FINANCE AND TAXATION 
 
 
 SPEECH 
 
 OF 
 
 HON. SIDNEY CLARKE, 
 
 OF KANSAS, 
 
 IN THE HOUSE OF REPRESENTATIVES, MARCH 7, 1868. 
 
 Mr. CLARKE, of Kansas. Mr. Speaker, 
 if we except ihe absorbing topic of the im¬ 
 peachment of an unfaithful Chief Magistrate 
 and of political reconstruction, no question 
 presents at this hour such vital importance as 
 th6 financial condition of the country. With 
 the vast burden of taxation, business depres¬ 
 sion, and disaster which have been forced upon 
 ihe country by a policy either corrupt or fool¬ 
 ish. and, perhaps, combining both elements, 
 it is no wonder that a large number of those 
 who have always been associated with the 
 national party should be growing restless and 
 uneasy. Nor is it unnatural that everywhere 
 men are found almost willing to ignore the 
 fundamental political necessity of the land— 
 that which demands the establishment of equal 
 and exact justice for all before the law—at the 
 instigation of democratic demagogues, who 
 seek adroitly to use the burden of taxation, for 
 which that party is alone responsible, and join 
 in a raid against those with whom they have 
 affiliated in a vain attempt to better the finan¬ 
 cial condition of individuals and of commu¬ 
 nities. It is, therefore, both from principle 
 and from policy that those who comprise the 
 majority .should not only face this problem 
 but solve it. Surely,, sir, the statesmen under 
 whose leadership a great war was conducted, 
 who have stood here battling with treachery of 
 the most heinous character, cowardice of the 
 most embarrassing kind, and a defiant spirit 
 which everywhere has made itself felt inju¬ 
 riously, are able to properly meet this and all 
 other issues. I deny to the party which opposed 
 the war, after having in great part caused its 
 horrors, and who have been and are now sys¬ 
 tematically seeking to prevent a peaceful res¬ 
 toration of the Union, either the capacity or 
 the patriotism necessary to manage the finan¬ 
 cial a (fairs of this nation in theinterestsofsonnd 
 economy and active loyalty. The financial 
 restoration we seek to attain must lie reached 
 through the great loyal sentiment of the coun¬ 
 try which upheld the banners of the Repub¬ 
 
 lic through the fearful contest for our nation¬ 
 ality. And let me remind gentlemen repre¬ 
 senting the dominant party upon this iloor 
 that it seems to me to' be far from the pub¬ 
 lic interests to engage in mutual denunciation 
 of each other because there is a difference 
 of opinion as to the methods by which results 
 are to be achieved. 
 
 Sir, 1 represent a State not in the far West, 
 but in the interior of the continent, and where 
 no favored classes are recognized by the masses 
 of the people; and because I differ with the 
 gentleman from Maine, [Mr. Blaine,] who 
 opened this discussion, and who, from the tone’ 
 of his speech, seemed to speak in the interests 
 of the bondholders and the rich as against 
 the rights and necessities of the poor, I do 
 not admit his right to number me with the men 
 who would tarnish the honor of the country 
 by any species of repudiation because 1 see 
 fit to stand by the letter and spirit of the law 
 in the liquidation of our national securities. 
 Having said this much by way of introduction, 
 
 T proceed to the discussion of ihe financial 
 situation and of the difficulties by which the 
 question is surrounded. 
 
 now THE MONEY LENDERS CONTROL. 
 
 Mr. Speaker, the country needs immediate 
 relief. When the war closed the loyal Stales 
 were in a state of great prosperity. Business 
 activity everywhere prevailed. During the war 
 we had been compelled to abandon the general 
 system of credit which had previously existed. 
 This fact is not taken into account by those 
 who now advocate contraction and immediate 
 resumption. 
 
 We are constantly informed of the amount 
 and volume of the circulating medium which 
 then existed. But we are not informed of the 
 large amount of business that was transacted 
 upon individual “ promise to pay.” Of ibis kind 
 of paper, representing large transactions in 
 trade, commerce, and all kinds of business, 
 there was probably not le-;s than a thousand 
 million dollars in use. Credit accepts such 
 
2 
 
 a circulation. Cash ignores it entirely. Conse¬ 
 quently the change in our mode of doing busi¬ 
 ness wiped all this out of existence, and in 
 doing so it created a necessity for a much 
 larger volume of money as a circulating me¬ 
 dium of trade. 
 
 Before the war business men with good secur¬ 
 ities to offer found no difficulty in obtaining ad¬ 
 vances. Banks and money lenders were not then 
 able, by means of a diminished currency, the 
 abrogation of credit, and ageneral trafficin Gov¬ 
 ernment bonds, to dictate such extraordinary 
 rates of interest as virtually to stop all business 
 of an enterprising or speculative character. 
 We have about seven hundred million dollars of 
 paper money in circulation, no coin, except on 
 the Pacific coast and in Texas, perhaps, and 
 no credit. Government securities give to the 
 holder and the dealer in them from nine to 
 twelve per cent., estimating interest in green¬ 
 backs. State usury laws forbid payment of 
 interest over a certain per cent. Massachusetts 
 says six ; New York seven. Everybody who 
 deals in money finds “ Governments 5 ’ the most 
 profitable thing in which to traffic. 
 
 Sir, the larger portion of the national bank 
 circulation is in the commercial States; so 
 with the balance of “ legal tender” still afloat. 
 Commercial centers, it is notorious, do not 
 require by one half as much circulating medium 
 to carry on their great operations as more 
 sparsely settled regions and new States do for 
 their not as heavy transactions. Actual money 
 is needed in the latter; in the former one 
 piece of paper may represent during the day 
 many times its value. So, with the Government 
 securities to crush out the borrowers, thus stag¬ 
 nating enterprise, and with so limited an 
 amount of money or its representative in cir¬ 
 culation that the money-changing and lend¬ 
 ing class can control it nearly all, there can 
 be no wonder that over a million of laboriug 
 men, North and South, should be out of em¬ 
 ployment. 
 
 WHO IS RESPONSIBLE FOR FINANCIAL DISASTER? 
 
 It is not to be wondered at that these causes 
 have not only provoked wide-spread dissatis¬ 
 faction with the great party to which I belong— 
 unjustly so as 1 think—but they daily rob the 
 country of great wealth and so destroy the 
 nation’s ability to pay the debt which a Demo¬ 
 cratic war fastened upon us. I said, Mr. 
 Speaker, the Republican party is not now re¬ 
 sponsible for present financial disaster any 
 more than it is responsible for the great polit¬ 
 ical treachery from the evil effects of which 
 we are suffering. It will, however, be respon¬ 
 sible if, knowing the evil, it fails to apply a 
 remedy. It would have been the part of wis¬ 
 dom, it seems to plain common sense men, to 
 have given the business needs of the South 
 and West the great advantange of an abun¬ 
 dant, not a redundant currency. 
 
 The reverse has been the case. Every dollar 
 oflegal tender which could legitimately have 
 been absorbed in the South would have been 
 
 as potent, and even more so, in fostering ac* 
 quiescence and renewed loyalty as our bullets 
 and bayonets were in subduing rebellion. The 
 confederacy, during the last two years of its 
 existence, was maintained chiefly by the des¬ 
 perate endeavors of a people, who, having 
 been cunningly involved, were simply fighting 
 in the vain hope of saving themselves from 
 financial ruin which defeat was sure to bring. 
 Every confederate note represented far more 
 than even its nominal value. It represented 
 its portion of a life’s struggle for pecuniary 
 independence, with all the hopes and ambi¬ 
 tions which cluster around such an endeavor. 
 When the war ended the entire circulating 
 medium of the rebels was blotted out of ex¬ 
 istence. Did we wisely endeavour to replace 
 it? Not at all. On the contrary under the San- 
 grado system of Mr. McCulloch, we have been 
 most actively engaged in draining the loyal 
 States of their currency, and in refusing to 
 give any to the South. We have not only shut 
 off a much needed supply for the South and 
 West, but carried out a system of contraction 
 which has brought us near to general panic 
 and bankruptcy. 
 
 There can be but little doubt that the pres¬ 
 ent distress is caused entirely by the policy of 
 contraction pursued by the Secretary, com¬ 
 bined with a burdensome system of internal 
 taxation and the terrible fears which the polit¬ 
 ical treachery of this infamous Administration 
 have given rise to. Let me, as simply as I 
 may, present the actual facts in relation to 
 this policy of contraction, upon which Con¬ 
 gress so recently set a seal of condemnation. 
 
 THE NATIONAL DEBT AND ITS MISMANAGEMENT. 
 
 In August, 1865, the public debt reached its 
 highest point, and was made up as follows: 
 
 Funded debt.S1.109.5SS.191 8!) 
 
 Matured debt. 1,503,020 09 
 
 Temporary loans. 107.l-18.7i3 IS 
 
 Certificates of indebtedness. 8-3.093.000 00 
 
 Five percent, legal-tender notes. 33,951.230 00 
 
 Compoundinterestlegal-tendernotes. 217,021.1(30 00 
 
 Seven-thirty notes. 830,000,000 00 
 
 United States notes, (legal tenders)... 433,160,509 00 
 Fractional currency. 26,344,742 51 
 
 Suspended requisitions uncalled for... 2,111,000 00 
 
 Total.$2,815,907,626 56 
 
 Deduct cash in Treasury...*.. 83,218,053 13 
 
 Balance 
 
 $2,757,689,571 43 
 
 Of these obligations, it will be noticed, 
 $684,138,959 were a legal tender, to wit: 
 
 United States notes.:.$433,160,569 00 
 
 Five per cent, notes. 33.954,230 00 
 
 Compound-interest notes. 217,024,160 09 
 
 Total.$684,138,959 00 
 
 There were other items which amounted to 
 over $30,000,000, and swelled the totai vol¬ 
 ume of circulation to about $720,000,000. If 
 we estimated the then value of the property 
 and wealth of the Union as about $20,000,- 
 000.000, and allowed a margin of teu per cent. 
 
3 
 
 on this, as the amount necessary for moving 
 the ordinary business interests of the country, 
 avc should have required a circulating medium 
 of about $2,000,000,000. Yet Ave had less than 
 half this sum, with the extraordinary demands 
 presented by the condition of the South and the 
 rapid development of the West, consequent 
 upon the activity of the country being turned 
 in that direction. What course was pursued 
 by the head of the Treasury Department? 
 Within twenty-one months Mr. McCulloch has 
 succeeded in reducing the volume of currency 
 from $720,000,000 to $570,000,000, a reduc¬ 
 tion of $150,0o0,000. At the same time he 
 has paid considerably over $400,000,000 of 
 the national debt. It Avould appear as if this 
 financial management Avas part and parcel of 
 the administrative and executive policy that 
 seems to have been cunningly designed for no 
 other purpose than national destruction. 
 
 HOW THE SECRETARY FUNDS THE DEBT. 
 
 Mr. McCulloch tells us in his report that his 
 object has been to convert interest-bearing 
 notes, temporary loans, and the bonds which 
 Avere distinctly to be paid in “legal tender,” 
 into gold-bearing bonds and to contract tho 
 paper circulation by the redemption of United 
 IStates notes. “This policy,” the Secretary 
 says, “ he has pursued to his own satisfaction ; 
 and,” as he believes, “to that of a large ma¬ 
 jority of the people.” Of the first portion of 
 the statement there can be no doubt. Mr. Mc¬ 
 Culloch is not a gentleman who will be likely to 
 lose faith in his own Avisdom and capacity. 
 But the latter portion required a larger amount 
 of egotism to make than did even the utter¬ 
 ance of that remarkable harangue in which this 
 financier stigmatized the Thirty-Ninth Congress 
 as a “tinkering Congress.” Sir, the restora¬ 
 tion of rebels to power as the aim of the White 
 House, and the destruction of the national 
 prosperity as the chief result of financial mis¬ 
 management, are strands in a terrible rope 
 twined by this Administration for the nation’s 
 strangulation. The Secretary makes this ex¬ 
 hibit. of the results of his policy of contraction 
 and funding: 
 
 “ Since the first day of September, 1865, the tempo¬ 
 rary loans, the certificates of indebtedness, and the 
 five per cent, notes have all been paid, (with the ex¬ 
 ception of small amounts of each not presented tor 
 payment,) the compound-interest notes have been 
 reduced from $-17,024,160 to $71,875,040, ($11,560,000 
 having been taken up with three per cent, certifi¬ 
 cates;) lho seven and thrcc-tcnth notes from $830,- 
 000,000 to $337,078,800: the United Stntcs notes, includ¬ 
 ing fractional currency, from $450,505,311 51 to $387,- 
 871,477 30—wiiitc the cash in the Treasury lias b‘*en 
 increase l from $88,218,055 13 to $133,998,308 02, and 
 the funded debt has been increased $636,534,800.” 
 
 PRESENT RESUMPTION OF SPECIE PAYMENTS 
 IMPOSSIBLE. 
 
 That is to say, we are now paying in gold an 
 annual interest amounting to $37,410,238— 
 equivalent to nearly fifty millions in greenbacks 
 —more than we would have done had not this 
 policy been pursued. It certainly involves no 
 extraordinary amount of financial skill to sell 
 six per cent, gold bonds, and seven-thirty cur¬ 
 
 rency notes. Neither does the buying of five 
 per cent, compound interest notes, and the 
 putting out, of six per cent, gold bonds require 
 much ability. It is a paying business for the 
 holders of the currency debt—the national 
 banks, speculators, money brokers of the trad¬ 
 ing and commercial centers; but it is an ex¬ 
 pensive and losing operation for tli/e Govern- 
 mentand tliepeople. in short, Mr. McCulloch 
 is putting this portion of the national debt into 
 such shape that the interest is being largely 
 increased, while it is absolutely necessary that 
 the taxes shall be lessened, and as a necessary 
 result the revenue be largely reduced. Jn the 
 face of all this, the Secretary desires to contract 
 the currency to an extent that will enable him 
 to resume specie payments on the first of Jan¬ 
 uary, 1869. We Avould then have a debt bear¬ 
 ing six per cent, interest, in gold, of $2,400,- 
 000,000, and a debt bearing live per cent, of 
 $205,000,000, calling for an annual interest of 
 $151,000,O0O. Add to this $150,000,000 more 
 to pay the expenses of the Government, and 
 we have over three hundred millions a year to 
 meet, with a currency, coin and paper, of 
 about live hundred millions. Our income from 
 customs, with even l lie present high tariff, can¬ 
 not be safely calculated at over one hundred 
 millions. This would leave $200,000,000 to be 
 obtained from a system of internal taxes. And 
 if the people, with $750,000,OOOof paper money, 
 cry out against the present tax, what may be 
 expected when they shall be called on for 
 $200,000,000 a year in gold, and that, too, in 
 t he midst of the distress Avhich will be expe¬ 
 rienced if Ave hurry prematurely to specie pay¬ 
 ment? 
 
 THE SECRETARY'S POLICY. 
 
 Mr. Speaker, I have no idea, however desir¬ 
 able it may be, that we are in any sense pre¬ 
 pared for such a resumption. For myself, sir, 
 l atn not impressed with its necessity. Mr. 
 McCulloch’s (and the hanking and money- 
 broker interests lie represents) general policy 
 seems to include— 
 
 First. The funding or payment of the bal¬ 
 ance of interest-bearing notes and a continued 
 contraction of the paper currency. 
 
 Second. The payment of the public debt in 
 gold, or, as he chooses to term it, “ the main¬ 
 tenance of the public faith.” 
 
 Third. The collection in the Treasury of a 
 large amount of gold, as a means of paying off 
 the non-interest-bearing notes. 
 
 Fourth. The liquidation of the debt by a 
 large annual payment, which will extinguish 
 it in the course of a short period of time. 
 
 Fifth. The issue of bonds,«to be known as 
 the consolidated debt of the United States, 
 bearing six per cent, interest, and having 
 twenty years to run, into Avhicli all other obli¬ 
 gations of the Government shall, as rapidly as 
 possible, be converted ; one sixth part of the 
 interest at each semi-annual payment to be 
 reserved by the Government in lieu of taxes, 
 or paid over to the States according to their 
 
4 
 
 population, as a means of return to the pay¬ 
 ment of specie. 
 
 THE SITUATION. 
 
 On the other hand, the financial situation 
 may be thus briefly presented : 
 
 1. A national debt of $2,600,000,000, of 
 which a little more than $375,000,000 are 
 greenbacks and fractional currency, and $2,- 
 000,000,000 are, or soon will be if the present 
 policy prevails bonds bearing gold interest, 
 mostly at six per cent. 
 
 2. A national bank currency limited to 
 $300,000,000. 
 
 3. A high tariff, the duties under which, pay¬ 
 able in gold, are estimated at about thirty per 
 cent, of the invoice prices of the goods. These 
 duties, so far as needed, are pledged to pay the 
 gold interest on the funded debt. 
 
 4. An elaborate system of internal revenue 
 taxation, from which but few of our industries 
 and only our humblest incomes are exempt, 
 and the proceeds of which (currency) are de¬ 
 signed to meet the general expenses of the 
 Government. 
 
 5. An available balance in the Treasury of 
 abouttwenty million dollars currency and eighty 
 millions gold after paying the interest on debt 
 up to January 1 of the present year. 
 
 CONTRACTION A FAILURE. 
 
 Sir, this Congress has already closed the 
 contraction account. The changing of the 
 debt payable only in greenbacks into bonds, 
 payable, according to the interpretation of the 
 bondholders and this Secretary—so facile in 
 their hands—in gold alone, has already re¬ 
 ceived the general condemnation of the coun¬ 
 try. It benefits no one except the banker and 
 speculator. It cheats the industry of the 
 country by draining its resources, through ex¬ 
 cessive taxation, into the hands of the non¬ 
 producing classes. 
 
 Mr. Speaker, a great deal is said about a 
 “redundant” and an “inflated currency,” 
 whenever men talk about the necessities of 
 business, the demands of enterprise, and the 
 depression of all industries by the system now 
 being pursued. I have endeavored to show 
 liow largely the whole volume of currency and 
 coin in circulation is below the most moderate 
 per cent, needed to move forward the business 
 of the country. Let us look at the amount of 
 the currency debt, as shown by a late exhibit 
 of the Secretary of the Treasury: 
 
 Six per cent, bonds. $18,601,000 
 
 Compound notes (live per cent.). 62,249,360 
 
 Seven-thirty notes .. 285,587,100 
 
 Three per cent, certificates. 12,855,000 
 
 Matured debt, not presented lor pay¬ 
 ment. a. 14,178,363 
 
 Greenbacks. 356,212,473 
 
 Fractional currency. 30,929,984 
 
 Total. $780,604,280 
 
 Of this amount the greenbacks and frac¬ 
 tional currency, amounting to $387,142,457, 
 only need to be let alone ; and holders of com¬ 
 pound-interest notes which bear five per cent. 
 
 interest can profitably exchange them for three 
 per cent, certificates, the latter being preferred 
 by the banks. 
 
 PAYING THE DEBT DURING THIS GENERATION. 
 
 Another item in Mr. McCulloch’s plan is 
 the collection of large gold reserves wherewith 
 to pay off the legal tenders and other non-in¬ 
 terest-bearing notes. Of that policy we have 
 certainly had sufficient, or what might be more 
 truly said none, for the gold collected by the 
 department has been mainly used for the bene¬ 
 fit of the “Bulls and Bears” of Wall street. 
 The Treasury has long enough served as the 
 gold brokers’ exchange. The system pursued 
 hitherto has only succeeded in disordering all 
 values, and it has only benefited the fortunate 
 few who, being within the ring, would know 
 when the Secretary was intending to sell. 
 
 Secretary McCulloch desires to liquidate the 
 debt within this generation. That is the plain, 
 matter-of-fact statement of this scheme for ac¬ 
 cumulating large amounts to make annual 
 deductions therefrom. I have no desire, Mr. 
 Speaker, to do any such thing. We have 
 borne the burden of the terrible struggle. We 
 have given our best beloved to the sacrifice. 
 The land swells with the graves of the dead 
 who died for man. Wealthy money lenders 
 secured a bonus of $800,000,000 profit on what 
 they advanced the nation by payment of it in 
 a currency whose deterioration was secured by 
 their own operations. We wrote our own cur¬ 
 rency below par at their demands. We declared 
 that the interest should be paid in gold, while 
 the soldier who faced death as he went to the 
 field was paid his scant wages in greenbacks, 
 for the redemption of which all the values in 
 the nation were pledged. Perhaps we could 
 do no better. But I demand for the people 
 that those who drove hard bargains out of 
 their necessities should receive only the letter 
 of their bonds. Let us equalize the burden. 
 Put the larger share on that future which is to 
 be so much benefited by our past and present 
 toil and sacrifice. 
 
 THE LETTER OF THE BOND—NO MORE. 
 
 The letter of the bond—that is all the people 
 require; that is all they will give. The party 
 which tries to do more in the interests only of 
 the money-lender will go to the wall. What is 
 the letter of the bond? The act of February 
 25, 1862, by which the first $150,000,000 of 
 legal-tender notes were issued, says in these 
 words: 
 
 “And such notes, herein authorized, shall be receiv¬ 
 able in payment of all taxes, internal duties, excises, 
 debts, and demands of every kind due to the United 
 States, except duties on imports, and for all claims 
 and demands against the United States of every kind 
 whatsoever, except for interest upon bonds and notes 
 which shall be paid in coin ; and shall also be lawful 
 money and a legal tender in payment of all debts, 
 public and private, within the United States, except 
 duties on imports and interests as aforesaid.” 
 
 “A lawful money” was thus created in which 
 every debt could be liquidated, except interest 
 upon bonds or duties on imports. The second 
 section of the same act provides for issuing 
 
5 
 
 $500,000,000 of registered bonds—those known 
 now as five-twenties. How were they to be 
 paid? Here are the words of the law, and I do 
 not find a line as to the money in which the 
 principal shall be paid other than the lav/ful 
 money previously authorized: 
 
 “These coupon bonds are to be issued to an amount 
 not exceeding $500,000,000, payable in twenty years 
 from date, and bearing a rate of six per cent., paya¬ 
 ble semi-annually. ” 
 
 The first section creates a “lawful money,” 
 making it a legal tender for all debts except 
 interest and import duties. Why, then, under¬ 
 take to force the law to another meaning? 
 No, Messrs. Creditors, we stand on the plain 
 intent and letter of the law. We should be 
 greatly wronged if any other rule was followed. 
 The bondholders who hold these five-twenties 
 have already grown wide on their investment 
 in the shape of freedom from taxation, premium 
 in the gold paid for interest, and especially in 
 the fact that they seldom paid more than forty 
 per cent, for their bonds. 
 
 WHAT WE REALLY NEED—A FIFTY-YEAR CONSOL. 
 
 Mr. Speaker, a great deal of talk is had 
 about speedy payment of national indebted¬ 
 ness. What we really need to do in the first 
 place is to secure to the industrial needs of the 
 land a stable circulating medium—enough in 
 volume to move business forward, and so earn 
 the means by which it must eventually be paid. 
 That “medium” is not to be found in gold, 
 yearly becoming more and more an article of 
 trade, and having no intrinsic value outside of 
 art and mechanics but what an arbitrary rule 
 imposes. Gold may be used as the standard 
 of value, but must not be made the currency 
 itself. We need a circulating medium abun¬ 
 dant and uniform, having the confidence of the 
 people, and not one which renders us tributary 
 to monarchical Europe and leaves our property 
 to be reduced in value every time Bismarck’s, 
 Napoleon’s, or Alexander’s ambition may let 
 slip the dogs of war. Such a medium we had 
 in our “greenbacks.” 
 
 The next step is to take the United States 
 securities out of the market as matters of trade 
 and make of them a matter of investment. 
 The proper position of Government securities 
 in the money market should be that of stable 
 investment, and not of daily barter. We pay 
 by far too large an interest. The interest rate 
 might not have been too great when the risks 
 of war were considered, but certainly with the 
 assured stability victory brought and the grand 
 material development opening before us we 
 can command on a funded debt much more 
 reasonable terms than those now paid. Let us 
 fund bonds into a fifty year consol, at the rate 
 of 8.65 per cent., a rate convenient for its easy 
 calculation, giving, as it would, one cent per day 
 on every hundred dollars. Let the five twenties, 
 which are to be paid by the terms of the law in 
 “ lawful money,” be paid as they mature in 
 the money nominated in the bond, or give the 
 bondholder the choice of receiving the fifty 
 
 years' bond, bearing the beforenamed interest. 
 So, as other forms of bonds fall due, let them 
 be transferred in the same way. In this way 
 there could be a simple and economical fund¬ 
 ing system carried out. The attempt to tax 
 this generation for the purpose of at once pay¬ 
 ing off a great debt, incurred to secure per¬ 
 manent liberty and peace, having been defi¬ 
 nitely abandoned, the people would at once 
 enter upon what is the normal and present 
 duty, the development of means wherewith to 
 pay the debt when it shall mature, and the crea¬ 
 tion of such mean3 as will enable the Treasury 
 to cancel from time to time such portions of the 
 consols as it can buy in the market. 
 
 INDUSTRIAL INTERESTS VS. BANKERS AND BROKERS. 
 
 It is time that the attention of Congress and 
 of the Administration was given to the promo¬ 
 tion of the financial and industrial interests of 
 the whole people, rather than of that portion 
 which, patriotic as it may esteem itself to be, 
 is none the less only the non-producing class. 
 There are other interests in the land besides 
 those of bankers, bondholders, brokers, and 
 money-changers. It is Dickens who tells us 
 of an English woman riding through the streets 
 of London on the top of a stage coach for the 
 first time, who was attracted by nothing but the 
 narrow windows of the houses. She proved to 
 be the daughter of a builder. The same anal¬ 
 ogy applies to the policy of Mr. Secretary 
 McCulloch. He was doubtless an ornament to 
 the banking business, but as Secretary of the 
 Treasury, unfortunately for the country, he can 
 be nothing else but a banker. The trading and 
 banking interests have had more than their due 
 showing, and it is time, if ruin is not courted, 
 that the manufacturing and producing interests 
 should be relieved and fostered. It has been 
 my endeavor to show that this can be done, in 
 great part, by means of a» abundant and uni¬ 
 form currency, to be gained by the issues of 
 national notes, or if the present banking sys¬ 
 tem is too strongto be abolished, as it ought to 
 be, then, by making it a free system, allowing 
 all to participate in it who choose to obey the 
 law’s requirements. They must be made, in 
 fact, to pay the Government for the privileges 
 they enjoy and the profits they make, instead, 
 as is now the case, making the Government 
 pay them. 
 
 PRINCIPLES OF TAXATION. 
 
 But there is another and crying necessity, 
 that is, to relieve the producing and industrial 
 interest of its present and intolerable burden 
 of taxation. The all-important consideration 
 in the framing of a revenue law should be the 
 raising the greatest amount with the least pos¬ 
 sible injury to the producing class. To keep 
 their interests in view should be the duty of 
 legislation. The defect of the present system 
 is, that it is based upon the upholding of the 
 non-producers. In view of all that has been 
 j done and said on this subject, a statement of 
 ! some simple but common-sense rules which 
 ! should regulate internal revenue systems seem 
 
6 
 
 not to be out of place. Certainly a radical 
 change is demanded. Congress must make it: 
 
 1. The burdens of taxation must, as before 
 said, be imposed as lightly as possibleon produc¬ 
 tion and its processes. Tax the least we can 
 and it is sure to be more or less oppressive. 
 We cannot devise a revenue system which will 
 not operate unequally in the collection and dis¬ 
 bursement of its proceeds. 
 
 2. Taxation should principally be imposed 
 upon accumulated wealth and not upon em¬ 
 ployments. An income tax is the most bur¬ 
 densome method of all. Continued in its 
 present shape it would eat up all industries. 
 Let us, then, tax accumulations, not incomes. 
 Articles of luxury and indulgence, not of neces¬ 
 sity, should be made to bear the chief propor¬ 
 tion of t he revenue required. The tax on such 
 articles is more easily collected, or should be, 
 if the appointees of the Administration could 
 be controlled. 
 
 3. As little of the accumulated wealth as 
 possible should be exempted from taxation for 
 State and municipal purposes. The present 
 system of bond exemption is ruinous to all 
 industries. One of two things must be done, 
 or both, if possible. Tax your bonds or fund 
 them, reducing the rate of interest so low as to 
 keep most active capital afloat in business en¬ 
 terprises and not locked up in these securities. 
 Under our system a manufacturer or mechanic 
 bears double share of taxation. Continue the 
 present mode and it is fair to presume that the 
 bondholders will in time absorb all the accu¬ 
 mulated wealth of the nation, and the indus¬ 
 trious class will have leave only to bear its 
 burdens. Such a system will not long be tol¬ 
 erated. It is our duty to see this and to provide 
 for an equitable readjustment. 
 
 A FINANCIAL POLICY PROPOSED. 
 
 Mr. Speaker, I shall first endeavor to secure 
 by my vote such readjustment of the present 
 national debt as will place it in the form of a 
 forty or fifty year bond, bearing not a higher 
 rate of interest than three-sixty-five per cent, 
 or a cent per day on each hundred dollars. 
 
 Second. I shall vote for such measures as, in 
 my judgment, will secure to the country a large 
 volume of money. To accomplish this I would 
 favor the payment at the end of the five years 
 at which the Government has the optional 
 right of redemption of at least one half of the 
 five-twenty bonds in “legal tender” or Treas¬ 
 ury notes, to be made “a lawful money” and 
 receivable in payment of all debts. 
 
 I would vote at this time for the immediate 
 issue of “greenbacks” equal in value “to 
 the remaining matured and maturing debt 
 which is payable, principal and interest, in 
 Treasury notes, and so prevent the conversion 
 of them into gold-bearing bonds as the Treas¬ 
 ury is now actively doing. 
 
 Third. The repeal of the national banking 
 law, if proposed, will secure my vote. 
 
 Failing in that 1 shall certainly vote to re¬ 
 move all restrictions, and allow banks to be 1 
 
 set in motion wherever the people want them, 
 requiring, of course, proper safe-guards. All 
 measures which will make the banks pay the 
 Government for the privilege of getting rich, 
 instead of as now having the Government pay 
 the banks, will receive my hearty support. 
 
 DECREASE NATIONAL BURDENS BY DEVELOPING NA¬ 
 TIONAL RESOURCES. 
 
 In addition to lessening the burdens of the 
 people, opening all business, and renewing 
 activities by affording a stable yet flexible and 
 abundant currency, it will be my duty to urge 
 upon this floor all measures which tend to aid 
 internal improvements, thus stimulating devel¬ 
 opment, and by its rapidity creating within so 
 short a period as to be almost fabulous such 
 an abundant wealth as will lift the great bur¬ 
 dens of taxation and debt from the shoulders of 
 even this generation. It is not in accordance 
 with my convictions nor consistent with the 
 duty I owe to my constituency for me to sus¬ 
 tain the false idea of economy which seems to 
 prevail with some gentlemen on this floor. 
 Governments are not so much machines for 
 saving money as for seeing that it is wisely ex¬ 
 pended. 
 
 The undeveloped wealth of the West, its 
 great and fertile soil, from which many mil¬ 
 lions are to be sustained, and still more its 
 immense mineral resources, only wailing the 
 miner’s skill, capital, and enterprise to wrench 
 from the granite—these are alone sufficient, if 
 the proper impetus be given, to pay the great 
 debt the war piled up. In addition to the 
 course before indicated it would seem to be 
 the part of wisdom to aid the grand material 
 progress of the land, so that the further shores 
 of the continent may be bound in the indis¬ 
 soluble links of interest as well as consan¬ 
 guinity. 
 
 OUR CONTINENTAL RAILROAD SYSTEM. 
 
 Mr. Speaker, any scheme looking to the final 
 and even speedy payment of the debt and of the 
 equitable adjustment of the burdens it imposes 
 must wisely aid, by loaning the Government 
 credit, the building of our great continental or 
 Pacific railroads. 
 
 We want the Union Pacific completed at the 
 earliest moment. We need and must have 
 additional legislation by which the great cen¬ 
 tral route, the Union Pacific, eastern division, 
 may be authorized to continue its way westward 
 along its present direct and axial line, opening 
 and building up all that amazingly rich region 
 of" southern Colorado, New Mexico, Arizona, 
 Nevada, and sout hern California until it reaches 
 the Pacific coast. 
 
 In addition to these, any comprehensive 
 scheme, which looks to the readjustment of our 
 national burdens and the equitable aiding of our 
 internal development, must take into consider¬ 
 ation the erection of two other great roads to 
 the Pacific ; the one passing through the North¬ 
 west Territory and the other opening up and 
 passing through the Southwest, draining Ark¬ 
 ansas, Louisiana, and Texas, by the valley of 
 
7 
 
 the Gila river, through southern New Mexico 
 ami Arizona, and crossing the Rio Colorado to 
 reach the Pacific at or near San Diego, Califor¬ 
 nia. This last continental route, in conjunc¬ 
 tion with one already projected in my own State, 
 would undoubtedly form the main artery of the 
 Southwest; and by the aid of thorough south¬ 
 ern railroad systemsand of those great railroads 
 which will finally develop the vast resources of 
 Mexico, it will undoubtedly drain the wonder¬ 
 fully rich silver regions of Chihuahua, Sonora, 
 aud Durango, and by a great feeder terminating 
 at Guayamas, on the Gulf of California, make 
 all northern and central Mexico our tributary. 
 
 The Northern Pacific road would make trib¬ 
 utary the British provinces on the Pacific coast. 
 It would open that immense grain region lying 
 east of the Rocky mountains known as the 
 Valley of Saskatchewan or Red River of the 
 North. Dakota would quickly become a State ; 
 Minnesota would prosper largely ; while the 
 mineral wealth of Idaho and Montana would 
 startle t he picayune economists by its magnitude. 
 
 Besides thus lending our credit to the devel¬ 
 opment of our great territory to the west of 
 the Missouri and Mississippi rivers, I shall urge 
 that aid be granted to that other system of 
 roads already empowered, the initial point of 
 which is in my own State, but which must ulti¬ 
 mately open the southwestern sea-board to the 
 use of the farmers of ihe great interior plains. 
 I refer now to that North and South system 
 whose objective point is Galveston, on the Gulf 
 of Mexico. The great plains stretching from 
 the Rio Brazos, in Texas, to beyond the North 
 Platte, in Nebraska, need a route by which to 
 reach the sea-board within a shorter distance 
 than they can either to the East or West. 
 Only railroads can develop and populate these 
 great interiors. With this rapid means of 
 reaching the sea-board, and the securement 
 thereby of a market for their grain, wool, and 
 other staples, they will quickly repay all it may 
 cost to aid them in creating their prosperity. 
 
 AID FOE A LOYAL SOUTH. 
 
 The South will need aid. Internal develop¬ 
 ment on a grand scale is the primal necessity 
 of our continental position. There can be no 
 sectional policy adopted, least of all by the 
 party which so far has preeminently repre¬ 
 sented the nation. 
 
 Sir, I shall favor at the proper time, as part 
 of this general policy, the extension of Govern¬ 
 ment aid, in the form of credit or otherwise, 
 lor securing the rebuilding of the Mississippi 
 levees, so that the vast and fertile region now 
 subject to overflow may again be made of value 
 to the nation by the abundant harvests of cot¬ 
 ton, sugar, and other crops it can produce. 
 When the southern States are represented here 
 by loyal men, when their home affairs are ad¬ 
 ministered by loyal officers, which will soon 
 come to pass, I shall favor a generous policy 
 toward them in the matter of land grants for 
 railroads or other reasonable purposes. 
 
 WHAT WE MAY HOPE—CONCLUSION. 
 
 Sir, with economy in expenditures, justice in 
 taxation, an abundant and equable volume of 
 money, adjusting itself easily to the needs of 
 the country ; with the burden of the national 
 debt laid more equally on the future as well as 
 the present; and above all, with a generous 
 and wisely comprehensive policy and system 
 of internal improvement, may we not ffirly 
 hope to enter upon an unexampled and won¬ 
 derful career of national prosperity? With 
 equality before the law; with no slave and no 
 caste in the land : with both oceans and the gulf 
 and lakes linked together, bringing to our midst 
 the wealth of the world; and with a hearty 
 welcome and full protection to all who come 
 to us, and prosperity to all who labor honestly; 
 with education as abundant as bread, and an 
 open field for all worthy ambitions, may we 
 not, looking into the near future, see soon and 
 surely the great American Republic standing 
 august and honored as no other land has ever 
 been among the nations of the earth? 
 
 Printed at the Congressional Globo Office. 
 
i