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of appropriations of money for that purpose, that the power of Congress to authorize legaland limits the time for which they may be tender notes was derived in any respect from made. The thought connected with that clause the war powers of the Constitution. All conof the Constitution at the time it was written, cede that it is a power not to be exercised so far as money was concerned, evidently needlessly; neither is any other power of dwelt on the power to appropriate money Congress to be exerted without reason. But from the Treasury, and not upon the power of of the occasion when the public good or the Congress to declare what should be the money safety of the Government calls for its exercise, of the country. The truth is that the power the Congress itself is the judge, subject only of Congress over the currency is far broader to the limitations heretofore stated. than all the war powers of the Constitution * But, sir, aside from the Constitutional powcombined. War is not the chief pursuit of this er of Congress, to make this kind of currency Government, nor of any other, except a gov a legal tender, it is now vehemently insisted ernment of savages. War is not the only con- in certain quarters that its legal-tender quality dition in which the American people may need has been from the first injurious to the best financial relief. Peace may have its financial interests of the country. It is absolutely urged emergencies as well as war. Peace, the friend that the power to pay debts with this curof industry, the promoter of trade, the builder rency, standing firmly the equal of gold if not of cities, the patron saint of commerce; peace, better, is a great and dangerous evil to the the best gift of God to nations and to men; people. It is in daily use at this hour in all why should it have less power in the Constitu- the transactions of life, from the most minute tion with which to execute the purposes of the to the most extensive, from the purchase of a Government than war? Why should the long night's lodgings to the purchase of a railroad, reign of peace be less able to preserve the Gov- or a line of ships. It is now transacting the ernment and to promote the general welfare business of every neighborhood, every village, than the brief periods of strife and bloodshed? and every city in the United States. It has

“Sir, Chief-Justice Marshall did not speak been the basis of all contracts among the peoof a time of war or a time of peace, but for all ple for the last eighteen years. It is the meastimes and for all conditions of public affairs, ure now, at this very moment of time, of the when he said that

obligation of parties to nine hundred and “The sound construction of the Constitution must ninety-nine contracts out of every thousand allow to the national Legislature that discretion, with in existence. Yet we are asked to believe respect to the means by which the powers it confers that the legal-tender quality of this money, are to be carried into execution, which will enable that quality which enables a party to pay a that body to perform the high duties assigned to it in debt contracted with reference to it, is injurithe manner most beneticial to the people. “This principle here laid down by the mighty to be withdrawn. It has even been claimed

ous to the public interests, and ought at once mind of Marshall recognizes in Congress, in the that the money would be better without such immediate representatives of the people, the quality, and that it would still circulate, with power, without respect to a condition of peace increased vigor and usefulness, after it had or war, to adopt such measures as in their received the fatal blow aimed at it by its enejudgment are best calculated to promote the

mies. general welfare, provided simply that the meas

“As well might you expect a man to walk ures adopted are not prohibited by the Consti- erect through this ball after his heart had tution and are consistent with its letter and its been taken from his body. The Senator from spirit. I think I have shown that the power Delaware, on a former occasion, in strong, to make paper currency a legal tender in pay- figurative language, said, “This assumed legalment of debts is not prohibited to Congress by tender power is like the germ of a deadly the Constitution, neither by the letter nor by fever. He said he would destroy that germ the spirit of that instrument. No conclusion without delay. Rather is the legal-tender of law was over plainer to me than that such a

power of our currency like the benignant acpower exists at all times, subject to be exer

tion of the human heart, carrying a healthy cised by Congress in its wisdom and in its dis- and an indispensable circulation to the remotest cretion. The necessity for the exercise of the

extremities. power is left wholly with Congress. ChiefJustice Marshall, in McCulloch vs. The State of of this great question for the present. I have

“Sir, I shall in a few moments take leave Maryland, again says:

detained the Senate longer than I desired, but, “ But where the law is not prohibited, and is really calculated to effect any of the objects intrusted to the have conceived it my duty to submit the rea

as a member of the Committee on Finance, I Government, to undertake here to inquire into the degree of its necessity would be to pass the line which sons which govern my action. Let no one circumscribes the judicial department and to tread on suppose that the financial question will disturb legislative ground. This court disclaims all preten us here no more. The holders of amassed sions to such a power.

capital are grasping for additional power, and “It is a satisfaction to know that the Su- this question will come again and again as long preme Court in making its decision on this as human cupidity can spy out new fields of subject, in twelfth Wallace, made no claim profit to occupy, and new bounties and still

further special privileges to demand from the An act to facilitate the refunding of the national debt. labor of the people. A vast money corpora- tives of the United States of America in Congress as

Be it enacted by the Senate and House of Representation, the most gigantic on earth, is aiming to sembled, That all existing provisions of law authorcentralize within itself all the powers of this izing the refunding of the national debt shall apply to Government over the currency, and, conse any bonds of the United States bearing a higher rate quently, over the entire trade and business of of interest than 45 per cent per annum which may the American people. That corporation, the of the bonds authorized to be issued by the act of July National Bank Association, possesses already a 14, 1870, entitled "An Act to authorize the refunding combination of powers inconsistent with the of the national debt," and the acts amendatory there safety of free government, and we have seen to, and the certificates authorized by the act of Februit within the past year clutch at all the remain-ary 26, 1879, entitled " An Act to authorize the issue ing powers connected with the subject of the public debt," the Secretary of the Treasury is hereby

of certificates of deposit in aid of the refunding of the finances. The holders of privileged capital are authorized to issue bonds (1) [in the] to an amourt (2) also uttering their battle-cry for the future. [of] not exceeding $400,000,000, (3) of denominations Their demand for a strong government is now of $50, or some multiple of that sum, which shall bear heard on every hand. No one neeil mistake able semi-annually, redeemable, at the pleasure of the

interest at the rate of 3 per cent per annum, (4) paytheir meaning. A strong government, in their United States, after 5 years, and payable (5) (ten] estimation, is one in which the people are de- twenty years from the date of issue ; and also (6) (cerprived as far as possible, and the farther the tificates in the Treasury notes to an amount (1) [of] better, of all power to control public affairs. not exceeding $300,000,000, in denominations of ten A call for a strong government to-day in our ) [twenty, and fitty) dollars, (9) or some multiple of

that sum not exceeding $1,000, either registered or midst has the same meaning it has had in all coupon, bearing interest at (10)"(the) a rate (11) [of] the ages of the past—a government of the not exceeding 3 per cent per annum, (12) payable semiprivileged few. Sir, I too am in favor of a annually, redeemable at the pleasure of the United strong government, but the strength which I States, atter one year, and payable in ten years from wish my government to have is to be found denomination than $100 shall be registered. The only in the hearts of a free, self-governing bonds and (14) (certificates] Treasury notes shall be, people, inspired with a love of country because in all other respects, of liko character and subject to of its just and equal laws. On such a founda the same provisions as the bonds authorized to be istion no government can be overthrown; on

sued by the act of July 14, 1870, entitled “ An Act to

authorize the refunding of the national debt," and acts any other, no government ought to stand.”

amendatory thereto: Provided, That nothing in this The Presiding Officer: “Shall the amend- act shall be so construed as to' authorizo an increase ments be engrossed and the bill be ordered to of the public debt: Provided further, That interest a third reading ?”

upon tho 6 per cent bonds hereby authorized to be re

funded shall cease at the expiration of thirty days after The amendments were ordered to be en

(15) publication of notice that the same have been grossed, and the bill to be read a third time.

designated by the Secretary of the Treasury for reThe bill was read the third time.

demption. (16) It shall be the duty of the Secretary The result was announced as follows: of the Treasury, under such rules and regulations as

he may prescribe, to authorize public subscriptions, at Yeas-Bailey, Bayard, Beck, Booth, Brown, But

not less than par, to be received at all depositories of the ler, Call, Cockrell, Coké, Davis of Illinois, Eaton,

United States, and at all national banks, and such Farley, Garland, Groome, Grover, Hampton, Harris, other banks as he may designate, for the bonds and for Hereford, Hill of Georgia, Ingalls, Johnston, Jonas, the Treasury notes herein provided for, for thirty days Kernan, Lamar, McDonald, McPherson, Maxey, Mor before he shall contract for or award any portion of gan, Pendleton, Plumb, Pugh, Saulsbury, Saunders, said bonds or Treasury notes to any syndicate of indiSlater, Thurman, Vance, Vest, Voorhees, Walker, viduals or bankers, or otherwise than under such public Wallace, Whyte, Williams, Withers-43. Nays-Allison, Anthony, Baldwin, Blair, Burn- the entire amount of said bonds and Treasury notes,

subscriptions ; and if it shall happen that more than side, Cameron of Wisconsin, Dawes, Ferry, Hamlin,

or of either of them, has been subscribed within said Hill of Colorado, Hoar, Kirkwood, Logan McMillan thirty days, he shall award the full amount subscribed

ABSENT—Blaine, Bruce, Cameron of Pennsylvania, tions for the sum of $2,000 or less, at rates most adCarpenter, Conkling, Davis of West Virginia, Ed- vintageous to the United States, and the residue ratamunds, Jones of Florida, Jones of Nevada, Kellogs, bly among the subscribers in proportion to the amount Randolph, Ransom, Sharon13.

by them respectively subscribéd, at rates most advanSo the bill was passed.

tageous to the United States.

SECTION 2. The Secretary of the Treasury is hereby In the House, on February 18th, the refunding authorized, in the process of refunding the national bill was considered.

debt, to exchange, at not less than par, any of the Mr. Tucker, of Virginia: "I ask consent that thorized for any of the bonds of the United States out

bonds or (17) (certificates) Treasury notes herein auHouse bill No. 4592, to facilitate the refunding standing and uncalled bearing a higher rate of interest of the national debt, which has been returned than 45 per cent per annum; and on the bonds so refrom the Senate with amendments, and is now deemed the Secretary of the Treasury may allow to on the Speaker's table, be printed with the bonds from the date of exchange to the time of their

the holders the difference between the interest on such Senate amendments in regular bill form.”

maturity, and the interest for a like period on the There was no objection, and it was so or bonds or (18), (certificates] Treasury notes issued; (19) dered.

[but none of the provisions of this act shall apply to The bill, with Senate amendments, is as fol- tho redemption or exchange of any of the bonds issued lows: [Strike out the parts in brackets, and in- received and exchanged in pursuance of the provisions

to the Pacific Railway Companies';) and the bonds so sert the parts printed in italics.]

of this act shall be canceled and destroyed; (20) but

none of the prorisions of this act shall apply to the re- committee retired from the change from July demption of erchange of any of the bonds issued to the to September in order to allow the gentleman Pacific Railway Companies.

SEO. 3. (21) Authority to issue bonds and certifi- from Michigan to move the September amendcates to the annount necessary to carry out the provis- ment with another amendment. Now, if the ions of this act is hereby granted ; and The Secretary House concurs in the Senate amendment, will of the Treasury is hereby authorized and directed to the gentleman still have his right of moving make suitable rules and regulations to carry this act into effect (22) [ : Provided that ;j and the expense of to amend by changing that to September and preparing, issuing, advertising, and disposing of the something else? If not, then the gentleman bonds and (23) (certificates) I reasury notes authorized from Michigan could offer his amendment at to be issued shall not exceed (24) Cone quarter) one this point.” half of 1 per cent.

The Clerk read as follows: Sec. 4. That the Secretary of the Treasury is hereby authorized, iť in his opinion it shall become necessary,

Amend the fifth section by striking out “ July," in to use (25) 'temporarily not exceeding $50,000,000 of the first line, and after the words "provided further," the standard gold and silver coin in the Treasury in in line twenty and to and including the word “ repeal” the redemption of the 5 and 6 per cent bonds of the in line twenty-four; and by inserting the word ". Sep; United States authorized to be refunded by the pro

tember" in the first line in place of the word “July, visions of this act, (26) which shall from time to time proposed to be stricken out. be repaid and replaced out of the proceeds of the sale Mr. Frye: “The amendment which the genof the bonds or Treasury notes authorized by this act; tleman from Michigan offers is one, in my judgand he may at any time apply the surplus money the Treasury not otherwise appropriated, or so much ment, in the present condition of public senthereof as he may consider proper, to the purchase or timent, of very great importance. Sections redemption of United States bonds'or (27) [certificates] 5220, 5221, 5222, and 5224 of the Revised Treasury notes authorized by this act : Provided, That Statutes of the United States provide for the the bonds and (28) (certificates) Treasury notes so purchased or redeemed shall constitute no part of the In that voluntary liquidation the bank itself,

voluntary liquidation of banking corporations. sinking fund, but shall be canceled.

Sec. 5. From and after the 1st day of (29) (May] by the action of a certain number of its stock July, 1881, the 3 per cent bonds authorized by the holders, may, under the law, redeem all its first section of this act shall be the only bonds receiv- bonds on deposit in the Treasury for its cirable as security for national-bank circulation, or as security for the safe-keeping and prompt payment of culation in the lawful currency of the United the public money deposited with such banks; but States; and two of these sections providing when any such bonds deposited for the purposes afore- for that contingency were the revised acts of said shall be designated for purchase or redemption June, 1874, referred to in section 5 of this bill. by the Secretary of the Treasury, the banking asso “Now, the bill proposed by the Committee on ciation depositing the same shall have the right to substitute other issues of the bonds of the United Ways and Means, in this section now under States in lieu thereof: Prorided, That no bond upon consideration, and the amendments proposed which interest has ceased shall be accepted or shall by the gentleman from Kentucky, provides be continued on deposit as security for circulation or for a repeal of that law of June, 1874, and the for the safe-keeping of the public money; and in case question meeting this House squarely is simply bonds so deposited shall not be withdrawn, as pro- this: Does that repeal of the law of June, 1874, vided by law, within thirty days after interest has ceased thereon, the banking association depositing the repeal the right of a national bank to go into same shall be subject to the liabilities and proceedings voluntary liquidation and redeem its bonds by 5234 of the Revised Statutes of the United States; gentlemen are divided, and divided honestly,

part of the Comptroller provided for in section the use of lawful currency? And, Mr. Speaker, June 20, 1874, entitled " An Act fixing the amount of in their opinion on this subject. Some of the United States notes, providing for a redistribution of best lawyers in this country to-day are writing the national-bank currency, and for other purposes," to Congress insisting that if the amendment be and the same is hereby repealed; and sections recommended by the gentleman from Kentucky 5159 and 5160 of the Revised Statutes of the United shall prevail, they hold that it will operate as States be and the same are hereby re-enacted.

(39) Sec. 6. That the payment of any of the bonds an absolute repeal of all power on the part of hereby authorized, after the erpiration of five years, the national banks voluntarily to liquidate and shall be made in amounts to be determined from time redeem their United States bonds deposited to time by the Secretary of the Treasury, at his discre, with the Secretary of the Treasury as security described by the dates and numbers, beginning for each for circulation by lawful currency. If it does successive payment with the bonds of each class last this, if it accomplishes this result, a gross and dated and numbered: of the time of which intended grave injustice is done to this great interest payment or redemption the Secretary of the Treasury in this country. If it does not, then the comshall give public notice, and the interest on the particua plaint is without foundation. But, sir, a maat the erpiration of thirty days from the publication jority of the banking people of the country toof such notice.

day fully believe that it does repeal that right. SEO. (31) [6]. 7. That this act shall be known as “The funding act of 1881”; and all acts and parts of tion about it? Why should it be left open to

"Mr. Speaker, why should there be any quesacts inconsistent with this act are hereby repealed.

doubt? Here we are enacting a law touching The House proceeded to consider the amend- the most sensitive thing in the world, finance ments.

(and gentlemen can see how sensitive a subMr. Frye, of Maine: “If the Speaker pleases, ject it is by observing what has transpired the Senate changed May to July. The com- within the last week), and in that enactment mittee changed July to September. Then the we are met with questions of such gravity and

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doubt as this. In legislating upon a subject words, by this fifth section you say they shall so sensitive as this, why should it be left to a do a certain thing that is morally impossible doubt if a single amendment, a few words in- for them to do. And then you say if they corporated in it, or if the English language can don't do it you will put them into the hands make it plain, certain, and unequivocal ? of a receiver under section 5234 of the Revised

“Sir, the committee, in order to remove all Statutes; and there is no getting away from doubt, agreed to an amendment offered by the that section. gentleman from Ohio [Mr. McKinley), provid “But the great bugbear about this thing is ing that nothing in this act shall be construed the cry as to the national banks. They are to affect these sections to which I called the the troublesome element in this matter. There attention of the House.

are gentlemen upon this floor, of intelligence, “But, Mr. Speaker, that very amendment is of integrity, of standing, not only here but at probably open to the point of order, if any home, who rush to the front with as much gentleman here should make it; and under a velocity and ferocity whenever you name former ruling of the Speaker it is very likely “national banks'as the wildest bull that ever that it might be ruled out. What will be the came from the mountains of Andalusia would effect? The friends of the bill reject Mr. Con- rush upon a red flag. ger's amendment, also reject or have ruled out “Oh, it is astonishing. What have the nationof order the amendment of the gentleman from al banks done? They furnished a market for Ohio [Mr. McKinley).

your bonds, and they did it at the solicitation “What meaning will you convey to the of the Government, instead of your having to country? What will be the signification of send your bonds to Europe, where you would your action? Do you not give notice, practi- have to send money to pay the coupons for cally, to the banks that they can not liquidate interest accruing on them; and they did it for without redeeming their bonds held by the the purpose of aiding the Government to float Treasury in their own circulation? By reject- its debt. But that is all forgotten, and the ing the McKinley amendment do you not send hue and cry was raised from one end of the out word to the country that it is the purpose country to the other that it would not do to in framing this bill to prevent the banks from put power in the hands of a few men.” liquidating under the existing provisions of Mr. Carlisle, of Kentucky: "Mr. Speaker: law? that such at any rate is your construc- The fifth section of this bill has been so much tion? Sir, I hope this House will do nothing misconstrued or so much misrepresented in of the kind, but will so amend the law that no various parts of the country, that I consider it man can fail to comprehend readily and under- my duty, notwithstanding the lateness of the stand clearly its provisions."

hour, to say something in explanation of its Mr. Price, of Missouri: “The gentleman provisions. It is not my purpose to enter from Kentucky [Mr. Carlisle), who has the upon an argument in support of the section principal charge of this bill, alleges and has en- except so far as the argument may be necesdeavored to make gentlemen upon this side of sary to explain the principles upon which it the House believe, possibly has gentlemen was framed, and to state fully its purpose and on that side of the House believe, that you do effect. It contains four separate and distinct not intend to repeal the sections referred to by provisions, all relating, however, to the same my friend the gentleman from Maine [Mr. Frye), general subject, and all calculated, in my opinwhen the last section of his bill provides in ion, to aid materially in the successful inauguterms, not by implication, not by inference, but ration and maintenance of the financial policy in terms, that this bill shall be called so-and- advocated by those of us who believe that the so, and that it shall repeal all acts and parts of outstanding 5 and 6 per cent bonds of the acts in conflict with this act. And this act United States should be funded at the miniprovides that you can not get the bonds out of mum rate of interest paid by other first-class the Treasury of the United States belonging to nations, and that the national banks should a bank that has deposited them there for cir- be required to assist in accomplishing this reculation or for security of deposits made with sult. In the first place, it provides, as amendthem by the Government unless you deposited in the Senate, that from and after the 1st your own paper there for them. The section day of July next the 3 per cent bonds authorI refer to provides that lawful money may be ized by the bill, and no others, shall be redeposited and these bonds taken up; while ceivable as security for the circulating notes this bill says that they must return their own of the national banks, and as security for the notes; and it would be base flattery not to safe-keeping and prompt payment of the pubcall a man very foolish—that is as mild as I lic money deposited with such banks. can put it-who does not know there never “This is certainly a very plain and simple prowas a bank of issue established in this world vision, and it seems to me that it requires much that ever got in all of its own notes. And, more ingenuity to pervert its true meaning consequently, if they can not get in their own than it does to ascertain it; and yet for å notes, and if they can not get their bonds out while a persistent attempt was made to conany other way than by depositing their notes, vince the public that if this provision should they never can get their bonds. In other be adopted all national banks having 4 and 45

per cent bonds on deposit to secure their cir- redemption thereof," approved June 8, 1864; and all culation and public deposits would be com

national-banking associations organized under said pelled after the date named to withdraw them act, or any amendment thereof, are hereby required

to deposit bonds issued by this act, as security for and substitute bonds bearing 3 per cent, or go their circulating notes, within one year from the pasinto liquidation. It is almost impossible to sage of this act, in default of which their right to ismake an argument against such a construction sue notes for circulation shall be forfeited, and the as this; nor is it necessary to attempt it, as it Treasurer and the Comptroller of the Currency shall is now conceded, I believe, everywhere, that may be necessary to call in and destroy their outthere was not a shadow ot' foundation for it. standing circulation, and to return the bonds held as It was one of the devices adopted by interested security therefor to the association by which they parties to alarm the banks and to precipitate were deposited in sums of not less than $1,000: Proà resort by them to the exercise of that dan- rided, That any such association now in existence gerous power of contraction conferred upon trolier of the Currency, by resolution of its board of them by the act of 1874; and in connection directors, deposit legal-tender notes with the Treaswith other statements equally groundless it urer of the United States to the amount of its outactually produced a rapid withdrawal of circu- standing circulation and take up the bonds pledged lation, which for a few days threatened dis

for its redemption: And prorided further, That no

more than one third of the bonds deposited by any aster and ruin to all the business interests of bank as such security shall be of either of the classes the people.

of bonds hereby authorized on which the maximum “Sir, this is not the first effort that bas rate of interest is fixed at 4+ or 5 per cent per anbeen made in Congress to compel these creat

num.' ures and agencies of the Government to assist “ The next section provided that the circait in reducing the interest charge upon the lating notes which any banking association people, and, if it shall fail now, it will not be might receive from the Comptroller of the the first demonstration of their power over the Currency should not exceed 80 per cent of the financial legislation of the country. It is a par value of the bonds deposited instead of 90 humiliating confession for the representatives per cent, as they may now obtain under the law. of the people to make, but it is true, neverthe " It will be observed that the section just less, that ten years ago, when these institutions read is much more serere in its requirements were fewer in number than they are to-day, than anything contained in this bill. It prowhen their organization was less perfect, and posed to compel national banks not only to dewhen their combined capital was not so great, posit the new bonds and no others as security they had power enough to defeat in this House for circulation after a certain date, but it went a provision which was designed by the present further and declared that their right to issue Secretary of the Treasury to compel them to notes for circulation should be absolutely foraid in funding a large part of the public debt feited unless they should within one year withat 4, 45, and 5 per cent. On the 2d day of draw all the old bonds they then had on deFebruary, 1870, Mr. Sherman, as chairman of posit and substitute the new ones in their the Finance Committee in the Senate, reported places. This was a sweeping and radical provisback to that body, as a substitute for a billion, which went to the full extent of asserting previously introduced by Mr. Sumner, a bill the absolute power of Congress to legislate acwhich after some amendments was finally cording to its own conception of the public inpassed and is now known as the funding act terests concerning the character of the bonds of July 14, 1870. The bill as reported by Mr. that should be deposited or permitted to reSherman provided for the issue and sale of main on deposit as security for the circulating $400,000,000 of bonds bearing interest at the notes of these corporations. That such power rate of 5 per cent, $400,000,000 bearing inter- exists in Congress has been asserted again and est at the rate of 45 per cent, and $400,000,000 again by some of the most eminent men in the bearing interest at the rate of 4 per cent; and country, and by none more frequently or emin order to create a certain market for a large phatically than Mr. Sherman himself. part of these securities it contained in its “ These assertions are sufficient to show that eighth section the following provisions, which the policy indicated in the first clause of the I beg leave to submit for the consideration of fifth section of the pending bill is not now pregentlemen who have denounced what they sented to the country for the first time, and have been pleased to call the ‘forced loan' that the right and duty of Congress to adopt feature in the measure now before us. The it when in its judgment the interests of the eighth section of Mr. Sherman's bill was as Government and people require it have been follows:

asserted and maintained, not only by men of

eminent ability as lawyers and large experi". And be it further enacted, That on and after the 1st day of October, 1870, registered bonds of any de

ence in financial affairs, but by a majority of nomination not less than $1,000, issued under the two to one in the Senate when the very first provisions of this act, and no other, shall be deposited attempt was made to fund our enormous public with the Treasurer of the United States as security debt at a reduced rate of interest. It was then for notes issued to national-banking associations for insisted—and properly insisted, in my opinioncirculation under an act entitled “ An act to provide a national currency secured by a pledge of United that those institutions which, in the language States bonds, and to provide for the circulation and of Mr. Sherman, had, prior to 1870,' made on

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