The national debt is a sacred obligation upon this government, and it is to be paid, every dollar of it. But it is a Democratic debt, every dollar. If anybody should talk of repudiation it should be the Republican party, who had no instrumentality in creating it. But did you ever hear a Republican talk of repudiating it? It is a large debt. It is the price we pay for government. Is the government worth the cost? If it is, then the debt is not only an honest debt, but it has been worthily contracted. The Democrats propose to pay this debt in greenbacks, and they propose to pay the greenbacks by issuing more greenbacks. What do we gain by that? Issue $2,500,000,000 more greenbacks and they would not be worth the paper they are printed on, because the supply would flood the country and be greater than the demand.... It is a measure of fraudulent repudiation. In five or ten years the country might recover financially, but we would never wipe out the national disgrace that would follow that repudiation. It means the absolute annihilation of all values. These extra issues would be utterly worthless.
Mr. Chandler accordingly voted for the act of March 18, 1869, which formally declared that the United States would redeem its "greenbacks" and pay the interest and principal of its long term bonds in coin, and which was simply a new pledge that the government would do what it was already honorably bound to do both by fair construction of its own legislation and by the explicit and repeated promises of its agents. The full maintenance of the public faith, both as a matter of honor and of wise policy, he always upheld, and saw his arguments sustained and his prophecies made good in the steady improvement of the nation's credit and the refunding of its debt at greatly reduced rates of interest.
Of the national banking system Mr. Chandler was an original supporter. He regarded it as certain to become a lasting feature of the fiscal system of the United States, and as destined to ultimately furnish the paper money of the Union. The uniformity of its circulation, the security afforded to bill-holders, and the excellent results attending its method of governmental supervision, he considered as unanswerable arguments in favor of its permanent maintenance. It was his firm opinion that ultimately these banks would furnish all the national currency, and that their notes would supplant the "greenbacks." If national banking should be kept free, and redemption in coin required by law, he believed that the result would be a thoroughly-secured and readily-convertible paper currency, whose volume would be controlled by commercial demand and not by legislative caprice or political agitation, and which would lubricate and not obstruct the machinery of trade.
When the national bank bill first made its appearance in Congress, Mr. Chandler (in February, 1863) favored it as a measure of relief offering a quick market for $300,000,000 of government bonds, and as sure to supply "a better currency than the local banks now furnish." Holding the views he did, he supported the measures which promised to substitute bank notes for "greenbacks," although he opposed those which contemplated any expansion of the aggregate volume of both issues. For instance, in 1870, when the inflation element in Congress introduced a bill to add $52,000,000 to the national bank circulation (banking was not then free, it not being deemed prudent to leave the issue unlimited while all the paper money was irredeemable), he offered on January 31 an amendment to make the sum $100,000,000 and to withdraw "greenbacks" to an amount equal to the bank notes issued under this provision. He said:
The simple effect of my proposition, if adopted, will be to keep the circulation to a dollar where it is. If no new banks are started, no greenbacks are withdrawn, and if banks are started anywhere, then an amount of greenbacks must be withdrawn equal to the amount of national bank bills put in circulation. Should the whole $100,000,000 be taken we will be just $100,000,000 nearer to specie payments than we are to-day, ... and in the meantime the amount of national currency will not be changed in the slightest degree.
Mr. Sumner: There is salvation in that.
Mr. Chandler: Of course there is salvation in it; that is why I offer it.
All proposals made at the time to increase the aggregate paper circulation he resisted, saying:
That is a step in the wrong direction.... If you let it go out that this is to be the policy of Congress, you will see gold go up immediately, ... because it will show that the Congress of the United States is in favor of expansion instead of a reduction of the currency.
After the panic of 1873, when there was such a universal clamor for further inflation, and scores of propositions were introduced to add many millions to the existing volume of "greenbacks" and of bank notes, Mr. Chandler again insisted at all proper opportunities that resumption was the most essential step toward financial soundness, and that the substitution of bank notes for "greenbacks" would aid greatly both in reaching and in maintaining specie payment. On Feb. 18, 1874, he offered an amendment to a pending bill, directing "the Secretary of the Treasury to retire and destroy one dollar in 'legal tender' notes for each and every dollar of additional issue of bank notes," and spoke upon this proposition at length. He did not urge it as a complete remedy for the existing situation (contraction and resumption would alone furnish that), but he said:
This is a step in the right direction. In 1865 I advocated upon this floor the substitution of bank notes for greenbacks as a step toward the resumption of specie payments, and a rapid step toward that resumption. I am now simply advocating what I advocated then.