"I will say to my friend," replied Mr. Stevens, "that in this case I do not act as a member of the Republican party."
"I have followed the gentlemen," said Mr. Wentworth, "because I supposed him to be a Republican leader."
"If I believed," said Mr. Stevens, "that we could resume specie payments in a month without crushing the interests of the country, without injuring the laborer, without breaking down the manufacturer, without oppressing the people, without decreasing the revenues of the Government; if I had the power, I would order every bank in the country, State and national, and the Government also, to resume specie payment."
"Suppose McCulloch could do that," said Mr. Wentworth, "and give all our boys their money at par."
"If he could do it, I would give him great credit," said Mr. Stevens.
"I believe he can," said Mr. Wentworth.
"My friend is large," said Mr. Stevens, "and has faith like two grains of mustard-seed."
Plans were devised, and ultimately carried through Congress, by which the great volume of paper currency should be gradually reduced at a certain fixed rate, so that the people might know how to calculate the future, and be enabled to provide against a commercial crash.
The first measure designed to accomplish this result was popularly called the Loan Bill, which was amendatory of an act "to provide ways and means to support the Government." When first considered, in March, 1866, it was defeated in the House. It was soon after brought up again in a modified form, and passed both the House and Senate by large majorities. The act provided that the Secretary of the Treasury might receive treasury notes, or "other obligations issued under any act of Congress," in exchange for bonds. The contraction of the currency was restricted and limited by the provision that not more than ten millions of dollars might be retired and canceled within six months from the passage of the act, and thereafter not more than four millions of dollars in any one month.
A financial problem of great importance presented itself for solution in the second session of the Thirty-ninth Congress. A large amount of compound-interest notes, weighed down with accrued interest, had ceased to float as currency, and lay in the vaults of the banks and the coffers of capitalists, awaiting redemption. The question arose as to how they should be redeemed, and the nation saved the payment of the immense amounts of interest which must accumulate in course of time. The House of Representatives proposed to pass an act authorizing and directing the Secretary of the Treasury to issue legal-tender notes, without interest, not exceeding $100,000,000, in place of the compound-interest bearing notes.