Indiana State Sentinel, Volume 26, Number 38, Indianapolis, Marion County, 9 May 1877 — Page 6

TIIE INDIANA STATE SENTINEL, WEDNESDAY MOKNING, !MAY 9. 1877.

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Of INDIANA. In the House of Kepreseutatires, tlAKCII 1,177, On the Texai ami Farifir liaUnxii Hill. Mr. Landern, of Indiana. Mr. Speaker, the amendment In the nature of a substitute to house bill No. 472, commonly known as the Texas and Pacific railroad bill, which I have submitted for the consideration of the house, has been ottered In no spirit of hostility to the project of constructing another railroad along a southern route from the Mississippi river to the Pacific ocean. On the contrary, It embodies, as I bei ievo. principles and rueastiies far leas open to objection, and consequently far better calculated to attain the end desired, than the original bill or any or Its amendmentü presented to this house. I am not, Mr Speaker, la favor of the federal government entering upon a general system of internal improvements: but there are. certain Improvements of a national character which are manifestly of vast importance to the federal government and the people at lanje, a:sd which are far bevono the reach of private capital, that can not possibly be undertaken and curried through successfully without the all of the federal government being extended in some form. This distinction, and the policy which It implies, has been recognized and acted upon by the leadlag s'atesmen of all parties almost since the foundation of the governn ent, and with the most beneficial result. As early a 11 Mr. Jefferson approved a bill passed by congress to aid in the construction of a road from Cumberland to Wheeling. In 1817 Mr. Calhoun advocated inthis body Unconstitutional power of congress to appropriate the dividends anl interest on the bon;isof the United Stats bank to the construction of roads and canals: again in lStö he advocated the granting of aid to a road fronr Cincinnati to Chattanooga : and again in 1st!) be advocated the principle of governmental aid to a Pacific road on the southern route. In 1827 an act of congress donated lflO,000 of acres of laud in aid of the Wabash and Krie canal. The measure was supported by Benton, R. M. Johnson, Huf us Kin?, llorat'o Seymour, and other of like distinction. In ISV) congress granted 2,500,000 acres of land to aid the construction of the II linois Central railroad. The bill was introduced by Stephen A. Douglas, and recti vd the support of Benton, Cass, Houston, Shields, King, and many others, distinguished Hi ike for their great ability and strict construction of the powers conferred by the constitution upon the federal government. The policy and results of these grants' by congress in new suites and territories are thus reierred to by Hobert McClelland, secretary of the interior, in his annual rport of Iecember b. KÜS: "There can be as little doubt of the constitutionality of such grants -s of their propriety. The right to donate a part for the enhancement of the value of the residue can no longer bo questioned. The principle has been adopted and acted upon for nearly ;io years. It has been of Incalculable Importance to the great west, and either directly or Indirectly to all the states." In)K.j6both of the great political rarticsof the day Incorporated in tuelr platforms a plank in favor of extending governmental aid To a railroad to the Pacinc ocean. Indeed, in February. 1855, a bill passed the senate for the construction of three railroads to the Pacific a Northern, a Somborn and a Central Pacific railroad. 1 may addthitup to the breaging out of the rebellion the construction of no less than three railroads,-in order to do Justice to all sections of the countrv alike, was almost universally advocated by those who sought to develo the immense resources of the inteiior of the continent and to bind togetner more firmly the various sections of our widely extended country. But the breaking out of the rebellion In lstil put in end for a time to all hope of carrying out the original plan. The Union Pacific and the Central Pacific were, however, completed, and, notwithstanding the fact that their construction was attended with great speculation and fraud, they have frovtl of incalculable benefit to the nation at arge. It Is true, to refer briefly to what followed, that the subsidizing of these roads by the government led to a mania for building land grant roads, which was encouraged by congress in the most reckless and dfsgtaceful manner. Railroad projects, lioth good and bad, were indiscriminately aided by congress without the slightest regard to the character of the enterprises, and the wants of I he region which they proposed to traverse, or the Interests of the nation at large; and dishonest men were enabled to swindle not only the government but the people of this as well as foreign countries In the most shameful manner. It is not surprising, in view of these facts, that a strong prejudice exists in the minds af the people ana of members of this house aeu'nst the policy of the government extending further aid to project of a similar character. Bnt no such considerations should be permitted to control our actions at the present time. The question Is one oi too much Importance and too farreaching in its consequences tobe considered and disposed, of lightly or with a prejudiced mind. It is within our power to ojmi up to civilization a vast regiojj, rich beyond calculation in natural resources, now oecurlf'd by the savage alone, and to add immensely to the wealth and prosperity of our people without adding one ioU to the burdens of government, if a wi.se policy is pursued in the determination of this question. I have no doubt whatever, Mr. Speaker, as to our constitutional right to aid a work of national lmrortance, though I shall not go Info any elaborate discussion of the quesliou, but rely simply upon the fact to which I have already adverted, that the right has been recognized and acted upon since an early period in the history of the government. It will be observed that the statesmen whom I have cited at favoring governmental ai to national projects all oolong to the school known as strict constructionists. Mr. Calhoun, who was noted in this respect as chairman of a select committee of tle senate in 1H1V, to whom was referred a memorial from the Memphis convention, made an elaborate report, from which I take the lollowlng extract: Your commltte wllnext proceed to consider inat portion of the memorial which relates to the communication by railroad Instwee n the valley of the Mississippi and the southern Allan. Ic states. They regard works of the kind as belonging to internal improvements, (that is, improvements within the body of the states), and as such are, in their opinion, not embraced in the power to regulato commerce. But they are, nevertheless, of opinion that where such roads or other works of internal improvement may pass through public lands, the United Htates may contribute to their construction in their character of proprietors, to the extent that they may be enhanced in price thereby. That congress has a right to maka such contributions where there is reasonable ground to believe that the public lands will be enhanced in proportion, under its right to dispose of the territory and other public property of the United States,' your committee can not doubt. In making this assertion, ti-ey jold to the rule of trlct construction, and that this power, like all the other powers of the government, is a trust power, and as such is strictly limited by the nature and object of the trust. In this case the rule requires that the lands and other public property of the United States should be disponed of to the best advantage; and where that can be done by contributing a portion to works which would make the residue equally or mora valuable than the whole would be without it, as is supposed, they hold It would be strictly within the rule. Your committee go further. They are of the opinion not only that congress baa the right to contribute to the extent stated In auch cases, but that It lain duty bound to do so, a the representative of part of the proprietors of the land to be benefited. It would be neither Just nor fair for it to stand by and realise the advantage they would derive from this work without eoutrlbutlng a due proportion toward its construction. It would be still less JufltiflaOle to refuse to contribute if it effect would be to defeat a work the construction of which, while It would enhance the value of the land belonging to the public and that of Individ nsi proprietor, would promote the prosperity of the country generally." Assuming, therefore, that we not only have the right to aid works ot national importance. but mat, in oaaea where the government is a part proprietor and the effect of the work is to , promote me prosperity or tne country gencr ÄUly, it is our duty to doso.it remains to be riwnsiaerea whetwer the construction oi a ran road from the present tcminui of the Texas

and Paciflo railroad at Fort Worth to the Pacinc-ocean is a work of national Importance of the character described. When it Is considered that the entire line yet tobe constructedextends through an unsettled region, much

J f'-deral government, I think there can "be no t i i . . . r. A tn r' t vakf rcrlon UOIHH UUOIl Hit nuojiit. aiiw Uaversed bv the projected roul, now given ver to solitude, would be splily settled and the wealth of the nation oe enormously Increased bv its construction. It would also open another great highway to the Pacific ocean end increase the facilities of the nation for trading with the nations of the east, thus Mini f.irther "nrnmotlng the prosperity of the country generally." To refer briefly to details, that portion of the road extending through the great and as yet but partially developed state of Texas will open up to the husbands an one of the richest and most Inviting agricultural regions ou the continent. Grains of all kinds can there be produced In larger quantities to the acre than In almost any other section of the country, while as a grazing region it is uusur passed. Cotton, one of our leading exports. Is also eopable of being produced to an unlimited extent. Build this road and It will be but a short time until our annual crop of cotton will be doubled and contribute materially toward turning the balance of trade In our favor. This is a matter of no little Importance In the present condition of the country. After leaviiu the state of Texas the road travers s"from eat to west the extensive territories of New Mexico and Arizona, whose mineral reources are believed, upon undoubted information, to surpass those of any other ngion known to civilization. Let this region once be thrown open to immigration and rich and prosperous states, contributing untold millions to the national wealth. will soon be added to our great confederacy. Surely this will be "promoting the prosperity of the country generally." The trade of a larpe portion of old Mexico would also be secured by the constnctlon of this road, which, although at our very doors, now tends to enrich, foreign aud distant nations. As already suggested, it would lurnish the nation with another aud more direct highway to the Pacinc ocean, and build upon its shores another great city to handle and distribute the increased products of our own and other uations. There is still another consideration of great impor'ancn which should be mentioned in this connection. It ts well known that in the regions to be traversed by this road the government Is unable to afford that protection to life and property which is the right of every citizen. Millions of dollars are spent annually in maintaining distant and Isolated military posts without accomplishing the ends desired. There is no civllizer equal to the railroad. Let this road be built, aud industrious farmers, mechanics and miners will be found making their bonus a?ong its line In sufficient numbers to protect themselves until civilization spreads over the entire region now occupied by the savage alone. Indeed, were the statistics at hand, I have no doubt they would show that In the territories of New Mexico and Arizona alone the government has expended more money in a fruitless effort to protect their inhabitants than would construct and equip a railroad from the Mississippi to the Pacific, to say nothing alaiut the lossot millioiisof dollars of private property, and of the lives of hundreds, perhaps thousands, of nur hardr pioneers. Itlsthedntv of the government to afford protection to all of Its citizens, and the means best calculated to secure that end ought unquestionably to hj adopted. If protection Is thus extended ai.d the region referred to Is settled by means of the completion of the Texas and pacific, the lands of ihe government would lind ready purchasers and the revenues of the government be correspond ingly increased, not only by the proc"eds of the sales of its lands, but by the Increased production of wealth, both mineral and agr. cultural, m hleh would follow. Ina large jMtrtlon ot the country traversed by the Texas and Pacific the government Is the sole proprietor, aud Its interests alone are promoted. If that be true, according to the rule laid down by Mr. Calhoun in the report from which I have quoted, "it would be neither. Just nor fair for the government to stand by and realize the advantage it would derive from this work without contributing a due proportion toward Its construction." There can not, I think, be any doubt in the minds of the members of this body in regard to the character of this project, but that all will, upon due reflection, agree with me that it is a work of national importance, and falls under that class of public improvements which for nearly half a century have been recognized by leading statesmen of all parties as being within the scope of the powers con ferred upon congress by the constitution. That point settled, it only remains now to consldt r the several plans submitted to this house for extending governmental aid to this road, and for this purpose it is only necessary to examine the provisions of the original bill offered by the committee and the substitute which I have had the honor to submit for the consideration of the house. And I may re-n-ark at the outset that I have been obliged to otter a substitute instead ef attempting sim ply to amend the original bil', because, as will be. s?eti by an examination of the original bill and the substitute, they differ not only as to details, but as to the manner In which gov ernmental aid should b-extended to the pro ject In the most radical manner. The original bin seems to nave been pre pared with great care, wltn a view to protecting the government and tho people, solar as it is possible to protect them, under the plan of aiding the road as proposed in the bill. My objection go directly to the plan proposed. But before proceeding to discuss the merits and demerits of the plan I desire to call atten tion to two or three important objections to the original bill which have been avoided in the substitute. I allude, first, to the provision nnthorlzirg the construction of several branches, uamely, one to New Orleans, one to Vlcksburgh, and another to Memphis, ana also one from Vlnita, the present terminus of the Atlantic and Pacific railroad, to a connec-, tion with the Texas and Pacific at the one hundredth degree of longitude. The three branches first named are all within the states, and in reality form no part whatever of a direct trunk line to the Pacific ocean. They have all, I believe, been organized under state charters. How ever that may be, they all extend through old states, in which the government has long since ceased to be part proprietor of land, and are clearly not entitled to government aid under the principles which I have laid down as gov erning the action or congress in cases or Internal improvement of this character. With the same propriety congress might be called upon to aid branches from Louisville. Cincinnati or Charleston, thus committing tne federal government to a system of general internal imrrovements in tne construction of railroads not contemplated by the constitution and manifestly in direct violation of public policy. Tne Atlantic and Pacific branch differs from the other branches in this, that it is not projected through any of the old states. It is proposed to extend it through the Indian territory, which would render it necessary for the government to extinguish the Indian title by purchase, thusaddingto the liabilities to be assumed by the federal government. The Atlantic and Pacific does not necessarily ionn any partoi atnrougn trunk line to the Paciflo ocean, and as part of a branch to St. Louis ifs construction is entirely unnecessary, for tho reason that the extensive region of which that city Is the commercial center tire ad y enjoys the advantage of two road extending from St. Iouls to a con nection with the lexas at a racino west or the Mississippi river, namely, the Iron Mountain and St. Iiouls railroad, and the Missouri, Kansas and Texas railroad. The estimated length of the several branches Cro posed is as follows: The New Orleans ranch, 337 miles; the Vicksbnrg branch, 100 miles; the Memphis branch, 25 miles, and the Atlantic and Pacific branch, 325 miles, or in the aggregate over 1,000 miles but little less than tue whole number of miles of the main trunk line yet remain to be constructed. To guarantee the interest on bonds ayable 60 years after date, at the rate of t25,WX a mile, as is proposed, would require the government to become responsible for the Interest on 5,000,OUO of bonds, which, at S per cent, per annum, would amount in 60 years to the large sum of WiluKX), reckoned at simple interest, or if reckoned at compund interest, which would represent the actual loss to the government if obliged to pay this interest, to tne still larger sum of about t.TÖ.OUO,UuO. A part from the constitutional objections and the objections on the gronnds public tiollcy to which I have adverted the proposllon that the federal government shall become responsible for the payment of this large sum in aid of branches that are in no sense works of national Importance, and form no part of the main project, which is a work of national Importance, should not be entertained by this house for one moment. There is also another feature of the original bill open to serious obJectlona which has been remedied by the substitute. I refer to the authority granted to the Southern Pacific (of California) to build that

portion of the rood which, extends from a point 100 la lies west of El Paso to the Pacific coast, by wuy of Gorgonia pass. At Fort Yuma, a point about 'Mi miles east ot Han Direo, the Southern Pacific of California Is authorised to divert the road Irom a direct course aid build In a northwesterly direction to (iorgonla pass, on the line of the .Southern Pacific of Calitornl t, to San Francisco. This is manifestly for the purpose of rendering the entire road tributary to the Southern Pacific of California and the city of San Francisco. It is true that the original bill provides for a branch from Gorgonia pass to San Diego, but It is clearly a departure from the Idea of a short and direct route to the Pacific ocean, and militates against the theory of building up on the shores of the Pacific another great commercial city to handle and distribute the. wealth which will seek this channel of trade. The projHsed deflection in the lin of rond, by way of Gorgonia pass, will add about 100 miles to its length, which is, so far as I can learn. altogether unnecessary when the main object of constructing this road is considered. Besides this, it is well known that the Southern Pacific of California and the Central Pacific, which forms the western division of the Union Pacific -railroad to San Francisco, are Identical in Interest. The iebple of California aud San Francisco, as well as the states and territories along the fortieth- and forty-first parallels of latitude, have had a transcontinental railroad const ructed at the expense of the federal government; and the chief claims of the Texas and Pacific to government aid are lounded upon the theory that it will open up and develop an entirely new region of country, and when completed will constitute a rival and competing route to the Pacific ocean. To place the western division of the Texas and Pacific under the control of the same parties thnt own and control the western division of the Union Pacific wou d hardly accord with the theory of establishing a competing line t' the I aclllc; it would be too much like turning over the lambs to the care of the wolves, and should be deemed by this house a fatal objection to the bill of the committee. I submit, Mr. Speaker, that to place this project upon a square, honest footing to entitle it to the consideration ot this house ts a work of national importance it must be divested of all entangling alliances, which are only calculated to surround It with suspicion and detract from its real merit. Such I have regarded the branches to Memphis, Vlcksburg, New Orleans, and Vlnita, and the alliance with the southern Factflcof California, which undoubtedly deprives the project of one of its most important features, namely, that of a competing road to the Pacific. For these and oilier reaaoti8 of a like nature I have provided In the substitute for the bill of the committee only for the construction of the main trunk line from Fort Worth to Han Diego by what Is known as the niost direct route, a distance of less than l,4(i0 miles, and have lett out the branches entirely, which diminishes the length of the road to be subsidized over 1,000 miles. I now come to discuss the two plans of extending governmental aid to this project, and with all due deference to the opinions of others, I Insist that the plan embodied in the substitute will be found to he so Infinitely superior to that proposed by the committee that It can not fail to commend itself to this house and to the couutry. Heretofore two methods of granting aid to works of internal Improvement have invariably been adopted ; one by donating public lands, the tlier by lending

the credit of the government in the form of Interest bearing bonds. Both of these methods have resulted in great abuses. When lands have been donated It has been found that, sooner or later, they were monopolized by tho few and held for private speculation, thus preventing their occupancy by actual settlers and retarding the growth aud development of the country. Fut there is another and a still stronger objection to this method, which also anulies to the method of guaranteeing bonds. Tue corporation to whom lands have been donated have been enabled by such grants to negotiate bonds based uHn them for capital bearing a high rate of Interest, mostly abroad, with which to construct, their roads. This has rendered our country tributary to other nations to an alarm fig extent, it is estimated that over one hundred m 111 ion dollars' worth of products of American Industry are required each year to pay the annual Interest on railroad securities alone, held abroad. The larger part of this Immense amount might have been kept at home to further enrich our own ieople, had a wiser policy been pursued In the matt of aiding works of th is character. . The inethod of aiding works of national importance by guaranteeing bonds is equally vicious. Its workings may be seen in the loan of So-lOOO.Hk) in 6 per cent, bonds to the Union Pacific. The bonds are still outstanding, and the government had already paid over isiO.OtiO.Ouo In interest, obtained from the people by taxation, and will be obliged to pay a great many mlllians more before it is released from responsibility on aC' count of that road. These methods it will be observed are indirect. The railroad companies thus aided can not use either the lands or the bonds, but have to use them in procuring money. This is done bv shinning through the markets of the world. at great expense, and obtaining the use of money at exhorbitant rates of interest, which largely increases the cost of construction and renders cheap transportation an lmjossibility. In the case under consideration tiie bill offered by the committee projxjses to guarantee the interest, at the rate of 5 per cent, a year, on bonds of the company to the amount in round numbers of $70,100,000. The annual interest on that sum at 5 per cent, a year is t3,5U0,itj0, or for fifty years, the time the bonds have to run, 8175,iJ0,0uO. These bonds would undoubtedly sooner or later lollow our other bonds to Kurope, and eventually, whether paid by the comanyor the government, would require this countrv to send products abroad to tho fu.l amount of both principal and interest, in all & 15,000,000, to mee-, their payment. This is an absurd and rnlnous method of raising money for enterprises of any kind, and it is high time for it to be stopped. It is this policy that is bankrupting all our railroads, as well as all other legitimate industries in the couutry, and which has rendered cheap transpor tation an impossiDi ity. it is estimated mat over two hundred million dollars' worth of the products of this country are required to be sent abroad each year to meet the Interest on our various obligations held there. This, I re peat, is a fearful drain upon the labor and re sources of the country. Few people stop to consider the wonderfully rapid accumulation of money by means of interest. It is perfectly legitimate to reckon the IHtUIUUIOUUH wi ,oiuca .U11IJHU11U 1 U VC I VOL, for If the amount rent abroad In payment of Interest was retained at home it would contribute to the Increase of our own wealth in a corresponding degree. For example, let us take 11,000 and see what it will amount to in fifty years, the Interest being added every six months. One thousand dollars at. 5 per cent, in flftj years'will amount to fi2.ft75.87. The interest on f7ü,0l0,0oü, the amount which the Texas and Pacific company desire to borrow, would amount in fifty years, at compound interest, to an enormous sum many times greater than the principal. i mention these facts for the purpose of call ing attention to the accumulative power of capital in the form or money, as money is now instituted, by means of interest, and the false principle upon which the system is based. As money is now instituted it is something more than a mere tool of exchange, as it is described by the economists. A scarce metal Is selected as the msterial out of which to make money, and one, I may add, that is relatively growing scarcer as population increases aud society moves on; and not content with this, it Is clothed with the sole power ouegalleuder. the most potent power known in the affairs of a civilized community, in mis way money is endowed with supreme control over labor and all kinds of property, and its functions as a tool of exchange are totally perverted. Although a community may possess abundant resources as well as labor, nothing can be accomplished until capital in the form of money is employed. Money in the form or capital it is said represents past labor. Well. I would like to know why past labor should be considered any better, or entitled to any more rights, than present labor. Well-informed people, and even political economists, are in tho habit of con sidering it a great advantage to us u we can borrow money abroad at a low rate of Interest. They say it gives ns what we most need, capital; and at the same time they entirely overlook the fact that we have a thousand times more capital In the form ot natural wealth and labor going to loss before our yes constantly, simply for the want of a tcol of exChange to render ft available. It ia for reasons auch as these that I am opposed to tho gov em men t ever Isul t, g another bond, or enoour aging corporations to do so, under the present false system oi money ana nnanoe But. Mr. Sneaker, there la ft way in which the government of the United Htates can aid undertakings of national Importance, not onlv without burdening either the govern ment or the people, hut to the great and lasting advantage of both, and one which, I sub mit, La founded upon sound principles of

finance as well as common sense. That wy I have embodied in the substitute, hielt I have submitted for the consideration of this house, and I shall now proceed to discuss its

merits In the briefest manner possible: inenrst section oi tne substitute provides for the construct ion of the main trii-'k line from its present terminus at Fort Worth to San Diego by the hortest practicable route. The branches provided for In the original bill are, for the reasons already given, not em braced in the substitute, nor is any provision made to authorize the Southern Pacific of California to build the west half of the road. The second section, relating to vro rata ar rangements with connecting roads and like questions, is almost identical with the same section in the original bill, and affords I think all the safeguards required to secure the end tumea at. The third section provides that the com nan v shall execute and deposit with the secietary of the treasury bonus of the company, projerly secured by mortgage on the road, lands, anu iruiicuises of tne company, to tne amount of X,ooo per mile of road tobe constructed, said bonds to be paid In lawful money fifty years aner äste, ana to near interest at the rate of 2 per cent, a year; Interest not to begin to run until three years after date. The fourth section provides t hat on the con stjuctiou of ten or more miles of road and their acceptance by the government on the certificate of commissioners given under oath, the secretary of the treasury shall deliver to said company non-Interest bearing treasury notes of the United States to the amount of the actual cost of the road, not to exceed the average rate of $.10,000 per mile. The proposition embodied in the two last sections is simply this, that, instead of the government lending the company its credit in the shape of a guarantee of the Interest on the bondsof the company to the amount of $ '73,000,00, It shall lend its credit in the form of non-interest bearing treasury notes to the amount of about f-12,1'00,000. This proposition, simple and plain as It is, will lead to results as different from those which would follow the pnxnge 0f the original bill as day is fiom night. If the bonds of the company are guaranteed as to their interest by the government, the company could not use them directly in the construction of the road, but would have to go shinning around the markets of the world at a great expense and stand a heavy discount, in all probability, to obtain capital, representing past labor, to use as a tool of exchange In order to avail Itself of the labor and resources of our own people In the construction of its road. This is not only entirely unnecessary for, as already suggested, it is not past laoor that Is wanted, but simply a tool of exchange to render available present labor and resource on baud but it is worse. It entaPs upon the people a burden equal to the Interest paid tor foreign capital used in the construction of the road, and In case the company becomes delinquent and the roal passes intothe hands of its foreign mortgagees it will prove a drain upon the country to the extent of the profits of the road forever, unless the road Is repurchased by our own people at some lulure time, which can never happen If money continues to be Instituted as ut present. The interest on fTO.OOO.too at 5 per cent, a year would be 'J,500,(Mu, the amount which would have to be sent abroad each year in products or bullion to pay for the use of capital needed to serve the purpose of money. If the experience of the I nion Pacific is to be taken as a criterion, this amount is larger than the Texas and Pacific company can hope to realize from the profits of Its road for many years to come, and would lead to embarrassment to the company, high rhtesof transportation and to further taxation on the part of the government; ami in the end. as already suggested, would render the road tributary solely to for elgn capitalists. We have now too many roads built In this manner, working solely for the advantage of foreigners, and it Is time for ns to look a little more closely to the Interests of our people The cry of reform wa heard throughout the land last fall, and was Indorsed by the people In the most overwhelming manner, as indicated by the election of Mr. Tilden. If reformation Is needed In anything more than anothermore even than turning out the thieves and plunderers of the people now in office it is in the present financial policy of the gov eminent, which lor years past has been skillfully molded to enrich the capitalist, the money-lender and the bondholder at the expense of the industrial aud business classes of the countrv. Let us now contrast this with the results to which the principles embodied in the substitute will lead. Tne company in the first place would be furnished with precisely what is needed, a tool of exchange, ready money, without incurlng any ruinous expense to obtain it, to prosecute its work and construct the road. Inter st does not begin to run on the credit of the government, lent in this form to the company lor three years, giving ample time, with the advantage of ready money, to complete the ror.d and begin to earn money required to meet it. The interest which the company will be called upon to pay to the government is fixed at the low rate ot 2 per cent, in order to enable the company to construct its road cheaply, and es a consequence to carry cheaply. This fact o Itself Involves results of the most important charucter, such as inviting immigration along the line of road atid securing the rapid development of tne region iraveiscu oy it; ana also insuring cheap transportation to the Pacific ocean by a competing line to the route already established. The low "ate of interest will place it within the power of the company to meet its obligations as they fall due; for if it can hope to pay 5 per cent, to foreign capitalists it can certainly pay 2 to the United States government, so that no embarrassment to the conpanyorhtgh rates of transportation need be apprehended, and Instead of proving a. dram upon the country, tending to enrich foreigners, it will prove a source of revenue to the government, and relieve to that extent the burden of taxation. If the federal government is to lend it credit to a corporation lor the purpose of constructing a work of t his kind, to be owned by the corporation and operated solely for its private gains, it is but fair and proper tnat, until this credit, in the form of notes, is repaid, a portion of the earnings of the roa J should be applied to the payment of Interest to the government. It certainly Is better all round, for both the government and the people, as well as the company, that it should pay 2 per cent. Interest tothegovernaient than 5 per cent, abroad. In order to meet the Interest on its bonds and for the purpose of providing for their gradual redemption the company is required to pay into the treasury of the United States every six months; first, the net earnings of the road; second, the net proceeds oi the sale of lands; and third, the amount due from the government for transportation and mall and telegraphic service, and ample provision is made by the substitute to protect the government again; fraud in these particulars. The whole amount of the revenues of the road is required to be turned over to the government in order that it may be secured to the utmost extent for the loan of its credit until the whole is repaid. It will not be possible under these provisions for anybody to misapply, under any circumstances, the funds of the road. That the government is Justified in exacting these conditions, I think can not be disputed, when the object to be attained, as well as the responsibility of the government, Is fully considered. As the company can not control one dollar of the revenues of the road, over and above operating expenses, until the entire debt is paid, it would naturally desire to pay it off as rapidly as possible in order to acquire absolute control of the road at the earliest day possible. To accomplish this end, the highest obtainable rates lor freight and travel would be imposed, depriving the people of cheap transportation aud defeating one of the main objects of the construction of the road; and It is therefore provided by the substitute that the bonds ol the company held by the government shall not be redeemed at a more rapid rate than ri,000.000 a year. This, In connection with the right reerved by congress to regulate rates of travel and freight, will enable this body.when advised from time to time of the revenues of the company, by the secretary of the treasury, to see that the rates are uniformly kept on a plane corresponding with its revenues. The matter may therefore be summed np as follows: The government is to lend Its credit to the Texas Pacific company to the amount of f 12.000,000, at the rate of 2 per cent. per annum, in tho form of non-Interest bearing treasury notes, calculated to circulate as money, the Interest not to begin to run for three years, after which it la to be paid semi-annually at the rate of 2 percent, a year, and the bonds are tobe redeemed at the rate of J.OOü.uuo a year. Assuming that the company will have no dlfflcalty In complying with these terms the result will be seen at a glance at the following table, three yearn being allowed for the completion ol the road: Total amount of loan Jane 1, 177 U2,000,0O Interest due January 1,1881 1120,000 Interest due June 1, lsi..... iJO.OOO Totsftlaeeeseaeeea)eiaeaasaaaaaaa Sa0yQQQ First installment of bonds pay-

2,000,000 40,000,000 Total 800,000 S cond Installment of bonds pnyable June 1, 1S82 2,000,000 Leaving 3S,000.000 Interest due January 1, lfc3 3SO.000 Int rest due June 1, 18NJ. 3.S0,oo0 Total 700,000 Third installment of bonds payable June 1, WS3 2,000,0X0 leaving. 30,000,000 Interest one January 1. ."Jfio.OfO Interest dmi June 1, 18S1 3),0o0 Total --"O.OOO Fourth installment of bonds payable J uue 1, 1884 2,01X1,000 Leaving 34.000,000 Interest due January 1, 1885 &10.000 Interest due June 1, lb85 340,000 Total . 680,000 Fifth installment of bonds, payable June 1, 18s5 .. 2,000,000 Leaving 32,000,000 in it rest uue January i, in.., Iuterest due June 1, 18üj. 320,000 320,000 Total.- 610,000 Sixth installment of bonds payable June 1, ItiStL 2,000,000 Leaving...'. 30,000,000 Interest due January 1, 1877 300,000 Interest due June 1, 1877 300,000 Total 50,000 Seventh installment of bonds payable June 1, 1877 2,000,000 Leaving - 28,000,000 Interest due January 1, 1S8S 2S0,000 Interest due June 1, 1888. 280,000 Total 600,000 Eighth installment of bonds payable June 1,1888 2.000,000 Leaving .. 26 000,000 Interest due January 1, 1889 2(0,0o0 Interest due June 1, 18S9.. . 2t0,000 Total 520,000 Ninth Installment of bonds payable June 1, 1880 2,000,000 Leaving.. 24,000,000 Interest due January 1, lsiW. 240,000 Interest due June 1, 1800 240,000 Total 480,000 Tenth installment of bonds payable June 1, 1890 2,000,000 Leaving 22,000,000 Interest due January 1, 1SIU 220,000 Interest duo June 1, 1891 220,000 Total 440,000 Eleventh Installment of bonds payable June 1, 18'Jl. 2,000,00 Leaving 20,000.000 Interest due January 1, 1MJ2. iryl.li 1, 1892.. 200,000 200,000 Interest due June Total 400,000 Twelfth Installment of bonds payable June 1, 1892 2,000,000 Leaving - 18,000,000 Interest due January 1. 1893 180,000 Interest due June 1, 1893 180,000 Thirteenth installment of bonds payable .i une 1, 1893 2,000,000 Leaving Interest due January 1, 1814... Interest due June 1, 1891 10,000,000 MO.OOO 100,000 Total 320,000 Fourteenth Installment of bonds payable J une 1,1891 2,000,000 leaving Interest due January I, 1895., 14,000,000 140,000 110 000 Interest due June 1, lRw , Total 280,000 Fifteenth Installment of bonds, payable Juntil, 1895 2,000,000, Leaving 12,000,000 Interest due January 1, 18J... 120,000 Interest due June 1, 1896 120,000 Total 240,000 Sixteenth Installment of bonds payable Junel, 1896 2,000,000 Leaving 10,0o0,000 Interest due Jatiuary 1, 1897. 100,000 interest due June 1, 1897 - loO.OOO Total 200,000 Seventeenth Installment of bonds, payable June 1, 1897.... Z,0ü0,ww Leaving 8,000,000 Interest due January 1, 1898... 80,000 Interest due June 1, 189S 8t000 Total - 100,000 Eighteenth installment of bonds, payable June 1,1898.... 2,000,000 Leaving 6,000,000 Interest due January 1, 1899...... 60,000 iuterest due June 1, 1899. ...... 60,000 Total - 12D.0OÖ Nineteenth installment of bonds, payable Junel, 189.... z.ooo.uou Leavlng .. 4,000,000 Interest due January 1, 1900 40,000 Interest due Junel, 1900 40.0U0 Tot til .. 80,000 Twentieth installment of bonds, payable June l, looo.... 2,000.000 Leaving Interest due June 1, 1901 Interest due January 1, 1901. 2,000,000 ... 20,000 ,.. 20,000 Total - 40,00 Twenty-first Installment of bonds, payable j une i, iwi.... - z.wu.uw By the foregoing table it will be seen that the whole amount of the credit lent by the government will be repaid In 21 years, and that the government will also receive duiing this period the sum of f9,2 10,000 as interest. Thus, besides the other ad antages conferred upon the nation by the cons: ruction of the foad, it will prove a sonrce of revenue instead of expense, until after the bonds of the company ate wholly retired. But suppose the company is not able to redeem any of Its bonds for the first 20 or 30 years, in that event not only will no harm result to the government or the people, but on the contrary the government will continue to be in the receipt of a much larger revenue from the load during the whole time in the way of interest, and I may still go further, and say that even in case the company is unable to pay either principal or interest for years to come, its failure to do so would not redound to the lnjurv of either government or people in the slightest degree. Contrast this with the plan proposed by the original bill, which under the most ;avorable circumstances will cause to be sent abroad in the payment of principal and Interest products or bullion to the amount of 240 000,000, or, in case the road should fall to meet its obligat Ion, would render the government liable for 1 175,000.000, to be raised by taxation, and In all probability give the road Intohe hands of foreigners, to be managed in their own interest for all time to come; or again, contrast it with the plan npou which the Union Pacific was built; which has rendered that road a burden to the nation, to the amount of nearly f4.l00.000 a year. Besides the many advantages which the nation would enjoy, arising from the construction of the road by the plan proposed, the Issue and circulation of 142,000,009 of par paper money not peddled out by the banks at a high rate of interest, to be recalled at pleasure, would contribute largely to the revival or our prostrate industries; no small matter of itself. As this money could not be retired by the federal treasury any faster than the bonds of the company are redeemed, any delinquency on the part of the company In that respect would be mora than counterbalanced by the good results that would continue to flow from the use of that amount of cheap money In the hands of the people. The cry oi Inflation will doubtless be raised by the bondholders und gold gamblers and their tools and organs throughout the country, and it may not therefore be out of place to say ft word upon that point. The government has succeeded, by contraction and so legislating as to render further contraction Inevitable la the Interests of the classes referred to, in

able June 1, 1SS1... Leaving Interest due January 1, lfe&L 400,0(0 Interest due June 1, lto'2...... 4-0,000

paralyzing the productive Industries of the country to an alnrming extent. Indeed, if matters go on in the present a ay much longer it will soon be Impossible for the Industrial and business classes lo pay their taxes, much less thelrcurrent obligations. When it is prorsNl hy this house to undo tlie i Aconit V which was perpttrated in 1873 and re-establish the silver dollar nfihe eonntrvn cn.ai ....,

cry is raised by the mopey 'power that injus tice w m oe uone to tue creditor, meaning more particularly the bondholders, ana much is said about mnlntainiT.r tho -...n. of the government. Why, the credit of the government as represented by our tands is 5 j r cent, or more iiDove par In gold to-dav; but where is the voice of any one heaid denouncing the rarcallv pollcv flint. Is r...ln-.(r, ,. value of propel ty of all kinds from M to To per eent that is driving the business classes of the country into bankruptcy and is spreading poverty and distress broadcast throughout the We iossess a land rich In nninmt .on.. far more so perhaps than that possessed br any other nation under the sun ; we are In the habit of boast ine our intelligence, our skill and our cut n io, and vet to-dav poverty and want are slaking through the land, and i ur,t- lwc- xuk poorest or any civilized jistion. Is th i e not a reason for this? Wouldbe statesmen mid political economists who eat tl.eir bu ad in the :ear of the money power sav that it Is due to overproduction. on the part of the jeople and like cau-s." This is more man nonsense, and will deceive none but the ignoiant. Human lngeuuitv ia being constant iv new methods lUAcu io invent by which r,. inl tion can be increased and cheapened in dustrial and pioducing cla-vsi s of society labor year in and year out, scarcely enjovin" the common comforts of life, and are only tooelad u.,i.r. ... .-,u rKieiii li iney can accumulate a little property after years of toil. No Mr. speaker, the only extravagance that hai manifested itself to any great extent in American society is among those who are enabled to rob the people while occupying positions of public trust or by means of the present false and corrupt financial policy. The simple truth, divested of all the fallacies by which it has been surroutded by interested parties In these halts, in the press and in colleges. Is this: The powers of production of late years have Ween increased enormously but no corresponding advancement or progress has taken place In trie machinery of distribution, in which money, the tool of exchange plays the most Important part. On the contrary, every effort has been made by the money power not only to repress any advancement In that direction, but to still further inerease the power of money and labor over property by further diminishing its amount, as compared with population and trade. This is witnessed in the old world by the attempt to demonetize silver, and in this country bv the demonetization of silver and the effort to retire the treasury notes of the federal government. In European countries, except perhaps in trance, where an enlightened system of money exists, the money power has hud absolute sway, and by limiting the legal tender money to an insignificant amount as compared with the growth of population, commerce and trade, it has been enabled to rear i the entire profits of industry for generations, until now we see it as u result that the wealth of the world is being rapidly concentrated In the bunds of tho few, and the masses are consigned to drudgery and imverty. I to American statesmen desire to produce similar results In this country? The legislation of congress during the past ten years looks very much ns if they did. A nation can not have any more wealth than It produces. It is therefore of the first importance to give free development to all of its producing forces: its soil, its mines, lt water power, its machinery, its labor, etc. This can only be done, as is fully demonstrated by experience, through the Instrumentality of an abundant and cheap currency. As well talk about farming without implements, or transportation without cars or wagons as to talk ubont producing wealth in a civilized nation without a currency sufficiently cheap and abundant to circulate naturally in the channels of trade, in obedience to the btws of supply aud demand. It will he said, however, that we have sufficient currency In the banks and that It can easily be got out If people have anything to get it with. Tills Is another of the plausible fallacies used to hoodwink the public in regard to the source of our present financial troubles. Why is money plenty in the banks? This fact alone, that the money and currency of the country are all concentrated in the banks and the money centers, 1 submit, is conclusive proof that there is something Inherently wrong with our system of money. Why Is It not filling the channels of trade and performing the functions for which money or currency is desigtied? Because, Mr. Speaker, Industry has beeu robbed of Its profits ana driven to the wall, helpless, by means of contraction and the tribute exacted by the banks, as middlemen, is supplied by th government, free of tribute, in the legitimate conduct of its affairs No revival of business or production can possibly be looked for as long as money lenders and bondholders are permitted to furnish us with a theory cf money and a financial policy calculated to advance their own interests alone, nor can we ever hope to extinguish the vast load of debt, national, state, corporate and individual, which now burdens this people. And in this connection I wish to call attention to a fact connected with the national banks which 1 think is not fully considered or appreciated by the public at large. The basis of the currency of the national banking system is the public debt or the bonds which represent It. Is it not perfectly clear that it is to the interest of the national banks to perpetuate the national delkt in order th.it it may serve forever as such basis, and that every obstacle will be thrown by them in the way to prevant its extinction. This la one reason why silver has been deraonltized and the bonds made payable only In gold. Uood care will be taken that the government shall never be able to get the gold, and in this way it is expected, not only that oar national debt shall never be extinguished, but, on th other hand, that it will be increased. The late message of President (irant, recommending the funding of f 150,090,000 of greenbacks in interest bearing gold bonds, is a step In this direction that has been contemplated all along, and will be pressed until accomplished unless the people are aroused to a sense of their danger. It was not expected that the recomraendatlonscontalned in the message referred to would be carried out at this session of congress, but its object is to familiarize the people with the proposition by having it favorably commented upon and indorsed by th organs of the money po"er throughout the country. This question in relation to banks I allude to the power with which they are clothed by law to Issue their own notes to circulate as ft crnncy is one of paramount importance at the present time, for during the next four or five years they intend by retiring the circulation of the government to obtain sole control of the currency of the country, and fasten upon us ft system of money the effect of which will be here, as In Kuroie, to concentrate the wealth of the people in the hands of the few and reduce the masses to the ignoble position of "hewers of wood and drawers of water" lor them. I may add further, in regard to the charge of Inflation which wlU be raised against this substitute, -that the whole amount of treasury notes proposed to be issued under its provisions, about 942,000,000. will not equal the amount of bank currency retired from circulation during the past year. Besides, these treasury notes would not all be issued at once, but gradually, as the road is constructed, and it is more than probable that a much larger amount could be absorbed by the increased business consequent upon the development of the new region of country through which It would extend. The design of this substitute, It will be observed, is twofold: to secure the construction of another and a competing road to the Pacific ocean, opening up and developing at tbe same time a vast region abounding in natural wealth, and to give to the nation the nucleus of ft aonnd currency. At this period of civilization It Is manifest that a paper money in some form Is absolutely necessary, and as bank currency has been demonstrated by experience to be the worst form of paper money ever devised, some other system of money should be established. With the fathers of the republic I am In favor of gold, silver and the treasury note, and as much ado continues to be made beut the legal tender character ot the greenback, I have adopted that form of treaauty note which baa received the sanction of all branches of the government and of the people since the early part of the present century. A great deal has been aald about tinkering with the currency, and we have been told by the money power and economists that If we let matters alone they will regulate themselves. I agree with them fully so far as the principle la concerned, but perhaps I would.

oiwci iinu.if u'khi uiings or this world mar be brought within the rei.el, of all. and such a thing us over production, as society is now constituted, is an absurdity. The clnrg of extravagance is eouu'.lv irronn.l!..v- t,. ,