SPEECH 
 
 
 OP 
 
 HON. JACOB COLLAMER, OF VERMONT, 
 
 ON THE 
 
 BILL TO PROVIDE A NATIONAL CURRENCY; 
 
 DELIVERED 
 
 19 THE SENATE OP THE UNITED STATES, FEBRUARY 11, 1803. 
 
 
 WASHINGTON! 
 
 1863 . 
 

232 - 52 - 
 (L 6> X-S 
 
 
 Lincoln fiootr^ 
 
 SPEECH. 
 
 • ..._ _— 
 
 The Senate having under consideration bill No. 486, to 
 provide a national currency, secured by a pledge of United 
 States stocks, and to provide for the circulation and re¬ 
 demption thereof— 
 
 Mr. COLLAMER said: 
 
 I propose, Mr. President, to remark in relation 
 to the general character of this bill, and to point 
 out wherein I think it is exceptionable, and l shall 
 do so, perhaps, somewhat at length. 
 
 In the first place, I would say that I do not re¬ 
 gard this as a measure in any respect connected 
 with the war. It is not a war measure. I am the 
 more willing to put it in that light from this con¬ 
 sideration: 1 have observed that almost every¬ 
 thing that is asked for, especially if it is asked for 
 with any degree of pertinacity, is put upon that 
 ground; it is either a military necessity or a po¬ 
 litical necessity, or you cannot keep the Union 
 together without it, or something of that kind by 
 which we are appealed to, to let our conscience 
 and our discernment go, and obey the dictates 
 pressed upon us. I do not view this as of that 
 character. 1 take it that this war will come to 
 some end within the course of a year or so—not 
 exceeding two years at most. It is not necessary 
 for me now to predict what will be the form of that 
 termination. I clo not desire to make preparations 
 for its continuing much longer than that, at any 
 rate not at present. I desire that all preparations 
 should be made with a view of bringing it to a 
 speedy termination; and 1 will not agree at pres¬ 
 ent to the framing of any measures that seem to 
 be predicated on the idea of its continuing a long 
 time. I may at last be compelled to view it in 
 that light; but I shall not at present. 
 
 The organization of these proposed banks is 
 necessarily of slow operation. If the bill be passed, 
 Mr. Chase tells us in his report, I believe, that 
 nothing can be expected from it for a year to come, 
 and probably not much for two years. I think 
 that is the expression contained in his report. I 
 noticed it the other day. 1 will not trouble the 
 Senate with reading the words; I have stated the 
 substance. I believe he is correct in that. I have 
 no occasion to take issue on that point. Then, if 
 it is a thing from which we are to expect no prac¬ 
 tical effect for this year, and probably very kittle 
 for another year afterward, we cannot call this a 
 
 present war measure. If it be anything connect¬ 
 ed with the war, it is for a war to be continued 
 some four, five, six, or ten years hence, to which 
 view, I take it, we will not at present accede. 
 
 Having laid that out of consideration in rela¬ 
 tion to this bill, I come to consider what are ita 
 great purposes and objects, as stated by thosa 
 who framed, recommend, and support it. It i* 
 said to be to institute a great national paper cur¬ 
 rency through the medium of banks, to be organ¬ 
 ized under this act, who are to take United States 
 stocks and deposit them in the Treasury, and 
 take ninety per cent, of them in notes to circulate 
 as money, with which to do banking business; 
 and that they shall have twenty-five per cent, 
 more than this circulating part as a permanent 
 capital to work upon. They are to pay two per 
 cent, on their circulation to the United States 
 Government annually, or one per cent, every six 
 months, and the United States are to pay them 
 six per cent, per annum on the bonds in gold. 
 The United States further agree that they will 
 take all this money in circulation, receive it for 
 and pay it out on all public dues, and declare it 
 to be in the act a national currency. Besidea 
 that the United States agree that they will guar¬ 
 anty to the bill-holders the payment of these bill* 
 at the Treasury. If the banks do not redeem 
 them in currency when asked for their redemp¬ 
 tion they may be protested and presented at the 
 Treasury, and the Treasury is to pay them, and 
 pay them in full, whether the stocks left upon 
 deposit are able to meet them or not. Besides 
 this investment the property put into these asso¬ 
 ciations is itself to be clear of taxation. 
 
 Now, Mr. President, it is to be further under¬ 
 stood, and is an integral part of the very system,, 
 without which it is good for nothing, that the 
 circulation of the existing banks of the country 
 is to be withdrawn. Measures are to be taken 
 with those banks that shall induce or compe4 
 them to take home their circulation and put it 
 out no more, so that this shall be a national cur¬ 
 rency. Unless this latter part of the scheme t» 
 secured, its great professed object of making a 
 uniform national currency throughout the United 
 States is not and cannot be effected. It there¬ 
 fore implies all this, and we must understand 
 
/ 
 
 4 
 
 that if we enter upon this proposition and enter¬ 
 tain this plan, we are to take measures in order 
 to perfect it to do the other thing; that is, to de¬ 
 stroy, put out of existence, the circulation of the 
 present State banks. 
 
 I know it is not very easy for men who reside 
 and have been brought up and educated in differ¬ 
 ent sections of our country to understand the mi¬ 
 nute business relations of other distant sections. 
 1 suppose it is difficult to make a man at the West 
 understand how it is in New England that all the 
 ordinary affairs and business of the people are in¬ 
 terwoven with the banks. The connection of the 
 banks enters into all the filaments of our business; 
 it is the warp and woof of it. Every little manu¬ 
 facturing village has its bank; large numbers of 
 the owners of the various factories are also stock¬ 
 holders in the bank; that bank counting-room is 
 the place where the business of the factory is done, 
 where all its family affairs, where all the business 
 of the different mechanics and little tradesmen is 
 done through the bank. Young men setting up 
 in business have fathers out on farms who indorse 
 for them. What will be the effect of this scheme 
 now, to say nothing about the bank, exercising 
 no care or concern about the bank—that is not the 
 effect that we are to contemplate; but what is the 
 result that will be produced on th%condition of 
 society by the winding up of these banks, by un¬ 
 dergoing this great process of transition which 
 the bill demhnds? If we pass this bill, it lays the 
 foundation for passing the next bill that comes up 
 before us, that is the bill for raising money, in 
 which is inserted a tax of two per cent, on the cir¬ 
 culation of the State banks, with a view to effect 
 this object, and that must pass if this does; and 
 if this does not pass, 1 take it that will not, unless 
 it receives large modifications. 
 
 I cannot but be sensible, though I do not sup¬ 
 pose that I can succeed in showing it to others, 
 that if you wind up at one time the banks of the 
 State in which I live—and I believe it is so in the 
 New England States generally-, and as low down 
 at least as New Jersey and Pennsylvania—it can 
 only be done by collecting in all their dues and 
 delivering them over to the stockholders. The 
 whole debts would have to be collected and brought 
 in at about one time. The derangement thus 
 caused in the business of our country, interwoven 
 as I say it is with these banks as its fiscal agency, 
 would be utterly destructive of the condition of 
 •society in which I live. Burst these connections, 
 .and you carry distress up the sides of all our 
 mountains, and to the homes of all our farmers, 
 w ho are indorsers for their sons in business; you 
 destroy all our young mechanics. Indeed, I can¬ 
 not undertake to draw a picture of the amount of 
 distress and ruin that would follow the winding 
 up of our banks of New England all ai, one time; 
 and I think I may say about the same of New 
 York and New Jersey, and even of Ohio, and I 
 think perhaps of Michigan. 
 
 Mr. President, this is no slight operation for us 
 to undergo. Had it not been for this I should be 
 content, as I ordinarily am, to let the Senate take 
 their own way. I am not in the habit of troubling 
 them much; but when a measure of this kind is 
 pending, involving such consequences,Icould not 
 
 do my duty to the people, whom I am permitted 
 in some degree to represent, without putting in my 
 protestation against it. I have felt a little as if my 
 duty was somewhat like that of Judah when he 
 spoke for his brother Benjamin in Egypt. He 
 said, in substance, “you are as Pharaoh; 1 have 
 brought down this lad here at your direction; my 
 father’s life is bound up in the boy,and I cannot 
 return to my father without him, or I shall bring 
 down his gray hairs in sorrow to the grave; there¬ 
 fore let me speak a word in my lord’s ear.” It is 
 therefore 1 can say that 1 pray thee let me speak 
 a word in my lord’s ear. If my speech needs any 
 apology, it will be found in that. 
 
 I have, Mr. President, given an outline of this 
 plan. It is simple, brief, clearly capable of being 
 understood by all who choose to devote any at¬ 
 tention to it. 1 am aware that in times of national 
 violence, and especially of domestic violence, we 
 have new illustrations of the principle laid down 
 by Montesquieu, that power is always at war with 
 its own boundaries; it is always restless with its 
 own limitations, and making war on those limit¬ 
 ations; and we are constantly inclined to the ex¬ 
 ercise even of doubtful powers on the ground of 
 necessity when there is violence against us. Go¬ 
 ing to the verge of power is the present tendency, 
 perhaps occasionally overstepping it. It is in that 
 direction that we need caution. Now, would it 
 not be worth while to stop for a moment and in¬ 
 quire whether we really have the power, honestly 
 exercising our functions, candidly construing the 
 Constitution, to do this great thing—extinguish 
 the State banks? Have we, by the use of the 
 power of taxation to raise revenue, openly, avow¬ 
 edly, intentionally, the authority to pervert that 
 power to the destruction of those banks? I am 
 sensible that I am speaking in a time when any 
 sort of doubt about power is received as somewhat 
 dangerous doctrine any way. Still 1 would say a 
 word on that point. 
 
 Mr. President, there are many rights and pow¬ 
 ers which the States have, and which they have 
 the right to exercise, utterly independent of the 
 United States Government. There are other rights 
 and powers which they may exercise, but if the 
 United States exercises power over that thing it 
 supersedes them. There are other powers abso¬ 
 lute to either and independentof each other. There 
 are some powers forbidden to the States. To il¬ 
 lustrate this: the State has the power of taxation, 
 and that power is an unlimited power; and it may 
 select its own subjects of taxation. It is unlim¬ 
 ited in all respects but one; and that is, that they 
 shall not lay and collect duties upon importations. 
 That is the only one that occurs to me now. In 
 the power of taxation by the States they are only 
 limited in that, that they shall not levy and collect 
 duties on imports; any other tax they may collect. 
 The United States has the same general power of 
 taxation in the country. Now, they both go on, 
 and neither of them can have any check upon the 
 other. The power may exist in a State, for in¬ 
 stance like that to make a State bankrupt law; 
 and that would be well enough; but when the Uni¬ 
 ted States under its power to make a uniform sys¬ 
 tem of bankruptcy exercises that power, it super¬ 
 sedes the State bankrupt law; because otherwise 
 
5 
 
 it would not be a uniform system. But whatever 
 power a State has, and which it does not hold at 
 the will of Congress, I take it, cannot bo checked 
 by Congress in any way; and so, if the United 
 States lias a power which it has a right to exer¬ 
 cise independent of State action, I take it it may 
 exercise it, and the State cannot frustrate it in any 
 way; and this is just as true of one as the other. 
 
 Now, Air. President, for the application of this 
 argument. The Supreme Court, in the case of 
 McCullough vs. Alaryland, decided that the j 
 United States had the right to make a United 
 States Bank, with branches in different States, 
 and they said the States could not tax that United 
 States Bank. Why? Because the exercise of that 
 power in the extreme would destroy it, and there¬ 
 fore you would make it out that Congress had the 
 power to establish a bank; but after all it was 
 subject to the power of the States to put it down, j 
 In the case of Kentucky, the Supreme Court de¬ 
 cided that the long continued usage in this coun¬ 
 try in States to make banks v/as constitutional, 
 and that a State had a right to make a bank of 
 issue. There were other questions in that case, 
 which it is not necessary now to bring in here. 
 
 It was decided that a State had tjie right, not to 
 make a bank to issue the State paper, but a bank 
 to issue paper currency. 
 
 Now, sir, if a State has that right, it has that | 
 right certainly independent of the consent of Con¬ 
 gress. Does it hold it at the will of Congress? ; 
 Certainly not. The United States, in making a 
 United States Bank, held it independent of State j 
 action, and it was so decided. If the State has i 
 this right, and has it independent of the consent i 
 of Congress, it cannot have that right if the Uni¬ 
 ted States can tax it out of existence. Hence, I say 
 the United States has no more power to tax a State 
 institution out of existence than a State has to tax 
 u United States institution out of existence. 1 
 should like to see that answered. I have some- l| 
 times proposed that question, but 1 have never 
 received any answer to it. In most of the Slates, i 
 the State of New York for instance, almost all j 
 their banks are founded upon their own State i 
 stocks. Itisapartof their financial system to 
 make their stocks valuable, and to enable them 
 to make internal improvements. All these State 
 banks are more or less connected with and rami¬ 
 fied in with the business of their several States, j 
 Can they be taxed out of existence by the United 
 States? Why, sir, you might just as well tell me |i 
 that the United States, under the power of tax¬ 
 ation, could go on and extinguish all the schools 
 in New England by taxing its schools, its col- i 
 leges, and its academies, and their books and 
 their buildings and the salaries of the professors, 
 and in that way destroy them under the very gen¬ 
 eral principle of the power of universal taxation! 
 
 I shall not dwell longer upon that point. I have 
 stated my view upon it. 
 
 But, Air. President, there is another principle 
 involved in this measure; and I am looking at it j 
 now in its great national aspects, as a national prin¬ 
 ciple, without regard to the time*. 1 say it is to 
 establish corporations in all the States and Terri¬ 
 tories entirely independent of any power of vis¬ 
 itation by those Slates or Territories. This, to I 
 
 say the least of it, is an extremely questionable 
 power. What may be the number oftlie.se insti¬ 
 tutions? As the capital is to be §.'100,000,000, 
 that will make three thousand banks of §100,000 
 each; and the bill provides that they may be made 
 §50,000 banks, which will make six thousand 
 §50,000 banks. I believe we have now, in what 
 are called the loyal States, between thirteen and 
 fourteen hundred banks altogether, and this bill 
 proposes to make at least three thousand, or per¬ 
 haps six thousand, of these bank corporations, 
 established all over the States. 
 
 That is not all. It is proposed that there shall 
 be no other banks but these; the whole banking 
 capital is to be put into these banks; and the whole' 
 of that property is removed from all State taxa¬ 
 tion. 1 ask gentlemen to reflect on what will be 
 the effect in their different States of closing up the 
 present banks, and taking the capital belonging 
 to the stockholders, putting it into the banks un¬ 
 der this bill, and removing the whole of it from 
 all the forms of State taxation—State, county, 
 city, and town. Alany of our States derive their 
 school fund from what they obtain from these 
 State banks. I believe it is so in New Hamp¬ 
 shire. They have their school fund in that way. 
 
 Air. CLARK. Yes, sir: the only school fund 
 we have. 
 
 Air. COLLAMER. The whole school fund of 
 the State of New Hampshire is what they derive 
 from these banks. 
 
 Air. CLARK. And we raise a tax from them 
 in each town besides. 
 
 Mr. COLLAA1ER. That is forlocal taxation. 
 The only State fund they have for schools is de¬ 
 rived from the banks. I believe in the State of 
 Connecticut they have a large school fund, the 
 greater portion of which is in these very stock*' 
 in these banks, and if you wind up the bank» 
 they can derive no more income from them. 
 
 I cannot go into all the particulars on this sub¬ 
 ject; but l just mention this that gentlemen may 
 reflect for a little while on what will be the effeca 
 of this measure on society and the various insti¬ 
 tutions of the community connected with thews, 
 banks. There is manifest injustice in allowing 
 moneyed men, who have some money to spare* 
 to put it into these banks, and thus keep it out of 
 the way of State taxation altogether. 
 
 Air. SHERMAN. If it will not interrupt my 
 honorable friend, I will ask if we do not go through 
 the same process by issuing bonds of the United 
 States which are exempt from taxation ? Th® 
 same process is gone through there that is gon® 
 through under this bill. The banks invest in theao 
 bonds instead of individuals purchasing the bonds. 
 
 Air. COLLAMER. That does not relieve th® 
 subject of taxation within the State, nor equalise 
 it in any degree by taking the money out of th* 
 present State banks, where it is taxed in the State* 
 as the property of the stockholder or director i« 
 the bank,extinguishing that property and taking 
 the money to buy United States stocks which are 
 not subject to taxation. Our people are never 
 going to buy United States stocks in this way to 
 make any permanent investment upon. If they 
 had their bank money back in their own hands, 
 they would lend it and loon it out wherever they 
 
6 
 
 could in their own neighborhoods. If the gentle¬ 
 man will hear me through, as extravagant as he 
 may think my views are, he will be enabled to 
 .give me some credit for consistency. He will find 
 that the people will not break up their present 
 system of banking, interwoven, as it is, with all 
 their transactions, bound upas their business life 
 is with it, to establish banks under this bill, and 
 they will never buy United States stocks for this 
 purpose. 
 
 The next point to which I desire to call atten¬ 
 tion is the propriety of our undertaking as a na¬ 
 tion to say that we will be responsible for the ul¬ 
 timate redemption of these bills by the securities 
 that are deposited. I am aware that the honor¬ 
 able Senator who is the parent of the bill here 
 thinks he has got in it something very valuable, 
 in the provision about the liability of individual 
 fltockholders, and requiring twenty-five per cent, 
 of the amount of their circulation to be kept on 
 hand. All these things, to my mind, are hardly 
 worth the paper on which they are written; they 
 are good for nothing at all. How can you fol¬ 
 low the responsibility of stockholders? The very 
 stocks are assignable; they are personal property. 
 They are bought and sold in the market every 
 •day for more or less, according to their worth. Al¬ 
 though one of these banks may start with some 
 very responsible men when it first sets up, the 
 moment it becomes at all doubtful or troublesome 
 it quickly passes off into the hands of men who 
 :have no responsibility. You can never pursue it 
 in that way. As to the provision that they shall 
 retain twenty-five per cent, on their circulation on 
 hand, that is their own money; it is not United 
 States money. The effect is just this: whenever 
 your bonds that you hold for your security to re¬ 
 deem these bills depreciate essentially, the bank 
 will wind up, and they will doit without any sort 
 of disparagement or any dishonesty. The stock¬ 
 holders will say at once to themselves, “ we have 
 noticed the fall of these stocks; we know they are 
 very much down; we will not redeem any more 
 of these bills; we will leave them to be redeemed 
 by the Government; we gave them $100,000 and 
 deposited it with them in bonds; they only al¬ 
 lowed us $90,000; that is all we have had of them; 
 we leave these notes in their hands to redeem; we 
 will let them redeem them; we gave them a great 
 deal more than they ever gave us, and let them 
 redeem them. ” When would that occur ? Why, 
 sir, in great national calamities such as those un¬ 
 der which we already suffer by the unfortunate 
 proceedings of this war, we know that public 
 etocks rise and fall with the prosperity or decline 
 of the nation. 
 
 Again, I will take the very reverse of this state 
 of things. Suppose we should close this unfor¬ 
 tunate controversy and return to peace. The 
 moment you are at peace every man wants all 
 the money he has got to go into business. He 
 has lent it to the United States, taken this, that, 
 or the other sort of stock in order to have it earn 
 something while this public controversy and diffi¬ 
 culty was going on. The moment that is ended 
 he wants his money to go into business again in 
 our cities and towns—importing and the like. He 
 immediately cashes tiiese bonds, and a very large 
 
 portion of these bonds will at once be thrown or? 
 the market at a discount the moment you are at 
 peace. In either of these cases, whether from 
 public calamity or from peace, there comes a de¬ 
 terioration upon the value of these bonds; these 
 banks are wound up, the bills are protested and 
 presented to the Treasury here in bundles for pay¬ 
 ment. What will you do ? It is said in the bill 
 that they are to be paid here. You may take the 
 stocks the bank left as security and go and sell 
 them in the market, and thus get money to pay 
 them. If they have deteriorated so much that the 
 banks do not want to pay their bills, it will be a 
 pretty hard bargain for us to pay them with those 
 bonds. We should have to sell at as much dis¬ 
 count as they. Besides, we do not get rid of any¬ 
 thing in that way. We have to anticipate our 
 bonds. They run twenty years. We have got 
 to pay these notes when they are presented; and 
 if we sell our bonds at a discount in the market to 
 get some money to redeem them with, we have 
 got to meet that bond in the end, have we not? 
 We do not get rid of it at all; but we are compelled 
 to get the money about twenty years before it is 
 due. I do not see the policy, the expediency, or 
 the profit of such a bargain. 
 
 The next aspect to which I will call attention is 
 this: we once had, or twice had, a United States 
 Bank. The history of the last one is within the 
 recollection of most of those who hear me. That 
 bank had a capital of $35,000,000. The proposi¬ 
 tion now is to.make United States banks with a 
 capital of $300,000,000. The United States took 
 $7,000,000 of that stock. They paid nothing in, 
 but put in their stock for it on time. They had 
 directors of their own appointed to keep watch of 
 that bank. They had the right to borrow money 
 at that bank. The bank was bound to loan it to 
 them at a certain rate and limitation. They went 
 on with that bank during the whole period of its 
 existence. They took their dividends from year 
 to year by extinguishing the payment of interest 
 on their bonds; and at the close of the whole they 
 received back their stock and ten per cent, upon 
 it of accumulated profits that had not been divided. 
 Everybody concerned in it was paid; the stock 
 was paid back; and the United States made that 
 money. 
 
 Now, sir, why did that institution go down; or 
 rather, why was it not renewed and enlarged and 
 adapted to the condition of the country? It was 
 because it was said to be a dangerous political en¬ 
 gine in the hands of whatever political party ex¬ 
 isted at the time; that it would be used as a great 
 machine in the different States by the favor which 
 theGovernmentwouldgiveit,orthe control which 
 they would exercise over it; and it v/as dangerous 
 as it was said then, and I think it was demonstra¬ 
 ble. 
 
 Mr. President, look at the proposition now be¬ 
 fore us in this aspect. It provides that the Sec¬ 
 retary of the Treasury shall nominate this Comp¬ 
 troller of the Currency. He can be appointed by 
 the President only on the nomination of the Sec¬ 
 retary of the Treasury; and he is given any num¬ 
 ber (not limited at all) of clerks and agents. There 
 are established, if you please, three thousand of 
 these banks under this bill of $100,000each, scat- 
 
7 
 
 tered through all the country. They can be visited 
 by agents appointed here under this bill, and in¬ 
 spected from time to time and reported upon. The 
 Secretary is authorized to make such of them as 
 he thinks proper depositories of the public revenue, 
 and he is to distribute this stock, one half of the 
 $300,000,000 to the different States, according to 
 their representative population, and the other half 
 according to the banking resources of the country; 
 there is no limitation upon him whatever. If the 
 old United States Bank furnished well-grounded 
 apprehensions of its dangerous political tendency 
 as a political agency, permit me to ask gentlemen 
 to reflect for a moment on what you have got 
 here,, with $300,000,000 of capital, with three 
 thousand banks subject to inspection, and to be 
 troubled, just as much as the head of the Treasury 
 Department pleases, if they do not support his 
 views; or to receive favors by way of being made 
 depositories for the public dues; and the Secretary 
 having the power to appoint agents and clerks ad 
 libitum. I do not wish to enlarge upon this point 
 at all, but I say this: if a Secretary of the Treasury 
 can be furnished with these powers and chooses to 
 use them, he must be a very bungling politician 
 if he cannot make himself President any day. 
 
 Mr. President, in the outset of our present na¬ 
 tional difficulties I had occasion, with some others, 
 to have a conference with the Secretary of the 
 Treasury about the public funds, bonds, &c. I 
 suppose we then understood, as it has been un¬ 
 derstood always, that no nation is expected to pay 
 the expenses of a war while that war continues; 
 it is not expected by the world; but that if a coun¬ 
 try raises taxes from year to year to meet its 
 ordinary expenses and to pay the interest on its 
 loans, it can always obtain a loan. Have we not 
 done that? Will not the amountof our duties on 
 imports and our income from the internal revenue 
 duties, which, it is said, will amount to something 
 like $150,000,000, pay our ordinary expenses, and 
 pay not only the interest on $1,000,000,000, but 
 twice $1,000,000,000? If you have a debt of 
 $1,000,000,000, $60,000,000 will pay the interest 
 of it at six per cent.; $120,000,000 would pay the 
 interest of it, if, instead of $1,000,000,000, it were 
 $2,000,000,000. We raise enough to pay it, and 
 pay it in gold. Have our stocks been sold at a 
 discount? Not at all. The gentleman from Ohio 
 read to us here to what extreme depreciation the 
 public stocks of England and France went in a 
 period of distress. Have we suffered any sacri¬ 
 fice of that sort? Not at all. The view then enter¬ 
 tained by us at that conference has been realized. 
 
 The mode of raising money by loan during war 
 is either by long loans upon bonds, as they are 
 called, on interest, or by furnishing a circulating 
 medium to the people in the form of Treasury 
 notes. That is a loan without interest; the other 
 is a loan with interest. That is the only differ¬ 
 ence between them. But in relation to the loan 
 without interest, that is, circulating money, there 
 must be a large measure of caution; for if you put 
 out any too much, there will be a period of de¬ 
 preciation and distress followiyg; and therefore 
 it requires great caution. At the lime they were 
 issued, I entertained the opinion that we had no 
 right to make them a legal tender for debts. I 
 
 thought so then, and I think so now; but I was 
 voted down, and it remains a question for the 
 courts to decide. 1 have no more to say about 
 that subject. I leave that question to the courts. 
 But because you can send it out cheaply, and be¬ 
 cause you have no interest to payupon it,any pres¬ 
 sure for the need of some money is very likely to 
 tempt us to put it out. I said at the time we autho¬ 
 rized them that the apprehension of danger would 
 be from extending and extending the issue as de¬ 
 mands arose. 1 was reconciled in a great meas¬ 
 ure to the circulation of these Treasury notes as 
 a currency from this view: we inserted a pro¬ 
 vision that the holders might at any time fund 
 them at the Treasury for twenty years six per 
 cent, bonds. It seemed to me that if there was 
 any depreciation of them in the market, you 
 would find the people funding them. It was a sort 
 of safety-valve, a barometer to ascertain when 
 there was a tendency to depreciate, for then they 
 would run off into bonds. The Secretary says he 
 has found much difficulty in relation to those 
 4onds. He cannot get anything of an advance 
 for them, because anybody can take them with 
 these greenbacks as you call them at par at the 
 Treasury at any time; and he is very desirous of 
 getting rid of that provision. The finance bill on 
 our table contains a provision for that; that is, 
 fixing a time within which they shall be funded, 
 and prohibiting it after that time. I do not ob¬ 
 ject to that particularly; though when it is adopt¬ 
 ed we lose this safety-valve. However, we? se¬ 
 cure other advantages, and a chance to negotiate 
 that paper in the market for some advancement. 
 
 We have relieved the Secretary of any trouble 
 on that score. All the danger now is that you 
 may issue too many of these bills. How are you 
 to ascertain when they depreciate? for, when they 
 do, you should stop. The Secretary labors at 
 length in his report to show that they have not 
 depreciated. I agree to that. There has been 
 no redundancy of circulation at all, and there is 
 none now. What, then, is the cause of apprehen¬ 
 sion ? Why the necessity to resort to new schemes 
 to get along* We have need of them for circula¬ 
 tion; and I take it we will take care they do not 
 go too far. It is due from us to the country that 
 they shall not be allowed to go too far and be too 
 numerous. As we can raise enough by taxes to 
 pay the interest on the loans, I have no appre¬ 
 hension on that subject at all. 
 
 We have issued say about two hundred and 
 fifty million dollars of these notes, besides a hun¬ 
 dred and fifty or a hundred and sixty millions of 
 bank circulation. It is said it has not depreci¬ 
 ated; that we could not find enough of it lately to 
 make a loan in New York. Where has it gone, 
 and what has become of it? If gentlemen will 
 reflect, in the first place they will remember the 
 whole of the specie circulation has been taken 
 up. All that had to be filled in the current of cir¬ 
 culation with this paper. In the next place, we 
 had a large amount—more than gentlemen not 
 acquainted with that locality would imagine—of 
 Canadian circulation extending along our whole 
 frontier far off into the West, into Michigan, and 
 1 believe clear off to the Mississippi river. The 
 moment this war came on that was cashed on pre- 
 
 
8 
 
 sentation, and was carried home and disappeared. 
 That amount of currency had to be supplied. 
 Then, again, a large body of western banks, 
 founded on southern stocks, went down when this 
 rebellion took place, and all that currency went out 
 of existence, and had to be supplied. I can easily 
 see that this, together with the very large demand 
 for the use of money in moving this large body 
 of provisions, paying large bodies of troops, mak¬ 
 ing large contracts for all Army supplies, requires 
 the use of a much extended amount of circulation. 
 Instead of having, with what we have put out, 
 and with what the banks have put out, any re¬ 
 dundancy, there is a demand in the market, and 
 no depreciation has happened, as evidenced by 
 any increase of prices. 
 
 I now wish to call attention to this scheme as 
 compared with the one we have in operation at 
 present. We put out our circulation, and it takes 
 its circulation, I suppose, without much expense, 
 if you will put it into the currents of commerce 
 it will go West, drift off by its own wind, I take 
 it, wherever it is needed. It needs no expense of 
 the Government to do that, if you but put it out. 
 It circulates and answers to the people the pur¬ 
 poses of circulation at present; and it costs com¬ 
 paratively nothing to the Government, merely the 
 cost of striking it off. Now, what do you pro¬ 
 pose to do in lien of it? To induce people to take 
 $300,000,000 of stock on interest, set up these 
 banks, put out their circulation as a national cur¬ 
 rency, and we guaranty its payment. Wherein 
 is that any better than the paper we have got out 
 now? I will ask gentlemen to put that question 
 to themselves. Is it any better? What is it 
 founded on ? United States credit, United States 
 stocks. Whom do the bill-holders look to for 
 final redemption? The United States Treasury. 
 We say we will redeem them. The system has 
 no other foundation. All these fictitious contriv¬ 
 ances about the responsibility of the individual 
 stockholders amount to just nothing at all. As 
 to the provision retaining twenty-five percent, of 
 their circulation, they can put that in their own 
 pockets whenever they please, and there is no¬ 
 body to question them about it. It is simply and 
 ■singly founded upon the public responsibility; 
 and indeed the honorable Senator from Ohio claims 
 that to be its great feature of excellence. 
 
 Mr. SHERMAN. Does the Senator want an 
 answer to his question? If he does, I will answer 
 it the best way I can. 
 
 Mr. COLLAMER. I did not ask for an an¬ 
 swer now. The answer might be as long as his 
 speech. I am not asking the Senator any ques¬ 
 tions. When I do, I will await his answer. 
 
 Mr. SHERMAN. The Senator need not make 
 any remark about it, for I understood him dis¬ 
 tinctly to ask a question. He looked at me and 
 propounded a question. Of course I do not wish 
 to answer it now. 
 
 Mr. COLLAMER. I did not put a question. 
 It is true I did look at the Senator. If that is 
 offensive I will not look at him again. 
 
 Mr. SHERMAN. I understood him to put a 
 question distinctly. 
 
 Mr. COLLAMER. No; I put no question. 
 The honorable Senator claimed the fact that this 
 
 paper rested on our public credit as its great vir¬ 
 tue, as its great excellence. Very well; let it be 
 so. I have no objection to it. I was not going to 
 answer that, nor to controvert it in any way. But 
 does not your present circulation rest on the same 
 basis precisely ? Then, putting it in plain English, 
 you propose to hire these people to go into these 
 associations, take these bonds and deposit them. 
 They are to pay two percent, on their circulation, 
 and you pay them six on their bonds. I will call 
 it four per cent.; though it is more, as the gentle¬ 
 man knows, because the two per cent, they pay' 
 in currency and the six percent, we pay in gold. 
 The amount of it is this: we say to them, “ if you 
 will do this to the amount of $300,000,000, and 
 put out notes to the extent of ninety per cent, of 
 the bonds, we will pay you $12,000,000 in gold 
 every year for doing it.” You may talk about 
 its being in the form of bonds, but that does not 
 alter it at all. We are to enter into that arrange¬ 
 ment with them. If they take their money, buy 
 these bonds, put them on deposit, issue paper to 
 the extent of ninety per cent, of those bonds and 
 circulate it, and pay two per cent, on that circu¬ 
 lation, we pay them six on the bonds; that is, we 
 pay them four per cent, on the bonds, if they will 
 do us this great service ! There is all there is 
 about it. You may discuss it as you please and use 
 a great many financial expressions and schemes; 
 but that is the English of it; that is the simple 
 common sense of it. Instead of circulating that 
 amount of our own currency upon our own re¬ 
 sponsibility and paying nothing, we are to hire 
 them to circulate that amount of our currency, 
 and pay them $12,000,000 a year in gold for doing 
 it; and we are to be responsible after all. That 
 is all there is of it. Yankee as 1 am, I am una¬ 
 ble to perceive how it is possible that that can be a 
 good trade for us, or how any shrewd man would 
 ever think of entering into an agreement of that 
 kind. 
 
 Mr. President, this measure looks to me, and 
 I am suspicious it will look to the moneyed world, 
 like an acknowledgment of a terrible desperation 
 in the financial affairs of this country, which we 
 disclose by offering to make such a provision as 
 this. It is conceding to the world that we have 
 become perfectly desperate; that we will hire these 
 banks to circulate these bills, and guaranty the 
 payment of them, which are in fact no more nor 
 less than our bills, and pay them $12,000,000 a 
 year for doing it; whereas, if we were to circulate 
 our own bills, it would cost us nothing. I am 
 unwilling to make such an acknowledgment of 
 desperation as that to the world. 
 
 But it is said the State banks increase their cir¬ 
 culation unreasonably, and, it is thought, some¬ 
 times dangerously. The Secretary says that 
 they have increased during the last year about 
 $30,000,000; from something over $130,000,000 
 to something over $160,000,000. 1 can say of the 
 banks of New England that no man can suppose 
 any great increase can take place there, as their 
 circulation has to be redeemed in Boston and in 
 New York, and in exchange, every day. It has 
 to be redeemed every day through the Suffolk 
 Bank, the Bank of Mutual Redemption, the Me¬ 
 tropolitan Bank, and at the Clearing House, and 
 
 
 I 
 
when any hank gets out an amount beyond its 
 responsibility, it is known in twenty-four hours, 
 and its bills are thrown out. 
 
 The reason of this extended increase of currency 
 by the banks was the demand for it, arising from 
 what I have already stated, the withdrawing of 
 the circulation money, the breaking up of the west¬ 
 ern banks. Our own banks in Vermont even were 
 called upon for large sums of money. A single 
 bank I knew lent $200,000 or $300,000 for the pur¬ 
 pose of enabling a man to go west to purchase wool 
 throughout the West to bring to market. A large 
 portion of that money has not come back, from 
 last summer to this time. The reason is that they 
 needed the money in the West for circulation, and 
 they have kept it there for their business in conse¬ 
 quence of the breaking down of their banks. No 
 blame can be attached to the banks for that. But 
 if there is danger of that, if there is any apprehen¬ 
 sion of an artificial increase of that kind, take the 
 House bill as they have sent it to us, that puts a 
 tax on all banks that circulate beyond a certain 
 amount, proportionate to their capital. That may 
 be a proper check. I do not say that it is not. 
 That which yon can cure and stop, you, it seems, 
 will not cure and stop, but will make a topic to 
 use for another purpose, for destroying the banks 
 altogether. That would hardly seetn to be proper. 
 
 Some words have been said about their taking 
 these United States notes and banking on them. 
 What hurt does that do? No bank ever issues 
 or deposits more than the amount of them, never 
 quite that. If they keep the United States notes 
 in their vaults, it leaves so much more room for 
 the circulation of more of them. Is anybody 
 injured by that? The truth is, Mr. President, 
 the fact that the banks have issued and cannot 
 get back their circulation at this time is evidence 
 of what? That there is a redundancy of the cur¬ 
 rency and a fear of depreciation? It is directly 
 the other way. It is evidence there is no redun¬ 
 dancy, and the reason they cannot get it back 
 is it is wanted, it is needed in circulation. 
 
 It is said that after all the great object to be ef¬ 
 fected is a uniform currency. Well now, Mr. 
 President, the idea of makinga uniform currency 
 by force of law is utterly impracticable. You 
 might just as well make a lav/ to regulate the cir¬ 
 culation of blood in the human system. You 
 have a most explicit law that a certain weight of 
 gold stamped in a certain way shall positively be 
 here in the United States ten dollars. You have 
 another law that a piece of paper stamped so and 
 so, and saying thus and so, shall be ten dollars 
 lawful money, a legal tender. Have you not by 
 law made them exactly alike os far a3 human laws 
 can? Yes. Are they alike ? Are they ofthesame 
 value? The laws of commerce and the laws of 
 pecuniary circulation are utterly beyond 4 human 
 legislation. 
 
 And here, Mr. President, I cannot but call at¬ 
 tention for a moment to the extraordinary manner, 
 as it seems to me, in which gentlemen, when they 
 get a favorite idea and theory, having plausibility 
 with them, soon become what is called one-ideaed; 
 it is a hobby, und everything gives way to it, and 
 they can see in cverythingevidence to themselves 
 of its correctness. The honorable Senator from 
 
 I 
 
 I 
 
 
 Ohio, before this bill came before us at all, and to 
 prepare the way for it, as “coming events cast 
 their shadow's before,” some time since made us 
 a great speech against banks and bank circula¬ 
 tion; and the great burden of it was, the inequal¬ 
 ity of that circulation because it w r ould not go 
 everywhere; and, among other things, he cited, as 
 an authority for him to make a uniform paper cur¬ 
 rency-—for that is what we are at—the argument 
 of Mr. Webster upon the reestablishment of the 
 old national bank. 
 
 Did Mr. Webster, and those men who acted 
 with him, when they wanted to make a uniform 
 currency, by means of that United States Bank, 
 everywhere current and receivable for public dues, 
 undertake to say that they would make that out 
 of a paper currency in any other way than by 
 having it convertible on demand into specie? 
 Never. What is wanted now is that we should 
 establish a system and make a national currency 
 irredeemable in specie; and the honorable Senator 
 quoted—and I read from his quotation—from Mr. 
 Webster, a few words. Mr. Webster said: 
 
 “A sound currency is an essential and indispensable 
 security for the fruits of indu-try and honest enterprise. 
 Every man of property or industry, every man who desires 
 to preserve what he honestly possesses, or to obtain what 
 he can>honest!y earn, has a direct interest in maintaining 
 a safe circulating medium ; such a medium as shall he a 
 real and substantial representative of property, not liable to 
 vibrate with opinions, not subject to he blown up or blown 
 down by the breath of speculation, hut made stable and 
 secure by its immediate relation to that which the whole 
 world regards as of a permanent value.” 
 
 That is it. The right of being at once trans¬ 
 ferred into specie on demand was alone the basis 
 on which it could be made good. After other elo¬ 
 quent remarks, Mr. Webster said: 
 
 “ Our own history has recorded for our instruction 
 enough, and more than enough, of the demoralizing tend¬ 
 ency, the injustice, and the intolerable oppression on the 
 virtuous and well-disposed, of a degraded paper currency, 
 authorized by law, or in any way countenanced by Govern 
 ment.” 
 
 That is it. Paper not redeemable in specie, and 
 authorized by law, was what he opposed. No 
 words could to my mind be more in condemnation 
 of the proposed system than these, instead of being 
 in support of it, as they are quoted. 
 
 The next question is, Mr. President, suppose 
 these banks were established, would that make a 
 uniform currency ? You agree to receive their pa¬ 
 per for public dues and pay it out; but does that 
 make it uniform ? It has to be carried to the hank 
 that issued it, and there pay is to be demanded on 
 it before you can present it to the Treasury for 
 payment. It is as much exclusively a local paper 
 as that is which is issued from the banks now. 
 Gentlemen say that the people can pay internal du¬ 
 ties with it. When a quantity of money is wanted 
 to be transferred from West to East or East to 
 West, will the notes ofthese local banks, for they 
 are really nothing more than that, go current be¬ 
 cause a man, if he has some of them, may pul the 
 mnstexceptionable and the most distant ones aside 
 in his pocket once in a year, to pay his taxes with ? 
 Does that make them all alike? Not at all, sir. 
 They must pass in the currency of commercial 
 life, and they will be precisely as bank issues now 
 are. li may be said that they will be more cred 
 italde, because of the responsibility of the Go*- 
 
r 
 
 ernment; but as to their uniformity as currency, 
 it will not be accomplished at all; they are noth¬ 
 ing like equal in that respect to your present green¬ 
 backs. The United States notes which we issue 
 now will pass anywhere and for anything, as well 
 one thing as another, and are a great deal more 
 uniform currency than these bank notes can be. 
 
 There is another thing observable in this mat¬ 
 ter. When our predecessors were making the 
 United States Bank, and meant to make its paper 
 current everywhere because convertible into spe¬ 
 cie, did they undertake to make that uniform (and 
 that was the great object labored for) by extin¬ 
 guishing the State banks? Did they propose the 
 exercise ofa power of that kind ? No; that is left 
 with all other extraordinary powers, to be looked 
 up for this occasion. It was never heard of be¬ 
 fore. Was it proposed to tax them out of exist¬ 
 ence? They never thought of doing that then, 
 and did nothing of the kind. 
 
 The next thing I come to, Mr. President, is 
 whether the proposed measure will end our State 
 banks? The bill which is the cognate of this, a 
 part of the system, taxes the State banks two per 
 cent, annually upon their circulation. In all our 
 country banksat the East the circulation is always 
 more than the capital of the bank; otherwise they 
 could make nothing, because their business is en¬ 
 tirely confined to circulation. They have no ex¬ 
 change, or none that amounts to anything. And 
 here you will observe, and I wish it borne in mind 
 in my after remarks, if any man pays any atten¬ 
 tion to them, that the theory of this proposed 
 system is that there shall be no exchange. These 
 notes are to be uniform in their currency every¬ 
 where, all alike. That is the great excellence of 
 this scheme; and then, of course, there will be 
 nothing to pay for exchange. The difference of 
 price between the currency of different points, 
 Avhich makes the exchange, will not exist at all. 
 That is what is claimed. Of course, then, the 
 business of banks anywhere and everywhere 
 hereafter will be merely loaning their money and 
 accommodating the people with loans of their 
 money, not with their capital—that is lent to 
 the Government—but on notes which are fur¬ 
 nished them for circulation. As for exchange, 
 this ends it, if the theory and principle of this bill 
 is right. • 
 
 A bank which has $100,000 of capital in New 
 England must keep out more than $100,000 in 
 bills, or it makes nothing. Then you tax the 
 bank not immediately on its capital, but the pro¬ 
 posed tax is two per cent, on its circulation. That 
 would be about three percent, on its capital. Now, 
 however extravagant a gentleman may think me 
 who looks beyond the Ohio, I tell him all the 
 banks of New England, and 1 think of New Y ork, 
 too,averaged around among them, have not made, 
 and do not make, and cannot make, more than 
 seven per cent, a year. Whenever stockholders 
 put their money into a bank and cannot make 
 more than six per cent, lawful interest, they will 
 soon draw it out. They may be willing to take 
 that much interest for one year; but if it turns out 
 in the course of years that they cannot realize 
 more than six per cent, from their investment in 
 a bank the stockholders will say, “ we cannot 
 
 afford to hire you as a bank to do our business; 
 let us have our money back; we can make six per 
 cent, out of it ourselves.” When a bank cannot 
 make six per cent, it will soon wind up. 
 
 This tax, as I say, is just about three per cent, 
 on their capital. They make but seven per cent, 
 von their capital at best, after paying expenses. 
 Take three from that, and there is but four per 
 cent. left. Now, I say—and it does not need many 
 words on that point—that, as a matter of course, 
 this ends our banks, and they must be wound up. 
 It is intended to be so. If it does not effect that 
 purpose sooner or later, then the great purpose of 
 this bill fails; you do not get a uniform national 
 currency. If this will not do it, more shall do it; 
 and a larger tax will be imposed. That is part of 
 the system; but I grant that this will do it. 
 
 There has been some strange, and I may say 
 extraordinary, talk on this subject. It is said that 
 two per cent, is no more than a reasonable revenue 
 tax on a bank, and that it is only fair and equal in 
 our system of taxation to impose that rate. I 
 wish to call attention for a moment to that pre¬ 
 tense. It is more than intimated in the reportofthe 
 Secretary of the Treasury and the President’s late 
 message that a bank makes its bills and circulates 
 them,and that doesnotcostitmuch,and weeharge 
 manufacturers three per cent, tax on the articles 
 they make and carry to market and sell; and, 
 therefore, it is no more than equal to tax the banks 
 three per cent, on the circulation they have out. 
 When a manufacturer is taxed three per cent, on 
 the article he manufactures, on the cloth he makes, 
 every one knows that when he sells the cloth he 
 puts the three per cent, on the price; and every 
 man through whose hands that cloth passes, takes 
 it with that three per cent, added to the original 
 price as part of the value. In that way the man¬ 
 ufacturer gets back the three per cent. Now, take 
 the case of a bank. Suppose a bank issues $1,000 
 circulation and is taxed two percent. Can it say 
 to the man that takes it, that is $1,020 ? Can the 
 man take it at $1,020 and pass it off for that, and 
 so have it go current in the world as $1,020? Cer¬ 
 tainly not. Then there is no resemblance between 
 the two cases. There is an obvious delusion in 
 undertaking to make a resemblance of that kind 
 where none exists. 
 
 It is said, however, that it is a fair tax in pro¬ 
 portion to our other war taxes. Let us look at this 
 for a moment. My neighbor here, [Mr. Fessen¬ 
 den,] we will say, has $100,000, the result of his 
 long earnings. 
 
 Mr. FESSENDEN. Oh, no. 
 
 Mr. COLLAMER. I hope he will have it. If 
 my will would give it to him, he should have it. 
 He has $100,000 saved, we will say, and having 
 retired from business he lives by loaning out that 
 money, And he realizes six per cent, a year on 
 it. How much do we tax him? One hundred 
 and eighty dollars, three per cent, on what he gets. 
 
 1 am going now upon the ground that he has got 
 $6,000 income in some other way. We tax him 
 three per cent, on his gain; and that is $180, al¬ 
 though he has used $100,000. Here are three 
 other neighbors of mine—l will not include my¬ 
 self, because that would make the supposition too 
 improbable—who have $100,000, and they bank 
 
with it according to the law of their State. What 
 do they make? Perhaps they make eight per cent. 
 If they do make $8,000 on the $100,000, they have 
 to pay a tax of three per cent, on that now, and it 
 goes into the Treasury. But what is the proposi¬ 
 tion here? The Government says to them, “ you 
 have got $100,000 invested in hanking; you will 
 therefore probably have about $150,000 of circu¬ 
 lation; we will tax you on the $150,000 one per 
 cent, every six months, or two per cent, a year.” 
 How much will that be? Three thousand dollars. 
 “ For the use of your $100,000 in banking you 
 shall pay $3,000 a year.” The other man, for the 
 use of his $100,000, pays but $180 a year. Do 
 you call that fair and equal taxation? The one 
 pays $180, while the other, on the same amount of 
 capital, pays $3,000. It is perfectly monstrous. 
 
 It is said, however, that it is proposed to tax 
 the associations that shall be organized under this 
 bill two per cent, on their circulation, and there¬ 
 fore it is no more than fair that we should tax the 
 State banks two per cent, on their circulation. 
 Let us attend to that for a moment. That sug¬ 
 gestion is quite plausible, and may go down with 
 a man who will not think on the subject or listen 
 to anything about it. But let us look at it. The 
 bank which is formed by association, under this 
 bill, must always have its circulation less than 
 the principal, because it receives but ninety per 
 cent, on its deposit of bonds for the purpose of 
 circulation, and then it has always to keep on 
 hand twenty-five per cent, more of other money to 
 redeem its circulation. To work a bank of this 
 kind, therefore, you put in $100,000 in bonds, and 
 then take out $90,000 in notes, and must keep on 
 hand $22,500of other money, twenty-five percent, 
 of the $90,000, to redeem with. Such an associa¬ 
 tion would have to pay two per cent, only on the 
 $90,000 of circulation. Now, take a State bank 
 which has $100,000 capital, and must circulate 
 $150,000 to make anything. You make that bank 
 pay two percent, on $150,000, and the other bank 
 two percent, on $90,000, and yet you call that equal. 
 
 Again: the Government says to the banks or¬ 
 ganized underthisbill,“ we will take your money; 
 we will pay it out to the soldiers and to all our 
 creditors; we will make it a national currency; 
 we will guaranty the payment of it, if you will 
 enter into this bargain with us.” Can they not 
 very well afford to pay two per cent, to have all 
 these privileges? Then you turn around to the 
 State banks and tax them two per cent., but you 
 will not take a dollar of their money; you will not 
 circulate any oftheir money; you decry them here 
 before the nation; you engage the most eloquent 
 men in the Senate to bring them into disrepute 
 and contempt, and seek to annihilate them if you 
 can, and yet tax them two per cent. Is this equal ? 
 
 But go a step further. You say by this bill, 
 “ put your money here into these associations, 
 and there shall be no State tax levied on you;” 
 but you say to the State banks, “all your stock, 
 all your property is subject to taxation by the 
 States,” which, I take it, in the various forms of 
 taxation, State, county, town, &c., amounts to 
 two per cent. 1 think 1 am putting it quite low in 
 time of war when I put it at two per cent. You 
 clear the banks created under this bill of all State 
 
 tax, and they pay you two percent. On the other 
 hand, you say to the State banks that they shall 
 pay the two per cent, to you, and be subject to all 
 these taxes. Do you call that equal? Do you call 
 it fair? 
 
 Our largest city banks,it will be observed, have 
 very little circulation. Some of the very largest 
 have none at all, and most of them have very lit¬ 
 tle. They care nothing about circulation. They 
 do business on deposits. A law taxing circula¬ 
 tion does not reach them at all. Now, doing 
 business on deposits amounts exactly to*he same 
 thing as doing business on circulation. In the 
 cities the people do not keep their money in their 
 pockets, but take it to banks and deposit it, and 
 they take it out whenever they want it. The 
 banks, knowing from experience about how much 
 deposits they will always have on hand, make 
 their calculations to accommodate people on the 
 strength of the deposits. How is it with the 
 country banks? In the country the people keep 
 their money in their own pockets; do not deposit 
 it in bank. The banks from experience see about 
 how much of their circulation is kept out all the 
 while, and they accommodate the people on the 
 strength of that. Is not the result exactly the 
 same? What difference does it make to the bank 
 whether I keep in my pocket the money they issue 
 or put it into their vault? It amounts to precisely 
 the same thing to them; and yet you say by your 
 tax bill that those who use the circulation shall 
 pay two‘per cent, a year, and those banks that 
 work on deposits shall pay nothing at all; thus, 
 if you please, subsidizing all our country banks 
 to the large city institutions. 
 
 But you say, “ well, if we destroy your coun¬ 
 try banks by taxing them out of existence on their 
 circulation, the people will be resupplied by new 
 banks made under this bill.” I believe no new 
 banks will be made under this bill in the country. 
 I cannot say what may be done in the cities; and 
 I do not know but what there might be some made 
 in some of the States in the West where their in¬ 
 terest is ten per cent. I believe there have been 
 some such States; whether there are any now I 
 do not know. Inasmuch as they may lend money 
 at the rate of interest legal in the State where they 
 lend it under this bill, if there is any place where 
 they can take this ninety per cent, of notes and 
 go and lend it at ten per cent, a year, they may get 
 along with it; but I cannot answer for that. My 
 notion, however, has been that very heavy per 
 cent, interest is merely nothing more nor less than 
 the correlative of very poor security. They gen¬ 
 erally go together. But I am talking now of the 
 country at the East, where our rate of interest is 
 six per cent., and about the probability of men 
 there going and getting these bonds for the pur¬ 
 pose of setting up a bank; I know that men will, 
 when they have money out of use in n lime of war, 
 buy United States stocks; and they hold them in 
 their own hands. Some will put money on de¬ 
 posit and take a certificate for it and take four or 
 five per cent, interest, so ns to have it where they 
 can get it on demand. Some will take seven-thirty 
 bonds, or six per cent, bonds, holding them in 
 their hands, watching the fluctuations of the mar¬ 
 ket, and watching the chances of war, and all that, 
 
F 
 
 12 
 
 * 
 
 to put tnem out of their hands whenever conve¬ 
 nience requires. But here you are asking these 
 people that they shall go and buy these bonds as 
 a permanent investment, set up their banks upon 
 them, put them in operation, and place the bonds 
 where they cannot control them at all; put their 
 circulation out on the faith of the bonds, and make 
 a pet manent investment for twenty or thirty years 
 to come. They will be very slow to do that. 
 
 But, in the next place, I think it a mere matter 
 of figures and capable of mathematical certainty 
 about this problem of whether banks will be set 
 up in my part of the country under this bill, even 
 if the existing banks are all destroyed. To illus¬ 
 trate it, 1 will take the plain case of a $100,000 
 bank, because that is the ordinary size of a coun¬ 
 try bank in my part of the country, and it is in 
 round numbers easy of calculation. You are to 
 taice $100,000, go and buy bonds with it, leave 
 < them there, and take out $90,000 of circulating 
 • notes. As to exchange, that is to be the same all 
 over the country, and that is to be no item in the 
 profit of a bank hereafter. 
 
 Now let us see how it will work. In the first 
 place I believe I am borne out by examination of 
 .experienced men in saying that you cannot oper- 
 ,ate a country bank, or any bank of the amount 
 of $100,000, with less than $2,500 per year. Pay 
 .your cashier, open your office, warm it, light it, 
 take care of it, pay yourexpresses, and do all your 
 .business,and itcannotbe done for less than $2,500, 
 and that is putting it very low. -Now, a $100,000 
 bunk under this bill will, in the first place, get 
 from the Government of the United States $4,000 
 a year interest, after paying the tax. We under¬ 
 stand that. They lend the $90,000 which they 
 receive and they get six percent, interest on that. 
 That interest would amount to $5,400. There is 
 ail they can make without stealing. It is all that 
 can be made. What does it cost? It costs $2,500 
 to operate the bank, the ordinary expenses, and 
 they lose the use of $22,500 for that year because 
 they are to keep on hand twenty-five per cent, on 
 their circulation. They have kept that on hand, 
 and of couise the use of it is lost. That is over 
 $1,300. That expense and loss makes $3,800. 
 The interest from the Government and the inter¬ 
 est on the $90,000 amounts to $9,400. Deducting 
 the one from the other, it leaves $5,600. Now, 
 what did it make that on? On the $100,000 put 
 m, and the $22,500 which was kept on hand. The 
 investment was $122 ; 500, and the profit is $5,600; 
 that is, about four per cent. That is all that can 
 be made under it. They are to run the risk in 
 their loans of all the loanings of $90,000, and get¬ 
 ting^ it out and in, and cannot make five per cent., 
 if ail works smoothly and there are no losses at 
 
 all. I say that is not a matter of speculation; that 
 
 ;s a matter of certainty. Those figures which I 
 nave given in this instance cannot lie, which they 
 i|o sometimes. 1 therefore say 1 feel quite con¬ 
 fident—and that is not merely my opinion; I have 
 compared my opinions with those of men of ex¬ 
 perience, who know much more than I do about 
 ,t, and they assure me that that is assuredly true 
 —that banks will never be set up under this bill 
 n the country. In that condition of things, Mr. 
 President, all our people in the country are to be 
 
 sent to the cities for all their loans, where their se- 
 cui ities aic not known, and it becomes impractica¬ 
 ble to get along, and these banks will not be sub¬ 
 stituted in the place of the present. Hence I take 
 it that if 1 am right in these views we must look 
 t° the winding up of our banks, a system with 
 which our people are entirely content, and under 
 which and with which they prosper, and which 
 they prefer. 
 
 Now, is there any great national necessity that 
 compels us to drive the chariot of State rough¬ 
 shod o\ei these institutions? I care nothing for 
 the banks; they are not what I am talking about. 
 
 1 stated in the beginning, and I state again, that 
 my trouble is in relation to the people; that this 
 destioying these agencies of theirs, commonly 
 cahed fiscal agencies, these pecuniary institutions, 
 interwoven with all their business, will bring dis¬ 
 tress and ruin on our people, and distribute that 
 rum through all parts of society. 
 
 Mr. President, I do owe a little something to our 
 banks. I should not say that I care nothing for 
 them; I mean as a public man. The banks of our 
 cities aided very freely and as long as they could 
 this Government in the beginning of this war, and 
 something is due to them. I can say that but for 
 the assistance of the banks of Vermont we could 
 never have put our troops in the field, and I be¬ 
 lieve that to be true of New Plampshire, and 1 do 
 not know but that it is of Connecticut. 
 
 Mr. FOSTER. I think it is. 
 
 Mr. COLLAMER. I have no doubt it is true 
 there. We never could have put our men in the 
 field; and I would have it borne in mind that we 
 have put in every man that we have been asked for. 
 We not only furnished the amount of all the calls 
 made upon us, but filled up all our old regiments, 
 to the amount of between two and three thousand 
 men. Everything asked of us has been done. 1 
 claim no particular merit for this. We have done 
 no more than our duty, which we were willing to 
 do; and now, when the bodies of these sons of 
 ours are brought home and carried far up among 
 °ur mountain recesses, or information is received 
 of their death on the Chickahominy, our people 
 know that an enemy has done this. But what 
 shall I tell them when there must bean immediate 
 collection of all the debts they owe to the banks, 
 and a winding up of all their business connected 
 with the banks, and the distress that will follow— 
 what shall I say to them ? A friend has done this; 
 it has not been done by an enemy. I do not know 
 what will be the consequence, i can merely say 
 that I do not hold myself responsible for the po¬ 
 litical consequences of such an act. 1 believe my 
 State is as loyal a one as there is in the Union. 
 
 I think we have exhibited it, manifested it fully; 
 but our people can be unnecessarily distressed to 
 an amount that they will not endure. I do not 
 say that they will resist by revolution, but I mean 
 that they.will hardly admire an Administration 
 which visits upon them such calamities in return 
 for what they have done. 
 
 Mr. President, some arguments- are used, or 
 some tilings that are called arguments, to which 
 I can hardly trust myself to reply, for fear I shall 
 be wanting in courtesy. It has been more than 
 intimated to us in this debate that if a man will 
 
13 
 
 notgive up the protection of any local interest that 
 stands in the way of the great national problem 
 before us, he is unfaithful to the Government. I 
 cannot do it on this occasion. I know, too, that 
 men—I will not call bad names—political re¬ 
 formers, get up a project which, with them, is an 
 ideal perfection and an absolute necessity, and 
 they have worked upon it until they have got into 
 lhatcondition when they thinkevery thing on earth 
 must give way to it, and everything that does not 
 give way to it is an enemy to the country; and 
 every man who does not agree to it is an enemy 
 to the country. To add to that, we are told in 
 the Senate that the whole Cabinet are in its favor. 
 Mr. President, it is not many years since a man 
 would have been called to order for using an ex¬ 
 pression of that kind in the Senate. Men have 
 been called to order for such expressions. Legis¬ 
 lation is to be left to the House of Representatives 
 and theSenate; itis theexercise of their judgment, 
 not the authority of others, which is to give cur¬ 
 rency and support to measures. If it has come 
 to this, that it is to be more than intimated that 
 we are not to consult our understanding, not to 
 indulge ourselves in reasoning about a matter, but 
 we are to be told ex cathedra by the organ of the 
 Administration that the Cabinet desire and are all 
 in favor of a certain thing as an argument to in¬ 
 duce us to come into it, it seems to me that im¬ 
 plies a degree of subserviency that can hardly be 
 expected. I respect those gentlemen in their posi¬ 
 tion; but do you not know, Mr. President, that 
 our people were very careful in forming the Con¬ 
 stitution that the ministry should not be admitted 
 on the door of Congress? They would not have 
 it like the British Parliament, where the members 
 of the ministry are admitted upon the floor of the 
 House of Commons and the House of Lords. 
 Our people carefully provided against that. They 
 ■would not have it here. They would have no 
 such influence as that operating on either House 
 of Congress. So we are to have it second hand; 
 they are not to come, but they are to send their 
 views to us. I respect all men in official position 
 in their place; and that is all they should expect 
 of us. I say of these men without offense—1 will 
 
 not call them as John Randolph did, the Presi¬ 
 dent’s clerks—but I say we made them. Wc are 
 not to be dictated to by them, nor do I believe 
 they ever attempted any such thing, or ever in¬ 
 tended any such thing. I have no idea there was 
 ever any such errand sent; but the Senator from 
 Ohio seemed to suppose that it was weighty and 
 worthy of great consideration here, or he would 
 not have mentioned it. I intend to consult my 
 : own judgment in the discharge of my official du¬ 
 ties. If other gentlemen are willing to let their 
 j conscience swing loose from its moorings, and to 
 ( cease to consult their own judgments in reference 
 to measures, but rather to consult their own safety 
 for fear they will fall into contempt by being 
 charged with being unfriendly to the Government, 
 and will therefore give up all further consideration 
 of the subject, they may do it; but 1 should like 
 to know when that time comes; that is all. 
 
 Mr. President, in closing I have one thing fur¬ 
 ther to say, and that is if such an experiment as 
 this is desired, some time of peace should be se¬ 
 lected when the community can better bear it. To 
 begin a general pecuniary revolution at this time, 
 when there is an armed revolution in the country 
 and we desire that every nerve should be strained 
 I against our enemies, seems to me very singular. 
 This i3 a very inauspicious period to remodel so¬ 
 ciety and recast the order of business. It is in¬ 
 voking a degree of suffering which the occasion 
 does not demand. I agree with the Senator that 
 there is nothing desperate in the condition of our 
 affairs. I agree with him that there is nothing 
 at all alarming in our pecuniary affairs. We have 
 not sold any stock below par. We have provided 
 for the raising of taxes enough to pay the interest 
 on our public debt, if we increase that debt three¬ 
 fold. We can pay our ordinary expenses with¬ 
 out trouble, and we can pay our interest in gold, 
 and we do it. Nor has any calamity come or any 
 ! suffering been endured in relation to our pecuniary • 
 affairs, nor need there be. Therefore there can¬ 
 not be an excuse on this occasion or in the cir¬ 
 cumstances in which we stand as a country for 
 putting in operation so sweeping and extraordi¬ 
 nary an experiment as this at this juncture. 
 
 » 
 
 • • 
 
 i