FROM THE REMARKS OP
Hon. ARTHUR P. GORMAN, of Maryland
Hon. WILLIAM LINDSAY, of Kentucky
Hon. AMOS J. CUMMINGS, of Mew York
From the Congressional Record.
THE NEW YORK
In the SENATE OF THE UNITED STATES, May 24th and May ayth,
and the HOUSE OF REPRESENTATIVES, May 3,
The Senate having under consideration the bill (H. R. 10,100) to provide
ways and meaiis to meet war expenditures
MR. GORMAN said:
It is said we propose to issue bonds. Mr. President, of course it is pro-
posed to issue bonds. Why not issue bonds? What declaration has ever
been made by any political party against issuing- bonds in time of war?
What war was ever conducted without issuing- bonds, and issuing- them in
the very beg-inning- of the conflict? liei'me the first gun was tired at Sumter
in the war of the re he 1 1 ion we began to issue bonds, and we also issued
$150,000,000 of greenbacks as a war measure. What were the conditions?
<!old anil silver had disappeared; they could not be found or followed into
their hiding- places; there were no national banks, and the State banks had
disappeared, or, at least, they were useless so far as the purposes ot tin;
Government were concerned.
An enlarged currency was necessary. The act of July 11, 1862, author-
ized the issue of $150,000,000 of greenbacks or leg-al-tender notes, and this
was the only issue authorized; They were receivable at the Treasury for all
dues and were then reissued time and again; but the total amount out-
standing at any one time was not over $450,000,000. There were:
Old demand notes $00,000,000
One and two \ear notes, bearing 5 per cent, interest 211,000,000
Compound-interest notes, bearing (', per cent, interest.... 266,000,000
The total amount of notes issued by the Treasury from 18U1 to 1869 was
Demand notes $392,070
United States notes (greenbacks) 427,769,199
Fractional currency 26,U>7,469
Matured debt, interest ceased 1,37::, 920
Unpaid requisitions 660,900
Total $456,252, SoS
While from 1861 to 1869 the debt bearing interest was. .$2,351,699,479
BONDS IN TIME OF WAR.
Mr. President, it is said that the great cormorants of the moneyed insti-
tutions are now after these bonds; that they are the men who urge their
issuance. Yes; but the man with money, whether he be a small or a lar^e
holder, caw. only get bonds by paying his money for them, loaning it to the
Government on a security as good as gold or silver, and the bonds will be
paid when they become due.
Why. should Senators on this side of the Chamber, why should the dis-
tinguished Senator from Missouri [Mr. CocKBELl/j, denounce the issuance of
bonds in time of war? Our party convention, which met at a time when
every Democrat was incensed at the action of a man whom we had elected
President, who had asked us to issue gold bonds so as to save $10,000,000, a
proposition which was rejected, passed a resolution, not against bonds as
bonds, but only against the issuance of bonds in time of peace.
The Senator from Arkansas [Mr. JONES], who had probably more to do
with the framing of that declaration than anybody else at least we hold
him responsible, whether he was actually so or not is too astute a politician
to have put any other declaration in that platform. He would not have gone
before the people of the country in that campaign with the candidate who
was our nominee and the platform upon which he ran, a campaign which
was a campaign of appeal to the masses of the people, with a declaralimi
that the Government should not have the right in time of war to issue bonds
to save the life of the nation.
I will refer to what we did on this side in 1802, 1864, and 1865, and will
insert in the RECORD the list of the bonds that were issued.
UNITED STATES BONDS.
According to the statement of the public debt published October 31, 1805,
the interest-bearing debt of the United States on that date wa. c as follows:
Aggregate of debt bearing coin interest ............. $1,161,137,091 80
Aggregate of debt bearing lawful-money interest. . . .1,190,561,787 46
Total interest-bearing debt $2,351,699, -179 20
But in 1861, as Senators know and I refer to it with great kindness -
I here were no great corporations south of the Potomac; there were no coin-
lin:it ions which were robbing the people. The trusts and monopolies and
money changers were not there.
THE ACT OF FEBRUARY 28, 1861, AUTHORIZED BONDS.
Mr. TILLMAN. And they are not there now.
Mr. GORMAN. And they are not there now, the Senator from South
Carolina says. No. You were free from their control. You attempted to
establish, and did establish, a government, and you conducted a great con-
flict such as the world has never seen conducted by a like number of people.
But when you started your government the first financial act the act of
February 28, 1861 authorized bonds, coupon bonds, bearing 8 per cent.
interest, running 1 for five and twenty years, and you continued to issue
bonds and .stork bearing 1 interest up to nearly $800,000,000. Your unfunded
debt amounted to more than double the bonds, or $1,600,000,000 of treasury
notes and other obligations which did not bear interest not legal tenders, a
friend in my rear tells me. No: they were not legal tenders, but they were
convertible into bonds, and they were received for taxes and a great many
other things, but not in payment of the export duty on cotton.
GUEAT MEN SUPPOBTED BOTH GOVERNMENTS BY ISSUES OF
The idea I wish to present is that it is only by example, and by history
\vo can tell what is proper to be done. Here there were two great divisions
of the American people; one representing exclusively agricultural interests,
free from all of the great combinations which have been described here to-
day, and the other, on this side of the Potomac, embracing within its con-
fines practically all the great monopolies of which we hear so much; and
yet those great men for they were great men supported both governments
by issues of bonds. In so doing they followed only the teachings of history.
When war begins no government is ever ready for it with ample supplies of
money in its treasury, and with the exception of Germany, which was pre-
pared for war, there is no other instance in the last one hundred years where
any government has been able to successfully prosecute a war without mak-
ing a loan on bonds in the very beginning.
If that be true, wh\- should we hesitate here? Why should we hesitate
to vote for the issuance of bonds running ten and twenty years at 3 per
cent, interest? Every Senator is aware of the fact that if we fail to make
provision for that sort of a bond at low interest, and the crisis comes, as
come, in my judgment, it will, when within thirty days, before you can get
your tax bill in operation, the President of the United States and his Secre-
tary of the Treasury, following the example of their predecessors, and as I
believe they will be in duty bound although there is doubt, and great
doubt, as to the right to issue bonds for ordinary purposes will be com-
pelled to issue bonds running a longer time and bearing a higher rate of
interest than those proposed to be issued under the terms of this bill.
Why, then, are we opposed to bonds, Mr. President? In the Senate we
have met that question quite recently. At the close of Mr. Harrison's ad-
ministration, after the Presidential election of 1S02 and before the inaugura-
tion of Mr. Cleveland, the condition of the Treasury was so threatening
that bonds were asked for, and in this Chamber we placed upon an appro-
priation bill a provision authorizing the Secretary of the Treasury to issue
5 per cent, bonds on like terms with those described in this bill; and more
Democrats voted for the proposition than against it. It was thrown out by
the other House. It was thrown out, it was said, by secret instructions
from the powers that were to be.
SALE OF BONDS UNDER THE ACT OF 1875.
Following within eighteen months after that influence and that action,
came the transaction of the sale of the bonds authorized under the act of
1875, which every Democrat in the Senate, and which nearly all Democrats
everywhere, denounced. What brought that condition about? A DEFI-
CIENCY IN THE REVENUE, AND NOTHING ELSE. What will brimr
about the necessity for bonds now? A deficiency in the revenue. In my.
judgment I only speak for myself Senators will be estopped from pro-
testing against bonds. The President may sell $300,000,000 of bonds under
the authorization of the act of 1875, if, in his judgment, it be necessary
to maintain the honor, the dignity, and the glory of his country, and to
secure the success of our arms.
I think the amendment of 1he minority of the committee is wise. The
bonds are limited in amount and to a certain purpose, to be issued only after
certain things have occurred. I THINK, WITH ALL DUE DEFEKKXCi:
TO THE AUTHORS OF THAT PROVISION, EVEN THAT IS TOO
Mr. President, at this session of Congress the appropriations already
made for all purposes of the Government, or which are pending 1 and about
to be made, including the war expenses and contracts authorized, including
the sinking fund, amounted to $923,082,797; excluding- the sinking fund, to
$872,682,797; and more is to be appropi'iated before the Senate adjourns.
Senators who have spoken seem to be fearful of providing/ too rrmch money.
In my humble judgment you have not provided enough, even with the pro-
vision of the Finance Committee for bonds and certificates. I was not anx-
ious that we should enter upon this contest. I had hoped we might adjust
the matter without a conflict of arms in a manner honorable to the Ameri-
can people. But that has passed and gone.
COST NO MAN CAN ESTIMATE.
We have entered upon a contest. When and where it will stop no man
can tell. How much it is to cost no man can estimate. That; it will cost
during this year $400,000,000, $500,000,000 possibly, is, in my judgment, a
moderate estimate. If it were to close and peace be declared within six
months from this time, your expenditures would go on at a rate, compared
with peace expenditures, that no man can measure to-day. The complica-
tions that may come from this Avar nobody knows. The cost of closing and
adjusting all the questions that will arise can not be measured by tens of
millions of dollars to-day, in my judgment. We have a fair Navy.
Who, after the occurrences of the last few months, expects this govern-
ment to suspend building war ships? They will be multiplied until the
number reaches that point where we will be supplied, in the judgment of
the people, with sufficient war ships to defend us from any act of aggres-
sion. Who can tell how far we are to go fn looking to the development of
the trade and commerce which is being strived for by all the nations of the
earth? I do not expect to see any action which will prevent us from getting
our full share of that trade and providing all the facilities for our war ships
and ships engaged in commerce.
Mr. President, there is only one other feature of the bill to which I
desire to allude, and that is the provision reported by the majority of the
committee and so strongly advocated by the distinguished Senator from
Missouri [Mr. COCKKELJ,] the issuance of $150,000,000 of greenbacks. I
confess my amazement that that distinguished Senator and others should,
in the year 18"98, advocate and hold that the issuance of greenbacks, legal-
tender notes of the Treasury, is now or ever was the Democratic doctrine or
was ever maintained by either of the great parties, except for the great
emergency of the war. 1 shall take the liberty of reading from one or two
eminent Democrats who have spoken for the Democratic party in times past.
JUDGE THURMAN'S REPLY.
There was Judge Thurman. In 1874, on the floor of the Senate, when
.he question of issuing only a few millions more of greenbacks was under
consideration, he made a speech. He had been charged with being in favor
of inflation, the issuing of notes l>y the (Jovernmeiil, because he had gone
through the Ohio campaign of 1873 with his party, which there, under the
control of Mr. Allen, advocated the green back theory. Mr. Thurman's reply
to this charge will be found in the CONGRESSIONAL RECORD for the session
of 1874, page 2394, when he said:
"Never did any man hear me utter one word in favor of inflation. Not
one word, sir. I have spoken against a contraction of the currency that
would bring about too speedily a resumption of specie payments: but never
have I spoken in favor of that inflation of the currency wnich I think 1 see
full well means that there never shall be any resumption at all. That is the
difference. It is one thing to contract the currency with a view to a re-
sumption of specie payments; it is another thing neither to contract nor
enlarge it. But let resumption come naturally and as soon as the business
and production of the country will bring it about; but it is a very different
thing to inflate the currency never in all time to redeem it at all, and that
is precisely what, this inflation means. It means demonetizing gold and
silver in perpetuity and substituting a currency of irredeemable paper based
wholly and entirely upon Government credit and depending upon the opin-
ions and the interests of members of Congress and their hopes of popularity,
whether the volume oi* it shall be large or whether it shall be small. That
is what this inflation means. Sir, I have never said anything in favor of
that. I am too old-fashioned a- Democrat for that. I have heard and
preached too many hard-money lessons to advocate such a theory as that,
and although there are many friends who differ with me in opinion, and
from whom it pains me to differ, I can not give up the convictions of a life-
thne, whether they be popular or unpopular, whether they please or
uhether they displease."
THE PRESIDENTIAL CONVENTION OF 1876.
Now, following 1 that, which was in 1874, came the Presidential conven-
tion of 1876. In the greenback campaign which was made in Ohio the
Democratic party had lost. The Democratic party had been for hard money,
for gold and silver, the money of the Constitution, and it wanted to right
itself and relieve itself from those in Ohio who were carrying it toward the
I'opulistic idea. The Democrats wanted to recover it and bring the party
back to its old moorings and its old doctrines, and they cast about the
country for some man to lead them, and they fotind in Samuel J. Tilden, of
.New York, a 7uan who could carry them, as they thought, to victory. They
made a platform to suit his views upon the financial question, ignoring en-
tire! \ the greenback theory and the Ohio idea, as it was called, and placed
him upon a sound-money platform of gold and silver. They did it with the
knowledge of (ho fact that Mr. Tilden in 1875, right after this discussion and
after the veto try the President of the greenback bill, had delivered a mes-
sage to the New York legislature in which he said:
LEGAL TENDERS DURING THE CIVIL WAR, GREATLY INCREASED
INFLATION OF PRICES.
"There, is no doubt, that the issue of legal lenders during the civil war
hastened a.nd greatly increased 1hat inflation of prices which naturally re-
sulted from the increased consumption and the waste resulting from mili-
tary operations, and from the. diminished production occasioned by so large
a withdrawal of workers from their ordinary industries. It is the nature
i.l credit to be voluntary; it is founded on confidence. Credit on compul-
sion is a solecism. Therefore a forced loan of capital from all existing pri-
vate creditors can not but be costly.
"It was made in this instance on a security which bore no interest, and
interest on which could only be represented in discount from its par value.
It gave to the lender an agreement to pay which, being instantly due on
demand, started in its career a broken and dishonored promise. Every suc-
cessive holder was left to conjecture when it would be redeemed by the
issuer, how far it might be absorbed in the Treasury receipts, whether it
could still be paid out to some private creditor, and at what loss it could be
passed away in new purchases on a market advancing rapidly and irregu-
larly. Everybody was advised that the Federal Government, unwisely dis-
trusting the intelligence and patriotism of the people, shrank from exer-
cising its borrowing power, supplemented by its taxing power, and instead
of resorting at once to the whole capital of the country capable of being
loaned, which forms a vast fund, perhaps thirty or forty times as large as
the then existing currency, it chose to begin by debasing that comparatively
insignificant part of circulating credits, creating fictitious prices for the
commodities and services for which it was next to exchange its bonds, in
an expenditure ten times as large as the whole amount of the legal tenders
it ventured to put afloat.
"No man could know how often or how much of legal tenders might be
issuer! under possible exigencies of the future. It could not be wholly for-
gotten that such issues, made by our ancestors to sustain the victorious war
for national independence, were never redeemed, while the public loans
made for the same purposes were all paid. It was remembered that history
a.ffords other warning examples to the same effect. These elements of dis-
trust were needlessly invoked. But the system stopped short of the logical
completeness of the expedients of the French convention in 1793. While it
compelled the existing private creditor, or anybody who should grant a new
credit, to accept payment in legal tenders, it did not assume to regulate the
prices of commodities. The seller, therefore, gradually learned to represent
the depreciation of the currency in the price of the article he exchanged for
it. As compared with gold, the currency, during all the last year of the war.
was depreciated to between '10 and 50 cents on the dollar, touching at its
lowest point .'!."> cents on the dollar.
TESTIMONY OF THE GREATEST LEADER OF HIS PARTY.
"Governments in times of public danger can not be expected always to
adhere to the maxims of economical science; the few who would firmly trust
to the wisest policy will often .he overborne by the advocates of popular ex-
pedients, dictated by the general alarm. If the Federal Government had
paid out Treasury notes, not made a legal tender, in its own transactions
whenever it was convenient, and redeemed them by the proceeds of loans
and taxes on their presentation at a. central point of commerce, and mean-
while had borrowed at the market rates for its bonus, secured by ample
sinking funds founded on taxation, and had supplemented such loans by all
necessary taxes, the sacrifice would not have been half that required by the
false system adopted, perhaps the cost of the war would not have been half
what it became."
There, Senators, is the testimony of a man who was the greatest leader
of his party in my time. It was his wisdom, his statesmanship, his courage,
his control of men, his influence with capital that enabled us to have a
reunited party in either Hall of Congress. Will you now, when his grave
is still green, go back and repeat the folly of 1873, when there is no neces-
sity whatever for such an experiment ?
"A GREAT WAR CANNOT BE CARRIED ON BY PIECES OF PAPER."
Mr. President, I dislike to go outside of my party for authorities against
the issuing of greenbacks, but there is one, an honored member of this
Chamber, one who now, as I understand, makes the majority of the com-
mittee who report in favor of the issuance of $150,000,000 of greenbacks,
whom I will quote. I mean the Senator from Nevada [Mr. JONES]. He has
a perfect right to change his opinion. We all do that, but he uttered truths
upon this floor in 1874. No matter why he has changed his opinion since.
No man has ever answered and no man, in my judgment, can answer the
truths he then enunciated. I will let him speak for himself. In this de-
bate, when it was proposed to increase the greenback circulation only
$18,000,000, the Senator from Nevada, speaking of the action of Congress in
1862 and 1863, when they authorized the issue of greenbacks, legal-tender
"Ignoring the history of other nations, taking no warning from the
wrecks of financial systems strewn along their pathway, the iirst tiling we
did was to make irredeemable paper a legal tender, and thereby almost im-
mediately advance the price of everything 100 per cent. Having thus made
everything we were compelled to buy double its former price, we then en-
tered upon the negotiation of loans and a rigorous system of taxation to
raise money with which to buy. This we should have done in the start, and
what we could have done. But we first thoroughly demoralized the whole
country and all its industries, we plundered the creditors and allowed the
debtors to discharge their obligations by paying from 30 to 50 per cent, less
than they owed, and then we started to raise money for putting down the
rebellion in the only way we should have done in the commencement. We
resorted at the outset to measures condemned by financiers everywhere. To
that which I would only have been willing to do at the last extremity.
* * * A GREAT WAR CANNOT BE CA11KIED ON BY PJECKS oV
PAPER PAYABLE AT CONVENIENCE AND BEARING NO INTKUKvST."
I commend that sentiment to every Senator on this floor. It is a truth
that will last for all time.
"This paper currency, instead of adding strength to the imperiled coun-
try, was a source of weakness. Its issuance was an impeachment of the
patriotism of the nation and an underrating of the resources of the country.
It was a cheat upon the people in teaching them the pernicious idea that in
carrying on a great civil war economy and industry were not necessary;
that production and destruction were convertible terms, and that the activity
of the printing press in the production of paper money would amply com-
pensate for the activity of armies in the destruction of wealth."
SUSTENANCE OF THE GOVERNMENT WHEN FACING A FOREIGN
Said he, in reply to Mr. Morton, whether he regarded the greenback as
"T do, most undoubtedly, and I further believe that it is the duty of men
to iace that question."
Those declarations were true when he uttered them, and they are true
to-day. In my judgment, the results of the legislation of 1802 to 18H5 will
i'ci!'<\v this measure if you enact it. You may impair the credit of the Gov-
ernment by this aet. No Senator desires to do that, I know, but I appeal to
all to stand by the uniform action of governments heretofore and supply
the money in the only way in which history shows it can be supplied with-
As I said at the outset, I am aware of the fact that there are differences
on the tax provisions of this bill. They are matters of individual opinion,
of honest judgment. If I wanted to treat it alone from a political stand-
point and gain advantage for my part}', I would support the measure as I
have, indicated that I will support it.
I believe that if any advantage politically could come, it would come
because there had been on my part a perfect sustenance of the Government
when it was facing a foreign foe. The benefit would come because I have
adhered to the doctrines of the party to which I belong, it would come
because I have considered nothing but gold and silver the money of the
Constitution. It would come because I have followed every great leader
from Jackson down to Buchanan in maintaining the integrity of the Gov-
iTjutient and of its currency, so that it could be used to pay our soldiers at
home and the sailors and soldiers who are now fighting and bleeding and
dying for us in a foreign land.
DEMOCRATIC IDEA ON GREENBACKS IN JANUARY, 1895,
[From the speech of Senator Wm. Lindsay, of Kentucky, May 24, 1898.]
Mr. RAWLINS. I do not understand, or if I do I hope the Senator will
make it clear, that the Senator contends that we are here in our legislative
policy to conform to the declaration of a political platform, especially of
the Republican party, which has not been embodied into law.
Mr. LINDSAY. I do say that if we do not legislate in view of condi-
tions which we know to exist, then we do not legislate wisely or intelli-
gently. That is my answer to the question.