Indiana State Sentinel, Volume 25, Number 30, Indianapolis, Marion County, 8 March 1876 — Page 9

MUM. SUPPLEMENT.

FINANCES. TUB QUESTION OF THE DAY. DISOU.SED IN DETAIL. Pull Text of Mr. Landers's Speech in Congress on the Financial Issues of the Times A SEARCHING REVIEW. THB HISTORY OF PAPER HON KT TBACID THROUGH T1MK ISO THAT KIND OF CURRENCY CONTRASTED WITH COIN IHK CUKBKNCT OF IHK COUNTRY. From the Congressional Kecord. Mr. Chairman, la view of the pro trat condition ol ihe wealth-producing Industries ot the country, the pecuniary rain of bo great a Proportion of our business men, and the threatened pecuniary ruin of thousands more. It la the paramount doty of congress to investigate the cause that has produced so disastrous and distressing a condition of affairs. In order that we may apply a proper remedy. In entering upon this investigation, i am lully aware ol the cause that divides the people and their representatives into parties on this momentous subject. Were it not tor this cause of division, a remedy tor the evils that afflict the business commuuly could easily be discovered and speedily applied; one which the mmol our citizens woull heartily applaud. Mr. Chairman, the difficulties that prevent us fromsneUU applying relief to the.buslness, laboring, and wealth producing industries of the country arise from the simple fact that there Ueslu our pathway a contest between two forms of government a outest that is as old as the constitution, for It took Its rise in the convention of 1787 that framed the constitutionand until we come to a clear understanding of the difficulties that baset our patnway, that divide us into parties, and prevent us from united action, or any action at ail, we will not be able to apply the remedies required to relieve the distress of the people, arising fiom a contraction of the circulating medium ot the country, as I will clearly snow. The contest about forms of government to vilch I refer is a contest between the American system of state and lederal governments and the British aristocratic system, consolidating Scotland, Ireland, Knglmd, and Wales into one national government, based on aristocratic principles; therefore, the effort with us to subordinate the state governments and consolidate tbtlr powers Into a despotic national government, based on a moneyed aristocracy : which of ail forms of g' vernment is the m -M odious. In this contest over forms of government, we find that the American system ot full legaltender money and the cah system of business best accorded with trie American system of governments, while on the other hand, the British system of baBk currency and the credit system of buslnesr sustain the British system of aristocratic government. On the 19th of February, 18 J, the Hon. K. G. Spauldlng.in this House, in his speech In f a vor ol THB NATIONAL B INK CURRENCY BILL, aald: It Is now most apparent that the policy advocated by Alexander Hamilton of a strong central government was the true policy. (ee page 4 ot appendix to SpauMlng'a History cd the Legal Tender.) In the general convention of 1787 that framed the Federal Constitution the contest was between a national arlstocratie form of government and a federal nnloa of equal states, with "sll power Inherent in the people'' o' each state. On tbis suojecr, on June 18, 1787, Mr. Hamilton said: We must establish a general and national government, and annihilate the state distinctions and state operations ; and unless we do tnis, no good purpose can be answered. ... I foresee the difficulty on a consolidated plan ef drawing a representation from so extensive a continent to one place. . . . This, however, can be no conclusive objection, if It geventualea 1a sn extinction of state governments. ... I believe the British government forms the best model the world ever produced, and such has been Its progress In the minds ol many, that this truth gradually gains ground. This government has for Its object public strength and individual security. It la said With us to be unattainable. If It was once formed It would maintain itself. All communities divide themselves Into the Jew and the many. The first are the rich and well born, the others the mass of the people. ... Can a democratic assembly, who annually revolve In the mass otlhe people, be supposed steadily to pursue the pu lie good? Noinlng bat a permanent body can check: the Imprudence of democracy. 'Iber turbulent and anoontrolilng disposition requires checks. . . . Let one body of the legislature be constituted daring good behavior or life. Let one executive be appointed for life who dares execute kls powers. . . . Ail state laws to be absolutely void which contravene the general laws. All officers to be appointed in eacn state to have a negative on all state laws. All the militia and the appointment of officers to be ander . the national government. ... The people are gradually ripening In their opinions of government; they begin to tire of an excess of democracy. Yates's Debates of the convention, pages 132-137. Mr. Hamilton's proposed scheme of "national" government having bn adopted in committee of the whole and reported to the convention, the federal anion advocates on June lAJth, 1787. moved to strike our the word "national In the first resolve" and to subs'ltute the words "Government of the United mates;" whlen was agreed to. The national system of Hamilton was abandoned, and the federal system was adopted. Alexander Hamilton, as secretary of the treasury, proposed to congress the adoption of the British system of bank currency; and on his recommendation, on February 2a, 1791, "The president, directors, and company ot the Bank of the United tHatee" was Incorporated for a period of twenty years, with a capital of 10,(AiO,0OU. Thomas Jefierson, then secretary of state, gave a written opinion denying the power of congress to Incorporate a bank of Issue. Mr. Madison opposed It In a powerful speech in congress as unconstitutional; and, although Ueueral Washington signed the bill, it Is known that he was strongly opposed to bank currency based on specie lor redemption, or to any paper cur rency made redeemable In coin, even though It should be made a legal tender, as Is fully shown by bis letter to X. Stone, a member of the Maryland legislature, written at Mount Vernon, February 27, 1787; and al-o by the action of the Virginia delegation in the constitutional convention of 1787, which, by a vote of nine states to two, refused to delegate the power to congress to emit a "bill of credit," which is defined to be "a note promising payment In law ml money on demand and fp2ially authorized by law to pass as a circulating medium." Virginia was one of the nine states which refused to delegate auch a power tooongrees. Mr. Madison appended a note to the proceedings of the coaven tlon In which he says that he " became satisfied that striking out the words 'to emit bills of eredlt' would not dlsab e the government from the nss or public notes as far as they couid be safe and proper, and would cut off the pretext for a paper curreacy, and partlcu larly for making the bill of credit a tender either for public or private debts." A lull legal tender is both money and currency. whereas a note, promising payment in lawful money, la mere currency and not money, and . is made to depend for lis value on THB PROMPT PERFORMANCE OF THB PR0MISR to pay la lawful money on demand. The notes of Ihe United States bank, Incorporated In 1791, were made legal tenders to the govern ment and pay alle In legal tender coin on do mand, which made them "bills of credit,' and therefore unconstitutional. The present national Dana currency. redeemaDia on aematid In legal tender greenbacks, are alsole gal tenders for public aues, and are therefore mere currency or "bills of ere Jit." As the advocates of national banc currener have ever contended that the promissory notes of banks may be made legal tender, or coarse It Is both inconsistent and absurd for . them to deny the constitutionality of a legal tender treasury note More over. they are estopped by their own acts from setting up such a plea: and more especially In the lace of a declsloa of the United B tatea Supreme Court in lavor of the constitutionality of United States treasury notes Issued In 1813 and '814 which decision was delivered by Judge Story. In order to show more clearly the want of anj constitutional Diver In congress to Incorporate a bank or banks of Issue, we call attention te the fact that in 1791, on a consideration or me phi to incorporate the "national" bank, Mr. Baldwin remlndea Judge wuson, oi reuusjuiui, that the states refused to delegate to the iea jtral MTcmmant the power to create corpora tions. Particular power was tnen proposed to

establish a national bank, which proposition was also rejected. Judge Wilson admitted the correctness of the statement, which will be found to be correct by an examination of the proceedings of tbat convention. In 1811 the national bank applied for a recbarter; which was denied It by congress, on which oocasloa Mr. Clay, or Kentucky, made a powerful speech against the reco arter of the bank. In his remarks he treats such an Institution as "unconstitutional, anti-American and strict y a British institution." Mr. Ciay, addressing himself to the advocates of bank currency, said: Do they forget that we are not In Westminster Hau? . . . May not the time arrive when the concentration of such a vast portion oi the circulating medium ol the country In the nanus of any corporation will be dangerous to the liberUes oi tne country? Mr. Chairman, that time has now arrived Svhlch Mr. Clay foresaw; and It becomes the duty of the representatives of the people te take from the national banks the power to make and control the currency. But lesi we may fail into a still greater evil of returning to state banks of issue, 1 shall now show that the states are directly and positively prohibited from emitting a " bill of credit," and consequently of Incorporating a bank or issue. Article 1, section 10 of the federal constitution says: No ktate shall coin money, emit bills of credit, or make anything but gold sad stiver coin a tender In payment cf debts. Section 8, article 1, paragraph 6, of federal constitution says: Congress snail have power to cola money, regulate the value thereof, and of foreign coin. The power to make money or a medium of exchange, which "is the tool of trade," is a power incident to sovereignty, and, as "all power la Inherent in the people," they mnst bo sovereign, as sovereignty is defined to be the highest power known to any government; and, as we can not have two highest pwers, sovereignty must reside in the people, and not in any constitution or form of government, but In lhote who make them and may at their pleasure change, alter, or amend them. Sovereignty del gates power to make supreme or the highest law, but can not delegate any part of Its sovereignty without losing the whole, as it can not reside In the people and In their lepresentalives at one and the same time Therefore, in making coustltn ions and governments it was proper that the people should have delegated either to congress or to the stale legislatures the power to make money; and, having shown that this power bas been delegated to congress, it becomes necessary to show by what act of congress this power is exercised. It Is raaoe by that act of congress which makes anything a tender in payment or debts, which Is called a legal tender act. Two things are clearly observable In connection with this question : First, that the power to make a legal tender act Is not granted in the federal constitution by any mention ol such an act; econd, that the power to make t-uch an act is contained u the power and duty to regulate the value ot money. Mr. Webster on this subject said : Collating the grant to congress and the prohibi ion to tne states, a Just reading of the provision is this: Congress shall have the power to coin money, regulate the value thereof and of foreign coins, em.t bills . or mate anything besides gold and silver coin a legal tender In payment of debts. In reply to those who assert that coin only can be declared a legal tender, It is proper to call attention to the fct tbat the powers granted to congress ar PERMISSIVE, AND NOT OBLIGATORY;

therefore, as congress might not ce-ln gold and silver, the states reser red the power to make gold and silver coin (of other countries) a ten der in payment of debts. As the laws of con gress made in accordance with the powers granted to It are supreme, had congress been compelled to make coin a tender In the pay ment of debts, dues, and demands, or the only legal tender, es tne deslgniDf; advocates of bank currency contend, the leservatlon ou the part ot the states would not have been made. It would have been both useless and absutd. One other fact must be borne in mind in connection with this subject, that in order to regulate the value of money congress must make It a full legal lender, as a partial legal tender Is always depreciated s compared with a full legal tender, as is proved In the case of sliver coin, It being a partial legal tender is depreciated as cmDared wit n gold coin, which is the only fall legal tender, and as was proven in the case of the demand notes issued in July, 1(61, and February, 18b"J. Those demand notes were only legal tenuers for public dues. W hen the banks fcUSDtnded specie payments in Decern ber. 161. they refused to take them for debt due them, which depreciated those notes to level with suspended bank paper. On March 17, 1801. congress made them aa equal legal tender with gold coin, at a time wnen there war no coin to redeem them with. and when their redemption had been virtually prohibited by the act of February A 1M2. whan t bey Instantly rose to an equal lty in value wun gold coin, ana continued to rise with It to a value ot $-85 60 on the f ICO, as compared with partial legal-tender greenbacks. There are &,V0 oi those full legaltender notes not yet redeemed, and II there are any ol them not yet destroyed by use. tney will now command the same premium as gold coin because by law they are made to perform the same functions, consequently money is not only the creature of a legal-tender aot, but that act also gives it value, wnetner compose! of coin or paper. When money Is made a full iegaitender.it is par or or equal value ana bears a premium or higher value than a pai tlal legal tender as compared with a full legal tender. Having shown that the entire power over the question ox creating money Is In congress and by what act that power is exercised, and that congress can not justly make a partial legal tender, it Is proper to call attention to the fact mat congress can not demonetize coin, as the states may make it a legal tender Incase con gras tails or re fuses to do so. THE AMERICAN 6Y8TEM OF MONET AND ITS SUPERIORITY OVER BASK CURRENCY. By an examination of Jefferson's published correspondence, the following will be found In a letter to his son-in-law, Colonel Eppes, chairman of the committee of ways and meana In congress, dated June 24, 1813. He said In the war of 1755 oar state a vallei itself of this fund by issuing a paper currency bot tomed on a peel no tax tor its redemption and, to Insure Its credit, bearing an Interest of five per cent. Within a very short time not a bill of this emission was to be found in circu lation. It was locked up In the chests of ex ecators, guardians, widows, farmers, etc. We then issued bills bottomed on a redeeming tax but bearing no Interest. These were received and never depreciated a single farthing In the revolutionary war the old con gross ana the states Issued bills without In terest and without tax. They occupied the channels of circulation very ireely nn til those channels were overflowed by an excess beyond ail the cans or circulation . liut, although we have so lmprovidently suffered the field of circulating medium to be filched from ns by private individuals, yet i tuink we may recover It in part, and even I n the whole if the states will co-operate with us. if treasury bills are emitted, on a tax appropriated for their redemption in fifteen years, and (to In sure preference in the first moments of com petition) bearing an interest of six per cent., there is no one who would, not take them in preference to bank paper now afloat, oa a principle of patriotism, as well as interest, and they would be withdrawn from circulation into private hands to a considerable amount. Their credit once established, others might be emitted, bottomed also on a tax, but not bear ing interest; and if ever their credit faltered, open public loans, on which these bills alone should be received as specie. These, operating as a sinking tuna, wouia reduce the quantity in circulation, so as to maintain them on an equilibrium with specie, it Is not easy to estimate 'he obstacles which. In the begin ning, we should encounter In ousting the banks lrora the poisesslon ot circulation. But it will be asked, are we to have no banks? Are merchants and others to be deprived of the rt source of short accomnoda tlons. found so convenient? 1 answer, Let us have binks; but let them be such as are alone to be found In any country on earth except Great Britain. . . No one has a natural right to the trade of a money- ender, but be who has the money to ICUUi JUCv lUVnCi U1CU swllvll UQ "UU UTQ B moneyed capital, and who prefer employing lanrl I a IViaoa triam a m svn tw ns vavVis kafra aa it in loans rather than otherwise, set np Danas, ana give can, or national Dills, (United Slates treasury notes) for the notes they discount It is from Great Britain we copy the Idea of giving paper in ex change ror discounted bins; and, while we have derived from that country some good principles of government and legislation, we unfortunately run lato the most servile lmlta tlon of all her practices, ruinous as they prove to her, ana wun tne gair yawning be ror e as Into which these practices are precipitating her." In October, 1873, the Westminster heview publ.sbed the following, showing the foresight of Jefferson In bis ailusion to the ruinous British system of bank currency: THE MINT AND THB BANK OF ENGLAND. In breaking the monopoly of the bank we should be taking great strides toward the attainment of tbat ideal system of currency which Sir Robert Peel must have had in his heart when he passed his currency laws; a system under which the state shall be the sole fountain of Issue: ander which no money

shall circulate on credit, or. If It does, shall

circulate on the credit of the state, ail bank notes as well as coins bearing the Image and superscription of the beaaol the state, and under wntcn all profits upon the issue of money shall form part of the Imperial revenue. . . . The power of issue now exercised by the Bank of England and by the English, Irish, and Hootch banks (all private corporations) la a relic of feudalism The manufacture of coin bas been suppressed long ago, but the manufacture of ptper money still remains, and the profits of this manufacture are allowed to remain in private nanus, tne state taking upon ltseutne manu facture of the only part of the currency upon which there is or can be a Ions, it is high time this state of things cease: that all rights of Issue were gathered into the hands of the state; tbat the debt of the Bank of F.ngland was paid fx; that alt notes but those of the state were suppressed ; that the powers of Issue now exercised by the banks were vested in me royal mint. and tbat the profits upon paper currency were claimed bv tne state and appropriated to the reduction of taxation. In England there is now going on an active controversy and darn and for the total abolishment of the British system of bank currency and the substitution of government legal tender paper for such Issues. The following quotations Irom Frank 11 a not only sustain Jeffer son's view In relation to full legal tender treasury notes, convertible Into bonds or cer tificates of indebtedness, but they prove the superiority of the money of the colonies of Virginia ana Pennsylvania previous to the revolution of 177, over a redeemable carr racy. ruu leaai tender money, not redeemable in coin or other money, is always par, known as the American system of money. Franklin. In a letter to famuel Cooper, of April 22, 1779, (the woras oi .Benjamin rranaiia, volume pace 328. b Jared Sparks). savs: Seeonuly, after the first emission of bills or continental money l proposed that we should top, Hirne no more, but borrow on interest tbote we bad Issued. This was not then approved of, and more b'lls were issued. This shown that Franklin as well as Jefferson understood the Importance of allowing United States treasury notes to be bonded at the pleasure of the bolder; and, although the "old congress" could not lay any taxes, either directly or Indirectly, and had no revenue bat what was derived from a requisition on the states, had Franklin e proposition been adopted, the continental money would have remained Sar. Benjauin Franklin, In 1769, before the rltish boHrd of trade, defended the American colonial system of legal tender paper money, in opposition to tne sritisn system or bank currency or '-bills of credit. ' It was said tnat paper money carries the gold and sliver out or the provinces, and so ruins the country, as experience has shown in every colony where It has seen practl ed to any degree. To which Franklin replied as follows: This opinion of its ruining the country se;m to oe merely speculative, cr not otberwise founded than upon misinformation in the matter of fact. The tru'h is that tbe balance of trade with Britain being greatly against them, the gold and sliver are drawn oat to pay tne Daxance ; ana men THE NECESSITY OFSOME MEDIUM OF TRADE has Induced the making of paper money. Thcs.lt carrying oat all the gold and silver reins a country every colony was ruined be fore it made paper money. But, far from being ruined by It, the colonies that have made use of paper money have been, and are, all In a thriving condition. ... Pennsyl vania, before It made any paper money, was totally stripped of its gold and silver, though they bad from time to time, like the neighboring colonies, agreed to take gold and silver cons at higher nominal values, in hopes of drawing money into and retaining It for the internal uses ef the province. During that weak practice silver got np by degress to eight shillings and nlnepence per ounce ... long before paper money was made. But this practice of ' increasing the denomination was fonnd not - to answer tbe people. The balance of tra'e carried out the gold and sliver coins as 'ast as they were brought In, the merchants raising the price ol their goods in proportion to the Increased denomination, of the money. Tbe difficulties for want of cash were accordingly very great, the chief part of tbe trade being carried on by the extremely Inconvenient method of barter, when, in 1723, paper money was first made taere, In Pennsylvania, which gave new ll.'e to business, prompted greatly the settlement of new lands, (by lending small sums to beginners, on easy Interest, to be paid In small installments.) where ay the province has so greatly Increased In Inhabitants that tbe-ex-port Irom thence thither Is now more than tenfold what It was, . . .so that it does not appear to be of the ruinous nature ascribed to it. The British board of trade then said: Tbat every medium of trade should have an Intrinsic value, which paper money has not. . . . lownicn franklin replied as follows: How ever fit a particular thing may be for a partic ular purpose, wnenever inai tning is not to b had, or not to be had In sufficient Quantity. fand mnst be given np to the demands of com merce wnenever madej it becomes necessary to use something else, the fittest that can be got In Ilea of It. ... It reems hard, therefore, to Craw all their real money from them, and then refuse them the poor privilege of using paper Instead of Its bank bills and banker's notes are dally nsed here i in rngiana i as a medium or trade, and in large dealings, perhaps tbe greater part Is transacted by tneir means, and yet they have no lntnasio vaiue, doi rest on the credit of those tbat Issued them, as paper bills in tbe colonies do on the credit of the respective govermenta there. Their bank bills being pay able In cash upon sight by the drawer is. in deed, a circumstance that can not attend the colony bills, for the reason Just above men tioned, their cash bullion being drawn from them by the British trade, bat the legal tender being suostitutea in its piace it rather a greater advantage to the possessor. nines he need not be at the trouble of going to a particular bank or banker to de mand the money. ... At this very time even the silver money In England is obliged to the legal tender for a part of Its value ; that part wmcn is tne difference between its real weight and denomination. Great part of the shillings and sixpences now current are, by wearing, become 6, 10. 30. and some of the six pences even 50 per cent, too light. For this difference between the real and nominal you have no Intrinsic value : yen have not so much as paper; you have nothing. It is the legal tender, with the knowledge that It can easily be repassed for the same value, that makes three pennyworth of sliver pass for sixpence. Gold and silver are not intrinsically of equal value with Iron, a metal In itself capable of many more benefits to mankind. Their value rests chiefly in tbe estimation they happen to be in among the generality of nations, and the.credlt given to the opinion that the estimation will continue. Otherwise a pound of gold would not be a real equivalent for even a bushel of wheat. (See Franklin's Works: Daane's edition. 1809. velame 4.) Gouge, in his HI STOBT OF PAPEB MONEY AND BANKING, In part second, chapter 2, page 8, in support of Franklin's defense of the Pennsylvania sys tern of legai;tender paper money, says: Gov ernor Pownall, in his work on the admlnls tratlon of the colonies, bestows high praise on the paper system of Pennsylvania. "Xwlll venture to say that there never was a wiser or better measure: never one better calculated to serve the Interests of an Increasing country; tnat mere nerer was a measure more steadily pnrsaed, or more faithfully executed, for forty years together, than the loan office in Pennsylvania, founded and administered by the assembly of mat province." vr. rankim aiso es to wed h'gb commendation on the system: And Adam Hmlth, apparently guided by Governor Pownall and Dr. Franklin, says: "Pennsyl vania was always more moderate In Its em Is sion of paper money than any of our other colonies. Its paper currency accordingly Is said never to have sunk below tbe value of gold and silver which was current in the colony before the first emission of its paper money." The par value or the legal tender paper money of Pennsylvania and Virginia was not oecause eitner co.ony was more moderate in its Issues, as Adam Smith assumes, but because it was not redeemable in other money, and therefore it did not depend for Its value in a prompt performance of a promise to redeem It In coin, which the colonies did not have and could not obtain. This is a use. ml lesson which mere theorists or writers on po itical economy are slow to learn. In 1797, when the British government declared war against Krause, the Bank of England sus pended specie payments and remained in a state of suspension until 1821, a period of neariy a quarter oi a century. The suspension was legalised by act of parliament, and the notes of the Bank of England were made a legal tender to tne government, ana individuals were prohibited from collecting debts by legal process unless they would take these bank notes In payment. With these Irredeemable bsnk notes the trade and Industries ot Eng land were maintained in an active and pros perous condition aunng tne wars on the con linen L. England doubled Its wealth, business was carried on more neariy on a casn oasis there being a constant and steadily Increasing volume of money Meo aal to the wants of trade and Industry In that country. Jot having

any contraction, there was no commercial

crash or money panic until 1819, when an act was psssed for a resumption or specie paymenu or a return to a redeemable currency In 13H. in anticipation of which act and to pre pare for a return to the old system the banks began to curtail discounts. In order to contract their currency, producing riots in i8i, ana general ruin to tbe business interests in is, when the great money panio took place in that country, in consequence or a learroi contrac tion or tne circulating meaium. i nomas Doubleday. In A Financial. Monetary and Ufatlst leal History of England, aald that "prices declined one-half in six months" in ism. CONTRACTION CAUSED THIS PANIC, and an expansion of t he circulating medium Instantly relieved it. Thrice since the resumption act of 1819 the Bank of England would have been compelled to suspend specie payments, under a specie basis system, bat for a suspension of the law, which enabted the bank to expand the currency and relieve the demands for more currency, coin being limited In amount, a currency being based on It for redemption must be limited In volume bytliebals,lt being Insufficient In volume, the credit system of doing business is forced on the country. Periodically the credit sys tem becomes blown uo to the bursting point, when a commercial crash and money panio ensue, to the ruin of business men and the advan tage of credit-mongers or note shavers, and uioae wno nave a money capital, in isa there were ltiO.000 property holders In Eng land; to-day there are lees than 30,000. Such are the ruinous effects In England of bank currency based on specie for redemption. from if) J to istiö we had a legal tender circulation not redeemablA In coin, and therefore limited only by the necessities of the lederal government and the wants of trade. During that time tbe country nearly douo ed its wealth, business was carried on with cash payments: business men In 1868 were "out of debt and out of danger." But, as there were but few notes to shave, money-lenders were desirous of again forcing the business of the country to be carried on ander tbe credit system. To accomplish this purpose, an act as passed on April 12, 184U. to fund United taitates treasury notes, which was carried on until over Sl,2UO,oou,ouo of United States treasury notes and certificates of Indebtedness and deposit had been funded up to 1873, whe. the commercial crash and money panic of that year took place in consequence of this stealthy contraction by funding. William Pitt, in reference to Alexander Hamilton's funding system In 1783 to aid as a basis for bis bank currency In 1791, aald: Let the Americans adopt their fundin g system and go into their banking Institutions, and their boasted independence will be a mere phan torn. These facts fully prove the ad van tage of legal tender , money over baak currency requiring redemption in legal tender money. They aHosbow the superiority of the cash system of ousiness over the credit system, which lat ter makes business men the slaves of credltmongeis, note-shavers, and money-leaders generally. Having shown the desperate char acter or the contest now going on between two systems of government, and that the bank currency and credit system of business largely enter into this contesr, ana hence the deeper ate efforts on the part of those aiming to es tablish a moneyed aristocracy in this country to force us to retain banks of issue and the credit system of business to aid them In tbe accomplishment of their purpose, I will now refer to the history of United States treasury notes from isu to this time. THE ISSUE OF UNITED STATES TREASURY NOTES. On July 12, 1813, February 25, 1813, March 4 and December 26, 1814, congress authorised United States treasary notes to be Issued, which were legal tenders to the lederal gov ernment and convertible into the stocks or bonds of the government . This was done nn der the administration of Mr. Madison, and by the advice or Jefferson. The constitutionality of these legal tender convertible notes was tested in the Supreme Court of the United States in tbe ease of 1 horn dike vs. The United States. The following opinion of the court was delivered by Judge ritery: By the statutes of the United states, under which the treasury notes have been issued. It Is enacted that such note shall be re celvabie In payment to the United States for duties, taxes and sales of public lands to the full amount of the principal and Interest accruing due on such notes. It follows of course tbat they are a legal tender In payment of debts of this nature dne the United States, and bv tbe very terms or the acts publlo officers are bound to receive them, ft Mason. 1-18.) In the case of McCulloch vs. Maryland, Chief Justice Marshall said: When the law Is not pronioited, and is reaiiy caicuiatea toenectaay ot tbe objects Intrusted to the government, to undertake here to mquire into the degree or its necessity would be to pass tne line which circumscribes the Judicial department. and to tread on legislative ground. In 1815 congress again authorized an issue of 120.000,000 of legal tender convertible treasury notes, uenersi jacason, in nis nrst message to congress, in December, 1829, In reference to the "national" bank, said: Under these cir cumstances. If soch an Institution is deemed essential to the fiscal operations of the govern ment, l submit to the wisdom or the legisia tore whether a national one, rounded upon the credit or the government and Its reve nues, might not be devised, whlc a would avoid all constitutional difficulties, and at the same time secure all advantages to the government and country tnat were expected to result from the present bank, in i&st uenerai Jackson vetoed a recharter of the national bank, and was triumphantly sustained by the anti-bank currency democrats and whlgs. Then, as now. many persons who assumed to be leaders in the democratic ranks supported Dank currency and denounced Jackson and tbe veto. Jack son and bis supporters repudiated and drove them into the ranks or tne bank currency party. Gen. Jackson, In his farewell address, said: But experience has now proved the mischiefs and dangers of a paper currency, (bank currency,) and It rests with you to de termine whether tne proper remedy ssau oe applied. . . . The corporations which create tne paper money can not oe reuea upon to keep the circulating medium uniform In amount. . . . Recent events have proved that the money system (banks of issue) of this country may be used as an engine to under mine your iree institutions : ana tnat tnose who desire to engross all power In the hands of the few, and to govern by fraud or force, are aware of lis power, and prepared to employ It. Your banks now rurnisn your eniy circulating medium, and money is plenty or scarce ac cording to the quantity of notes Issued by them. . . . When the charter for tbe Bank of the United States was obtained from con gress It perfected tbe scheme of the paper sys tem, ana gave to lta aavocaies tne position they have struggled to obtain from tbe com mencement of the federal government down to the present nour. . . . xne distress ana SUFFEKINQS INFLICTED ON THE PEOPLE BT THE BANK are some of the fruits of that system of policy which is continually striving to enlarge the authority of the federal government beyond the limits fixed for II by the constitution. The powers enumerated in that Instrument do not confer on congress the right to establish such a corporation as the bank of the United states, it benooves you. tnererore, to oe watcn ful in your states as weil as in tbe federal gov ernment. The power which the moneyed In terest can exercise when concentrated ander a single head, and with our present system of currency, was sufficiently demonstrated In tbe struggle made by the bank of the United States. . . . The paoer money system (of banks of issue) and lis natural associates, monoply and exclusive privileges, have already struek their roots deep In the soil, and It will require ail your efforts to cneck its runner growtn ana to eradicate the evil. . . . But it will require steady and perserving exertions on your part to rid yourself of the iniquities and mischiefs of the paper system and to checK the spirit of monopoly and other abuses which have sprang np with it, and or wnicn it is the main support So many interests are united to resist ail re form on this subject, that you most not hope the conflict win he a snort one nor success easy. In 1837 cndlt the system be came extended to the bursting point; bank currency was contracted as usual at such times, producing a commercial crash and money panic; specie payments were suspended by the banks, they locked their doors. and bade defiance to the people. Mr. Van Baren called a special session of congress, to meet In September. 1817. In his message he advised a separation between tbe United States treasury and the banks. Tbe adoption of the Independent treasury system composed of gold, sliver and treasary notes was recommended. John S. Calhoun, in speaklLg ot this system and in favor of an issue of treasury notes on the 19th of Septem ber, said : "It Is, then, my impression that in tbe present condition of the world a paper currency, in some form ... Is almost Indispensable in financial and commercial opera tions of civilized and extensive communities, lu many respects It has vast superiority over a metallic currency, especially In great and extended transactions. by its greater sneapness, lightness, and the facility of determining the ameant. ... It I may throw some light on this subject to state

Issued a large amount of paper, which was

made receivable In dues to her; It was also made a legal tender, but which, of course, was not obligatory after the adoption of the federal constitution. A large amount, say between four and five hundrel thousand dollars, iemalned In circulation after that period, and continued to circulate for more than twenty years at par with gold and silver during tbe whole time, with no other advantage man being received lathe revenue ot the state, which was much less than IUO.0U) per annum. No one can doubt but that the government credit Is netter than that of any bank: more reliable, more safe. Why, then, should it mix it up with tbe less perfect credit or those institutions? Wny not use its own crealt to tbe amoun t of i is own transactions ? Why should li not be safe in its own hands, while It should be considered safe in the hands of eight hundred private institutions scattered ail over the country, and which bave no other object but their owu private Erofit; to increase which they extend their ualness to the most dangerous extremes. And why should the community be compelled to give tt per cent discount for the government credit blended with tbat of the bank, when tbe superior credit of the government could be lurnlshe-1 separately without discount, to the mutual advantage of the government and the community. . . . Believing there might be a sound and safe paper currency founded on the credit or tbe government ex clusively, I was desirous that those who are responsible and have the power should have avild themselves of the opportunity," . . . On October 3 Mr. Calhoun said: We are told the form I suggested Is but a repetition of the oia continental moaey;" a ghost that is even conjured up by all who wish to give the Danas an exclusive monopoly or government credit. The assertion is not true ; there is not the least analogy between them. The one was a promise to pay, when there was no revenue; and the other a promise to receive In the dues of the government when there is abundant revenue. We are told that there is no Instance of a government paper that did not depreciate. In reply, 1 affirm that there Is none, assuming the form 1 propose, that ever did depreciate. Whenever a paper, receivable in dues of government, had anything like a fair tilal, it has succeeded. Instance the case of North Carolina, referred to In my opening remarks. Tbe drafts of the treasury at this moment, with all their incumbrance, ARB N E ABLY AT PAR WITH GOLD AND SILVER. . . The case of Russia might also be mentioned. In 1827 she had a fixed paper cir culation In the form of bank notes, but which were inconvertible, of upward or $120,000,000 estimated In tbe metallic rouble, and which had for years remained without fluctuation. having nothing to sustain It, bat that it was received In the dues of tbe government, and that, too, with a revenue or only an out sw,ouu,OuO annually. I speak on the authority of a re spectable traveler. Other Instances no doubt. might De added, but it needs no such support. It baa another and striking advantage over bank circulation, In Its superior cheapness, as weu as greater stability Zand safety. Bank paper Is cheap to those wno maae it ; out dear, very dear, to tnose wno use it, fully as much as gold and sliver. It Is the little cost of its manufacture, and the dear rates at which it is furnished to the com munity, which gives the great profit to those who have a monopoly of the article. Some Idea may be formed of tbe extent of tne profit by tbe spendid palaces which we see under the name or banking houses, and the vast fortunes which have been accumulated In this branch of business; all of which mustul timately be derived from the productive powers of the community, and of course adds so much to the cost of production. On tbe other hand, the credit of government, while it would greatly facilitate lis nnanciai opera' tlons, would cost nothing, or next to nothing, both to it and to the people, and of course nrAtiM a si rv v. st Vi I n rr tn t Vto. rajtct. tf nwufnAtlAn nuuivt auu uuiuiu vua vvos va ivuuvutvui which would give to every branch of industry, agriculture, commerce and manufactures, as far as circulation might extend, great advantages both at home and abroad. Mr. Calhoun, In bis speech on tbe Independent treas ury bill. March 22, 1838, said: I now under take to affirm positively, and without the least fear that I can be answered what here tofore L have but suggested that a paper is sued by government, with the simple promise to receive in an dues, leaving its creditors to taae it, or gold ana suver, at tneir option, would, to the extent to wmcn it would circu late, form a perfect paper circulation, which could not be abused by the government: that would be as steady and unllorm in value as the metals themselves. 1 shall not go Into tbe discussion now. but on a suitable occasion i shall be able to make good every word I have uttered. 1 will be able to do more to prove that it Is within the constitutional power of congress to ose such a paper, in the management of Its finances, according to the most rigid ruie oi construing tne constitution: and that those at least who think that con gress can authorize tbe notes of private cor porations to be received in the public dues are estopped from denying its right to receive its own paper. On J uly 4, 1840, the Independent treasury act was signed by the president and became a law, establishing such a system as General Jackson recommended to congress In 181. The crash and panic of 1837 were of long continuance, the business of the country was stagnated, ana so continuea until lsiu The people, not knowing that It was caused by bank currency expansion and contraction, held the democratic administration reeponsi ble for the prostrate condition of the Indus, tries of the country, and defeated Mr. van Buren, and brought into power the very party of men who had produced the distress of the people. Among the mst acts or those men was to repeal tne independent treasury sys tern, with the view or again incorporating national bank, which purpose they failed to accomplish by President Tyler's veto. In 1845 the democratic party was restored to power, and in l84o congress re-enacted the lnueaena ent treasary system, of which the legal tender convertible treasury note rormed a part, in 1841, 1847, 18i7 and I860 congress authorized the issues of treasury notes, legal tenders and con vertiDie. And here the record or tne demo cratic party on this important sub Ject closes, December, 18U0. We find mat tne democratic party nas unuormiy opposed banks of issue; that from 1812tol80 It Issued United States treasury notes; that it never Issued a redeemable treasary note, but uniformly made them converti ble into the stocks or bonds oi the lede'ai gov ernment: that In 1833 Gen. Jackson denied that any man was or could be a democrat who was in lavor ot the national Dank, ana arove the advocates of bank currency into the ranks of the national bank party, tanks of lesue being created by a special law. granting special privileges to a special class, are, theiefore, based on aristocratic or anti-democratic and ant 1-repubiican principles, and as no man can be both a democrat and a republican and an aristocrat at one and the same time, and as men are known by their practices rather than by their professions, no genuine demc erat or republican can desire to avoid meet lpg an issue on this momentous question. FACTS IS RELATION TO THB CREATION OF "GREENBACKS" AND THB NATIONAL BANK ACT. Secretary Chase, tn December, 1S61, advised congress to pass a national bank act. Mr. Spaoldlng, in his "history" of the "green back," informs as that bankers were the ad visers of Mr. Chase. Mr. Spauldinz was on the sub-committee of ways and means, and knowing that national banks could not be or ganlzed until a bonded Indebtedness could be created, and tbat tbe speediest means of cre ating such a debt and of obtaining the means or carrying on the war. he lniorms ns mat on his own responsibility on December 30, 1861, he introduced mi dui to sutnonze an issue oi iau legal tender United States notes, '-payable generally without specifying any place or lime of payment." and convertible into a bond at the pleasure of the holder Mr. Spauldlng informs us that the bankers of the various Eastern eitles, when his bill was reported, appeared In Washington In opposi tion to 1U Having oomroi ot eoreiary jnase thty appointed a meeting at the treasury, and sent for the committees of the Senate ana House to meet them there on Sa'urday. Jana arv 11.1862: which they did. Tbe bankers proposed tbat United States notes should not oe r ceived for custom house duties, and also required a suspension of the Independent treasury act, which prevented the public moneys irom Deing deposited in Danas : tney further insisted on tbe secretary of the treasary being allowed to sell bonds without limit as to price, and finally proposed that the secretary of the treasury should be permitted to pawn bonds for loans, which, If not paid at maturity, were to be sold at any price, tbat could be obtained for them. We are Informed that tbe House committee rejected the proposl tlons of bankers and lelt them and the secre tary in conference, which resulted in an agreement between tbe bukers andthesecre tary that congress should not Issue treasury notes, bat should Immediately pass a national bank act. The committee on ways and means also rejected this proposition, and amended Mr. Spauldlng's bill of December 30tb, 1861, authorizing an issue of full legal tender con verüble United States notes and bonds, redeemable In twenty years, which was reported to tbe House on January 22d, 1862; the bill passed the House on February 6th, 1CÖ2. it authorized an Issue of tl00,0o0,u00 )t full legal tender United States notes, not "bills or credit," but convertible into bonds

at the pleasure or the holder : it aiso authorized an Issue ot SjuO,100,000 of

bonds, bearing per cent, interest, prin cipal and Interest payable In full legal tender Cni tea states notes. iu sc iumviucu iu such note should be "received the same as coin In payment for any loans that should hereafter be sold or negotiated by the secretary of the treasury." The finance committee of the Senate amended the House out pronioiung United States notes from being received for custom house duties as the eastern bankers had so cunningly ana design ecu y aictatea. The Interest on the bonds was also made payable In gold coin. No coin was to be paid out for any purpose but Interest on bonds and notes Deaxing mveiesu ur. rwwuueu, wuru he reported the House bill to the Senate on Feb. 16. 1862. as amended oy tne committee. In his remarks very clearly Insinuated that the main purpose was to perpetuate tne oonaea Indebtedness and pay the interest In coin. The bill was opposed In the Senate because the treasury notes were made convertible and not redeemable in coin on demand. In reply to this oblectlon Senator Howe aald : Ail pa per currencies have been and ever will be Irredeemable. It Is a pleasant fiction to call them redeemable ; It is an agreeable fancy to think them so. I would not dispel tbat fancy I would not oppose that fiction only that tbe great emergency that is upon ns seems to me to render it more than usually prone'- that the nation ahonld begin to speak truth to it self, to have done with shams and deal with realities. On February 19, the House pro ceeded to a consideration of the bill as amended bv the Hen ate. By a reference to the Globe of that date It will be seen that Mr. Stevens, of Pennsylvania, and Mr. Spaoldlng, de nounced the enate amendments as DICTATED BY THB EASTERN BANKERS and money-lenders in severe terms. Mr. Stevens said: I have a melancholy foreboding that we are about to consummate a cunningly devised scheme which will eirry great inJury and great loss to all classes of the people throughout this Union except one. No one knew better than the author of the act to place, a premium on gold coin, that it was a gross act of injustice to the people and that what Mr. Htevens learea tney aesignea to accompiisn oy their "cunningly devised scheme." IbellooM bill, as amended by the Senate, was relerred to a committee or conference, ana, as it came from their hands and was adopted by congress. It authorized an issue of one hundred and fifty millions of United States notes payable at the treasury. wlthoat saying how or when, ana coveruoie Into a 6J2U bona at the pleasure of the holder, and the act of February 25, 1862, required tbat this note should have printed on it tne following: This note is a legal tender in payment of all debts, public and private, except dut.es on imports and interest en the public debt, and Is exchangeable for United States 6 percent, bonds redeemable, at the pleasure ef the United States, after five years. I have care fully examined the acts of congress which au thorized issues oi c nitea estates notes, commonly known aa "greenbacks," and assert, without the fear of successful contradiction, that no such not by any of those acts was maae payable in coin or otner legai tenner money, but were made convertible into bonds at the pleasure of the holder, until the passage of tbe national bank act In March, 186Ü, when that prevision of the legai tender act was repudiated by depriving tbe holder or those notes of the right to bond them at his pleasure after July 1, 1863. Perhaps the following re marks or Mr. spauldlng on mat subject may throw some light on It. The bond had to be created before the national banks could go into operation. On Monday, January 12, ltoi, Mr. Spauldlng said: The secretary has paid out nearly !i0,OCO,U00 of legal tender notes, being ail that he was authorized to issue : ana, notwithstanding he has had authority for the last ten months to sell loOO.OUU.OU) of &2u per cent, bonds at the market price, he has only disposed of about t5.0UU,000, and he has still authority to sell $47j,000,J at the market price, and take his pay for them in legal tender notes. One of the reasons why more of these bonds have not been disposed of is that there nas been no redundancy (no surplus) of the currency, and It has been difficult for the secretary te get legal tender notes on a sale of the bonds and 7.30 notea that he has already negotiated. Gold coin, being tbe only full legal tender, makes a greater demand for It, causing it to commas a prem ium. The moment greenbacks and silver coin are made equal legal tenders with gold coin, they will be equal to each other aa money or par. This would close the gold gambling rooms and give the people par money, it would also give to real estate and all productions of labor and industry real values, which would decrease the cost ot living and of doing business equal to the premium on coin or the comparative depreciation on silver coin and "greenbacks," thus increasing the net profits of labor and of the business or wealth-pro ducing capitalists without doing any injustice to the speculative capitalists ana Donanoiasrs, as their par money would have a greater purchasing power. This "cunningly-aevised' scheme of making the Interest on bonds paya ble in gold coin at six per cent, interest per annum, with exemption from state and local taxation, eaual to from two to eight perceaL more, and by making gold coin the only full legal tender or the only legal tender for custom house duties, has designedly and unjustly cost the peoDla Incalculable millions of dollars. If there are representatives in this House who are disposed to doubt or deny this fact or doubt that greenbacks and gold coin can be par, we propose tnai goiu ana silver coins and greenbacks be made equal legal tenders; and, If they do not circulate side by side or ar or equal value, as money, readily exchangeable with-each other, obviating any ana au neces sity for ''bills of credit, or mere currency requiring redemption In money, and consequently obviating the necessity of locking up coin or greenbacks as a basis or credit ior a redeemable currency, we will cheerfully aba c don our propositions and aubmlt to the present evils without a murmur, and absolve those who made a premium on coin of any and all design to plunder the laborer, the wealth producing capitalists, and general business men, to advance tbe interest or speculative or non-wealth producing capital ists, we as ir. a fair tnai ior our propoaiuoas, and are not afraid of the result. Dare those who oppose and denounce ns risk the test proposed? If so, let It be done promptly,' that the industrial Interests of our country may be - BELIEVED AND RESCUED FROM TOTAL RUIN, Early In the session of 1863 congress Incor porated the useless, costly and dangerous national bank system of currency. Mr. Spauldlng, then In congress and now president of a national bank at Buffalo, N. Yn on page 167 of his History of the Legal Tender, In speaking of the nlne-hundredmillion-loan act considered in committee of the whole House on Monday, January 12, 1863, says: "The bill as reported did not contain some provisions which Secretary Chase was very anxious to have passed; one was to repeal the provision restricting him In the sale of bonds to the market value, another was to abrogate repudiate that most equitable and just provision contained in the original legal tender act of February 25,lo2, allowing the holders of legal tender notes to convert them at any time Into 5.20 6 per cent, bonds, Interest payable semiannually in coin. The committee did not deem It Just to abrogate this provision, while Secretary Chase believed Its repeal would enable him to make better terms lc selling bonds. Wa are told that the secretary of the treasury desired to obtain better terms for bonds: but we have never been informed tbat be did obtain better terms for them; while we do know that by this cunningly devised legislation they were obtained at less than forty cents on the dollar. On page 169 of Mr. Spaulding's history, containing his speech on thefcJO,ouO.O0O loan act, he said: "That as there was then (January, 18oü) no excess of money or circulating medium the secretary of the treasury had not been able to dispose of more than twenty-five millions of the five hundred millions of bonds which the legal tender act of February 2d, 1862, authorized him to dispose of.' This is a very important fact In the consideration or this remakable subject of creating a bonded indebtedness to enable bankers to get national bank currency to pat In operation those institutions which congress, at the repeated urgent request of Secretary Chase, Incorporated in March, 1863: at this same session of congress which "repudiated" that "most equitable and Just" contract with the people allowing them to bond United Htates treasury notes at their pleasure: and the gentleman from Maine Mr. Blaine who participated In this lnlquitlous legislation "affects to" shed "crocodile tears" on tbe floor of this House and to be ashamed of such legislation as increased the premium on coin and comparatively lowered the value of the legal tender greenback, repudiated by its maker for cut torn house duties and interest on bonds. Mr. Chairman, if the gentleman from Maine can lmposeon the representatives of the people on this floor. It would be too absurd to suppose that he can delude our constituents or make them believe tbat he now desires to make legal tender treasury notes or greenbacks of equal or par value with gold coin, while he opposes the passage of an act of congress to honor the notes of the government by making them recaivable for all debts due to tbe maker of it, as well as receivable by the citizms of the country for private debts. Those of us who make our living by bard work and diligent attention to business, and are extensively engaged In trade, know that, when we put out our.