When the bill was taken up for consideration on the 29th of January, the objections which had been raised in the public press were elaborated in the Committee of the Whole. Mr. Pendleton of Ohio was the first in opposition. In beginning a long argument, he insisted that "the feature of this bill which first strikes every thinking man, even in these days of novelties, is the proposition that these notes shall be made a legal-tender in discharge of all pecuniary obligations, as well those which have accrued in virtue of contracts already made as those which are yet to accrue in pursuance of contracts which shall hereafter be made. Do gentlemen appreciate the full import and meaning of that clause? Do they realize the full extent to which it will carry them? Every contract for the purchase of money is in legal contemplation a contract for the payment of gold and silver coin. Every promissory note, every bill of exchange, every lease reserving rent, every loan of money reserving interest, every bond issued by this government, is a contract to which the faith of the obligor is pledged, that the amount, whether rent, interest, or principal, shall be paid in the gold and silver coin of the country." Mr. Pendleton deemed it a very serious matter that "the provisions of this bill contemplate impairing the obligation of every contract of that kind, and disturbing the basis upon which every judgment and decree and verdict have been entered." He concluded by referring to the depreciated paper of the French Revolution, to the long suspension of specie currency in England, and the throes attending return to it in 1822. Quoting Daniel Webster's words that "gold and silver currency is the law of the land at home, the law of the world abroad: there can, in the present condition of the world, be no other currency," Mr. Pendleton made an earnest appeal to the House "to heed this lesson of wisdom."
Repeated declarations were made during the debate that the Secretary of the Treasury had not given his approval of the pending measure. This impression was seriously impeding the progress of the bill, and, if it had been confirmed, would probably have defeated it. A belief was prevalent that Mr. Chase would be glad to have the advantage of the measure in the management of the Treasury without assuming the responsibility of its recommendation. But it was soon evident that he could not remain in a passive and receptive position without defeating the bill. Its real opponents took advantage of the rumors; and its supporters, annoyed if not angered, by the suggestion of hostility on the part of the Treasury, were determined that Secretary Chase should take open ground. The embarrassment was relieved by a letter from the Secretary to the Committee of Ways and Means, dated Jan. 29, and read in the House on the 4th of February by Mr. Spaulding. The letter had great influence on Congress. Without it, the measure would probably have been defeated.
Mr. Chase, assuming that "the provision making United-States notes a legal-tender has doubtless been well considered by the committee," deemed it his duty to say that "in respect to the provision his reflections had conducted him to the same conclusions the committee had reached." He did not wish to conceal that he felt "a great aversion to making any thing but coin a legal-tender in payment of debts." He had been anxious "to avoid the necessity of such legislation." He found it however "impossible, in consequence of the large expenditures entailed by the war and the suspension of the banks, to procure sufficient coin for disbursements." He declared therefore that it "had become indispensably necessary that we should resort to the issue of United-States notes. Making them a legal-tender might however still be avoided, if the willingness manifested by the people generally, by railroad companies, and by many of the banking institutions, to receive and pay them as money in all transactions were absolutely or practically universal; but unfortunately there are some persons and some institutions that refuse to receive and pay them, and their action tends, not merely to the unnecessary depreciation of the notes, but to establish discriminations in business against those, who, in this matter, give a cordial support to the government, and in favor of those who do not. Such discrimination should if possible be prevented; and the provision making the notes a legal-tender, in a great measure at least, prevents it by putting all citizens in this respect on the same level, both of rights and duties." In addition to this official communication, Mr. Spaulding felt justified in reading a personal note from Mr. Chase, in which he said that he "came with reluctance to the conclusion that the legal-tender clause is a necessity," but that he "came to it decidedly and supported it earnestly."
THADDEUS STEVENS IN THE DEBATE.
Thaddeus Stevens threw the whole weight of his influence in favor of the measure. To alternative propositions which had been submitted, he made strenuous objection. Certain bankers of New York had suggested that the immediate wants of the government might be supplied by pledging seven and three-tenths per cent. bonds with a liberal margin, payable in one year, to the banks, which would advance a portion in gold and the rest in currency. Mr. Stevens argued that "the effect of this would be that the government would pay out to its creditors the depreciated notes of non-specie-paying banks. And as there is no possibility that the pledges would be redeemed when due, they would be thrown into the market and sold for whatever the banks might choose to pay for them. The folly of this scheme needs no illustration." Another proposition, pressed very earnestly, was to strike out the legal-tender clause, and make the notes receivable for all taxes and public dues, but not to make any provision for redeeming them in coin on demand. Mr. Stevens did not "believe that such notes would circulate anywhere except at a ruinous discount. Notes not redeemable on demand, and not made a legal-tender, have never been kept at par." Even those who could use them for taxes and duties would, in Mr. Stevens's opinion, "discredit them that they might get them low." He was convinced that "if soldiers, mechanics, contractors, and farmers were compelled to take them from the government, they must submit to a heavy shave before they could use them. The knowledge that they were provided for by taxation, and would surely be paid twenty years hence, would not sustain them."
To two prominent amendments which had been submitted, Mr. Stevens manifested earnest opposition. He said "the one moved by the gentleman from Ohio (Mr. Vallandigham) proposes the same issue of notes, but objects to legal-tender, and does not provide for their redemption in coin. He fears our notes would depreciate. Let him who is sharp enough, instruct the House how notes that every man must take can be less valuable than the same notes that no man need take and few would, since they are irredeemable on demand." As to the constitutionality of the bill, he thought that whoever "admits our power to emit bills of credit, nowhere expressly authorized by the Constitution, is an unreasonable doubter when he denies the power to make them a legal-tender." "The proposition of the gentleman from New York" (Mr. Roscoe Conkling), continued Mr. Stevens, "authorizes the issuing of seven per cent. bonds, payable in thirty-one years, to be sold ($250,000,000 of it) or exchanged for the currency of the banks of Boston, New York, and Philadelphia. This suggestion seems to lack every element of wise legislation. Make a loan payable in irredeemable currency, and pay that in its depreciated condition to our contractors, soldiers, and creditors generally! The banks would issue unlimited amounts of what would become trash, and buy good hard-money bonds of the nation. Was there ever such a temptation to swindle? The gentleman from New York further proposes to issue $200,000,000 United-States notes, redeemable in coin in one year. Does he not know that such notes must be dishonored, and the plighted faith of the government be broken? If we are to use suspended notes to pay our expenses, why not use our own?"
The minority of the Ways and Means Committee, through Mr. V. B. Horton of Ohio, had submitted a plan, as Mr. Stevens characterized it, "to issue United-States notes, not a legal-tender, bearing an interest of three and sixty-five hundredths per cent., and fundable in seven and three-tenths per cent. bonds, not payable on demand, but at the pleasure of the United States. This gives one and three- tenths per cent. higher interest than our loan, and, not being redeemable on demand, would share the fate of all non specie-paying notes not a legal-tender." Mr. Stevens believed that the government was reduced to a narrow choice. It must either throw bonds at six or seven per cent. on the market within a few months in amount sufficient to raise at least $600,000,000 in money,—$557,000,000 being already appropriated,—or it must issue United-States notes, not redeemable in coin, but fundable in specie-paying bonds at twenty years; such notes either to be made a legal-tender, or to take their chance of circulation by the voluntary act of the people. The sturdy chairman of Ways and Means maintained that "the highest rate at which we could sell our bonds would be seventy-five per cent., payable in currency, itself at a discount, entailing a loss which no nation or individual doing a large business could stand for a single year." He contended that "such issue, without being made legal-tender, must immediately depreciate, and would go on from bad to worse. If made a legal-tender, and not issued in excess of the legitimate demand, the notes will remain at par, and pass in all transactions, great and small, at the full value of their face; we shall have one currency for all sections of the country, and for every class of people, the poor as well as the rich."
MR. LOVEJOY AND MR. CONKLING.
Mr. Owen Lovejoy of Illinois on the other hand marked out a very different plan. He advocated as the first step, "adequate taxation, if need be to the extent of $200,000,000." In the next place, he would so legislate as to "compel all banking institutions to do business on a specie basis. Every piece of paper that claimed to be money but was not, he would chase back to the man or corporation that forged it, and visit upon the criminal the penalties of the law. He would not allow a bank note to circulate that was not constantly, conveniently, and certainly convertible into specie." In the third place, he would issue interest-paying bonds of the United States, and "go into the market and borrow money and pay the obligations of the government. This would be honest, business- like, and in the end economical. This could be done. Other channels of investment are blocked up, and capital would seek the bonds as an investment." As contrasted with the measure proposed by the Ways and Means Committee, Mr. Lovejoy intimated that his represented "the health and vigor of the athlete;" the other, "the bloated flesh of the beer-guzzler."
Mr. Roscoe Conkling of New York expressed hearty agreement with Mr. Lovejoy. He agreed "with some other gentleman who said that his bill was a legislative declaration of national bankruptcy." He agreed "with still another gentleman who said that we were following at an humble and disgraceful distance the Confederate Government, as it is called, which has set up the example of making paper a legal-tender, and punishing with death those who deny the propriety of the proposition." Mr. Conkling declared that "insolvency is ruin and dissolution;" and he believed that "in passing this bill, as was said by the gentleman from Massachusetts [Mr. Thomas], we are to realize the French proposition about virtue,—that it is the first step that costs. Another and another and another $100,000,000 of this issue will follow. We are plunging into an abyss from which there are to be no resuscitation and no resurrection." Mr. Conkling thought "it right to learn of an enemy," and already "the London Times hails this $150,000,000 legal-tender bill as the dawn of American bankruptcy, the downfall of American credit." The public debt by the first of the ensuing July, within less than a year from the first battle of the war, was already estimated at $806,000,000. "Who can credit these figures," said Mr. Conkling, "when he remembers that the world's greatest tragedian closed his bloody drama at St. Helena leaving the public debt of France less than seventy million of pounds?" He believed that "all the money needed can be provided by means of unquestionable legality and safety." He believed the substitute he had offered would effect that result.