Contraction the Road to Bankruptcy—Not to Resumption. 
 
 SPEECH 
 
 HON. WILLIAM, D. KELLEY, 
 
 \ 
 
 OF PENNSYLVANIA, 
 
 DELIVERED 
 
 IN THE HOUSE OF REPRESENTATIVES, 
 
 JANUARY IS, 1S6S. 
 
 WASHINGTON: 
 
 F. & J. RIVES & GEO. A. BAILEY, 
 
 REPORTERS AND PRINTERS OF TIIE DEBATES OF CONGRESS. 
 
 1868. 
 

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 I 
 
 CONTRACTION AND TAXATION. 
 
 I 
 
 The House beinerin the Committee of the Whole on 
 the state of the Union— 
 
 Mr. KELLEY said: 
 
 Mr. Chairman: War is not an unmitigated 
 evil. It calls into action the worst of human 
 passions and the highest of human virtues. It 
 contrasts the spirit that conceived and gloated 
 over the horrors of Libby, Belle Isle, and 
 Andersonville, by the uncomplaining patriot¬ 
 ism and fortitude with which those horrors 
 were endured. It may be called the science 
 of destruction, yet it develops the germs of 
 future prosperity, evokes wealth from unrecog¬ 
 nized sources, and frequently leaves commu¬ 
 nities, which for the time it seems to have deci¬ 
 mated and desolated, richer than they were in 
 the peaceful seasons which preceded it. This 
 is not often true of mere dynastic wars, but of 
 such as involve a question between forms of 
 government or are waged for the transfer of 
 territory from an oppressive to a liberal gov¬ 
 ernment it is almost an invariable consequence. 
 
 The unparalleled struggle through which we 
 have gone was of the latter class, and illus¬ 
 trates most forcibly the truth that in God’s 
 providence, so often inscrutable, war has its 
 purposes. We mourn hundreds of thousands 
 of the prematurely dead, among whom were the 
 bravest, best, and most beautiful of the circles 
 in which they moved. The maimed soldier 
 meets us at every turn in the bustling highway, 
 and the widows of those who fell for our coun¬ 
 try have not yet laid aside their wee'ds or their 
 tender children lost the memory of the linea¬ 
 ments of him they loved, and who, but for his 
 patriotism, might have lived to shield them from 
 the ills they endure in poverty and orphanage. 
 They suffer, but the people in whose cause 
 they suffer were richer, more powerful, and 
 consequently abler to endure additional taxa¬ 
 tion, on the 19th of April, 1865, when Johnston 
 
 surrendered, than it was on the 14th of April, 
 1861, when the guns of the rebellion opened 
 on Fort Sumter. 
 
 Mr. Chairman, I venture the assertion, and 
 doubt not that history will demonstrate its 
 correctness, that the war for the suppression 
 of the rebellion developed a productive power 
 in the country more than equal to the indebt¬ 
 edness, national, State, and municipal, incurred 
 in support of it and by the payment of bounties 
 and pensions. And when gentlemen speak of 
 securing the results of the war I ask them to 
 regard this fact, and to see to it that it, as well 
 as the purely political results of the struggle, 
 be secured, in order that those who survive its 
 victims may share its happier consequences. 
 The policy which had with rare and brief inter¬ 
 vals controlled the legislation of the country 
 from its foundation to the opening of the rebel¬ 
 lion was not calculated to develop the resources 
 or improve the condition of the laboring people 
 of the country. It did not aim at these results. 
 It was conceived and enforced by those whose 
 interests were peculiar and adverse to the gen¬ 
 eral prosperity. Under the ancient r6ghnt the 
 legislative power of the country resided for more 
 than sixty years in a Democratic congressional 
 caucus, the preponderance in which of the slave¬ 
 holders of the South was almost, if not abso¬ 
 lutely, without intermission. Controlling the 
 caucus of the dominant party, they controlled 
 the legislation of Congress, and except in the 
 brief periods from 1825 to 1833 and from 1843 
 to 1847 the policy of the caucus was to prevent 
 the diversification of employments, impair the 
 demand for, and so diminish the wages of. free 
 labor, and by compelling the masses to engage 
 in the production of provisions to so cheapen 
 them as to make it to the advantage of the slave¬ 
 owner to produce nothing but leading staples, 
 and depend upon the farmers of the North for 
 
4 
 
 cheap food for themselves, their animals, and 
 slaves. It was their aim to make mechanical 
 labor unprofitable and degrading, that they 
 might be able to discourage immigration by 
 contrasting the condition of the well-fed slave 
 with that of the laborer'of the North, who in 
 freedom should by the exercise of his skill be able 
 to obtain ’out.a precarious support for himself 
 and family. I do not make this arraignment. 
 History presents it. That remarkable southern 
 book, “ Cotton is King,” is but an elaboration 
 of it running through well-nigh a thousand 
 finely-printed pages; and in his remarkable 
 address at the .close of the grand fair of the 
 Mechanics and Agricultural Fair Association 
 of Louisiana, held in the city of New Orleans 
 November, 1866, one of the ablest writers and 
 most cogent thinkers of the South, William 
 M. Burwell, Esq., in their behalf, pleaded 
 guilty to it when, in stating “such points of 
 southern opinion and policy as bea# upon the 
 causes of subjugation,” he thus enumerated 
 them: 
 
 “ 1. That the Federal Government had no right to 
 administer any duties save those which were written 
 down in its charter. 
 
 “2. That staple culture by slave labor was the 
 most honorable, the most virtuous, and the most 
 military system of State polity. 
 
 “3. That commerce, the mechanic arts, and the 
 banking system were incompatible with the social 
 safety of the slave States, and tended to disparage 
 the high standard of virtue, courage, intellect, and 
 patriotism which accompanied the pursuits of agri¬ 
 culture and the institution of slavery. 
 
 “4. That great cities were great sores, aggrega¬ 
 tions of people an evil, immigrant numbers and 
 capital not desirable, and works of internal com¬ 
 merce, only to be allowed where they were built at 
 the private cost of those who used them. The ocean 
 was regarded as ' a sceneof strife,’ and it was thought 
 our ships and workshops should be stationed beyond 
 the Atlantic.” 
 
 Concise as these propositions are, they pre¬ 
 sent a comprehensive statement of the policy 
 of the leaders of the Democratic party. They 
 were foes to commerce and the mechanic arts, 
 and, in view of the extent of our country, 
 its boundless, varied, and equally-distributed 
 natural resources succeeded to a degree that is 
 almost incredible in stationing 11 our ships and 
 workshops beyond the Atlantic.” In the south¬ 
 ern theory of society the free laboring man had 
 no place; its philosophy gave him no consid¬ 
 eration. It regarded him as a nuisance, an 
 interloper, who had no place in a well regu¬ 
 lated State. In its ideal republic there were 
 to be two classes of people only : the wealthy 
 producers of agricultural staples and laborers, 
 the slaves they owned and upon the sweat of 
 
 whose brows and by the sale of whose offspring 
 they should live. 
 
 But so great were our natural advantages, 
 so ingenious our people, and so largely was 
 American industry and inventive power pro¬ 
 tected by our patent laws, that in spite of legis¬ 
 lation, which produced commercial crises with 
 almost regular periodicity, the manufacturing 
 interests of the North had come to be very con¬ 
 siderable. We, however, still remained a com¬ 
 mercial dependency of England, and were, 
 indeed, her principal and most profitable 
 dependency; and, sir, we continue to be such, 
 notwithstanding the enormous development of 
 our productive power during the war, as is 
 shown by the official statement of the exports 
 from the United Kingdom to the various coun¬ 
 tries of the world during the first half of the 
 last two years. In introducing this table the 
 compiler remarks that there has been a con¬ 
 siderable falling off in our American trade 
 during the last year, owing chiefly to the pro¬ 
 hibitory tariff and the scanty harvest of 1866. 
 It appears that the exports from the United 
 Kingdom to her two greatest dependencies in 
 the periods designated were : 
 
 1866. 1867. 
 
 To India.£9,406,838 £10.135,920 
 
 To tho United States.15,223,220 11,951,179 
 
 India stands, in the exhibit from which I 
 obtain these figures, at the head of the list of 
 her colonial customers, and the United States 
 heads the column of foreign dependents. 
 
 Sir, it would weary the committee were I to 
 bring to its attention the many illustrations that 
 occur to my mind of the wondrous increase of our 
 productive power during the war, but I beg you 
 to bear with me while I submit a few of them. 
 The war, endeavor to disguise it as we may, 
 was an irrepressible conflict between two sys¬ 
 tems of labor, one of which regarded the laborer 
 as a thing to be owned, and the other of which 
 recognized his manhood, kindled his hope, and 
 quickened his aspirations by opening to him 
 the avenues to all public honors, and which 
 sought to secure him, however humble he might 
 be, such wages for his work as would enable 
 him to shelter, care for, and give culture to his 
 family. The triumph of freedom over slavery 
 in this contest was of inestimable pecuniary 
 value. But at the beginning of the war we were 
 unable to clothe our soldiers and sailors or 
 provide them with arms and ammunition of 
 
5 
 
 our own production. Most of the men who 
 responded to President Lincoln’s first requisi¬ 
 tion for troops, though newly equipped, were 
 in rags when they reached the capital. Our 
 “boys in blue,” after a few days’ exposure 
 to alternate rain and sun, were surprised to 
 find themselves wearing red coats, and looking 
 rather like English than American soldiers. 
 The prospect of war had flooded the country 
 with what Carlyle calls “cheap and nasty” 
 British fabrics, the warp and woof of which 
 were shoddy, and the indigo blue of which had 
 been derived from logwood. 
 
 We had neither the wool in which to clothe 
 them nor the spindles and looms to fashion it 
 into cloth. Nor were we capable of producing 
 iron fit for gun-barrels or cannon; yet when at 
 the close of the war the armies marched on 
 successive days through Pennsylvania avenue, 
 more than one hundred and eighty thousand 
 strong, they were clad as substantially—I think 
 I may say with truth more comfortably and sub¬ 
 stantially—thau had ever been a great army 
 returning from the fields of its conquest at 
 the close a protracted war. They then 
 wore the wotI of America, spun by American 
 spindles and woven in American looms; and I 
 was assured about that time by the Secretary 
 of War and gentlemen connected with the ord¬ 
 nance department that their choicest arms were 
 of native production, and that we could manu¬ 
 facture better gun-barrel iron than we could 
 import. 
 
 Every railroad company whose line runs 
 north and south was then suffering depression, 
 if not in actual embarrassment. Their condi¬ 
 tion was not improving but deteriorating, not¬ 
 withstanding the fact that communities in the 
 same latitude can and should produce the same 
 commodities, and that the natural course of 
 inter-State and international trade is across and 
 not along parallels of latitude. The Democratic 
 policy of stationing “our ships and workshops 
 beyond the Atlantic” contravened these natu¬ 
 ral laws, and by compelling the people of the 
 North and South to make their commercial 
 exchanges beyond the Atlantic instead of in 
 our own country had deprived the roads from 
 north to south of business adequate to their 
 maintenance. They were single-track roads, 
 and a number of them had fallen into such 
 dangerous dilapidation as to cause them to be 
 regarded as “ man-traps” and “dead-falls.” 
 
 Yet such was the healthful influences of active 
 business and prompt pay in the irredeemable 
 notes of a somewhat expanded currency that 
 many of them, while reducing or extinguish¬ 
 ing their indebtedness, renewed and doubled 
 their tracks during the war, and all of them 
 procured adequate motive power and rolling 
 stock for any amount of business, public or 
 private, that might offer. 
 
 At the beginning of the war the iron of Lake 
 Superior was not an article of commerce, but at 
 its close the Marquette region was furnishing 
 one eighth of the entire production of the coun¬ 
 try. In 1801 we were dependent on foreign fac¬ 
 tories for steel; but under the impulse of the 
 war we are manufacturing ordinary and Bes¬ 
 semer steel in such quantities and of such 
 superior quality as to justify the hope that a 
 few years will enable us* to compete in the 
 markets of Central and South America with 
 the nations on which we have hitherto de¬ 
 pended. At the beginning of the war the great 
 western coal basin had not been tested experi¬ 
 mentally. Intelligent gentlemen from Indiana, 
 Illinois, Missouri, Iowa, and Kansas spoke of 
 the wonderful coal deposit which underlies 
 their respective States as a matter of belief, 
 or theory; but now every railroad through 
 those States has either provided itself or is 
 devising means to procure cars adapted to the 
 transportation of that cheap and convenient 
 fuel. Brazil, Indiana, was then an obscure 
 and inconsiderable railroad station, but now, 
 as the center of an iron and coal producing dis¬ 
 trict, its population is increasing with greater 
 rapidity than any town in the State, and trains 
 of cars laden with coal leave it daily for the iron 
 mountain of Missouri, to supply the furnaces 
 and forges of that vicinity with fuel, and return 
 from the iron mountain to Brazil freighted with 
 ore to be smelted and wrought in the midst 
 of coal beds which experience has proven to 
 be an inexhaustible deposit of almost pure 
 carbon. Active demand and prompt payment 
 in irredeemable greenbacks have elicited the 
 demonstration at both points that in Indiana 
 and Missouri are natural deposits that will, if 
 properly developed, before the close of another 
 generation, dwarf the relative importance of 
 England, Wales, or Belgium as coal, iron, and 
 steel “producing centers. 
 
 Thus did the country respond to the necessi¬ 
 ties of the Government, and thus did the de- 
 
6 
 
 mand for industry created by the war and 
 prompt pay by the Government for all that it 
 bought from its citizens, in irredeemable but 
 well-secured greenbacks though it was, enable 
 the people to respond promptly and amply to 
 its calls for men, money, and materials. Our 
 progress was not, as already appears, confined 
 to the military direction, but other branches of 
 industry were also quickened into life. At the 
 beginning of the war the West made no zinc or 
 brass or clocks or watches, and she depended 
 on foreign nations for sugar and molasses. But 
 now the zinc of Illinois and the copper of Michi¬ 
 gan, smelted by native fuel, is furnishing the 
 West with merchant brass that i3 preferred to 
 foreign by engravers. The town of Elgin, Illi¬ 
 nois, which rivals the most beautiful New Eng¬ 
 land villages, and which produces watches equal 
 to the best productions of any nation, has sprung 
 up since Sumter was fired on; and in Austin, 
 a suburb of Chicago, not yet three years old, 
 they make clocks, the brass, the glass, the en¬ 
 amel, the steel, and the frames of which, whether 
 simple or ornate, are all of native production, 
 and into which no particle of material enters 
 that has ever been on salt water or paid duty 
 at a custom-house. The inhabitants of the 
 town of Chatsworth, Illinois, did not number 
 two hundred at the close of 18G3; they now 
 number nearly two thousand people, who use 
 in their intercourse fourteen of the dialects of 
 Europe, and are producing this year nearly one 
 thousand tons of sugar from beet roots, and an 
 amount of molasses that will pay each laborer 
 good wages, and for the coal consumed by the 
 wjiole community; and not only did we prove 
 ourselves able to olothe our Army and improve 
 the material, texture, and durability of its cloth¬ 
 ing, but we increased the variety and improved 
 our woolen fabrics for private wear so much that 
 we are able to enter the list with the most suc¬ 
 cessful woolen manufacturing nations. But, sir, 
 that we did during the war add to our productive 
 power and realized wealth more than the prin¬ 
 cipal of our debt is to my mind demonstrated 
 by the fact that though the taxes upon our 
 industry, trade, income, and the earnings of 
 our corporations, were heavier than now by 
 hundreds per cent., they were, after the first 
 year of the war, or from the time that green¬ 
 backs relieved the want of adequate currency, 
 paid cheerfully, because they were paid from 
 monthly or annual profits. Our people were 
 
 steadily increasing in wealth, every exchange 
 of property between them was for mutual ad¬ 
 vantage, and by increasing their wealth added 
 to the taxable resources of the country. The 
 able report of the Special Commissioner of the 
 Revenue, D. A. Wells, Esq., thus corroborates 
 this view: 
 
 “As has been already shown, the national expendi¬ 
 tures, exclusive of appropriations for the redemption 
 of the public debt and for interest, attained during the 
 five years from 1861 to 1866 the extraordinary aver¬ 
 age of over seven hundred and twelve million dol¬ 
 lars per annum, to which must also be added the great * 
 increase during the same period of State and local 
 expenditures. Now, while by far the largest portion 
 of the money represented by this expenditure wa3 
 borrowed, it must nevertheless be borne in mind that 
 the average annual money statement for the year3 
 specified is in a great degree, if not entirely, the 
 measure of the labor annually furnished to the Gov¬ 
 ernment in the form of commodities or services ren¬ 
 dered in the Army or Navy, for the war in the main 
 was conducted by means of the services of the soldiers 
 rendered at the time, and by means of the food, cloth¬ 
 ing, and material of war raised or made during the 
 period of hostilities, and for which money or an ac¬ 
 knowledgment of indebtedness was given. It there¬ 
 fore appears that during the years from 1861 to 1866 
 labor and commodities were continually withdrawn 
 from the productive employments of peace to the 
 destructive occupations of war, and that the meas¬ 
 ure of this unproductive diversion was in excess of 
 $712,000,000 per annum, and yet during the continu¬ 
 ance of all this drain the northern and Pacific States 
 did notcease to make a real progress in the creation of 
 substantial wealth. Thus the aggregate of the north¬ 
 ern crops, measured in bulk and quarry, and not in 
 money, did not decrease, but increas™; the area of 
 territory placed under cultivation was continually 
 enlarged; railroads continued to be built, mines to 
 be opened, and mills, stores, and dwellings to be 
 erected.” 
 
 As if to emphasize this statement, the Com¬ 
 missioner adds the following foot note: 
 
 “ It is notbelievedthat any great amount of north¬ 
 ern capital accumulated prior to the war was used or 
 destroyed during the war, but that the service and 
 commodities used were mainly tho product of the 
 time.” 
 
 Mr. Chairman, so immensely had ready 
 demand, the rapid circulation of commodities^ 
 and prompt pay in greilnbacks stimulated our 
 industry that the amount of American produc¬ 
 tions—agricultural, mineral, scientific, or me¬ 
 chanical—that had been devoted to the work of 
 destruction are thus shown to have been in 
 excess of th.e requirements for civil life in a 
 season of prosperity, and certainly in increasing 
 -excess of the production of former years. 
 
 But, sir, the war has ended; we are again at 
 peace; the jurisdiction of the Government ex¬ 
 tends over the whole country. Twelve million 
 of producers and consumers have been brought 
 within our jurisdictibn by the extinguishment 
 of the confederate government, under whose 
 laws they had lived and to whose treasury they 
 had paid tribute during the war, and the com¬ 
 missioner, in this connection, submits this prop- 
 
osition, to which I propose, briefly as I can, to 
 reply. He asks: 
 
 “ If a portion of the country could contribute of its 
 surplus labor and capital an annual value of $21 07 
 per capita for destructive purposes, will it not bo 
 easy for the whole country, with its labor and capital 
 restored to productive employments, to contribute 
 $8 73per capftaforthopaymentof interest, expenses, 
 and the reduction of the debt?” 
 
 This diminished rate of taxation, the Com¬ 
 missioner tells us, will not only provide for an 
 annual expenditure of $140,000,000 for ordi¬ 
 nary expenses, $130,000,000 for interest on the 
 public debt, but $50,000,000 annually for the 
 reduction of the principal of the debt. 
 
 Mr. Chairman, whether the people can bear 
 this rate of taxation, reduced as it is, will 
 depend upon our legislation. Had Congress 
 one year ago, when I urged it to that course, 
 repealed the taxes that have not only burdened 
 all but prostrated many of the industries of the 
 country during the past year, and withheld from 
 the Secretary of the Treasury the power to con¬ 
 tract the currency, I believe there would be no 
 doubt on this question. My views on this point 
 are the results of much deliberation, and have 
 undergone no recent change. Experience has 
 but made that history which for the two last 
 years I have uttered to the House as predic¬ 
 tion. When addressing the House on January 
 31, 1866, I said: 
 
 “ England, if supreme selfishness be consistent with 
 sagacity, has been eminently sagacious in preventing 
 us from becoming a manufacturing people; for with 
 our enterprise, our ingenuity, our freer institutions, 
 the extent of our country, tho cheapness of our land, 
 the diversity of our resources, the grandeur of our 
 seas, lakes, and rivers, we should long ago have been 
 ablo to offer her best workmen such inducements as 
 would have brought them by millions to help bear 
 our burdens and fight our battles. We can thus raise 
 the standard of British and continental wages and 
 protect American workmen against ill-paid compe¬ 
 tition. This wo must do if we mean to maintain the 
 national honor. The fields now under culture, the 
 houses now existing, the mines now being worked, 
 the men we now employ, cannot pay our debt. To 
 meet its annual interest by.taxing our present popu¬ 
 lation and developed resources would be to continue 
 an ever-enduring burden. 
 
 ‘‘ The principal of tho debt must be paid; but as 
 it was contracted for posterity its extinguishment 
 should not impoverish those who sustained the bur¬ 
 dens of the war. I am not anxious to reduce the 
 total of our debt, and would, in this respect, follow 
 tho example of England, and as its amount has been 
 fixed would not for tho present trouble myself about 
 its aggregate, except to prevent its increase. My 
 anxiety is that the taxes it involves shall be as little 
 oppressive as possible, and bo so adjusted that, while 
 defending our industry against foreign assault, they 
 may add nothing to tho cost of those necessaries of 
 life which we cannot produce, and for which wo must 
 therefore look to other lands. Tho raw materials 
 entering into our manufactures, which we are yet 
 uuable to produce, but on which we unwisely impose 
 duties, I would put into the freo list with tea. coffee, 
 and other such purely foreign essentials of life, and 
 would impose duties on commodities that compete 
 with American productions, so as to protect every 
 fceblo or infant branch of industry and quicken those 
 
 that arc robust. I would thus cheapen tho elements 
 of lifo and enable those whoso capital is embarked 
 in any branch of production to offer such wages to 
 the skilled workmen of all lands as would steadily 
 and rapidly increase our numbers, and, as is always 
 the case in the neighborhood of growing cities or 
 towns of considerable extent, increase the return for 
 farm labor; this policy would open new mines and 
 quarries, build new furnaces, forges, and factories, 
 and rapidly increase the ta xable property and inhab¬ 
 itants of the country. "Would the south accept this 
 theory and enter heartily upon it3 execution, -he 
 would pay more than now seems her share of the debt 
 and feel herself blessed in tho ability to do it. Her 
 climate is more genial than ours; her soil may be 
 restored to its original fertility; her rivers are broad 
 and her harbors good; and, above all, hers is the 
 monopoly of tho fields for rice, sugar, and cotton. 
 Let us pursue for twenty years tho sound national 
 po.licy of protection, and wo will double our popula¬ 
 tion and more than quadruple our capital, and re¬ 
 duce our indebtedness per capita and per acre to little 
 more than a nominal sum. Thus each man can ‘with¬ 
 out moneys’ pay the bulk of his portion of the debt 
 by blessing others with the ability to bear an honor¬ 
 able burden.” 
 
 Confirmed in the correctness of these views 
 by subsequent observation and reflection, at 
 the final session of the Thirty-Ninth Congress 
 I introduced a resolution instructing the Com¬ 
 mittee of Ways and Means— 
 
 “To inquire into the expediency of immediately 
 repealing the provisions of the internal revenue law 
 whereby a tax of five per cent, is imposed on the 
 mechanical and manufacturing industry of the coun¬ 
 try.” 
 
 And on the earliest day the rules would per¬ 
 mit I offered another resolution declaring— 
 
 “That the proposition that tho war debt of the 
 country should be extinguished by tho generation 
 that contracted it is not sanctioned by sound princi¬ 
 ples of national economy and does not meet the ap¬ 
 proval of this House.” 
 
 On the 3d of January, 1867, in addressing 
 the House in opposition to the views of the 
 Secretary of the Treasury in favor of the main¬ 
 tenance of extraordinary taxes, contraction of 
 the currency, and resumption of specie pay¬ 
 ments within two years from the date of his 
 Fort Wayne speech, or of his annual report, 
 and the extinguishment of not less than $100,- 
 000,000 of the principal of the debt annually, 
 I said: 
 
 ‘‘Peace is restored, our currency approximates the 
 specie standard, and it is discovered that by aid of 
 our inordinate internal taxes foreign manufacturers 
 arc monopolizing our homo market. Our publishers 
 buy their paper and print and bind their books in 
 England or Belgium; our umbrella-makers have 
 transferred their workshops to English towns; our 
 woolen and worsted mills are closed or closing, and 
 tho laborers in theso branches aro not only wasting 
 their capital, which consists in their skill and indus¬ 
 try, but drawing from tho savings banks or selling 
 tho Government bonds in which they had invested 
 their small accumulations to maintain their families 
 during the winter; and our enlarged importations 
 of foreign goods aro swelling the balance of trado 
 against us and preparing us for goucral bankruptcy.” 
 
 And again: 
 
 “Tho experiment, if attempted as a means of has- 
 i tening specie payments, will provo a failure, but not 
 1 a harmless one. It will bo fatal to tho prospects of 
 
8 
 
 a majority of the business men of this generation 
 and strip the frugal laboring people of the country 
 of the small but hard-earned sums they have depos¬ 
 ited in savings banks or invested in Government 
 securities. It will make money scarce and employ¬ 
 ment uncertain. Its object is to reduce the amount 
 of that which in every part of our country and for 
 the hundreds of thousands of millions of dollars of 
 domestic trade is money and to increase its pur¬ 
 chasing power; and by unsettling values it will 
 paralyze trade, suspend production, and deprive 
 industry of employment. It will make the money 
 of the rich man more valuable and deprive the poor 
 man of his entire capital, the value of his labor, by 
 depriving him of employment. Its first effect will 
 be to increase the rate of interest arid diminish the 
 rate of wages, and its final effect wide-spread bank¬ 
 ruptcy and a more protracted suspension of specie 
 payments.” 
 
 Sir, these predictions were not only not 
 heeded but were denounced as the vagaries 
 of a mere theorist by gentlemen whose position 
 made their voices potential; and I remember 
 that when the productions of the hand-loom 
 weavers of the country had been freed from 
 taxation by the votes of both Houses the com¬ 
 mittee of conference upon the disagreeing votes 
 of the two Houses on the tax bill, seizing the 
 fact that the Senate and House had differed as 
 to the use of a verb, restored the provision 
 providing for the tax, and the chairman of the 
 committee in each House proclaimed the pos¬ 
 sibility of the exemption of these compara¬ 
 tively unimportant productions producing a 
 deficit in the revenue. Some reduction in the 
 scale of taxation was made by the bill to which 
 I refer, and it is well for the country that it 
 was. Large as it was, it would have been bet¬ 
 ter had every direct tax upon our industry been 
 removed. Nor would the revenue of the Gov¬ 
 ernment have suffered from the change, for we 
 collected during the year 18G6-G7 $143,904,880 
 more than was required for payment of inter¬ 
 est on the public debt and current expenses. 
 These iuordinate exactions determined the line 
 between profit and loss on many branches of 
 industry and diminished our production by para¬ 
 lyzing or suppressing such branches. Without 
 the $G7,778,082 70, the amount derived from 
 direct taxes on manufactures other than spir¬ 
 its, malt liquors, and tobacco in its various 
 forms, we would have been able to extinguish 
 more than seventy-five million dollars of the 
 principal of the debt. 
 
 Permit me to say, if I may use a homely 
 figure, that we lighted our candle at both ends 
 by attempting to collect such heavy taxes while 
 contracting the currency. The loom and the 
 spindle, no longer able to yield profit to their 
 proprietor, stand idle; the fires are extinguished 1 
 
 in forge and furnace, and the rolling-mill does 
 not send forth its hum of cheerful and profitable 
 industry. On one day of last month eighteen 
 hundred operatives in the glass factories of 
 Pittsburg were deprived of the poor privilege 
 of earning wages by honest toil at the trade in 
 which they were skilled. The establishments 
 in which they worked are closed. In the ab¬ 
 sence of productive employment for men or 
 machinery the small holders of bonds are sell¬ 
 ing them to save themselves from bankruptcy 
 if they are the proprietors of establishments, 
 or to feed themselves and families in involun¬ 
 tary idleness if they were laborers whose hard- 
 earned savings had been loaned to the Govern¬ 
 ment in its exigency. Look where we may, to 
 any section of the country, we hear of u shrink¬ 
 age” in the value of manufactured goods, of 
 reduction of wages, or of the hours of labor, of 
 factories running on part time, or closed or to 
 be closed. I present no jaundiced or partisan 
 view of the case, for the gentleman who sub¬ 
 mitted to this House the report of the commit¬ 
 tee of conference to which I have alluded, and 
 who resisted proposed reductions of taxes m ith 
 such persuasive ability, [Mr. Morrill, of Ver¬ 
 mont,] in a recent discussion in the Senate on 
 the repeal of the cotton tax, said ; 
 
 ‘‘It may bo said that the South are clamoring fbr 
 the repeal of the tax on cotton. Is there any less 
 clamor in the West or the North or the East for a 
 repeal of taxation? I deny it. I say there is as 
 much urgency for a relief from taxation in the 
 North, the East, and the West as in the South. 
 Look at the industries that are at the present mo¬ 
 ment unusually depressed. Take, for instance, the 
 entire woolen interest. There is not an establish¬ 
 ment that is not losing money to-day. Take the 
 wool-grower; not a pound of wool raised last year 
 that will bring within ten cents per pound of its 
 cost. Take the cotton interest; the whole circle of 
 manufactures are in no better circumstances. Look 
 at the value of their stocks: for instance, take the Bates 
 manufacturing stock of Maine, worth two years ago 
 one hundred and sixty cents on the dollar, now there 
 are more sellers than buyers at one hundred. Take 
 the Lyman mills on the Connecticut, worth two years 
 ago ninety-eight to one hundred, now selling at sixty- 
 nine orless; and so I might go on almost through the 
 whole list. They all suffer. Take the West—Ohio, 
 Illinois, or Iowa—look at their hog crop. Why, if 
 they had given away all their hogs, or if they had 
 slaughtered them a year ago andthrown them away, 
 they would have been better off to-day. They have 
 absolutely lost their hog crop by feeding out grain to 
 them, which unfed would have brought more than 
 all their pork.” 
 
 Mr. Chairman, accepting the business of 
 the oldest and best-managed savings bank for 
 the receipt of small deposits in Philadelphia 
 as a good index to the condition of the labor¬ 
 ing class of the country, I have obtained a 
 statement of the number and amount of drafts 
 made by the depositors whose whole deposit 
 
is under one hundred dollars, and of the whole 
 number of drafts of depositors for the month 
 of December of the years 1865, 1866, and 1867, 
 and the total amount drawn in each year. It 
 is as follows: 
 
 Months. 
 
 Year. 
 
 Under 
 
 8100. 
 
 Whole 
 number of 
 payments. 
 
 Amount. 
 
 Dec. 
 
 1365 
 
 846 
 
 1,186 
 
 99,603 10 
 
 Doc. 
 
 1SG6 
 
 811 
 
 1,174 
 
 104,430 95 
 
 Doc. 
 
 1867 
 
 1,128 
 
 1,596 
 
 144,205 70 
 
 To gentlemen used to large business trans¬ 
 actions the movement of the small sums enu¬ 
 merated in this exhibit may not seem import¬ 
 ant, but they tell a story of bankruptcy as 
 grievous to the victim whose hours of toil were 
 solaced by the reflection that he was by his 
 small deposits garnering a trifling capital for 
 his children or a shelter for his age as is one 
 which is telegraphed to the press of every sec¬ 
 tion of the country by reason of the large 
 amount involved. Nay, more than that, these 
 drafts upon the small accumulations of years 
 of toil tell a story of practical agrarianism and 
 confiscation that would shock gentlemen if 
 it applied to the bonds or land of the wealthy. 
 The attempt to force a resumption of specie 
 payments by contracting a volume of currency 
 which was actively, legitimately, and profitably 
 employed is as dishonest as it is unwise. The 
 object and effect of such a movement is to 
 increase the purchasing power, the value of 
 the rich man’s hoarded or invested dollars, 
 and its projectors pause not, though they dis¬ 
 cover that it robs millions of laborers of their 
 whole estate. The laborer’s income is derived 
 from the exercise of his thews and sinews and 
 the skill of his cunning right hand. These are his 
 estate—these and his little savings—and of these 
 millions are being robbed by the mad attempt 
 of the Secretary of the ^Treasury to bring about 
 specie payments while the balance of trade is 
 heavily against us and our gold-bearing bonds 
 are so largely held by foreigners that resump¬ 
 tion would in less than thirty days induce the 
 return of bonds enough to drain us of specie 
 and make us feel the curse of absenteeism as 
 distinctly as Ireland ever felt it. Were our 
 bonds held at home, or were commercial 
 exchanges greatly in our favor, we might main¬ 
 tain a forced resumption ; but with our bonds 
 
 abroad, and the balance of trade heavily against 
 us, we could not maintain it a month. And if 
 Congress does not restrain Mr. McCulloch from 
 persisting in the attempt he will unsettle the 
 value of every species of property, curtail the 
 productive power of the country, bankrupt men 
 of enterprise, and rob millions of laboring peo¬ 
 ple of their tvhole estate. 
 
 But permit me to inquire what effect this 
 experiment will have on the public revenues? 
 Can an honest bankrupt contribute much to 
 the exchequer of his country? Are those who 
 are conducting business at a loss apt to make 
 large contributions to the fund derived from 
 income tax? And are unemployed laborers 
 who have drawn and consumed their last dol¬ 
 lar in a condition to buy dutiable or taxable 
 commodities? No, sir; as the number in each 
 of these classes increases the public revenue 
 diminishes; and in view of the facts I have 
 hastily presented I am prepared to say that with 
 full employment, even though prices had con¬ 
 tinued as high as they were during the war, which 
 I maintain was impossible under the influence 
 of our increasing activity and productive power, 
 the people could better pay the taxes they then 
 endured heavy as they were, than they can 
 with a contracting currency, low prices, and 
 but partial or no employment for men and 
 machinery, pay the greatly diminished rate 
 suggested by the commissioner. 
 
 Mr. Chairman, two policies were open to us 
 at the close of the war. We have tried one, 
 and the results are but too painfully apparent; 
 the other is still open to us. It is true we can¬ 
 not repair the losses already endured, but we 
 can check the downward tendency, quicken 
 industry, and give a new impulse to the pro¬ 
 ductive power of the country. It was open to 
 us to diminish the depreciation in the rate of 
 wages by diminishing taxes and furnishing, as 
 we had done during the war, a sound circulat¬ 
 ing medium adequate in volume for the rapid 
 exchange of commodities among our own 'peo¬ 
 ple, and thus secure employment to our labor¬ 
 ers with fair wages for their work ; or, on the 
 other hand, we could by imposing taxes not 
 demanded bv our exigencies and contracting 
 the currency impair confidence, force sales, 
 palsy enterprise, reduce wages, and deprive 
 the laborer of a market for the only commod¬ 
 ity he has to sell—his industry. 
 
 Gentlemen will say there can for the present 
 
10 
 
 bo no employment because the markets are 
 overstocked, and there is what political econo¬ 
 mists often speak of, “a glut in the market.” 
 Sir, the time has never been when the markets 
 of the world were glutted. When that event 
 shall come, every home will be well furnished 
 and every human being well clothed. A 
 superabundance of the necessaries of life can 
 not exist while the urgent wants of millions 
 cannot be supplied. Our markets are not 
 glutted. The stock of goods of every kind in 
 the hands of merchants is unusually low, and 
 there are unemployed people in the country 
 who need them all and who would gladly labor 
 for the means to purchase them all. The 
 wretch that shivers in a cheerless home with¬ 
 out food, fuel, or adequate clothing 5 she who, 
 ill-fed herself, shares her last crust with her 
 hungry children; and they who in the midst 
 of winter are deprived of the privilege of toil¬ 
 ing, and as their goods are thrown rudely into 
 the street realize a landlord’s power when rent 
 is in arrear, do not believe that the market is 
 glutted. Nor is it. The disease from which 
 we suffer is not glut or plethora. Its seat is in 
 the functions of circulation. It is congestion 
 produced by a financial tourniquet applied by a 
 charlatan. That phrase “ glut in the market ’ ’ 
 involves a perversion of terms and is used to 
 express the fact that the masses are from some 
 cause unable to consume their usual supply of 
 the comforts or necessaries of life. It does 
 not, as it implies, express the fact that there is 
 an over supply of commodities essential to the 
 comfort of man, but that there is financial 
 derangement. It is a convenient phrase for 
 the theorist, a veil used to conceal a fact the 
 occurrence of which should admonish every 
 statesman that there is something wrong in the 
 prevailing practice of government. 
 
 The author of the next treatise on popular 
 fallacies should make “glut in the market” 
 the subject of a leading chapter; for they who 
 use the phrase invariably confound terms and 
 designate the consequence as the cause. Thus 
 the Irish Republic, in the course of a very able 
 article in its issue of January 4, says: 
 
 “From all parts of Massachusetts and Connecticut 
 we have been receiving, during the past six weeks, 
 the very unwelcome intelligence that mill owners 
 and manufacturers were either contracting their pro¬ 
 ducing operations or suspending them altogether. 
 Running half or quarter time appears to be the order 
 of the day; while not unfrequently the engine fires 
 arc blown out and the machinery left to rust in idle¬ 
 ness. The cause is obvious. There is little or no 
 
 demand for goods. The consequences are what we 
 have already stated. The hands of hundreds of thou¬ 
 sands of honest workmen are idle, and their children 
 are ill-fed and ill-clad under the biting blasts of a 
 North American winter.” 
 
 Let me point out the fallacy of this state¬ 
 ment. Fires are blown out and machinery 
 left to rust in idleness, not because there is no 
 demand for goods, but because throughout the 
 South and West there is no circulating medium 
 with which to effect exchanges; and the policy 
 of the Secretary of the Treasury with the cry 
 of the creditor class for resumption have de¬ 
 stroyed confidence in individual credit. The 
 proposition should be stated thus: 
 
 “There is little or no demand for goods. The cause 
 is obvious: it is that the hands of hundreds of thou¬ 
 sands of honest workmen are idle, and their children 
 ill-fed and ill-clad, because mill owners and manu¬ 
 facturers have been compelled to contract their 
 operations and withhold from laborers employment 
 and wages with which they would be able to pur¬ 
 chase the products of the farmer and manufacturer.” 
 
 The general theory I am advancing is not new, 
 and is one that should never be disregarded by 
 those who legislate for the people of a republic. 
 The social evils we are enduring, the bankruptcy 
 that is overtaking so many men of enterprise, 
 the want and enforced idleness that prevails so 
 largely among our laboring classes are due to 
 two causes:—excessive internal taxation and 
 the curtailment of our currency at a time when 
 the numbers and activities of our people were 
 rapidly increasing. The Secretary of the Treas¬ 
 ury and his adherents are responsible for this 
 general prostration of credit and business. 
 They talk of the honor of the country, and the 
 necessity of maintaining it by making the paper 
 dollar equal to the gold dollar, and of hasten¬ 
 ing the day when our bonds shall be paid in gold. 
 The means to which they resort will not pro¬ 
 duce the results they desire, but will defeat 
 them. Nor are those who resist them hostile 
 to the bondholder. They aim to secure the 
 laborer the possession and just fruits of his 
 hard inheritance, and by the rapid development 
 of the boundless resources of the country and 
 the restoration of general prosperity to enable 
 the Government to meet the utmost of its obli¬ 
 gations with honor at maturity. The contest 
 is between the creditor and the debtor class— 
 the men of investments and the men of enter¬ 
 prise ; and during all such contests the laboring 
 classes are inevitable sufferers. 
 
 The issue thus raised is as old as civilization. 
 And now, as always heretofore, the creditor 
 class is the aggressor. Alison, in his history 
 
11 
 
 of Europe from the fall of Napoleon to the 
 
 accession of his nephew, says : 
 
 “ Whoever has studied with attention the structure 
 or tendencies of society, either as they ate portrayed 
 in the annals of ancient story or exist in the com¬ 
 plicated relations of men around us, must have be¬ 
 come aware that tho greatest evils which in the later 
 stages of national progress come to alllict mankind, 
 arose from the undue influence and paramount 
 importance of realized riches. That tho rich in 
 the later stages of national progress are constantly 
 getting richer and tho poor poorer is a common 
 observation, which has been repeated in every 
 age, from the days of Solon to those of Sir Robert 
 Peel; and many of the greatest changes which have 
 occurred in the world—in particular the fall of the 
 Roman empire—may be distinctly traced to the long- 
 continued operation of this pernicious tendency.” 
 
 * * * ‘‘For tho evils complained of arose from 
 
 the unavoidable result of a stationary currency, 
 coexisting with a rapid increase in tho numbers 
 and transactions of mankind; and these were only 
 aggravated by every addition made to the energies 
 and productive powers of society.” 
 
 Again, ho says: 
 
 ‘‘But if an increase in the numbers and industry 
 of man coexists with a diminution in the circulating 
 medium by which their transactions arc carried on, 
 the most serious evils await society, and the whole 
 relations of its different classes to each other will be 
 speedily changed; and it is in that state of things 
 that the saying proves true that the rich aro every 
 day growing richer and the poor poorer.”— Alison’s 
 History of Europe , 1815 to 1852, chapter 1. 
 
 As Sir Archibald Alison was not gifted with 
 more than human prescience he could not 
 have forseen the condition of our country in 
 the years that are passing. If, therefore, he 
 described it, he did so by declaring a general 
 law. That he did portray our condition with 
 nice discrimination no one can controvert. 
 Let us see how exact a compliance the con¬ 
 traction policy is producing with all the condi¬ 
 tions the conjunction of which he tells us must 
 produce the most serious evils to society. 
 
 The close of tho war found us with a cur- 
 iglicy expanded somewhat beyond the amount 
 to which we had been used before the rebel¬ 
 lion, but wifli everybody in fhe North well 
 employed. Men of character were able to 
 borrow money at moderate rates of interest, 
 and were everywhere engaging in new enter¬ 
 prises that were not merely speculative, but 
 calculated to add to individual and national 
 wealth. Labor was in demand at fair wages. 
 It is true that food was high, for a great war 
 had raged through a series of years, and been 
 succeeded by years of drought or excessive 
 rain, during which the fields had not yielded 
 their usual crops. This no legislation could 
 have averted; but in spite of it tho people at 
 large were prosperous and confident that a 
 fruitful year would adjust the cost of food to 
 the prices of other commodities. From ten to 
 
 twelve millions of our people, occupying more 
 than six hundred thousand square miles of our 
 most fertile territory, which abounded in water 
 power and varied mineral resources, were 
 almost without currency. Their whole capi¬ 
 tal, other than lands and houses, railroads 
 and canals, had been invested in confederate 
 loans or otherwise exhausted. Their banks 
 and insurance companies were bankrupt. They 
 had cotton, tobacco, naval stores, and the 
 fields from which to produce them and all 
 other agricultural commodities. They had 
 laborers skilled in their arts of cultivation, 
 and willing to toil for wages unreasonably low, 
 but they had no currency, no circulating me¬ 
 dium with which to make commercial or other 
 exchanges of property or to pay their laborers. 
 
 At the same time an unusual stream of emi¬ 
 gration was flowing to us, from transatlantic 
 countries. Enterprise was pushing rapidly 
 westward, and towns and cities were rising 
 where the buffalo had roamed over unbroken 
 prairies when the war began. With these ad¬ 
 ditions to our population and to the area over 
 which it was to circulate what was there to 
 indicate the propriety of a curtailment of the 
 medium by which transactions between man 
 and man and community and community were 
 to be carried on? For myself I was unable to 
 see any, and protested against the mad theories 
 of the Secretary of the Treasury and his disci¬ 
 ples. In the course of my remarks on the 3d 
 of January, 1867, to which I have alluded, I 
 said: 
 
 “Neither tho Secretary of the Treasury nor Con¬ 
 gress know whether our currency is in excess of tho 
 amount required by legitimate and healthful tradff; 
 or if it be, how long it will remain so if undisturbed 
 by legislation. Nor can we settle these points by an 
 appeal to experience, for many of our conditions are 
 novel. That would be a curious and instructive cal¬ 
 culation which would show the country the precise 
 demand for currency created by the operation of the 
 Bureau of Internal Revenue, or by tho enlargement 
 of the Army and Navy and clerical force of the Gov¬ 
 ernment. 
 
 “ Under tho discipline of Providence tho southern 
 people will, before many years glide away, consent 
 to permit their fields to bo tilled, their mints to bo 
 worked, and their cities to bo rebuilt and expanded; 
 and who can tell tho amount of currency that will 
 then be required by the four million enfranchised 
 slaves and tho two million poor whites, who did not 
 in tho past, but arc hencelorth to earn wages and 
 buy and sell commodities, or for handling the crops 
 and mineral productions of tho South? Since we 
 last adjourned tho iron horse has Crossed Nebraska 
 on one of the routes to the Pacific, and his snort has 
 been heard in tho neighborhood of Fort Riley on 
 another; and during the last year threo hundred 
 thousand industrious people, who had been fed and 
 clothed through unproductive chi hi hood at tho cost of 
 other nations, came and cast their lot among us to till 
 our fields, smelt our ores, work our metals, and man¬ 
 age our spindles uud looms; and I cannot guess what 
 
12 
 
 amount of currency these energetic people and the 
 westward-marching column of our civilization will 
 require. But, sir, of one thing I am certain, and it is 
 that had the Secretary of the Treasury not destroyed 
 all sense of security in the future, the demand for 
 currency to purchase, especially in the South, mineral 
 and other lands, and develop their productive power, 
 would have prevented the accumulation of the 
 immense deposits which now lie paralyzed in bank 
 or are loaned on call to speculators in the necessaries 
 of life. We unsettled values and made or scattered 
 fortunes by the rapid expansion of the currency; 
 and the people implore us to avoid another violent 
 change fraught with like consequences, and to stay 
 the work of contraction till we shall have ascertained, 
 at least proximately, the amount of currency required 
 by healthy and legitimate trade.” 
 
 But, Mr. Chairman, gentlemen ask, do you 
 not wish to return to specie payments? I 
 answer, yes; but not by the way of bank¬ 
 ruptcy and repudiation; and that way leads 
 contraction in the midst of an increase such 
 as never existed before in the numbers of men 
 and fields for their activity. Return to specie 
 payments ! Are we doing it? No, sir. The 
 difference between the greenback and gold 
 dollar widens with each month. And while a 
 greenback dollar will buy less gold it will pur¬ 
 chase much more of any other commodity than 
 it would a year ago. The rate of interest 
 demanded for loans in the West and South is 
 so inordinate that it has suspended enterprise 
 and must exhaust the resources of any man 
 who attempts to pay it; and while the labor¬ 
 ing people are idle the capital which should 
 furnish them employment may be borrowed 
 from the banks of Boston or New York, in 
 whose vaults the bulk of our currency has 
 accumulated, by those who have gold or United 
 States bonds to offer as security, at four per 
 cent, per annum. Contraction has destroyed 
 confidence. The possessors of “ realized 
 riches” have no faith in spindles and looms 
 that are producing goods for a falling market, 
 or forges and furnaces the productions of 
 which must be sold at a loss, and invest their 
 funds in Government bonds, or let them lie on 
 deposit till they can buy, at a small percentage 
 of their value, mills, factories, mines, and 
 other valuable properties, when bankruptc} 7 
 shall cause them to be exposed at public or 
 judicial sale. Sir, we are not on the road to 
 resumption, and will not be till we restore 
 confidence and quicken industry by repealing 
 needless taxes which are giving foreign manu¬ 
 facturers an advantage in our market, and de¬ 
 prive the Secretary of the Treasury of his power 
 to contract the currency and tamper with the 
 market value of every species of property by 
 
 secret operations in gold and the credit of the 
 country. 
 
 . Mr. Chairman, the Secretary and his adher¬ 
 ents will assume to find a response to the sug¬ 
 gestions I have made iu the facts set forth by 
 the Special Commissioner of Revenue in his 
 able and valuable report that the income of the 
 country from either internal revenue and cus¬ 
 toms has not fallen off during the last two 
 years. The Commissioner’s statements are 
 indisputable, and I thank him for the industry, 
 patience, and care he has exhibited in procur¬ 
 ing and digesting the materials for his report. 
 But, sir, there is a fact that deprives this re¬ 
 sponse of anything like conclusive power. It 
 is not alluded to by Mr. Wells, because itlouched 
 no poiut he assumed to discuss. Let me state 
 it. The revenues of the country from 1860 to 
 1865 were derived from the loyal States. Dur¬ 
 ing that time the confederate States did not 
 contribute to our public revenue, and Maryland, 
 Kentuckjq Tennessee, and Missouri were rav¬ 
 aged by war. To find a reply to my argument 
 in the Commissioner’s report it should show 
 not only that our revenues during the last fiscal 
 year have exceeded those of 1864 and 1865 in 
 the ratio of our ordinary growth and progress, 
 but also how largely the ten States now being 
 reconstructed, with Missouri, Tennessee, Ken¬ 
 tucky, and Maryland, when freed from the 
 tramp of war, were able to contribute to the 
 resources of the country. To this fact the Com¬ 
 missioner does not allude. No, sir; it requires 
 the contributions made by the people of the 
 insurgent and border slave States during the 
 last fiscal year to furnish the Commissioner 
 with the gratifying figures he presents to the 
 country and its creditors. A fair statement of 
 the account would contain the amount received 
 from the southern States as a credit and be 
 debited with the amount lost by the paralysis 
 of industry and the productive power of the 
 North. Were the account thus stated it would 
 be apparent to all that, notwithstanding the 
 addition of fifty per cent, to the taxable popu¬ 
 lation, the current revenue derived by the Gov¬ 
 ernment was not increased, but simply steadily 
 maintained. 
 
 Gentlemen may say that the South has yielded 
 but little internal revenue besides that derived 
 from the cotton tax, and I freely admit that she 
 has not contributed so largely as we might well 
 have hoped; but I affirm that her contributions 
 
 4 
 
13 
 
 would have been much greater had our policy 
 been wiser. It has affected that section of the 
 country more potently for evil than it has the 
 North. Our society was not disorganized and 
 our industrial force was admirably arranged 
 and producing its best results, yet we are suf¬ 
 fering derangement and paralysis. Wide sec¬ 
 tions of the South had been ravaged by war, 
 and, as I have already said, its financial institu¬ 
 tions and the accumulated capital of its citizens 
 not invested in lands and buildings had been 
 absorbed by the confederate loan or consumed 
 in the war; but by judicious treatment its recu¬ 
 peration should have been so rapid as to have 
 been the marvel of the world. That the natural 
 resources of the South are greater than those 
 of the North is undeniable. She is capable of 
 producing every agricultural product that can 
 be grown in our climate. Her mineral resources 
 are greater and more varied than ours; she lies 
 near the sea and abounds in navigable rivers, 
 affording cheap water transportation to sea¬ 
 ports for the greater portion of her productions, 
 and to her belongs the monopoly of the pro¬ 
 duction of cotton, fine tobacco, rice, and naval 
 stores, and, until now that we are availing our¬ 
 selves of the beet, of the sugar fields of the 
 country also. Immense bodies of land, as fertile 
 as any in the country, and which has never 
 felt the pressure of the plowshare, are to be 
 found in every southern State. Louisiana alone 
 has sixty thousand such acres which will yield 
 cotton or sugar, wheat or corn. Marvelous as 
 was the increase, of the productive power of the 
 loyal States during the war, that of the southern 
 States almost equaled it. Gentlemen will not 
 forget that her Merrimac had sunk the Cum¬ 
 berland before our first monitor was ready to 
 measure power with her. Great Britain sup¬ 
 plied her with much of her munitions of war, 
 but the unmechanical South overwhelmed us 
 with surprise by the large share of these she 
 produced for herself. Great Britain again, in 
 defiance of our admirable blockade, clothed 
 many of the confederate soldiers, but the spin¬ 
 dles and looms of the tonstantly increasing 
 factories of the South were each year supplying 
 a larger percentage of cloths for civic and mili¬ 
 tary wear. She had depended on New England 
 for boots and shoes, but she found that she could 
 tan her own hides, and people were found to 
 make boots and shoes. Thomasville, North 
 Carolina, is the Lynn, though not the only 
 
 shoe manufacturing town of the South. With¬ 
 out detaining the committee by details of the 
 improvement and extension of her railroad 
 system, I will mention the fact that though Vir¬ 
 ginia and North Carolina had never been able 
 to build a road from Danville to Greensboro’, 
 whereby a central through route from North to 
 South would have been completed, that road 
 was built in the first year of the war. This 
 increased the value of every foot of a chain of 
 roads extending from Richmond to New Or¬ 
 leans, and which now carries a large portion of 
 the freight passing between the eastern, States 
 of the North and the South and Southwest. 
 
 But, sir, without elaborating the point, let 
 me state in general terms that the value of the 
 lands of the South were trebled by the recog¬ 
 nition of facts which the war compelled the 
 southern people to recognize, namely : that 
 they could raise their own food, and that they 
 had advantages over those on whom they had 
 hitherto depended for food for man and beast 
 in the markets of the eastern States, Central 
 and South America, the West India Islands, 
 and Europe. As cotton and sugar had been 
 the only crop of the greater portion of their 
 country the people had come to believe that 
 they had but One harvest seasou—that in which 
 those crops were gathered and prepared for 
 market. But when the armies of the confed¬ 
 eracy had to be fed from the fields within its 
 lines they discovered that they had three har¬ 
 vest seasons—the spring for wheat and grasses, 
 summer for corn, and autumn for cotton and 
 sugar. And in this very year many a broad 
 acre, after having yielded its golden harvest of 
 wheat, will have the stubble turned under and 
 be planted in corn that will mature before the 
 frost threatens it. The necessities of the war 
 also taught them the value of deep plowing, 
 fertilizers, and of keeping procreative stock for 
 the work for which they had kept only mules 
 in the past. As an illustration of the value of 
 these discoveries, let me say that it is within 
 my knowledge that Mr. McDonald, of Con¬ 
 cord, North Carolina, in order to settle the 
 question of the value of deep plowing and 
 the application of phosphates in the produc¬ 
 tion of cotton, tried two experiments on fields 
 which together embraced one hundred acres 
 of land that had ever been regarded as too 
 poor for cotton land. Wishing to make the 
 experiment for public as well as private ad- 
 
14 
 
 vantage, Mr. McDonald took the opinion of 
 the planters of his section of the State as to 
 the possibility of making cotton on such land, 
 and found' no man among his neighbors or 
 visitors who believed that it would return him 
 the value of the seed with which he would 
 plant it. But with a heavy old-fashioned Penn¬ 
 sylvania plow he broke the land and turned in 
 a given amount of super-phosphate to the acre, 
 and lo, when the season came for gathering 
 cotton he had the demonstration that the poor¬ 
 est land in Cabarras county had been made to 
 yield the finest crop of cotton ever raised 
 within her limits, and which many of her citi¬ 
 zens pronounce the finest ever raised in North 
 
 breadstuffs and meats, which maintain former prices 
 on account of their scarcity. Judgments are passed, 
 execution sales are common, the bankrupt law is 
 taking hold of estate after estate, property of all 
 kinds is rapidly falling in price, lands are changing 
 hands and will soon be knocked off for a mere song; 
 and there is no prospect, so far as we can see, that this 
 condition of things will speedily improve. One of 
 the first effects will be to greatly restrict if not abol¬ 
 ish the credit system. Every step, no matter how 
 painful or how much to be deplored, is in that direc¬ 
 tion. Credit is based on confidence between man 
 and man, and where there is no confidence there can 
 be no credit. The end will be that a large majority 
 of our people will find it impossible to meet their 
 obligations, and must have indulgence in some way, 
 or the hard earnings of many years will be sacrificed 
 under the sheriff’s hammer or in courts of bank¬ 
 ruptcy.” 
 
 And a correspondent of the New York Tri¬ 
 bune, writing from Hinesville, Liberty county, 
 Georgia, last month, says: 
 
 Carolina. The many intelligent planters who 
 observed this experiment now know that by the 
 aid of proper implements and adequate stimu¬ 
 lants to the soil their fields maybe made to yield 
 a handred per cent, more cotton than they ever 
 have yielded, and that with but fifty per cent, 
 of .the labor hitherto applied. 
 
 But, as I have before said, the people of this 
 wonderfully endowed section of our country 
 wore without a circulating medium. This was 
 their paramount necessity. For the want of it 
 all their interests were suffering. The Commis¬ 
 sioner of Internal Revenue suggests that our 
 condition is such that u soothing and sustain¬ 
 ing” treatment rather than the 11 heroic” is 
 most likely to promote and hasten our recovery, 
 and I beg leave to inquire whether his suggestion 
 is hot much more applicable to them. Inordi¬ 
 nate taxes have borne more heavily upon the 
 people of the South than upon us, and contrac¬ 
 tion has operated with still more aggravated 
 Severity upon them, as whatever redundancy 
 there may have been in our currency at the close 
 
 “ A sale has taken place at this county seat that so 
 well marks the extreme depression in the money 
 market that I send you the particulars: Colonel 
 Quarterman, of this county, deceased, and his exec¬ 
 utor, Judge Featter, was compelled to close the 
 estate. The property was advertised, as required by 
 law, and on last court day it was sold. A handsome 
 residence at Walthourville, with ten acres attached, 
 out-houses, and all the necessary appendages of a 
 first-class planter’s residence, was sold for $60. The 
 purchaser was the agent of the Freedmen’s Bureau. 
 His plantation, four hundred and fifty acres of prime 
 land, brought $150; sold to a Mr. Fraser. Sixty-six 
 acres of other land near Walthourville, brought throe 
 dollars; purchaser, Mr. W. D. Bacon. These were 
 all bona fide sales. It was court day, and a large con¬ 
 course of people were present. The most of them were 
 large property owners, but really had not five dollars in 
 their pockets, and in consequence would not bid, as the 
 sales were for cash. In Montgomery, Alabama, lots 
 on Market street near thecapitol, well located, 50 feet 
 by 110 feet averaged about two hundred and fifty dol¬ 
 lars each. The Welsh residence on Perry street, two- 
 story dwelling houses, including.four lots, sold for 
 $3,500; Dr. Robert M. Williams was the purchaser. 
 The same property in better times would not have 
 brought less than $10,000. The Loftin place, near 
 Montgomery, containing one thousand acres, was 
 recently rented at auction for forty cents an acre. 
 The same lands rented the present year for throe 
 dollars an acre.” 
 
 It is proper that I should admit that some¬ 
 thing of this depression is due to the resistance 
 leading men of the South present to her con¬ 
 stitutional restoration to the Union and the 
 
 of the war would have been absorbed by the invit¬ 
 ing fields of enterprise offered by the South, and 
 would have gone there to quicken her resources 
 and enable her people to consume dutiable 
 goods afid those from which internal revenue 
 is collected by the sale of stamps. That the 
 productive power the war developed in the 
 South has been suppressed by lack of cur¬ 
 rency, and that by contraction we are abstract¬ 
 ing from her people the little they had is be¬ 
 coming apparent to every observing man. We 
 find evidence of it in every paper that comes 
 from the South. The Standard, (Raleigh, North 
 Carolina,) of the 4tli instant, says : 
 
 “Everything seems to have fallen in price except 
 
 hostility the baser sort of her people exhibit 
 toward northern settlers; yet there are wide 
 sections of the country into which northern men 
 ma}’- go and find themselves welcomed as bend- 
 factors if they go to engage in any industrial 
 pursuit; aud it must also be admitted that under 
 our present scale of taxation, and with the Sec¬ 
 retary of the Treasury constantly threatening 
 contraction and able to execute his threat, that 
 capital will not engage in any new enterprise 
 either North or South. 
 
 Commissioner ^ r ells is right in prescribing 
 11 soothing and sustaining” rather than 11 he¬ 
 roic” treatment for our diseased body-politic; 
 and if the capitalists of the country do not wish 
 
15 
 
 to swell the cry of repudiation till it shall be¬ 
 come the shibboleth of a party they had better 
 abate their demand for the further contraction 
 of the currency and consent to the repeal of 
 taxes that are proving the correctness of Dean 
 Swift’s proposition that “ We can double the 
 taxes and diminish the income one half.” The 
 rapid development of the wondrous resources 
 of our country and recuperation of the South 
 will, under happier conditions, soon swell the 
 volume of our exports beyond that of our im¬ 
 ports and enable us to recall our bonds from 
 Abroad in exchange for commodities, and resume 
 specie payments without grinding into bank¬ 
 ruptcy or beggary the men of enterprise and 
 laborers of the country. In refutation of the 
 favorite theory of the contractionists that the 
 price of gold regulates the price of domestic 
 productions I pause to refer to the fact that the 
 difference between gold and greenbacks widens 
 daily, yet the purchasing power of a greenback 
 is now for almost every article of home pro¬ 
 duction twice what it was when the bulk of our 
 bonds were subscribed for, and is increasing 
 coevally with a steady rise in the price of gold. 
 The suit of clothes in which I stand, and which 
 I know to have been woven from pure Ohio 
 wool, was bought for forty dollars in green¬ 
 backs ; not from what is called a slop-shop, but 
 from the merchant tailors who have made my 
 clothes for years. In 1804 it would have cost 
 twice that sum. Many styles of cotton goods 
 which were commanding an advance of four 
 hundred per cent, at that time are now selling 
 at prices less than those they brought before 
 the war. If any gentleman be disposed to dis¬ 
 pute the increased general purchasing power of 
 greenbacks, irrespective of the price of gold, 
 I recommend him to examine pages 42, 43, and 
 44 of the Report of the Special Commissioner 
 of Revenue. He will there find abundant evi¬ 
 dence of the fact. 
 
 Had Congress at the close of the war has¬ 
 tened to relieve the country of the taxes against 
 which I am protesting, and while avoiding any 
 expansion of the currency protected its volume 
 from diminution, and assured' the people that 
 no essential change in its volume should be 
 made until the business of the country had 
 adjusted itself to the conditions of peace, pro¬ 
 duction would have advanced and our bonds 
 would have been returning to us in the p*ockets 
 of emigrants or in settlement of a favorable 
 
 balance of trade, and millions of people North 
 and South, who are to-day eating bread they 
 have not earned, would have been busily em¬ 
 ployed and adding to the nation’s wealth by 
 earning each day more than they consume. A 
 gradual decline in prices was inevitable, but it 
 would not have destroyed confidence and sus¬ 
 pended production, and with immensely in¬ 
 creased production, both agricultural and man¬ 
 ufacturing, there would have been no cry of a 
 “glut in the market.” The people of the South, 
 whose agricultural stock and implements, fur¬ 
 niture and apparel, were exhausted during the 
 war, would have* been supplying their wants by 
 the sale of the results of their industry. Under 
 the influence of northern capital and enterprise 
 water-power that now runs to waste through 
 cotton fields would have been moving spindles 
 and looms. Forges, furnaces, and rolling-mills 
 such as those the war developed at Chatta¬ 
 nooga, Atlanta, Lynchburg, and other points, 
 would be in profitable operation, and by sup¬ 
 plying merchantable iron diminishing our 
 dependence upon England and keeping down 
 that balance of trade which with the interest 
 on our bonds held abroad must prevent the 
 resumption of specie payments as long as we 
 continue the “heroic” treatment of sacrificing 
 all other interests in order to give increased 
 value to the hoarded wealth of the possessors 
 of “ realised riches.” An increasing demand 
 for skilled labor in the South would also be a 
 powerful agent in the works of reconstruction 
 and the redemption of the country from finan¬ 
 cial embarrassment. 
 
 Mr. Chairman, Bishop Kingsley, in one of 
 his admirable letters from Europe, from Swe¬ 
 den, I think, stated that there were ten mil¬ 
 lion industrious people in Europe eager to 
 leave their fatherlands, cross the Atlantic, 
 and identify themselves with us. This state¬ 
 ment seemed to bear the aspect of exaggera¬ 
 tion, but is confirmed by the judgment of 
 every judicious traveler with whom I have 
 conversed. We have room for them all; we 
 need them all, and could give them “ample 
 room and verge enough” in which to live 
 prosperously could the navies of the world 
 bring them all to us in a single year. We 
 need them on our vine and pasture lands and 
 our grain-fields; in our forests, our mines, 
 and our ore-beds. We want the industrial 
 secrets and experience they possess, but which 
 
16 
 
 have not been introduced into our country. 
 We need them to guide our magnificent water 
 powers running to waste, and so harness them 
 that they shall labor for us as they speed their 
 way to the sea. But would they better their 
 condition to come to us at this time? I fear 
 not. Most of them can live where they are, 
 and are used to the ills they suffer; but could 
 they hope to prosper as strangers in a strange 
 land, in which there is not adequate employ¬ 
 ment for the native workingman; in which 
 that most powerful of productive agents, the 
 steam-engine, is idle and powerless, and 
 machinery is decaying in inaction, because 
 the Government arbitrarily interferes with a 
 volume of currency to which all values had 
 adjusted themselves, and which as a medium 
 of exchanges in internal trade was enhancing 
 the wealth and power of the nation in a ratio 
 unprecedented in its history or the history of 
 the world? 
 
 Sir, it is in the power of Congress, by reani¬ 
 mating ‘the industry and restoring the confi¬ 
 dence of the country before the sun of May shall 
 have fitted the fields of the North for the plow, 
 to prepare a welcome for all these people who 
 may be able to come to us. I have indicated 
 the principal measures by which this is to be 
 done. There are other measures suggested to 
 which I would gladly allude, but for the discus¬ 
 sion of which the future will offer more fitting 
 occasions. I have no fear for the distant future. 
 There is nothing in our condition to justify a 
 dread of repudiation. We are not poor and 
 exhausted, but are richer than we or any other 
 people ever were. I have shown that the coun¬ 
 try was richer at the close of the war by a newly 
 created productive power far more than equal 
 to the entire indebtedness created by the war. 
 
 I have pointed to the fact that the South, now 
 the home of freedom, will under its inspira¬ 
 tion be no longer a burden upon the exchequer 
 of the country for her postal system and other 
 Government service, as she has hitherto been, 
 but will contribute as liberally to its income as 
 the most prosperous portions of the North 
 have done or will do. Contraction of the cur¬ 
 rency and excessive taxation have temporarily 
 diminished our productive power, and may pro¬ 
 duce a period of most unhealthy agitation, but 
 the strife waging in our midst is, as I have shown, 
 the offspring of the natural, desire of the pos¬ 
 sessors of riches to expedite and increase their 
 profits. But we are not here to legislate for 
 them beyond the protection of their just rights. 
 Our charge is far nobler than that; it is the 
 welfare of a great, intelligent and enterprising 
 people. Justice to all will injure none, and by 
 laboring to promote the welfare of the poor and 
 lowly we will do most to protect the property 
 and guaranty the rights of those whose estates 
 are largest. Were it in our power and within 
 the scope of our functions to organize a system 
 of cooperation, or by any other means to har¬ 
 monize the conflict between labor and capital— 
 employer and employed—it would confer the 
 highest blessing upon our country and give sta¬ 
 bility to every interest. There is, could we but 
 discover it, a solution of that difficult question, 
 and let us hope that with our vast wealth, our 
 immense bodies of public land, the intelligence 
 and enterprise of our people, we may solve the 
 difficult problem and by the the happy condi¬ 
 tion of our people compel the rulers of the Old 
 World to follow our example and guaranty to 
 every citizen of their countries the right to exer¬ 
 cise every privilege and prerogative of a free¬ 
 man.