REPORT OF A SELECT- COMMITTEE
of the
(tomtov of Commerce of the Jétate of gew-^ovfc,
os the subject of a
RETURN TO SPECIE PAYMENTS.
NOVEMBER, 1867.
IJrfo-^crk :
JOHN W . A M ER M AN, PRINTER,
No. 47 Cedar Street.
1867.
• • J • -Afx
The John Crerar Librar
REPORT OF A SELECT COMMITTEE
op toe
fcmfoe* of tëowMttw of the ¿fate of §ew-f ovfc,
on the subject op a
RETURN TO SPECIE PAYMENTS...
NOVEMBER, 1867. )
Ifrbj-^orkj
J,OH N W . AMERMAN, PRINT E_R,
No. 47 Cedar Street.
1 8 6 7TWC
Annex
3 5 f- 1 73
fZS~i>
Extract from the Minutes of the Chamber of Commerce.
The following report was submitted to the Chamber of Commerce at a Spe¬
cial Meeting, held on the 26th November, 1867, adopted and ordered to be
printed, and the Committee was directed to draft a memorial to Congress on
the subject, and present the same at the next meeting of the Chamber.
Attest,
John Austin Stevens, Jr.,
Secretary.
REPORT OF A SELECT COMMITTEE
of the
CHAMBER OF COMMERCE,
The Committee appointed by the Chamber of Commerce, "To
consider the subject of a return to specie payments, the reasons
therefor, and the earliest date at which a resumption of specie pay¬
ments may be practicable," beg to report :
The theme, in all its varied relations, opens up a wide field of
inquiry, and it will be hardly possible to treat it with the fulness
the importance of the subject demands.
Indeed the control of our financial system rests so entirely with
the government, that it is doubtful whether any commercial body
can satisfactorily solve the many questions that appertain to its
future working. Existing laws may be well enough understood,
but the execution of them depends, in no small degree, upon the
discretion of the Secretary of the Treasury.
Your Committee propose to deal with the laws and the adminis¬
tration thereof as they appear upon the statute book, and in the
operations of the Treasury Department, and out of past experiences,
to throw what light they can upon the future that is opening before
A knowledge of the policy that is to guide the Treasury Depart¬
ment is essential to the formation of any just, conclusion ; and in
on the subject op a
EETURN TO SPECIE PAYMENTS.
them.
671337
4
like manner the pursuit of any policy by the Secretary of the
Treasury must depend on the action of Congress.
Congress is about to meet, and new financial measures are to be
brought forward, and it is now to be determined whether our Sena¬
tors and Representatives will sustain the Honorable Secretary of
the Treasury in the work of restoration so successfully initiated, or,
whether Congress will yield to the spirit of demoralization which
is too general throughout the land.
Interests of vast magnitude are involved in the decision of this
question ; and the character of our people, and the standing of our
country among the commercial countries of the world, are to be
determined by it.
It is to be decided whether the United States are, at an early day,
to take a stand with the foremost of nations, or deliberately to
abandon, for decades of years, the position to which they have
aspired amid all the discouragements of war, and rashly jeopard, in
a time of profound peace, the honor of a life which has been so
courageously preserved.
In the very outset, your Committee present the importance of
returning to specie payments as of great moral significance ; regard¬
ing all other reasons for resumption as secondary to this, and this
alone of really vital concern.
It needs no argument to prove that a great commercial people,
occupying an inferior position in the scale of nations, must resign
itself to perpetual disesteem at home and abroad, or seek redemp¬
tion from financial disrepute by a steadfast adherence to the path
of rectitude through whatever trials it may lead.
We must continue to endure the ills under which we sutler, and
see our foreign trade languish, or re-establish ourselves upon a foot¬
ing of equality by affording to our merchants and mariners a bet¬
ter opportunity to join in the competitions of the sea and the land.
The inconveniences of a depreciated currency are most severely
felt on the seaboard, and the restraints and losses incident to an
abnormal condition of our foreign exchanges are most patent to
those who are brought in contact with the pecuniary systems of
England and continental Europe.
Prudent men will not willingly embark their money or their mer¬
chandise in ventures to distant markets, with gold at a premium of
forty per cent., with the probability or even possibility of a fall of
fifteen or twenty per cent, ere their returns can be brought to
market.
5
Nor will patriotic men look complacently ou and see our best
securities—national, State and city bonds, and others of equal worth
—having a long term of years to run—transferred to other countries
at three-fourths their real value, and not deplore the needless sacri¬
fice.
Your Committee cannot shut their eyes to the fact that, while the
securities referred to, as a general thing, are as low in the currency
of the country as they were before the war, and are known to be as
safe now as then, they are all at the command of the foreign buyer
at thirty per cent. less.
The apprehended return of securities thus cheaply bought operates
as a discouragement in the minds of some, retarding and preventing,
as they fear it will, the effort to resume. "Whether the danger from
this cause be much or little, it is constantly increasing, and the
longer the transfer goes on the greater will the ensuing disability
become.
But the disadvantages of a depreciated currency are not limited
to the seaboard or felt only in the restraints put upon our external
commerce. It is true that our ship-yards are deserted, the me¬
chanics, of whose skill we once boasted, are out of employ, and the
vessels that carried the flag of our country to the pride and the
jM'ofit of their owners are passing away, leaving the great highway
of the ocean in.all but undisputed possession of other nations ; and
we continue to pay in gold or in bonds for the produce of other
climes, which, under other conditions, would be had in exchange for
the products of our soil and our industry.
It is at the same time true that enterprise within our own borders
is kept in check by the very high cost of labor and materials that
enter into the construction of storehouse and dwelling, and it is to
be feared that the character and security of both will be slighted
because of the enhanced expense and the danger of depreciation.
It would not be difficult to trace much of the demoralization that
exists throughout our community to habits of idleness and extrava¬
gance, which have been engendered by a too free circulation of
paper money ; but your Committee do not think it necessary to
enlarge on the disadvantages of a currency that is not redeemable
with gold or silver, or upon the uncertainties that attend transac¬
tions in merchandise that is to be paid for in gold and sold for
currency ; the members ■ of this Chamber are too familiar with
them.
6
There is hut one corrective, and that is a speedy return to a
■specie basis. The reasons for this are believed to- be sufficiently
manifest from a brief contemplation of the evil consequences involved
in the suspension of specie payments.
These were foreseen when the first bill making Treasury notes a
" legal tender" was before Congress ; and the strongest argument
then urged against their issue in this form, was the danger in view
of which those who advanced their capital to the country in time
of its utmost need, now stand appalled—the danger of increased
issues. There was but one justification then, and it was found not
in the letter of the Constitution, but in the necessities of the war.
It has been the aim of the Honorable Secretary of the Treasury
to retrace the steps so reluctantly taken, to steadily withdraw from
circulation a portion of the legal tender notes, and thus approxi¬
mate the value of the dollar, whether in gold or in government
paper.
To this policy Congress has hitherto rendered loyal support, and
to this it is to be hoped, despite all efforts to the contrary, it will
continue to be true.
The malign influence that is relied on to plunge the country once
more into the abyss from which it is just escaping, is said to be
most strongly developed in the West; but the record made by
western men, in all the years of the war, affords no warrant for
attaching to that section so unworthy a purpose.
The resolution under which they are acting, directs your Com¬
mittee to report " the earliest day at which a return to specie pay¬
ments may be practicable."
Assuming that Congress will adhere to the policy of contraction
hitherto so steadily pursued, neither listening to the call for more
circulation nor to interpretations of law that tend to dishonor, your
Committee see no reason why a full resumption of specie payments
may not take place in the year 1869, provided, in the meantime,
the temporary debt of the government shall have been funded.
It is not to be supposed, of course, that so great a difference as
now exists in the value of gold and of currency can be at once
bridged over, and that one will be made to pass instantaneously
with the same freedom as the other ; nor is it to be expected that
we can return immediately, or for many years, to a purely specie
standard. The power to redeem with " legal tender" must be
continued, and " legal tender" be brought to perform the same
office as gold at the Custom-House.
1
But your Committee do not admit that there is any such difference
in the value of gold and paper as speculation has recently assigned
to it, and a little patience will determine whether the law that
regulates commerce, or the passion for gain that discounts the de¬
pravity it imputes to our representatives in Congress, is the stronger
and more reliable of the two ; or if it be admitted that gold is worth
a premium of 40 per cent, in currency, this exhibits the dispropor¬
tion existing between gold and paper in our country at a period
when the abundance of gold has advanced the prices of commodities
throughout the world, and with every dilution of our currency the
premium on gold may be expected to advance pari jxcmu.
The farmer will get more for what he sells and pay more for what
he buys; the old debt may be cancelled with ease, to be replaced
with another of enlarged dimensions ; and all over the land, public
officers, professional men, and all who live on fixed salaries, will
need to have their salaries adjusted and re-adjusted, as unwise
expedients are repeated to relieve the pressure brought on by
extravagant living and improvident speculation.
It is the opinion of the Com mittee that the return to specie pay¬
ments will affect the interests of the great mass of the people ; the
mechanics, the agriculturists, the laborers and the poor of every
class, more favorably than those of the rich.
There has been a time since the war ceased when merchandise
from every quarter of the globe could be imported into our country
and yield a handsome profit to the importer, and yet the premium
011 gold was no higher than now, when almost every thing is
losing money.
The volume of duties as a consequence rapidly increased, and
gold poured into the vaults of the Treasury Department till it
absorbed nearly all the floating stock. Those who speculate for an
advance in the premium have had but a light burden to carry, and
all who are engaged in foreign commerce and contribute to the
revenues of the country are compelled to enter into competition
with those who depreciate its currency, clamor against the sale of
gold absolutely needed for common use, and treat every attempt to
accommodate the mercantile community as an unwarrantable inter¬
ference with the commerce of the city.
It has doubtless harmonized with the purpose of government
while converting its temporary debt to keep gold at a premium
that would secure a prompt sale of government bonds. This process
has been going steadily on till most of the temporary debt has been
8
cancelled or converted. Henceforth the demands on the Treasury
Department for interest payable in gold will be largely increased
and the Custom-House receipts will at the same time diminish ; the
consequence will be a better supply of gold for all purposes of trade,
a lesser accumulation in the Treasury and a corresponding tendency
to a decline in the premium till trade again resumes its wonted
activity.
Your Committee assume in the first place as a preliminary to the
resumption of specie payments that all the floating debt of the
government, except that known as " legal tender," must be funded ;
second, that gold and greenbacks may be made of equal value if
Congress will enact that the latter shall be received in part, say to
the extent of 10 per cent, for duties "atthe Custom-House," and
the notes thus received cancelled, until the desired end is reached ;
any further curtailment being in that case suspended. To this ex¬
tent the necessity would be obviated of selling gold which, under
the existing tariff, is received in excess of the amount required to
pay interest on the public debt.
Third, that whenever the value of gold and greenbacks approx¬
imates under the conditions already suggested, the Treasury De¬
partment may safely undertake to redeem greenbacks with gold,
provided there is 110 material falling off in the customs' revenue or
in the amount of gold in the Treasury.
Fourth, that resumption by the Treasury Department necessarily
involves resumption by the banks, and that the Treasury Depart¬
ment, the banks and the community will have a common interest
in sustaining each other, if the attempt be not prematurely made.
In presenting the reasons for resumption, and indicating a time
when it may be practicable, your Committee are not disposed to
overlook or underrate the difficulties that stand in the way ; what¬
ever these may be, it is safe to say that they will never be less than
they are now, if other than the policy of contraction hitherto pur¬
sued is followed or the one above suggested.
It is wiser and more manly to accept without unnecessary delay
the remedy for our financial ills which time and experience have
proved efficacious, rather than to live in perpetual fear of the tem¬
porary suffering it will cause.
Contraction doubtless means a reduction of prices, and a curtail¬
ment of monied facilities, but it points to one medium of payment,
and resumption will put at rest ' many disquieting suggestions in
regard to the public debt.
9
What portion of the debt is held abroad your Committee have
been unable to learn, nor are there any means of knowing ; what¬
ever the amount may be, it is all the time increasing, and there is
no evidence to show that any part has been returned, because it
was worth more than when it was bought.
Our bonds went abroad when gold was at 280, and they have
gone in larger volume as the cost, through a decline in the price of
gold, has been steadily appreciating. It is safe to assume that they
will be held with confident tenacity as long as Congress and the
people manifest an integrity of purpose worthy of our great
republic, and it is unreasonable to anticipate any molestation from
parties abroad in the pursuit of measures that will tend to further im¬
prove the value of their property. Observation shows that for the
most part the price of our bonds in foreign markets is regulated by
the value of gold in New-York.
By the annexed table, it will be seen how slight the changes have
been in the currency value of United States bonds and other secu¬
rities, referred to in this report, for a series of years, with unceasing
fluctuations in the premium on gold, and they venture to submit the
record as a guide to what will be the etfect of the further change
contemplated by a return to specie payments.
Two propositions will be made in divers forms to Congress :
First, to increase the " legal tender," by a substitution of Treas¬
ury Notes for our present bank circulation ; as understood by your
Committee—the proposition being, to pay bonds bearing interest
with notes that do not.
Second, to increase the amount of bank circulation by fifty or one
hundred millions.
Should the first be adopted, confidence in the public faith will
receive a shock, the injurious effects of which none can estimate.
If, on the other hand, the issue of more bank currency is authorized
without an increase of " legal tender," it will but hasten the crash,
through which, perhaps, sooner or later, it is destined the country
shall pass, after much temporizing to avoid a calamity that is certain
to result from injudicious legislation.
For the honor of our country, for the sake of patriot at home,
and the friend abroad who aided in its extremity, when foes far
outnumbered friends ; for the sake of all who confided to it in adverse
fortune, your Committee feel that this Chamber should protest
against any further debasement of our national currency ; against
the initiation of the novel mode suggested of paying the public
10
debt, and lift up its voice in favor of a speedy resumption of specie
payments, which will consign to oblivion all adverse and unworthy
financial expedients.
Respectfully submitted.
A. A. Low,
Fred'k S. Winston,
S. D. Babcock, Committee.
W. M. Verm i lye,
Jonathan Stukges,
New-Yore, November 26, 1867.
Statement exhibiting the loicest and highest premium on Gold, com¬
pared with the lowest and highest prices of several of the leading
United States Stocks in the New-York market for each month
during the years 1864, 1865, 1866 and 1867, to November 20.
Year 1864.
Gold.
r. 8. Bonds.
U. S. Bonds.
U. S. Kotes.
*5-20.
1881.
7-3
0.
January,
151% ß
% 159% .
.. 101%,® 104% .
. 104%
©107
. 106 ß
a 107%
February,
157% a
% 161% .
. 103% ß
a 107
. 105
©111% •
• 107% ß
a ni
March,
159% ß
% 170
.. 107 ß
a no% .
. 111%
@113% .
. 109% ß
a 113
April,
166 ß
% 189
.. 105 ß
a 114
. Ill
©118
. 108 ß
a 114
May,
168 ß
^ 194% .
. 105% ß
a io7% .
. 113
©115
. 109% ß
a 112
June,
187% @ 230
. 101 (S
a 108% .
. 110% i
@114
. 103 (S
1 110
July,
225 ß
% 285
. 101% ß
a 109
. 102
©106% .
. 102% ß
a io8%
August,
231X ß
261% .
. 106% ß
a us .
. 104%
@110
. 107 ß
a m
September,
185 ß
£ 254% .
. 105 ß
a in% .
. 106%
© 109
. 106 ß
a 112
October,
188 ß
a 229% .
. 106% ß
a io8% .
. 104%
@ 106% .
. 104% ß
a io8%
November,
209 ß
a 260
. 100% ß
a io7% .
. 106%
@113
. 107 ß
a m
December,
210% ß
& 243% .
. 106% ß
ano
■ 112%
@118
■ 114% ß
a 123
L. and H. for year,
151% ß
a 285
. 100% ß
a ni
. 102
©118
. 102% ß
a 124
Year 1865.
January,
198 ß
& 234% .
. 106% ß
ano
. 108%
©112% .
. 114 ß
a 119
February,
196% ß
% 216% .
. 108% ß
a 112
. 109%
@111% .
. 101% ß
a ii6%
March,
148% ß
% 200% .
,. 104% ß
a in% .
. 100
@111% .
. 114 ß
a U4%
April,
144% ß
a 153
.. 105% ß
a io9% .
. 105
©110% .
ß
a....
May,
128% ß
a 145% .
. 102% ß
a 107
. 108%
©Ill
. 99% ß
a 99%
June,
135% ß
& 147% .
. 102 ß
a io4% .
. 108%
@ 110% .
. 99% ß
a 99%
July,
138% ß
M46 % .
. 103% ß
a 107
. 106
©108
. 97 ß
a loo
August,
140% ß
i, 145% .
. 104 ß
a io6% .
. 106
@ 107% .
• 94% ß
a 99%
September,
142% ß
it 145
. 105 ß
a io8% .
. 107%
@108% .
- 90% ß
a 99%
a 99%
October,
144% ß
a 149
. 101 ß
a 102% .
. 106%
@ 108% .
• 97 ß
November,
145% ß
a 148% .
. 99% ß
a 103
. 105%
@106% .
. 95% ß
a 98
December,
144% ß
ly 146% .
. 99% ß
a io5% .
. 106%
@108% .
. 96% ß
a 9s%
L. and H. for year,
128% ß
a 234% .
. 99% ß
a 112
. 100
@ 112% .
. 90% ß
a no
* Issue of 1862.
11
Tear 18S6.
Gold.
U. S. Bonds.
; U. S. Bonds.
U. S. Notes.
*5-
20.
1881.
7-30.
January,
136%
@144%
.. 101%
> 105%
. 103% C
% 104%
. 97%
© 99%
February,
135%
@141%
.. 102% (a
> 104%
. 103% C
> 104%
. 98%
@ 99%
March,
125
@ 136%
.. 102%®
> 108%
. 104%
> 105% .
. 99«
@ 100%
April,
125
@129%
.. 100 ®
> 106%
. 104% (
> 108%
. 99%
@105%
May,
125 %
@141%
.. 100% ®
> 102%
. 106% C
> 109 %
. 101% @102%
June,
137%
@167%
.. 102 <s
>104%
. 106% C
> 110%
. 102
@ 103%
July,
147
@ 155%
.. 103%'®
à 108%
. 106%
2> 110
. 102%
©104%
August,
146%
@ 152%
.. 105%
> 113%
. 109% C
> 113%
. 104
@107%
September,
143%
© 147%
.. 108% ®
> 113%
. 111 (
> 112
. 105
@107%
October,
145%
@ 154%
.. 111%®
>115%
. 111% (
>113%
. 106
© 107
November,
137%
@148%
.. 107%®
>110% .
. 112 (
> 114%
. 105%
©108%
December,
131%
@ 141%
.. 105 ®
>108%
. 110
3) 113
. 104
@105%
L. and II. for year,
125
@ 167%
.. 100 ®
>115% .
. 103%
> H4% .
■ 97%
@108%
Year
1867 to November 20.
January,
132
@ 137%
.. 106%®
>108
. 106%®
>108% .
. 104
@105%
February,
135%
@ 140%
.. 107% ®
>111% -
. 107%®
>110% .
• 104%
@ 106%
March,
133%
@140%
.. 108% @
>111 .
. 108% @ 110% .
105%
©106
April, „
134 Si
© 141%
.. 109 " ®
>111% .
108%®
>110% .
106
©106%
May,
134%
@ 138%
.. 107%®
>109% .
. no%®
> 112
. 106%
@ 106%
June,
136%
@ 138%
.. 109% <3
>110% .
111%®
>113% .
105%
@ 106%
July,
138
@ 140%
.. 110% ®
> 112%
. 109%®
>110% .
. 106).
@ 108%
August
139%
@142%
.. 111%®
>114% .
. 110% @112% .
. 107%
© 107%
September,
141
@ 146%
.. 113%®
>115% .
110% ®
>112% .
107%
@ 107%
October,
140%
@145%
.. 111% <3
>113% .
1101« <§
>112% .
104
® 106%
November,
138%
©141%
.. 104%®
108% .
. 112%®
>113% .
. 105%
©105%
L. and H. to Nov. 20,
1867,
132
@146%
•. 106% ®
>115% .
. 106% ®
>113% -
. 104
©108%
* Issue of 1862.
Note.—Prices of leading New-York State Bonds and of the Municipal Bonds of the Cities of
New-York and Brooklyn are omitted in consequence of their limited sale in the market.
332.4973
N567r