and the interest on the $90,000 amounts to $9,400. Deducting the one from the other, it leaves $5,600. Now, what did it make that on? On the $100,000 put in, and the $22,500 which was kept on hand. The investment was $122,500, and the profit is $5,600; that is, about four per cent. That is all that can be made under it. They are to run the risk in their loans of all the loanings of $90,000, and getting it out and in, and cannot make five per cent., if all works smoothly and there are no losses at all. I say that is not a matter of speculation; that is a matter of certainty. Those figures which I have given in this instance cannot lie."

Mr. Sherman, of Ohio, followed in defence of the bill. "That bankers can make a reasonable profit under this bill I have no doubt. They have the benefit of four per cent. on the bonds deposited by them. They have the benefit of interest on the notes given them for circulation. They have the benefit of exchange; not the rates of exchange formerly paid, but that incidental exchange which every bank charges in drawing a draft, probably a quarter or a half of one per cent. They have the profits they can make from deposits. They have other profits from the ordinary incidents of banking. I have no doubt from all these various profits they will make what banks in ordinary times under specie payments could make, that is, seven or eight per cent. a year.

"But, sir, the principal point made by the honorable senator, and one most likely to influence the judgment of senators, is this: he asks what benefit the United States derives from this arrangement, and he endeavors by argument to show that the United States derives no benefit. I would put to him this simple proposition: there are now $167,000,000 of local bank circulation in the country. Suppose we can induce through their interestsI do not propose to do it by any arbitrary mode the retirement of $100,000,000 of this circulation, taking the smallest sum that will probably be used in the course of a year; suppose we can induce the banks to withdraw $100,000,000 of their circulation, is it no benefit to the United States? Now, the United States gets no benefit whatever from their circulation. The United States cannot receive it in their ordinary business transactions. It fills the channels of circulation to the exclusion of the greenbacks. Suppose we can induce the banks to withdraw $100,000,000 of their circulation, and invest that much money in our bonds, and receive United States circulation, does not the honorable senator see that we should derive a great advantage from it? That is the object of this bill. The object is, by appealing to the patriotism and the interest of the people and the banks, to induce the banks to withdraw their local circulation and convert it into a national circulation. If it fails, as a matter of course it does no harm. But suppose it succeeds, does not the United States derive a

benefit from it? Certainly; because at once a demand is created for the purchase of $100,000,000 of United States bonds. We are anxious to sell these bonds. They are now below the par of gold. The creation of a demand for $100,000,000 will, as I showed yesterday, by the well-known and recognized laws of trade, probably create a demand for $500,000000. There is the benefit, there is the advantage we seek to derive. We shall make a market at once for the sale of $100,000,000 worth of our bonds, and the additional market which is always created by making a demand for a particular commodity, which is equivalent at least to five times the amount of the real demand. The Government of the United States is willing to borrow money from the honorable senator at six per cent. and pay the interest in gold coin. Any person who desires to loan money to the United States may receive six per cent. interest on it, and we are very glad to sell our bonds at that rate in this time of war; but to those who avail themselves of the privileges of this law we only pay four per cent., so that we save one third of the interest on the amount of our bonds used for banking; and more than that, we get a circulation which by the laws of the United States may be used in the collection of our dues; and in the ordinary operations of our Government these banking agencies may be made useful and beneficial as depositories. There is the answer. The benefit derived to the Government is by making a market for its bonds, by having fiscal agencies throughout the United States, so that it may the more readily collect its debts, and by saving one third of the interest on the payment of its bonds, and by securing to the people of the country a uniform national currency which can be passed from hand to hand in all parts of the country without loss by exchange, or deterioration, or alteration.

"But the honorable senator says that the power granted by this bill would render the Secretary of the Treasury a very dangerous person, or a very powerful person; probably that is the meaning. He says that this bill would create a dangerous political power. According to all experience, if you invest in any particular person the power to appoint men to office, or the power to manage banks or control a scheme of this kind, it rather weakens him. Sir, it will be a dangerous power in one sense; not to the American people, but it will be dangerous to the individual who exercises the power. Any man in this country who is clothed with the power of appointing men to office or selecting certain persons to have certain privileges, loses more than he makes, by the well-known law that he disappoints more than he benefits. And if you confer upon the Secretary of War or the Secretary of the Treasury the power to appoint twenty clerks, as we did the other day, there are five hundred applicants at once; and you disappoint four hundred and eighty, and make them enemies, for the sake of gaining twenty

friends. No, sir, the administration of patronage, the power to select depositories, all the power conferred by this bill, the power of visitation, all these are powers which tend rather to decrease the influence of the Secretary of the Treasury, because they are more likely to make him enemies than friends."

Mr. Howard, of Michigan, urged the following grounds for his opposition to the bill: "Sir, I am opposed to the scheme of the bill, because it ignores the great principle which I think is the only sound principle, that a paper circulation shall be convertible at the will of the holder into specie. I oppose it because it is likely to wage a very unnecessary and, I fear, dangerous war upon the State institutions; and I oppose it because I deplore the contest which will probably arise out of it in our local politics."

Mr. Wilson, of Massachusetts, briefly said: "Mr. President, I do not believe the banks are warring on the Government. They have proved in the past that they are not hostile to the Government. I do not believe the Government means to be hostile to them. I believe that this is a system which will absorb the existing banking system, and will be for the credit of the Government now, and for the interests of the people afterward, including the banks."

Mr. Doolittle, of Wisconsin, approved of the bill. He said: "As an original question, under the Constitution, I would maintain that the States have no constitutional power to issue paper money in any form, or to incorporate any company to do so; I would maintain, further, that under the Constitution, gold and silver coin is the only constitutional currency; bat the truth is that the whole history of the country, and I am constrained to say the decision of the Supreme Court, has gone the other way.

war

"I say the practical effect is, that the history of the Government and the decision of the court have given rise to about fifteen hundred or two thousand banks created under the authority of the States; and they have issued their money, so that at the beginning of this practically all the money we had in this country was the paper money of these two thousand State banks; and they very soon suspended, and all the practical currency we had was the irredeemable paper money of the State banks. That is the real truth; and in that state of things and under the necessity which grew out of it, I felt constrained, for one, to vote for the issue of notes by the Government of the United States.

"I maintain, sir, that in that state of the currency, our only circulation, in fact, being the irredeemable paper money of bank corporations created by the States, it was impossible for this Government to go on with this war on gold and silver. We must go on with the war on paper money as a practical fact; and if we must wage the war with paper money, we have got to take the control of that paper money

into our own hands, or the Government will be destroyed; and the practical question is the mode of arriving at the control. This Government must dominate and master and control the currency of this country in this exigency.

"I maintain, again, that it is not possible for us to return to gold and silver at this present time, and go on with this war, because the State banks are continually issuing their paper money. Such is the state of things that it is an impossibility, and we must look the issue squarely in the face.

"As I have said, I believe it is a necessity of this Government, in some mode, to take control of the paper currency of the country. In some way we have got to restrain the issues. I will not say the paper that has already been issued by the banks; but the new issues of the State banks, the issues which the banks have made since the Government has commenced issuing its legal-tender notes. While we are creating and issuing paper money, we cannot allow the banks still to continue to flood the channels of circulation. By that course we are destroying ourselves. We must restrain them, at least to the limit at which they stood when we began, and not allow them to flood all the channels of circulation.

"Mr. President, the only possible way in which we can do this is by inaugurating some better system. It is claimed and maintained that the system proposed to be inaugurated here is a better system. Sir, I have listened to the arguments on both sides, and I confess that at times in my own mind I have been shaken somewhat by the arguments I have heard against this system: but no better system seems to be proposed. Those who oppose this system do not come forward with another; and as, in my judgment, it is necessary to have some system, upon the whole I have been constrained to say that I shall favor this system, because I do not see that a better system is proposed to meet the exigency."

After further brief debate, the vote was taken on the bill as follows:

YEAS-Messrs. Anthony, Arnold, Chandler, Clark, Doolittle, Fessenden, Foster, Harding, Harlan, Harris, Howard, Howe, Lane of Kansas, Morrill, Nesmith, Pomeroy, Sherman, Sumner, Ten Eyck, Wade, Wilkinson, Wilmot, and Wilson of Massachusetts-23.

NAYS-Messrs. Carlile, Collamer, Cowan, Davis, Dixon, Foot, Grimes, Henderson, Hicks, Kennedy, King, Latham, McDougall, Powell, Rice, Richardson, Saulsbury, Trumbull, Turpie, Wall, and Wilson of

Missouri-21.

The bill came up in the House on the 19th of February. Mr. Spaulding, of New York, thus stated, some of the advantages of the measure: "The additional advantages held out by the bill to induce rich men, men of accumulated capital, to join the Government in maintaining this national currency, are:

"1. The national character given to the bills to circulate at par in all parts of the United States.

“2. It is made receivable at par for all in

"3. The banking associations are to be exempt from all State and United States taxation, and only pay two per cent. per annum for engraving, paper, and printing their circulating notes, and which is to include all the other expenses of the Currency Bureau at Washington. "On a full review of this proposed plan of a national currency, it will be seen that it is based on public and private faith; that it proposes to combine the interest of the nation with the rich individuals belonging to it. Men of surplus capital only can profitably engage in the business of banking. If speculators and adventurers, without positive capital, attempt to bank under this bill, they will fail. Moneylenders, and not money borrowers, can successfully organize and manage banking associations under the provisions of this act."

Mr. Harrison, of Ohio, urged the following objections to the bill: "As long, Mr. Speaker, as our domestic troubles continue, the business of the country must be done with an unredeemed paper circulation; and the alternative is presented of a circulation of Treasury notes issued directly by the Government, or bank notes issued by institutions organized under Federal grant. The former, it seems to me, is to be preferred, and for obvious reasons. It is an expedient resorted to in an emergency, justified by an emergency, and made acceptable to the country by reason of the emergency. The evils and inconveniences arising from it can be borne, because there is no other way by which we can help ourselves along in our present straits. There has been and there will necessarily be an expansion of credits-a rise of values, or, rather, of prices-a good deal of speculation-but then the ordinarily disastrous consequences of this state of things will be measurably averted by the temporary character of the cause which produced it. When the necessity for the expedient ceases, the expedient will be abandoned, and business will resume its ordinary courses. On the other hand, the other alternative inaugurates an expedient into a policy, and fastens permanently upon the country evils otherwise of a temporary char

acter."

The debate was further continued, and the bill finally passed by the following vote :

YEAS-Messrs. Aldrich, Alley, Ashley, Babbitt, Beaman, Bingham, Jacob B. Blair, Blake, Buffinton, Calvert, Campbell, Casey, Chamberlain, Clements, Colfax, Conway, Covode, Cutler, Davis, Delano, Dunn, Edgerton, Eliot, Ely, Fenton, Samuel C. Fessenden, Thomas A. D. Fessenden, Fisher, Frank, Goodwin, Granger, Hahn, Haight, Hickman, Hooper, Hutchins, Julian, Kelley, Francis W. Kellogg, William Kellogg, Lansing, Leary, Lovejoy, Low, McIndoe, McKean, McPherson, Marston, Maynard, Moorhead, Anson P. Morrill, Noell, Olin, Patton, Timothy G. Phelps, Potter, Alexander H. Rice, John H. Rice, Sargeant, Sedgwick, Segar, Shanks, Shellabarger, Sherman, Sloan, Spaulding, Stevens, Trimble, Trowbridge, Van Horn,

Van Wyck, Verree, Wall, Wallace, Washburne, Albert S. White, Windom, and Worcester-78. Baxter, Biddle, Cobb, Frederick A. Conkling, Roscoe Conkling, Cox, Cravens, Crittenden, Dawes, Edwards, English, Gooch, Grider, Gurley, Hall, Harding, Harrison, Holman, Horton, Johnson, Kerrigan, Knapp, Law, Lazear, Loomis, Mallory, May, Menzies, Justin S. Morrill, Morris, Nixon, Noble, Norton, Nugen, Odell, Pendleton, Perry, Pike, Pomeroy, Porter, Price, Robinson, James S. Rollins, Sheffield, Shiel, John B. Steele, William G. Steele, Stiles, Stratton, Benjamin F. Thomas, Francis Thomas, Vallandigham, Wadsworth, Wheeler, Whaley, Chilton A. White, Wickliffe, Wilson, Woodruff, and Wright-64.

NAYS-Messrs. William Allen, Ancona, Bailey, Baker,

The following is the bill as passed: An Act to provide a National Currency, secured by a pledge of United States Stocks, and to provide for the circulation and redemption thereof.

Be it enacted by the Senate and House of Represensembled, That there shall be established in the Treastatives of the United States of America in Congress asury Department a separate bureau, which shall be charged with the execution of this and all other laws that may be passed by Congress respecting the issue and regulation of a national currency secured by United States bonds. The chief officer of the said bureau shall be denominated the Comptroller of the Currency, and shall be under the general direction of the Secretary of the Treasury. He shall be appointed by the President, on the nomination of the Secretary of the Senate, and shall hold his office for the term of of the Treasury, by and with the advice and consent five years, unless sooner removed by the President, by and with the advice and consent of the Senate. He shall receive an annual salary of five thousand dollars. He shall have a competent deputy, appointed by the Secretary, whose salary shall be two thousand five hundred dollars, and who shall possess the power and perform the duties attached by law to the office of comptroller during a vacancy in such office, and during his absence or inability. He shall employ, from duties as he shall direct, which clerks shall be appointtime to time, the necessary clerks to discharge such ed and classified by the Secretary of the Treasury in the manner now provided by law. Within fifteen days from the time of notice of his appointment, the Comptroller shall take and subscribe the oath of office prescribed by the Constitution and laws of the United States; and he shall give to the United States a bond in the penalty of one hundred thousand dollars, with not less than two responsible freeholders as sureties, to be approved by the Secretary of the Treasury, conditioned for the faithful discharge of the duties of his office. The Deputy Comptroller so appointed shall also take the oath of office prescribed by the Constitution and laws of the United States, and shall give a like bond in the penalty of fifty thousand dollars. The Comptroller and Deputy Comptroller shall not, either directly or indirectly, be interested in any association issuing national currency under the provisions of this

act.

SEC. 2. And be it further enacted, That the Comptroller of the Currency, with the approval of the Secretary of the Treasury, shall devise a seal, with suitable inscriptions, for his office, a description of which, with a certificate of approval by the Secretary of the Treasury, shall be filed in the office of the Secretary of State with an impression thereof, which shall thereupon become the seal of office of the Comptroller of the Currency, and the same may be renewed when necessary. Every certificate, assignment, and conveyance executed by the Comptroller, in pursuance of any authority conferred on him by law, and sealed with his seal of office, shall be received in evidence in all places and courts whatsoever; and all copies of papers in the office of the Comptroller, certified by him and authenticated by the said seal, shall in all cases be evidence equally and in like manner as the original. An

their articles of association, for the purposes authorized by this act, and by exercising such incidental powers as shall be necessary to carry on such business; to choose one of their number as president of such association, and to appoint a cashier and such other of ficers and agents as their business may require; and to remove such president, cashier, officers, and agents at pleasure, and appoint others in their place; and their usual business shall be transacted in banking offices located at the places specified respectively in its certificate of association, and not elsewhere.

SEC. 12. And be it further enacted, That the shares of associations formed under this act shall be deemed

personal property, and shall be transferable on the books of the association in such manner as may be prescribed in the by-laws or articles of association; and every person becoming a shareholder by such transfer shall, in proportion to his shares, succeed to all the rights and liabilities of the prior holder of such shares; and no change shall be made in the articles of association by which the rights, remedies, or security of the existing creditors of the association shall be impaired. For all debts contracted by such association for the circulation, deposits, or otherwise, each shareholder shall be liable to the amount, at their par value, of the shares held by him, in addition to the amount invested in such shares.

SEC. 13. And be it further enacted, That it shall be lawful for any association formed under this act, by its articles of association, to provide for an increase of its capital from time to time as may be deemed expedient, subject to the limitations of this act; but no such increase shall be valid until the increased capital shall be paid in, and notice thereof shall have been transmitted to the Comptroller of the Currency, and his certificate obtained, specifying the amount of such increase of capital stock, and that the same has been duly paid to such association.

SEC. 14. And be it further enacted, That it shall be lawful for any such association to purchase, hold, and convey real estate as follows:

First. Such as shall be necessary for its immediate accommodation in the transaction of its busi

Such association shall not purchase or hold real estate in any other case or for any other purpose than as specified in this section.

SEC. 15. And be it further enacted, That every association, after having complied with the provisions of this act preliminary to the commencement of banking business under its provisions, shall transfer and deliv er to the Treasurer of the United States any United States bonds bearing interest to an amount not less than one third of the capital stock paid in, which bonds shall be deposited with the Treasurer of the United States, and by him safely kept in his office until the same shall be otherwise disposed of, in pursuance of the provisions of this act.

SEC. 16. And be it further enacted, That upon the making of any such transfer and delivery, the associ ation making the same shall be entitled to receive from the Comptroller of the Currency circulating notes of different denominations, in blank, registered and countersigned as hereinafter provided, equal in amount to ninety per centum of the current market value of the United States bonds so transferred and delivered, but not exceeding the par value thereof, if bearing interest at the rate of six per centum, or of equivalent United States bonds bearing a less rate of interest; and at no time shall the total amount of such notes, issued to any such association, exceed the amount at such time actually paid in of its capital stock.

SEC. 17. And be it further enacted, That the entire amount of circulating notes to be issued under this act shall not exceed three hundred millions of dollars. One hundred and fifty millions of which sum shall be apportioned to associations in the States, in the District of Columbia, and in the Territories, according to repre sentative population, and the remainder shall be appor tioned by the Secretary of the Treasury among associations formed in the several States, in the District of Columbia, and in the Territories, having due regard to the existing banking capital, resources, and business of such States, District, and Territories.

SEC. 18. And be it further enacted, That, in order to furnish suitable notes for circulation, the Comptroller of the Currency is hereby authorized and required, under the direction of the Secretary of the Treasury, to cause plates to be engraved in the best manner, to guard against counterfeiting and fraudulent alterations, and to have printed therefrom, and numbered, such quantity of circulating notes, in blank, of the denominations of five dollars, ten dollars, twenty dollars, fifty dollars, one hundred dollars, five hundred dollars, and one thousand dollars, as may be required to supply, under this act, the associations entitled to receive the same; which notes shall express upon their face that they are secured by United States bonds, deposited with the Treasurer of the United States, and issued under the provisions of this act, which statement shall be attested by the written or engraved signatures of the Treasurer and Register, and by the imprint of the seal of the Treasury; and shall also express upon their face the promise of the association receiving the same, to pay on demand, attested by the signatures of the president, or vice-president, and cashier; and the said notes shall bear such devices and such other statements, and shall be in such form, as the Secretary of the Treasury shall, by regulation, direct.

SEC. 19. And be it further enacted, That the plates and special dies to be procured by the Comptroller of the Currency for the printing of such circulating notes as shall remain under his control and direction, and the expenses necessarily incurred in executing the provisions of this act respecting the procuring of such notes, shall be audited and paid as contingent expenses of the Treasury Department; and for the purpose of reimbursing the same, and all other expenses incurred under this act, and in lieu of all taxes upon the circulation authorized by this act, or upon the bonds deposited for the security of the same, such association organized under this act shall semi-annually, on the first days of January and July, after its organization, pay to the Comptroller of the Currency, in lawful money of the United States, one per centum on the amount of circulating notes received by such associa tion, and in default thereof, the Treasurer of the United States is hereby authorized to reserve and retain one per centum on the amount of said bonds so deposited, at each semi-annual payment of interest thereon; and all sums so reserved and retained shall be paid into the Treasury under the direction of the Secretary; and every bank, banking association, or organization, not organized under the provisions of this act, issuing notes calculated or intended to circulate as money, shall, on the first day of July next, and regularly on the first days of January and July thereafter, make and deliver to the Comptroller of the Currency a true and accurate return of the gross amount of notes issued by it, whether in circulation, or in its vaults, or on deposit elsewhere, and in default of any such return, the bank, banking association, or corporation so failing to make return, shall pay to the United States a penalty of two per centum upon its entire capital stock, to be recovered, for the use of the United States, in any court of competent jurisdiction.

SEC. 20. And be it further enacted, That after any such association shall have caused its promise to pay such notes on demand to be signed by the president or vice-president and cashier thereof, in such manner as to make them obligatory promissory notes, payable on demand, at its place of business, such association is hereby authorized to issue and circulate the same as