If I am right in this review, the bill of the Committee does not deserve our support. But I do not confine myself to criticism. I offer a substitute. Could I have my way, I would treat the whole financial question as a unit, providing at the same time for all the points involved in what I have called Financial Reconstruction. This I have attempted in the bill which I have already introduced. But on the present occasion I content myself with a substitute for the present measure. The amendment of which I have given notice has the twofold object of the pending bill: first, to enlarge the currency; and, secondly, to change the existing banking system, so as to provide practically for free banking and to enlarge banking facilities.
If you will look at my amendment, you will see that it enlarges the limit of bank-notes from $300,000,000 to $500,000,000. This is practically a provision for free banking, at least for some years. Practically it leaves the volume of currency to be regulated by legitimate demand, with a proviso for the withdrawal of legal-tender notes to an amount equal to the new issues. The amendment then proceeds to provide bonds to be deposited with the Government as the basis of the new banks. And here is a just and much-needed economy,—just to the Government, and not unjust to the banks. It is proposed for the future to allow but four per cent. interest on the bonds deposited by the banks. Thus far the banks have enjoyed large benefits, and in part at the expense of the Government. Under the operation of my amendment these profits would be slightly reduced, but not unduly, while the Treasury would receive an annual benefit of not far from six million dollars in coin. In this respect the proposition harmonizes with the idea, which is constantly present to my mind, of diminishing our taxes.
Sir, in the remarks submitted by me on a former occasion I ventured to say that the first great duty of Congress was to mitigate the burdens now pressing upon the energies of the people and upon the business of the country, and, as one means of accomplishing this important result, to extend these burdens, in a diminishing annual ratio, over a large population entering upon the enjoyment of the blessings which the present generation at such enormous cost has assured to the Republic.[218] Upon the assumption that the national revenues and the national expenditures would continue relatively the same as now, a sum extending from eighty to one hundred millions would be the measure of relief that might be accorded at once, without arresting the continuous reduction of the debt at the rate of $2,000,000 a month.
In proposing this large reduction of taxation at this time, with the hope of larger reductions in the near future, it was necessary to keep in view the possibility of increased expenditure or of decreased receipts. To guard against such contingency we must keep strict watch over the expenditures, and, if possible, diminish the positive annual obligations of the nation. And here the mind is naturally and irresistibly attracted to the prodigious item of interest. Cannot this be reduced at an early day by a large amount, and then subsequently, though contingently, by a much larger amount? And should not this result be one of our first endeavors? Is it not the first considerable stage in the reduction of taxation?
The credit of the country is injured by two causes: first, the refusal to redeem past-due obligations, being so much failed paper, which condition must necessarily continue so long as we deliberately sanction an inconvertible currency; and, secondly, the menace of Repudiation, with slurs upon the integrity of the people uttered in important quarters. These two causes are impediments to the national credit. How long shall they continue? Loyally and emphatically has Congress declared that all the obligations of the nation shall be paid according to their spirit as well as letter. But this is not enough. More must be done. And here Congress must act, not partially, nor timidly, nor in the interests of the few only, but impartially, comprehensively, firmly, and in the interests of the many. It must help the recognized ability of the nation by removing its disabilities.
Nearly five years have now passed since the Rebellion sheathed its sword. But the national expenditures did not cease at once when the sword no longer plied its bloody work. They still continued, sometimes under existing contracts which could not be broken, sometimes in guarding the transition from war to peace. Meanwhile the national faith was preserved, while the people carried the unexampled burden willingly, if not cheerfully. The large unliquidated debt, the débris of the war, has been paid off or reduced to a form satisfactory to the creditor, and the world has been assured that the people are ready for any sacrifices according to the exigency. Is more necessary? Should these sacrifices be continued when the exigency has ceased?
These sacrifices are twofold, being direct and indirect. The direct are measured by the known amount of taxation. The indirect are also traced to existing taxation, and their witnesses are crippled trade, unsettled values, oppressive prices, and an inconvertible currency, which of itself is a constant sacrifice. Therefore do I say again, Down with the taxes!
Bills relating to taxation do not originate in the Senate; but Senators are not shut out from expressing themselves freely on the proper policy which is demanded at this time. On the finances and the banks the Senate has the same powers as the other House. Here it may take the initiative, as is shown by the present bill. But what it does should be equal to the occasion; it should be large, and not petty,—far-reaching, and not restricted in its sphere. The present bill, I fear, has none of these qualities which we desire at this time. It is a patch or plaster only, when we need a comprehensive cure.