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Speech on the Treasury Note Bill,

Delivered February 20, 1862, in Congress


    Mr. Stevens. Mr. Speaker, I have a very few words to say. I approach the subject with more depression of spirits that I ever before approached any question. No personal motive or feeling influences me. I hope not, at least. I have a melancholy foreboding that we are about to consummate a cunningly devised scheme, which will carry great injury and great loss to all classes of the people throughout this Union, except one. With my colleague, I believe that no act of legislation of this Government was ever hailed with as much delight throughout the whole length and breadth of this Union, by every class of people, without exception, as the bill which we passed and sent to the Senate. Congratulations from all classes – merchants, traders, manufacturers, mechanics, and laborers – poured in upon us from all quarters. The Boards of Trade from Boston, New York, Philadelphia, Cincinnati, Louisville, St. Louis, Chicago, and Milwaukee approved the provisions, and urged its passage as it was.

    I have a dispatch from the Chamber of Commerce of Cincinnati, sent to the Secretary of the Treasury, and by him to me, urging a speedy passage of the bill as passed in the House. It is true that there was a doleful sound came up from the caverns of bullion brokers, and from the saloons of the associated banks. Their cashiers and agents were soon on the ground, and persuaded the Senate, with but little deliberation, to mangle and destroy what it had cost the House months to digest, consider and pass. They fell upon the bill in hot haste, and so disfigured and deformed it, that its very father would not know it. (Laughter.) Instead of being a beneficent and invigorating measure, it is now positively mischievous. It has all the bad qualities which its enemies charged on the original bill, and none of its benefits. It now creates money, and by its very terms declares it a depreciated currency. It makes two classes of money – one for the banks and brokers and another for the people. It discriminates between the rights of different classes of creditors, allowing the rich capitalist to demand gold, and compelling the ordinary lender of money on individual security to receive notes which the Government had purposely discredited.

    Let us examine the principal amendments separately, and see their effect. The first important one (being the fifth) makes the notes issued under the law of July 17 a legal tender, equally with those authorized by this bill. There can be but little wisdom in putting these two classes on an equality. The notes of July bear seven and three tenths per cent interest, and are payable in three years. This gives them a sufficient advantage over notes bearing no interest and payable virtually in twenty years, with six per cent interest. Why give them this additional advantage? Simply because the $100,000,000 issued are all held by the associated banks, and this is their amended bill. They would displace $100,000,000 of this money in the circulation, and render it impossible to use any considerable amount of these United States notes as a currency. These notes have served their purpose. Why allow them to block up the market against further relief to the Government?

   The banks took $50,000,000 of six per cent bonds, and shaved the Government $5,500,000 on them, and now ask to shave the Government fifteen or twenty per cent half yearly, to pay themselves the interest on these very bonds. They paid for the $50,000,000 in demand notes, not specie, and now demand the specie for them. Yet gentlemen talk about our making other loans in these times. They are crazy or sleeping, one or the other, I do not know which.

     When this question was discussed before, the distinguished gentleman from Kentucky (Mr. Crittenden) asked me whether it was the intention or expectation of the House to go on and issue more than one hundred and fifty millions of dollars of legal tender notes – a pertinent question, which I saw the whole force of at the time. I told him that it was my expectation that no more would be issued by the Government; that they would be received and funded in the twenty year bonds.

    Mr. Lovejoy. I ask the gentleman from Pennsylvania whether $150,000,000 of gold could not be put into circulation as well as $150,000,000 of Treasury notes?

    Mr. Stevens. If this $150,000,000 would come out of the bankers’ and miser’s hands; but they have suspended specie payment, and would not give out a dollar. They say pay us a discount, and then when these notes are made a legal tender we will be again in the clutches of these harpies. I do not want to use hard names. I suppose these men act from instinct. If I were now to answer the question of the gentleman from Kentucky, I would not give that answer. I do not expect one dollar of the $150,000,000 of legal tender notes ever to be invested in the twenty year bonds. I infer from the amendment that before we adjourn $150,000,000 will be asked for, which will never be funded in those bonds, and so on, as they are needed, as no bonds will be sold until our circulation will become frightfully inflated.

    The notes, by another amendment, are authorized to be invested in notes or bonds payable in two years, and bearing an interest of seven and three tenths. One of the great objects of the bill was to induce capitalists to invest in six per cent bonds or lose their interest, and thus to furnish a continually recurring currency by the sale of those six per cent bonds. This provision would effectually prevent the funding a dollar in those bonds. They would all go in preference into seven and three tenths bonds, due in two years, when no one believes we can pay them.

    But this is not the worst. The tenth amendment provides that any holder of the United States legal tender notes, if we have $100 and upwards, shall draw five or six per cent interest on them until he chooses to use them. The poor who have less than $100 shall draw no interest. It is plain that, by these two contrivances, not one dollar of these United States notes will ever be funded in six per cent bonds.

     But now comes the main clause. All classes of people shall take these notes at par for every article of trade or contract unless they have money enough to buy United States bonds, and then they shall be paid in gold. Who is that favored class? The banks and brokers, and nobody else. They have already $250,000,000 of State debt, and their commissioners would soon take all the rest that might be issued.

    But how is this gold to be raised? The duties and public lands are to be paid for in United States notes, and they or bonds are to be put up at auction to get coin for these very brokers who would furnish the coin to pay themselves, by getting twenty per cent discount on the notes thus bought.

    Now, in less than a year, taking the public debt at what my colleague makes it – I make it more -- $1,200, 000,000, what will the interest be upon it at seven and three tenths per cent, for it will all center in that rate of interest? It will be $87,000,000, and one half of that amount, $43,500,000, must be raised every six months for paying of this interest, and it is to be raised in coin, which nobody holds but the large capitalists. Does anybody suppose that they are going to give that coin for such notes as we are now about to issue, at par? They will sell the gold for what their consciences will allow, and they will compel the government to give anything they choose, unless the Government consents to become dishonored. The first purchase of gold by the Government will fix the value of these notes which we issue and declare to be legal tender. That sale will fix their value at ten, fifteen, or twenty per cent discount, and then every poor man, when he buys his beef, his pork, and his supplies, must submit to this fifteen, or twenty five per cent discount, because you have said that that shall be the value of the very notes which you have made a legal tender to him, but not a legal tender to those who fix the value of these very notes. Does anyone believe that anybody but bankers and brokers fixes the depreciation of the currency? So you will thus have fixed the market value of your notes at seventy-five or eighty per cent, and yet they are a legal tender to the poor of the country, while they are no legal tender to those who hold the coin of the country.

    By the original bill the Secretary of the Treasury was allowed to sell these bonds at their value for lawful money – that is, for these legal tender notes. But now, by the provisions of this bill, after the market value has been fixed and they are depreciated, the Secretary of the Treasury is authorized to go into the market and sell them for coin, not at par, but at the market value therefor. Was there ever a more convenient contrivance got up, into which blind mice run, to catch them? Was ever before such a machine got up for swindling the Government and making the fortunes of the gold bullionists in one single year?

    But as if this accumulated folly were not quite enough, another amendment provides that these notes, when presented in sums not less than $100, may be transferred into seven and three tenths notes payable in two years. Parties may buy these notes at discount and put them into notes payable in bullion at two years, at seven and three-tenths interest, for that is part of the whole system.

    Now, sir, does any man here believe that, notwithstanding the victories we are gaining, the Government will be able to redeem these notes in two years? If not, they will be shoved upon the market and sold for coin at whatever discount may be demanded.

    I have proposed an amendment to the Senate amendment upon the principle of legitimate parliamentary rules that you may make as palatable as you can an amendment which you do not like before the vote is taken upon it. My amendment is offered for the purpose of curing a little the evils and hardships of the original amendment of the Senate. And though it may be adopted, the whole will be pernicious; and if adopted, I shall vote against the whole as amended. My amendment is to except from the operation of the legal tender clause the officers and soldiers of the Army and Navy, and those who supply them with provisions, and thus put them upon the same footing with the Government creditors who hold their bonds. I hope I will not be thought less meritorious than the money-changers. I trust it will be adopted as an amendment to the Senate amendment, so that if this pernicious system is to be adopted, if the beauty of the original bill is to be entirely impaired, those who are fighting our battles, and the widows and children of those who are lying in their graves in every part of the country, killed in defense of the Government, may be placed upon no worse footing than those who hold the bonds of the Government and the coin of the country.


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