THE LOAN BILL. 
 
 SPEECH , // Ho hi ■ 
 
 OF / f ' /' ‘ 
 
 HON. HENRY NIC01L, OF NEW YORK, 
 
 IN THE HOUSE OF REPRESENTATIVES, FEBRUARY 15, 1848, 
 
 In Committee of the Whole on the state of the Union, on the Bill to authorize a Loan not 
 exceeding eighteen million five hundred thousand Dollars . 
 
 i 
 
 Mr. NICOLL said: 
 
 Mr. Chairman: It is with no little embarrass¬ 
 ment that I rise to address the committee on the 
 important subject now under discussion. Had I 
 consulted my personal feelings in the matter, I 
 should have abstained from any participation in 
 the debate; but as a member of the committee from 
 which this bill has emanated, and more than all, as 
 one of the representatives of the commercial me¬ 
 tropolis of the country—a city sensitively alive to 
 all legislation in relation to the national finances, 
 and deeply interested in having the action of Con¬ 
 gress in this respect discreet and proper, and regu¬ 
 lated in such manner as to interfere as little as 
 ossible with the monetary affairs of the country— 
 have felt it to be my duty to offer to the commit¬ 
 tee the.vie.M^ which I entertain in regard to the 
 best mode of fiegotiating the proposed loan, and 
 at the same time to express my entire dissent from 
 the bill Its reported by the Committee of Ways 
 and Means. 
 
 The President, in his annual message commu¬ 
 nicated at the opening of Congress, has recom¬ 
 mended the passage of a law authorizing the 
 Government to borrow the sum of eighteen and a 
 half millions of dollars, of which fifteen and a half 
 millions are to supply a deficiency then estimated 
 at that amount at the close of the present fiscal 
 year, and of which the remainder—three millions 
 —is for the necessary reserve, to be kept constantly 
 in the treasury. The President has recommended 
 that this loan should be issued under the same 
 provisions and restrictions as have been enacted in 
 regard to the twenty-three million loan of the last 
 session—that is, by the issue of treasury notes, 
 fundable at the option of the holder in a six percent, 
 stock, redeemableat the expiration of twenty years. 
 For the purpose of facilitating the negotiation of 
 this loan, to strengthen the credit of the Govern¬ 
 ment, and to add to its revenues, it has been further 
 recommended by the Executive, that a tax of 
 twenty-five per cent, ad valorem should be imposed 
 on all tea and coffee to be imported into the coun¬ 
 try. The Secretary of the Treasury, in his annual 
 report to Congress on the state of the finances, has 
 earnestly united in these recommendations. 'For 
 reasons which are well known, we have been offi¬ 
 cially apprized that the amount which was sup¬ 
 planted at the Congressional Globe Office. 
 
 posed at the opening of Congress to be necessary 
 may be reduced to sixteen millions of dollars. 
 This is the plan of the Administration, and is re¬ 
 garded by their friends as the only one which ought 
 to be adopted. It has met, however—and this per¬ 
 haps was to be expected—with no favor in the 
 Committee of Ways and Means. They have de¬ 
 liberately rejected it, and in lieu thereof have pro¬ 
 posed a simple loan of sixteen millions of dollars 
 in a six per cent, stock, redeemable after twenty 
 years^ and not to be negotiated under par. The 
 minority of the committee have imbodifed the sug- 
 gestionsof the President in the substitute reported 
 by them, with an additional provision, restricting 
 the amount of treasury notes at any time outstand¬ 
 ing, under all acts, to twenty millions of dollars. 
 Of this last provision, I propose to speak hereafter. 
 It is between these two plans of finance that the 
 committee is now to choose. 
 
 I confess, Mr. Chairman, I expected to have 
 heard from the chairman of the Committee of 
 Ways and Means, [Mr. Vinton,] when he opened 
 this debate a few days ago, a full exposition of the 
 reasons which had induced the committee to give 
 their preference to the bill reported by him. The 
 minority of this House and the Government, after 
 its deliberate recommendation of a plan for the rais¬ 
 ing of this money, which seemed to them feasible, 
 had a right to hear the reasons for its rejection, and 
 the substitution of another so different from their 
 own. Such a course was due to this House and the 
 country. Has the chairman of the Committee of 
 Ways and Means given, or even attempted to give, 
 any such explanation ? I regret to say he has not. 
 So far as I have been able to understand the re¬ 
 marks of that gentleman, I believe I may safely 
 assert that not a single reason has been urged by 
 him for this rejection of the plan of the Adminis¬ 
 tration. He seems, on the contrary, to have care¬ 
 fully avoided the subject, and has assiduously 
 occupied himself in endeavoring to show that egre¬ 
 gious errors had been committed in estimating the 
 deficiency in the treasury on the 1st of July next 
 at only sixteen millions of dollars. I must be per¬ 
 mitted to say that, in my judgment, these errors are 
 highly exaggerated in his remarks; and that it 
 would have been far wiser on the part of the hon¬ 
 orable chairman of the committee, had he, instead 
 
2 
 
 of this labored attempt to magnify the extent of our 
 financial wants, availed himself of his conceded 
 ability to defend the course intended to be pursued 
 by the majority in respect to this loan. Nothing 
 can be more calculated to embarrass the Govern¬ 
 ment in the raising of money than to have it go 
 forth to the world that we are so straitened in 
 our finances, as the chairman of the committee has 
 attempted to show. No better plan could be de¬ 
 vised to alarm the capitalists of the country than 
 that which has been followed by my honorable 
 friend. Deeming the course taken by him in this 
 respect of most pernicious tendency, I will now 
 proceed to review his statements in respect to what 
 he calls the errors in the estimates of the Secretary 
 of the Treasury; and in doing so, will endeavor to 
 show how untenable are his positions, and vindi¬ 
 cate the correctness of thecourse taken by the head 
 of the financial department of the Government. 
 
 I shall maintain, Mr. Chairman, that the Sec¬ 
 retary of the Treasury, in recommending a loan of 
 sixteen millions of dollars, has asked for as much 
 as will be necessary to provide ample means in the 
 treasury up to the first day of July next. The 
 first charge made by the chairman of the commit¬ 
 tee is, that the receipts of the fiscal year ending on 
 the thirtieth day of June last, were largely over¬ 
 estimated in the annual report of the Secretary of 
 the Treasury made at the opening of the last ses¬ 
 sion of Congress; and that at the same time the 
 expenses of the Government, for the like period, 
 were estimated greatly under their real amount. 
 This might be admitted without in any manner 
 detracting from the judgment or accuracy of the 
 Secretary of the Treasury, and without advancing 
 the argument of the chairman of the committee a 
 single step; for, in asking for this new loan, and in 
 estimating the deficiency which it is intended to 
 supply, full allowance has been made for this dif¬ 
 ference between the realities and the estimates of 
 the past year. But, sir, under what circumstances 
 were these estimates of receipts made? The new 
 tariff act was about going into operation, and how 
 long it would be before its beneficial effects upon the 
 revenues would be felt, no one could calculate with 
 precision. The vast exportation of our produce 
 which has taken place in the last year was just then 
 commencing, and its magnitude was fully counted 
 upon. But who could have anticipated that so great 
 a portion of its avails asnearly twenty-three millions 
 of dollars would have been returned in coin instead 
 of the dutiable articles of Europe ? The importation 
 of so large an amount of specie was fortunate in 
 the extreme, for it has flowed into those portions 
 of the country in which the chief part of the bread- 
 stuffs exported had been produced, restoring to the 
 people a sound currency, and bringing to them in¬ 
 creased prosperity. The estimates of the expenses 
 of the Government were made for a state of war— 
 a war, Mr. Chairman, where the theatre of action 
 was at least two thousand miles distant, to which 
 large numbers of troops were to be transported, at 
 a vast expense, and under circumstances that it 
 was impossible to foresee and appreciate. No hu¬ 
 man being should be held liable for the accuracy 
 of estimates made upon data so necessarily imper¬ 
 fect. When we add to all this the large number 
 of subsequent appropriations made during the ses¬ 
 sion of Congress, for which no estimates could have 
 been legally or properly made, we shall cease to 
 wonder that the expenses of the last fiscal year 
 
 have overrun the estimates of the Secretary of the 
 Treasury. The estimates of these expenditures, 
 it must have been fully known to all parties, could, 
 under the circumstances of the case, have been but 
 an approximation to th£ reality. And although 
 now it js an easy matter to ascertain the difference, 
 and to complacently dwell upon it as a misfortune, 
 what gentleman is there on the other side who 
 would not, in case the Government had asked at 
 the last session of Congress for a loan of forty mil¬ 
 lions of dollars, as the chairman of the committee 
 thinks ought to have been done, warmly have con¬ 
 demned such a course as unnecessary, and as inju¬ 
 rious to the best interests of the country? The 
 chairman of the committee seems to think that a 
 loan for that amount could then as easily have 
 been negotiated as one for twenty-three millions 
 of dollars; and, in support of this conclusion, states 
 that the offers for that loan, at the time that propos¬ 
 als were invited, exceeded in the aggregate the 
 sum of fifty millions of dollars. It is a well known 
 fact, that the highest offers for the great bulk of 
 that loan, and which were accepted, were made at 
 but a small fraction above par; and this, too, at a 
 time when the country was in a high state of pros¬ 
 perity. I ask the chairman of the Committee of 
 Ways and Means whether he really thinks that 
 even par could have been obtained for the loan had 
 the amount thrown upon the market been so large¬ 
 ly increased as he contends it ought to have been? 
 I ask him, in all candor, whether the simple fact, 
 that the offers for this loan so much exceeded the 
 amount to be disposed of, furnishes any evidence 
 that there was then an amount of capital equal to 
 the aggregate of said offers, or anything like it, 
 seeking investment? Sir, the individuals who of¬ 
 fered for this loan were not, to any extent, capital¬ 
 ists. They were legitimately operating, and not 
 for investment, but for profit. They all were 
 aware that but twenty-three millions were to be 
 disposed of, and they desired to be the means 
 through which the whole amount of the loan might 
 be gradually absorbed into the capital of the coun¬ 
 try. It is, in my judgment, a complete fallacy to 
 argue, from the number and amount of these bids, 
 that a greater sum could have been disposed of 
 than has actually been negotiated. It would, Mr. 
 Chairman, have been, in my opinion, in the high¬ 
 est degree mischievous to have asked, at the period 
 referred to, for so great a loan as forty millions of 
 dollars. There was nothing, then, in the financial 
 state of the country to indicate any diminution in 
 our prosperity. Our trade was healthy in all its 
 branches, and we had no reason to anticipate a re¬ 
 verse. Great Britain had not then commenced 
 her desperate struggle to turn the exchanges in 
 her favor by any means and at any cost. Every¬ 
 thing denoted a continuance of the favorable state 
 of things then existing. For these reasons, I do 
 not see how any censure is to be laid upon the 
 Secretary of the Treasury for not asking for an 
 amount greater than he was fully justified in sup¬ 
 posing the Government would require. 
 
 But the chairman of the Committee of Ways 
 and Means has not confined his attacks to sup¬ 
 posed errors in the estimates of the past year. He 
 has assailed with equal, perhaps greafer vigor, 
 those which have been made by the Secretary for 
 the present fiscal year. Here, at least, he ima¬ 
 gines he is upon impregnable ground; and yet, Mr. 
 Chairman, I am satisfied that even here my hon- 
 
3 
 
 orable friend is equally in fault. He professes to be 
 entirely confident that the receipts into the treasury 
 for the present year will fall at least five millions 
 short of the estimates. We are not, of course, 
 entitled to expect from the other side any willing 
 concessions as to the beneficial effects of our pres¬ 
 ent revenue tariff. Their feelings and prejudices 
 against this great measure of the Administration 
 need no illustration from me. It is in proper keep¬ 
 ing with their policy to underrate, as much as 
 possible, the amount of revenues which we are to 
 receive from the customs. But, sir, what grounds 
 are there for charging the Secretary with any errors 
 in estimating these receipts at thirty-one millions 
 of dollars, as has been done by him ? The returns 
 thus far, for the current year, give no such indi¬ 
 cation; on the contrary, they fully. warrant the 
 belief that those estimates of receipts are not, in 
 any degree, exaggerated: 
 
 The receipts from customs for the first quarter of the pres¬ 
 ent year were.■.$ 11,106,257 
 
 For the same quarter last year . 8,153,626 
 
 Increase.■.. 3,952,431 
 
 The receipts for the second quarter of this year 
 
 were. 5,337,879 
 
 For the same quarter last year. 3,641,192 
 
 Increase. 1,695,687 
 
 Total increase for the two quarters. 5,649.118 
 
 If the increase for the remaining quarters of the 
 present year should be at a similar rate, the whole 
 amount of increase, at the end of the year, will be 
 $11,298,236; and the revenues from the customs 
 would thus yield an amount exceeding thirty-five 
 millions of dollars. Again: if no greater amount 
 shall be realized from customs in the remaining 
 quarters of the present year than was obtained in 
 the corresponding quarters of the past year, the 
 whole amount received would be $33,356,984. It 
 will be perceived that, even upon this hypothesis, 
 there will be an excess of nearly $2,500,000 in the 
 receipts over the estimates of the Secretary for the 
 current year. That this ratio of increase is still 
 going on, we are fully justified in asserting. The 
 receipts for duties at the custom-houseat New York 
 for the month of January last, were $2,305,017— 
 being an increase of $870,181 over the same month 
 last year; while, in the first ten days of the present, 
 month, the receipts at the same custom-house were 
 $1,028,549—showing an increase over the receipts 
 for the same period, in February of the last year, 
 of $505,404; and the indications would seem to be 
 abundant that this large ratio of increase will be 
 sustained to the end of the fiscal year. 
 
 The chairman of the Committee of Ways and 
 Means does not seem inclined to take issue with 
 the Secretary of the Treasury in respect to the 
 estimate of receipts for the sales of public lands 
 during the present year, although he. is a little dis¬ 
 posed to question its accuracy. The actual re¬ 
 ceipts from this source in the last fiscal year, were 
 $2,493,355 20. The Secretary has estimated them 
 for the present year at $3,500,000; and the returns 
 which have thus far been made fully sustain him 
 in this estimate. The receipts from this source, 
 for one-half of the current year, are $1,805,778, 
 which will admit of a considerable*decline in the 
 rates of increase in the remaining two quarters of 
 the year without the revenues from this source 
 
 falling below the estimated amount. But it may 
 be said, on the other side, that a considerable dim¬ 
 inution in these receipts is likely to be produced 
 by the warrants for bounty lands, issued to our 
 soldiers under the provisions of the act of the last 
 session. Some such effect may be produced by 
 this cause, although it is not yet apparent; but any 
 deficiency thus arising will, I believe, be nearly 
 if not fully made up by the increase in the immi¬ 
 gration to the country from Europe. It is con¬ 
 tended, however, and with great earnestness by 
 the chairman of the committee, that the receipts 
 from the sales of public lands are wholly un¬ 
 available to the treasury at present, except so far 
 as may be necessary to pay the interest on twenty- 
 eight millions of the national debt, for which pay¬ 
 ment, and the reimbursement of the principal, the 
 whole amount of these receipts is solemnly pledged. 
 Sir, I am not disposed to deny the solemn obliga¬ 
 tion of this pledge. I only hope that we may act 
 with equal honor and integrity in providing for the 
 redemption of the loan which we are now about to 
 authorize. The chairman of the committee, how¬ 
 ever, is, I think, clearly in error in supposing that 
 any sinking fund is directed to be established out of 
 the proceeds of the sales of the public lands for such 
 redemption. If the stocks cannot be purchased in 
 the market at their par value, the Secretary has no 
 authority under the law to make any other invest¬ 
 ment of the money for the benefit of the loan. It 
 must remain in the treasury, to be used only upon 
 the contingency above named. So long, then, as 
 the credit of the Government is sustained and these 
 stocks are above par, the surplus proceeds of the 
 sale of the public lands may, and indeed must, 
 remain in the treasury, and may be made available 
 as a portion of the permanent reserve or deposit of 
 three millions, required to be kept there. In doing 
 so, the pledge would not be violated, for the money 
 would not be appropriated or expended. 
 
 In the remarks of the chairman of the commit¬ 
 tee upon the estimates of expenditures for the 
 present year, I do not understand that it is assert¬ 
 ed by him that we have not now before us full 
 statements of the amount of those expenses; or 
 that there is any probability of further additions 
 to them, save in a single instance. The point made 
 by the gentleman is, that the Government is cen¬ 
 surable for not having presented an estimate at the 
 opening of the last session of Congress of the 
 whole amount which it is now ascertained was ac¬ 
 tually wanted. I think, Mr. Chairman, I have 
 already given sufficient reasons why this could not 
 be done. It was impossible, from the very nature 
 of the case, as every gentleman on the other side 
 of the House must know, or ought to know. No 
 one dares to charge the Government with a want 
 of good faith in this matter. The estimates were 
 presented by the Heads of Departments, acting 
 under a sound discretion, and in the conscientious 
 discharge of important duties. It seems to me, 
 when we turn to consider what has beeen achieved 
 in this war, how many obstacles have been over¬ 
 come and under what disadvantages, and how 
 many glorious battles have been won, it is hardly 
 worth our while to criticise too nicely the accuracy 
 of estimates for operations so extended in iheir 
 nature, and so successful in their results. But the 
 Secretary of War is arraigned for the course taken 
 in relation to the estimates of the Quartermaster 
 General, which resulted in their being reduced by 
 
4 
 
 that officer in the sum of $2,860,000. Here is, > 
 in fact, the strongest point upon which the gentle¬ 
 man relies. It will be well remembered how ably 
 it was elaborated by him; how nicely and curious¬ 
 ly every word in the letter of the Quartermaster 
 General to the Secretary of War was weighed and 
 commented upon, and some hidden meaning, some 
 want of confidence in the accuracy of his own es¬ 
 timates, attempted to be wrung from the guarded 
 language of the letter. Like Iago in the play, my 
 honorable friend “ is nothing if not critical;” and 
 he thinks that he has here found sufficient reason 
 to sustain him in his position. Sir, I admit that 
 the language of the Quartermaster General is suf¬ 
 ficiently cautious; but I affirm that it does not 
 authorize the inference that the estimate for the de¬ 
 ficiencies of the present year in his department is 
 under the amount which wiil be actually required. 
 It would not have been consistent with the safety 
 of the public interests to have made known some 
 of the important grounds upon which he has been 
 able to reduce this estimate. It is sufficient for 
 me that the Secretary of War has assented to this , 
 reduction, and has assumed its responsibility. I 
 doubt not the step has been taken by him with de¬ 
 liberation. I am willing to give it my full reliance, 
 for I know that his information on the subject 
 must be far more accurate and extensive than any 
 that we can obtain. 
 
 But, sir, admitting, if you choose, that in these 
 estimates of expenditure, deficiencies to some ex¬ 
 tent are necessarily to be found, may we not count 
 upon receiving from Mexico far more than suffi¬ 
 cient to counterbalance them? That unhappy and 
 heretofore distracted country may, I believe, be con¬ 
 sidered as practically in our possession. We know 
 its resources and its wealth. Will they not, under . 
 returning order and good government, be largely 
 increased ? Firmly believing that the policy of this 
 Government in respect to Mexico will be wise and 
 liberal, and that under its protecting care, quiet and 
 confidence and harmony will appear in places 
 where they have so long been strangers, I have 
 every reason to hope that the revenues which may 
 be collected by us in that country will be far greater 
 than any one has thus far ventured to anticipate. 
 
 I have seen estimates which are to a sufficient ex¬ 
 tent reliable, putting the total revenues of the Mex¬ 
 ican Government at twelve millions of dollars. 
 Sir, if we can collect but one-half, or even a quar¬ 
 ter of this amount, we shall sensibly relieve our 
 own finances. I maintain that these contributions, 
 sanctioned as they are by the settled principles of 
 the law of nations, are in no respect unjust or 
 improper. It is not a scheme of plunder or pil¬ 
 lage, that has been devised by the Government, as 
 has been charged upon them. In directing these 
 contributions, they have aimed to make the Mexi¬ 
 can people know and feel the burdens of this war, 
 which they have so long and unreasonably pro¬ 
 tracted; but, sir, other effects will flow from this 
 system. The people of Mexico will be taught to 
 learn the benefits of a wise and discreet govern¬ 
 ment. Their revenues, heretofore squandered 
 amongst corrupt men, will now be applied to their 
 legitimate use—the preservation of order, and the 
 protection of trade and commerce. The result will, 
 in my judgment, not only recruit the military 
 chests of our army, but it will bring great and sub¬ 
 stantial benefits to the people of Mexico them¬ 
 selves. 
 
 Mr. Chairman, I have not time to follow the 
 honorable chairman of the committee in his gloomy 
 speculations as to our financial wants in the com¬ 
 ing year. His forebodings in this respect I deem 
 to be as unfounded as they are prejudicial. We 
 are not now legislating for a future, but for an ex¬ 
 isting real and ascertained deficiency in our rev¬ 
 enues. It is true, the probabilities are at present 
 in favor of the necessity of a further loan in the 
 next fiscal year; but what may not occur before 
 we shall be called upon to consider it in this 
 House? We may even now be on the eve of 
 peace with Mexico. An event so auspicious would 
 at once, of itself, remove every obstacle in the way 
 of negotiating the credit of the Government to any 
 amount that might be required to relieve its wants. 
 Besides, too, Mr. Chairman, we shall, before this 
 loan can be required, know more fully the extent 
 to which we shall be able to draw revenues from 
 Mexico. The future is too full of hope, to admit 
 of such sombre forebodings as we have been favor¬ 
 ed with by the chairman of-the committee. Every¬ 
 thing would seem to point to the wisdom of con¬ 
 fining ourselves to the only subject now before 
 us—the pressing and immediate wants of the Gov¬ 
 ernment. 
 
 If, sir, I have shown, as I trust I have, that the 
 Government will require a loan to thd extent of 
 but sixteen millions of dollars to supply the exist¬ 
 ing deficiency in the treasury, the question remains 
 to be considered, on what terms, and in what 
 manner it ought to be authorized? I will remark 
 preliminarily, Mr. Chairman, that it is our plain 
 duty, in raising means to so large an amount, 
 to take care that it be done with as little possible 
 injury to the great business relations of the coun¬ 
 try. If, in authorizing the negotiation of this loan, 
 we can direct it to be effected in a manner which, 
 by admitting of a gradual instead of a sudden ab¬ 
 sorption of capital, and which, by furnishing to 
 the country, not a circulation or a currency, but a 
 convenient instrument of transfer and exchange, 
 will be less likely to be accompanied with any se¬ 
 rious injury or embarrassment, I maintain, that 
 it is our plain duty to follow that course in directing 
 its issue. Sir, I am satisfied that such effects will 
 be far more likely to follow from adopting the plan 
 recommended by the minority of the committee 
 than from that which I fear it is the deliberate in¬ 
 tention of the responsible majority of this House 
 to force upon the Government. What are the 
 grounds of objection to treasury notes ? The only 
 one which has been urged with any degree of 
 plausibility is their liability to become a depreci¬ 
 ated currency, tending to drive our specie abroad, 
 and to inflate prices. Treasury notes are in no 
 sense of the word currency or circulation. They 
 are not payable on demand, and are invariably 
 upon interest. As well might we contend that the 
 bills of exchange and promissory notes of the com¬ 
 mercial world were a part of the paper money of 
 the country. It has also been attempted to draw 
 an argument in support of the supposed perni¬ 
 cious effects of treasury notes from the continental 
 money of the Revolution and from what occurred in 
 respect to similar issues in the last war. There is 
 no parallelism in the cases. In our first great con¬ 
 test, the credit of the Government was issued in 
 the form of and as paper money. We could scarcely 
 be said to have then had a currency at all. In the 
 war of 1812, it is well known that there was a 
 
5 
 
 universal suspension of specie payments through¬ 
 out the whole country, with, I believe, a solitary 
 exception. All currency was then necessarily de¬ 
 preciated; and it is no matter of surprise that, 
 with the ordinary revenues of the Government de¬ 
 stroyed, and its expenses so suddenly and largely 
 increased, its credit should have been seriously 
 impaired. Its stocks and treasury notes were both 
 depreciated to a large extent, although, I believe, 
 at all times the latter commanded higher prices in 
 the market than the former. What is our present 
 situation in this respect? We have accruing an¬ 
 nual revenues to the amount of between thirty-four 
 and thirty-five millions of dollars. The amount 
 of treasury notes to be at any time outstanding, 
 under all issues, is confined to twenty milions of 
 dollars. It is known to all that these treasury 
 notes are at all times receivable in payment of the 
 public dues; how, then, is there a possibility of 
 any serious depreciation in their value when the 
 amount of their issue is thus carefully limited? 
 The conviction that such cannot be the case be¬ 
 comes conclusive, when we consider that these 
 same notes may at any time be funded in a Gov¬ 
 ernment six per cent, stock. 
 
 I am fully satisfied, Mr. Chairman, that we may 
 safely issue the full amount of treasury notes 
 which it is now proposed to authorize, and which 
 will not, in addition to those as well now outstand¬ 
 ing as those which can be issued by law, amount to 
 five hundred thousand dollars, without producing 
 any sensible embarrassment in the monetary affairs 
 of the country. I sincerely believe that such an 
 issue would have a beneficial effect upon our busi¬ 
 ness operations, affording not only increased facili¬ 
 ties of remittance, but the conveniency of temporary 
 investments, at all times so desirable in our large 
 commercial cities. Under so benign an operation, 
 the transfer of this large amount of capital from 
 its present channels into the stock of the Govern¬ 
 ment would be gradual, Sind its effects, to a great 
 extent, innocuous. The chairman of the Commit¬ 
 tee of Ways and Means has condemned the issu¬ 
 ing of treasury notes for so large a portion of the 
 twenty-three million loan, on the ground that, be¬ 
 ing now worth less than specie, as he avers, they 
 are flowing back into the treasury (to quote his 
 own words) “ in payment of all Government de¬ 
 mands, and thus the Government is, or shortly 
 must be, unable to meet its engagements in spe¬ 
 cie.” No such event has occurred, or is likely to 
 occur. Treasury notes have in no instance been 
 disposed of by the Government at less than their 
 par value. It must be remembered, too, that all 
 these treasury notes now coming back upon the 
 Government, are reissuable —a fact which the chair¬ 
 man of the committee seems to have forgotten. 
 There is nothing in the present appearance of 
 monetary affairs, to justify the apprehension that 
 treasury notes will not hereafter be kept at par. 
 But it has been asked, in what manner is the Gov¬ 
 ernment to be benefited by the proposed plan of 
 issuing treasury notes, seeing that the amount of 
 all issues is restricted to twenty millions of dollars, 
 and that the treasury notes now.outstanding, with 
 those remaining to be issued under previous laws, 
 exceed, in the aggregate, the sum of nineteen mil¬ 
 lions five hundred thousand dollars? The expla¬ 
 nation is a simple one. Of the large amount of 
 treasury notes which is now outstanding, amount¬ 
 ing to nearly fifteen millions, a very considerable 
 
 portion will be converted into stock, under the 
 provisions of the law. This funding process is 
 constantly going on. For every dollar of treasury 
 notes thus funded, the plan, as proposed by the 
 minority of the committee, will authorize the issue 
 of an equivalent in treasury notes, the amount of 
 which upon the market may thus be kept at the pro¬ 
 posed limit, reissuing as fast as notes are returned, 
 until the whole or the chief part of the amount is 
 absorbed into stock. The amount of treasury 
 notes funded from the 1st day of October last to 
 the 7th day of the present month, is $3,524,654— 
 giving a monthly average in this respect of over 
 $800,000. This process has been continued during 
 a period when the money market on the seaboard 
 has been very restricted; when the rate of interest 
 has never been less than from eight to ten per cent, 
 a year, and when it has often been impossible to 
 negotiate undoubted commercial paper except upon 
 terms far less favorable., No more satisfactory 
 evidence could be given of the high value set upon 
 the credit of the Government, than a steady pro¬ 
 cess of investment like this in its stocks, made 
 under circumstances apparently so unpropitious. 
 I have no doubt, Mr. Chairman, that when the 
 loan we are now discussing shall be brought into 
 the market, it will be an object of equally favor¬ 
 able consideration. 
 
 Mr. DUER inquired if he was to understand his 
 colleague to predict that the loan would be taken 
 at par? 
 
 Mr. NICOLL, in reply, said: I have every rea¬ 
 son to believe that such will be the case, if the plan 
 presented by the minority of the committee shall 
 be adopted. I hope the Government may succeed 
 in effecting the loan on equally favorable terms, 
 even if we are compelled to accept the bill as re¬ 
 ported by the committee. In that event, however, 
 the responsibility must rest with gentlemen on the 
 other side of the House in case of a failure to get 
 the money at par. 
 
 Mr. N. continued his remarks. 
 
 I do not share in the apprehensions of those who 
 appear to think that this loan cannot, under any cir¬ 
 cumstances, be negotiated at par. I cannot bring 
 myself to believe that the situation of the country i3 
 so gloomy as it is represented by many. I can see 
 no substantial causes for any drawback to our 
 prosperity. The results of the last year have been 
 most gratifying. There never has been a season 
 when our exports have been larger, or when they 
 have been made at more remunerating prices. 
 There has been no excess of imports of merchan¬ 
 dise, and by far the larger part of the specie im¬ 
 ported has been coined into our money, and gone 
 into the thousand channels of circulation through¬ 
 out the country. It is true, indeed, that for some 
 time past, a severe pressure has existed in our com¬ 
 mercial cities on the seacoast, produced not by 
 natural causes arising at home, but by an artificial 
 state of affairs in Europe, created by the immense 
 efforts made on the other side of the water to get 
 back their coin, and to turn the exchanges in their 
 favor. The effects of these causes have been felt 
 with peculiar severity by the merchants and cap¬ 
 italists of the seaboard. Bills of exchange to a 
 vast amount drawn against produce exported have 
 been dishonored on the other side, and new remit¬ 
 tances been necessarily sent to supply their place. 
 The losses, too, on shipments of produce have'been 
 large, falling in a very great degree, not on the pro- 
 
6 
 
 ducer, but the shipper. Money, too, lias been 
 drawn from our banks upon foreign credit, thrown 
 upon the market, and sold at the existing high rates. 
 All these causes have combined in producing a 
 stricture upon the money market in our Atlantic 
 cities greater than has been known for several 
 years. How nobly this crisis has been met, how 
 uniformly engagements have been honored, despite 
 the pressure, and the proof thus given to the world 
 of the healthy state of our mercantile credit and 
 commerce, I need not stop to say. But the tide 
 has already turned. The low rate of interest in 
 Great Britain, compared with the value of money 
 here, must, under the natural laws of trade, bring 
 back to us the capital which had gone under the 
 operation of the causes alluded to. It is the opin¬ 
 ion of many sound financial men, that, in a few 
 months, the rate of interest here will not exceed 
 five per cent. Be this a$ it may, Mr. Chairman, 
 there is every reason for thinking that our Gov¬ 
 ernment securities will henceforth be kept steadily 
 above par. 
 
 I have said that this pressure in monetary affairs 
 has been confined to our commercial cities. It is 
 true, perhaps, that it has, in some portions of the 
 country, extended itself into the manufacturing 
 districts; but in such cases, I apprehend, it will be 
 found to have been mainly caused by larger invest¬ 
 ments than usual within the year in fixed capital, 
 and by their necessary connection with the com¬ 
 merce of the seaboard. The agricultural portions of 
 our country, the great producers and consumers of 
 the nation, have known nothing but prosperity. 
 The profits on the last year’s vast exports have 
 not been arrested in the hands of the moneyed in¬ 
 terest on the Atlantic coast, but have chiefly gone 
 into the pockets of those to whom they rightfully 
 belonged—the farmers of the country. I venture 
 to say, Mr. Chairman, that no pecuniary distress 
 or stricture has existed among them. The returns 
 of our banks show a large indebtedness from the 
 cities to the country, so unlike what has been the 
 case in former years; and the excess of our exports 
 over our imports furnishes gratifying proof that 
 there has been no overtrading with the interior. 
 
 It is apparent to me, Mr. Chairman, that if any 
 difficulty should be found to exist in the negotiation 
 of the proposed loan with the capitalists of our 
 cities—although I do not apprehend that such will 
 be the case—the proper course to be pursued would 
 be to offer it, in small sums, to those in the coun¬ 
 try who have money, and by whom, I believe, it 
 would be readily taken, as a desirable and secure 
 investment. In my own city, (New York,) a plan 
 like this was, several years ago, pursued in regard 
 to the stock created for the purpose of bringing in 
 the Croton water, and was attended with entire 
 success. By this course, any combination or mo¬ 
 nopoly, on the part of capitalists, might be effectu¬ 
 ally avoided. 
 
 I think, for these reasons, Mr. Chairman, that 
 the injury to the business operations of the coun¬ 
 try, which, it has been stated, would be likely to 
 be caused by the negotiation of this loan, have 
 been greatly overrated. Let it be remembered, too, 
 that the amount asked for will not be required at 
 once, nor in sums greater, as I believe, than three 
 millions a month; that a very large portion of it 
 is needed for the payment of contracts here, and 
 that, in all probability, no very considerable part 
 of the loan will be expended out of the country. 
 
 I ought to mention here another advantage which 
 will attend the issue of treasury notes. For every 
 dollar required to be expended in Mexico, treas¬ 
 ury notes, which are understood to be above par 
 in that country, might be most advantageously 
 disposed of there, where they are eagerly sought 
 fo r as a desirable mode of remittance. The objec¬ 
 tion that they would be returned upon us, and the 
 speciedrawn upon them and sentoutof thecountry, 
 is untenable under the present rates of exchange, 
 which are not likely to be less favorable for some 
 time to come. 
 
 I propose now, Mr. Chairman, to say a few 
 words on the subject of additional revenue, which 
 I am pursuaded ought to be voted fearlessly, and 
 without regard to consequences. For nearly two 
 years we have bee.n engaged in a foreign war, 
 necessarily carried on at an efiormous expense, 
 and without thus far imposing a single additional 
 burden upon the people—an example, I undertake 
 to say, unparalleled in the history of warfare. 
 Thanks to our abundant resources and our high 
 credit, we have been able thus far to do this v ithout 
 difficulty; but the time has now come when it 
 should occupy the serious consideration of every 
 member on this floor—whether we shall continue 
 in a course which is ultimately calculated to be pro¬ 
 ductive of financial embarrassment to the Govern¬ 
 ment. Our ability to meet our engagements, our 
 determination to preserve the national credit un¬ 
 tarnished, cannot and should not be doubted. We 
 owe it to ourselves, to our constituents, to their 
 ' posterity, to take care that the large debt which, 
 under the most favorable circumstances, must be 
 incurred in the prosecution of this war, should 
 be redeemed within a reasonable time. I trust 
 there is not a gentleman on this floor who does not 
 regard the existence of a large national debt as a 
 national evil, and who is not convinced that a fund¬ 
 ing system, unaccompanied with provisions for 
 ultimate and early redemption of the principal, is 
 calculated to throw the labor of the country at the 
 feet of our own and foreign capitalists. Believing 
 that the early redemption of our debt is required 
 by every consideration of national honor and in¬ 
 terest, I shall support the recommendation of the 
 Executive for the tax as proposed by him on tea 
 and coffee. As between indirect and direct taxa¬ 
 tion, my preferences are in favor of the latter. I 
 believe all taxation, Mr. Chairman, to be an evil, 
 and I think a greater service could not be rendered 
 to the people than to make them know and feel it 
 is such. On this subject I speak for no one but 
 myself. I know, indeed, that the sentiments of 
 this side of the House are on this great subject 
 divided; but I am pursuaded that when it shall be 
 fully and thoroughly discussed before the intelligent 
 masses of our citizens, they will not hesitate to give 
 their judgment in favor of a system of direct taxa¬ 
 tion, as one which will ensure a greater interest on 
 the part of the people in the affairs of Government, 
 and a wise economy on the part of their agents in 
 the expenditure of the public revenues. That time, 
 I hope add believe, is rapidly approaching. I know 
 that, in the ordinary acceptation of the meaning of 
 direct taxation, there are involved great difficulties 
 as to the imposing it with fairness and equality, 
 growing out of the fixed rule of the Constitution 
 requiring such taxes to belaid in proportion to the 
 ratio of representation, which is so different in most 
 Slates from the ratio of property and wealth. I 
 
believe that these difficulties may be in a great 
 measure obviated, if not removed; but I have not 
 time, nor, perhaps, is it fitting, that I should now 
 enter upon a discussion which must necessarily 
 embrace so wide a range. Perhaps on some future 
 occasion, the opportunity may be presented of 
 giving my views at length on this interesting sub¬ 
 ject. I will only say, Mr. Chairman, that in -voting 
 for a tax on tea and coffee, 1 admit to a certain ex¬ 
 tent the inequality of its operation, although I sin¬ 
 cerely believe that its burdens have been most 
 unnecessarily exaggerated. Nor do I think that 
 when our patriotic people, who have declared so 
 earnestly in favor of a war, which has covered 
 their country with glory, are made to understand 
 that additional taxation is necessary to maintain 
 our credit, they will not cheerfully consent to it. 
 To believe otherwise, would be to degrade and dis¬ 
 grace them. I vote for this tax, because it can be 
 at once collected, and with no considerable increase 
 of expense. The complex machinery of our cus¬ 
 tom-houses is in successful operation, and a duty 
 on tea and coffee would be levied, and the money 
 obtained and paid into the treasury, without any 
 delay, and without additional force. To design and 
 perfect a system of direct taxation, is a work of 
 time, and should not be attempted except upon the 
 most mature consideration, and with the under¬ 
 standing that it is not to be collateral with our sys¬ 
 tem of taxation upon articles of consumption; but 
 is intended to supplant it, and to be the only mode 
 of collecting revenues for the expenses of Govern¬ 
 ment. So great a change as this is not the work 
 of a day; nor should it, in my opinion, take place 
 except in a time of peace, when the energies of 
 every department of the Government may beunited 
 in bringing it to perfection. 
 
 I have thus, Mr. Chairman, given my views 
 explicitly and at length, in respect to the mode 
 which ought to be pursued in negotiating this 
 loan, and in providing immediate additional rev¬ 
 enue. In doing so, I believe I have but expressed 
 what is well known to be the wishes of the Ad¬ 
 ministration and their friends, the minority of this 
 House. Let me now, in a spirit of frankness and 
 candor, call upon the honorable chairman of the 
 Committee of Ways and Means to come forward 
 and state in what manner that gentleman and 
 his political friends are willing to replenish the 
 national treasury. > The course intended to be 
 pursued on this side of the House, in this import¬ 
 ant matter, will be open and manly. Can we dare 
 to hope that it will be equally so with gentlemen 
 on the other side? Sir, has there not been some 
 hidden reason for this gloomy, this labored and 
 
 over-wrought picture of our financial position? 
 Has it been all for nothing, that we have been 
 again and again called upon to mourn over diffi¬ 
 culties and embarrassments, which have been con¬ 
 jured up on the other side, and which have no real 
 existence, save in their imagination? I charge 
 upon the majority a deliberate purpose in those 
 earnest attempts to overrate our necessities: Latet 
 anguis in hcrba. I see in it all the “ foregone con¬ 
 clusion” of a high protective tariff. Ardent and 
 sincere, as I honestly believe the chairman of the 
 Committee of Ways and Means to be, in his ad¬ 
 vocacy of such a system, it is most significant that 
 he did not venture to make it a distinct point 
 in opening this debate. It was hinted, but not 
 pressed ; and all that the honorable gentleman 
 did in this respect was but to express his belief— 
 I quote the gentleman’s own words—“that the 
 ‘ Government will be compelled, under the pressure 
 ‘ of its necessities, to abandon its mischievous free- 
 ‘ trade policy, and to come back to the protection of 
 ‘ the home labor of the country, as the only sure 
 ‘ foundation of public prosperity, and of abundant 
 ‘ supply of revenue.” And is this the course 
 which the majority are determined to pursue? Do 
 they really believe that the great Democratic party 
 of this country are prepared to abandon a system 
 which has been so productive of revenue, and which 
 has contributed so much to the prosperity of the 
 nation? Human credulity cannot be tasked to this 
 extent. No, sir; if such an issue is to be made, 
 the responsibility of the initiative must rest with 
 the majority in this House. I do not believe it will 
 now be taken. The experience of the past is too 
 significant; the events of the future too uncertain; 
 and, more than all, the elements of the majority 
 are too discordant, to permit this issue to be made 
 at present by the other side. , If, however, we are 
 wrong in this, it need scarcely .be said that the 
 minority of this House are ready and willing to 
 go before the country on such an issue. The de¬ 
 liberate judgment of the people has condemned the 
 protective system in every form and shape; and 
 their convictions in this matter are not, under any 
 circumstances, likely to be changed. But, how¬ 
 ever unprepared or unwilling our opponents may 
 now be to renew the old agitation, there is much 
 reason for believing that it is their settled purpose 
 to do so as soon as a favorable opportunity shall 
 present itself. Come when the contest may, it 
 will not find the Democratic party unprepared; but 
 the battle, when next fought, will, I venture to pre¬ 
 dict, take a higher ran°:e; and the issue made will 
 be, not as between high and low duties, but as be- 
 ween protection and direct taxation. 
 

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