The coinage act of 1873. Speech ... delivered in the Senate of the United States, March 13, 1888

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THE COISTACTE ACT OF 1873.

SPEECH

OF

HON. JOHN SHERMAN,

DELIVERED IX THE

SENATE OF THE UNITED STATES,

MARCH 13, 1888.

WASHI NGTON.

1888.

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The Coinage Act of 1^73.
SPE E C H

OP

HOX. JO II N 8 H E R M A X .

The Senate having under c >n«ide 'ation the bill (S. 8) I<> provide for tlie retire-
ment <>i I nited stale-- legal-tender and national-bank notes of small denomi-
nations, and the issue of coin certiticates in lieu of gold and silver certifi-
cates, and for other purposes-
Mr. SHERMAN said:

Mr. President: As a matter of course I shall not undertake to
reply to the argument of the Senator from Kentucky [Mr. BECK]
upon the silver question, but I wish now, before the subject passes
from the attention of the Senate, to briefly reply to one or two mat-
ters of a personal character which the Senator from Kentucky feels
himself justified in lugging into this controversy. 1 say "lugging." he
cause this debate is but an addendum to the debate had the other day
when the Senator from Kentucky started oil' against a bill intended to
grant pensions to certain disabled soldiers of the Union Army. He ex-
tended from that point until begot upon the tariff, very naturally, per-
haps; he thinks so at least, because every road leads to the tariff with
him. When the tariff got to be a liti-e tiresome he commenced talk-
ing about trusts and said that the great trusts were caused by the tariff.
I ventured in a mild-mannered way to suggest to him a doubt whether
trusts were caused by the tariff; whether trusts did not exist in domes-
tic as well as foreign productions, and he answered promptly that the
tariff was the great cause of all. 1 named to him the whisky trust,
the oil trust, the cotton-seed trust, and other trusts of thai kind, and
wanted to know how they grew out of the tariff. Thereupon the Sen-
ator changed his ground and got onto the silver question, and then he
commenced assailing me for the coinage act, and said I had been re-
sponsible for the coinage act of 1873. lie spoke of it as having been
secretly passed, surreptitiously done, etc., that I did it, that I knew it.
I was very indifferent to the previous part of Ins speech, but I fell a
little sensitive that f was charged with having the management or
custody of any bill whatever that was not openly and manfully dis-
cussed, and, although my opinions often differ with those of the Sen-
ator from Kentucky, 1 believe that he is as sincere and honest in his
Opinions as 1 am in mine. When the; heat was over he should have

withdrawn his imputation. He will never find me dodging responsi-
bility, or evading or concealing a measure, in whole or in part, as long
as I live; and in reply, 1 think I convinced the Senate that 1 did not

3

in this case. And now, Mr. President, his answer, near three hours
long, is "Lime and impotent" to the last degree. How does he an-
swer? By goingto the public records and showing by them whether or
not the law was put through the Senate in a secret and suppressed and
indefinite way? Not at all. The records are the evidence of our acts
here; but instead of going to them, he quotes speeches which have been
made on the stump, one by yourself, sir, [Mr. Ixgalls in the chair],
which he grossly misapplies. He cites what several gentlemen say
they did not know.

He quotes from a speech made by Mr. Kelley, of Pennsylvania,
and other members of the House of Representatives, and a speech made
by my friend from Iowa [Mr. Allison], not one of them bearing upon
the question as to whether the bill under my charge was openly and
manfdlly presented and discussed, and now, thank fortune, I am able
from the original records of the Senate to show that that bill was more
openly discussed, was more fully considered than any bill pending in
Congress. It was submitted in every possible form to public opinion
inside and outside of Congress, as is shown by the original records here
upon my table.

Whit was the coinage act of 1873? Was it a bill of my devising?
No, I never saw it until it was sent to me here, in a letter dated April
25, 18 0, addressed to me as chairman of the Committee on Finance,
from Mr. Bout well, the Secretary of the Treasury. It was a long bill
containing many sections that I had never before seen. With that bill
came a history of the bill; that it had been prepared nearly a year be-
fore that time. At a time when we hopefully looked for the resuniDtion
of specie payments, then faintly in the glimmering distauce, Mr. Lin-
derman, not a man of my politics at all, but a leading Democrat, who
had held for a long time the office of Superintendent of the Mint at
Philadelphia, and Mr. Knox, Comptroller'of the Currency, framed a bill
to codify or include in one law all the coinage acts of the United States
which were then in force. The bill was sent to us with a formal letter
and it was printed. Here is the printed letter:

Treasury Department, April 25, 1870.

Sir: I have the honor to transmit herewith a bill revising the laws relative
to the mint, assay offices, and coinage of the United States, and accompanying
report. The bill has been prepared under the supervision of John Jay Knox.
Deputy Comptroller of the Currency, and its passage is recommended in the
form presented. It includes, in a condensed form, all the important legislation
upon the coinage, not now obsolete, since the first mint was established, in
1792; and the report gives a concise statement of the various amendments pro-
posed to existing laws and the necessity for the change recommended. There
has been no revision of the laws pertaining to the mint and coinage since 1837,
and it is believed that the passage of the inclosed bill will conduce greatly to
the efficiency and economy of this important branch of the Government service.
I am, very respectfully, vour obedient servant.

GEO. S. BOUTWELL,
Secretary of the Treasury.

The report and the bill were referred to the Committee on Finance
April 28, 1870, and printed, and 500 additional copies printed for the
use of the Treasury Department.

The report says:

The method adopted in the preparation of the bill was first to arrange in as
concise a form as possible the laws now in existence upon these subjects, with
such additional sections and suggestions as seemed valuable. Having accom-
plished this, the bill as thus prepared was printed upon paper with wide mar-
gin, and in this form transmitted to the different mints and assay offices, to the
First Comptroller, the Treasurer, the Solicitor, the First Auditor, and to such
other gentlemen as are known to be intelligent upon metallurgical and numis-
matieal subjects, with the request that the printed bill should be returned with

such notes and suggestions as experience and education should dictate. In
this way the views of more than unity gentlemen who are conv rsant with
the manipulation of metals, the manufacture of coinage, the execution of tin-
present laws relative thereto, the method of keeping accounts and of making
returns to the Department, have been obtained with l>ut little expense to the
Department and little inconvenience to correspondents. Having received tie —
suggestions, the present Mil lias been framed, and is believed to comprise within
the compass of eight or ten pages of the Revised Statutes every important pro-
vision contained in more than sixty different enact incuts upon the mint, assay
offices, and coinage of the I'nitcd Slates, which are the result of nearly eighty
years of legislation upon these subjects.

The Senator says that the silver dollar was surreptitiously and se-
cretly suppressed by the operation of this bill. It did not become a
law until three years afterwards, and, as I will show, it was printed
thirteen different times, over and over again debated, and the debates
upon the bill in the Senate occupied sixty-eight columns of the Globe,
and in the House seventy-eight columns of the Globe, probably ten
times as many columns devoted to it as the Senator's speech will make,
and that is a long standard for debate. It was debated day after day.
The first proposition submitted to us was the discontinuing the coinage
of the silver dollar. The report of Mr. Knox called special attention to
the discontinuance of the silver dollar as a standard, as may be seen
from the following paragraph on page 11:

SILVEB DOLLAR— ITS DISCONTINUANCE AS A STANDARD.

The coinage of the silver dollar-piece, the history of which is here given, is
discontinued in the proposed bill. It is~by law the dollar unit, and, assuming
the value of gold to be fifteen and one-half times that of silver, being about the
mean ratio for the past six years, is worth in gold a premium of about 3 per cent,
(its value being 103.12) and intrinsically more than 7 per cent, premium in our
other silver coin, its value thus being 107.42. The present laws consequently au-
thorize both a gold-dollar unit and a silver-dollar unit, differing from each other
in intrinsic value. The present gold-dollar piece is made the dollar unit in the
proposed bill, and the silver-dollar piece is discontinued. If, however, such a
coin is authorized.it should be issued only as a commercial dollar, not as a
standard unit of account, and of the exact value of the Mexican dollar, which is
the favorite for circulation in China and Japan and other oriental countries.

This original bill and report were sent, as I have stated, to all the
leading specialists familiar with this subject, to theofficersof the mints
all over the country, to the leading bankers of the country, ami to
members of Congress, inviting their criticism. In the first bill that
was thus sent there was this section, which I will read:

That of the silver coins the weight of the dollar shall he 384 .mains (now 412}
{Trains), the weightof the half-dollar or picceof 50 cents shall he 192 grains; and
that the quarter-dollar and dime and half-dime shall he, respectively, one-half
and one-fifth and one-tenth of the weight of said half-dollar. That the silver
coin issued in conformity with the above sections shall be a legal tender in any-
one payment of debts for all sums not exceeding $5, except duties on imports.

That was substantially the form in which that section appeared in
the last bill sent by the House here in the spring of 1*7:2, two years
afterwards, and that particular section which abolished, as you Bay, or
dropped the silver dollar, was in the bill during till its history from the
beginning to the end. The dollar proposed by Mr. Knox, instead of
the old dollar of 41:3' grains, was a dollar of :;-l grains, or just the
exact equivalent of two of the minor half-dollars, and reduced the dol-
lar by their proposition to a minor, a subsidiary coin, and lie specially
called attention to this by saying the dollar was "now \\-!'. grains,"
and proposed to make the new coin a legal-tender lor only $5. That
was the proposition.

Mr. DAWES. Jusl what the fractional currency was.

Mr.. SHERMAN. Just what the fractional currency was. So in the

original bill the old dollar was displaced and in its place was put a
minor coin equal to two half-dollars coined under the old act of 1834.
Th.it was the proposition, and it was sent to California and other gold
and silver regions.

It was objected in California that the dollar proposed would not an-
swer commercial exchanges, that they wanted a dollar even larger than
the old silver dollar of 412-j grains, that they wanted a convenient coin
into which silver, then being mined largely in that region of country,
might be put for exportation. It was said if we would give them a
coin of 420 grains, it would be worth about 3 grains more than the
Mexican dollar, and that such a coin as that would fill the channels of
commerce and enable them to export silver, at that time only valuable
to be exported, not used by the people of our country, because we were
then using paper and fractional currency entirely.

During this time the officers of the San Francisco branch mint made
the following suggestion:

Would not the proposed change in the weight of the silver dollar disturb the
relative value of all our coinage, affect our commercial conventions, and pos-
sibly impair the validity of contracts running through a long period? Might
not the dollar be retained as a measure of value, but the coinage of the piece
or circulation be discontinued?

Mr. E. B. Elliot, of the Treasury Department, gave a complete his-
tory of the silver dollar and suggested —

The issue of a commercial dollar of nine-tenths fineness, and containing of pure
silver just 25 grams, in place of the then existing silver dollar of 412£ grains;
the proposed silver dollar being almost the exact equivalent of the silver con-
tained in the older Spanish-Mexican pillared dollar, established in 1704 by proc-
lamation of Queen Anne as a legal tender of payment and accepted as par of
exchange for the British colonies of North America at the rate of 54 pence
sterling to the dollar, or four and four-ninths dollars to the pound sterling.

Mr. Robert Patterson, of Philadelphia, long an officer of the mint and
an expert, recommended that this dollar of 385 grains be stricken out,
and there is here a petition from the California Legislature — I had it
in my hand a few moments ago; it is on the Secretary's desk — in which
they ask Congress formally to raise the standard of silver and not to use
this diminished dollar of 335 grains.

In consequence of this diversity of opinion among experts the Comp-
troller of the Currency dropped out the silver dollar entirely, said noth-
ing about it, made no provisiou for it, but instead of that told us that
if not omitted entirely a dollar ought to be inserted, as demanded by
the Pacific coast, for commercial purposes, containing 420 grains.

Mr. President, from the beginning, from April, 1870, uutil the pas-
sage of the law on February 27, 1873, the provision discontinuing the
old silver dollar of 412} grains stood in that proposed law, printed here
over and over again by both Houses through nearly three sessions of
Congress, and yet members of Congress are quoted, forsooth, as saying
that they never saw it ! Whose fault was it?

Why, Mr. President, I have here the last print of the bill. Here it
is, with the old-time appearance of decayed bills, folded away for good.
Here it is in the very last print of the bill. Look at the history of it,
and see whether there was anything secret about it. Here is the bill:

May 29, 1872.— In the Senate of the United States
Read twice and referred to the Committee on Finance.

December 16, 1872. — Reported by Mr. Sherman with amendments, namely:
"Strike out the parts in brackets and insert the parts printed in italics."

Then follows:

January 7, 1873.— Mr. Sherman, from the Committee on Finance, reported ad-
ditional amendments ■ which were ordered to be printed with the bill.

Then, two or three -weeks afterwards, I do not know exactly when,
although the date can he easily had, I called np the bill for considera-
tion. Here it was, printed in double-leaded type.

I will read what I asked the Senator from Kentucky to put in his
remarks, but I will put it in mine. Here is the proposition ol the House.
I have already read the proposition as it came to us originally. The
proposition of the House was:

That the silvercoinsof the United States shallbe a dollar.a half-dollar or fifty-
cent piece, a quarter-dollar or twenty-five-cent piece, and a dime or ten-cent
piece; and the weight of the dollar shall be 384 grains; the half-dollar, quarter-
dollar, and the dime shall be, respectively, one-half, one-quarter, and one-tenth
of the weight of said dollar; which coins shall be a legal tender, at tin ir denom-
inational value, for any amount not exceeding $5 in any one payment.

That is substantially as it stood at the beginning of this controversy,
and yet the Senator says it was secretly, surreptitiously inserted.

The Senate, on the other hand, in deference to the demands made
from the Pacific coast, where the great body of the silver bullion was
produced, offered, instead of that, this proposition (and it is now the
law J, to strike out what I have read and insert:

That the silver coins of the United States shall be a trade-dollar, a half-dollar
or fifty-cent piece, a quarter-dollar or twenty-five-cent piece, a dime or ten-cent
piece; and the weight of the trade-dollar shall be 420 grains troy, the weight of
the half-dollar shall be 12,^ grams; the quarter-dollar and the dime shall be, re-
spectively, one-half and one-fifth of the weight of said half-dollar; and said coins
shall be legal tender, at their nominal value, for any amount not exceeding $o
in any one payment.

The following section was contained in all the different bills and the
coinage act of 1873:

Sec. 18. And be it further enacted, That no coins, either of gold, silver, or minor
coinage, shall hereafter be issued from the mint other than those of the denomi-
nations, standards, and weights herein set forth.

The amendment of the Senate converted the grains of the old half-
dollar into the grams of the French. Instead of taking the diminished
minor dollar proposed by the House, not the old dollar of the lathers
that the Senator has been talking about, but the dollar of 384 grains,
we struck that out and put in the trade-dollar of 420 grains, and then
we adapted the minor coins exactly to the French grain, so that two
half-dollars would be precisely equal to 5 francs in the French currency.
That was done by common consent. It only amounted to a change of
one-half of lper cent., 12J grams being, I believe, the equivalent of
about 193 instead of 192 grains. The precise fraction I will not pre-
tend to state, but that was all.

Here was a proposition printed which lay upon that table for three
months. Yes, the bill came over to us in the session before. It lay
over through a vacation and was then taken up, and after some days,
probably with considerable debate upon other questions, this propo-
sition was put and carried almost nem. con.

Can any Senator say that he did not see this bill? No. Senators; no
man would plead the baby act in that way. I never would. I did see
it. I did see that the original proposition of the House was to convert
the silver dollar into a minor coin, and I did not believe in that. I
did believe that it was better to have a coin according to the desire of
the California people; to give them a coin of commerce, a trade-dollar
into which they might convert their silver bullion, mined from the
American mines, to be exported in the best form lor the Oriental mar-
kets

That is what 1 thought; and every Senator and Member had the same

8

opportunity to see it, and ho doubt did see it. But there is one thing
which, it seems, some did not see, and the Senator from Kentucky did
not and does not seem to know, and that is, the difference between
seeing what is past and what is to come in the future. We did not
see iuto the future, and it is not given to man to see into the future.
We did not know that while we were acting here upon the official
statement that a silver dollar was worth over 3 per cent, more than a
gold dollar, by changes of production and other causes that position
would be reversed. If any man had then said to me that within
twenty years, yea, within fiiteen years after that time the silver dollar
would only be worth 70 cents on the dollar, I would have thought
him crazy. All there is about it is that we did not foresee the great
change in the value of silver bullion.

But when any one in the light of these facts will say of the members
of that Senate or the members of that House, that they sought to do
anything by indirection or by secrecy, he does injustice to himself; he
can not do injustice to me, because the records are there, and the Sen-
ator has seen them.

Now, Mr. President, let us go a little further. I answered promptly
to the Senator from Kentucky, and made this statement, not so clear
as I have now made it, because I have the documents before me. He
brings a collateral witness to prove that after all I was a secret con-
spirator, because at one time or another I proposed to make gold the
single standard. There again he misrepresents my position. I did not
make or propose to make it the single standard. I proposed to make
gold an international coin, and to so change the coinage and the gold
coins of all the peoples of the world that one would be easily converted
into the other.

As these coins now exist, a franc is worth less than one-fifth of a
dollar, and yet the dollar only passes for five francs, and the loss falls
upon our people. So a pound sterling is not worth $5, and yet in
common account we call the pound sterling $5. It has been the desire of
scientists for more than a hundred years, commencing with Newton
when he was director of the mint in England, that this difficulty of
exchanges among peoples should be abolished, and it was the common
sentiment of all the men who met in Paris, of all the nations, you
may say, of Europe and Asia, that this difference should be in some
way or other got rid of, so that the traveler might start in America and
cross two oceans, traverse the world, with one American coin of un-
changeable value.

What was the proposition ? The proposition was that we should take
the franc, which was the lowest standard or unit of value, as the unit,
and then change our gold coins so as to make 5 francs of French coin
exactly equal in size, in material, in shape, in form, to the five-franc gold
piece. But as gold coins could not be readily issued in such small
sums, it was proposed that we should take what is called the interna-
tional, a gold coin of 25 francs, as a standard, and we recommended
that the United States should make the half-eagle a coin of the exact
commercial equivalent of 25 francs, and that England should make
her pound sterling conform to this standard, so that 5 francs should
be equal to $1 and $5 would be equal to £1. Austria, then greater
even than Germany, was to make her 10 florins equal to 25 francs. So
we should have an international coin of commerce which would go
over the world.

Mr. President, that was the proposition. I was there, a citizen of
the United States and a member of this body. I was not a member

9

per se of what is called the Paris conference, but I was invited. I went
there. They published what was said in different lan^ua^es. They
gave me no special compliment in publishing what I wrote in two lan-
guages as if it was an extraordinary thing. All the proceedings were
published in two languages. I read them, and after reading them all
and finding a concurring opinion that what they meant to do was a good
thing to do, I wrote the letter, riot one word of which I now withdraw;
not one word.of which, fairly interpreted under the circumstances which
then surrounded me, would bear the meaning that is now suggested.
The Senator from Kentucky uses this letter, which I will ask to have
put in the Record. It is not very long, not one-half as long as some
of the schedules attached to the speech of my friend from Kentucky.

What we intended to do is plain and manifest. The Senator intro-
duces this to prove what? That I was wrong in seeking to get an inter-
national coin? No; that was not it, but in some way or other that I
wanted to conspire against silver; that it was silver I was striking at.
Why at that time the silver dollar was worth over 3 per cent, above
par. It was shortly before that time that Chevalier proposed to de-
monetize gold, and take the better metal, as he called it, silver, as
the single standard. It was because silver had been practically aban-
doned for circulation, and every country in modern Europe and our
own had been compelled to lower the standard of our coins in silver iu
order to prevent their exportation.

Does the Senator from Kentucky know that Tom Benton and the
men of 1834 and 1837 who met this difficulty in the first place demon-
etized silver, and from that time to this we have been practically upon
the unit of gold coin? Although nominally in law the silver dollar
stood as the unit of value, yet in fact and in practice gold was the only
standard of value. But the silver was coined freely into what are called
minor coins, 50 cents and 25 cents, and there was 7 per cent, less silver
put in them, so that they would not be exported. The whole object
of this demonetization of silver was to prevent the silver dollar from
being exported, as it always was exported, because it was worth more
in the mints of Europe than in our own.

One difficulty grew out of the difference between our ratio in 'this
country and that in Europe. In France it was 15.', ounces of silver to
one of gold. In our country it was 16 ounces of silver to one of gold.
The result was, as we undervalued silver according to tlie market value,
our silver dollar, whenever coined, went abroad, and therefore for forty
or fifty years there was none of it coined, although any man had a right
to carry silver bullion to the mint and have it coined. Therefore, so
i'ar from intending any reproach or dishonor or depreciation of silver,
we were trying to meet a difficulty entirely outside of the scope of that
controversy between the two ratios.

The Senator from Kentucky must take notice that 1 say this letter,
which I will ask to have printed in this place in my remarks, expressed
my opinion better and more carefully than I could do now in anything
that I would say.

The letter referred to is as follows:

Hotel Jabdin i>i - Toiu km s. May 18, 1887.

My De\r Sir: Your note of yesterday, inquiring whether « longress won 1 . 1
probably in future coinage make <>ur K°'<i dollar Conform In value to the gold
live-franc pieee, ha- been reeeived.

There has been so little discussion in Congress upon the subject that 1 can not
base my opinion upon anything said or done there.

The subject nas, however, excited the attention of several import a id commer-
cial bodies in the United States, and the time is now so favorable that I feel quite

10

sure that Congress will adopt any practical measure that will secure to the com-
mercial world a uniform standard of value and exchange.

The only question will be, how this can be accomplished.

The treaty of December 23, 1865, between France, Italy, Belgium, and Switz-
erland, and the probable acquiescence in that treaty by Prussia, has laid the foun-
dation for such a standard. If Great Britain will reduce the value of her sov--
ereign two pence, and the United States will reduce the value of her dollar
something over three cents, we then have g, coinage in the franc, dollar, and sov-
ereign, easily computed, and which will readily pass in all countries — the dol-
lar as five francs, and the sovereign as twenty-live francs.

This will put an end to the loss and intricacies of exchange and discount.

Our gold dollar is certainly as good a unit of value as the franc ; and so the
English think of their pound sterling. These coinsare nowexchangeableonly
at a considerable loss, and this exchange is a profit only to brokers and bankers.
Surely each commercial nation should be willing to yield a little to secure a gold
coin of equal value, weight, and diameter, from whatever mint it may have
been issued.

As the gold five-franc piece is now in use by over sixty millions of people of
several different nationalities, and is of convenient form and size.it may well
be adopted by other nations as the common standard of value, leaving to each
nation to regulate the divisions of this unit in silver coin or tokens.

If this is done, France will surely abandon the impossible effort of making two
standards of value. Gold coins will answer all the purposesof European com-
merce. A common gold standard will regulate silver coinage, of which the
United Slates will furnish the greater part, especially for the Chinese trade.

I have thought a good deal of how the object you propose may be most readily
accomplished. It is clear that the United States can not become a party to the
treaty referred to. They could not agree upon the silver standard ; nor could
we limit the amount of our coinage as proposed by the treaty. The United States
is so large in extent, is so sparsely populated, and the price of labor is so much
higher than in Europe, that we require more currency per capita. We now pro-
duce the larger part of the gold and silver of the world, and can not limit our
coinage, except by the wants of our people and the demands of commerce.

Congress alone can change the value of our coin. I see no object in negoti-
ating with other powers on the subject. As coin is not now in general circula-
tion with us, we can readily fix by law the size, weight, and measure of future
issues. It is not worth while to negotiate about that which we can do without
negotiation, and we do not wish to limit ourselves by treaty restrictions.

In England many persons of influence and different chambers of commerce
are earnestly in favor of the proposed change in their coinage. The change is
so slight with them that an enlightened self-interest will soon induce them to
make it, especially if we make the greater change in our coinage. V."e will
have some difficulty in adjusting existing contracts with the new dollar; but
as contracts are now based upon the fluctuating value of paper money, even the
reduced dollar in coin will be of more purchasable value than our currency.

We can easily adjust the reduction with the public creditors in the payment
or conversion of their securities, while private creditors might be authorized to
recover upon the old standard. All these are matters of detail to which I hope
the commission will direct their attention.

And now, my dear sir, allow me to say in conclusion, that I heartily sympa-
thize with you and others in your efforts to secure the adoption of the metrical
system of weights and measures.

The tendency of the age is to break down all needless restrictions upon social
and commercial intercourse. Nations are now as much akin to each other as
provinces were of old. Prejudices disappear by contact. People of different
nations learn to respect each other as they find that their differences are the ef-
fect of social and local custom not founded upon good reasons. I trust that the
industrial commission will enable the world to compute the value of all pro-
ductions by the same standard, to measure by the same yard or meter, and
■weigh by the same scales.

Such a result would be of greater value than the usual employments of diplo-
matists and statesmen.

I am, very truly, yours,

JOHN SHERMAN.

Samuel B. Ruggles, Esq.

Mr. SHERMAN. There I stand, and would to God this day that a
spirit might exist among the nations of the world that we should agree
not only upon a ratio between silver and gold, but that we should agree
upon a coin which, bearing the image of every nation according to its
own devices, should be of equal and exact weight, value, and metal,
travel over the world, and be the supreme standard of value among the
nations.

11

The Senator from Kentucky says lie does not know how the plan ft r an
international coin was dropped out. He seems to think there was some
thing suspicious about it. J can tell him§ He need not have explored
ancient history to have found it. It is true whin this question came
before the Committee on Finance we substantially agreed, with the
single exception ofSenator Morgan, of New York. Hethought it might
derange affairs in New York, the profits of exchange, the effect upon ex-
isting contracts, and perhaps it would; and he presented some difficul-
ties in reducing our coins down to the standard proposed by the French
ratio.

It would have created some trouble, but still the Senate would have
passed it without much debate, and Senators around me were continu-
ally complaining of me for not bringing up that bill. The reason why
it was not brought up was because Great Britain took ground against
it, though her representatives had given a qualified assent. They said
they would not change their pound sterling to conform to the proposed
coin, because, in the first place, it was a matter of pride; in the next
place, it would disturb the value of the shilling and farthing; that it
would disturb the current of their money in the smaller payments ot
human life; that it would disturb to a slight degree the value of the
farthing. When England had thus refused to enter into this interna-
tional union, this international coin, as it may be called, it was found
not to be feasible to proceed any further in the matter.

Then soon came on the war between France and Germany, and then
these two nations were iu no condition to negotiate with each other
about coinage or anything else. This was the reason why this great
effort at reform failed, for which Mr. Ruggles is fairly entitled to credit
by the people of the United States. It was because England, from her
exclusive pride and supreme selfishness, would not enter into this ar-
rangement, and it fell dead. But I hope the time may come yet, in
the lifetime of some of us at least, when this idea, so honorable to all
the nations represented in that conference, so useful to mankind at
large, so beneficial to every one who travels or trades, to every one
who emigrates or migrates, will be finally adopted by the common
consent of the great nations of the world. So much for that.

Now, what else is there that I care to answer in the speech of the
Senator from Kentucky? He said we insisted upon paying our bonds
in coin. So we did, and I thank God we did. If we had not paid our
bonds in coin during the war, or promised to pay them in coin, what
would have become of our credit? Even as it was, with the interest
fairly secured by revenues collected in coin, our bonds went at one time
in the markets of the world at about 40 cents on the dollar. Suppose
we had not supported our credit, and maintained the standard that we
had proclaimed, that we would not only pay the principal but the in-
terest in gold? In the direst times of the war we bought coin and paid
untold premiums almost to get it, iu order to pay the public creditor.
But that was to sustain the public credit and maintain the public faith.

The Senator said some harsh words — he will find them when he look-
over his remarks, if he does so — about the men of business daring the
war, that they were grabbers, seeking something more than they de-
served. My countrymen, it required patriotism, heroism, courage, and
hope to take the bonds of the United states during that fearful war.
All of you know how severely at times we wen- pressed, and bow dan-
gerously our credit was affected, and yet without that strong anchor of
coin interest our bonds would have disappeared like the Confederate
bonds into thin air, dishonored and unsung.

But, sir, thanks to the courage of the people of the United States,
they stood by that polity, and by that means we are able now to legis-
late for a restored and ad vanc<pi country of untarnished creditaud to bor-
row money at a less rate than any country in the world.

Let us go a little further to illustrate the wisdom of the financial
policy of the Senate. Senators may now be forgetful of one fact which
I will state, not for the purpose of criticising any one — perhaps it may
be new to the Senator from Kentucky, and yet he was here at the time
it was done. When it became necessary to refund the public debt, after
the first five-twenties had matured, everybody demanded a refunding
act to lessen the burden of our debt. It was a very difficult thing to
do. The Senate of the United States, after more care and deliberation
than, so far as I know, it has ever bestowed on any bill, finally reported
a bill to fund the public debt, to aid in the resumption of specie pay-
ments, and to advance the public credit.

On the 3d day of February, 1870, I was directed by the Committee
on Finance to report Senate bill No. 380, "to authorize the refunding
and consolidation of the national debt, to extend banking facilities, and
to establish fixed specie payments. " The Congressional Globe shows
that this bill received the most careful consideration. Its first form is
printed on page 1587, Congressional Globe, part 2, second session Forty-
first Congress.

The first section authorizes the issue of four hundred million of bonds
redeemable in. coin at the pleasure of the United States at any time
after ten years, bearing interest at 5 per cent.

The second section authorizes the issue of bonds to the amount of
$400,000,000, redeemable at the pleasure of the Government at any
time after fifteen years, and bearing interest at 4? per cent.

The third section authorizes the issue of $400,000,000 of bonds, re-
deemable at any time after twenty years, and bearing interest at the
rate of 4 per cent.

The proceeds of all these bouds were to be applied to the redemption
of 5.20 and 10.40 bonds and other obligations of the United States then
outstanding.

It will be perceived that this bill provided for the issue of securities
all of which were redeemable within twenty years and two-thirds of
which were redeemable within fifteen years; so that if the bill as re-
ported by the Committee on Finance had become the law no such dif-
ficulty as we now labor under would exist, but four hundred millions
of these bonds would be within reach of the Government at this mo-
ment, and the four hundred millions would he due within two years.

The bill passed the Senate in substantially the form reported from
the Committee on Finance by the large vote of 33 to 10, and was per-
haps the most carefully prepared of any of the financial measures of
the Government. In opening the debate I called the attention of the
Senate to the great advantage the Government had derived from mak-
ing its bonds redeemable at brief periods like the 5-20 bonds, the 10-40
bonds, and the Treasury notes. I also called attention to the fact that
the same principle of maintaining the right to redeem had been ingrafted
in the bill then before the Senate, that the duration of the bonds was
divided into three periods of ten, fifteen, and twenty years, during
which time, by the g*\dual application of the surplus revenue, the
whole debt might be paid. This was the bill sent by the Senate to the
House of Representatives, and if it had been adopted by the House
there would be no trouble now about the application of the surplus

13

revenue, but by common consent it would be used in the speedy extinc-
tion of the public debt.

The bill was sent to the House of Representatives on the 11th of
March, 1870, and there seems to have slept lor nearly three months with-
out any action on the part of the House.

On the 6th day of June, 1870, the Committee on Ways and Means
reported House bill 21(57, covering the same subject-matters as were
contained in the Senate bill. The consideration of this hill was com-
menced by sections on the 30th of June, 1870. The material part of
the first section of this bill is as follows:

That the Secretary of the Treasury is hereby authorized to issue, in a sum or

Bums not exceeding in the aggregate $1,000. 1,000 coupon or registered bonds

of the United Stales, in such form as he may prescribe, and of denomination of
850 or some multiple of that sum, redeemable in coin of the present standard
value at the pleasure of the United States after thirty years from the date of
their issue, and bearing interest payable semi-annually in such eoin at the rate
of 4 per cent, per annum.

Thus it will be perceived that instead of the three series of bonds
provided by the Senate, the House proposed to authorize the issue of
$1,000,000,COO, redeemable in coin after thirty years from the date of
their issue, with 4 per cent.; and this difference in the description of
the bonds was the chief difference between the proposition of the House
and the Senate. To emphasize this difference I will read what was
said by the chairman of the House committee reporting the bill:

It is a proposition to refund a portion of the public debt of the country at a
very much lower rate of interest. It is a proposition that $1,000,000,000 of that
debt shall take the form of bonds, upon whi h the United States 'will agree to
pay only 4 per cent, per annum. But in order to make those bonds acceptable
to capitalists at home and abroad, further provision is made that the bonds
themselves shall have a longer time to run, not merely for thirty years, but that
they shall only be redeemable after thirty years; thus giving them, without the
objections, the advantages which in a great degree attach to a perpetual loan.

This bill, with a very limited debate, passed the House on the 1st of
July, 1870. and then immediately was offered as a substitute for the
Senate bill and was adopted.

Those two rival propositions, differing mainly upon the question of
the character of the bonds to be issued, were sent to a committee of
conference composed on thepart of the Senate of Messrs. SHERMA x, Sum-
ner, and Davis. It appears that the chief controversy in the conference
was as to the description of funding bonds to be provided for. After
many meetings it was finally agreed that the bonds authorized should
be $200,000,000 5 per cent, bonds, $300,000,000 4 j percent, bonds of
the character described in the Senate bill, and $1,000,000,000 of 4 per
cent, bonds, as described in the House bill. In other words, it was a
compromise which, like many other compromises, was in its results an
injury of great magnitude, but it was an honest difference of opinion
between the Senate and the House, in which, tested by the march of
time, the Senate was right and the House was wrong. Bui it is per-
fectly manifest that without this concession by the Senate to the House
the bill could not have passed, and even with this concession the first
report of the committee of conference was disagreed to by the House
because of certain provisions requiring the national hanks to provide
the new bonds as the basis of hanking, as circulation This disagree-
ment by the House compelled a second committee of conference, in
which the contested banking section was stricken out and the bill agreed
to as it now stands on t he statute-books.

And tints thirty-year securities now at a premium of more than '.'.">
per cent, were forced into the law by the determined action of the

14

House. Where the Senator from Kentucky stood on this question, or
other gentlemen who now make complaint, I have not stopped to in-
quire, because I wish to make no personal issue. No doubt the mem-
bers were honest iu their convictions that long 4 per cent, bonds were
best for the Government, better than the issue of short bonds bearing
' 4J or 5 per cent, interest, but certain it is that the then House of .Rep-
resentatives is responsible for the terms of these bonds, and that I at
least am free from this blame, if there be any, and am rather entitled
to the credit, whatever it may be, of forming a better estimate as to
what was best for the interests of the people of the United States.

Every man now who can see backwards can see what a terrible mis-
take that was. It makes a difference of one or two hundred millious
of dollars. But does any man reproach those in public life who hon-
estly believed that the time would never come when the Government of
the United States could borrow money at less than 4 per cent.? They
thought so, and I never would reproach them. I do not mention a
name; 1 will not quote their language, because they were as honest
as I was in insisting on other terms and conditions.

Mr. President, these are the three things about which I have been
arraigned, and a kind of personal attack has been made upon me. The
Senator tal ked about resumption . I do not want to say anything about
resumption. Who does not feel that that great work of courage, not
only in Congress but in the Departments and araonj; the people, was
one of the proud triumphs of our age and generation? I have no apol-
ogies to make for it.

As to the silver question, I am perfectly willing to debate it. I am
not opposed to silver. I wish to God I could add more than 30 per
cent, to the value of every grain of silver in the mines and in the world.
The interest of our country is to have both gold and silver. You
never can keep them at the present ratio except by doing one of two
things, and that the Senator from Kentucky wants to break down. You
must maintain the silver dollar at the gold standard by receiving them
as gold and hoarding them when they are not readily taken by the
people. If you would force the silver dollars now in the Treasury
out among the people, you would break down their credit so that they
would fall more and more. You therefore have either to maintain
them at the gold standard by redeeming them at par with gold or you
have got to put more silver in them to make them equal in market value
to gold. I do not want to precipitate this question, and do not care to
discuss it. The arguments are old. I do not care to have them re-
peated and printed at every session.

Whenever I can see the way clear, by general consent of the people
interested in this product, with the consent of Colorado and Nevada
and California, to take any steps to deal with the silver question, lam
willing to do it. I think the time may come when we can make the
silver production in our country the basis for coin certificates; but then
■we must buy it at market value; we must not take it at an artificial
value. But after all the efforts of our silver friends, by these fierce
attempts to get their money into circulation, silver has gone down
steadily under this process. I should like to see it advanced, and I
believe I can see my way clear to measures which if agreed to by
them — reasonable in their character — would bring up silver nearer to
its old standard.

When finally a fair ratio is fixed by the commercial nations of the
relative value of silver and gold in the world, all we can do is to adopt

15

that ratio and base our action upon it. This Senate and this nation
are powerful in ruauy things, but they have not the power to fix the
value in anything. You may hold a thin"; up to a standard of value
by receiving it and redeeming it, but you cau not make the value of a
plate or a bar of iron or a grain of wheat. That is beyond the power
of man. It must be fixed by the general market value among commer-
cial nations. I do not intend to be led off into that discussion. When-
ever the time comes when a bill of this kind, such as the Senator has
introduced, shall be taken up and discussed in an orderly way, so that
we can present our views to each other, not in the presence of a capti-
vating audience, not for the purpose of filling the tomes of our RECORD,
but for legitimate debate to convince each other as to what is best for our
country, I shall be present with my friend from Kentucky prepared to
consider the question.

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