Democratic Sentinel, Volume 2, Number 3, Rensselaer, Jasper County, 1 March 1878 — THE FINANCIAL ISSUE. [ARTICLE]

THE FINANCIAL ISSUE.

A History ot the National Bonds-Wnat the People Demand. [Extracts from Mr. Voorhees’ Speech in the Senate.] The act of Feb. 35, 1862, is the beginning of our bonded debt. The precious metals were found to be unequal to the emergency Of war. Specie payments were abandoned as soon as the hour of trial came, and gold and silver cowered in the rear, while the legal-tender dollar went to the front with the flag and staid there. I was among those who doubted our right to issue it, but experience has shown it the best money, all things considered, that ever circulated on American foil. By this act of February, 1862, and by similar legislation at subsequent periods, every bond issued- by the Government which did not on Its for payment in coin was male payaWe.by the express words of law Tn legal-tender, notes. It was plainly in the statute that these notes, now Known as greenbacks, “/hall be receivable in payment of all taxes, internal duties, excise, debts, and demands of every kind-due to the unitea States, except duties oh imports; and of all clairiis ard demand* against the United States of every kind whatever, eicept for interest upon bonds and notes, shall.be paid ip coin and shall alto be lawful money and a legal tender in payment of all debts, public and private, within the United States, except ditties on imports and interest as aforesaid.” This simple, explicit, and at the same time comprehensive enactment guaranteed to the American people the right to pay three-fourth* of theft national debt in national currency. It was the law of the contract when all the 5-20 bonds, amounting to over $1,500,000,000. xyere purchased from the Government by the bondholders and paid for in currency at par, when it was quoted at from 40 to 60 per cent, •below par in coin. -"Every one understood .the law to be as I have stated it at the time of its passage'. In fact the great struggle then was whether even the interest on the bonds I have mentioned should be paid in coin. The act ol Feb. 25, 1862, first passed the House without any provision at all for the coin payment of interest. That feature of the law was attached here in the Senate as an amendment, and-when the act, thus amended, was ieturned to the House, a violent conflict at once arose. An examination of the Congressional Glol>e for the second session of the Thirty-seventh Congress, at pages 821 ana 900, will show that' both Mr. Spaulding; of New York, and Mr. Stevens, of Pennsylvania, the leading members of the Committee of Ways and Means, and one its Chairman, united in denouncing the Senate amendment in the bitterest and severest terms. They contended, in stern, and determined language, that even the payment of interest in coin was an odious and unjust discrimination in favor of the bondholder and against the soldier, the sailor and the citizen, who were compelled to receive the legal-tender currency, greatly depreciated by this very discrimination. No one by a single word in that entire debate made the slightest pretense or intimation that the principal of the bon Is was payable in coin. During the full term of seven eventful yeai s that followed there is not a platform of either, political party in any State of the Union which makes such an assertion. No claim for such a construction of the law in behalf of the bondholder ever fell from the lips of a leading member of the party in power during the same length of t me in either branch of Congress, or anywhere else, so far as the public is advised. On the contrary, in many States, and notably in Ohio, the home of the President and his Secretary of the Treasury, the dominant partyin its State Convention in 1868 expressed its deliberate “conviction that according to the laws under wlftch. the 5 20 bonds were issued, said bonds be paid in the currency ot the country w hich may be legal tenders when the Government sha l l,e prepared to i edeem such bonds.” Ou this doctrine the present Chief Magistrate and his Secretary took their stand only nine years ago, and told the people that the doctrine was true. Not only so, but Secretary Sherman, who now in his recent report warns us against repudiation, then gave in a letter, dated March 20, 1868, and widely published, his idea of what constituted a repudiator. Speaking on this subject, he says: “United States Senate Chambkb,! Washington, March 30,1868. ) “Dear Sir: I was glad to receive your letter. My personal interests are the same as yours, but, like you, Ido not intend to be influenced by them. My construct on of the law is the result of careful examination, and I feel quite sure an impartial court would confirm it if the case should be tried before a court. I send you my views, as fully st tied in a speech. Your idea that we propo eto repudiate or violate a promise when we offer to redeem the “principal” in legal tenders is erroneous. I think the bondholder violates his promise when he refuses to take the same kind of money he paid for the bonds. If tide case is to be tested by the law I am right, if it is to be tested by Jay Qcoke’s advertisements, I am wrong. I hate repudiation x>r anything like it, lilt we onght not to be deterred from what is rTgnrfqr*fear of undeserved epithets. If under the law- as it stands the holder Of five-twenties can only be paid in gold, the bondholder can demand only the kind of money he paid, then he is a repudiator and extortioner to demand money more valuable than he gave. “Truly yours, John Sherman.” When it is remembered that the bondholder never paid a dollar in com fora bond of an> description, but purchased them all with Government currency, which the Government itself had depreciated by refusing to take it for custom dues and interest, the full meaning of thia letter becomes vety plain and forcible. It is not the offspring of impulse or inexperience. Its author was Chairman of the Finance Comof this body, and he wrote, as he says, after “ careful examination.” By the light which he here throws upon the subject we may see the exa<?t beginning of repudiation and behold the furtive and ravenous movements of the actuul repudiators as they hurry up and dbwh the precincts of legislation during the last nine years of our history. By its light too we behold the present Secretary of the Treasury, judged by his own words, as the chief of repudiators, foremost among the violators of contracts, and a leader among those who have in no instance kept the good faith of the Government with its own people a moment after they found that bad faith would bring them richer gains. In less than ten months after this letter was written, and offer the denunciation of the Ohio platform, Hom John Silexman, then a SouaAor, advocated and procured the passage of the act of March, 1869, for the payment of all the bonds in cpin which he had declared payable in currency, thereby establishing an open repudiation of" a solemn and binding contract ana fastening an extortion of not less than $500,000,000 on the staggering industries of the country as the speculative profits of the operation. In the whole financial history of the civilized world no parallelcan be found to this audacious deed of brokenfaith, deliberate treachery to the people; and national dishonesty. It stands odt by itself, towering high above all oommorf frauds, and dwarfing them in comparison with its own vast proportions. It will bear the names of those who enacted it to distant generations amid the groans, the curses, and the lamentations of those who toil on the land and on the sea; and more deeply engraven than any other name will be forever found that of the" Secretary of the Treasury as the author of what he himself said constituted the twofold crimC*of repudiation and exortion. Do I state the case too strongly ? Does any Senator think that ‘I am not justified in the language I use or in the conclusion I state ? If ro, I pray him to recall the utterances of my lamented and distinguished predecessor in this body. When this monstrons act of repudiation was .on its passage here in March, 1869, Senator Morton pointed out in the plainest and most explicit manner four distinct acts of Cofigress under which the people had to pay the &30 bonds in legal tender notes, ana which were to be broken and set aside by the measure then under discussion. Among other things he said : “And now I propound the question. It Is either intended by this bill to make a new contract or it is not. If it is intended to make a new contract I protest against it. We should do foul injustice to the Government and the people of the United States after we have sold these bonds on an average for not more than 60 cents on the dollar now to make a new contract for the benefit of the holders.” Again he says: “It gives to those laws a construction that I do not beiieveia, and that 1 have shown is contradicted by at least four acts of Congress,” And again Stenator Morton exclaimed, with that power of ! statement which always so greatly characterized him: “ Sir, it is understood, I believe, that the passage of a bill of this kind would ba vet the effect in ElU'opp, where our financial questions are not well understood, to increvo the fienwnd, and that wifi enable the operators

to sell the bonds they have on hand at a profit It is in the nature of a broker’s operation. It is a bull movement intended to put up the price of bonds for the interest of parties dealing in them. This great interest is thundering at the doors of Congress, and has been for many months and by every means attempting to drive us into legislation for the purpose of making money for the great operators. That is what it means snd nothing else.” These are words of intense and overwhelming force. Where in the whole range cf de bate can be found a more revolting picture of bad faith inspired by base cupidity than is here portrayed by the greatest party leader perhapu ever known in the American Congress? He has passed away, his voice is rilefit and he rerts after life’s fitful fever, but this accusation hurled against criminal wrong-doing survives, and will continue to survive as long as it re mates to be determined who have repudiated the sacred obligations and the plighted faith of the American republic. In the far distant times generations now unborn, while examining the sources of the burdens that have descended to them, will read the charge made in this presence to the late Senator from Indiana, that a combination of stock-jobbers, as destitute of conscience as pirates, and inspired alone -by greed for money, successfully thnndered at these doors and finally drove this Government into the most stupendous act of bad faith and legalized robbery ever practiced upon any people since the dawn of history. ‘Five hundred millions made by great operators and five hundred millions lost to the plowman and the mechanic who have it all to pay ! Sir, thus far I have spoken in pointing out what I conceive to be the vicious legislation of this country on the great and paramount question of its finances. There are two opposing ideas on this subject now thoroughly art,used into vigilance and activity. On the one band is the vast money-power in all its various developments of bonds, banks and loaning associations, and on the other are the gr< at industries, the active business, and the laboring people. The issue has been years in making up, but it is now joined. Nobody need be deceived. All the widespread influences of capital are organized and combined. The holders of public securities in America and in Europe work together. They think and act in concert. The national banks of the United States have a solid organization to protect what they have and get as much more as possible. They are asking now to be relieved from paying taxes on their circulation and deposits, in order that they may enjoy their enormous profits free from all burdens for the support of the Government. Associations of capitalists, engaged in obtaining mortgages ac 12 per cent, interest on Western farms, on account of the scarcity of money in that section, are not only striving to make all such mortgages, payable in gold a year hence, but they are threatening those in pecuniary distress that they shall have no further favors at the same rates, unless they agree in advance to pay gold in return for greenback loans. The power of money in the midst of times" like these is very great, but I am much deceived in the people if they have not turned at last in defiance and bold warning upon thoir oppressors. They are not in favor of repudiating a single dollar of their public or private debts. They intend to pay everything they owe, but they intend to submit to no more changes of contracts, violations of obligations, and breaches of public faith, in order to increase their indebtedness or to take away their menns to pay it. They demand, too, that certain specific wrongs shall be redressed. First, those for whom I speak demand the restoration of the silver dollar exactly as it stood before it was touched by the act of Feb. ruary. 1873. They desire that it shall have unlimited coinage, not fearing that it will become too plenty for their wants; and that it be made a full legal tender, believing that it is as good now with which to pay all debts, pub - lie and private, as it was during eighty-one years of American history. Second, they demand the repeal, unconditionally, of the act of January 14, 1875, comp Hing a resumption of i-pacie payments in January, 18/9, holding that the question of a return to a specie basis for our currency shou’d be controlled entirely by the business interests of the country. They do not believe that the countiy should be dragged through the depths of ruin, wretchedness and degradation in order to reach a gold standard for the benefit alone of the income classes.

Third, tb< y declare that the national-bank-ing system be removed and a circulating medium provided by the Government for the people, without taxing them for the privilege of obtaining it. And they a k that the anlbunt thus placed in circulation shall bear a reasonable and judicious proportion to the business transactions and the population of the United States. Fourth, they demand that the currency circulated on the authority of the Government shall be made a legal tender in payment of all debts, public and private, including all duos to the Government, well Knowing that it wil then be at par with gold, or more likely at a premium over it. And fifth, they demand that hereafter the financial policy of the country be framed permanently in their interest; that they shall not be discriminated against in future legislation as in the past, and that their prosperity, and not the mere growth of incomes to retired capitalists, shall be the primary duty of the Government. In my judgment, these demands are just and moderate. 1 implore Senators not to suppose that they can be disregarded with safety. If they are rejected now they will be renewed hereafter with still greater detenninaiion, and perhaps with others added. I plead for the financial credit of ti e Government. It rests on the popular will alone, and that will can no longer be defied or menaced with impunity. The people are sovereign, and they oan bind and they can loosen. If the money power is advised with wisdom it will stop and retrace its steps. It confronts a power now mightier than itself ; a free people at the ballot-box, inflamed by a sense of injustice and oppression. If, however, it is joined to its golden idol; if its heart is hardened and its by its vast possessions ; if the burning lust of avarice has made it deaf to the voice of reason and blind to all human experience, it will push on its career until it works its own destruction; for, sooner or iater, the people, irrespective of party names, will unite in their own defense and establish justice.