FINANCE-CU R R E N C Y . 
 
 An act to prevent iiimncial panics, emancipate labor, and promote the 
 prosperity of the people. 
 
 » 
 
 / — i . 
 
 S P E E C PI 
 
 OF 
 
 HON. MOSES W. FIELD, 
 
 OF MICHIGAN, 
 
 IX THE HOUSE OF REPRESENTATIVES, 
 
 JANUARY 10, 1874. 
 
 •'Let us. therefore, in behalf of a depressed and suffering people, act with signal 
 promptness in adopting measures that wall start every workshop and factory 
 throughout t lie land, set the unemployed laborers at work, and bring contentment 
 and happiness to the people of the whole country." 
 
 Mr. FIELD. Mr. Speaker, early in the session I introduced a "bill 
 (H. 1\. No. 701) entitled "A l)ill authorizing the issne of 3.05 con- 
 vertible "bonds, to provide for their intorchangeability with legal- 
 tender notes, and to lessen the interest on the public debt and I will 
 now explain the provisions of the hill and submit my reasons in sup- 
 pofet of the measure. 
 
 The first section provides that the Secretary of the Treasury shall 
 issue on demand, in exchange for legal-tender notes, the bonds of the 
 Government in denominations of fifty dollars and upward, bearing 
 intercut at the rate of 3.05 per cent, per annum, and principal and 
 interest payable in the legal-tender or lawful money of the United 
 Slates. I assume that no opposition will be made to this section of 
 the bill. If the people choose to lend our Government money bearing 
 this low rate of interest, I think convenient arrangements should be 
 made to accommodate them. 
 
 The venerable Frederick Fraley, president of the National Board 
 of Trade, a gentleman of ripe judgment and large experience, in a 
 speech on the finances before the board at its recent annual meeting, 
 expresses the opinions very generally entertained by our intelligent 
 business men upon the necessity and public utility of this measure. 
 He says : 
 
 During the summer season money accumulates in the great commercial centers 
 of the country and becomes such a .drug there that it is loaned for all sorts of 
 speculations. It is not actually demanded for the business purposes of the conn- 
 
try, and it is loaned, to a very large extent, to the speculators and gamblers m 
 stocks, and this leads to a very dangerous state of things which is very dangerous 
 to the structure upon which our business rests. Now this proposition for the issue 
 of certificates of debt, bearing a moderate rate of interest, is intended to provide 
 for such a state of things, by giving to those who hold this currency in excess an 
 opportunity of converting it" into a security of the highest character, bearing a 
 reasonable but moderate rate of interest, with the privilege of reconverting it 
 into currency when the necessities of trade and the fluctuations of the season shall 
 demand such proceedings. The issue of such certificates woidd give an oppor- 
 tunity for investment of the funds of the savings institutions; and it would also 
 give an opportunity for the investment of the surplus currency w hich might be 
 held by the national banks ; it would enable them to get some small return upon 
 their money, instead of throwing it into the vortex of speculation. 
 
 The issue of Government bonds convertible into legal-tender 
 notes is also recommended by General Spinner, the distinguished 
 and venerable Treasurer of the United States. In his last report he 
 says : 
 
 At other seasons of the year nothing like the legally fixed quantity of cuiTency 
 is needed; neither can it be used for any legitimate purposes. 4 At such times the 
 holders, naturally desirous to "turn an honest penny," finding all the legitimate 
 avenues of trade closed, either engage in speculations themselves, or place their 
 money at interest with corp orations and individuals, who too often use it for pur- 
 poses that, in point of morality, are but little removed from ordinary gambling and 
 downright swindling. * * * For these notorious evils a remedy should be found 
 and interposed. In looking over the whole ground, no scheme has presented itself 
 that would be so likely to accomplish the end in view as the authorization by Con- 
 gress of the issue of a certain amount of legal-tender notes, that could at all times 
 be converted into a currency interest-bearing stock of the United States, and for 
 which the holder of such stock so authorized could at pleasure at any time receive 
 legal-tender notes, with the accrued interest, from the day of issue of such stock 
 to the day of its redemption. It is believed that a rate of interest no higher than 
 3.65 per cent, will be high enough to absorb the desired amount of the circulation 
 when not needed for commercial purposes, and low enough to force the return of 
 the bonds in exchange for legal-tender notes at the times when the business wants 
 of the country shall require more currency. 
 
 It is now more than ten years since Congress, on the advice of the 
 Treasury Department, refused to give a willing and patriotic people 
 the privilege of furnishing all the money required for the maintenance 
 and support of the Government at a moderate rate of interest. For 
 some reasons, to the public unknown and unexplained, our financial 
 chiefs and leaders insisted upon selling bonds at extortionate rates of 
 interest and on conditions calculated to facilitate their shipment to 
 Europe, so that at the present time more than one-half of our bonded in- 
 debtedness is held by foreign capitalists. If the terms and conditions 
 on which these loans were invited had been more favorable for invest- 
 ment in our own country, the Government would have been supplied 
 with an overflowing Treasury from the hands of the American peo- 
 ple. In issuing currency, too, the Government has, upon the largest 
 portion, insisted on paying interests — amounting in the aggregate 
 nearly to $300,000,000 — and the issues have been so cunningly arranged 
 that the accruing interest, in nearly every ease, instead of going into 
 the hands of the people, was gathered into the swollen coffers of 
 bankers and money-changers. The interest paid on compound-inter- 
 est legal-tender notes, one and two year 5 per cent, legal-tender notes, 
 and certificates of indebtedness was a gratuitous and shameful waste 
 of public money, and nineteen-twentieths of this interest money fell 
 into the hands of syndicates and bankers. If plain greenbacks had 
 been issued instead of these interest-bearing notes, the burdens of the 
 people in taxation might have been less oppressive, and no man can 
 assert that greenbacks would not have accomplished this purpose 
 just as well, if not better. The issue of compound-interest notes was a 
 stupid compound folly of the Treasury Department for which our 
 tax-payers have paid over s50.000.000 interest. 
 
I aver that the interest paid by our Government was w holly un- 
 necessary and unjustifiable on the following obligations, allot' which 
 were national currency in circulation : 
 
 Statement of interest paid since 18G2 on national currency in circulation. 
 
 Compound-interest notes, (legal-tender) 150,923,903 
 
 ruited States notes, one-year, (le<;al-tender.) 3 per eent M, -J-.";, ooo 
 
 I'nited States notes, two-year, (leyal-tender,) 5 per cent 10, G4e, 000 
 
 Certificates of indebtedness, (issued for commissary stores,) one-year, 
 
 6 per eent ' 33,705,194 
 
 Temporary-loan certificates, 4 per cent 3, 000, 000 
 
 Temporary-loan certificates, 5 per eent 5, 000, 000 
 
 Three per cent, certificates, (convertible into greenbacks on demand,) 
 
 3 per cent 5,100,000 
 
 Three-year Treasury notes. 7.3 per cent., 181, 770, 000 
 
 Total 298,373,ls7 
 
 Now, there is no hidden mystery about this matter. Nearly three 
 hundred million dollars have been needlessly expended for interest on 
 Government obligations, which were a part of the circulating medium 
 of the country ; and our hard-working farmers and producers under- 
 stand these questions, and they can estimate this enormous waste of 
 the public money as well as Jay Cooke, McCulloch & Co. 
 
 In view of these facts and wrongs, and the stupendous mistakes, if 
 not gross designs, against the Treasury, let us now offer the people a 
 convertible bond, bearing 3.65 per cent, interest, in exchange for the 
 legal-tender greenbacks which Congress on the 25th day of February, 
 L862, by solemn enactment, promised the American people should be 
 convertible* at the option of the holder, into Government bonds at par. 
 Let us at least make good this express contract in the legal-tender act. 
 
 The second section of the bill provides that the convertible bonds 
 shall be issued bearing interest at 3.65 per cent., and the same shall 
 be made payable on demand at the Treasury of the United States, and 
 at such other convenient places as the Secretary of the Treasury may 
 designate for the purpose. I think no objection can be urged to this 
 provision in the bill. It provides at once against plethora or inflation 
 of the currency, assures its elasticity and stability, and, if adopted by 
 Congress, will be hailed with joy by the people, for they will know 
 that on this fiscal arrangement no financial or commercial crisis can 
 disturb the commerce and industries of the country, and for all time 
 to come we may enjoy exemption from the destructive, distressing, 
 and baneful effects of revulsions and financial panics. Let such a law- 
 be enacted by Congress, securing, as it will, elasticity to the currency, 
 its volume to be expanded or contracted to meet the exact needs of 
 the sociefary circulation, in active as well as in passive seasons of 
 business, and we shall have a financial panacea which will exempt 
 our country in the future from the power of the rings, the money- 
 changers, and the swindlers, who, with a iixed and unalterable quan- 
 tity of lawful money, possess the power to crush commerce and in- 
 dustry to suit their own avarice or caprice. We need at once and 
 forever to clear ourselves from the unflinching grasp of unprinci- 
 pled and unpatriotic men, who, by cornering and locking up our law- 
 ful money in times of stringency and peril, exercise their power 
 to bring upon the country disaster and ruin; and while merchants 
 are in distress, and industries embarrassed or paralyzed, they step 
 in to buy up the hard earnings of a helpless and bankrupt people 
 at their own will and at their- own prices. Thus '"the rich become 
 richer and the poor poorer." But on the plan proposed in this bill we 
 need have no apprehension of such combinations and misfortunes in 
 the future ; the surplus earnings of the people will be lodged with the 
 Government, and whenever the business needs of the country require 
 
4 
 
 an increase of the currency, it will be at their easy call famished by 
 the Government in exchange for its convertible bonds. 
 
 The Treasurer of the United States, again, in referring to the neces- 
 sity for an improvement of the currency, in his last annual report says: 
 
 Few, if any, believe that the volume of the circulating medium, as fixed by law, 
 stands at an amount that is exactly right. It must be obvious to all who have 
 watched the course of the business and financial relations of the country that there 
 are times when the real wants of the country demand, and there should he, an in- 
 crease of the currency ; and that there are other times when the safety of all legiti- 
 mate business requires that it should be largely reduced. "What is really needed 
 is a currency so flexible as to at all times accommodate itself to the real business 
 wants of the, whole country. 
 
 The greatest objection to an exclusively metallic currency is its want of elasticity. 
 That there are regularly recurring times when the wants of legitimate trade re- 
 quire an expansion of the circulating medium to an amount much greater than is 
 necessary at other times, is a faet that is patent to all observing business men. 
 
 From the days of barter among the savage and nomadic tribes, 
 when shells and bark and stamped leather were in use as money, and 
 afterward when bullocks and iron blooms were employed for the pur- 
 pose, even down to the period of silver and gold currency, the use of 
 credit in exchanges and settlements was wholly unknown ; but during 
 the past and present centuries thebank-note and the bank-check have 
 been more universally employed as the instruments of exchange than 
 any other description of money. Like the railroad and the telegraph, 
 they have been the outgrowth, the necessity, and the complement of 
 civilization. They are esteemed by merchants as superior to me- 
 tallic money, for without their use the business of the wholesale 
 commuuity could not be transacted, and the wheels of commerce 
 would become clogged ;ind blocked. In England, as well as in the large 
 cities of the United States, the bank-check performs the function of 
 currency in volume a thousand times greater than the metallic money. 
 Some idea of the extent of its use may be formed by considering the 
 operations of the clearing-house in the city of New York, where the 
 average daily transactions exceed $100,000,000; and in effecting ex- 
 changes of this magnitude very often not a quarter of a million dol- 
 lars of lawful money is required. But outside of our cities, in the 
 interior sections of our broad country, bank-checks are not so practi- 
 cable, and the currency of lawful money is a greater convenience, if 
 not an actual necessity, for the people. 
 
 There are two kinds of money : first, that created by the sovereign 
 or by the national legislature, called lawful money; second, that of 
 courtesy, which is employed by common consent and convenience, 
 such as bank-notes, bank-checks, letters of credit, promissory notes, 
 bills of exchange, and bank credits. If, however, an abundant and 
 adequate supply of the first or best kind be furnished, a less amount 
 of the second or inferior description would be required and used by 
 the people. 
 
 Some ignorant persons have a notion that money should be redeemed, 
 and they call ours ''irredeemable currency** and "false promises to 
 pay." Now, the power of transferring a debt from one to another is 
 the true and only function of money. Who ever heard of English 
 sovereigns or American eagles being redeemed in any other sense ? 
 Our greenbacks are in fact redeemed every day in effecting exchanges 
 and in the payment of debts. Again, others, still more ignorant, assert 
 that our money should be the money of the world — they never specify 
 what world, nor do they describe the kind of money wanted, nor how 
 Congress is to exercise its "express powers" to provide lawful money 
 for other nations. If they mean gold coin, then what shall be done 
 for China and the East Indies, containing probably one-third of the 
 whole population of the globe, and whose money consists solely of 
 
o 
 
 copper and silver.' Our sentimental writers oil finance should know 
 that the lawful money of one nation becomes merchandise, like corn 
 and pork, in another: our gold coins, when shipped abroad, leave the 
 country like other of our raw products, and bankers (haw for the avails 
 at sight. Such persons should also know that Congress can only 
 provide money for the New World : and that our national credit — the 
 greenback — is the best lawful money forthe people of the United 
 
 States. 
 
 Owing to a disturbance in private credits, commencing with 
 the failure of .Jay Cook,' Co., a shrinkage in discounts began 
 in September; debts could not be paid by the usual currency; 
 a vast volume of promissory notes and bills of exchange became 
 unavailable and useless for settlements and exchanges, and a great 
 manufacturing and trading population were compelled to fall back 
 on the totally inadequate and limited supply of legal-tender and 
 national-bank currency. The banks in New York and throughout 
 the country were obliged to suspend payment in currency and resort 
 to an illegal issue of clearing-house checks, which were used as money 
 to the extent of $24,000,000. An increase of our lawful money was the 
 true and proper remedy for the crisis, and even a knowledge of the 
 fact that legal-tender notes could be had in exchange for Govern- 
 ment bonds would have resulted in the complete restoration of con- 
 fidence and commercial prosperity. 
 
 All our bank-notes and Legal-tenders are not equal in volume to one 
 in a thousand of other credits used in ordinary times as currency, for 
 the entire circulating power is the circulating medium of the country. 
 The rich trader requires, in ordinary times, but little legal-tender 
 currency; he deals in private credits, such as bank-checks, bills of 
 exchange, and promissory notes. This is the currency of wholesale. 
 But the industrious classes, the day-laborer, and many others of small 
 means, must have small bills for daily use. This is the money of retail. 
 
 Unfortunately, our laws fix and limit the volume of legal currency, 
 whic h has been very much contracted since 1865. In the mean time 
 the business of the country has vastly increased; paid labor now fills 
 the Southern States, while the producing classes of the North and 
 of the great West have multiplied in public and private enterprises 
 until the army of laborers is counted by millions. The boy of eight 
 years ago has now become a man and must have a man's clothes, else 
 he will split his garments in every seam. Money is made for the use of 
 producing classes principally, and its volume should be increased 
 with the increase of population and with the growth of the produc- 
 tive industry of the country. 
 
 It is manifest that our money or currency must be increased suffi- 
 ciently to pay all elasses for their daily labor, or we must reduce the 
 work and discharge the workers now employed on our farms, in our 
 mines and workshops. The question is, shall the currency be increased 
 with our increase of labor and business, or shall we reduce the labor 
 and business of the country so as to handle the traffic conveniently 
 with the volume now in circulat ion ? The factory employing one hun- 
 dred mechanics to-day certainly requires more currency than last year 
 when only ten were employed. The production of wealth by labor 
 has been more than doubled in eight years; in the mean time our na- 
 tional currency has been reduced over $1,300,000,000. While the de- 
 mand, therefore, has been increasing, the supply has been rapidly 
 diminishing, and the tightening process finally culminated last Sep- 
 tember in throwing one-half of our laboring population out of work. 
 
 The question is, shall we reduce the population of the country, keep 
 one-half of our productive forces out of work, and destroy two-third- 
 
6 
 
 of the wealth and property now on hand for the purpose of accommo- 
 dating our condition to the present volume of the currency ? If Con- 
 gress shall refuse to augment the currency in order to meet the 
 increasing needs of a growing country, then provision should he 
 made for the annual destruction of our Avealth. We should burn up 
 our corn and cotton, our homiiiy and our hogs, to enable us to effect 
 our exchanges, and thus to suit the views of the ancients on finance 
 and currency. The amount of money required being manifestly pro- 
 portionate to the number and value of the exchanges made, it follows 
 that as population increases domestic commerce enlarges, and occu- 
 pations are diversified, an increase of the circulating medium be- 
 comes an absolute necessity to growth and prosperity. 
 
 The money that will pay one thousand men will not pay two thou- 
 sand unless the latter reduce the price of labor one-half. Thus, cur- 
 rency must be increased or wages reduced. Which of these alterna- 
 tives, Mr. Speaker, will you choose ? 
 
 It is thus apparent that in this question of currency lies the con- 
 flict between capital and labor. It is a well-known fact that when 
 money is abundant the laborer receives his full reward, and prospers, 
 but when money is scarce the laborer finds but little employment even 
 at "starvation prices." Thus, then, if we unduly restrict the volume 
 of currency we oppress and pauperize labor, while we give capital 
 more power to deny to the laborer and producer a fair reward for 
 their toil. An abundant supply of ciuTency facilitates and aids pro- 
 duction like tools in the hands of the mechanic, and like oil on tiie 
 axle, it accelerates and expedites. Its volume should not be fixed by 
 law, for its uses are as changeable and variable as the wants of man. 
 A single cup of water may suffice in winter, but the workman during 
 the heat and dust of summer may need another draught ; and so it 
 is with currency — more is required at one season than at another. 
 
 Under the operation of this bill, the volume of our currency would 
 be self-adjusting, expanding or contracting with the needs of the 
 people, by this simple property of interconversion ; for convenient 
 facilities are afforded for changing at any time currency into bonds, 
 or bonds into currency. The total amount of 6 per cent, bonds now 
 outstanding is $1,218,728,150; and should this entire amount within 
 a few years become transferred to 3.65 convertible bonds there would 
 be an annual saving of $28,642,744 in interest on the public debt. On 
 this point I again refer to the able report of the Treasurer of the 
 United States. He says: 
 
 This would change a large amount of the indebtedness of the nation from 6 per 
 cent, gold-interest-bearing bonds to others bearing a lower rate of interest, payable 
 in currency, thus making a great saving to the nation, and at the same time giving 
 to all the 'people who choose to avail'themselves of its benefits a place of safe 
 deposit where they will be able to receive interest on their surplus means. 
 
 I have prepared statements showing the large contraction made 
 during the past eight years in the volume of circulation. 
 
 On the 1st of September, 1865, the circulating medium consisted, 
 in part, as follows : 
 
 United States notes f 133, 160, 560 
 
 Fractional currenc v 26, 344, 742 
 
 X atiomil-bank notes 300, 000, 000 
 
 Compound-interest legal-tender notes 217, 024, 160 
 
 Temporary-loan certificates. 10 d-d 107, 148,713 
 
 Certificates of indebtedness 85, 003, 000 
 
 Treasury 5 per cent, legal-tenders 32, 536, 90 1 
 
 Treasury notes, legal-tenders past due and not presented 1, 503, 020 
 
 State-hank notes 78, 867, 575 
 
 Three-year Treasury notes 830, 000, 000 
 
 Total 2,111,678,680 
 
On the 1st of December, 1973, tin* circulating medium consisted in 
 part as follows : 
 
 United States notes 8307, 001, Gsr> 
 
 Fractional currency 48,000,000 
 
 Certificates of indebtedness 078,000 
 
 Xational-bank notes. . : 350, 000, 000 
 
 Total 703, 079, 685 
 
 It will be perceived by the exhibit here made that the currency 
 lias been reduced $l,345,998",995 since September 1, 1805. 
 
 The history of panics in England and in our own country discloses 
 the fact that a sovereign and unfailing remedy is obtained by increas- 
 ing the currency. In England this has been done in violation of law. 
 In America let enlightened Legislation prevent the occurrence of finan- 
 cial disorders in the future. 
 
 Referring to the existing panic, the Treasurer of the United States 
 says : 
 
 This could not have happened had there been an clastic and flexible instead Of 
 our present rigid and unyielding currency. There is scarce a doubt but this finan- 
 cial revulsion lias cost the people in the aggregate hundreds of millions of dollars, 
 to say nothing of the loss of revenue to the Government. 
 
 The views of the Comptroller of the Currency on the panic and the 
 remedy therefor maybe found in his last report, (page 22.) He says: 
 
 It can hardly he doubted that if the surplus means of the country hanks which 
 were invested in call loans by their city correspondents had been invested in public 
 funds, convertible into cash upon demand, the disastrous results of the late panic 
 WOUld have been avoided. 
 
 A Government issue of certificates, bearing a low rate of interest, to be counted 
 as a certain proportion of the reserve, is the proper remedy for such a state of 
 things. If the surplus of the country banks had been to a considerable extent in- 
 vested in such Government certiticates the drafts upon the city banks would have 
 been proportionately less; and if the surplus funds of the city banks had likewise 
 been held in such certificates, thcavailsof such certiticates would have been quietly 
 withdrawn from the Treasury, and the banks would have found themselves pos- 
 sessed of ready means with which to supply the demands of their dealers. 
 
 By the act of March 3, 18G3, Congress authorized the issue of frac- 
 tional currency "not exceeding $50,000,000;" but. the traffic of the 
 country not requiring so large a sum of these small bills, The amount 
 issued has never exceeded s48.000.0U0. The amount outstanding has 
 varied between $85,000,000 and $48,000,000, and probably $10,000,000 
 of the issue have been worn out and destroyed. I refer to this fact as 
 an illustration of the safe working of the convertible plan contem- 
 plated by this bill. The people have taken only $48,000,000 fractional 
 currency, although they might have had s.~>0, 000,000 ; and so it will be 
 with regard to the amount of greenbacks to be issued in exchange 
 for bonds — no more will be taken than the business interests of the 
 country require ; and should the volume of currency at any time 
 become redundant, the unproductive or excessive portion could be 
 conveniently exchanged for the interest-bearing bonds. 
 
 Now, if the Secretary of the Treasury at the beginning of the exist- 
 ing panic had promptly paid out the $44,000,000 legal-tender reserve 
 in exchange for Government bonds, distributing the same to the 
 principal cities of the country, it would have been checked and ended. 
 The Secretary would not have been under the necessity of asking Con- 
 gress to tax the people to increase the revenue, for the prosperity* of the 
 country — a reserve not to be disregarded — would have continued, the 
 receipts of the Treasury would have been ample for all public expendi- 
 tures, and the wealth of the. nation would have been over $] .000,000,000 
 greater than it is to-day. No business man of any experience will doubt 
 
8 
 
 this statement. Let us, therefore, in behalf of a depressed and par- 
 alyzed people, act with signal promptness in adopting measures that 
 wUl start every workshop and factory throughout the land, set the 
 unemployed laborers at work, and bring contentment and happiness 
 to the people of the whole country. 
 
 The experience of England has been similar to ours in commercial 
 revulsions. The panic of 1825 has been graphically described by 
 Mr. Huskisson in the House of Commons, (Pari. Debs., vol. 14, page 
 230.) He says: "It was impossible to convert into money, to any 
 extent, the best securities of the Government. Persons could not 
 sell exchequer bills, nor bank stock, nor East India stock, noi the 
 public funds." Mr. Baring said that "men would not part with 
 their money on any terms nor for any security. Persons of un- 
 doubted wealth and real capital were seen walking about the streets 
 of London not knowing whether they should be able to meet their 
 engagements of the next day." At this juncture of the crisis, Decem- 
 ber 14, the banks totally changed their policy and discounted with 
 the utmost profuseness. They made enormous advances on excheq- 
 uer bills and securities of all sorts, and the great London panic of 
 1825 was completely allayed by the profuse issue of the notes of the 
 Bank of England in excess of the limitation fixed by its charter. 
 Between the 14th and 17th of December the bank issued over 
 £5,000,000 in bank-notes. This bold policy on the part of the Bank 
 of England directors and the ministry was crowned with the most 
 complete success; the panic was stayed almost immediately through- 
 out the kingdom, and private credits were again available for busi- 
 ness purposes. (Macleod on Banking, vol. 2, p. 253.) 
 
 All contemporary evidence proves tli.it it was this profuse issue of £5.000.000 of 
 paper by the Bank of England in a few days that stayed the panic. If the bank 
 had persevered in the restrictive policy required by law for three days longer, the 
 total and entire destruction of commercial credits would infallibly have ensued. — 
 Macleod on Banking, vol. 2, p. 252. 
 
 I again quote from the same authority, describing the great panic 
 of October, 1847 : 
 
 From Monday, the 18th. to Saturday, the 23d, was the great crisis. On Monday 
 the Royal Bank of Liverpool, with a paid-up capital of ££00,000, stopped payment, 
 which caused the funds to fall 2 per cent. This was followed by the stoppage of 
 the North and South Wales Bank, also of Liverpool, the Liverpool Banking Company, 
 the Union Bank of Newcastle, heavy runs on the other banks of the district, aiid 
 other bank failures at Manchester and in the west of England. As the Avhole com- 
 mercial world knew that the resources of the banking department were being rap- 
 idly exhausted a complete panic seized them. A complete cessation of private 
 discounts followed. The most exorbitant sums were offered to, and refused by, 
 merchants for acceptances and commercial bills. 
 
 The continued and ever-increasing severity of the crisis caused the ministry on 
 the 23d to authorize the bank to issue notes 'beyond the limits prescribed by tin- 
 bank act. whereupon the bank immediately acted upon it and discounted freelv at 
 9 per cent. The letter of the ministry proposing to submit to Parliament a bill of 
 indemnity for the infringement of the law by the bank was not made public until 
 one o'clock on Monday, the 25th, and no sooner was it done than the panic vanished 
 like a dream. 
 
 Mr. Gurney stated that it produced its effects in less than ten minutes. No 
 sooner was it known that notes might be had than the want of them ceased. Not 
 only did no infringement of the act take place, but the whole issue of notes in con- 
 sequence of this letter from the ministry was only £400,000, so that while atone 
 moment the whole credit of Great Britain was in imminent danger of total destruc- 
 tion, within one hour it was saved by the issue of £400,000 of the Bank of England 
 notes. — Ibid., p. 313. 
 
 Now, if the illegal issue of bank-notes saved England from an im- 
 pending commercial catastrophe, should Ave not provide by law for 
 the issue of our greenbacks in exchange for Government bonds in 
 
9 
 
 limes of need, and thus prevent the recurrence of panics and com- 
 mercial disorders in the United Slates .' 
 
 "In every civilized country," says Tooke, "-supplying and regulating 
 the circulating medium is a function of sovereign prerogative." This 
 doctrine has been adniiltcd, and the power exercised in all ages; and 
 since the t'omiuest the legal money of England has been regulated or 
 altered by proclamation of the Crown, or by act of Parliament, one 
 hundred and eighty-four times. Nearly every sovereign has altered 
 the standard of money and legalized variations in its weight and 
 denominations, and it has been so often reduced in value, and its 
 quality from time to time so debased, that the lawful money of Eng- 
 land to-day in weight is not one-third what it was in the twenty- 
 eighth year of Edward I. In the days of William the Conqueror 
 the ''pound" actually was a pound weight, pure silver, and a shilling 
 was a twentieth part of a pound; but at the present day the pound 
 is coined into sixty-six shillings; and yet the standard of money has 
 been less degraded in England than in any other country. 
 
 To hx the standard and regulate money is of necessity a govern- 
 mental function, and in this country this power has been lodged 
 solely with Congress. All governments have assumed to alter the 
 standard of money, and to change what they had a right to make. 
 The facts in the history of American coinage show the view which 
 Congress has taken of its own powers. On the 6th of July, 1785, 
 the money unit of the United States was adopted, and on the 8th 
 of August, 1786, Congress enacted that the silver dollar should con- 
 tain 375.64 grains; that the gold eagle, or ten dollars, should contain 
 246.2(i8 grains; and that the half -eagle, or five dollars, should contain 
 1*2:5.134 grains, all composed of eleven parts fine and one part alloy. 
 The mint price of a pound, troy weight, of uncoined silver was fixed 
 at 69.92. On the 16th of October, 1786, an ordinance was passed estab- 
 lishing the United States Mint, and the mint price of one pound 
 of silver coin was then fixed at $13.77. By the act approved April 
 2, 1792, the weight of the eagle was increased and fixed at 270 grains, 
 the half-eagle 135 grains, and the silver dollar 416 grains. The dollar 
 was declared to be the unit of Federal money, and both gold and silver 
 coins were made a legal tender for all sums. By the act of June 28, 
 1834, the weight of the eagle was fixed at 258 grains, the half-eagle 
 at 129 grains, and the silver dollar at 412?} grains, thus reducing 
 the weight of these coins 4 per cent. By act of Congress approved 
 January 18, 1837, the weight of silver and copper coins was altered, 
 and the standard of both silver and gold was altered to nine parts 
 line and one part alloy. Other changes, exceeding 6 per cent., were 
 made in the standard and quality of money by acts of Congress ap- 
 proved March 3, 1851, and February 21, 1853, and the legal-tender 
 quality of silver was limited to sums of five dollars. 
 
 This summary of legislation shows that Cougress has exercised the 
 power of determining what shall be legal tender — altering the laws 
 regulating money according to the exigency of circumstances ; increas- 
 ing or diminishing the quantity and purity of gold, silver, and copper 
 coins at its pleasure ; changing their intrinsic worth, while retain- 
 ing the same titles, hestowing upon thehi the 'same nominal value, 
 and declaring Treasury notes issued at the close of the war of 1812, 
 and also during the Mormon troubles in 1857, legal tender for cer- 
 tain purposes. The act of Congress approved February 25, 1862, in- 
 vested the United States notes with the legal-tender quality. They 
 were of small denominations and entered into general circulation, 
 and they continue to be the lawful money of the country. Con- 
 
10 
 
 gross having the power to make these changes has also the same 
 right to make any further changes which may seem to it wise. If 
 it can declare that silver shall not he a legal tender for any amount 
 ahove five dollars it can declare that it shall not he a legal tender at all, 
 and it may deal in the same way with gold. It is not hound to either 
 except hy its own discretion. So, also, if it can alter the intrinsic 
 value of these coins 1, 2, or 6 per cent, without impairing their 
 legal-tender quality at the same nominal value, it may do the same 
 thing to a still greater extent. In one word, Congress has always 
 proceeded upon the assumption that the whole question of creating 
 money and altering it lies within its constitutional competency. 
 Moreover, when changes have heen made in the weight and fineness 
 of legal-tender coins, reducing their intrinsic worth, dehts contracted 
 hefore such changes, and made payahle in dollars, have heen paid in 
 the new coins at their nominal value, and the dehts discharged. In 
 every such case the ohligation was contracted under one standard 
 and liquidated under another. 
 
 It is quite true that not until the late war had any occasion arisen 
 to alter the legal tender except in relation to coinage. Then, however, 
 Congress, in the exercise of those powers which are ''necessary ami 
 proper" for carrying into execution its express powers, saw fit to 
 invest United States notes with the legal-tender quality. It had the 
 powerful precedent of the English Parliament in the hank act of 
 1833, wherein the legal-tender quality was imparted to hank-notes, 
 and carried in the House of Commons hy a vote of 214 to 156. There 
 is not a clause in the fundamental law of the land, which confines 
 Congress to gold and silver as the materials of which the legal 
 tender must he composed, or which forhids it to use copper or 
 platina, or anything else in its discretion, or restrains it from 
 making any change in quality or kind, which in its judgment 
 may he required hy circumstances. There are such clauses in re- 
 spect to the powers of the States, hut none in respect to those of 
 Congress. As to the whole question of creating money, designat- 
 ing its titles, and fixing its value, the people chose to make Con- 
 gress the sole depository of legal power, without limitations upon 
 its exercise; leaving it to act in the premises, to revise its own 
 action, and from time to time to change its monetary laws ac- 
 cording to its best judgment. It is not true, as is too often assumed, 
 that in respect to the laws of Congress the legal-tender property is 
 hy the Constitution attached to gold and silver, and to these only. 
 The truth is the Constitution does not make anything money — either 
 gold, or silver, or anything else — hut leaves this question with the 
 legislative department of the Government, imposing no restraints or 
 limitations upon its discretion, and assuming that it would he gov- 
 erned hy the general principles of expediency and common sense. 
 Xow. in view of these antecedents and principles, I feel compelled to 
 regard the powers of Congress over the money of the Republic abso- 
 lutely sovereign, complete, indivisible, and unrestrained. 
 
 By act of Parliament in the time of William IV, the promissory 
 notes of the Bank of England were declared a legal tender. This 
 hank is a private corporation ; and yet Parliament deemed it neces- 
 sary and expedient to declare its notes a legal tender throughout 
 England. Would it not have heen more in accordance with the tra- 
 ditions and precedents of England had Parliament conferred this 
 quality of lawful money and legal tender on the credit of the British 
 government ? They had not advanced far enough for that, and it 
 
1 1 
 
 remained for the Congress of the United States, representing the 
 most intelligent ami the most highly civilized people oj' the world, to 
 coin "the credit of the nation/' and it lias thus wisely provided a 
 lawful money for the people, an instrument of exchange more per- 
 fect than that of any other nation; In our progress and develop- 
 ment a great stride was taken in monetary science when the Legal- 
 tender act of lHi-J was approved hy the President of the United 
 Slates; and now to perfect our fiscal system is .the task which Con- 
 gress must undertake and accomplish, i have referred to the acts of 
 Parliament and of Congress in relation to metallic money, and the 
 innumerable changes and depreciations made therein by law, for the 
 purpose of showing the superior advantage of choosing the national 
 credit for use as money. Its quality and weight cannot be debased 
 or reduced, nor is if liable to commercial changes in value, like 
 gold and silver. Sucb commodities are always affected by the condi- 
 tion of foreign trade, and by the law of supply and demand. On the 
 contrary, the credit of a great and powerful and wealthy nation is un- 
 changeable; it possesses, too, intrinsic value, and it represents labor: 
 for the credit of our country was issued in exchange for the labor 
 expended to perpetuate the nation's life. It is less changeable in 
 value than any other thing, and for this reason if is the best instru- 
 ment ever devised for a circulating medium. 
 
 I call the attention of tbe House to the petitions, the resolutions and 
 declarations, of numerous societies and associations of workingmen, 
 of conventions' and granges, throughout the country, demanding ex- 
 pressly tbe provisions of law embraced in this bill. I will particu- 
 larly refer to the following resolve of the Detroit Manufacturers' 
 Association, adopted on the 30th of January, 1868: 
 
 Resolved, That Congress should now provide for the funding of that portion of 
 the national debt not required for a circulating medium, by the issue of bonds or 
 consols bearing interest not to exceed 3.(35 per cent.; and the national money, 
 (greenbacks,) at the option of the holder, should be convertible to such bonds 
 at par, and the bonds should also be convertible to legal-tender notes at par on 
 demand. 
 
 They all ask that the principle of inferconverwon of bonds and 
 legal-tender notes may become tbe permanent fiscal system of the 
 country. It is not inflation, because when tbe small notes are paid 
 out the larger bonds are withdrawn ; and if tbis system bad been put 
 in operation by the Forty-second Congress, the existing panic could 
 not have visited and desolated our country. 
 
 The third section of the bill provides that the money received in 
 exchange for the convertible bonds, after redeeming such as may be 
 presented for payment, shall be used weekly in buying up the 6 per 
 cent, obligations of the Government in open market. Who can object 
 to this? Will it not tend slowly but gradually to transfer our in- 
 terest-bearing debt from 6 per cent, to 3.65 per cent., the greater 
 portion of which will be lodged in the hands of our own people 
 instead of being transported to foreign countries to be forced back 
 upon us at unpropitious times? If the objection be made that bonds 
 bearing 3.65 cannot be floated at tbe present time, I have to say that, 
 in view of our financial history since 1861, and tbe promptness ex- 
 hibited by our people in taking the temporary-loan certificates, 1 he 3 
 per cent, certificates, and other similar securities, and with my experi- 
 ence in business affairs for a quarter of a century, I am satisfied that 
 at least $250,000,600 of the convertible bonds would be taken within 
 twelve months, and the difference in interest — a clear saving to the 
 Treasury — even on this amount would enable us to discontinue the 
 
L2 
 
 stamps now required on "bank-checks, druggists' goods, and matches, 
 and the obnoxious, unprincipled, and chafing tax now levied on the 
 leaf-tobacco produced by our farmers. The terms and conditions of 
 a credit have much to do with its value, and the convertible bonds 
 provided for in this bill would be more attractive to thousands and 
 millions of our people than these 6 per cent, non-convertible bonds, 
 on account of the value of the option of converting the same on demand 
 into legal-tender notes. The people want this right, and for it they 
 will lodge their money at a very low rate of interest. A national 
 standard rate of interest as a regulator is thus secured. The rates for 
 the usance of currency when required in moving the great crops of 
 the South and West, and in all our manufacturing and ot her useful 
 industries, cannot ever rise above the limit of its profitable employ- 
 ment. In short, working with the ease and simplicity of the governor 
 on the steam-engine, a system will be inaugurated, doing good to all 
 and injustice to none, a system which will prevent money-changers and 
 Shylocks from extorting from useful industry a slice or shave for in- 
 terest, in the past often exceeding the whole earnings of labor, thus 
 cursing and blighting the effort s of toil, and effectually shackling the 
 prosperity of the whole country. In providing, therefore, for the in- 
 terchange of national bonds and currency the Government is bene- 
 fited in lessening the interest on the public debt ; and at the same 
 time facilities are afforded the people for investing their earnings 
 with a knowledge that they cannot possibly suffer loss. The scheme, 
 therefore, commends itself as a financial reform of the highest impor- 
 tance to the Treasury. I call the attention of the House to the sim- 
 plicity of the arrangement. There is no useless machinery. It can 
 be plainly understood by every person, the interest being a penny a 
 day on each one hundred dollars of the bonds ; and on surrender of 
 the bonds at any Government depository the principal, with the 
 accrued interest, will be paid in legal-tender notes and the bond can- 
 celed. If only a part be required, then a new bond will be issued for 
 the difference. In this respect the operation will be similar to the 
 certificates of deposit now issued by the banks. When the certifi- 
 cates are presented for payment and paid they are canceled; when 
 part paid a new certificate is issued for the difference and the old cer- 
 tificate surrendered. The notes of the Bank of England, you kuow, 
 when once redeemed are never reissued. 
 
 Some persons may think that these convertible bonds Avill not be 
 called for while 5 per cent, ten-year bonds are in the market, but I 
 remind the House that a 3.65 convertible bond would in many cases 
 be preferred, for the convenient conversion of the bonds to green- 
 backs whenever the necessity of the holder requires is a condition 
 Which gives them a greater value thau those bearing a higher rate 
 of interest but on long time. The temporary -loan certificates which 
 were authorized by Congress in 1862 to the amount of .$175,000,000 were 
 all taken up by the people, although made payable on ten days' notice 
 and at 4 per cent, and 5 per cent, interest. They were held until 
 their surrender was demanded by the order of the Treasury. The 3 
 percent, certificates authorized by Congress to theextent of §75,000,000 
 were also speedily taken and held by the people until their surrender 
 was required ; and in like manner the bonds bearing 3.65 as provided 
 for in this bill will be promptly taken ; -and should the amount in the 
 lapse of a few years be equal to the total amount of the 6 per cent, 
 bonds now outstanding, I see no objection to the working of the meas- 
 ure; on the contrary, a grand fiscal success is achieved, for which a 
 patriotic and intelligent iieople will be ever grateful to Congress. 
 
In 
 o 
 
 The British consols or "3pei cents" are owned by Kngli>limen,fortlie 
 reason that certificates are not issued at all ana the consols arc not 
 transferable except on the books of the chancellor of the exchequer 
 at the Bank of England; so our convert ible !J.d5 bonds would lie a 
 domestic loan, and they would remain in the hands of the American 
 people. 
 
 I now come to the last section of the hill, which provides that the 
 national banks shall, on and after the 30th of June, 1874, cease to be 
 hanks of issue, and that their notes are to he withdrawn in the same 
 manner as now provided by law for hanks that are being wound up or 
 choose to discontinue the issuing of bank-notes. I very much ques-: 
 tion the power of Congress to authorize private associations to issue 
 notes to be used as money by the people] and at any rate it is, in my 
 judgment, a bad bargain for the Government to hire banking associa- 
 tions to furnish money, paying them for the service the handsome 
 sum of $18,000,000 per annum. The banks lodge the national credit 
 in the shape of 6 per cent, bonds to secure their circulation, and 
 which yield them no less than sl8,000,000 interest in gold. Now, 
 why should we not cut up this $300,000,000 of 6 per cent, bonds 
 into small notes for circulation bearing no interest, and thus save 
 |18,000,000 per annum ! Take notice, it is the national credit for the 
 same amount, but in a different shape; and by making the change we 
 lessen the burden of the people, who will have that much of interest 
 less to pay each yeai\ The banks of course will cry out " inflation."' 
 and we must be prepared for that; but it is simply a "stop-thief" 
 dodge. The fact is, our banks in issuing notes effect an actual infla- 
 tion of credit, for on Government bonds of 81,000,000 they issue, say, 
 another million in bank-notes, making 8-2,000,000 floating credit in- 
 stead of $1,000,000. The credit of the Government, being less change- 
 able in intrinsic value than any other thing, is good enough for ourlaw- 
 ful money, and we do not require the aid or indorsement of banks in 
 furnishing a circulating medium for the people. Congress has enact ed 
 that the credit of the nation should be money ; it is our legal tender 
 and lawful money for many purposes; it now requires the act of 
 Congress t<*inake our national greenback currency a legal tender for 
 all purposes, and thus secure for the people a perfect instrument of 
 exchange. 
 
 The bill provides for the issue of $5,000,000 of legal-tender notes, 
 and such additional sums as ma}" be required to carry into effect the 
 provisions of the act. If legal-tender notes should be required ar any 
 time for the entire issue of convertible bonds, the Government would 
 be benefited thereby to the extent of the interest, for while green- 
 backs are out no interest is required. My opinion is that $5,000,000 
 greenbacks would put in operation the financial reform contemplated 
 by the bill and effect the floating of at least $250,000,000 of the con- 
 vertible bonds within a single year. The views of General Spinner 
 on this subject are so clear and philosophical that I am constrained 
 to make the following quotation from his last annual report. He 
 says : 
 
 It is very probable that the present legally authorized amount of $400,000,000 
 of legal-tender notes need not be increased in order o> carry <>ut thi.-s scheme, and ir 
 is more than likely that under the then changed condition of the currency, with no 
 Tendency to go into wild projects and stock speculations, tho minimum amount of 
 $:J36\000.000 would, on account of its being readily obtained in exchange for the pro- 
 posed stocks, be sufficient for the easy transaction of the legitimate business of the 
 country at times when commercial wants shall need the largest amount. Should, 
 however, the maximum of legal-tender notes authorized by law be found to be in- 
 adequate and insufficient to prevent the brigands and banditti who infest our 
 money marts, and who at times conspire against the public weal by "lock-ups/' 
 
14 
 
 making money scarce when most needed for business purposes, thereby robbing 
 whole communities to enrich themselves, the Secretary of the Treasury might be 
 authorized by law in such cases, or at any other time when the exigencies Of the 
 Treasury may require the same, to issue an additional limited amount of such con- 
 Yertihle'legaf-tender notes in exchange for any United States 6 per cent, stocks. 
 
 At the close of the war of the rebellion the circulating medium, as 
 I have shown, was largest, and private credits were very much less 
 in vogue. The farmer and gardener prospered, the merchant sold his 
 goods for cash or on short credit, the manufacturer found a ready sale 
 for his products in exchange for greenbacks, and private credits of all 
 kinds were less resorted to than at any other time in the history of 
 our country. You know we then enjoyed prosperous times. Labor 
 was in good demand and well paid; more work was done at that time, 
 and consequently more wealth created, than at any former period in 
 the history of our country. The cause for this prosperity is to be 
 found in the fact that the tariff shielded our manufacturers and re- 
 served to them the markets of the country, and we had a greater sup- 
 ply of currency than we ever had before or since; but Hugh McCul- 
 loch, in an evil hour, induced Congress to put on the screws of 
 "contraction." Our money was wound up tight, and the prosperity 
 of the country with it. 
 
 Now, experience has pixrven that where the public credit is used for 
 such, purposes private credits, such as due-bills, shin-plasters, &c, for 
 workingmen, are less employed, and to the manifest advantage and 
 profit of t he people. 
 
 It is of the highest importance to the prosperity of the country that 
 Congress should furnish an adequate amount of the public credit for 
 a circulating medium to facilitate the exchanges and settlements of 
 a population of forty millions, and of the vast traffic and business of 
 an active, enterprising, and industrious people, rapidly developing 
 a continent, building up great cities, constructing railways through 
 every State and Territory, and establishing industries of every vari- 
 ety and description, opening mines, digging canals, building churches 
 and school-houses and universities, and adding to our population by 
 immigration four hundred thousand per annum. 
 
 In conclusion, Mr. Speaker, I will call your attention to t*ie unhappy 
 situation of our country. Our merchants are embarrassed and busi- 
 ness of all kiuds is stagnant and unprofitable. Workingmen in pro- 
 cessions and mass meetings demand work or bread. 
 
 In this situation, Mr. Speaker, the people look to Congress for relief. 
 Sir, will you disappoint them? 
 
 Believing that the adoption of the financial reform contemplated in 
 the pending bill will be a great boon to the American people, and a 
 substantial benefit to mankind, I have given much time to its consid- 
 eration, with the sole purpose of accomplishing an object of vast com- 
 mon interest, involving the advancement and freedom of labor, and 
 the general welfare and prosperity of my beloved country. 
 
 Mr. VANCE obtained the floor. 
 
 Mr. TOWNSEND. Before the gentleman from Michigan [Mr. 
 Field] takes his seat I would like to ask him a question. 
 
 The SPEAKER pro tempore, (Mr. Butler, of Tennessee.) If the 
 gentleman from North Carolina [Mr. Vance] yields for that purpose 
 the gentleman from Pennsylvania [Mr. Tow t nsend] can proceed. 
 
 Mr. TOWNSEND. I think I understood the gentleman from Mich- 
 igan to say That since 1865 the circulation of the country has been 
 reduced to the extent of $1,300,000,000. If I correctly understood the 
 gentleman, I would like him to state where he derives that informa- 
 tion. 
 
15 
 
 Mr. FIELD. I refer the gentleman to tin* official reports. The 
 national circulation outstanding on (ho 1st of September, 1 st>."», is 
 shown by the official statement published at that time. The amount 
 at that time, as I have stated, was over §->,()()0,()()(>,(MIO. 
 
 Mr. TOWXSENI). What do I understand the gentleman to mean 
 by "circulation !" 
 
 Mr. FIELD. The gentleman can ascertain that by an examination 
 of the remarks I have already submitted. I embrace in my state- 
 ment all legal-tenders. I do not confine the estimate to the green- 
 backs, because tho 5 per cent, legal-tenders were currency; the 4 per- 
 cent, legal-tenders were currency; so were tho compound-interest 
 notes, and other notes which the gentleman will find fully enumerated 
 in my printed remarks. The gentleman will find that my statement 
 is correct. 
 
 Mr. TOWNSEND. Then the gentleman includes as circulation 
 bonds as well as notes. 
 Mr. FIELD. I mean 
 
 Mr. KELLEY. If the gentleman from Michigan will permit the 
 remark, I understand him to mean simply whatever may be held by 
 the banks as a reserve. 
 
 Mr. FIELD. I mean whatever was in circulation as currency. I 
 do not embrace irr my statement the five-twenties, or any other bonds 
 of the Government. 
 
 c 
 
•»