of appropriations of money for that purpose, and limits the time for which they may be made. The thought connected with that clause of the Constitution at the time it was written, so far as money was concerned, evidently dwelt on the power to appropriate money from the Treasury, and not upon the power of Congress to declare what should be the money of the country. The truth is that the power of Congress over the currency is far broader than all the war powers of the Constitution combined. War is not the chief pursuit of this Government, nor of any other, except a government of savages. War is not the only condition in which the American people may need financial relief. Peace may have its financial emergencies as well as war. Peace, the friend of industry, the promoter of trade, the builder of cities, the patron saint of commerce; peace, the best gift of God to nations and to men; why should it have less power in the Constitution with which to execute the purposes of the Government than war? Why should the long reign of peace be less able to preserve the Government and to promote the general welfare than the brief periods of strife and bloodshed? "Sir, Chief-Justice Marshall did not speak of a time of war or a time of peace, but for all times and for all conditions of public affairs, when he said that

"The sound construction of the Constitution must allow to the national Legislature that discretion, with respect to the means by which the powers it confers are to be carried into execution, which will enable that body to perform the high duties assigned to it in the manner most beneficial to the people.

"This principle here laid down by the mighty mind of Marshall recognizes in Congress, in the immediate representatives of the people, the power, without respect to a condition of peace or war, to adopt such measures as in their judgment are best calculated to promote the general welfare, provided simply that the measures adopted are not prohibited by the Constitution and are consistent with its letter and its spirit. I think I have shown that the power to make paper currency a legal tender in payment of debts is not prohibited to Congress by the Constitution, neither by the letter nor by the spirit of that instrument. No conclusion of law was over plainer to me than that such a power exists at all times, subject to be exercised by Congress in its wisdom and in its discretion. The necessity for the exercise of the power is left wholly with Congress. ChiefJustice Marshall, in McCulloch vs. The State of Maryland, again says:

"But where the law is not prohibited, and is really calculated to effect any of the objects intrusted to the Government, to undertake here to inquire into the degree of its necessity would be to pass the line which circumscribes the judicial department and to tread on legislative ground. This court disclaims all pretensions to such a power.

"It is a satisfaction to know that the Supreme Court in making its decision on this subject, in twelfth Wallace, made no claim

that the power of Congress to authorize legaltender notes was derived in any respect from the war powers of the Constitution. All concede that it is a power not to be exercised needlessly; neither is any other power of Congress to be exerted without reason. But of the occasion when the public good or the safety of the Government calls for its exercise, the Congress itself is the judge, subject only to the limitations heretofore stated.

"But, sir, aside from the Constitutional power of Congress, to make this kind of currency a legal tender, it is now vehemently insisted in certain quarters that its legal-tender quality has been from the first injurious to the best interests of the country. It is absolutely urged that the power to pay debts with this currency, standing firmly the equal of gold if not better, is a great and dangerous evil to the people. It is in daily use at this hour in all the transactions of life, from the most minute to the most extensive, from the purchase of a night's lodgings to the purchase of a railroad, or a line of ships. It is now transacting the business of every neighborhood, every village, and every city in the United States. It has been the basis of all contracts among the people for the last eighteen years. It is the measure now, at this very moment of time, of the obligation of parties to nine hundred and ninety-nine contracts out of every thousand in existence. Yet we are asked to believe that the legal-tender quality of this money, that quality which enables a party to pay a debt contracted with reference to it, is injurito be withdrawn. It has even been claimed ous to the public interests, and ought at once that the money would be better without such quality, and that it would still circulate, with increased vigor and usefulness, after it had received the fatal blow aimed at it by its ene

mies.

of this great question for the present. I have "Sir, I shall in a few moments take leave detained the Senate longer than I desired, but, as a member of the Committee on Finance, I have conceived it my duty to submit the reasons which govern my action. Let no one suppose that the financial question will disturb us here no more. The holders of amassed capital are grasping for additional power, and this question will come again and again as long as human cupidity can spy out new fields of profit to occupy, and new bounties and still

further special privileges to demand from the labor of the people. A vast money corporation, the most gigantic on earth, is aiming to centralize within itself all the powers of this Government over the currency, and, consequently, over the entire trade and business of the American people. That corporation, the National Bank Association, possesses already a combination of powers inconsistent with the safety of free government, and we have seen it within the past year clutch at all the remaining powers connected with the subject of the finances. The holders of privileged capital are also uttering their battle-cry for the future. Their demand for a strong government is now heard on every hand. No one need mistake their meaning. A strong government, in their estimation, is one in which the people are deprived as far as possible, and the farther the better, of all power to control public affairs. A call for a strong government to-day in our midst has the same meaning it has had in all the ages of the past-a government of the privileged few. Sir, I too am in favor of a strong government, but the strength which I wish my government to have is to be found only in the hearts of a free, self-governing people, inspired with a love of country because of its just and equal laws. On such a foundation no government can be overthrown; on any other, no government ought to stand."

The Presiding Officer: "Shall the amendments be engrossed and the bill be ordered to a third reading?"

The amendments were ordered to be engrossed, and the bill to be read a third time. The bill was read the third time. The result was announced as follows: YEAS-Bailey, Bayard, Beck, Booth, Brown, Butler, Call, Cockrell, Coke, Davis of Illinois, Eaton, Farley, Garland, Groome, Grover, Hampton, Harris, Hereford, Hill of Georgia, Ingalls, Johnston, Jonas, Kernan, Lamar, McDonald, McPherson, Maxey, Morgan, Pendleton, Plumb, Pugh, Saulsbury, Saunders, Slater, Thurman, Vance, Vest, Voorhees, Walker, Wallace, Whyte, Williams, Withers-43.

NAYS-Allison, Anthony, Baldwin, Blair, Burnside, Cameron of Wisconsin, Dawes, Ferry, Hamlin, Hill of Colorado, Hoar, Kirkwood, Logan, McMillan, Morrill, Paddock, Platt, Rollins, Teller, Windom-20. ABSENT-Blaine, Bruce, Cameron of Pennsylvania, Carpenter, Conkling, Davis of West Virginia, Edmunds, Jones of Florida, Jones of Nevada, Kellogg, Randolph, Ransom, Sharon-13.

So the bill was passed.

In the House, on February 18th, the refunding bill was considered.

Mr. Tucker, of Virginia: "I ask consent that House bill No. 4592, to facilitate the refunding of the national debt, which has been returned from the Senate with amendments, and is now on the Speaker's table, be printed with the Senate amendments in regular bill form."

There was no objection, and it was so ordered.

The bill, with Senate amendments, is as follows: [Strike out the parts in brackets, and insert the parts printed in italics.]

An act to facilitate the refunding of the national debt. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That all existing provisions of law authorizing the refunding of the national debt shall apply to any bonds of the United States bearing a higher rate of interest than 4 per cent per annum which may hereafter become redeemable: Provided, That in lieu of the bonds authorized to be issued by the act of July 14, 1870, entitled "An Act to authorize the refunding of the national debt," and the acts amendatory thereto, and the certificates authorized by the act of February 26, 1879, entitled "An Act to authorize the issue of certificates of deposit in aid of the refunding of the public debt," the Secretary of the Treasury is hereby authorized to issue bonds (1) [in the] to an amourt (2) [of] not exceeding $400,000,000, (3) of denominations of $50, or some multiple of that sum, which shall bear interest at the rate of 3 per cent per annum, (4) payable semi-annually, redeemable, at the pleasure of the United States, after 5 years, and payable (5) [ten] twenty years from the date of issue; and also (6) [certificates in the] Treasury notes to an amount (7) [of] not exceeding $300,000,000, in denominations of ten (8) [twenty, and fifty] dollars, (9) or some multiple of that sum not exceeding $1,000, either registered or coupon, bearing interest at (10) [the] a rate (11) [of] not exceeding 3 per cent per annum, (12) payable semiannually, redeemable at the pleasure of the United States, after one year, and payable in ten years from the date of issue (13); and no Treasury note of a less denomination than $100 shall be registered. The bonds and (14) [certificates] Treasury notes shall be, in all other respects, of like character and subject to the same provisions as the bonds authorized to be issued by the act of July 14, 1870, entitled "An Act to authorize the refunding of the national debt," and acts amendatory thereto: Provided, That nothing in this act shall be so construed as to authorize an increase of the public debt: Provided further, That interest upon the 6 per cent bonds hereby authorized to be refunded shall cease at the expiration of thirty days after (15) publication of notice that the same have been designated by the Secretary of the Treasury for redemption. (16) It shall be the duty of the Secretary of the Treasury, under such rules and regulations as he may prescribe, to authorize public subscriptions, at not less than par, to be received at all depositories of the United States, and at all national banks, and such other banks as he may designate, for the bonds and for before he shall contract for or award any portion of the Treasury notes herein provided for, for thirty days said bonds or Treasury notes to any syndicate of individuals or bankers, or otherwise than under such public subscriptions; and if it shall happen that more than the entire amount of said bonds and Treasury notes, or of either of them, has been subscribed within said thirty days, he shall award the full amount subscribed to all tions for the sum of $2,000 or less, at rates most adpersons who shall have made bona fide subscripvantageous to the United States, and the residue ratably among the subscribers in proportion to the amount by them respectively subscribed, at rates most advantageous to the United States.

SECTION 2. The Secretary of the Treasury is hereby authorized, in the process of refunding the national debt, to exchange, at not less than par, any of the thorized for any of the bonds of the United States outbonds or (17) [certificates] Treasury notes herein austanding and uncalled bearing a higher rate of interest than 4 per cent per annum; and on the bonds so redeemed the Secretary of the Treasury may allow to bonds from the date of exchange to the time of their the holders the difference between the interest on such maturity, and the interest for a like period on the bonds or (18) [certificates] Treasury notes issued ; (19) [but none of the provisions of this act shall apply to the redemption or exchange of any of the bonds issued received and exchanged in pursuance of the provisions to the Pacific Railway Companies;] and the bonds so of this act shall be canceled and destroyed; (20) but

doubt as this. In legislating upon a subject so sensitive as this, why should it be left to a doubt if a single amendment, a few words incorporated in it, or if the English language can make it plain, certain, and unequivocal ?

"Sir, the committee, in order to remove all doubt, agreed to an amendment offered by the gentleman from Ohio [Mr. McKinley], providing that nothing in this act shall be construed to affect these sections to which I called the attention of the House.

"But, Mr. Speaker, that very amendment is probably open to the point of order, if any gentleman here should make it; and under a former ruling of the Speaker it is very likely that it might be ruled out. What will be the effect? The friends of the bill reject Mr. Conger's amendment, also reject or have ruled out of order the amendment of the gentleman from Ohio [Mr. McKinley].

"What meaning will you convey to the country? What will be the signification of your action? Do you not give notice, practically, to the banks that they can not liquidate without redeeming their bonds held by the Treasury in their own circulation? By reject ing the McKinley amendment do you not send out word to the country that it is the purpose in framing this bill to prevent the banks from liquidating under the existing provisions of law? that such at any rate is your construction? Sir, I hope this House will do nothing of the kind, but will so amend the law that no man can fail to comprehend readily and understand clearly its provisions."

Mr. Price, of Missouri: "The gentleman from Kentucky [Mr. Carlisle], who has the principal charge of this bill, alleges and has endeavored to make gentlemen upon this side of the House believe, possibly has made gentlemen on that side of the House believe, that you do not intend to repeal the sections referred to by my friend the gentleman from Maine [Mr. Frye], when the last section of his bill provides in terms, not by implication, not by inference, but in terms, that this bill shall be called so-andso, and that it shall repeal all acts and parts of acts in conflict with this act. And this act provides that you can not get the bonds out of the Treasury of the United States belonging to a bank that has deposited them there for circulation or for security of deposits made with them by the Government unless you deposit your own paper there for them. The section I refer to provides that lawful money may be deposited and these bonds taken up; while this bill says that they must return their own notes; and it would be base flattery not to call a man very foolish-that is as mild as I can put it-who does not know there never was a bank of issue established in this world that ever got in all of its own notes. And, consequently, if they can not get in their own notes, and if they can not get their bonds out any other way than by depositing their notes, they never can get their bonds. In other

words, by this fifth section you say they shall do a certain thing that is morally impossible for them to do. And then you say if they don't do it you will put them into the hands of a receiver under section 5234 of the Revised Statutes; and there is no getting away from that section.

"But the great bugbear about this thing is the cry as to the national banks. They are the troublesome element in this matter. There are gentlemen upon this floor, of intelligence, of integrity, of standing, not only here but at home, who rush to the front with as much velocity and ferocity whenever you name national banks' as the wildest bull that ever came from the mountains of Andalusia would rush upon a red flag.

"Oh, it is astonishing. What have the national banks done? They furnished a market for your bonds, and they did it at the solicitation of the Government, instead of your having to send your bonds to Europe, where you would have to send money to pay the coupons for interest accruing on them; and they did it for the purpose of aiding the Government to float its debt. But that is all forgotten, and the hue and cry was raised from one end of the country to the other that it would not do to put power in the hands of a few men."

Mr. Carlisle, of Kentucky: "Mr. Speaker: The fifth section of this bill has been so much misconstrued or so much misrepresented in various parts of the country, that I consider it my duty, notwithstanding the lateness of the hour, to say something in explanation of its provisions. It is not my purpose to enter upon an argument in support of the section except so far as the argument may be necessary to explain the principles upon which it was framed, and to state fully its purpose and effect. It contains four separate and distinct provisions, all relating, however, to the same general subject, and all calculated, in my opinion, to aid materially in the successful inauguration and maintenance of the financial policy advocated by those of us who believe that the outstanding 5 and 6 per cent bonds of the United States should be funded at the minimum rate of interest paid by other first-class nations, and that the national banks should be required to assist in accomplishing this result. In the first place, it provides, as amended in the Senate, that from and after the 1st day of July next the 3 per cent bonds authorized by the bill, and no others, shall be receivable as security for the circulating notes of the national banks, and as security for the safe-keeping and prompt payment of the public money deposited with such banks.

"This is certainly a very plain and simple provision, and it seems to me that it requires much more ingenuity to pervert its true meaning than it does to ascertain it; and yet for a while a persistent attempt was made to convince the public that if this provision should be adopted all national banks having 4 and 43

"Sir, this is not the first effort that has been made in Congress to compel these creatures and agencies of the Government to assist it in reducing the interest charge upon the people, and, if it shall fail now, it will not be the first demonstration of their power over the financial legislation of the country. It is a humiliating confession for the representatives of the people to make, but it is true, nevertheless, that ten years ago, when these institutions were fewer in number than they are to-day, when their organization was less perfect, and when their combined capital was not so great, they had power enough to defeat in this House a provision which was designed by the present Secretary of the Treasury to compel them to aid in funding a large part of the public debt at 4, 4, and 5 per cent. On the 2d day of February, 1870, Mr. Sherman, as chairman of the Finance Committee in the Senate, reported back to that body, as a substitute for a bill previously introduced by Mr. Sumner, a bill which after some amendments was finally passed and is now known as the funding act of July 14, 1870. The bill as reported by Mr. Sherman provided for the issue and sale of $400,000,000 of bonds bearing interest at the rate of 5 per cent, $400,000,000 bearing interest at the rate of 4 per cent, and $400,000,000 bearing interest at the rate of 4 per cent; and in order to create a certain market for a large part of these securities it contained in its eighth section the following provisions, which I beg leave to submit for the consideration of gentlemen who have denounced what they have been pleased to call the 'forced loan' feature in the measure now before us. The eighth section of Mr. Sherman's bill was as follows:

"And be it further enacted, That on and after the 1st day of October, 1870, registered bonds of any denomination not less than $1,000, issued under the provisions of this act, and no other, shall be deposited with the Treasurer of the United States as security for notes issued to national-banking associations for circulation under an act entitled "An act to provide a national currency secured by a pledge of United States bonds, and to provide for the circulation and

redemption thereof," approved June 3, 1864; and all national-banking associations organized under said act, or any amendment thereof, are hereby required to deposit bonds issued by this act, as security for their circulating notes, within one year from the passage of this act, in default of which their right to issue notes for circulation shall be forfeited; and the Treasurer and the Comptroller of the Currency shall be authorized and required to take such measures as may be necessary to call in and destroy their outstanding circulation, and to return the bonds held as security therefor to the association by which they were deposited in sums of not less than $1,000: Prómay, upon giving thirty days' notice to the Comptroller of the Currency, by resolution of its board of directors, deposit legal-tender notes with the Treasurer of the United States to the amount of its outstanding circulation and take up the bonds pledged for its redemption: And provided further, That no more than one third of the bonds deposited by any bank as such security shall be of either of the classes of bonds hereby authorized on which the maximum rate of interest is fixed at 4 or 5 per cent per an

num.'

"The next section provided that the circulating notes which any banking association might receive from the Comptroller of the Currency should not exceed 80 per cent of the par value of the bonds deposited instead of 90 per cent, as they may now obtain under the law.

"It will be observed that the section just read is much more severe in its requirements than anything contained in this bill. It proposed to compel national banks not only to deposit the new bonds and no others as security for circulation after a certain date, but it went further and declared that their right to issue notes for circulation should be absolutely forfeited unless they should within one year withdraw all the old bonds they then had on deposit and substitute the new ones in their places. This was a sweeping and radical provision, which went to the full extent of asserting the absolute power of Congress to legislate according to its own conception of the public interests concerning the character of the bonds that should be deposited or permitted to remain on deposit as security for the circulating notes of these corporations. That such power exists in Congress has been asserted again and again by some of the most eminent men in the country, and by none more frequently or emphatically than Mr. Sherman himself.

"These assertions are sufficient to show that the policy indicated in the first clause of the fifth section of the pending bill is not now presented to the country for the first time, and that the right and duty of Congress to adopt it when in its judgment the interests of the Government and people require it have been asserted and maintained, not only by men of eminent ability as lawyers and large experience in financial affairs, but by a majority of two to one in the Senate when the very first attempt was made to fund our enormous public debt at a reduced rate of interest. It was then insisted-and properly insisted, in my opinionthat those institutions which, in the language of Mr. Sherman, had, prior to 1870, made on