And yet, in the face of this plain commandment, on which hangs so much of all that is most prized in national existence, we are called to break faith. It is proposed to tax the national bonds, in violation of the original bargain on which the money was lent. Sometimes the tax is to be by the Nation, and sometimes by the States. The power to do this wrong you may possess, but the right never. Do what you will, there is one thing you cannot do: you cannot make wrong right. It is in vain that you undertake to set aside the perpetual obligation which you have assumed. Against every such pretension, whether by speech or vote, there is this living duty, which will survive Congress and politician alike. Puny as the hand of a child is the effort to undo this original bargain. The Nation has promised six per cent. interest, payable semiannually in coin, nor more nor less, without any abatement; and then, having bound itself, it proceeds to guard against the States by declaring specifically that the bonds shall be “exempt from taxation by or under State authority.” Such is the bargain. There it is; and it must continue unchanged, except by the consent of the parties, until the laws of the universe tumble into chaos.
The rogue in Shakespeare exclaims, “What a fool Honesty is! and Trust, his sworn brother, a very simple gentleman!” In equal levity it is said, “Tax the bonds,” although, by the original bargain on which the money was obtained, amid the trials of war for the safety of the Nation, it was expressly stipulated that these bonds should not be taxed. Nevertheless, tax the bonds! Of course, by taxing the bonds the bargain is brutally broken,—and this, too, after the Nation has used the money. Such a transaction in common life, except where bankruptcy had supervened, would be intolerable. A proud Nation, justly sensitive to national honor, as the great Republic through whose example liberal institutions are commended to mankind, cannot do this thing.
The proposition to tax the bonds, in open violation of the original bargain, is similar in spirit to that other enterprise, which, under various discordant ensigns, proposes to pay the national bonds with inconvertible paper. Here at once, and on the threshold, Public Faith interposes a summary protest. On such a question debate even is dangerous; the man who doubts is lost. The money was borrowed and lent on the undoubting faith that it was to be paid in coin. Nothing to the contrary was suggested, imagined, or dreamed, at the time. Behind all forms of language, and even all omissions, this obligation stands forth, in the nature of the case, explained and confirmed by the history of our national loans, and by the official acts of successive Secretaries of the Treasury interpreting the obligations of the Nation.
So much stress is laid upon the language of the five-twenties that I cannot let it pass. The terms employed were precisely those in previous bonds of the United States where the principal was paid in coin, some of which are still outstanding. Had there been any doubt about the meaning, it was fixed by the general understanding, and by special declarations of responsible persons speaking for the Nation. On 26th May, 1863, Mr. Harrington, the Assistant Secretary of the Treasury, in an official letter, says: “These bonds will, therefore, be paid in gold.” On 15th February, 1864, Mr. Field, also Assistant Secretary of the Treasury, writes: “I am directed by the Secretary to say that it is the purpose of the Government to pay said bonds, like other bonds of the United States, in coin, at maturity.” On 18th May, 1864, Mr. Chase, at the time Secretary of the Treasury, wrote: “These bonds, according to the usage of the Government, are payable in coin.” Mr. Fessenden, while Secretary of the Treasury, in his annual report to Congress, expressed the same conclusion; and his successor, Mr. McCulloch, in a letter of 15th November, 1866, says: “I regard, as did also my predecessors, all bonds of the United States as payable in coin.” There are also numerous advertisements from the Treasury, and from its business agents, all in the same sense.
Here is a succession of authorities, embracing high functionaries of the United States, all concurring in affixing upon these bonds the obligation to pay in coin. As testimony to the meaning of the bonds, it is important; but considering that all these persons represented the National Treasury, and that they were the agents of the Nation for the sale of these very bonds, their representations are more than testimony. Until their authority is disowned by Congress, and their representations discarded, it is difficult to see why their language must not be treated as part of the contract, at least in all sales subsequent to its publication. It must not be forgotten that these original sales were mainly to bankers and brokers, and in large amounts, for the purpose of resale to small purchasers seeking investments. It was in reply to parties interested in these resales that the letters of Assistant Secretary Field and Mr. Chase were written, pledging the Nation to payment in coin. At the date of these important letters Congress was in session, and, although the opportunity was constant, there was no protest against the meaning thus authoritatively affixed to these obligations. The bonds were in the market, advertised and sold daily, with a value established by the representations of these national agents; and Congress did not interfere to set aside these representations. By subsequent Acts similar loans were authorized, and nobody protested. There was the supplementary clause of 3d March, 1864, for the issue of eleven millions of these bonds, to cover an excess subscribed above the amount authorized by the original Act. This was debated in the Senate on the 1st of March; but you will search the “Globe” in vain for any protest. Then came other Acts, at different dates, by which the loan was further enlarged to its present extent, and all the time these representations were uncontradicted. Against them there was no Act of Congress, no protest, nothing. If this is not “acquiescence,” then I am at a loss to know how acquiescence can be shown. Therefore do I insist that these representations are a part of the contract by which the Nation is bound.
It is said that in the five-twenty bonds there are words promising interest in coin, but nothing with regard to the principal. Forgetting the contemporary understanding and the official interpretation, and assuming that at maturity the bond is no better than a greenback, it becomes important to know the character of this obligation. On its face a greenback is a promise to pay a certain number of dollars. It is paper, and it promises to pay “dollars.” Here is an example, which I take from my pocket: “The United States promise to pay to the bearer five dollars”—not five dollars in paper, or in some other substituted promise, but “five dollars,” which can mean nothing else than the coin known over the world with the stamp of Spain, Mexico, and the United States, being a fixed value, which passes current in every zone and at the antipodes. The “dollar” is an established measure of value, like the five-franc piece of France, or the pound sterling of England. As well say, that, on a promise to pay so many francs in France, or so many pounds sterling in England, you could honestly acquit yourself by handing over a scrap of printed paper, inconvertible in value. This could not be done. The promise in our greenbacks carries with it an ultimate obligation to pay the silver dollar whose chink is so familiar in the commerce of the world. The convertibility of the greenback is for the present suspended; but when paid, it must be in coin. To pay with another promise is to renew, and not to discharge the debt. But the obligation in our bonds is to pay “dollars” also, whenever the bonds are paid; it may be after five years, or, in the discretion of the Nation, not till twenty years, but, when paid, it must be in “dollars.” Such is the stipulation; nor could the addition of “coin” or “gold” essentially change this obligation. It is contrary to reason that a bond should be paid in an inferior obligation. It is dishonest to force inconvertible paper without interest in payment of an interest-bearing obligation. The statement of the case is enough. Such an attempt disturbs the reason and shocks the moral sense.
Between the bond and the greenback there is an obvious distinction, doubly attested by the Act of Congress creating them both,—for they were created together. This distinction appears, first, in the title of the Act, and, secondly, in its provisions. According to its title, it is “An Act to authorize the issue of United States notes, and for the redemption or funding thereof, and for funding the floating debt of the United States.”[236] In brief, greenbacks were made a legal tender, and authority was given to fund them in these bonds. This appears in the very title of the Act. Now the object of funding is to bring what is uncertain and floating into a permanent form; and accordingly greenbacks were funded and placed on interest. The bonds were a substitute for the greenbacks; but the new theory makes the greenbacks a substitute for the bonds. To carry forward still further the policy of the Act, it was provided that the greenbacks might be exchanged at once for bonds; and then, by the Act of 11th July, 1862,[237] it was further provided that these very greenbacks “may be paid in coin,” at the direction of the Secretary, instead of being received in exchange for certificates of deposit, which were convertible into bonds,—thus treating the bonds as the equivalent of coin. The subsequent repeal of these provisions does not alter their testimony to the character of these bonds. Thus, at every turn, we are brought to the same conclusion. The dishonor of these obligations, whatever form it may assume, and whatever pretext it may adopt, is nothing but Repudiation.
The word Repudiation, now so generally used to denote the refusal to pay national obligations, has been known in this sense only recently. In the early dictionaries of our language it had no such signification. According to Dr. Johnson, it meant simply “divorce,” “rejection,” as when a man put away his wife. It began to be known in its present sense when Mississippi, the State of Jefferson Davis, dishonored her bonds. From that time the word has been too familiar in our public discussions. It was not unnatural that a State mad with Slavery should dishonor its bonds. Rejecting all obligations of humanity and justice, it easily rejected the obligations of Public Faith. Slavery was in itself a perpetual repudiation, and slave-masters were unblushing repudiators. Such an example is not fit for our Nation at this great period of its history.