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HOW AMD WHEN OUR WAR DEBT CAN BE PAH). 
 
 SPEECH 
 
 HON. WILLIAM D. KELLEY, 
 
 OF PENNSYLVANIA, 
 
 ON 
 
 THE EXTINGUISHMENT OF THE PUBLIC DEBT; 
 
 DELIVERED 
 
 IN THE HOUSE OF REPRESENTATIVES, JANUARY 3, 186? 
 
 WASHINGTON: 
 
 PRINTED AT THE CONGRESSIONAL GLOBE OFFICE. 
 
 1867. 
 

V, 
 
 
 EXTINGUISHMENT OF THE PUBLIC DEBT. 
 
 The House being in the Committee of the Whole 
 on the state of the Union— 
 
 Mr. KELLEY said: 
 
 Mr. Chairman : Within an hour of the open¬ 
 ing of the present session I introduced the 
 following resolution, which was adopted with¬ 
 out dissent: 
 
 “That the Committee of Ways and Means be in¬ 
 structed to inquire into the expediency of immedi¬ 
 ately repealing the provisions of the internal revenue 
 law whereby a tax of five per cent, is imposed on the 
 products of the mechanical and manufacturing in¬ 
 dustry of the country.” 
 
 On the succeeding Monday, having in the 
 mean time examined the report of the Secretary 
 of the Treasury, I submitted the following: 
 
 Resolved , That the proposition that the war debt 
 of the country should be extinguished by the genera¬ 
 tion that contracted it is not sanctioned by sound 
 principles of national economy, and does not meet 
 the approval of this House. 
 
 I hoped that this resolution would also re¬ 
 ceive the immediate assent of the House, but 
 it thought proper to refer it to the Committee 
 of Ways and Means. I am, however, not with¬ 
 out an assured hope that with the sanction of 
 that committee it will at an early day meet the 
 approval of the House and relieve the country 
 from the profound anxiety and depression cre¬ 
 ated by the unprecedented propositions of the 
 Secretary. With these resolutions in view I 
 propose, Mr. Chairman, to detain the com¬ 
 mittee for a little while by an examination of 
 that budget of inaptitudes, incongruities, and 
 non sequiturs —the report of the Secretary of 
 the Treasury. 
 
 This report is indeed a noticeable document. 
 It abounds in phrases and propositions of 
 doubtful meaning; its abstract propositions, 
 many of which as mere abstractions are true, 
 and should be considered by the founder of a 
 
 new and independent community, are not only 
 inapplicable but are contravened by the inexor¬ 
 able peculiarities of our condition ; its abound¬ 
 ing facts do not sustain but with emphasis 
 gainsay the conclusions they are marshaled 
 to support; and the means by which it pro¬ 
 poses to return to specie payments and extin¬ 
 guish the national debt within given periods 
 would, by virtue of laws as fixed as that of 
 gravitation, produce bankruptcy, individual, 
 corporate, State, and national, and postpone 
 the permanent resumption of specie payments 
 for a quarter of a century. There is nothing 
 in this report to gratify one’s national pride. 
 As we read it we seek excuses for its author 
 and hope we may be able to say for him that 
 he confided its preparation to a subordinate 
 who dealt unfairly by him. It may, however, be 
 that Mr. McCulloch, like an oarsman, rowed 
 one way and looked another, and was too mod¬ 
 est to announce his real purpose. He may 
 have improved the occasion to repair a neglect 
 in the education of the people; for Rev. Mr. 
 Nasby tells us that the Secretary was present 
 at the Cabinet meeting convened to consider 
 the “ onparallelled loosenin uv the Nashnel- 
 Union-Johnson-Dimekratic party in the vari¬ 
 ous States wich held elections on the 9th uv 
 October last,” and that he attributed it “to 
 the limited knowledge the masses hed uv 1 In- 
 geany bankin.’ ” But, be this as it may, I am 
 sure the country will sustain the assertion that 
 whatever commendation the report may de¬ 
 serve or receive from “Ingeany” or other 
 bankers it is marked by no leading sugges¬ 
 tion adapted to the existing exigencies of our 
 country. 
 
 The Secretary’s wisdom is that of a man 
 owning a thousand fertile acres, who by the 
 aid of a loan on mortgage had fenced them in 
 and built barns and all requisite outbuildings, 
 and gathered live stock and the many imple¬ 
 ments by which genius has lightened the labors 
 
 o 
 
4 
 
 and increased the profits of the farmer, and 
 who withal had able-bodied sons to share his 
 labors, and by aid of these was accumulat¬ 
 ing a fund with which in a few years he could 
 extinguish his indebtedness; but who when 
 a fire consumed his barns and implements 
 and choice stock would not use his savings to 
 renew his stock and implements, but though 
 his creditor was not anxious for his money 
 would sell his interest-bearing bonds and hand 
 over the proceeds, his working capital, as part 
 payment of the mortgage debt. 
 
 He who under such circumstances would 
 come to such a conclusion and execute it would 
 find but little sympathy among his neighbors. 
 Eager as they might be to repair his losses they 
 would not be likely to make him county treasurer 
 or confide the township funds to his adminis¬ 
 tration. They would probably deem him inad¬ 
 equate to the management of his own property, 
 and feel that their neighborhood was well rid 
 of one who could thus stupidly sacrifice his 
 resources and doom his sons to idleness or to 
 earn laborers’ wages on the land of strangers. 
 Yet, disavowing all disposition to exaggeration 
 or caricature, I present such an one as the pro¬ 
 totype of our Finance Minister, as he discloses 
 himself in this report. 
 
 Witness the exultation with which he an¬ 
 nounces that during the brief period of four¬ 
 teen months, namely, from August 31, 1865, to 
 October 31, 1866, the principal of our debt was 
 reduced $206,379,565 71. 1 wonder whether in 
 his exultation Mr. McCulloch remembered that 
 this immense sum of more than $206,000,000 
 had been added to the cost and market price 
 of the product of but fourteen months of 
 American labor and that by its addition to the 
 cost and price of our home productions those 
 of the underpaid labor of Europe had been 
 given the advantage over the American laborer 
 in our own markets and those of the world. I 
 wonder whether in his pride he perceived that he 
 was announcing the needless abstraction of 
 more than two hundred and six millions of active 
 working capital from the business men of this 
 country, many of whom were struggling to 
 maintain infant industries which had been 
 called into existence by the war and needed 
 the fostering care of the Government to give 
 them prosperity and permanence. Unfamiliar 
 as he appears to be with the laws of social 
 science and the history of their development, 
 it is possible he did not know the advantage 
 he was giving to British monopoly over com¬ 
 peting American enterprise and industry by 
 recommending the continuance of the excess¬ 
 ive taxation which enabled him to pay those 
 hundreds of millions. England is the foe of 
 the laborer in every land. To maintain her 
 monopoly she must undersell other nations 
 in their own markets, and to effect this must 
 depress the wages of labor to the lowest pos¬ 
 sible point and use shoddy or other base mate¬ 
 
 rial whenever it can be done without immediate 
 detection. Her capitalists are, we are assured, 
 accumulating £100,000,000 or $500,000,000 
 surplus capital per annum; and for more than 
 a century it has been their policy to apply a 
 portion of this surplus to the destruction of the 
 industries of other nations by underselling 
 them, though for a time it involved loss on cer¬ 
 tain kinds of goods. We have often been the 
 victims of this unscrupulous policy, and if the 
 suggestions of the Secretary prevail it will 
 again prostrate us. 
 
 The war of 1812 developed our productive 
 power very considerably ; but in two years after 
 the war closed the capitalists of England, by the 
 express advice of her leading statesmen and 
 in pursuance of a deliberate combination, 
 swept our young manufactures out of exist¬ 
 ence. In the course of a speech in Parlia¬ 
 ment in 1815, Henry Brougham, exulting over 
 our wide-spread bankruptcy, said : 
 
 “It is well worth while to incur a loss upon the 
 first exportation in order by the glut to stifle in the 
 cradle those rising manufactures in the United States 
 which the war has forced into existence.” 
 
 History, so far hs that chapter is concerned, 
 is repeating itself, and our market is glutted 
 with British woolen goods which until our fac¬ 
 tories shall discharge their work-people and 
 suspend operations will be sold at less than cost. 
 The assessment of extraordinary taxes for the 
 extinguishment of the war debt while such a 
 contest is waging will make the victory of our 
 enemy an easy one. The policy is suicidal, 
 and will prove fatal to our revenues by par¬ 
 alyzing the productive power of the country 
 and diminishing the ability of the people to 
 consume either dutiable or taxable commodi¬ 
 ties. This is not the language of declamation. 
 It has high official sanction, among which is 
 that of the revenue commission appointed by 
 the Secretary himself, as will appear by the 
 following extract from the last annual report 
 of the secretary of the National Association of 
 Wool-Growers. 
 
 Before presenting this extract I should re¬ 
 mark that the tax on manufactures has been 
 reduced from six to five per cent, since the 
 preparation of the official reports to which it 
 refers: > 
 
 “ The internal revenue tax paid in the year 1865 
 upon ‘ woolen fabrics and all manufactures of wool' 
 amounted to $7,947,094, being 3.79 per cent, upon the 
 whole of the internal revenue collected. How heavily 
 this tax bears upon our manufactures is shown by 
 facts presented in the report of the secretary of the 
 State of Massachusetts upon the industrial statistics 
 of the State for the year 1865. The capital invested 
 in woolens proper is shown to have been $14,775,830, 
 and the value of the woolen product to have been 
 $48,430,671. Six per cent, upon the latter sum, the 
 amount of the revenue tax, is $2,905,846, being 19.66 
 per cent., or in round numbers 20 per cent, upon the 
 
5 
 
 capital invested in woolens. This tax has been paid 
 cheerfully under the impulses of patriotism. But it 
 cannot be borne long. In’the language of one of the 
 special reports of the revenue commission, ‘ It has 
 no parallel, probably, in the fiscal regulations of any 
 civilized nation. It would utterly destroy in ten 
 years two thirds of the various kinds of production 
 subject to its operations.’ ” 
 
 Gentlemen will not fail to observe how per¬ 
 fectly the views of the commission are sup¬ 
 ported by the facts above cited in relation to 
 .the woolen manufactures of Massachusetts. 
 But I recur to the revenue report: 
 
 “ A very large proportion of the manufacturing es¬ 
 tablishments in the United States sell products year¬ 
 ly to two or three times the amount of their invested 
 capital; and in many departments of production their 
 sales yearly amount to more than three times the 
 cost of their establishments. If the capital invested 
 be $100,000 the sales may amount to two or three hun¬ 
 dred thousand dollars, and the tax on that business 
 will range from twelve to eighteen thousand dollars; 
 that is, from twelve to eighteen per cent, on the cost 
 of the manufacturing establishment.” 
 
 And again: 
 
 “ In every point of vie\V in which it is presented it 
 seems clear that the six per cent, tax upon manufac¬ 
 tures will destroy productive power in an increasing 
 progression; that it will in a few years, if not removed, 
 furnish a sad monument to perpetuate the memory of 
 a great mistake.” 
 
 Tlie Secretary’s time anct attention have 
 probably been so absorbed by his official guillo¬ 
 tine that he has not been able to examine the 
 reports submitted to him by the revenue com¬ 
 mission. I will, in the hope of bringing them 
 to his attention, add to the foregoing the follow¬ 
 ing brief extract from their pi’eliminary report 
 of last year, submitted to him by Mr. Commis¬ 
 sioner Wells: 
 
 ‘‘The remedy, therefore, for the difficulties abfeve 
 pointed out and illustrated, save in a few striking in¬ 
 stances which have probably resulted from oversight 
 in the framing of the law, must, in the opinion of the 
 commission, be sought for in such a revision of the 
 present internal revenue system as will look to an 
 entire exemption of the manufacturing industry of 
 the United States from all direct taxation, (distilled 
 and fermented liquors, tobacco, and possibly a few 
 other articles excepted.) This the commissioners are 
 unhesitatingly prepared to recommend.” 
 
 These grave considerations, though specially 
 reported to him by his own agents, do not seem 
 to have attracted the attention of Mr. McCul¬ 
 loch; for while exulting over the rapid pay¬ 
 ment of the debt, without seeming to detect the 
 cause of the popular emotion, he says: 
 
 “ Nothing in our history has created so much sur¬ 
 prise, both at home and abroad, as the reduction of 
 our national debt. The wonder excited by the ra¬ 
 pidity with which it was created is exceeded by the 
 
 ♦ > 
 
 admiration of the resolution of the tax-payers them¬ 
 selves that it shall be speedily extinguished.” 
 
 It is true, Mr. Chairman, that surprise and 
 wonder agitate the practical men of the country. 
 These emotions are not, however, excited by 
 the fact that we were able to bear extraordi¬ 
 nary taxation while the development of our 
 boundless productive power was stimulated by 
 the exigencies of the war, and our own market 
 was secured to our own producers by the dif¬ 
 ference between our lawful currency and gold, 
 in which payment of duties on imports was re¬ 
 quired. The taxes under which those hundreds 
 of millions accumulated were assessed while 
 war Was raging and for war purposes, and could 
 have been borne as long as the conditions I have 
 indicated were maintained. Wise men know 
 this, and that the war terminated abruptly and 
 earlier than was expected, and do not hold the 
 Secretary accountable for the results of this 
 contingency. No matter what sacrifices it 
 involved, the people would have cheerfully 
 borne them rather than yield the questions 
 put at issue by the war. But these questions 
 have been happily settled by war’s arbitra¬ 
 ment. Peace is restored, our currency approxi¬ 
 mates the specie standard, and it is discovered 
 that by aid of our inordinate internal taxes 
 foreign manufacturers are monopolizing our 
 home market. Our publishers buy their paper 
 and print and bind their books in England or 
 Belgium; our umbrella-makers have trans¬ 
 ferred their workshops to English towns ; our 
 woolen and worsted mills are closed or closing, 
 and the laborers in these branches are not 
 only wasting their capital, which consists in 
 their skill and industry, but drawing from the 
 savings-banks or selling the Government bonds 
 in which they had invested their small accu¬ 
 mulations to maintain their families during the 
 winter; and ourenlarged importations of foreign 
 goods are swelling the balance of trade against 
 us and preparing us for general bankruptcy. 
 The surprise of which Mr. McCulloch speaks 
 is excited by the fact that in view of this con¬ 
 dition of things the Secretary of the Treasury 
 should urge the maintenance of extraordinary 
 taxes sufficient to enable him to apply not less 
 than $50,000,000 per annum to the extinguish¬ 
 ment of our debt by the rapid absorption of 
 the only portion of that debt which bears no 
 interest. Wonder amounting almost to awe 
 does possess our people, and it is excited as 
 was that of the unsophisticated sailor who, in 
 the midst of an exhibition of magical illusions, 
 was blown into the air by the accidental ex¬ 
 plosion of powder, and in his damaged con¬ 
 dition wondered what would come next in the 
 order of exercises. 
 
 That the tax-payers have resolved that the 
 principal of our debt “ shall be speedily extin¬ 
 guished” I deny. They regard the attempt 
 as Quixotic, as destructive of our industrial 
 interests, and beneficial only to money-lenders, 
 
6 
 
 speculators in Government securities, and for¬ 
 eign manufacturers. Sir, if the Secretary is ac¬ 
 cessible to the voice of remonstrance he must by 
 this time be satisfied that there is no tax-payer in 
 the country who is not engaged in importing for¬ 
 eign goods or in shaving notes, or who, having 
 bought bonds at low rates in a depreciated cur¬ 
 rency, hopes to have them redeemed at an early 
 day in specie, who does not dissent from the 
 assessment of extraordinary taxes for the ex¬ 
 tinguishment by the generation which created 
 it, of a debt, the security of which is undoubted 
 and which was incurred for the benefit of pos¬ 
 terity. The opinion of the people on this ques¬ 
 tion is modestly expressed by the editor of the 
 ablest and most instructive of our industrial 
 journals, the Iron Age. He says: 
 
 “ We are glad to see that aresolution for the entire 
 remoral of the manufacturers’ tax of five per cent, 
 has been introduced, and hope it will be adopted. 
 As an independent proposition, outside of any other 
 amendment of the tax or tariff laws, this will com¬ 
 mend itself to the good sense of the country as one so 
 manifestly just that we should expect there would be 
 a very general expression of public feeling in its 
 favor. All classes can heartily unite in this effort to 
 untrammel the industry of the country and to cheapen 
 production. The free-trader and protectionist can at 
 least here agree; the workman is quite as directly 
 interested in this matter as the employer, for the 
 effect of the tax is only to restrict the demand for the 
 products of his labor. As a war necessity we cheer¬ 
 fully accepted this burden which the manufacturers 
 of the country have borne with such uncomplaining 
 loyalty; but now that the necessity is past, and that 
 the national exchequer is in such a condition that it 
 can easily and safely dispense with the revenue it 
 produced, we think we are entitled, on behalf of 
 manufacturers and their workmen, to demand its 
 repeal. England, with all her load of taxes, has no 
 such impost as this; her uniform policy is in every 
 way possible to cheapen the production of her wares, 
 and in the unequal contest which we are called to 
 wage with her it is in the last degree unwise to put 
 ourselves under this additional and unnecessary dis¬ 
 ability.” 
 
 Sir, this generation embraces the widows, 
 orphans, and maimed soldiers of the contend¬ 
 ing parties in a civil war, each of which parties 
 had armies numbering more than a million 
 men in the field. They at least are in no con¬ 
 dition to welcome excessive taxation, espe¬ 
 cially those of the South, who are without even 
 the poor pittance we give to ours as pensions. 
 The folly of the dull farmer I have sup¬ 
 posed—a case of stupidity scarcely probable, 
 though possible within the range of human 
 dullness—is the wisdom by which the Secre¬ 
 tary proposes to guide the finances of this 
 country and extricate them from embarrass¬ 
 ments which in this report he depicts as 
 almost overwhelming. Let us hear him. He 
 Bays that— 
 
 “He has been clear in his convictions that specie 
 
 payments are not to be restored by an accumulation 
 of coin in the Treasury to be paid out at a future day 
 in the redemption of Government obligations; but 
 rather by quickened industry, increased produc¬ 
 tion, and lower prices, which can alone make the 
 United States what they ought to be—a creditor an 
 not a debtor nation.” 
 
 And as if to illustrate his want of sincerity, 
 or the confusion of his ideas, proceeds to 
 speak of “ certain branches of industry that are 
 now languishing under the burdens which have 
 been imposed on them;” and to tell us that 
 though “the people of the United States are 
 naturally a commercial and maritime people, 
 fond of adventure—bold, enterprising, persist¬ 
 ent”— 
 
 “The disagreeable fact must be admitted, that, 
 with unequaled facilities for obtaining the materials, 
 and with acknowledged skill in ship-building, with 
 thousands of miles of sea-coast, indented with the 
 finest harbors in the world, with surplus products 
 that require in their exportation alarge and increas¬ 
 ing tonnage, we can neither profitably build ships 
 nor successfully compete with English ships in the 
 transportation of our own productions. Twenty 
 years ago it was anticipated that ere this the United 
 States would be the first* maritime Power in the 
 world. Contrary to our anticipations, our foreign 
 commerce has declined nearly fifty per cent, within 
 the last six years.” 
 
 And as if to impress us more profoundly 
 with our present inability to bear excessive 
 taxation, he sets forth the following statistics: 
 
 “The tonnage of American vessels engaged in the 
 foreign carrying trade which entered United States 
 ports was— 
 
 In-1860...5,921,285 tons. 
 
 In 1865.2,943,661 “ 
 
 In 1866.3,372,060 “ 
 
 “The tonnage of such vessels which were cleared 
 from the United States was— 
 
 In I860.6,165,924 tons. 
 
 In 1865.3,025,134 “ 
 
 In 1866.3,383,176 “ 
 
 “The tonnage of foreign vessels which entered our 
 ports was— 
 
 In 1860.2,353,911 tons. 
 
 In 1865.3,216,967 “ 
 
 In 1866.4,410,424 “ 
 
 “ The tonnage of foreign vessels which were cleared 
 was— 
 
 In 1860..2,624,005 tons. 
 
 In 1865 .3,595,123 “ 
 
 In 1866.4,438,384 “ 
 
 While admitting that something of the dim¬ 
 inution of our shipping must be attributed to 
 the effects of the war, the Secretary, as if to 
 prove that high taxes have been more destruct- 
 ive than war, says: 
 
 “The scarcity of American vessels ought to have 
 produced, and but for a redundant currency and high 
 taxes would have produced, activity in our ship-yards 
 and a rapid increase of tonnage; but this has not 
 
7 
 
 been the case. The prices of labor and materials are 
 so high that ship-building cannot be made profitable 
 in the United States, and many of our ship-yards are 
 being practically transferred to the British Provinces. 
 It is only a few years since American ships were 
 sought after on account of their superiority and cheap¬ 
 ness; and large numbers of vessels were built in 
 Maine and other States on foreign account or sold 
 to foreigners, while at the same time our own mer¬ 
 cantile marine was being rapidly increased.” * 
 * * * “ It is an important truth that vessels 
 
 can be built very much cheaper in the British Prov¬ 
 inces than in Maine. Nay, further, that timber can 
 be taken from Virginia to the Provinces, and from 
 these Provinces to England, and there made into 
 ships which can be sold at a profit; while the same 
 kind of vessels can only be built in New England at 
 a loss by the most skillful and economical builders.” 
 
 “ The same causes—a redundant currency and high 
 taxes—that prevent ship-building tend to prevent 
 the building of houses and even of manufactories. 
 So high are prices of every description that men 
 hesitate to build dwellings as fast as they are re¬ 
 quired, and thus rents are so advanced as tc* be op¬ 
 pressive to lessees, and the healthy growth of towns 
 and cities is retarded. So it is in regard, to manu¬ 
 factories. Mills which were built before the war can 
 be run profitably, but so expensive are labor and 
 materials that new mills cannot be erected and put 
 into operation with any prospect of fair returns upon 
 the investment, unless upon the expectation that 
 taxes will remain as they are and prices be sus¬ 
 tained, if they are not advanced. The same causes 
 are injuriously affecting agriculture and other inter¬ 
 ests which it is not necessary to particularize. It is 
 everywhere observed that existing high prices are 
 not only oppressing the masses of the people, but are 
 seriously checking the development, growth, and 
 prosperity of the country.” 
 
 What remedies does our sagacious Secre¬ 
 tary propose for the evils he so truthfully de¬ 
 picts? One, and apparently in his judgment 
 the most efficacious, is that which I have been 
 considering, namely, to add not less than four 
 or five million dollars per month to the price 
 of American products by taxing them to that 
 amount for the express purpose of extinguish¬ 
 ing so much of our national debt! If gentle¬ 
 men doubt my statement I beg them to give the 
 report an attentive reading. This mad policy 
 pervades all its suggestions. Nor is it to be 
 temporary. It is to be the fixed policy of the 
 Government, and he says our debt which, 
 according to his statement, was on the 31st of 
 October last $2,551,424,121 20, “can be paid 
 by the generation that created it.” 
 
 Sir, if my suspicion that the preparation of the 
 Secretary’s report was .committed to a treach¬ 
 erous subordinate be correct gentlemen will be 
 able to estimate the wantonness of that person’s 
 cruelty by the fact that in further illustration 
 of the absurdity of its leading proposition he 
 proceeds to tell us that ( ‘ between the years 1848 
 
 and the 1st of July, 1860, the product of the 
 gold and silver mines of the United States was 
 about $1,100,000,000,” but that “ it is not prob¬ 
 able that the amount of gold and silver now 
 in the United States is very much larger than 
 it was eighteen years ago.” And as if to give 
 greater effect to what, were it not gravely 
 trifling with the prosperity of the American 
 people, might be regarded as a huge joke, adds 
 the fact that beside exporting all our bullion 
 we have, in exchange for perishable foreign 
 commodities which we might have fabricated 
 from our own raw materials, given to foreign 
 capitalists, who now hold them, interest-bear¬ 
 ing evidences of debt to the amount of 
 $600,000,000, as follows: 
 
 United States bonds.$350,000,000 
 
 State and municipal bonds. 150,000,000 
 
 Itailroad and other stocks and bbnds. 100,000,000 
 
 Total.$600,000,000 
 
 Nor does he yet stay his hand in presenting 
 reasons why we should not adopt his proposi¬ 
 tion, for he informs us that the reports of the 
 custom-houses show that though we exported 
 specie during the fiscal year which ended June 
 30, 1866, to the amount of $82,643,374, the 
 balance of trade, as shown by those reports, 
 was still against us in gold values $8,009,577. 
 And with a measure of candor for which I 
 award him full credit, adds: 
 
 ‘‘But these figures, taken from the reports of the 
 custom-houses, do not present the whole truth. Eor 
 many years there has been a systematic undervalua¬ 
 tion of foreign merchandise imported into the United 
 States, and large amounts have been smuggled into 
 the country along our extended sea-coasts and 
 frontiers. To make up for undervaluations and 
 smuggling, and for cost of transportation paid to 
 foreign shipowners, twenty per cent, at least should 
 be added to the imports, which would make the 
 balance for the past year against the United States 
 nearly $100,000,000. It is evident that the balances 
 have been largely against the United States for some 
 years past, whatever may have been the custom¬ 
 house returns.” 
 
 Mr. Chairman, I confess my ignorance of 
 “ Ingeany bankin’,” and will proclaim my 
 gratitude to any of its disciples who will so far 
 admit me to its mysteries as to enable me to 
 reconcile the Secretary’s premises and conclu¬ 
 sions. 
 
 Meanwhile I ask who but he, unless it be 
 bankers and shavers of notes, importers of 
 foreign goods, and holders of our bonds who 
 desire to get two dollars for every one they in¬ 
 vested in them, who but these does not see 
 in this fearful array of evidences of our tend¬ 
 ency to universal bankruptcy a necessity for 
 developing our productive power by diminish¬ 
 ing the internal taxes of the country to the 
 lowest possible amount consistent with an 
 economical administration of the Government? 
 
8 
 
 And who but these does not see that by con¬ 
 tinuing the course we are pursuing we are 
 retarding the permanent resumption of specie 
 payments and postponing the day when we 
 shall be able to enter judiciously upon the 
 extinguishment of our debt? 
 
 Mr. McCulloch does not seem to perceive 
 that this fearful array of facts is but so many 
 concurrent items of evidence that notwith¬ 
 standing our freedom, enterprise, and energy, 
 and our infinitely diverse, easily-accessible, 
 and inexhaustible stores of natural wealth, our 
 extended sea-coast, fine harbors, broad lakes, 
 and far-rolling rivers, which invite us to manu- 
 ufacturingand maritime effort and preeminence, 
 we are but a mere commercial dependency. 
 Like all other debtors we are at the mercy of 
 our creditors. Though richer in natural re¬ 
 sources than all* of them combined the con¬ 
 tinuance of our prosperity is dependent upon 
 the caprices or necessities of England and the 
 nations of Europe, which, by protecting their 
 industry and importing only raw material or 
 commodities but slightly wrought and export¬ 
 ing products as much manufactured as possi¬ 
 ble, practice economies unknown to us, and by 
 diversifying their industry provide remunera¬ 
 tive employment for all their people. 
 
 Manufactures and agriculture are each the 
 handmaid of the other, and the successful prac¬ 
 tice of both is prerequisite to profitable and 
 sustained commerce. That sea-board nation 
 which most diversifies its productions and best 
 protects its skilled labor against unequal com¬ 
 petition will ever be foremost in the race for 
 commerce. 
 
 No, sir ; the Secretary does not see the proper 
 application of the facts he cites, and while di¬ 
 lating upon them illustrates his profound ignor¬ 
 ance of the progress social science has made 
 by reiterating trite maxims from English hand¬ 
 books of political economy to prove that inter¬ 
 national trade-balances are settled with gold 
 and silver and that the flow of specie “indi¬ 
 cates the condition and results of trade between 
 different nations.” In the light of these laws 
 1 point him and the country to the fact that the 
 trade between us and foreign nations has car¬ 
 ried them our cotton and wool, our beef, pork, 
 grain, and other staples, and $1,100,000,000 
 of our bullion with $600,000,000 of our bonds 
 to pay for wines, silks, laces, cloths, &c., and 
 iron rails to stretch across the coal and iron 
 beds which underlie our country from the Atlan¬ 
 tic coast to the Pacific and from the lakes to 
 the Gulf, and ask them if the facts do not indi¬ 
 cate bankruptcy as the “result” if the present 
 and past “condition” of that trade be main¬ 
 tained. And whether, when as now we are 
 compelled to look to our internal taxes for the 
 bulk of our receipts, when duties on foreign 
 imports could under no possible system pro¬ 
 vide us with adequate income, it would not be 
 well as a pure question of revenue to so adjust 
 
 our taxes as to relieve American labor and 
 land from every possible exaction and by every 
 possible device to stimulate the development 
 of our productive power and the immigration 
 of skilled laborers into the country? Thus, 
 and thus alone, can we check the flow of specie 
 and bonds to Europe and retain among us as 
 capital the production of our gold and silver 
 mines with which to redeem the $600,000,000 
 of bonds now held by foreigners. This the 
 Secretary professes to desire, but how the 
 imposition of extraordinary taxes upon our 
 industry to the amount of $50,000,000 per 
 annum is to promote it he has not condescended 
 to inform us. 
 
 The scheme of the Secretary is as unprece¬ 
 dented as it is unwise. It is without a single 
 historical example. The first Federal debt 
 was funded in 1791, and for sixteen years no 
 effort was made to reduce it. In 1807 the 
 receipts of the Government from ordinary 
 sources were in excess of current expenses, and 
 the surplus was applied to the debt. This 
 easy and natural process of extinguishment 
 continued till 1812. The average rate of pay : 
 ment per annum from 1807 to 1812 was about 
 $6,000,000, and at the breaking out of the war 
 with Great Britain the debt had been reduced 
 from $75,000,000 to $45,000,000. It was 
 swollen by that war to $127,000,000 ; but no 
 extraordinary taxes were imposed for its re¬ 
 demption. The revenues of the Government 
 were derived from ordinary sources, and such 
 balances as remained after paying current 
 expenses were applied to its absorption. No 
 statesman of either period proposed to cripple 
 industry and retard the development of the 
 country by the imposition of extraordinary 
 taxes as a means of extinguishing its debt. 
 They wisely stimulated both by imposing higher 
 duties upon foreign importations, and under 
 the avowedly protective tariffs of 1824 and 1828 
 paid it off. Such a spectacle had never been 
 witnessed before, for no other nation had ever 
 liquidated its entire debt. 
 
 The American people will rather follow the 
 successful example of the statesmen of those 
 days and foster our industry than accept the 
 crotchets of our present Secretary of the Treas¬ 
 ury and cripple labor and diminish production 
 by extraordinary taxation. They freely lent 
 their substance to the Government and hold 
 more than eighty per cent, of our national 
 securities, and none of them are demanding 
 payment. Nor need we be specially anxious 
 about that part of our bonds that are held in 
 Europe. They who hold them bought them as 
 investments or as matter of speculation. As 
 investments they pay better interest than the 
 holders can elsewhere obtain with equal secur¬ 
 ity, and we are not required to prostrate our 
 industry by a vain attempt to hasten the day 
 on which foreign speculators shall realize an¬ 
 ticipated profits. England has never been 
 
9 
 
 guilty of such stupidity. When the Napoleonic 
 wars closed the governing class of England held 
 her bonds, and like the money-changers and 
 “Ingeany” bankers of our country clamored 
 for the resumption of specie payments that they 
 might get par for the bonds which they had 
 bought during those wars at such prices as our 
 own sold for and in paper as irredeemable and 
 depreciated as ours has been. By this operation 
 they would .have made an average of one hun- 
 -dred per cent, on their investments. But govern¬ 
 ing class as they were, it was not until seven 
 years after the close of the war that the states¬ 
 men who controlled the financial affairs of 
 Great Britain attempted the experiment of a 
 resumption, or till the suspension had endured 
 for well nigh a quarter of a century. And only 
 within a few years—I think I may say within 
 the present decade—has England made serious 
 effort to reduce the principal of her debt, nor 
 has she yet imposed an extraordinary tax for 
 the purpose. Her statesmen knew that her 
 population was increasing and her productive 
 power in process of rapid development, and 
 they know' also that so long as the interest is 
 ready at maturity and the creditors of the nation 
 see that its taxes are steadily diminishing and 
 its population and resources increasing, they 
 will regard the investment as safe. 
 
 Thus has England, while permitting her debt 
 to increase, by showing her steady ability to 
 diminish the taxes upon her people and pro¬ 
 vide for interest and current expenditures 
 been able to reduce the interest on her debt 
 from war rates to the low rates at which she 
 now holds it; and that debt which by its im¬ 
 mense volume seemed to overshadow her whole 
 future, is now not in the proportion of.ten per 
 cent, per man, per dollar, and per acre to what 
 it was at the date of the treaty of Paris. So 
 will it be with us if we shun the nostrums of 
 the Secretary of the Treasury. The estimated 
 wealth of the loyal States at this time is 
 $17,428,000,000 and their annual product 
 $4,685,000,000. But thirty years hence, if 
 the progress of our growth is not retarded by 
 financial charlatanism, the. wealth of those 
 States will be $90,000,000,000, and the annual 
 product amount to $23,000,000,000, and the 
 now prostrate but naturally richer South will 
 then rival the people of the North in prosper¬ 
 ity and tax-paying power. 
 
 Let me, Mr. Chairman, as it is due to the 
 Secretary I should say, that he does not rest 
 this urgent demand for the speedy extinguish¬ 
 ment of the debt upon principles of social 
 science or national economy. In this matter 
 his head yields to his heart. He is guided by 
 a sentiment. He prides himself upon his mag¬ 
 nanimity, and would ruin the industry of the 
 North and retard the development of our coun¬ 
 try for a century if need be rather than wound 
 the sensibilities of our u erring southern breth¬ 
 ren.” Thus, after indulging in some trite 
 
 reflections upon the evil of public debt in 
 general, he tells us that— 
 
 ‘‘To the perpetuation of the existing debt of the 
 United States there are also, it may be proper to 
 remark, serious objections growing out of the cir¬ 
 cumstances under which it was created. Although 
 incurred in a great struggle for the preservation of 
 the Government, and therefore especially sacred in 
 its character, its burdens are to be shared by those 
 to whom it is a reminder of humiliation and defeat. 
 It is exceedingly desirable that this, with other causes 
 of heart-burnings and alienation, should be removed 
 as rapidly as possible, and that all should disappear 
 with the present generation, so that there may be 
 nothing in the future to prevent that unity and good 
 feeling between the sections which are necessary for 
 true national prosperity.” 
 
 To others thanth-e Secretary it is known that 
 the country is no longer divided into hostile 
 sections. That which made the South sec¬ 
 tional was slavery and pride of caste. Slavery, 
 thank God, has been forever abolished and 
 pride of caste is vanishing. Yes, sir, the de¬ 
 cree, sustained by a majority of nearly half a 
 million of the voters of the northern States and 
 enduring as the fiat of Heaven, that pride of 
 caste must disappear from American politics 
 has gone forth. Henceforth he who breathes 
 the air of our country, let his color or father- 
 land be what or where it may, may by his own 
 volition invest himself with the attributes of 
 American citizenship. Everyone born on the 
 soil is a citizen, and our naturalization laws are 
 henceforth of universal application. 
 
 I fear the southern people after reading the 
 Secretary’s report will regard him rather as a 
 man of sentiment than of affairs. They may 
 applaud the delicacy of his sensibilities, but 
 while doing so will probably wish that a well- 
 informed statesman presided over his Depart¬ 
 ment. Destructive to our interests as the 
 attempt to provide for the payment of out debt 
 by extraordinary taxes on this generation would 
 be, the southern people are less able than we to 
 endure the mad experiment. Among them are, 
 as I have said, the widows, orphans, and maimed 
 soldiers of their armies, whose poverty is not 
 relieved even by the pittance we give as pensions 
 to the same classes ; their industrial system has 
 been overthrown and is not yet reorganized; 
 their cities and towns by their dilapidation tell 
 how their trade and commerce have suffered, 
 and their lands to a great extent lie waste ; their 
 banks, insurance companies, and other moneyed 
 institutions have gone into liquidation ; their 
 railroads are in ruins and almost bare of roll¬ 
 ing-stock ; and they are making daily appeals to 
 the people of the North, whose presence among 
 them the baser sort of Southrons will not permit, 
 for capital with which to open and work mines 
 of gold, silver, copper, lead, iron, and coal, 
 in which their land abounds. Scourged by the 
 results of their own folly they are awakening 
 
10 
 
 to a knowledge of the value of their posses¬ 
 sions, and are proposing to make them avail¬ 
 able. They desire if they can obtain the re¬ 
 quisite capital to locate the factory near the 
 cotton-field and the forge and furnace near 
 the mine and ore bed. 
 
 A brief extract or two from southern papers 
 of very recent date will show how cruel Mr. 
 McCulloch is to those to whom he wishes to be 
 so kind. Says the Petersburg Index: 
 
 “The variety of schemes devised for the relief of 
 that numerous and unfortunate class of persons who 
 are now laboring under pecuniary embarrassment 
 evinces the necessity, as well as the difficulty, of pro¬ 
 viding an adequate remedy for the mischief sought 
 to be prevented. A further extension of the stay 
 law, a total or partial repudiation of private indebt¬ 
 edness, and the exemption of specified property from 
 involuntary alienation are some of the expedients 
 now brought forward to meet the pressing exigencies 
 of the occasion.” 
 
 The Nationalist, Mobile, Alabama, says : 
 
 “ Reliable planters from Mississippi say that not 
 one half dozen, on an average, in each county in that 
 State, can pay their debts. Targe tracts of valuable 
 land are selling at nominal rates.” 
 
 And the Richmond Times says: 
 
 “ If the tide of immigration continues to flow by us, 
 and we make no energetic and intelligent effort to 
 secure it, taxation will speedily devour what little the 
 war left, and a few years hence when the pine, the 
 persimmon, and the sassafras have made a wilderness 
 of many a broad and once fertile field, some inaus¬ 
 picious day the tax-gatherer or the sheriff will hang 
 out his red flag over the ruins of the old family man¬ 
 sion, and then, alas for the paternal acres, and the 
 dear, sacred old homes of our boyhood! for every¬ 
 thing, even the dear old graveyard, where repose 
 the honored dust of our forefathers and the bones 
 of many a noble ‘soldier,’ ‘son,’ and fair daughter 
 will pass into the hands of some codfish-eating Puri¬ 
 tan from Boston or Nantucket.” 
 
 How incapable tlie people of North Caro¬ 
 lina are of enduring extraordinary taxation is 
 'shown by reference to facts which occurred 
 anterior to the war by a writer in the Newbern 
 Times of September 8. After saying with 
 truth that “the old North State is inferior to 
 none of her sisters in the combined advantages 
 of situation, climate, agricultural and mineral 
 riches,” he proceeds to make the following 
 exhibit: 
 
 “In 1860North Carolina ranked as twelfth among 
 the States, containing a population of 992,622, of whom 
 331,059 were slaves. The free population are distrib¬ 
 uted according to places of birth, as follows: 
 
 Born in North Carolina.634,220 
 
 Born in other southern States. 21,446 
 
 Born in northern States. 2,399 
 
 Born in foreign countries. 3,299 
 
 Born at sea and not classified. 201 
 
 “While North Carolina was thus receiving from 
 
 without her limits about twenty-seven thousand im¬ 
 migrants, she sent as emigrants to other States no less 
 than 272,606 of her free-born offspring who are scat¬ 
 tered throughout the western and southwestern States, 
 of whom Tennessee received 55,000, Georgia 29,000, 
 Indiana 27,000, Alabama 23,000, Arkansas 18,000. 
 
 “ She was ninth among the States in her contribu¬ 
 tion to the population of the Union; seventh in con¬ 
 tributing to the population of other States; behind 
 all, save little Delaware and South Casolina, which 
 ranks last of all, in the reception of citizens from 
 other States. 
 
 “ Of the vast foreign immigration, numbering up¬ 
 ward of four millions, which has built up the manu¬ 
 factures and the internal improvements of the north¬ 
 ern and western States she received only about three 
 thousand, standing in that respect behind every State 
 in the Union and behind three of the Territories.” 
 
 But bow capable the future people of North 
 Carolina will be is well shown by the editor of 
 the Old North State, published at Salisbury. 
 In an article entitled “The Future of North 
 Carolina,” he says: 
 
 “ The questions present themselves, how is all this 
 to be done, and can the Government promote the 
 great object by a proper policy? We shall endeavor 
 to answer these questions to the best of our poor 
 ability. 
 
 “ The abolition of slavery has, in our opinion, 
 changed the destiny of the State. The negro cannot 
 be entirely relied upon as a laborer, and he must be 
 assisted by or his place be supplied with white labor¬ 
 ers sooner or later. These, except in a small portion 
 of the State, cannot be profitably employed in agri¬ 
 cultural pursuits until other interests are brought 
 prominently forward and partially developed. This 
 cannot be done without an influx of capital from 
 abroad. 
 
 “The greatest of these interests, and those which 
 we shall notice on this occasion, are the mining and 
 manufacturing interests. It is perfectly useless for 
 us to speak of the vast mineral wealth of North Caro¬ 
 lina; it is known to all the world to be inferior to 
 that of no country on the globe, both in quantity, 
 quality, and variety of minerals, but we have no 
 capital to render them available. 
 
 “And to the capitalist who desires to engage in man¬ 
 ufacturing, no country in the world presents more 
 inducements than North Carolina. Her water power 
 is unsurpassed. As a general thing steam is useless in 
 the State for manufacturing purposes; for the face of 
 the country is intersected by water courses such as 
 abound in few other lands. If we look at the map 
 we shall see that there is a perfect net-work of 
 streams, showing that it is one of the best watered 
 portions of the earth, and the structure of the country 
 is such that every one of these streams can be made 
 to drive machinery. All this magnificent provision 
 of nature has thus far,been permitted to waste, in a 
 great measure at least. 
 
 “It is scarcely necessary to refer to these facilities 
 more in detail. Every reader knows the vast capacity 
 of our larger rivers for these purposes. That of the 
 
11 
 
 Roanoke, the Neuse, the Haw, the Deep, the Main 
 Yadkin, the South Yadkin, the Little Yadkin, the 
 Catawba and other rivers of the State for driving 
 machinery is scarcely equaled by any in the world, 
 while we have many other smaller streams of very 
 great capacity. 
 
 “And when all this water power is turned to account 
 for manufacturing purposes, as it will be at no great 
 distance of time, when we have thousands of furnaces 
 in full blast turning the ores from the bowels of the 
 earth into tho richest marketable commodities, and 
 when our vast, deposits of coal shall be used for these 
 and other purposes for which nature intended them, 
 what a country we will havel What vast amounts 
 of wealth must then flow into our laps. Our State 
 will then be dotted over with the most flourishing 
 manufacturing towns and villages and our now barren 
 fields will teem with the richest verdure. 
 
 “This must necessarily be so. Wo stated at the 
 outset that until the mining and manufacturing 
 interests were at least partially developed imported 
 white labor could not be profitably employed in agri¬ 
 cultural pursuits. But when these interests become 
 to be a power in the State the thing changes. All 
 the thousands, if not hundreds of thousands, of factory 
 operatives and miners must find a support,, and the 
 result will be that vast home markets will be created. 
 The soil will be heavily taxed for their sustenance 
 and consequently vast improvements will be made in 
 our system of agriculture—and nothing needs im¬ 
 provement more. But we will not pursue this lino 
 of remark further—we have presented the general 
 outlines, and we leave it to the imagination of our 
 readers to fill up the picture. In the course of time 
 the farms of our State will rival those of tho Dutch 
 Pennsylvanians; our lands will become equally pro¬ 
 ductive, while our system of internal improvements 
 will become equal to theirs.” 
 
 More gladly, sir, than the people of the North 
 will those of the South welcome release from 
 every dollar of taxation from which sagacity 
 can exempt them. And I assure the Secre¬ 
 tary that the people of no part of the country 
 have shared so largely as those of the South 
 the surprise and wonder to which he alludes. 
 Mr. McCulloch says: 
 
 “ We have but touched the surface of our resources; 
 the great mines of our national wealth are yet to be 
 developed.” 
 
 This is specially true as to the southern portion 
 of our country, and in the name of the impov¬ 
 erished people of that section I ask, is it well 
 to tax a generation the surface of whose re¬ 
 sources has not been touched by the transmut¬ 
 ing hand of labor, and the mines of whose 
 wealth are yet to be developed, in order to pay 
 the principal of a mortgage the holder of which 
 neither needs nor desires his money ? and would 
 not wisdom or state craft suggest the propriety 
 of enabling the owners of these mines of wealth 
 to accumulate the capital with which to work 
 them and by the magic touch of labor to con¬ 
 vert them into current gold? The taxing pro¬ 
 
 cess maintains our exhausting dependence on 
 foreign nations, while the developing process 
 would make us as free commercially as we are 
 politically 5 and enable us, by our example 
 of liberal wages and freedom from their ex¬ 
 hausting hours of toil, to influence the com¬ 
 mercial and manufacturing usages of European 
 States, as our political example is influencing 
 their political and social institutions. 
 
 The Secretary, however, has other prescrip¬ 
 tions than that of excessive taxation by which 
 to restore the country. In his opening para¬ 
 graphs he says: 
 
 “With proper economy in all the Departments of 
 the Government, the debt can be paid by the genera¬ 
 tion that created it, if wise and equal revenue laws 
 shall be enacted and continued by Congress, and 
 these laws are faithfully enforced by the officers 
 charged with their execution.” 
 
 Again, he tells us that he 11 has mainly 
 directed his attention to measures looking to 
 an increase of efficiency in the collection of 
 revenues, to the conversion of interest-bearing 
 notes into five-twenty bonds, and to a reduc¬ 
 tion of the*public debt.” Efficiency in the 
 collection of revenues, forsooth! u The faith-' 
 ful enforcement of laws by the officers charged 
 with their execution ! ’ ’ These are brave words 
 to fall from the lips of one whose faithless ex¬ 
 ercise of official functions in this very matter 
 has during the past year cost the Government 
 more than $50,000,000. Brave words, indeed, 
 are these from one who in a wicked attempt 
 to subvert the popular will by the corrupt use 
 of official patronage has removed hundreds 
 of well-tried, capable, and experienced offi¬ 
 cers of the revenue and customs departments 
 and substituted for them men deficient alike 
 in capacity, experience, and character. There 
 is not a congressional district in the country 
 whose people are not grieving over the fact 
 that the Secretary of the Treasury, who em¬ 
 bodies in his report reiterations of these fine 
 phrases, has wantonly and wickedly aggravated 
 the onerous taxation under which they groan. 
 Let who will speak of the necessity of a faith¬ 
 ful administration and due enforcement of the 
 revenue laws, for which every patriot will pray, 
 becoming modesty ■would constrain the Secre¬ 
 tary of the Treasury to avoid the topic. This 
 is a matter on which Congress should take 
 early action, and if it means that the customs 
 and internal revenue laws shall be faithfully 
 and impartially enforced it must see that an¬ 
 other than the author of the report I am con¬ 
 sidering shall have the selection of officers for 
 their enforcement. 
 
 Some of the Secretary’s suggestions are em¬ 
 bodied in distinct—no, not in distinct, but in 
 numerical propositions. To one of these I 
 invite the attention of the committee. It is as 
 follows: 
 
 “•2. That the duties upon imported commodities 
 
12 
 
 should correspond and harmonize with the taxes upon 
 home productions; and that these duties should not 
 be so high as to bo prohibitory, nor to build up home 
 monopolies, nor to prevent that free exchange of 
 commodities which is the life of commerce. Nor, on 
 the other hand, should they be so low as to seriously 
 impair the revenues, nor to subject the home manu¬ 
 facturers, burdened with heavy internal taxes, to a 
 competition with cheaper labor and larger capital 
 which they may be unable to sustain.” 
 
 “There’s wisdom for you!” I venture to 
 assert that Jack Bunsby throughout his intel¬ 
 lectual career never uttered a more character¬ 
 istic proposition than that; and all will agree 
 that since the celebrated Kane letter of James 
 K. Polk our political literature has embodied 
 no utterance more shrewdly Delphic. 
 
 This ingeniously inexpressive proposition 
 does not embody the Secretary’s only allusion 
 to “home monopolies.” He seems to hold 
 them in special dread; and it is to be deeply 
 regretted that he has not indicated the argu¬ 
 ment by which his apprehensions are sustained, 
 as they are not to be found in the works of the 
 disciples of any school of political economy or 
 social science. 
 
 The teachers of free trade do not agree with 
 him in believing that high duties “build up 
 home monopolies.” They assert that protec¬ 
 tion secures undue profits to certain branches 
 of production and tempts capitalists to ruin 
 themselves by so overdoing the business as 
 to glut the market and have to sell their 
 goods at small profits or at a loss. Their 
 theory proceeds upon the want of judgment 
 in capitalists and business men—but by assert¬ 
 ing that high duties beget undue domestic 
 competition denies that they promote local 
 monopolies. 
 
 Nor does Mr. McCulloch agree with the 
 school of protectionists, for they say that 
 assured protection against unequal competition 
 gives capitalists confidence and induces them 
 to open mines and build furnaces, forges, and 
 factories, whereby constant employment and 
 ample wages are secured to the otherwise idle 
 people of the country. This theory proceeds 
 on the assumption that the American manu¬ 
 facturer is competent to measure the contin¬ 
 gencies of our own markets and of the natural 
 course of foreign trade, but is not competent 
 to resist the gigantic efforts which were corm 
 mended by Lord Brougham, and one of which 
 is now making by the Croesus-like capitalists 
 of England “ to stifle in the cradle those rising 
 manufactures in the United States which the 
 war has forced into existence.” 
 
 Our present condition resembles very closely 
 that of the States of Europe at the close of 
 Napoleon’s wars, and the following passage 
 from the admirable address of John L. Hayes, 
 Esq., entitled “The Fleece and the Loom,” 
 embodies illustrations of fixed laws applicable 
 
 enough to dispel even the Secretary’s dread of 
 “home monopolies:” 
 
 “ What would have been the future industrial con¬ 
 dition of continental Europe if at the time when 
 peace restored the nations to labor the textile manu¬ 
 factures had been left to their own free course and 
 no legislation had intervened to regulate their pro¬ 
 gress? Can there be anydoubtthat they would have 
 become the exclusive occupation of England? Alone 
 in the possession of steam power and machinery; 
 alone provided with ships and means of transport; 
 alone endowed, through her staple legislation, with 
 capital to vivify her natural wealth, she had abso¬ 
 lute command of the markets of the Continent. The 
 question was presented to the continental nations 
 whether they should accept the cheap tissues of Eng¬ 
 land, or at some sacrifices repel them, to appropriate 
 to themselves the labor and profit of their production. 
 The latter course was successively adopted, with some 
 modifications, by each of the continental nations; 
 and with what results to their own wealth and the 
 industrial progress and comfort of the world? In¬ 
 stead of a single workshop Europe has the workshops 
 of France, Russia, Austria, Prussia, Belgium, Swe¬ 
 den, Denmark, Spain, each clothing its own peoplo 
 with substantial fabrics; each developing its own 
 creative genius and peculiar resources; each con¬ 
 tributing to substitute the excellence of competition 
 for the mediocrity of monopoly; each adding to the 
 progress of the arts and the wealth and comfort of 
 mankind.” 
 
 The fifth of the Secretary’s propositions is 
 “the rehabilitation of the States recently in 
 insurrection.” Referring to the conquered ter¬ 
 ritories, which notwithstanding the President’s 
 usurpations await the action of the law r -making 
 power, Mr. McCulloch says: 
 
 “ Embracing as they do one third part of the richest 
 lands of the country, and producing articles of great 
 value for home use and for exportation to other 
 countries, their position with regard to the General 
 Government cannot remain unsettled, and their in¬ 
 dustrial pursuits cannot continue to be seriously dis¬ 
 turbed, without causing such a diminution of the 
 production of their great staples as must necessarily 
 affect our revenues, and render still more unsatis¬ 
 factory than they now are our trade relations with 
 Europe.” * * * * “There will be no 
 
 real prosperity in these States, and consequently no 
 real prosperity in one third part of the United States, 
 until all possess again equal privileges under the 
 Constitution.” 
 
 If it be true, as it undoubtedly is, that “one 
 third part of the richest lands of the country” 
 are by reason of temporary causes not pro¬ 
 ducing “articles of great value for home use 
 and for exportation to other countries” would 
 it not seem to suggest the idea that this un¬ 
 happy state of affairs should be permitted to 
 pass away and these lands be made product¬ 
 ive before they should be burdened with taxes 
 not demanded by imperious necessity? And 
 
13 
 
 whether before these lands shall be able to bear 
 taxation for that purpose the people of the 
 North, whose sacrifices during the war saved 
 the integrity of the Union, should be called 
 upon to extinguish the debt created by the 
 crimes of the possessors of this broad and rich 
 territory? The people of the northern States 
 have certainly arrived at this conclusion, and I 
 have shown that schooled by suffering the peo¬ 
 ple of the South, while antagonizing them on 
 many points, agree with them on this. 
 
 Pursuing this branch of his subject, Mr. 
 McCulloch asks, “ Can the nation be regarded 
 as in a healthy condition when the industry of 
 so large a portion of it is deranged ?’ ’ And the 
 people, North and South, answer “No; and 
 in our enfeebled condition we pray you not to 
 rob us of our working capital in order to ex¬ 
 tinguish a debt which was contracted for the 
 benefit of mankind and future ages.” 
 
 lie asks again, “And can the labor question 
 at the South be settled as long as the political 
 status of the South is unsettled?” And the 
 country answers “yee, there is no inseparable 
 connection between the labor question and the 
 political status of the conquered territories;” 
 and adds that the “political status” of the 
 South cannot be settled until its rebellious 
 leaders discover that the loyal people of the 
 country are able to defend its institutions 
 against the usurpations of Andrew Johnson, 
 accept the constitutional amendments already 
 adopted and which are in process of adoption 
 by three fourths of the States which now con¬ 
 stitute the Union, and submit to Congress con¬ 
 stitutions republican in form upon which the 
 people shall have set the seal of their approval. 
 The people of the loyal North cannot restore 
 those of the conquered territories to their 
 “political status.” We can only consent to 
 their restoration when they shall be willing 
 that it shall take place on terms which will 
 render the future peace of the country secure, 
 and for this we are and have been ready. The 
 leaders of the South not we are the dog in the 
 manger. It is they who by refusing to abandon 
 the dogmas that evoked the war and the oli¬ 
 garchic institutions that sustained it resist the 
 influx of the tide of immigration that would 
 fertilize their lands and republicanize their 
 institutions. 
 
 The imminent want of the people of the South 
 is not ‘ 1 political status. ’ ’ That would not ena¬ 
 ble them to settle the “labor question.” What 
 they want is capital and currency and a will¬ 
 ingness to permit loyal men, whether white or 
 black, native or foreign, to dwell among them, 
 and by their labor quicken into commercial 
 value the boundless and varied natural wealth 
 of the land they occupy, but which they will 
 neither work themselves nor permit others to 
 work in peace and safetjn When in obedience 
 to a healthy national sentiment or the prompt¬ 
 ings of their own interests they will make capi¬ 
 
 tal secure, opinion free, and give peaceful scope 
 to enterprise within their borders, the immense 
 deposits which profitless to their owners now lie 
 in bank, because under the hammering process 
 of the Secretary of the Treasury judicious men 
 are afraid to embark in new enterprises will be 
 transferred to the South to develop her pro¬ 
 ductive and taxable power, and make her pop¬ 
 ulous and prosperous beyond the wildest dream 
 of the visionary theorists who involved her in a 
 war as causeless as it was disastrous. 
 
 Mr. Chairman, time will not permit me to 
 answer all the Secretary’s interrogatories or 
 examine each of his numerical propositions. 
 
 But his friends may complain that I have 
 not alluded to that which they regard as his 
 chief specific. It is set forth in the second 
 of another series of propositions as follows: 
 “ a curtailment of the currency to the amount 
 required by legitimate and healthful trade.” 
 On this point, though not condescending to 
 indicate what amount of currency is in his 
 judgment required by “legitimate and health¬ 
 ful trade” in the present abnormal' condition 
 of the country, the Secretary is peculiarly 
 coherent and luminous. He is clearly a dis¬ 
 ciple of Dr. Sangrado. He recognizes the 
 circulating medium as the life-blood of com¬ 
 merce, and as Sangrado attempted to restore 
 his patients by withdrawing blood and inject¬ 
 ing warm water into their veins he proposes to 
 assist extraordinary taxation in the work of 
 rehabilitating the southern States, whose great 
 want is currency and working capital, and in 
 invigorating the languishing interests of the 
 North by contracting the currency, and especi¬ 
 ally by withdrawing that portion which is of 
 equal and unquestioned value in every part of 
 the country—the United States notes, com¬ 
 monly called “greenbacks.” He says: 
 
 “He regards a redundant legal-tender currency as 
 the prime cause of our financial difficulties and a 
 curtailment thereof indispensable to an increase of 
 labor and a reduction of prices to an augmentation 
 of exports and a diminution of imports, which alone 
 will place the trade between the United States and 
 other nations on an equal and satisfactory footing.” 
 
 And that— 
 
 “ He is of opinion that the national banks should 
 be sustained, and that the paper circulation of the 
 country should be reduced, not by compelling them 
 to retire their notes, but by the withdrawal of the 
 United States notes.” 
 
 Mr. Chairman, had I been properly in¬ 
 structed in the mysteries of “ Injeany bank¬ 
 in’ ” I might be able to comprehend and ap¬ 
 preciate these suggestions; but in the blind¬ 
 ness of my ignorance I cannot see what there 
 is to commend his theory to the Finance Min¬ 
 ister of our country. The greenbacks are, it 
 is true, part of our debt, and must therefore at 
 some day be redeemed ; but they are the only 
 
14 
 
 part of our immense debt which bears no inter¬ 
 est; and while there are outstanding, as the 
 Secretary’s statement of December 1, 1866, 
 shows, $147,387,140 of compound-interestnotes 
 which are currency and used as such by the na¬ 
 tional banks, and $699,933,750 of three-years’ 
 notes bearing seven and three tenths per cent, 
 interest, all of which were purchased in a 
 greatly depreciated currency, I cannot compre¬ 
 hend the philosophy which proposes to let the 
 interest on these run,- while absorbing a non- 
 interest-bearing loan which the people cherish 
 as furnishing the best currency except specie 
 they have ever had. 
 
 The experiment if attempted as a means of 
 hastening specie payments will prove a failure, 
 but not a harmless one. It will be fatal to the 
 prospects of 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 deposited in savings 
 banks or invested in Government securities. It 
 will make money scarce and employment un¬ 
 certain. 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 dol¬ 
 lars of domestic trade is money and to increase 
 its purchasing 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 em¬ 
 ployment. Its first effect will be to increase 
 the rate of interest and diminish the rate of 
 wages, and its final effect wide-spread bank¬ 
 ruptcy and a more protracted suspension 
 of specie payments. Anxious as the people 
 are to relieve the country of the evils entailed 
 upon it by the war, and willing as they have 
 proven themselves to be to endure any priva¬ 
 tions or make any sacrifices required by the 
 exigencies of the country, they will not consent 
 to an experiment involving such terrible conse 
 quences for the purpose of paying the “Inge- 
 any” and other banks which hold and use as 
 part of their reserve our compound-interest 
 notes two dollars for every one they invested 
 in this interest-bearing portion of our “ lawful 
 money.” Much as banks, bankers, and spec¬ 
 ulators in Government securities may approve 
 this policy, the people earnestly and indignantly 
 protest against it. 
 
 Does Mr. McCulloch forget that the com¬ 
 pound-interest bearing notes are part of the 
 “legal tender currency” against which lie 
 declaims, and that by absorbing them he will 
 be contracting the currency and reducing the 
 volume of interest that is compounding against 
 the Government? The banks are required, 
 those of certain cities, to maintain a reserve of 
 “lawful money” equal to twenty-five percent, 
 of their circulation and deposits, and the bal¬ 
 ance of them a like reserve of fifteen per cent., 
 
 and as he well knows they have absorbed and 
 hold not greenbacks, but compound-interest 
 notes as that reserve. He should keep his 
 non-interest-bearing notes afloat till these are 
 redeemed. They will mature in 1867 and 
 1868, and by redeeming them he will contract 
 the currency at the rate of $6,000,000 per 
 month and relieve the Government of one of 
 its most exhausting interest accounts. By 
 this process he will keep five-twenties above 
 par and promote the conversion into them of 
 seven-thirties, and reduce the interest on that 
 portion of our debt from seven and three-tenths 
 to six per cent. But by his process of contract¬ 
 ing the volume of greenbacks and imposing 
 extraordinary taxes on our industry he will 
 delay the redemption of the one and the con¬ 
 version of the other, and may deprive us of the 
 ability to redeem either the seven-thirties or 
 compound-interest notes at maturity. 
 
 The people do not regard greenbacks and the 
 notes of national banks with equal favor, but 
 have a well-grounded preference for the former. 
 They know that the ultimate redemption of the 
 bank notes is secured by deposits of Govern¬ 
 ment securities and the maintenance of a re¬ 
 serve of greenbacks; and as the substance is 
 more solid than its shadow, they prefer that 
 which secures to that which requires to be 
 secured. Several national banks have failed ; 
 and though the ultimate redemption of the 
 notes was secured, there was no provision for 
 their immediate redemption, and the laboring 
 people who held them had to sell them at great 
 loss to “Ingeany” or other bankers, w r ho 
 could afford to hold them till the Government 
 was ready to redeem them. Having sustained 
 no such losses by greenbacks they naturally 
 prefer them. Adequate as these reasons are 
 for the popular preference, there are others 
 which I will state, in the language of the Sec¬ 
 retary’s report. 
 
 Mr. HOOPER, of Massachusetts. If I 
 understand the gentleman from Pennsylvania, 
 he asserts that when national banks fail their 
 notes cease to circulate. Has the gentleman 
 ever heard of any such instance? The Govern¬ 
 ment is still responsible when the bank fails, 
 and these notes are redeemed when presented 
 at the Treasury. I understand they circulate, 
 therefore, as well after as before the suspen¬ 
 sion of the bank. It may be remembered that 
 the Treasurer of the United States Avas recently 
 somewhat criticised by the press for his state¬ 
 ment that the national bank notes were better 
 after the bank failed than before. 
 
 Mr. KELLEY. I have recognized the ulti¬ 
 mate responsibility of the Government for 
 them, but I know that traders, and traders in 
 money especially, take advantage of all con¬ 
 tingencies, and I have known laboring men 
 to sell to brokers the notes of a broken na¬ 
 tional bank at considerable loss. The an¬ 
 nouncement that a bank has failed depreciates 
 
15 
 
 the notes in the market, for the people, and 
 especially laboring people, arenotas familiaras 
 the gentleman from Massachusetts with all the 
 minute provisions of the law by which the ulti¬ 
 mate redemption of these notes is secured; 
 and when a bank fails those poor people, who 
 cannot carry them to the Treasury for redemp¬ 
 tion, are compelled to sell them at a heavy loss. 
 But, as I was proceeding to show, the Secre¬ 
 tary of the Treasury more than sustains my 
 position on this point, for he deliberately ar¬ 
 gues that legislation is required “to make them 
 throughout the United States a par circulation. ’’ 
 He says: 
 
 “The solvency of the notes of national banks is 
 secured by a deposit of bonds with the Treasurer at 
 Washington ; but as the banks are scattered through¬ 
 out the country, and many of them are in places dif¬ 
 ficult of access, a redemption of their notes at their 
 respective counters is not all that is required to make 
 them throughout the United States a par circulation. 
 It is true that the notes of all national banks are 
 receivable for all public dues, except duties upon 
 imports, and must be paid by the Treasurer in case 
 the banks which issued are unable to redeem them ; 
 but it will not be claimed that the notes of banks, 
 although perfectly solvent, but situated in interior 
 towns, are practically as valuable as the notes of 
 banks in the sea-board cities.” 
 
 These depreciatory remarks are not appli¬ 
 cable to greenbacks. They are of equal value 
 throughout the country, and the people cherish 
 them for this reason more than from the fact 
 that they are the evidence of a patriotic loan 
 made by the people to the Government with¬ 
 out interest. Had Mr. McCulloch suggested 
 that the national bank notes, for holding bonds 
 to secure which we pay the banks $18,000,000 
 per annum, should be supplanted by green¬ 
 backs, and that a sum equal to the interest on 
 the bonds should be applied to the creation of 
 a sinking fund for the redemption of the national 
 debt, the people would have applauded his wis¬ 
 dom and patriotism, and not questioned his 
 motives as they are now constrained to. 
 
 Had such been the Secretary’s suggestion he 
 might have omitted this one of his propositions, 
 namely, to compel “the national banks to 
 redeem their notes at the Atlantic cities, or, 
 what would be better, at a single city,” which, 
 in plain language, is a recommendation that we 
 increase the power and profits of the banks of 
 New York by compelling every national bank 
 outside of that city to deposit a portion of its 
 funds with them. The gambling tendencies 
 of the New York speculators in stocks and 
 provisions need no such stimulant as this; 
 and recent experience has shown that leading 
 banks of that city are managed more recklessly 
 than any others in the country, and would 
 therefore be an unsafe depository for so large, 
 a trust. Less than a month ago the Secretary 
 tested their management and produced a per¬ 
 
 turbation in prices throughout the country by 
 which fortunes were lost and won by calling 
 upon them for a small portion of the Govern¬ 
 ment deposits, which were mistakenly supposed 
 to be represented by a reserve of greenbacks 
 in their vaults. He has not given the facts to 
 the country, but it is known in well-informed 
 circles that some of them were compelled to ask 
 for a “ brief extension” because they were un¬ 
 able to pay the checks of a depositor. Prac¬ 
 tical men may therefore be excused for speak¬ 
 ing of the proposal of such remedies as char¬ 
 latanism. 
 
 Mr. Chairman, as I have said, the Secretary 
 has not ventured to indicate what, in his judg¬ 
 ment, is the amount of currency “required by 
 legitimate and healthful trade” in the present 
 condition of the country. That condition is 
 abnormal, though not entirely peculiar, and 
 certainly not unprecedented. By unwise and 
 unpatriotic legislation, which was dictated by 
 the magnates of the South, millions of our 
 poor people were doomed to the simplest and 
 least remunerative forms of agricultural labor, 
 or to enforced idleness, in which they were 
 tending to barbarism ; while our raw materials 
 were being wrought into fabrics for our use 
 in the workshops of transatlantic nations, and 
 we had thus been drained of specie and had 
 become largely a debtor nation before the 
 war begun. Those same magnates plunged us 
 into a war of unprecedented proportions, which 
 we were unable to maintain with a specie or 
 convertible currency. In the hour of our need 
 we discerned the fact that ours is one of the 
 two countries to which, in the language of 
 Gortschakoff, the enlightened prince who is 
 guiding the destinies of the other, “ God has 
 given such conditions of existence that their 
 grand internal life is enough for them,” and 
 determined that until the war and its conse¬ 
 quences should have passed away we would give 
 the world an example of our ability and self- 
 reliance, and use a currency based, not on the 
 international standard, gold and silver, but on 
 our faith in the resources of our country and 
 the integrity of its Government. We thus fur¬ 
 nished the Government $3,000,000,000 with 
 which to create, arm, feed, clothe, and pay our 
 Army and Navy. 
 
 How this prompt supply of money quickened 
 industry and developed the productive power 
 of the country I need not pause to say. 1 will, , 
 however, remind the committee that though it 
 was “irredeemable legal-tender currency,” it 
 restored the credit of the nation, which had 
 been unable to borrow $5,000,000 at twelve per 
 cent., and lifted the people from the bank¬ 
 ruptcy of 1857 to a degree of prosperity un¬ 
 equaled in our history. From 1857 to 1861 
 the rate of interest was high and that of wages 
 low, and neither capital nor labor could find 
 profitable and permanent employment. But 
 with a safe, though perhaps somewhat redun- 
 
16 
 
 dant, currency, by the use of which our people 
 were compelled to look to our own workshops 
 for supplies, prosperity, in the midst of war, 
 succeeded the adversity of contracted and stag¬ 
 nant peace with magic speed. And if \ve now 
 adopt a tariff law that will protect our industry 
 as faithfully as did the difference between our 
 paper and gold, in which we required the 
 duties on foreign imports to be paid during the 
 war, w T e will soon discover that there is ample 
 and profitable employment for all the currency 
 authorized by law; and that if we resolutely 
 refuse to increase its volume it will approxi¬ 
 mate the standard of convertibility more rap¬ 
 idly by the development of the productive 
 power of the country and the diversification 
 of employment for the people than it can by 
 the process of contraction at any rate. Pro¬ 
 tection and development will insure a prosperous 
 future ; but rapid contraction will reproduce the 
 stagnation, bankruptcy, and suffering of 1837 
 and 1857. 
 
 The question presented to the mind of prac¬ 
 tical statesmen is not what would be the best 
 currency if we were founding a new community, 
 or how far we might with advantage add paper 
 to a purely metallic currency, but is, what under 
 existing conditions do the true interest of the 
 country require. And on this question I again 
 take issue with the Secretary of the Treasury 
 and deny that the country will find in a rapid 
 or material contraction of its currency, or in 
 extraordinary taxation, a remedy for any of 
 the evils that afflict it. If, as some of his 
 friends have done, the Secretary should point 
 me to the high prices which many articles com¬ 
 mand, or to the immense deposits which, unpro¬ 
 ductive to their owners, are enhancing the pres¬ 
 ent profits and future liabilities of the banks, I 
 will reply to him, as I have to them, that these 
 are not proofs of the redundancy of the cur¬ 
 rency, but of his mistaken policy and inveterate 
 mismanagement. 
 
 Though the use of those immense deposits is 
 lost to their cautious proprietors, the money 
 does not lie idle in the vaults of banks; it is 
 lent on call in large sums to adventurers, who 
 by its use enhance the price of such commod¬ 
 ities as they can monopolize or control. Those 
 who could make their own capital productive 
 are afraid to use it, and reckless gamblers riot 
 in its use. Yes, sir, the Secretary’s policy is 
 calculated to diminish production and stimu¬ 
 late speculation, which symptoms have been 
 the twin precursors of all our commercial 
 crises and eras of bankruptcy. Under his fatal 
 policy— 
 
 “The native hue of resolution 
 
 Is sicklied o’er with the pale cast of thought; 
 
 And enterprises of great pith and moment, 
 
 With this regard, their currents turn awry, 
 
 And lose the name of action.” 
 
 The sagacious but prudent owners of those 
 
 deposits grieve that the money with which they 
 would gladly open coal mines and ore banks and 
 build forges and furnaces and factories and im¬ 
 port skilled laborers from Europe to increase 
 and diversify our productions, enlarge our home 
 market, and swell the revenues of the Govern¬ 
 ment, lies dead and profitless to them. Th°y 
 justly charge their loss and that of the cou.i- 
 try to Mr. McCulloch, who, from his Fort 
 Wayne speech forward, has lost no opportu¬ 
 nity, official or unofficial, to warn the energetic 
 men of the country against embarking in any 
 new enterprises or accumulating any consid¬ 
 erable stock of goods, or otherwise enlarging 
 their arrangements for the future ; and who, in 
 his last utterance—the report which I am con¬ 
 sidering—notifies them of the near approach 
 of the fatal collapse by assuring them that 
 though the banks are without specie, the bal 
 ance of trade is vastly against us and the Treas¬ 
 ury has nearly one billion dollars of temporary 
 loan to provide for, he is “confident that specie 
 payments may be resumed by the time our in¬ 
 terest-bearing notes are retired, which must be 
 done in less than two years, and probably will 
 be in a much shorter period.” ' 
 
 What the effect of an effort at early resump¬ 
 tion under such circumstances would be every 
 experienced business man in the country 
 knows. They know that it can by any possi¬ 
 bility be but a spasmodic movement, which 
 will literally vomit forth from the country the 
 little gold and silver left in it. They know 
 that it will bankrupt individuals, corporations, 
 States, and, alas, it may be, the national Gov¬ 
 ernment itself. The avowed object of the Sec¬ 
 retary in contracting the currency is to increase 
 the purchasing power of money; and they 
 know that the rapid decline in prices pending 
 this mad experiment will sweep away the gar¬ 
 nered capital of those manufacturers whose 
 stock largely exceeds their working capital, 
 exclusive of buildings and machinery, that 
 mechanical and manufacturing production 
 must be wholly suspended till the blighting 
 tornado shall have spent its power, and that 
 while it rages the receipts of the Internal Rev¬ 
 enue Bureau must fall to zero. 
 
 But, sir, if by thus returning to the wretched¬ 
 ness of 1857 and 1837 we could resume specie 
 payments, how long could we maintain them? 
 The Secretary tells us that $350,000,000 of our 
 bonds are held abroad. The average rate at 
 which they were bought, when gold for long 
 periods was above two hundred per cent,., was 
 less than fifty cents on the dollar, nor was 
 that small amount paid in specie; for he also 
 tells us that—• 
 
 ‘‘The opinion that the country has been benefited 
 by the exportation of its securities is founded upon 
 the supposition thatwe have received real capital in 
 exchange for them. This supposition is to a large 
 extent unfounded. Our bonds have gone abroad to 
 pay for goods which without them might notHhave 
 
been purchased. Not only have we exported the 
 surplus products of our mines and our fields, with no 
 small amount of our manufactures, but a large amount 
 of securities also, to pay for the articles which we have 
 purchased from other countries. That these pur¬ 
 chases have been stimulated and increased by the 
 facility of paying for them in bonds can hardly be 
 doubted. Our importations of goods have been 
 increased by nearly the amount of the bonds which 
 have been exported. Not one dollar in five of the 
 amount of the five-twenties now held in England and 
 upon the Continent has been returned to the United 
 States in the form of real capital. But if this were 
 not a true statement of the case, the fact exists, as 
 has been already stated, that some three hundred, 
 and fifty millions of Government bonds—not to men¬ 
 tion State and railroad bonds and other securities— 
 are in the hands of the citizens of other countries, 
 which may be returned at any time for sale in the 
 United States, and which being so held may seriously 
 embarrass our efforts to return to specie payments.” 
 
 Thus by Mr. McCulloch’s own statement it 
 appears that our bonds were bought at half 
 their nominal value and paid for in commercial 
 products which should have been created by 
 our own industry from our own raw material 
 by setting 11 our unemployed and poor people 
 at work on the growth of our own lands;” and, 
 if we may believe the Secretary’s statement to 
 which I have referred, a large portion of which 
 commodities were brought into the country in 
 fraud of our revenue laws by 11 undervaluations 
 and smuggling.” For what purpose, let me 
 ask, were those bonds bought by their foreign 
 holders? How long will they be held? When 
 and under what contingencies are they likely 
 to be returned to this country? And a more 
 pregnant question still: what effect would be 
 produced by the early return to specie pay¬ 
 ments threatened by the Secretary of the 
 Treasury? 
 
 That I may do Mr. McCulloch no injustice, 
 I answer these momentous questions in the 
 language of his report: 
 
 ‘‘A large portion of these bonds have been bought 
 on speculation, and will bo likely to be returned 
 whenever financial troubles in the countries in which 
 they are held shall make it necessary for the holders 
 to realize upon them, or whenever satisfactory prof¬ 
 its can be made by returning them, which will be 
 when they nearly approach their par value in coin.” 
 
 Here at least he is right. Those bonds, hav¬ 
 ing been bought at half the value expressed on 
 their face, will be returned “ when they nearly 
 approach their par value in coin,” and that 
 will be when we resume specie payments. But 
 as Mr. McCulloch has failed to pursue this 
 operation to its inevitable result, the committee 
 will pardon me for attempting the duty, though 
 in doing so I may deepen the shades in the mel¬ 
 ancholy picture of our future which I have 
 presented. 
 
 When those foreigners who bought our bonds 
 
 on speculation perceive that by returning them 
 they can convert them into gold and double 
 their investment they will assuredly avail 
 themselves of the literally golden opportunity. 
 Questions as to how they can reinvest the pro¬ 
 ceeds advantageously need not deter them. 
 They know how limited our stock of specie is, 
 how heavy the balance of trade is against us, 
 and consequently that by selling their bonds 
 in our markets they would compel us to sus¬ 
 pend specie payments again. Nor are they 
 strangers to the fact that during that suspension 
 they would be able to repurchase their bonds 
 for half the gold received for them. Thus the 
 experiment of the Secretary would inevitably 
 terminate in the impoverishment of the citizen 
 and the disgrace of the country by a renewed 
 and more protracted suspension of specie pay¬ 
 ments. 
 
 Mr. Chairman, neither the Secretary of the 
 Treasury nor Congress know whether our 
 currency is in excess of the amount required 
 by legitimate and healthful trade, 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 con¬ 
 ditions are novel. That would be a curious 
 and instructive calculation which would show 
 the country the precise demand for currency 
 created by the operation of the Bureau of Inter¬ 
 nal Revenue, or by the enlargement of the Army 
 and Navy and clerical force of the Government. 
 
 Under the discipline of Providence the south¬ 
 ern people will, before many years glide away, 
 consent to permit their fields to be tilled, their 
 mines to be worked, and their cities to be re¬ 
 built and expanded; and who can tell the 
 amount of currency that will then be required 
 by the four million enfranchised slaves and the 
 two million poor whites, who did not in the 
 past, but are henceforth to earn wages and buy 
 and sell commodities, or for handling the crops 
 and mineral productions of the South ? Since 
 we last adjourned the iron horse has crossed 
 Nebraska on one of the routes to the Pacific, 
 and his snort has been heard in the neighbor¬ 
 hood of Fort Riley on another; and during 
 the last year three hundred thousand indus¬ 
 trious people, who had been fed and clothed 
 through unproductive childhood at the cost of 
 other nations, came and cast their lot among 
 us to till our fields, smelt our ores, work our 
 metals, and manage our spindles and looms; 
 and I cannot guess what amount of currency 
 these energetic people and the westward-march¬ 
 ing 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 de¬ 
 stroyed all sense of security in the future, the 
 demand for currency to purchase, especially 
 in the South, mineral and other lands and de¬ 
 velop their productive power would have pre¬ 
 vented the accumulation of the immense de¬ 
 posits which now lie paralyzed in bank or are 
 
18 
 
 loaned on call to speculators in the necessaries 
 of life. We unsettled values and made or scat¬ 
 tered fortunes by the rapid expansion of the 
 currency ; and the people implore us to avoid 
 another violent change fraught with like con¬ 
 sequences, and to stay the work of contraction 
 till we shall have ascertained, at least proxi- 
 mately, the amount of currency required by 
 healthy and legitimate trade. 
 
 Mr. Chairman, the Secretary of the Treas¬ 
 ury is not a philosopher— 
 
 “A primrose by a river’s brim 
 A yellow primrose is to him;” 
 
 And the thing that has been is, in his belief, the 
 thing that shall be forever. Neither his ex¬ 
 perience as an “Ingeany” banker nor his official 
 connection with the Government has disclosed 
 to him the real relation of currency in detail 
 o*r in volume to the business of a community. 
 Throughout his report he assumes that the 
 currency is redundant, and ascribes to its 
 alleged redundancy consequences which are 
 directly attributable to another cause but re¬ 
 motely connected with the question of the 
 amount of currency. I refer to the prevailing 
 and traditional vice in our banking system, 
 that of building credits upon credit, of banking 
 on deposits, or lending money by a bank to 
 one man because it owes a like amount to 
 another who has intrusted liis funds to it for 
 safe-keeping and convenience. «*To this vice 
 in our banking system, which Mr. McCulloch 
 has done much to aggravate by leaving stupend¬ 
 ous balances of the public funds in favored 
 banks, is to be ascribed nearly all the evils he 
 mistakenly attributes to a “redundant legal- 
 tender currency.” If the corporations and 
 private bankers of the country were prohibited 
 from lending on call the deposits intrusted to 
 them or using them in discounting paper, the 
 doubling of the volume of currency would not 
 produce a material advance in the price of 
 commodities in general. This vice in our bank¬ 
 ing system, this banking on deposits or lending 
 that which the banks owe, and to calls for the 
 payment of which they are constantly liable, 
 aggravates from four hundred to one thousand 
 fold every modification of our currency, whether 
 it be by contraction or expansion. 
 
 Neither the price of gold nor of other com¬ 
 modities is regulated nor materially influenced 
 by the amount of currency *, nor is the differ¬ 
 ence between gold and our currency evidence 
 that the latter is inflated. If the Secretary 
 controverts these propositions, I will remind 
 him that gold commanded a premium of 185 in 
 1864, and ask him to let us know how much he 
 had contracted the currency before it went 
 down to 25, as it did in June, 1865 ; and again, 
 how much he expanded the currency to put 
 the premium on gold up again to 50, at about 
 which figure it stood so long before dropping 
 to 29 and ascending again to its present price. 
 
 During all these fluctuations the volume of 
 currency was not essentially modified. What 
 a commentary these facts are upon the theories 
 of the Secretary and his costly but vaunted 
 attempts “to keep the business'of the country 
 as steady as possible.” On this point he says: 
 
 “ He has regarded a steady market as of more im¬ 
 portance to the people of the country than the sav¬ 
 ing of a few million dollars in the way of interest.” 
 
 And elsewhere, that— 
 
 ‘‘The Secretary has also deemed it to be his duty 
 to use such means within his control as were, in his 
 judgment, best calculated to keep the business of the 
 country as steady as possible, while conducted on the 
 uncertain basis of an irredeemable currency. *To 
 accomplish this ho has thought it necessary to hold 
 a handsome reserve of coin in the Treasury.” 
 
 But, sir, assuming that the volume of currency 
 does not regulate prices, and that apart from 
 the often fatal vice in our banking system to 
 which I have alluded it has but little influence 
 on them, I appeal from the judgment of Mr. 
 McCulloch to that of the people, and ask 
 whether, if the volume of currency regulated 
 prices, it would not affect every species of prop¬ 
 erty equally or nearly so? 
 
 If prices are regulated by the volume of cur¬ 
 rency, how is it that American wool is as cheap 
 in the Philadelphia market now as it was before 
 the war? How is it that corn is unusually low 
 and wheat is commanding a higher price than 
 ever before in the history of our country? How 
 is it that during last month one variety of cot¬ 
 ton goods, those known as brown or unbleached 
 goods, advanced twenty per cent., or two cents 
 per yard, and another variety, bleached goods, 
 declined twenty per cent., or from five to seven 
 cents per yard? How is it that mess pork 
 commands but about half last year’s prices, 
 while the decline in beef has been little more 
 than nominal? And how is it that in 1865, 
 with gold at 25, Lehigh coal commanded at 
 the shipping point from five to six dollars per 
 ton, and in 1866, with gold ranging from 32 
 to 40, the same qualities of coal at the same 
 points will not bring three dollars to three dol¬ 
 lars and a quarter per ton? 
 
 But I will not weary the committee with fur¬ 
 ther illustrations of the absurdity of the Sec¬ 
 retary’s postulate. It is, however, proper that 
 before leaving this point for the present I 
 should admit that a violent and sudden con¬ 
 traction of the currency at a time when the 
 loans of our banks are extended by lending 
 their deposits does work an inevitable and often 
 ruinous reduction of prices. It is thus: under 
 the influence of contraction depositors draw 
 upon their reserve, and the banks to meet the 
 demand call upon their debtors, and they to pro¬ 
 tect their credit must sell, no matter at what sac- 
 j rifice, at such prices as they can get. I need 
 1 not follow the movement to its consequences. 
 
19 
 
 A tight money market, causing a few failures, 
 has more than once begotten panic and wide¬ 
 spread bankruptcy, and would now extinguish 
 the revenues of the Government. Had the Sec¬ 
 retary of the Treasury ascribed the fluctuations 
 in business and the inordinate prices at which 
 many of the necessaries of life are held to 
 their real cause, our habit of banking on ac¬ 
 cumulated credits, and not pressed the purpose 
 of contracting the currency, the country would 
 not be depressed as it is. Threatened con¬ 
 traction has hung like the sword of Damocles 
 over the heads of our producing classes. 
 
 Let me ask, what is currency and what is its 
 function? Currency is that which a people 
 have agreed to accept and use as money. It 
 is the medium by which the small transactions 
 of daily life are settled. Its sphere is that of 
 personal use and retail trade. Except in the 
 final settlements between banks and their cus¬ 
 tomers. it is not commonly used in large trans¬ 
 actions. We carry currency upon our persons 
 to meet current demands. You find it in the till 
 of the retail dealer and the hands of workmen, 
 who, when currency is abundant, are paid in it, 
 and not in orders on stores at which they are 
 compelled to select articles from a small stock 
 of inferior goods and pay high prices, as they did 
 when currency was scarce. It is possible that 
 Mr. McCulloch does not know that the abun¬ 
 dance of currency has redeemed our laboring 
 people from the burdensome taxation inflicted 
 upon them by the order system and payment 
 in the depreciated paper of distant and un¬ 
 known banks. Currency in its legitimate use 
 has no wider sphere than I have indicated. 
 Like all other blessings, it may be perverted, as 
 it is when it accumulates as deposits in banks 
 and is used as the basis of large loans to ad¬ 
 venturous operators or speculators. In the 
 heavy operations of business currency finds no 
 place. These are settled by checks, drafts, 
 and bills of exchange. Before the war cur¬ 
 rency was scarce, and the deficiency was sup¬ 
 plied by the promissory notes of individuals 
 who, by indorsing the notes of those who bought 
 from them or those oftheir factors or commission 
 merchants, became debtors to the amount due 
 them from others. It is said that when the war 
 began the amount represented by the prom¬ 
 issory notes of individuals was more than 
 $200,000,000; but now that the supply of cur¬ 
 rency is adequate, few men take such notes, 
 and none propose to give them but the people 
 of the South, who have no currency. The con¬ 
 traction of the currency insisted upon by Mr. 
 McCulloch would revive the credit system, with 
 its orders, for work people, and its periodical 
 returns of wide-spread bankruptcy to the com¬ 
 munity at large. 
 
 I do not think the Secretary is entirely igno¬ 
 rant of the simple truths I have been enun¬ 
 ciating. It would be pleasant to know that he 
 is, for°it is not agreeable to be constrained to 
 
 doubt the motives of one to whom we have 
 given our confidence. But in view of the com¬ 
 munication made by Mr. Nasby and the fact 
 that the Secretary’s theories, if carried into 
 execution, will promote speculation, I cannot 
 help thinking that he regards banking and 
 stock operations as the interests to which all 
 others should be subordinated. He recom¬ 
 mends the withdrawal of the greenbacks that 
 the national banks may supply the circulating 
 medium of the country, and he wishes each 
 national bank to lie compelled to deposit in 
 one of the Atlantic cities a sufficient amount 
 of its capital to justify the redemption of its 
 notes at that point. The Atlantic city to which 
 he points is the great center of banking and 
 speculation, and compliance with these sugges¬ 
 tions would aggravate the speculative power of 
 New York by the proportion such deposits 
 would bear to its general fund. His theories 
 are in perfect accord with his practice, for I 
 find that he is in the habit of furnishing the 
 banks, and through them speculators, an aver¬ 
 age loan of about twenty-five million dollars. 
 Thus by an official statement which lies before 
 me it appears that the balances in the hands 
 of the national banks was— 
 
 June 1, 1866.$26,335,725 59 
 
 July 1,1866. 34,124,171 21 
 
 August 1,1866. 33,931,415 22 
 
 September 1, 1866 . 32,590,274 58 
 
 October 1,1866. 30,976,979 85 
 
 I am, however, informed officially that there 
 was during those months a liability to draft 
 on these balances distributed through not less 
 than three months amounting in all to $14,- 
 000,000 by coupons in transitu or in the hands 
 of the holders; so that the banks could with 
 safety lend on call during the whole period 
 $25,000,000 to those engaged in speculating in 
 food and increasing its price. Had $20,000,000 
 of the sum been applied to the absorption of 
 seven-thirties or compound-interest notes spec¬ 
 ulation would have been less rife, our interest 
 account would have been materially dimin¬ 
 ished, and a slight approximation have been 
 made toward specie payments and the ultimate 
 redemption of the public debt. Doubtless Mr. 
 McCulloch’s desire “to keep the business of 
 the country as steady as possible” alone pre¬ 
 vented this happy consummation. 
 
 Sir, it is within our memory that the estab¬ 
 lishment of the sub-Treasury—the divorcement 
 of the public Treasury from thebanks and bank¬ 
 ing system of the country—overthrew the Ad¬ 
 ministration and party that inaugurated it; but 
 it is also remembered that so beneficent.were 
 its operations that no succeeding administra¬ 
 tion of any party dared assail it. It had not 
 been in operation a year till it had vindicated 
 its wisdom in the estimation of every judicious 
 business man. Nor would.it probably ever 
 have been interfered with in time of peace. 
 
 , The great convulsion which threatened to divide 
 
20 
 
 our country interrupted its action which should 
 forthwith be restored. It acted as a regulator, 
 a natural regulator, of the trade of the coun¬ 
 try. When enterprise ran into excesses and 
 unduly increased the public revenues, it with¬ 
 drew from circulation and locked up a portion 
 of the currency, and by the stringency it thus 
 created admonished banks and business men 
 to pause; and when, having given an early 
 check to rash operations and diminished the 
 current revenues of the country, it gently, as by 
 a process of nature, restored vigor to the circu¬ 
 lation by the fact that its payments were in ex¬ 
 cess of its receipts, as its receipts had just been 
 in excess of its payments. As a safeguard for 
 the public funds, if for no other reason, the Sec¬ 
 retary should have recommended its full res¬ 
 toration, for during the entire period of its 
 existence, as far as I know, the Government 
 did not lose by any of its officers as much as it 
 did by the failure of tfye Merchants’ National 
 Bank of Washington alone. It was a safe de¬ 
 pository for the public money, as well as a 
 healthful influence in the business operations 
 of the country. Had the Secretary suggested 
 that it would answer as well for a mixed cur¬ 
 rency as it did for the era of specie payments, 
 and recommended its immediate reestablish¬ 
 ment he would have done much to give steadi¬ 
 ness to the business of the country, diminish 
 speculative prices, quicken production, and in¬ 
 crease the revenue of the country. And I trust 
 that Congress before it rises will pass a law pro¬ 
 hibiting the deposit of any portion of the Gov¬ 
 ernment funds in any bank, or, in other words, 
 divorce the Treasury from the banks by reor¬ 
 ganizing the sub-Treasury. 
 
 It was perhaps too much to hope for such 
 a recommendation from the Secretary. He 
 enjoys the control he now exercises over the 
 business of the country, and would not will¬ 
 ingly surrender it. But for the maintenance 
 of an average deposit of more than $80,000,000 
 could the National-Union-Jolmson party have 
 extorted from the banks—perhaps not directly 
 as corporations, but from their stockholders and 
 officers, to be accounted for in the item of inci¬ 
 dental expenses—the large contributions which 
 the newspapers told us certain banks were forced 
 to make in aid of the recent effort of the Presi¬ 
 dent and the Secretary of the Treasury to subvert 
 the popular will. But this was but an occa¬ 
 sional incident, probably never to occur again ; 
 for I believe that the future can produce to our 
 country no second Andrew Johnson, or that 
 should it contain within its womb another like 
 unto him he will be unable to find creatures 
 to sacrifice their own convictions and the inter¬ 
 ests of the country for the poor privilege of 
 unworthily filling high places in a great Govern¬ 
 ment. That of which I speak is the influence 
 these deposits, coupled with his exclusive con¬ 
 trol of the gold in the Treasury, averaging about 
 one hundred million dollars, which he com¬ 
 
 placently calls a “handsome reserve of coin 
 in the Treasury,” give the Secretary over the 
 business of the country. 
 
 Under the action of the sub-Treasury, as I 
 have shown, a payment of money by the Govern¬ 
 ment relieved a stringent money market; but 
 how is it now ? "When the Secretary of the 
 Treasury is sacrificing such immense amounts 
 of interest in order to give steadiness to busi¬ 
 ness the Government deposits are loaned by 
 the banks on notes of short date or on call; 
 and if the current revenues of the Government 
 be in excess of its current expenses, as they 
 have been throughout his administration, its 
 deposits accumulate and swell the volume of 
 such loans. The receipts of the Government 
 thus aggravate the tendency to undue expan¬ 
 sion ; and what is the effect when it is required to 
 use any considerable amount of its deposits? It 
 is this: the Secretary notifies the banks thatlie 
 is about to call for ten or twenty million 
 dollars ; and the banks, not knowing which of 
 their debtors will be ready and who may be 
 utterly unable to pay, notify not alone borrow¬ 
 ers of the precise amount demanded by the 
 Secretary, but holders of five, six, or ten times 
 the amount. Thus that which should give 
 relief to the market becomes an exaggerated 
 caifse of contraction, and the payment of 
 $10,000,000 by the Government is made to 
 interfere with business operations to the 
 amount of $100,000,000. We have all observed 
 this and know that instead of being a natural 
 operation the effects of which should be felt 
 beneficially, each payment of any considerable 
 sum of money by the Government, after a long 
 line of deposits has accumulated, produces a 
 perturbation through all commercial circles. 
 The payment of but $15,000,000 in the early 
 part of last month came near producing a 
 national panic and damaged the credit of 
 leading banks. This system gives the Secre¬ 
 tary despotic control over the markets of the 
 country, and his favorites may have ascer¬ 
 tained practically, as did Voltaire, who was 
 given to stock speculations, that “it is a good 
 thing to have a friend at court” through whom 
 they may learn when it is well to sell, because 
 things have reached their highest price, as 
 Government is about doing that which should 
 establish confidence, but which, owing to the 
 Secretary’s efforts to insure steadiness to busi¬ 
 ness, will produce consternation if not panic 
 and a general decline in prices; and when it 
 is well to buy, because it suits the convenience 
 of the Government to make another large and 
 long loan to the banks. Such a power over 
 the business of the country should be vested 
 in no man ; and I challenge the world to point 
 to any fact in the official career of the present 
 Finance Minister of the country which would 
 induce any judicious man to vest it in him. 
 There certainly is nothing in the suggestions 
 of the report which I am considering to indi- 
 
21 
 
 cate that he is a safe depositary for so useless, 
 so wide-spread, and so dangerous a power. 
 
 But, Mr. Chairman, I am admonished that I 
 should hasten to a conclusion. I must, however, 
 beg the committee to bear with me while I 
 examine briefly another of Mr. McCulloch’s 
 suggestions. It is offered as a specific remedy, 
 because it is said it will diminish the rate of in¬ 
 terest on our loans and protect us against the 
 direful contingency of the bonds bought on 
 speculation at depreciated rates coming home 
 to exhaust our specie within a month of the 
 day on which we are, by the magical agencies 
 suggested by Mr. McCulloch, to resume specie 
 payments within two years. It is character¬ 
 ized by the candor and wisdom which pervade 
 his other suggestions. To a shrewd man of 
 mere practical business habits, one not skilled 
 in the mysteries of u Ingeany bankin’,” it 
 might seem to be somewhat impracticable; and 
 the country regards it with humiliation and 
 disgust. It is this: that after having carried 
 on the war without an appeal to foreign na¬ 
 tions or capitalists and without their sympa¬ 
 thy ; after having by our patriotic sacrifices put 
 our credit so high that the people of Europe 
 have voluntarily come and carried away, with 
 great profit to themselves, $350,000,000 of 
 our bonds; that now, when peace is restored, 
 when we again possess the custom-houses, 
 post offices, forts, an<} arsenals of the country, 
 and when our taxes are not divided between 
 our Treasury and that of a hostile confederacy, 
 but all flow to our own, we shall issue u bonds 
 payable in not over twenty years and bearing 
 interest at the rate of not over five per cent., 
 payable in England or Germany, to an amount 
 sufficient, to absorb the six per cent, bonds now 
 held in Europe and to meet the demand there 
 for actual and permanent investment.” 
 
 If this scheme were practicable, I for one 
 would spurn it. With their pirate ships on every 
 sea, their ship-yards and factories busy in fab¬ 
 ricating implements of war for our enemies, and 
 in the face of their hatred, with self-reliance, 
 of which posterity will be proud, we marched 
 steadily on to conquest and final victory. And 
 now, in the hour of our triumph, or in the 
 calm season which should succeed so grand 
 and successful an exhibition of power, with a 
 continent beneath our feet abounding in raw 
 material for the profitable employment of 
 every art, trade, and mystery known to in¬ 
 genious man; with India decimated by fam¬ 
 ine, Europe disturbed by wars and rumors of 
 war, Ireland in incipient rebellion ; and when 
 we offer to the people of Europe established 
 peace, political equality, public schools, a 
 free church, and briefer hours of labor with 
 better wages than those known to the arti¬ 
 sans of any other country, this suggestion 
 is as degrading as it is inopportune. Sir, 
 nothing but some such folly as this official 
 proclamation, as it would be regarded by the 
 
 people of Europe, that our struggle exhausted 
 us, and that with victory came premature de¬ 
 crepitude, can prevent us from compelling the 
 nations of the world, by the tide of skilled 
 workmen that will flow from their shores to 
 ours, to follow our example and give those 
 who produce their wealth culture, leisure, and 
 the consciousness of free manhood. In such 
 an hour and in view of such a prospect I am 
 sure that Congress will not degrade the coun¬ 
 try by asking the money-changers of Europe 
 to lighten its burdens or help us bear them. 
 
 But the scheme is hopelessly impracticable. 
 Mr. McCulloch may see advantages in it which 
 others fail to detect. It would serve, I doubt 
 not, by what he calls 11 the trifling commissions 
 to the agents through whom the exchanges 
 might be made,” to found a great American 
 banking-house in London with continental 
 branches, and might bless the country with 
 the hope of large gratuities from some future 
 George Peabody whom the Secretary would 
 designate as the agent for making transfers 
 and paying interest; but it would not accom¬ 
 plish the purpose its author suggests. With 
 such knowledge of human nature as we possess 
 let us consider the proposition. Those who 
 hold our bonds bought them either as an 
 investment or on speculation, and the inter¬ 
 est upon them ranges from six to seven and 
 three tenths per cent. Is it probable that 
 those who bought them as an investment will 
 change them before maturity for bonds bearing 
 but five or four and a half per cent. ? Or will 
 those who bought them as matter of specula¬ 
 tion, in view of the Secretary’s assurance that 
 in less than two years we will resume specie 
 payments and enable them to convert them 
 into gold at par, hasten to make such a con¬ 
 version? When the leopard shall change his 
 spots, the vulture protect the dove, and hungry 
 mice abstain from eating unguarded crackers 
 and cheese, I will be prepared to regard the 
 Secretary’s proposition as practicable. 
 
 Nor need we grieve that it is not practicable. 
 Our destiny is written. Unwise legislation 
 or such reckless maladministration as now 
 prevails may retard it, but !t will be achieved. 
 It is written in the sublime doctrine of human 
 equality, which gives vitality and stability to 
 our institutions, and more perceptibly though 
 not more enduringly in the geographical posi¬ 
 tion, the continental proportions, and the un¬ 
 equaled resources of our country. Bounded 
 by both oceans, with a larger area than all the 
 nations of Europe, including Great Britain, 
 which lie between the same distant parallels of 
 latitude that mark our limits,*and embracing 
 mineral, agricultural, manufacturing, and com¬ 
 mercial resources greater than they combined 
 possess, the United States must be the fore¬ 
 most, richest, and most powerful nation of the 
 world. However blind our Finance Minister 
 may be to this fact, others perceive it, and our 
 
22 
 
 affairs will yet bo administered in accordance 
 with the sublime assertion of Gortschakoff, 
 who, in an utterance to which I have already 
 referred, when speaking of Russia and our 
 country, said: ‘ 1 God has given to the two coun¬ 
 tries such conditions of existence that their 
 grand internal life is enough for them.” 
 
 Yes, the capitalist of Europe will yet be eager 
 to lend us money as cheaply as they now loan 
 it to England ; but it will be when, by the con¬ 
 version of our now profitless raw material into 
 fabrics, by the skill and industry of our now 
 unemployed citizens and the millions of indus¬ 
 trious people who are coming to us from abroad, 
 we manufacture more than we consume, and 
 by rivaling England, France, and other con¬ 
 tinental nations in tropical markets, and those 
 
 of other non-manufacturing regions, shall have 
 turned the balance of trade in our favor. Then 
 Americans will be able to compete with foreign¬ 
 ers in bidding for our loans; and in exchange for 
 cotton, tobacco, and other staples, our bonds 
 will be returned to us instead of woolen goods 
 and various other textile and metallic fabrics, 
 which we now receive but ought to manufac¬ 
 ture for ourselves. But foreign capitalists will 
 not take bonds from us at four and a half or five 
 per cent, in exchange for those which pay six 
 per cent., while the balance of trade is against 
 us to the amount of $100,000,OOOper annum, and 
 with compound-interest and seven-thirty notes 
 afloat to the amount of nearly $1,000,000,000, 
 with more than Gascon vanity we promise the 
 almost immediate return to specie payments. 
 
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