Twenty Years of Congress, Vol. 1 / From Lincoln to Garfield, with a Review of the Events Which Led to the Political Revolution of 1860

by James Gillespie Blaine

Mr. Hooper of Massachusetts, a man of large experience in financial and commercial affairs, spoke ably in support of the legal-tender clause. "No one," said he, "supposes for one moment that government notes will be sold for coined money, or that coined money will be borrowed on them. It is fair to suppose that the opponents of the administration well understand that this would be the effect of accepting the amendment to strike out the legal-tender clause from the bill; and that their object, while they talk about coined money to deceive some of our friends, is to oblige the government to give up the sub-treasury, and to use for its payment the depreciated bills of the suspended banks; thereby flooding the whole country with these irredeemable notes, and producing, in time, a state of financial confusion and distress that would ruin any administration. The proposed issue of government notes guards against this effect of inflating the currency by the provision to convert them into government bonds, the principal and interest of which, as before stated, are payable in specie."

Mr. Morrill of Vermont supported the bill proposed by the minority of the Ways and Means Committee. He described the legal-tender features as "not blessed by one sound precedent, but damned by all." As a war measure he thought "it was not waged against the enemy, but might well make him grin with delight." He would as soon provide "Chinese wooden guns for the army as paper money alone for the Treasury." Mr. Morrill declared that there never was a greater fallacy than to pretend that as "the whole United States are holden for the redemption of these notes, they will, if made a legal-tender, pass at par." He contended that, as currency, "no more of them can be used than enough to fill the demands of commerce." He directed attention to the fact that of the Treasury notes already issued, payable in specie on demand, "the government succeeded in circulating but $27,000,000 of the $50,000,000 authorized, and of these the banks had held $7,000,000." The sanguine feeling in regard to the length of the war was disclosed by Mr. Morrill. Speaking on the 4th of February, 1862, he ridiculed the suggestion that "the war would be prolonged until July 1, 1863." He declared that "we could close the war by the thirtieth day of July next, as well as in thirty years.' This opinion was the one commonly accepted at the time in Congressional circles, though discountenanced by the wisest among those holding important commands in the army.

Mr. Bingham of Ohio spoke earnestly in favor of the bill. He could not "keep silent" when he saw "efforts made to lay the power of the American people to control their currency, a power essential to their interest, at the feet of brokers and of city bankers who have not a tittle of authority save by the assent of forbearance of the people to deal in their paper issues as money." Mr. Bingham argued that as there "is not a line or word or syllable in the Constitution which makes any thing a legal-tender,—gold or silver or any thing else,—it follows that Congress, having 'the power to regulate commerce,' may determine what shall be a lawful tender in the discharge of obligations payable in money only." The "limitation of the power to impair the obligation of contracts," as Mr. Bingham pointed out, was "a limitation upon the States only, and did not restrain the action of Congress."

Mr. Sheffield of Rhode Island argued earnestly against the bill, and predicted the same fate for it, if enacted, that overcame a similar attempt in his State during the Revolutionary war "to make paper a legal-tender." The people would not submit to it, and "the courts set it aside as an unlawful exercise of legislative power."

ABLE SPEECH BY MR. PIKE.

Mr. Frederick A. Pike of Maine made one of the clearest and ablest speeches delivered in the House in favor of the bill. He regarded it as an experiment forced upon the country by necessity. "We issue $150,000,000," said Mr. Pike, "on a venture." We measure it "with population and wealth and existing currency. We compare it with the action of the past." The issue of Continental notes had reached $20,000,000 by the month of April, 1777, besides a large amount of currency by the States. "And yet," said Mr. Pike, "no marked signs of depreciation had appeared." The whole property of the country did not at that time in his judgment "exceed five hundred millions." From these facts he deduced our ability to stand the proposed issue of paper. Mr. Pike had little faith in the infallibility of any one's judgment as to the ultimate result of financial experiments. He recalled the circumstance that Sir Robert Peel's famous bank bill was introduced in Parliament in 1844 with the confident declaration by Her Majesty's Government that "inquiry had been exhausted." But in the "first mercantile pinch" the measure which was "the embodiment of financial wisdom" did not work favorably, and "the government was compelled to interpose on behalf of the bank and of the business community." "Tax, fight, and emancipate," Mr. Pike declared to be "the Trinity of our situation."

Mr. Valentine B. Horton of Ohio was opposed to giving the legal- tender quality to government paper. He said "the country was never so wealthy as to-day; never was so little due to foreign countries; never were the people so free from embarrassment. The one drawback is that the Treasury wants money to an immense amount." He believed that an appeal to the capitalists would call forth "gold in the utmost abundance." To pass the legal-tender bill would, in his judgment, be "a legislative declaration that the administration is not equal to the occasion for which it was elected." He thought "the time for oracular utterances about a great movement," by which bankers had been inspired with undue hope, had passed by, and that something practical and actual would soon be accomplished.

Mr. John B. Alley supported the bill by arguments which came from his own wide experience in business. The choice, he said, was between notes of the government and "an irredeemable bank currency, a great deal of which will be found, as it was after the war of 1812, utterly worthless."

Mr. Charles W. Walton of Maine spoke briefly but ably on the constitutional power of Congress to pass the bill. He contended that the authority to declare a legal-tender "was an implied and not a direct power;" that, admitting it to belong to the Government, it exists "without limitation." The question before the House, therefore, is "one of expediency only," and on that ground he earnestly supported the measure.

Mr. Shellabarger of Ohio answered the "charges of bad faith and injustice" which had been brought against the bill by its opponents. The cry of ruin to the country he compared with similar fears for England on the part of her economists, and showed how, in every case, they had been disproved by the rising power and growing wealth of that kingdom. He said the legal-tender notes would be "borne up by all the faith and all the property of the people, and they will have all the value which that faith untarnished and that property inestimable can given them."