It was in pursuance of the effort I made on the first day of this week that yesterday I presented a memorial from loyal citizens of Virginia here in Washington. I presented it as a memorial, and asked to have it read. The Senator from Nevada [Mr. Stewart], in the remarks which he so kindly made with regard to me later in the day, said that in asking to have it read I adopted it. I can pardon that remark to the Senator from Nevada, who is less experienced in this Chamber than the Senator from Illinois; but the latter Senator has repeated substantially the same remark. Sir, this is a new position, that in presenting a memorial one adopts it, especially when he asks to have it read. Why, Sir, what is the right of petition? Is it reduced to this, that no petition can be presented unless the Senator approves it, or that no petition can be read at the request of a Senator unless he approves it? Such a limitation on the right of petition would go far to cut it down to its unhappy condition in those pro-slavery days which some of us remember. Sir, I was right in presenting the memorial, and right in asking to have it read.

And now what is its character? It sets forth a condition of things in Virginia which might well make the Senate pause. I think no candid person can have listened to that memorial without seeing that it contains statements with regard to which the Senate ought to be instructed before it proceeds to a vote. Do you consider, Sir, that when you install this Legislature you consign the people of Virginia to its power? Do you consider that to this body belongs the choice of judges? The whole judiciary of the State is to be organized by it. This may be done in the interests of Freedom and Humanity, or in the ancient interests of the Rebellion. I am anxious that this judiciary should be pure and devoted to Human Rights. But if the policy is pursued which finds such strenuous support, especially from the Senator from Illinois, farewell then to such a judiciary!—that judiciary which is often called the Palladium of the Commonwealth, through which justice is secured, rights protected, and all men are made safe. Instead of that, you will have a judiciary true only to those who have lately been in rebellion. You will have a judiciary that will set its face like flint against those loyalists that find so little favor with the Senator from Illinois. You will have a judiciary that will follow out the spirit which the Senator has shown to-day, and do little else than pursue vindictively these loyalists.

There has been allusion to the Governor of Virginia. The Senator says I have made an assault upon him. Oh, no! How have I assaulted him? I said simply that I understood he was on the floor, as the member-elect from Richmond was on the floor. That is all that I said. But now there is something with regard to this Governor to which I should like to have an answer: possibly the Senator may be able to answer it. I have here a speech purporting to have been made by him at an agricultural fair in the southwest part of Virginia after the election, from which, with your permission, but, Sir, without adopting it at all or making myself in any way responsible for its contents, I will read.

Mr. Walker, addressing the audience, says:—

Now, Sir, what are the operative words of this remarkable speech? That this very Governor Walker, who finds a vindicator—I may say, adopting a term of the early law, a compurgator—in the Senator from Illinois, announces that by this recent election Virginia has “declared against vandalism, fraud, and treachery,—has freed herself from the tyranny of a horde of greedy cormorants and unprincipled carpet-baggers, who came to sap her very vitals.”

Such is the language by which this Governor characterizes loyal people from the North, from the West, from all parts of the country, who since the overthrow of the Rebellion have gone there with their household gods, with their energies, with their character, with their means, to contribute to the resources of the State! Sir, what does all this suggest? To my mind unhappy days in the future; to my mind anything but justice for the devoted loyal people and Unionists of that State. And now, Sir, while I make this plea for them, again let me say I present no exclusive claim to represent them; I speak now only because others do not speak; and as in other days when I encountered the opposition of the Senator from Illinois I was often in a small minority, sometimes almost alone, I may be so now; but I have a complete conviction that the course I am now taking will be justified by the future. Sad enough, if it be so! I hope it may be otherwise.

Mr. President,—Something has been said of the term by which this proposition should be designated. One will not call it “compact,” finding in this term much danger, but at the same time he refuses to the unhappy people in Virginia now looking to us for protection such safeguard as may be found in this proposition. For myself, Sir, I make no question of terms. Call it one thing or another, it is the same, for it has in it protection. Call it a compact, I accept it. Call it a law, I accept it. Call it a condition, I accept it. It is all three,—condition, law, compact,—and, as all three, binding. The old law-books speak of a triple cord. Here you have it.

My friend from Wisconsin [Mr. Carpenter] falls into another mistake,—he will pardon me, if I suggest it,—which I notice with regret. He exalts the technical State above the real State. He knows well what is the technical State, which is found in form, in technicality, in privilege, if you please,—for he has made himself to-night the advocate of privilege. To my mind the State is the people, and its highest office is their just safeguard; and when it is declared that a State hereafter shall not take away the right of any of its people, here is no infringement of anything that belongs to a State. I entreat my friend to bear the distinction in mind. A State can have no right or privilege to do wrong; nor can the denial of this pretension disparage the State, or in any way impair its complete equality with other States. The States have no power except to do justice. Any power beyond this is contrary to the Harmonies of the Universe.

Since the Senator spoke, I sent into the other room for the Declaration of Independence, in order to read a sentence which is beyond question the touchstone of our institutions, to which all the powers of a State must be brought. Here it is:—

And then it proceeds to say that—

Here is the claim, with its limitation,—the great claim, and its great limitation. The claim was Independence; the limitation was Justice.

“Which independent States may of right do”: nothing else, nothing which a State may not of right do. Now, Sir, bear in mind, do not forget, that there is not one thing prohibited by these fundamental conditions that a State may of right do. Therefore, Sir, in the name of Right, do I insist that it is binding upon the State. It is binding, even if not there; and it is binding, being there. Its insertion is like notice or proclamation of the perpetual obligation.

Mr. Sumner. Rather than say that she had ceased to be a member of the Union, I would say that her Government was destroyed. She never was able to take one foot of her soil or one of her people beyond the jurisdiction of the Nation. The people constitute the State in the just sense, and it has been always our duty to protect them, and this I now propose to do.

I return to the point, that what it is proposed to prohibit by these fundamental conditions no State can of right do. Therefore to require that Virginia shall not do these things is no infringement of anything that belongs to a State, for a State can have no such privilege. My friend made himself, I said, the advocate of privilege. He complained, that, if we imposed these conditions, we should impair the “privileges” of a State. No such thing. The State can have no such thing. The Senator would not curtail a State of its fair proportions. When will it be apparent that the license to do wrong is only a barbarism?

Then, again, the Senator says, if this is already forbidden, why repeat the prohibition in the form of a new condition? Why, Sir, my friend is too well read in the history of Liberty and of its struggles to make that inquiry seriously. Does he not remember how in English history Liberty has been won by just such repetitions? It began with Magna Charta, followed shortly afterward by a repetition; then again, in the time of Charles the First, by another repetition; and then again, at the Revolution of 1688, by still another repetition. But did anybody at either of those great epochs say that the repetition was needless, because all contained in Magna Charta? True, it was all there; but the repetition was needed in order to press it home upon the knowledge and the conscience of the people.

Mr. Sumner. I must say I cannot follow my friend to that conclusion, nor do I see the difference he makes between Magna Charta in England and our Constitution. I believe they are very much alike. And I believe that the time is at hand when another document of our history will stand side by side with the Constitution, and enjoy with it coëqual authority, as it has more than the renown of the Constitution: I mean the Declaration of Independence. This is the first Constitution of our history. It is our first Magna Charta. Nor can any State depart from it; nor can this Nation depart from it. To all the promises and the pledges of that great Declaration are we all pledged, whether as Nation or as State. The Nation, when it bends before them, exalts itself; and when it requires their performance of a State, again exalts itself, and exalts the State also.

So I see it. Full well, Sir, I know that in other days, when Slavery prevailed in this Chamber, there was a different rule of interpretation; but I had thought that our war had changed all that. Sir, to my mind the greatest victory in that terrible conflict was not at Appomattox: oh, no, by no means! Nor was it in the triumphal march of Sherman: oh, no, by no means! This greatest victory was the establishment of a new rule of interpretation by which the institutions of our country are dedicated forevermore to Human Rights, and the Declaration of Independence is made a living letter instead of a promise. Clearly, unquestionably, beyond all doubt, that, Sir, was the greatest victory of our war,—greater than any found on any field of blood: as a victory of ideas is above any victory of the sword; as the establishment of Human Rights is the end and consummation of government, without which government is hard to bear, if not a sham.

Mr. President,—In what the Senator from Indiana has said in reply to the Senator from Nevada I entirely sympathize. I unite with the Senator from Indiana in his amendments. I unite with him in his aspirations for that security in the future which I say is the first great object now of our legislation in matters of Reconstruction. Without security in the future Reconstruction is a failure; and that now should be our first, prime object. But while I unite with the Senator on those points, he will pardon me, if I suggest to him that he has not done me justice in his reference to what I said. And now, Sir, before I comment on his remarks, I ask to have the pending motion read.

Mr. Sumner. So I understood, Sir, and it was to that motion that I spoke. I argued that the bill and all pending questions should be referred to the Committee,—and on what ground? That the election was carried by a colossal fraud. The Senator complains because I did not go further, and say whether I would have a new election or not. The occasion did not require it. I am not in the habit, the Senator knows well, of hesitating in the expression of my opinions; but logically the time had not come for the expression of any opinion on that point. My argument was, that there must be inquiry. To that point the Senate knows well I have directed attention from the beginning of this debate. I have said: “Why speed this matter? Why hurry it to this rash consummation? Why, without inquiry, hand over the loyalists of Virginia, bound hand and foot, as victims?” That is what I have said; and it is no answer for my friend to say that I do not declare whether I would have a new election or not.

When an inquiry has been made, and we know officially and in authentic form the precise facts, I shall be ready to meet all the requirements of the occasion,—so, at least, I trust. My friend, therefore, was premature in his proposition to me. May I remind him of that incident in the history of our profession, when a very learned and eminent chief-justice of England said to a counsellor at the bar, “Do not leap before you come to the stile,”—in other words, Do not speak to a point until the point has arisen?[193] The point which the Senator presents to me had not yet arisen; the question was not before the Senate, whether there should be a new election or not. There was no such motion; nor did the occasion require its consideration. My aim was in all simplicity to show the reasons for inquiry. Now it may be, that, when that inquiry is made, it will appear that I am mistaken,—that this election is not the terrible fraud that I believe it,—that the loyal people, black and white, will hereafter be secure in the State of Virginia under the proposed Constitution. It may be that all that will become apparent on the report of your Committee. It is not apparent now. On the contrary, just the opposite is apparent. It is apparent that loyalists will not be secure, that freedmen will suffer unknown peril, unless you now throw over them your protecting arm.

That is my object. I wish to secure safety. I wish to surround all my fellow-citizens in that State with an impenetrable ægis. Is not that an honest desire? Is it not a just aspiration? I know that my friend from Indiana shares it with me; I claim no monopoly of it, but I mention it in order to explain the argument which I have made.

In the course of this debate there has been an iteration of assertion on certain points. I mention two,—one of fact, and the other of law. It has been said that we are pledged to admit Virginia, and this assertion has been repeated in every variety of form; and then it is said that in point of law the test oath is not required. Now to both these assertions, whether of fact or law, I reply, “You are mistaken.” The pledge to admit Virginia cannot be shown, and the requirement of the test oath can be shown.

It is strange to see the forgetfulness of great principles into which Senators have been led by partisanship. Certain Senators forget the people, forget the lowly, only to remember Rebels. They forget that our constant duty is to protect our fellow-citizens in Virginia at all hazards. This is our first duty, which cannot be postponed. In the reconstruction of Virginia it must be an ever-present touchstone.

Look at the text of the Reconstruction Acts, or their spirit, and it is the same. By their text the first and commanding duty is, “that peace and good order should be enforced in said States until loyal and republican State governments can be legally established”; and until then “any civil governments which may exist therein shall be deemed provisional only, and in all respects subject to the paramount authority of the United States at any time to abolish, modify, control, or supersede the same.” Such are the duties and powers devolved upon Congress by the very terms of the first Reconstruction Act.[194] The duty is to see that “loyal and republican State governments” be established; and the power is “to abolish, modify, control, or supersede” the provisional governments.

It is not enough to say that Virginia has performed certain things required by the statute. This is not enough. The Senate must be satisfied that her government is loyal and republican. This opens the question of fact. Is Virginia loyal? Is her Legislature loyal? Is the new Government loyal? These questions must be answered. How is the fact? Do not tell me that Virginia has complied with certain formal requirements. Behind all these is the great requirement of Loyalty. Let Senators who insist upon her present swift admission show this loyalty. There is no plighted faith of Congress which can supersede this duty. Disloyalty is like fraud; it vitiates the whole proceeding. Such is the plain meaning of the text in its words.

But if we look at the spirit of the Acts, the conclusion becomes still more irresistible. It is contrary to reason and to common sense to suppose that Congress intended to blind its eyes and tie its hands, so that it could see nothing and do nothing, although the State continued disloyal to the core. And yet this is the argument of Senators who set up the pretension of plighted faith. There is Virginia with a Constitution dabbled in blood, with a Legislature smoking with Rebellion, and with a Governor commending himself to Rebels throughout a long canvass by promising to strike at common schools; and here is Congress blindfold and with hands tied behind the back. Such is the picture. To look at it is enough.

Sir, the case is clear,—too clear for argument. Congress is not blindfold, nor are its hands tied. Congress must see, and it must act. But the loyalty of a State should be like the sun in the heavens, so that all can see it. At present we see nothing but disloyalty.

The next assertion concerns the test oath; and on this point I desire to be precise.

General Canby, the military commander in Virginia, thought that the test oath, or “iron-clad,” should be required in the organization of the Virginia Legislature. This opinion was given after careful examination of the statutes, and was reaffirmed by him at different times. According to him, the test oath must be applied until the Constitution has been approved by Congress; and in one of his letters the commander says, “Its application to the seceded States before they were represented in Congress appears to be the natural result of their political relation to the Union, independent of the requirements of the ninth section of the law of July 19, 1867.”[195] To my mind this opinion is unanswerable, and it is reinforced by the reason assigned. Nothing could be more natural than that the test oath, which was expressly required of the Boards of Registration and of other functionaries, should be required of the Legislature, so long as the same was within the power of Congress. The reason for it in one case was equally applicable in the other case; nay, it was stronger, if possible, in the case of the Legislature, inasmuch as the powers of the latter are the most vital. It is this Legislature which is to begin the new State government. Two essential parts of the system depend upon it,—the courts of justice, which are to be reorganized, and the common schools. To my mind it is contrary to reason that the establishment and control of these two great agencies should be committed to a disloyal Legislature,—in other words, to a Legislature that cannot take the test oath. The requirement of this oath is only a natural and reasonable precaution, without harshness or proscription. It is simply for the sake of security. Therefore is General Canby clearly right on grounds of reason.

Looking at the text of the Reconstruction Acts, the conclusion of reason is confirmed by a positive requirement. By the ninth section of the Act of July 19, 1867,[196] it is provided,—

Senators find ambiguity in the terms “under any so-called State or municipal authority”; but I submit, Sir, that this is because they do not sufficiently regard the whole series of Reconstruction Acts and construe these words in their light. If there be any ambiguity, it is removed by other words, which furnish a precise and unassailable definition of the term “so-called State authority.” By the Reconstruction Act of March 2, 1867, it is provided, “that, until the people of said Rebel States shall be by law admitted to representation in the Congress of the United States, any civil governments which may exist therein shall be deemed provisional only, and in all respects subject to the paramount authority of the United States.”[197] This is clear and precise. Until the people are admitted to representation, the State government is “provisional only,”—or, in other words, it is a “so-called State authority.” Now the Legislature was elected under “so-called State authority,”—that is, under a State constitution which was “provisional only.” Therefore, according to the very text of the Reconstruction Acts, one interpreting another, must this test oath be required.

If it be insisted that the Legislature was not elected under “so-called State authority,” pray under what authority was it elected? Perhaps it will be said, of the United States. Then surely it would fall under the general requirement of the Act of July 2, 1862,[198] prescribing the test oath to all officers of the United States. But I insist upon this application of the statute only in reply to those who would exclude the Legislature from the requirement of the Reconstruction Act. I cannot doubt that it comes precisely and specifically within this requirement.

This conclusion is enforced by three additional arguments.

1. By a resolution of Congress bearing date February 6, 1869, “respecting the provisional governments of Virginia and Texas,”[199] it is declared “that the persons now holding civil offices in the provisional governments of Virginia and Texas, who cannot take and subscribe the oath prescribed by the Act entitled ‘An Act to prescribe an Oath of Office, and for other Purposes,’ approved July 2, 1862, shall, on the passage of this Resolution, be removed therefrom.” By these plain words is the purpose of Congress manifest. The test oath is prescribed for all persons “holding civil offices in the provisional government of Virginia.” But, by requirement in the first Reconstruction Act, the provisional government lasts until the State is admitted to representation.

2. Then comes a well-known rule of interpretation, requiring that words shall be construed ut res magis valeat quam pereat,—in other words, so that the object shall prevail rather than perish. But the very object of the Reconstruction Act on which this question arises was to keep Rebels from the State government. This object is apparent from beginning to end. But this object is defeated by any interpretation disallowing the test oath.

3. Then comes another rule of interpretation, which is of equal obligation. It is, that we are always to incline so as to protect Liberty and Right; and this rule, for double assurance, is embodied in the very text of the statute whose meaning is now under consideration, being the last section, as follows:—

Following this rule, we find still another reason for so interpreting the statute as to require the test oath.

Thus by the reason of the case, by the natural signification of the text, by the light furnished from the supplementary statute, by the rule of interpretation that the object must prevail rather than perish, and by that other commanding rule which requires a liberal interpretation favorable to Liberty and Human Rights,—by all these considerations, any one of which alone is enough, while the whole make a combination of irresistible, infinite force, are we bound to require the test oath.

There is one remark of Andrew Johnson, just, wise, and patriotic, for which I can forget many derelictions of duty, when he said, “For the Rebels back seats.” I borrow this language. The time will come when Rebels will be welcome to the full copartnership of government; but this can be only when all are secure in their rights. Until then, “for the Rebels back seats.”

The next count in the Senator’s indictment was, that I had called the late election in Virginia a fraud; and how did he encounter this truthful allegation? He proceeded to show that General Canby designated only five counties in which there were cases of fraud. Is that an answer to my entirely different allegation? Does the Senator misunderstand me, or is it an unintentional change of issue? My statement was entirely different from that which he attributes to me. I made no allegation of frauds in different counties, be they few or many.

I said that the election in the whole State was carried by a conspiracy reaching from one end of the State to the other, of which the candidate for Governor was the head, to obtain the control of the State, and by this means take the loyalists away from the protecting arms of Congress. That was my allegation. Is that met by saying to me that I do not adduce evidence of fraud in districts, or that there were only five districts with regard to which we have such evidence? How do I know, that, if you should go into an inquiry, you might not find that very evidence with regard to all the districts? The Senator sets his face against inquiry, as we all know. But I did not intend to open this question. My object was entirely different: it was to show that from beginning to end the whole canvass was a gigantic fraud; that Walker by a fraudulent conspiracy imposed himself upon the State; that by appeals to the Rebels he obtained their votes and thus installed himself in power, with the understanding that when once installed he should administer the State in their interest.

Then, Sir, farewell the equal rights of all! farewell an equal judiciary, which is the Palladium of just government! farewell trial by jury! farewell suffrage for all! farewell that system of public schools which is essential to the welfare of the community!—all sacrificed to this conspiracy. Such, Sir, is my allegation; and it was in making this allegation I challenged reply. I challenge it now. When I first made it, I looked about the Senate, I looked at those who are most strenuous for this sacrifice, and none answered. None can answer. The evidence is before the Senate in the speeches of the Governor and in the election.

Sir, shall I follow the Senator in other things? I hesitate. I began by saying I would not follow him in his personalities. I began by saying that I would meet the counts of his indictment, one by one, precisely on the facts. Have I not done so, turning neither to the right nor to the left? I have no taste for controversy; much rather would I give the little of strength that now remains for me to the direct advocacy of those great principles to which my life in humble measure has been dedicated, not forgetting any of my other duties as a Senator. If I have in any respect failed, I regret it. Let me say in all simplicity, I have done much less than I wish I had. I have failed often,—oh, how often!—when I wish I had prevailed. No one can regret it more than I. But I have been constant and earnest always. Such, God willing, such I mean to be to the end.

And now, Sir, as I stand before the Senate, trying by a last effort to prevent the sacrifice of Unionists, white and black, in Virginia, I feel that I am discharging only a simple duty. To do less would be wretched failure. I must persevere. This cause I have at heart; this people I long to save; this great State of Virginia I long to secure as a true and loyal State in the National Union. Show that such is her character, and no welcome shall surpass mine.

FINANCIAL RECONSTRUCTION AND SPECIE PAYMENTS.

MR. PRESIDENT,—I have already during this session introduced a bill providing for the extension of the national banking system and the withdrawal of greenbacks in proportion to the new bank-notes issued,[202] thus preparing the way for specie payments. The more I reflect upon this simple proposition, the more I am satisfied of its value. It promises to be as efficacious as it is unquestionably simple. But it does not pretend to deal with the whole financial problem.

The bill which I now introduce is more comprehensive in character. While embodying the original proposition of substituting bank-notes for greenbacks, it provides for the refunding and consolidation of the national debt in such a way as to make it easy to bear, while it brings the existing currency to a par with coin. In making this attempt I am moved by the desire to do something for the business interests of the country, which suffer inconceivably from the derangement of the currency. Whether at home or abroad, it is the same. At home values are uncertain; abroad commerce is disturbed and out of gear. Political Reconstruction is not enough; there must be Financial Reconstruction also. The peace which we covet must enter into our finances; the reconciliation which we long for must embrace the disordered business of the country.

In any measure having this object there are two things which must not be forgotten: first, the preservation of the national credit; and, secondly, the reduction of existing taxation. Happily, there is a universal prevailing sentiment for the national credit, showing itself in a fixed determination that it shall be maintained at all hazards. Nobody can exaggerate the value of this determination, which is the corner-stone of Financial Reconstruction. On the reduction of taxation there is at present more difference of opinion; but I cannot doubt that here, too, there will be a speedy harmony. The country is uneasy under the heavy burden. Willingly, gladly, patriotically, it submitted to this burden while the Republic was in peril; but now there is a yearning for relief. War taxes should not be peace taxes; and so long as the present system continues, there is a constant and painful memento of war, while business halts in chains and life bends under the load.

The national credit being safe, relief from the pressure of existing taxation is the first practical object in our finances. But so entirely natural and consistent is this object, that it harmonizes with all other proper objects, especially with the refunding of the national debt, and with specie payments. As the people feel easy in their affairs, they will be ready for the work of Reconstruction. Therefore do I say, as an essential stage in what we all desire, Down with the taxes!

The proper reduction of taxation involves two other things: first, the reduction of the present annual interest on the national debt, thus affording immense relief; and, secondly, the spread or extension of the national debt over succeeding generations, for whom, as well as for ourselves, it was incurred. The practical value of the first is apparent on the simple statement. The second may be less apparent, as it opens a question of policy, on both sides of which much has been already said.

Nobody doubts the brilliancy of the movement to pay off the national debt,—calling to mind the charge of the six hundred at Balaclava riding into the jaws of Death, so that the beholder exclaimed, in memorable words, “It is magnificent, but it is not war.”[203] In other words, it was a feat of hardihood and immolation, abnormal, eccentric, and beyond even the terrible requirements of battle. In similar spirit might a beholder, witnessing the present sacrifice of our people in the redemption of a debt so large a part of which justly belongs to posterity, exclaim, “It is magnificent, but it is not business.” Unquestionably business requires that we should meet existing obligations according to their letter and spirit; but it does not require payment in advance, nor payment of obligations resting upon others. To do this is magnificent, but beyond the line of business.

President Lincoln, in one of his earliest propositions of Emancipation, before he had determined upon the great Proclamation, contemplated compensation to slave-masters, and, in order to commend this large expenditure, went into an elaborate calculation to show how easy it would be, if proportioned upon the giant shoulders of posterity. Dismissing the idea of payment by the existing generation, he proceeded to exhibit the growing capacity of the country,—how from the beginning there had been a decennial increase in population of 34.60 per cent.,—how during a period of seventy years the ratio had never been two per cent. below or two per cent. above this average, thus attesting the inflexibility of this law of increase. Assuming its continuance, he proceeded to show that in 1870 our population would be 42,323,341,—in 1880 it would be 56,967,216,—in 1890 it would be 76,677,872,—and in 1900 it would be 103,208,415,—while in 1930 it would amount to 251,680,914.[204] Nobody has impeached these estimates. There they stand in that Presidential Message as colossal mile-stones of the Republic.

The increase in material resources is beyond that of population. The most recent calculation, founded on the last census, shows that for the previous decade it was at the rate of eighty per cent.,[205] although other calculations have placed it as high as one hundred and twenty-six per cent.[206] Whether the one or the other, the rate of increase is enormous, and, unless arrested in some way not now foreseen, it must carry our national resources to a fabulous extent. What is a burden now will be scarcely a feather’s weight in the early decades of the next century, when a population counted by hundreds of millions will wield resources counted by thousands of millions. On this head details are superfluous. All must see at once the irresistible conclusion.

It is much in this discussion, when we have ascertained how easy it will be for posterity to bear this responsibility. But the case is strengthened, when it is considered that the war was for the life of the Republic, so that throughout all time, so long as the Republic endures, all who enjoy its transcendent citizenship will share the benefits. Should they not contribute to the unparalleled cost? Recent estimates, deemed to be moderate and reasonable, show an aggregate destruction of wealth or diversion of wealth-producing industry in the United States since 1861 approximating nine thousand millions of dollars, being the cost of the war, or, in other words, the cost of the destruction of Slavery.[207] If from this estimate be dropped the item for expenditures and loss of property in the Rebel States, amounting to $2,700,000,000,[208] we shall have $6,300,000,000 as the sum-total of cost to the loyal people, of which the existing national debt represents less than half. Thus, besides precious blood beyond any calculation of arithmetic, the present generation has already contributed immensely to that result in which succeeding generations have a stake even greater than theirs.

Assuming, then, that there is to be no considerable taxation for the immediate payment of the debt, we have one economy. If to this be added another economy from the reduction of the interest, we shall be able to relieve materially all the business interests of the country. Two such economies will be of infinite value to the people, whose riches will be proportionally increased. In the development of wealth, next to making money is saving money.

Bearing these things in mind, Financial Reconstruction is relieved of its difficulties. It only remains to find the proper machinery or process. And here we encounter the propositions of the Secretary of the Treasury in his Annual Report,[209] which are threefold:—

1. To refund twelve hundred millions of six per cent. Five-Twenty bonds in four and a half per cent. Fifteen-Twenties, Twenty-Twenty-Fives, and Twenty-Five-Thirties.

2. To make our exports equal in value with our imports, and to restore our commercial marine.

3. To regard these as essential conditions of reduced taxation and specie payments.

Considering these propositions with the best attention I could give to them, I have been impressed by their inadequacy as a system at the present moment. I cannot easily consent to the postponement which they imply. They hand over to the future what I wish to see accomplished at once, and what I cannot doubt with a firm will can be accomplished at an early day. But besides this capital defect, apparent on the face, I find in the system proposed no assurance of success. Will it work? I doubt. Here I wish to be understood as expressing myself with proper caution; and I wish further to declare my anxiety to obtain the substituted loans at the smallest rate of interest, and also my conviction that within a short time, at some slight present cost, this may be accomplished.

Looking at this question in the light of business, I am driven to the conclusion that twelve hundred millions of six per cents. cannot be refunded either now or hereafter in four or four and a half per cents. without offering compensation in an additional running period of the bonds which is not found in the Fifteen-Twenties nor in the Twenty-Five-Thirties proposed by the Secretary. With such bonds there would be a practical difficulty in the way of any such refunding to any considerable amount, from the inability to command a sufficient amount of coin under the “option of coin,” which must accompany the offer; nor is there any fund applicable to the purchase of coin in open market, were such a course desirable. Obviously, to induce the voluntary relinquishment of bonds at a high rate of interest for other bonds at a less rate, the holders must be offered something preferable to the coin tendered as an alternative.

The time has passed when holders can be menaced with payment in greenbacks. Whatever we do must be in coin, or in some bond which will be taken rather than coin. The attempt at too low a rate of interest would cause the coin to be taken rather than the bond, if we had the article at command,—and would end in a deluge of coin, sweeping away the premium on gold. A return to specie payments, thus precipitated, would be of doubtful value, if not illusive, without other and sustaining measures.

In the suggestion that our exports must be augmented, and our commercial marine restored, I sympathize cordially; but I do not see how this can be accomplished so long as the present taxation is maintained, exercising such a depressing influence on all industry, making the necessaries of life dearer, adding to the cost of raw material, and generally enhancing the price of our products so as to prevent them from competing in foreign markets with the products of other nations.

The proposition to make the interest on the new bonds payable at various points in Europe, at the option of the holder, seems unnecessary, while it is open to objections. Such agencies would be onerous and cumbersome. At London, Paris, Frankfort, and Berlin, there must be a machinery, with constant complications, continuing through the lifetime of the bonds, to secure the transfers from point to point and the obligatory remittances in gold; nor am I sure that in this way foreign powers might not obtain a certain jurisdiction over our monetary transactions. But I confess that the ruling objection with me is of a different character. New York is our commercial centre, designated by Providence and confirmed by man. Already it has made a great advance, but it is not yet quoted abroad as one of the clearing points of the world. At New York quotations are obtained daily on London and Paris; but in these places no such recognized quotations can be now obtained on New York. That the agencies proposed will tend to postpone this condition is a sufficient objection.

I have made these remarks with hesitation, but in order to prepare the way for the bill which I have introduced. It was my duty to show why the propositions of the Secretary were not sufficient for the occasion, and this I have tried to do simply and frankly. It is long since I avowed my conviction that specie payments should be resumed; and I should now do less than my duty, if I did not at least attempt to show the way which seems to me so natural and easy. While the present system continues, we are poor. The payment of the national debt and the accumulation of coin in the Treasury are the signs of unparalleled national wealth, but our financial condition is not in harmony with these signs. The latest figures from the Treasury are such as no other nation can exhibit. From these it appears that the amount of bonds purchased since March 1, 1869, for the sinking fund was $22,000,000, and the amount purchased subject to Congress $64,000,000, being in all $86,000,000.[210] The same proportion of purchase for January and February would be $23,000,000, making a sum-total of $109,000,000 for one year. And notwithstanding this outlay, we find in the Treasury, January 1, 1870, in coin no less than $109,159,000, and in currency $12,773,000, making a sum-total of $121,932,000. And yet, with these tokens of national resources manifest to the world, our bonds are below par, and our currency is inconvertible paper. This should not be permitted longer. With all these resources there must be a way, even if we were not taught that a will always finds a way.

The refunding of an existing loan implies two distinct and independent transactions: first, the extinction, by payment in some form, of the existing loan; and, secondly, the negotiation of a new loan to an amount equal to that extinguished.

The bill now before the Senate contemplates the prompt extinguishment of the Five-Twenties of 1862. But I would not have this important work entered upon until the Government is fully prepared to say, that, after a certain period of notice, say six months, in order that distant holders in Europe may be advised, interest on the Five-Twenties of 1862 shall cease, and the bonds be forthwith redeemed in coin. There should be no coercion of any kind upon any holder, at home or abroad, to induce the acceptance of a substitute bond. I am happy to believe, that, with the judicious use of five per cent. Ten-Forties, all the coin necessary for such independent action may be assured in advance. Believing that such five per cent. bonds will be regarded by investors as preferable to coin, I would give the holders of the old bonds the first opportunity to subscribe for the new. Those who elect coin will make room for others ready to give coin in exchange for such bonds.

If we look at the practical consequences, we shall be encouraged in this course. The refunding of the sixes of 1862, being upward of five hundred millions, in fives, as authorized by the first section of the bill, contemplates the payment from present funds of little more than fourteen millions, being the excess of Five-Twenties above the five hundred millions provided for. The annual reduction of interest on that loan will be $5,886,296. The substitution of three hundred millions of fours for a like amount of sixes, as provided in the bill, will operate a further saving of $6,000,000, making a sum-total of $11,886,296, or near twelve millions. There will then remain but $129,443,800, subject to redemption, being Five-Twenties of 1864.

During the year 1870 the further sum of $536,326,200, being Five-Twenties of 1865, will fall within the control of the Government, when, as it seems to me, and according to the contemplation of the bill, the credit of the Government will be at such a pitch that five hundred millions can be refunded in four and a half per cents., with the addition of thirty-six millions paid from the Treasury,—thus insuring a further annual reduction of $9,679,572, or a total annual saving of $21,565,868, of which about twelve millions may be saved during the current year.

Here for the present we stop. Our interest-paying debt cannot be further ameliorated before 1872, when three hundred and seventy-nine millions, being Five-Twenties of 1867, will become redeemable, and then in 1873, when forty-two millions, being Five-Twenties of 1868, and constituting the balance of our optional sixes, will become redeemable,—all of which I gladly believe may be refunded in the four per cents. provided by the present bill, to be followed in 1874 by a reduction of the original Ten-Forties into similar bonds.

I would remark here that the bill undertakes to deal with the whole disposable national debt. The amounts which I have given will be found in the Treasury tables of January 1st, and are irrespective of the sinking fund and invested surplus.

From these details I pass to consider the bill in its aims and principles.

The proposition with which I begin is to refund our six per cent. Five-Twenties of 1862, amounting to upward of five hundred millions, in five per cent. Ten-Forties. In taking the term “Ten-Forties,” I adopt the description of a bond well known and popular at home and abroad, whose payment “in coin” is expressly stipulated by the original Act authorizing the issue.[211] The bond begins with a good name, which will commend it. The interest which I propose is larger than I would propose for any late bond. It is important, if not necessary, in order to counteract the suspicion which has been allowed to fall upon our national credit. Even our sixes are now below par in Europe. But they will unquestionably share the elevation of the new fives substituted. Our first attempt should be with the latter. Let these be carried to par, and we shall have par everywhere.

In this process the first stage is the conviction that all our bonds will be paid in the universal money of the world. All bonds, whether fives or sixes, will then advance. I know no way in which this conviction can be created so promptly and easily as by redeeming in gold some one of our six per cent. loans; and that most naturally selected is the first, which is already so noted from the discussion to which it has been subjected. But this can be done only by offering to holders the option of coin or a satisfactory substitute bond. With a new issue of five per cent. Ten-Forties, limited in amount to about the aggregate of the six per cent. Five-Twenties of 1862,—say five hundred millions,—I cannot doubt that every foreign holder of such sixes will accept the fives in lieu of coin; and so much of that loan as is held at home may be paid in coin, if preferred by the holders, from the proceeds of an equal amount of fives placed in Europe at par for coin.

Then will follow the advantage of this positive policy. The national credit will be beyond question. Nobody will doubt it. The public faith will be vindicated. The time will have come, which is the condition-precedent named by the Secretary of the Treasury, when “the want of faith in the Government” will be removed, and the door will be open to cheap loans. This will be of course: it cannot be otherwise, if we only do our duty. Our fives, being limited in amount, after being taken at par in preference to coin, will advance in value, so that the investment will become popular. People will desire more, but there will be no more; so that, without difficulty or delay, we may hope to refund five hundred millions of our subsequent sixes, or so much as may be desirable, at four and a half per cent. in Fifteen-Fifties, if not at four per cent. in Twenty-Sixties.

In this operation the initial point is the national credit. With this starting-point all is easy. Our fives will at once ascend above par, while a market is opened for four and a half or four per cents. The stigma of Repudiation, whether breathed in doubt or hurled in taunt, will be silenced. There are other fields of glory than in war, and such a triumph will be among the most important in the annals of finance. But to this end there must be no hesitation. The offer must be plain,—“Bonds or coin,”—giving the world assurance of our determination. The answer will be as prompt as the offer,—“Bonds, and not coin.”

In the process of Financial Reconstruction we cannot forget the National Banks, which have already done so much. The uniform currency which they supply throughout the country commends them to our care. Accustomed to the facilities this currency supplies, it is difficult to understand how business was conducted under the old system, when every bank had its separate currency, taking its color, like the chameleon, from what was about it, so that there were as many currencies, with as many colors, as there were banks.

Two things must be done for the national banks: first, the bonds deposited by them with the Government must be reduced in interest; and, secondly, the system must be extended, so as to supply much-needed facilities, especially at the West and South.

I doubt if the national banks can expect to receive in the future more than four per cent. from the bonds deposited by them with the Government; and considering the profits attributed to their business, it may be that there would be a reluctant consent even to this allowance. Here it must be observed, that the whole system of national banks is founded upon the bonds of the nation; so that, at the rate of liquidation now adopted for the national debt, the system will be without support in the lapse of twelve or fifteen years. The stability of the banks, which is so vital alike to the national currency and to the pecuniary interests involved in the business, can be assured only by an issue of bonds for a longer term. Of course, the longer the period, the more valuable the bond. To reduce the interest arbitrarily on the existing short bonds of the banks, without offering compensation in some form, would be positively unjust, besides being an infringement of the guaranties surrounding such bonds, and therefore a violation of good faith. A substitute Twenty-Sixty bond will be assurance of stability for this length of time, while the additional life of the bond will be a compensation for the reduction of interest. As it is not proposed to issue such bonds immediately, except for banking purposes, they will not fall below par, and this par will be coin, which, I need not say, the sixes now held by the banks will not command. If, through the failure or winding-up of any bank, an amount of the substituted bonds should be liberated, there will be an instant demand for them at par by new banks arising to secure the relinquished circulation.

The extension of bank-notes from three to five hundred millions, which I propose, will extend the banking system where it is now needed. This alone is much. How long the Senate debated this question at the last session, without any practical result, cannot be forgotten. That debate certifies to the necessity of this extension. The proposition I offer shows how it may be accomplished and made especially beneficent. The requirement from all the banks of new four per cent. bonds, at the rate of one hundred dollars for eighty dollars of notes issued and to be issued, would absorb six hundred and twenty-five millions of the national debt into four per cents., while the withdrawal of one dollar of greenbacks for each additional dollar of notes will go far to extinguish the outstanding greenbacks, thus quietly, and without any appreciable contraction, removing an impediment to specie payments. Naturally, as by a process of gestation, will this birth be accomplished: it will come, and nobody can prevent it.