value as you, pass them—as all agree you must—to your noble soldiery in the field, and to all classes of the people not engaged, as the most persistent outside opposition to this bill is, in endeavoring to destroy the value of these, so that out of the blood of their sinking country they may be enabled to coin the gains of their infamy.”

MR. HICKMAN’S SPEECH.

Mr. HICKMAN, of Pennsylvania, spoke in favor of the bill :

“ The only question, Mr. Chairman, which I have ever had with reference to this bill, has not been a question as to the powers of Congress, but as to the policy of the enactment.  I would, myself, have preferred that this bill had followed the tax bill.  I would have preferred that, before the credit of the Government had been tried to that extent, the basis of that credit should have been exhibited to the country.  Before I take my neighbor’s note, I should require him to show me on what his credit rests ;  of what his capital consists.  I have, therefore, had great doubt as to the propriety of voting for this bill as it stands at this time.  But being assured by the Chairman of the Committee of Ways and Means that the Treasury, and, perhaps, the Administration, regard this as a governmental necessity, I am disposed to waive the question of propriety or expediency, and to vote for it as a necessity, having no doubt about the right.  That clause of the Constitution which gives to the Government the right to coin money, and to regulate the value thereof, is, to my mind, conclusive of the great question that has been raised in this House, ‘ To coin money.’  It does not indicate of what the material shall consist, which is to be regarded as money.  It might be gold, or silver, or copper, or brass, or iron, at the pleasure of the Government.  In other words, it is not demanded that the thing itself, which shall be coined as money, shall have any intrinsic value.  The coining of money is merely impressing upon that which is designated to be the circulating medium the mark of the sovereign, indicating the will of the sovereign that it shall be received in the exigencies of trade and commerce at the stated value.  And that mark of the sovereign, indicating the will of the sovereign, may just as well be impressed upon paper as upon gold or silver.  Nothing else can be made out of the Constitution in this regard.

According to the arguments which have been addressed against this bill, the Constitution should have been made to read :  ‘Congress, or the Government, shall have power to coin gold and silver money according to their intrinsic value.’  Why, Sir, the Government is not restricted as to the material out of which it may make money ;  is not restricted as to the metal that shall be adopted as money ;  it has perfect power to adopt iron as well as any other metalic basis ;  and if any other metal, why not paper ?  Why not impress upon paper the mark of the sovereign, indicating the will of the sovereign as to the value at which it shall be received, and make it a circulating medium, there being nothing in the Constitution to restrict us in this necessary exercise of sovereign power, without which no Government can carry on its operations ;  without which no Government could exist ?

I have no doubt, whatever, in regard to the right of Congress to pass this bill, and I am therefore willing to vote for it upon the ground that it is a necessity at this time.”

MR. LOVEJOY’S SPEECH.

Mr. LOVEJOY, of Illinois, opposed the bill :

“MR. CHAIRMAN—I have endeavored for a day or two to obtain the floor, for the purpose of expressing my views a little more at length than I can in the five minutes to which I am now limited ;  but, by an arrangement between the Chair and the Committee of Ways and Means, my purpose has been averted.

I will now simply say in regard to the question of constitutionality, that there has not been a respectable argument advanced in defense of the constitutionality of this bill ;  and, inasmuch as great talent and eminent ability have been brought to bear upon it, I take it that no respectable argument can be made in vindication of the constitutionality of this bill.  I would admit the plea of necessity, if I believed it ;  and I think it is more manly to confess, as Jefferson did, than it is to attempt to torture the constitution into the support of a measure which everybody must see to be unconstitutional.

Now, Mr. Chairman, in regard to the general idea of the bill, it is a mere fallacy.  The whole argument used in favor of the issue of these legal tender notes is based upon precisely the same foundation as the old theological dogma, crede ut edes, et edes—believe that you eat the real flesh of Christ in the wafer, and you do eat it.  Believe that this piece of paper is a five dollar gold piece, and it is a five dollar gold piece ;  believe it is worth five dollars, and it is worth five dollars.

Now, Sir, I am prepared to state that it is not in the power of this Congress, nor in the power of any legislative body, to accomplish an impossibility in making something out of nothing.

The piece of paper you stamp as five dollars is not five dollars, and it never will be unless it is convertible into a five dollar gold piece ;  and to profess that it is, is simply a delusion and a fallacy.  You may say even by legislative enactment that sixty or eighty or even ninety-nine cents are a hundred, but the rigid, inexorable digits will stand fixed and immovably by your legislative legerdemain.

Mr. Chairman, we are urged by the Chairman of the Committee of Ways and Means to pass this bill, because ruin is before the Government if we do not pass it.  It reminds me very forcibly of Cowper’s Needless Alarm, I cannot undertake to give it in rhyme, but I will give the substance of it.  You will remember that, hearing the deep braying of the hounds, and the sound of the hunter’s horn, the sheep coursed round and round the field, until the frightened flock came to the brink of a precipice, and to get away from the hounds and huntsman the pater gregis advised them thus :

“ I hold it, therefore, wisest and most fit
That life to save, we leap into the pit.”

The matron of the flock, more discreet than the spouse, replies :

“ How ? leap into the pit our life to save?
To save our life, leap all into the grave ? ”

Sir, there is no precipice, there is no chasm, there is no possible yawning, bottomless gulf before this nation so terrible, so appalling, so ruinous, as this same bill that is before us, and that it is proposed to pass under thy pressure of these influences brought to bear upon it.

You issue $100,000,000 of those notes.  The gentleman tells us they are already due.  We have got to pay the paper out almost before we can make it.  It has taken us six months to manufacture $50,000,000, and we cannot manufacture it as fast as we shall spend it at that rate ;  so that when we have issued $100,000,000 we must issue another $100,000,000, and then another $100,000,000.  And thus we plunge from lower depth to still lower, till we are buried in an ocean of inconvertible paper.  At every step your paper will depreciate more and more, until the expenses of the war will swell to such an appalling sum that redemption will be impossible, and repudiation inevitable.  Facilis deocensus averni, etc., which means it is easy to slide down hill, but very hard work to draw the sled back over smooth ice.  But the question is pressed :  what will you do ?  What do you propose ?  I propose this :

First—Adequate taxation, if need be, to the extent of $200,000,000.

Second—Adopt legislation that shall compel all banking institutions to do business on a specie basis.  Every piece of paper that claimed to be money, but was not, I would chase back to the man or corporation that forged it, and visit upon them the penalties of the law.  I would not allow a bank note to circulate that was not constantly, conveniently and certainly convertible into specie.

Third—I would issue interest-paying bonds of the United States, and go into the market and borrow money and pay the obligations of the Government.  This would be honest, business-like, and in the end economical.  This could be done.  Other channels of investment are blocked up, and capital would seek the bonds of investment.

This is, in substance, what I propose.  This would bring us through the war poor indeed, for half the nation has to support the other half, but with the health and vigor of the athlete, and not with the bloated flesh of the beer guzzler.  Did I not know that the passage of this bill was a foregone conclusion, I would move to re-commit, with instructions to that effect.”

SPEECH OF MR. WALTON.

Mr. WALTON, of Maine, advocated the bill.

“ Necessity compels us to pay our creditors in treasury notes.  Our credit is exhausted ;  or perhaps it will be more accurate to say that the means of those who are willing to lend to the Government have become exhausted.  To lay and collect taxes will require considerable time ;  besides, it cannot reasonably be expected that revenue enough can ever be derived from taxation to meet all the expenses of the Government while the war lasts.  Practically, therefore, our Government is reduced to the necessity of paying not only its other creditors, but our brave soldiers, in its own notes.  Thus compelling our creditors (our brave soldiers included) to take their pay in treasury notes ;  is it not just, is it anything more than common honesty, to allow them to pay their debts in the same way.  If these treasury notes are made a legal tender, they will circulate as readily as specie in the payment of debts, and will only cease thus to circulate, if ever, when they have reached the hands of those who have no debts to pay.  And if, as the enemies of the legal tender clause predict, they ever fall in value below par, will not the loss fall upon those who have money, and no debts to pay ?  And can it fall on a class who will feel it less ?  And as it is this class of persons that constitute our money-lenders, it will be rather a favor than an injury to them ;  for these notes are convertible into United States bonds, with semi-annual interest coupons attached, and therefore accomplishes for them just what they desire—a safe loan of their money.  I say a safe loan, for the issue of these notes is to be followed by vigorous taxation ;  and in equity the lender will have a lien on the whole property of the United States as security for every dollar of his debt, and a pledge of the public faith that this security shall be made available.

The legal tender clause of the bill, therefore, while it secures to our soldiers and the poorer class of our citizens, who have debts to pay, great advantages, does no real injury to capitalists, and ought to be retained.

The constitutional objections have not been overlooked.  I think the Federal Government has the same power to make these notes a legal tender that it has to make anything else a legal tender.  It can make nothing a legal tender by virtue of any express power.  It has but an implied power in any case.  And if it is admitted, as it always has been, that the Government possesses the power to declare what shall be a legal tender in any case, it has it without limitation.  It can make one thing a legal tender as well as another ;  and whether these notes shall have that character or not, is a question of expediency only, and not one of power.

It is objected by some that to make these notes a legal tender will impair the obligation of contracts, and is therefore unconstitutional.  But this is not true.  In every contract payable in money, and no particular kind of money is named, it is implied, and is a part of the contract, that it may be discharged in what shall be the legal currency at the time of payment.  A change or enlargement of the legal currency of the country, and a payment in such new currency, is no violation of the new contract, but is in pursuance of one of its implied conditions.

Having the power, and believing, on the whole, that the legal tender clause is a beneficial one, I am in favor of retaining it in the bill.”

The question recurred on Mr. Crisfield’s amendment, to strike out the legal tender clause in the original bill.  The vote was taken in Committee of the Whole by tellers.

On taking the vote the tellers reported—ayes 53, noes 93, so the amendment was rejected.

Several other amendments were made in Committee of the Whole, but inasmuch as they were all cut off, modified or adopted by subsequent proceedings, after the bill was reported to the House, it is not necessary to report them here.  The bill, as adopted, is copied at the end of this day’s proceedings.

Having gone through the bill in Committee of the Whole there was a good deal of preliminary skirmishing on the part of different members, who had proposed substitutes and amendments as to the order of taking the vote.  Some members feared that they would not be able to get a square vote in the House on their respective propositions.  Several members were on the floor at the same time.  Motions, objections and counter-motions were made in quick succession, and in various forms, which continued for some time, causing confusion and preventing any action of a practical character, and preventing any vote being taken on either proposition.  It finally resulted in an arrangement being made that the bill should be reported to the House, and a square vote be had on the two main propositions pending before the Committee.  Mr. Vallandigham and Mr. Conkling withdrew their substitutes, so that all of the opponents of the legal tender clause could concentrate on the substitute agreed to by Mr. Morrill, Mr. Horton, Mr. Corning and Mr. Stratton, one-half of the Committee of Ways and Means ;  and that the vote should be first taken of that substitute, which was modified to meet the conflicting views of the various gentlemen on that side, in order to make it as acceptable as possible to all the opponents of the original bill.  This substitute finally offered by Mr. Horton, will be found (Cong. Globe, p. ——,) and is as follows :

The substitute which was read was, to strike out of the bill all after the word “ that,” in the first section, and insert the following :

“ For temporary purposes, the Secretary of the Treasury be, and he is hereby, authorized to issue on the credit of the United States $100,000,000 of Treasury notes, bearing interest at the rate of three and sixty-five hundredths per cent. per annum, payable in two years after date, to bearer, at the Treasury of the United States, or at the office of the Assistant Treasurer, in the city of New York, or at the office of the designated depository in the city of Cincinnati, and of such denominations as he may deem expedient, not less than five dollars each ;  and such notes shall be receivable for all public dues, except duties on imports, and for all salaries, debts and demands owing by the United States to individuals, corporations and associations, within the United States, at the option of such individuals, corporations and associations ;  and any holder of said United States notes, depositing any sum not less than fifty dollars, or some multiple of fifty, with the Treasurer of the United States, or either of the Assistant Treasurers, or either of the designated depositories at Cincinnati or Baltimore, shall receive in exchange therefor duplicate certificates of deposit for the amount, with any accumulated interest thereon, one of which may be transmitted to the Secretary of the Treasury, who shall thereupon issue to the holder an equal amount in bonds of the United States, coupon or registered, as may be desired, bearing interest at the rate of seven and three-tenths per cent. per annum, payable semi-annually in coin, and redeemable at the pleasure of the Government after ten years from date ;  and such Treasury notes shall be received the same as coin, at their par value, with accumulated interest, in payment for any bonds that may be hereafter negotiated by the Secretary of the Treasury ;  and the Secretary of the Treasury may, from time to time, as the exigencies of the public service may require, issue any amount of such Treasury notes equal to the amount redeemed.  There shall be printed on the back of the Treasury notes, which may be issued under the provisions of this act, the following words :  ‘ The within note is receivable in payment of all public dues, except duties on imports, and is exchangeable for bonds of the United States, bearing seven and three-tenths per cent. per annum, payable in coin, semi-annually.

SEC. 2.  And be it further enacted, That to enable the Secretary of the Treasury to fund the Treasury notes and floating debt of the United States, he is hereby authorized to issue, on the credit of the United States, coupon bonds, or registered bonds, to an amount not exceeding $500,000,000,—$200,000,000 bearing interest at the rate of seven and three-tenths per cent. per annum, payable semi-annually in coin, and redeemable at the pleasure of the Government, after ten years from date, and $300,000,000, redeemable at the pleasure of the Government, after twenty-four years from date, and bearing interest at the rate of six per cent. per annum, payable semi annually in coin.  And the bonds herein authorized shall be of such denominations, not less than fifty dollars, as may be determined upon by the Secretary of the Treasury ;  and the Secretary of the Treasury may also exchange, at par, such bonds at any time for lawful money of the United States, or for any of the Treasury notes that have been, or may hereafter be, issued under any former Act of Congress, or that may be issued under the provisions of this Act.

§ 3.  And be it further enacted, That the Treasury notes and the coupon or registered bonds authorized by this Act, shall be in such form as the Secretary of the Treasury may direct, and shall bear the written or engraved signature of the Treasurer of the United States and the Register of the Treasury ;  and also, as evidence of lawful issue, the imprint of a copy of the seal of the Treasury Department, which imprint shall be made under the direction of the Secretary, after the said notes or bonds shall be received from the engravers, and before they are issued ;  or the said notes and bonds shall be signed by the Treasurer of the United States, or for the Treasurer, by such persons as may be specially appointed by the Secretary of the Treasury for that purpose, and shall be countersigned by the Register of the Treasury, or for the Register, by such persons as the Secretary of the Treasury may specially appoint for that purpose ;  and all the provisions of the Act entitled, ‘ An Act to authorize the issue of Treasury notes,’ approved the 23d day of December, 1857, so far as they can be applied to this act, and not inconsistent therewith, are hereby revived and re-enacted ;  and the sum of $300,000 is hereby appropriated out of any money in the Treasury not otherwise appropriated, to enable the Secretary of the Treasury to carry this act into effect.

§ 4.  And be it further enacted, That any person or persons, or any corporation, holding Treasury notes, may, at any time, deposit them, in sums of not less than $500, with any of the Assistant Treasurers or designated depositaries of the United States, authorized by the Secretary of the Treasury to receive them, who shall issue therefor, transferable certificates of deposit, made in such form as the Secretary of the Treasury shall prescribe, and said certificates of deposit shall bear interest after thirty days, at the rate of five and two-fifths of one per cent. per annum ;  and any Treasury notes so deposited may be withdrawn from deposit at any time, on the return of said certificates, but no interest shall be allowed except after thirty days.  And all such deposits shall cease and determine at the pleasure of the Secretary of the Treasury, and after ten days’ notice shall have been given to the depositor.

§ 5.  And be it further enacted, That if any person or persons, shall falsely make, forge, counterfeit or alter, or cause or procure to be falsely made, forged, counterfeited or altered, or shall willingly aid or assist in falsely making, forging, counterfeiting, or altering any note, bond or certificate, issued under the authority of this act, or heretofore issued under acts to authorize the issue of Treasury notes or bonds, or shall pass, utter, publish, or sell, or attempt to pass, utter, publish, or sell, or bring into the United States, from any foreign place, with intent to pass, utter, publish or sell, as true, or shall have, or keep in possession, or conceal, with intent to utter, publish or sell, as true, any such false, forged, counterfeited or altered note, bond or certificate, with intent to defraud anybody, corporate or politic, or any other person or persons whatsoever ;  every person so offending, shall be deemed guilty of felony, and shall, on conviction thereof, be punished by a fine not exceeding $5,000, and by imprisonment and confinement to hard labor, not exceeding fifteen years.”

Upon the bill being reported from the Committee of the Whole to the House, the vote was first taken on this substitute.

The yeas and nays were ordered.

The question was taken, and it was decided in the negative—yeas 55, nays 95, as follows :

Yeas—Messrs. Ancona, Baxter, Biddle, George H. Brown, William G. Brown, Cobb, Frederick A. Conkling, Roscoe Conkling, Conway, Corning, Cox, Cravens, Crisfield, Crittenden, Diven, Eliot, English, Goodwin, Grider, Harding, Holman, Hor-, ton, Johnson, Law, Lazear, Lovejoy, May, Menzies, Justin S. Morrill, Morris, Nixon, Noble, Norton, Nugen, Odell, Pendleton, Perry, Pomeroy, Porter, Edward H. Rollins, Sedgwick, Sheffield, Shiel, William G. Steele, Stratton, Benjamin F. Thomas, Francis Thomas, Train, Vallandigham, Wadsworth, E.P. Walton, Ward, Webster, Chilton A. White and Wright—55.

Nays—Messrs. Aldrich, Alley, Arnold, Ashley, Babbitt, Goldsmith F. Bailey, Joseph Bailey, Baker, Beaman, Bingham, Francis P. Blair, Jacob B. Blair, Samuel S. Blair, Blake, Buffinton, Burnham, Campbell, Chamberlain, Clark, Colfax, Cutler, Davis, Delano, Delaplaine, Duell, Dunlap, Dunn, Edgerton, Edwards, Ely, Fenton, Fessenden, Fisher, Franchott, Frank, Gooch, Granger, Gurley, Haight, Hale, Hanchett, Harrison, Hickman, Hooper, Hutchins, Julian, Kelley, Francis W. Kellogg, William Kellogg, Killinger, Knapp, Lansing, Leary, Loomis, McKean, McKnight, McPherson, Marston, Maynard, Mitchell, Moorhead, Anson P. Morrill, Olin, Patton, Timothy G. Phelps, Pike, Price, Alexander H. Rice, John H. Rice, Richardson, James S. Rollins, Sargent, Shanks, Shellabarger, Sherman, Sloan, Spaulding, John B. Steele, Stevens, Trimble, Trowbridge, Upton, Van Horn, Van Valkcnburg, Van Wyck, Verree, Wall, Wallace, Charles fir. Walton, Whaley, Albert S. White, Wyckliffe, Wilson, Windom and Worcester—95.

So the substitute was not agreed to.

The question then recurred on the modification of the original bill, offered by Mr. Stevens as a substitute, which was not read, but which Mr. Stevens had just before explained as follows :

Mr. STEVENS—“ I wish to state in regard to my amendment, that it is a modification of the original bill.  Those who are in favor of the original have agreed upon this in lieu of it.  We thought it better to adopt the suggestion contained in the amendment of the gentleman from Ohio of $150,000,000, retiring the $50,000,000 of demand notes (authorized last July), and of making $150,000,000 the maximum to which they shall go.  That is about all the change there is, except that we have left out the foreign loan clause, which is in the original ;  and we have agreed to adopt an amendment by which the holders of these notes may convert them either into a twenty years’ bond at six per cent., or five years’ bonds at seven per cent., at their option.”

This modification of the original bill had the concurrence of the other half of the Committee of Ways and Means—Messrs. Stevens, Spaulding, Hooper and Maynard, and was adopted by the House without a division.

The bill, as amended, was ordered to be engrossed and read a third time.  The yeas and nays were ordered on the final passage of the bill.  The question was taken, and it was decided in the affirmative—yeas 93, nays 59, as follows :

Yeas—Messrs. Aldrich, Alley, Arnold, Ashley, Babbitt, Goldsmith F. Bailey, Joseph Bailey, Baker, Beaman, Bingham, Francis P. Blair, Jacob Blair, Samuel S. Blair, Blake, Buffinton, Burnham, Campbell, Chamberlain, Clark, Colfax, Cutler, Davis, Delano, Delaplaine, Duell, Dunn, Edgerton, Edwards, Ely, Fenton, Fessenden, Fisher, Franchot, Frank, Gooch, Granger, Gurley, Haight, Hale, Hanchett, Harrison, Hickman, Hooper, Hutchins, Julian, Kelley, Francis W. Kellogg, William Kellogg, Killinger, Lansing, Leary, Loomis, McKean, McKnight, McPherson, Marston, Maynard, Mitchell, Moorhead, Anson P. Morrill, Nugen, Olin, Patton, Timothy G. Phelps, Pike, Price, Alexander H. Rice, John H. Rice, Riddle, James S. Rollins, Sargent, Shanks, Shellabarger, Sherman, Sloan, Spaulding, John B. Steele, Stevens, Trimble, Trowbridge, Lipton, Van Horn, Van Valkenburgh, Van Wyck, Verree, Wall, Wallace, Charles AV. Walton, Whaley, Albert S. White, Wilson, Windom and Worcester—93.

Nays—Messrs. Ancona, Baxter, Biddle, George H. Brown, Cobb, Frederick A. Conkling, Roscoe Conkling, Conway, Corning, Cox, Cravens, Crisfield, Diven, Dunlap, Eliot, English, Goodwin, Grider, Harding, Holman, Horton, Johnson, Knapp, Law, Lazear, Lovejoy, Mallory, May, Menzies, Justin S. Morrill, Morris, Nixon, Noble, Norton, Odell, Pendleton, Perry, Pomeroy, Porter, Richardson, Robinson, Edward H. Rollins, Sedgwick, Sheffield, Shiel, William G. Steele, Stratton, Benjamin F. Thomas, Francis Thomas, Train, Vallandigham, Voorhees, Wadsworth, E. P. Walton, Ward, Webster, Chilton A. White, Wickliffe and Wright—59.

Thus the legal tender act, after a protracted debate, and a most determined opposition, by prominent and influential Republicans, as well as Democrats, was passed through the House by a large majority.

The following is a copy of the bill as it first passed the House, on the 6th of February, 1862 :

“ An Act to authorize the issue of United States notes, and for the redemption funding thereof, and for funding the floating debt of the United States.

SECTION 1.  Be it enacted by the Senate and House of Representatives of the United States of America, in Congress assembled :  That to meet the necessities of the Treasury of the United States, and to provide a currency receivable for the public dues, the Secretary of the Treasury is hereby authorized to issue, on the credit of the United States, $150,000,000 of United States notes, not bearing interest, payable to bearer at the Treasury of the United States, at Washington or New York, and of such denominations as he may deem expedient, not less than five dollars each.  Provided, however, that $50,000,000 of said notes shall be in lieu of the demand Treasury notes authorized to be issued by the Act of July 17, 1861 ;  which said demand notes shall be taken up as rapidly as practicable, and the notes herein provided for substituted for them :  And provided, further, that the amount of the two kinds of notes together, shall, at no time, exceed the sum of $150,000,000.  And such notes, herein authorized, shall be receivable in payment of all taxes, duties, imports, excise, debts and demands of every kind due to the United States, and for all salaries, debts and demands owing by the United States to individuals, corporations and associations within the United States, and shall also be lawful money and a legal tender, in payment of all debts, public and private, within the United States.  And any holders of said United States notes, depositing any sum not less than $50, or some multiple of $50, with the Treasurer of the United States, or either of the Assistant Treasurers, shall receive in exchange therefor duplicate certificates of deposit, one of which may be transmitted to the Secretary of the Treasury, who shall thereupon issue to the holder an equal amount of bonds of the United States, coupon or registered, as may by said holder be desired, bearing interest at the rate of six per centum per annum, payable semi-annually, at the Treasury or Sub-Treasury of the United States, and redeemable at the pleasure of the United States, after twenty years from the date thereof.  Provided, that the Secretary of the Treasury shall, upon presentation of said certificates of deposit, issue to the holder thereof, at his option, and instead of the bonds already described, an equal amount of bonds of the United States, coupon or registered, as may by said holder be desired, bearing interest at the rate of seven per cent. per annum, payable semi-annually, and redeemable at the pleasure of the United States, after five years from the date thereof.  And such United States notes shall be received the same as coin, at their par value, in payments for any loans that may be hereafter sold or negotiated by the Secretary of the Treasury, and may be re-issued from time to time, as the exigencies of the public interests shall require.  There shall be printed on the back of the United States notes, which may be issued under the provisions of this act, the following words :  ‘ The within is a legal tender in payment of all debts, public and private, and is exchangeable for bonds of the United States, bearing six per centum interest at twenty years, or in seven per cent. bonds at five years.’

§ 2.  And be it further enacted, That to enable the Secretary of the Treasury to fund the Treasury notes and floating debt of the United States, he is hereby authorized to issue, on the credit of the United States, coupon bonds, or registered bonds, to an amount not exceeding $500,000,000, and redeemable at the pleasure of the Government, after twenty years from date, and bearing interest at the rate of six per centum per annum, payable semi-annually ;  and the bonds herein authorized shall be of such denominations, not less than fifty dollars, as may be determined upon by the Secretary of the Treasury ;  and the Secretary of the Treasury may dispose of such bonds at any time for lawful money of the United States, or for any of the Treasury notes that have been, or may hereafter be, issued under any former act of Congress, or for United States notes that may be issued under the provisions of this act ;  and all stocks, bonds, and other securities of the United States, held by individuals, corporations, or associations, within the United States, shall be exempt from taxation by any State or county.

§ 3.  And be it further enacted, That the United States notes and the coupon or registered bonds, authorized by this act, shall be in such form as the Secretary of the Treasury may direct, and shall bear the written or engraved signatures of the Treasurer of the United States, and the Registry of the Treasury, and also as evidence of lawful issue, the imprint of copy of the seal of the Treasury Department, which imprint shall be made under the direction of the Secretary, after the said notes or bonds shall be received from the engravers, and before they are issued ;  or the said notes and bonds shall be signed by the Treasurer of the United States, or for the Treasurer by such persons as may be especially appointed by the Secretary of the Treasury for that purpose, and shall be counter-signed by the Register of the Treasury, or for the Register by such persons as the Secretary of the Treasury may especially appoint for that purpose ;  and all the provisions of the act entitled “ An act to authorize the issue of Treasury notes,” approved the 23d day of December, 1857, so far as they can be applied to this act, and not inconsistent therewith, are hereby revived and re-enacted ;  and the sum of $300,000 is hereby appropriated out of any money in the Treasury not otherwise appropriated, to enable the Secretary of the Treasury to carry this act into effect.”

Two penal sections (§ 4 and § 5) were adopted as part of this bill, to guard against counterfeiting, but it is not important to insert them here, as they do not affect the principles of the bill.

LETTER FROM GEORGE DAWSON, ESQ., TO THE ALBANY EVENING JOURNAL.

“ WASHINGTON, February 6, 1862.

“ This has been an exciting day in the House.  A fierce battle has bee waged against the ‘legal tender’ Treasury notes.  But, as I think, the right has prevailed, and by a vote of 95 to 59—a much stronger force than was counted upon, the real argument was reduced to a very small compass.  All admitted the necessity of a resort to paper currency ;  and the question was whether that paper should be made as nearly par value as possible, or subjected to the fluctuations and depreciations of an ordinary irredeemable currency.  If made a legal tender, these notes could never sink below the best bank paper.  If not so made, they would very soon cease to be available as a circulating medium.

Besides, if Treasury notes were to be used to pay the Government creditors, why should not their creditors be required to take them ?  Why should the soldier be required to take what the sutler might refuse ?  To be sure, the now legal tender bill left it optional with the soldier, whether he should take the notes or not ;  but if he availed himself of the ‘option, what had the Government to give him ?  Practically, it would be Treasury notes or nothing, as, during a general Bank suspension, it is irredeemable bank bills ‘or no pay.’

It was not strange that members of the same political family, differed on a question of really doubtful expediency.  And but for the necessities of Government, I doubt whether the ‘legal tender’ principle would have received a dozen votes in the House.  It is a new financial principle, and its workings may result in some, if not all the evils predicted from it.  Nevertheless, as Treasury Notes had to be resorted to, the common sense of the House, as well as the common sense of the people, determined that they should be made as near the practical value of gold as possible.  Mr. Spaulding, of Erie, has had to assume the laboring oar in this financial expedient.  He had but a bare majority of his Committee with him at the outset ;  and, when the Secretary of the Treasury hesitated, as he did for several days, the Committee became equally divided.  And yet, the measure carried a large majority of the House with it—a fact as gratifying to Mr. S. as it is complimentary to his financial acumen.

The country breathes freer !  The legal tender bill has passed the House, and national bankruptcy is averted.  The grateful thanks of all loyal men are due to Mr. Spaulding and the representatives who supported the measure, for this timely effort in behalf of the public credit.  The relief comes not a moment too soon.  Now let the Senate do its duty promptly, and we shall be clear ‘of the breakers.’ ”

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