Chapter VII: Part 7

“Neither Mr. Lincoln, nor any member of his Cabinet, nor
more than two Senators, I believe, in this body, the
Senator from Massachusetts [Mr. SUMNER] and the Senator
from Missouri [Mr. GRATZ BROWN], at that time advocated
Reconstruction upon a basis including negro suffrage.”

And Mr. Doolittle then proclaimed that more than twenty
Republican Senators, who had stood with him, “advocating
Reconstruction upon the white basis,” now “go over to the side
of the Senator from Massachusetts, and advocate his theory
of Reconstruction upon the basis of negro suffrage and white
disfranchisement.”[153]

Then came another speech by the same Senator, in which he
describes Mr. Sumner as adding to his demands only to find them
adopted by Senators who had begun by opposing him.

“My friend from Massachusetts ought to feel a sense of
profound satisfaction to see the progress they have made. I
mean no discourtesy, when I say the ideas advanced by him
that night, rejected then by a majority of four to one,
rule the Senate now. Not only have they educated, they have
Sumnerized the Senate.”[154]

Mr. Hendricks, of Indiana, the Democratic leader of the
Senate, differing widely from Mr. Sumner, in the debate on the
Supplementary Reconstruction Bill, gave this testimony:--

“I said in the Senate, a year or two ago, that the course
of things is this: the Senator from Massachusetts steps out
boldly, declares his doctrine, and then he is approached,
and finally he governs. Believing that he is in the
right,--I concede that belief to him as a Senator,--his
place in this body and before this country to-day is
a very proud one. He was told somewhat sneeringly, two
years ago, that among his party friends he stood alone;
and to-day they all stand upon his position. This is a
compliment and indorsement of sagacity and intelligence
that but few men receive in the course of a public
life.”[155]

THE PRESS.

From the Senate the question was transferred to the great arena
where pamphlets, reviews, and newspapers were the disputants.
Here the opposition in the Senate found frequent expression.
The Resolutions by their positive character offered a full
front, and they were openly attacked.

Public meetings and committees also made them the subject of
discussion,--especially a great meeting at Cooper Institute,
New York, and a meeting of the German Republican Committee in
New York, where they were fully sustained.[156]

The _North American Review_,[157] in an elaborate article,
under the title of “Constitutional Law,” afterwards published
in a pamphlet with the author’s name[158] on the title-page,
treated the Resolutions with a severity which may be judged by
the concluding words.

“It is to be hoped that disloyalty will not become
more general by reason of threats of conquest, or
by propositions that the United States shall become
_administrator de bonis non_ of the seceding States.
One description of treason against the United States
consists ‘in adhering to their enemies, giving them aid
and comfort.’ Mr. Conway[159] and Mr. Sumner have given
the ‘aid and comfort.’ Had they sent in their _adhesion_
at the same time, they would have done the Union much less
mischief.”

Not content with this article, the learned author addressed the
following letter to the _Boston Journal_.

“UNCONSTITUTIONAL LEGISLATION.

“DEAR SIR,--Will you permit me to say, that, the
sooner the Republican party cuts itself loose from
all unconstitutional projects (whether they relate to
emancipation by proclamation, conquering States and holding
them as Territories, confiscation without trial, or any
other measure not warranted by the Constitution), the
sooner it will begin to provide for its own salvation.

“Very truly yours,

“JOEL PARKER.

“CAMBRIDGE, May 5, 1862.”

On the other side, Dr. Brownson, the able and indefatigable
Catholic writer, sustained Mr. Summer in a powerful article,
entitled “State Rebellion, State Suicide.”[160] A few sentences
will show its character.

“The slave-owners, by their rebellion, have unquestionably
forfeited their right under the Federal Constitution to be
protected in their slave property, or, as to that matter,
in any other species of property. If Slavery be ever again
recognized as legal, therefore, the responsibility will
attach not to Slave States only, but to the whole people of
the United States, and we of the Free States will become,
clearly and decidedly, _participes criminis_.”[161]

“We hold with Mr. Sumner in his noble Resolutions,
creditable alike to him as a statesman and a lawyer, that
the State by rebellion commits suicide, and lapses as a
civil and political entity. All laws, customs, or usages,
depending for their vitality, force, or vigor on the State,
are rendered null and void by its secession, and are to be
treated as _non avenues_. Slavery exists in any country
only by municipal law,--in no country by the _jus gentium_.
In our political system it exists by the local law, or by
the law or usage of a particular State, in distinction from
a law or usage of the United States.”[162]

“The Rebellion, in a word, kills the whole State and
everything dependent on it. Whether the State be revived
and permitted to return to the Union depends entirely on
the good pleasure of the Federal authority. It cannot be
claimed as a right by the population on the territory of
the defunct State. As they could not take the territory
out of the Union, and as they, so long as they remain on
it, are within the jurisdiction of the United States,
the Federal Government has authority to govern them, and
may govern them either as a Territory or as a conquered
province.”[163]

“The two most important measures ever introduced into
the American Congress are, first, the resolutions of Mr.
Sumner in the Senate, declaring that a State by rebellion
commits suicide, and, second, General Ashley’s bill in
the House, from the Territorial Committee, providing for
the government of the rebellious States as Territories.…
Their adoption would save constitutional government, and
give new guaranties of man’s capacity for freedom. But
whether these measures be adopted or not, Mr. Sumner’s
resolutions will serve as a platform on which will take
their stand all in the country worthy of consideration for
their political sagacity, their wise statesmanship, their
disinterestedness, and their nobility of sentiment.”[164]

The newspapers were not behind the quarterlies in earnestness
of difference; but citations from them will not add to the
case already stated. An article in the _Temps_, an Imperialist
organ at Paris, is interesting, as showing that the debate had
crossed the ocean to France.

“The confidence of the nation possesses the Washington
Cabinet, too often accessible to incertitude and
discouragements, and its members seem about to rally to
the system presented by Mr. Sumner. It is known that the
Constitution gives to Congress the absolute power over what
is called the Territories,--that is to say, the territorial
portions not yet incorporated politically into the Union.…
The practical consequence which Mr. Sumner draws from that
can be divined. He proposes to consider the Rebel States
as simple Territories, which necessarily after victory
will return one after another to their vitality. Then,
according to the manner in which the Washington Government
and Congress shall pronounce definitively on this supreme
question, can admittance into the Union be refused to
States which do not abolish Slavery or regulate it in a
sense favorable to Abolition.”[165]

CORRESPONDENCE.

The response by letters showed that Senatorial protest and
newspaper criticism did not prevent the acceptance of the
Resolutions by earnest, thoughtful people, anxious for decisive
measures and a true preparation for the future. Here was a plan
of Reconstruction without Slavery, and this was a wide-spread
longing of hearts.

Hon. John Jay, afterwards Minister at Vienna, wrote from New
York:--

“There is no question about the fact that Slavery in the
Rebel States has ceased to exist, within the meaning and
under the protection of the Constitution.

“I have thought somewhat on the matter, and have just
completed an argument on it, which I proposed to include in
my lecture before the Washington Association. The Southern
States have ceased to be States of the Union; their soil
has become national territory; and the slaves, in the eyes
of the Constitution, are freemen. I wish your resolutions
had been referred to some committee from whom we could have
had a careful report in their favor, even though it were a
minority report, to get the argument before the country.”

Charles T. Rodgers, President of the Young Men’s Republican
Union, wrote from New York:--

“I have just read the preamble and resolutions offered
by you in the Senate, in which you define the position
and status of the revolted States, and of persons held to
service under the laws thereof.

“I cannot refrain from expressing to you, personally, my
pleasure at the fact that the true doctrine on this subject
has been so clearly laid down. I am sure that your theory
is the true one, and, in fact, the only one this Government
can consistently follow, and the only one which seems to
offer a plain path out of the maze of conflicting legal and
constitutional points in which so many of our public men
seem to have become entangled. The States, by seceding,
have committed suicide. The slaves therein are _de facto_
free. Stick to that, and you will come out all right.”

Hon. Charles A. Dana, the accomplished journalist, afterwards
Assistant Secretary of War, wrote:--

“I fully appreciate the difficulty of settling the South
after it is conquered. I don’t see how your plan can be
avoided; _bon gré, mal gré_, it is what we all must come
to.”

Park Benjamin, writer and poet, who had not formerly
sympathized with Mr. Sumner politically, wrote from New York:--

“Your Territorial plan is the only right and just one, let
the short-sighted geese hiss at it as they may.”

William Herries, journalist, wrote from New York:--

“It was my pleasure to-night to be present at the meeting
of the German Republican Central Committee, and it was
truly refreshing to witness the enthusiasm manifested in
behalf of those lofty sentiments embraced in your Rebel
Territory Bill. A Memorial is now in course of preparation
for you on the subject.”

Hon. J. Y. Smith, of the _Wisconsin Argus_, wrote from
Madison:--

“Early in the Rebellion I took the same view of the effect
of Secession upon the Rebel States as is set forth in your
Resolutions,--suggested it to our Wisconsin Senators, and
wrote several articles in support of it, but could find
very few public journals or public men to agree with me.
When your resolutions on that subject appeared, I hailed
them with joy, and have been exerting the little influence
I have to instil the principle into the public mind. It is
the true theory, and I wonder why any friend of the country
can object to it. By their rebellion they have tumbled
Slavery right into our bag, and if we shake it out, our
life will go for its life.”

Thomas Garrett, a Quaker Abolitionist, wrote from Wilmington,
Delaware:--

“I yesterday read the resolutions thou offeredst on the
11th of this month, and think the view thou hast taken is
correct: that any vote of secession, or other act by which
a State may undertake to put an end to the supremacy of the
Constitution within its territory, is inoperative and void
against the Constitution, and, when sustained by force, is
practical abdication by the State of all rights under the
Constitution; and every such State ought to be expunged and
revert back into a Territory, and begin anew. I thought,
six months since, that ere this Slavery would have been
abolished by the War Power in all the seceded States, but
at present I have very little hope of it. It seems to me
incredible that the President and Cabinet should have so
much more sympathy for the Rebels than they have for the
loyal North.”

W. G. Snethen, lawyer, earnest against Slavery, wrote from
Baltimore:--

“Your admirable resolutions respecting the status of
the Rebel region, in which the Rebellion has killed
Slavery, did my heart good, especially as indicating an
Administration policy. I hope and pray that this doctrine
speaks the mind of Lincoln, and that he will not flinch
from its execution with the whole power of the Government.…
Oh that Congress may adopt your set just as they came from
your mighty pen, and then follow them up by legislation to
give them active life!”

Edward P. Brownson communicated the opinion of his father,
Orestes A. Brownson, in a letter from Elizabeth, New Jersey.

“I suppose my father has long since told you of his
delight, when you introduced your Resolutions into the
Senate. The joy with which he read them, and the attention
he has given them, you will find very clearly expressed
in the deep and careful study he has given the subject,
evident in his article on _State Rebellion, State Suicide_;
and he would much rather see them pass than win a victory
in the field.”

Mrs. Maria Weston Chapman, the devoted Abolitionist, and among
the earliest in the warfare, wrote from Boston:--

“Thanks a thousand-fold for the eleventh volume Pacific
Railroad Survey. Your Resolutions are _the great Pacific
Road to Freedom_,--made possible by the War Power though
they be. I thank you a million-fold. To say so is no
exaggeration, since all done in this behalf is done for all
men and all time; and from the hour that Garrison struck
the first blow, I have ever felt that the highest numbers
were needed fitly to express human gratitude for services
rendered to human nature.”

Jabez C. Woodman, an able lawyer, wrote from Portland, Maine:--

“You are not without some judicial authority. As much
as ten months ago I heard Judge Ware[166] express the
opinion that the Union troops would prevail. He then said
he was in favor of coercion,--that he would subjugate the
Rebel States, and, taking them at their word, he would
not acknowledge them at once as States, but would govern
them as conquered provinces, till they were fit to govern
themselves.”

Elizur Wright, the early and constant Abolitionist, wrote from
Boston:--

“Your Resolutions are _the very thing_. Had they been
passed at the extra session, the war would have been over
before now. They, or something to the same effect, must
be passed before spring opens, or we are lost. Victories,
without this _law_ of the _conquest_, cannot save us. Quite
the reverse. I beg you to press the resolutions with any
amount of animosity or violence, and to know that all that
is alive at the North will sustain you.

“There are thousands ready to see the present Government
blotted out in blood and chaos rather than see the old
curse reinstated. On us, not on our children! There has
been fooling enough. Heaven bless you!”

Rev. George C. Beckwith, Secretary of the American Peace
Society, wrote from Boston:--

“I had some difficulty for a time about your _Territorial_
views; but I am coming fully to the conclusion that we must
deal with all rebellion in some such way, before the South
can be brought to any terms. We must have and keep them all
in our grasp, until they prove themselves, by their good
behavior, fit to come again into the Union.”

Charles Husband, an intelligent citizen, whose correspondence
was always valuable, wrote from Taunton, Massachusetts:--

“I have to thank you for a copy of your Resolutions, and
perhaps you will not deem me intrusive, if I wish you a
hearty God-speed in the work you have undertaken,--a work
the successful accomplishment of which is large enough to
fill the measure of the highest ambition,--a work which
will redeem the nation from its low estate, which asserts
the nation’s sovereignty and self-existence, instead of
‘borrowing leave to be,’--which demands for the nation the
paramount allegiance of every inhabitant of its territory,
and sweeps away every institution which interposes itself
between the nation and that allegiance,--which calls the
Government from being the minister of oppression and the
mere dispenser of patronage, to take upon itself the high
purposes and duties for which ‘governments are instituted
among men,’--which transmutes four millions of chattels
into men.

“Allow me to suggest (although it has not, probably,
escaped your notice), that the constitutional requirement,
that every legislative, executive, and judicial officer
in the States shall be sworn to the support of the
Constitution of the United States, leaves the whole of the
Rebel territory without a civil officer whom the Government
can recognize, as every such pretended officer is just as
much a usurper in the eye of the Constitution as Jefferson
Davis himself.”

Henry Hoyt, publisher and bookseller, wrote from Boston:--

“I cannot sleep another night till I have thanked you
from the bottom of my heart for your bill resolving
Rebeldom into Territorial relations again. Of all measures
ever introduced into Congress, nothing so completely meets
the case of the present exigency of our country’s history,
and _nothing but this_ can make the confederacy of the
whole land stand in safety a single year. We may continue
to win battles, but, so long as the ruins of Slavery exist
in the body politic, we shall stand on a volcano.”

But the most important commentary on the Resolutions is found
in the measures of Reconstruction subsequently adopted, all of
which stand on the power of Congress over the Rebel States,
which they positively assert, including especially the power
and duty to guaranty a republican form of government.

The Report of the Joint Committee on Reconstruction, drawn up
by its Chairman, Mr. Fessenden, asserted that the Rebel States
“having voluntarily renounced the right to representation, and
disqualified themselves by crime from participating in the
Government, the burden now rests upon them, before claiming to
be reinstated in their former condition, to show that they are
qualified to resume Federal relations.” It then laid down the
rule:--

“Having, by this treasonable withdrawal from Congress,
and by flagrant rebellion and war, forfeited all civil
and political rights and privileges under the Federal
Constitution, they can only be restored thereto by the
permission and authority of that constitutional power
against which they rebelled, and by which they were
subdued.”[167]

Here was the power of Congress asserted,--but very tardily, and
after original denial.

* * * * *

A calm observer has recently recorded his regret that the
Resolutions were not adopted at once, and consistently
acted upon. After saying that “the mover was overwhelmed
with a tornado of denunciation and abuse,” and that the
opposition “rendered any satisfactory reconstruction as nearly
impracticable as can well be imagined,” the writer proceeds:--

“Time has fully vindicated the wisdom of Mr. Sumner’s
course, and many of the Senators against the measure now
admit their mistake,--while every man who comes here from
the South says that their present miserable condition grows
out of that great error.

“To the Democratic party the rejection of the Resolutions
was a God-send. It made the continued existence of the
Democratic party possible.”[168]

Such is the first chapter of Reconstruction.

TREASURY NOTES A LEGAL TENDER.

SPEECH IN THE SENATE, ON THE CLAUSE MAKING TREASURY NOTES A LEGAL TENDER, FEBRUARY 13, 1862.

February 13th, the Senate having under consideration a bill
from the House of Representatives to authorize the issue of
United States notes, and for the redemption or funding thereof,
and for funding the floating debt of the United States, Mr.
Collamer, of Vermont, moved to strike out the following words:--

“And such notes herein authorized, and the notes authorized
by the Act of July 17, 1861, shall be receivable in payment
of all public dues and demands of every description, and of
all claims and demands against the United States of every
kind whatsoever, except for interest upon bonds and notes,
which shall be paid in coin, _and shall also be lawful
money and a legal tender in payment of all debts, public
and private, within the United States, except interest as
aforesaid_.”

Mr. Collamer stated that some desired him to try the sense of
the Senate on the question of private debts, but he preferred
the above amendment, “that these notes shall not be tenderable
upon any debts due by the Government or by individuals.” On
this proposition he had already made an elaborate speech.

Mr. Fessenden also spoke elaborately upon the whole bill;
but he characterized the legal tender clause as “the main
question.” Here he said:--

“The question, then, is, Does the necessity exist?… If the
necessity exists, I have no hesitation upon the subject,
and shall have none. If there is nothing left for us to do
but that, and that will effect the object, I am perfectly
willing to do that.”

Mr. Sumner spoke last in the debate, and at least one Senator
acknowledged that on the question of constitutional power he
had been changed by this speech. The vote was then taken on the
amendment, and resulted, yeas 17, nays 22.

So the motion to strike out the legal tender clause was
rejected.

Mr. Doolittle moved an amendment so as to make the notes “a
legal tender in payment of all public debts, and all private
debts hereafter contracted within the United States,” which was
rejected without a division.

Mr. King also moved a comprehensive amendment, which likewise
struck out the legal tender clause; but it was rejected without
a division.

The bill was then passed, yeas 30, nays 7.

MR. PRESIDENT,--I am sorry to ask the attention of the Senate at this late hour; but the importance of the question must be my apology.

In what I say I shall confine myself exclusively to a single feature of the present bill. Others may regret that the exigencies of the country were not promptly met by taxation,--or that at the beginning a different system was not organized by the Treasury, through which the national securities might have found a readier market,--or that the national credit was not sustained, at the period of bank suspension, by the resolute redemption of the Government securities in coin at any present sacrifice. But it is useless to discuss these questions. The time for such discussion has passed. The Tax Bill is not yet matured. The system adopted by the Treasury cannot be changed at once, if it were desirable. It is too late to organize the redemption of the national securities in coin on the daily application of holders. Meanwhile the exigencies of Government have become imperative. Money must be had.

And we are told that the credit of Government can be saved only by an act that seems like a forfeiture of credit. Paper promises are to be made a legal tender, like gold and silver; and this provision is to be ingrafted on the present bill authorizing the issue of Treasury notes to the amount of $150,000,000.

All confess that they vote for this proposition with reluctance, while to many it seems positively unconstitutional. Of course, if unconstitutional, there is an end of it, and all discussion of its character is superfluous. I am compelled by candor to declare that the doubts which perplex me do not proceed from the Constitution. If the question of constitutionality were in all respects novel, or, as lawyers phrase it, of first impression, then I might join with friends in their doubts. But it seems to me that the constitutional power of Congress to make Treasury notes a legal tender was settled as long ago as when it was settled that Congress might authorize the issue of Treasury notes; for from time immemorial the two have gone together, one as incident of the other, and, unless expressly severed, they naturally go together.

It is true that in the Constitution there are no words expressly conferring upon Congress the power to make Treasury notes a legal tender; but there are no words expressly conferring upon Congress the power to issue Treasury notes. If we consult the text, we find it as silent with regard to one as with regard to the other. There is no silence with regard to the States, which are expressly prohibited to “emit bills of credit,” or “make anything but gold and silver coin a tender in payment of debts.” Treasury notes are “bills of credit”; and this prohibition is imperative on the States. The inference is just, that this prohibition, expressly addressed to the States, was not intended to embrace Congress indirectly, as it obviously does not embrace it directly. The presence of the prohibition, however, shows that the subject was in the minds of the framers of the Constitution. If they failed to extend it still further, it is reasonable to conclude that they left the whole subject in all its bearings to the sound discretion of Congress, under the ample powers intrusted to it.

The stress so constantly put upon the prohibitions addressed to the States will justify me in introducing the opinion of Mr. Justice Story, in his Commentaries.

“It is manifest that all these prohibitory clauses, as to
coining money, emitting bills of credit, and tendering anything
but gold and silver in payment of debts, are founded upon
the same general policy, and result from the same general
considerations. _The policy is, to provide a fixed and uniform
value throughout the United States_, by which commercial
and other dealings of the citizens, as well as the moneyed
transactions of the Government, might be regulated.”[169]

Plainly, no inference adverse to the powers of the National Government can be drawn from these prohibitory clauses; for, whatever may be these powers, there will be a fixed and uniform value throughout the United States.

As we proceed, the case becomes more clear. The States are prohibited to issue “bills of credit”; but there is no such prohibition on the National Government, which may do in the premises what the States cannot do. The failure to prohibit is equivalent to a recognition of the power. In other words, the National Government may issue “bills of credit,” which have been characterized by no less a person than Chief-Justice Marshall, in pronouncing the opinion of the Supreme Court, when he said: “To ‘emit bills of credit’ conveys to the mind the idea of issuing paper intended to circulate through the community for its ordinary purposes _as money_, which paper is redeemable at a future day.” And then again the learned Chief Justice said: “The term has acquired an appropriate meaning; and ‘bills of credit’ signify _a paper medium_, intended to circulate between individuals, and between Government and individuals, for the ordinary purposes of society.”[170] This “money” and “paper medium” the States are prohibited from emitting; but there is no such prohibition on the National Government,--as there is not a single word to prohibit the National Government from determining what shall be a legal tender.

From the proceedings of the National Convention it appears that a clause in the first draught of the Constitution empowering Congress to “emit bills on the credit of the United States” was after discussion struck out. In the debate on this clause, Mr. Madison asked: “Will it not be sufficient to prohibit the making them _a tender_? This will remove the temptation to emit them with unjust views.” Mr. Mason said, “Though he had a mortal hatred to paper money, yet, as he could not foresee all emergencies, he was unwilling to tie the hands of the [National] Legislature. He observed, that the late war could not have been carried on, had such a prohibition existed.” Mr. Mercer was “opposed to a prohibition of it altogether. It will stamp suspicion on the Government to deny it a discretion on this point.” Mr. Butler remarked, that “paper was a legal tender in no country in Europe. He was urgent for disarming the Government of such a power.” Mr. Mason was “still averse to tying the hands of the Legislature _altogether_. If there was no example in Europe, as just remarked, it might be observed, on the other side, that there was none in which the Government was restrained on this head.” Mr. Gorham was “for striking out, without inserting any prohibition.” And this view finally prevailed.[171] Thus it appears that the suggestion was made to prohibit the making of bills a tender; but this suggestion was not acted on, and no such prohibition was ever moved. It is evident that the Convention was not prepared for a measure so positive. Less still was it prepared for a prohibition to emit bills. Such is the record. While all words expressly authorizing bills were struck out, nothing was introduced in restriction of the powers of Congress on this subject.

Thus was the whole question practically settled; and the usage of the Government has been in harmony with this settlement. Treasury notes were issued during the war of 1812, and in the monetary crisis of 1837, also during the war with Mexico, and constantly since, so that the power to issue them cannot be drawn into doubt. If there was any doubt originally, unquestioned practice, sanctioned by successive Congresses, has completely removed it. I do not stop to consider whether the power is derived primarily from the power “to borrow money,” or the power “to regulate commerce,” or from the unenumerated powers. It is sufficient that the power exists.

But I see not how to escape the conclusion, that, if Congress is empowered to issue Treasury notes, it may affix to these notes such character as shall seem safe and proper, declaring the conditions of their circulation and the dues for which they shall be received. Grant the first power, and the rest must follow. Careful you will be in the exercise of this power, but, if you choose to take the responsibility, I see no check in the Constitution.

The history of our country furnishes testimony, which has been gathered with extraordinary minuteness in an elaborate opinion by Mr. Justice Story.[172] I follow mainly his authority, when I set it forth.

It appears that the phrase “bills of credit” was familiarly used for bank-notes as early as 1683 in England, and also as early as 1714 in New England. But the first issue in America was in 1690, by the Colony of Massachusetts, and the occasion--identical with the present--was to pay soldiers, returning unexpectedly from an unsuccessful expedition against Canada. These notes were from two shillings to ten pounds, and were receivable for dues at the Treasury. Their form was as follows: “This indented bill of ten shillings, due from the Massachusetts Colony to the possessor, shall be in value equal to money, and shall be accordingly accepted by the Treasurer, and Receivers subordinate to him, in all public payments, and for any stock at any time in the Treasury.” Here followed the date, and the signatures of the Committee authorized to issue these notes.[173] Such was their depreciation, that these notes could not command money or commodities at money price, although the historian, Hutchinson, who has recorded these interesting facts, does not hesitate to say that they had better credit than King James’s leather money in Ireland only a short time before.[174] Being of small amount, they were soon absorbed in the payment of taxes. But this example did not stand alone.

The facility with which paper money is created renders it difficult to withstand the temptation, unless a Government is under the restraint of correct principles of finance, which at that early day were utterly unknown. An excuse for Massachusetts may be found in the general poverty at that time, the lack of precious metals, and the distance from marts of trade. In 1702 there was another issue of bills of credit, for £15,000, which, by a subsequent Act, in 1712, were made a tender for private debts. Under the continued cry of scarcity of money, bills of credit were again issued in 1716, to the amount of £150,000, to be lent, for a limited period, to inhabitants, whose lands were mortgaged as security. These were not made a tender; but they were receivable at the Treasury in discharge of taxes, and also of mortgage debts. Other bills were afterwards issued, so that paper money was common. The historian who has exposed this condition of things does not hesitate to liken this currency to pretended values stamped on leather or paper, and declared to be receivable in payment of taxes and in discharge of private debts. The natural consequence was a fatal depreciation, so that an ounce of silver, worth in 1702 six shillings and eight pence, in 1749 was equivalent to fifty shillings of this paper currency.[175] At the present moment I do not seek to exhibit the character of this currency, but simply the original association between bills of credit and the idea of a tender.

But Massachusetts was not alone. The neighboring colony of Rhode Island, as early as 1710, followed her example, and in 1720 made her bills a tender in payment of all debts, except certain debts specified. Connecticut issued bills at different periods, beginning with 1709, some of which were made a tender, and some not. New York began in the same year, substantially following Massachusetts; and her bills were generally made a tender. In 1722 Pennsylvania issued bills, secured on mortgage, and made a tender. In 1739 Delaware did likewise, making her bills a tender. So also did Maryland, in 1733, to the amount of £90,000; but other bills were issued by Maryland, in 1769, which were not made a tender.

The example of Virginia is more conspicuous, although not so early in time. The very term, “Treasury notes,” now used as the equivalent of “bills of credit,” first appears in her colonial legislation, when, in 1755, they were made a tender in payment of debts.[176] There were successive emissions in 1769, 1771, and 1773, which were not made a tender,--and then in 1778, and at other times afterwards, which were made a tender. That these “Treasury notes” were deemed “bills of credit” is demonstrated by the legislation of the State, especially by the Act of May, 1780, which, after reciting that the exigencies of the war require the further emission of paper money, authorizes new “Treasury notes,” and proceeds to punish with death any person who shall forge “any bill of credit _or_ Treasury note to be issued by virtue of this Act.”[177]

I find that North Carolina, as early as 1748, sent forth bills of credit which were made a tender, and many subsequent emissions were authorized. South Carolina began in 1703; but these bills, bearing interest at twelve per cent, do not seem to have been made a tender. Others issued by this colony, at different times afterwards, were made a tender. In 1760 Georgia authorized bills of credit on interest, and secured by mortgage of the property of the receivers, which were made a tender.

The extensive employment of paper money in New England aroused the jealousy of the Imperial Parliament, which, by the Act of 25th June, 1751,[178] expressly forbade the issue of any “paper bills, or bills of credit,” except for certain specific purposes, or upon certain specified emergencies. The Act constantly speaks of these two as equivalent expressions, thus seeming to show that “bills of credit,” in their true meaning, were what is familiarly called “paper money,” with the incidents of such money. But the Act proceeds to limit these incidents by declaring expressly that “no paper currency, or bills of credit,” issued under it, shall be a tender in payment of any private debts or contracts whatsoever, with a proviso that nothing therein contained should make any bills then subsisting a tender. That Parliament should deem it necessary, by special enactment, to take from bills of credit the character of a tender, attests the customary association between these two ideas.

During the Revolutionary War, under the exigencies of that time, with a country without resources and a treasury without money, bills of credit, known as Continental money, were issued by Congress. But, while receivable in discharge of taxes and other public dues, they were not made a tender by Congress, although the States were recommended to make them such.

MR. COLLAMER. And did make them so.

MR. SUMNER. At the adoption of the National Constitution, the people, to their wide-spread cost, had become familiar with bills of credit and their incidents, while all conversant with Colonial history must have known the part which bills of credit played for nearly a century, not only as a help to currency, but as a tender, constituting paper money. And yet, with all this ample knowledge,--present certainly to the framers of the Constitution, if not to the people,--no express words on this subject were introduced into the text of the Constitution, except with regard to the States. The conclusion from this silence, under all the circumstances, is strong, if not irresistible.

But the omission of the Constitution with regard to bills of credit was practically supplied by Congress, which has not hesitated to assume the existence of the power. If the Constitution failed to speak, Congress has not failed; and the exercise of this power cannot now be questioned, without unsettling our whole financial system. But we have seen that throughout our Colonial history the tender was a constant, though not inseparable, incident of the bill of credit,--that, indeed, it was so much part of the bill of credit that the Imperial Parliament positively interfered to separate the two, and, while sanctioning the bill of credit, forbade the tender. And now, if this historical review is properly apprehended, if it is not entirely out of place, it must conduct to the conclusion, that, whatever may be the present question of policy, the power to make Treasury notes a tender has precisely the same origin in the Constitution with the power to create Treasury notes. It is true that you may exercise one power and decline the other; but if you assume the power to issue bills of credit, I am at a loss to understand how you can deny the power to make them a tender. The two spring from the same fountain. You may refuse to exercise one or both; but you cannot insist upon one, under the Constitution, and reject the other.

* * * * *

Assuming the constitutionality of this proposition, or rather declining to admit the satisfactory force of the constitutional arguments against it, I am brought to a question which has, for me, more of difficulty and doubt: I mean the policy of exercising the power at this moment. It is not too much to say that this question concerns the national character, as well as the national welfare, while intelligent and patriotic men differ earnestly with regard to it. Decide it as we may, we cannot escape anxiety on the subject. Take which way we will, we cannot escape the just sense of responsibility. Seeking the truth only, and jealous of that good name which is to a Government one of its best possessions, I shall consider the question frankly; nor shall I disguise any of the difficulties which it presents, whether from principle or from experience. This is not the time for concealment, and I insist, that, if the power is exercised, its true character shall be understood. I invoke, also, the examples of history, to make us pause; but it will be my duty to show that there are other examples calculated to sustain the Government in the policy it now so urgently recommends.

If the Treasury notes of the United States were at this moment convertible into coin, there would be no occasion to declare them a tender; for they would be everywhere, at least in our own country, as good as coin. But the suspension of the banks was followed by suspension of the Treasury, and its notes are now inconvertible paper, which it is proposed to sustain artificially by declaring them a tender. If this proposition be adopted, the Treasury will be enabled to substitute bits of engraved paper for money. Of course, such a proposition, on its face, is obnoxious to objections that make upon me an impression not to be disguised.

Looking at the history of paper money, especially in our own country, we find no encouragement. Its evils were vividly portrayed by the “Federalist,”[179] and have been powerfully presented in this debate by the Senator from Vermont [Mr. COLLAMER]. Congress, during the Revolution, began, as early as 1775, with bills to the amount of $3,000,000, on their face declaring the bearer entitled to receive the sum specified in “Spanish milled dollars, or the value thereof in gold or silver,” according to a certain resolution of Congress. The bills were receivable for taxes, and the thirteen colonies were pledged for their redemption. Other emissions followed, and, as their credit began to fail, Congress went so far as to declare that whoever refused to receive this paper in payment should “be deemed, published, and treated as an enemy of his country.”[180] As the paper continued to depreciate, Congress became more violent in its support, and even ventured to recommend it as of peculiar value. “Let it be remembered,” said Congress, “that paper money is the only kind of money which cannot ‘make unto itself wings and fly away.’”[181] The sum-total of these bills at last reached upwards of three hundred millions, which in 1780 became so utterly worthless in the hands of their possessors that they ceased to circulate, and have ever since been treated only as curiosities, without positive value. No serious proposition for their redemption has ever been made.

The French _assignats_, amounting to the enormous sum-total of _nine thousand million dollars_,[182] issued during the fiery excitements of the Great Revolution, shared the fortunes of American Continental money, passing into the limbo of “things transitory and vain.” Perhaps there is not a country on the European continent, which, during the fearful wars that followed, did not encounter the same experience. I have heard it said that old soldiers in Denmark lighted their pipes with paper money, which had become to them only the record of a broken promise.

Power of all kinds is liable to abuse, and experience shows that the power to issue inconvertible paper is no exception to this prevailing law. The issue may be moderate at first, and sustained by plausible reasons, but it breaks soon into excess. Of course, actual value, or its equivalent, is the life of money, giving to it a circulating quality; and when money begins to be suspected, it loses its circulating quality. But inconvertible paper, even when made a tender, has no actual value, and circulates only because Government commands its circulation. It has no present worth beyond the engraving; therefore all ordinary checks to undue issue of money are wanting. Nothing exists to prevent excess and consequent depreciation; and this danger is verified by history. I refer to it now that I may not seem indifferent to any of the perplexities which surround us.

In some countries a legal tender is gold and silver; in others it is gold alone. In England, since 1816, gold, and not silver, has been the tender for sums of forty shillings and upwards; and since 1833 the notes of the Bank have been a tender for sums over five pounds, everywhere except at the Bank itself and its branches. But it is to be borne in mind that both these metals have positive value in the market equivalent to that of coin; so that coin is value itself. But convertible paper is not value itself; it is only the representative of value; while it is doubtful if inconvertible paper can be called the representative of anything in particular. These considerations are not decisive of the policy now proposed, but they justly incline us to a prudent hesitation.

If we are not deterred by the bad examples of history, or by the acknowledged danger of excess and consequent depreciation,--if we are willing to take the chance of seeing Treasury notes in the same list with Continental money and French _assignats_, and of having returned soldiers in old age light their pipes with the worthless paper,--if these suggestions are put aside as exaggerated or irrelevant, I ask you not to forget that a constant aim of good government is to secure the immediate convertibility of paper into coin. But, instead of securing such immediate convertibility, or taking any steps towards it, you will for the present renounce it.

Pardon my frankness, Sir, if I declare that the present proposition, when examined carefully, seems too much like bad faith. I say it _seems_: I would not speak too strongly. Is there not bad faith towards creditors, who are compelled to receive what is due in a depreciated currency? Is there not bad faith towards all abroad, who, putting trust in our integrity, national and personal, have sent their money to this country in gold or its equivalent? And just in proportion as this is so, you cannot doubt that we shall suffer alike in character and resources too; for what resource is greater to a nation or to an individual than a character for integrity? The present proposition must be followed soon by others,--even to the extent of $1,000,000,000. But where shall this vast amount be obtained, and at what cost, when it is seen that we have already undertaken to authorize inconvertible paper as a tender? Credit is volatile and sensitive, and will not yield to force. Do you propose the right way to win the delicate possession? It will not come to you from abroad, where money usually abounds. Will it salute you here at home? And is it good economy to obtain the amount you seek by a policy which will create a disturbing impediment to all your efforts for the larger amounts soon to be required? I put these questions without answering them. It is sufficient for me that I open the difficulties before us; and here I follow the Senator from Maine [Mr. FESSENDEN], Chairman of the Committee on Finance, who commenced this debate.

In courts of law, experts are summoned to testify on questions of science or art within their special knowledge. If, on this occasion, experts in finance or currency were summoned, I do not know that we should be much enlightened; for, according to my observation, there are such differences among them, and, as the Senator from Maine [Mr. FESSENDEN] has pleasantly told us, such differences even in the same person, one day and the day after, that it is difficult to place reliance in their counsels. Some tell us that making Treasury notes a tender will be most beneficent; others insist that it will be dishonorable and pernicious. On each side strong words are employed. Which shall we follow?

Crossing the sea, we find similar differences, not, of course, with regard to the present proposition, which is not yet known there, but with regard to the principles entering into this debate. In England the general subject has occupied much attention. As late as 1857 it was brought before a distinguished Parliamentary Committee, and their Report is remarkable for the testimony of numerous witnesses whose experience and knowledge give authority to their opinions. The Report is a financial monument. But among these witnesses are some who were little disturbed by an inconvertible currency, although the weight of testimony was the other way.

Nobody was more positive than Nathaniel Alexander, Esq., head of the firm of Alexander & Co., India merchants. His attention being called to the proper means against the effects of panic on the Bank of England, he proposed, as an assistance to the Bank, another currency, inconvertible, and a tender for Government dues, under Act of Parliament. From its inconvertible character, such a currency, he said, would not be reached by panic, and would therefore contribute to the security of the Bank.[183] This testimony seems to maintain the principle of the present proposition; and I quote it, as showing that the proposition is not entirely without practical authority.

John Twells, Esq., a London banker for upwards of fifty years, also testified in favor of an inconvertible note under sanction of Government, and a legal tender. Here are his answers to two questions.

“What do you conceive to be the advantage of an inconvertible
note of that kind over a convertible note payable to bearer
on demand?--It would prevent a drain of bullion, when it is
required for foreign trade; and it would give us, what is so
very essential, a domestic currency which is not influenced by
any foreign transactions whatever. If France or America wants a
quantity of gold, it ought not to interfere with our domestic
currency. Our merchants and all our trade surely should not
suffer because America wants gold.

“Do you think that that currency would run the risk of ever
being depreciated in value,--that is to say, that inconvertible
five pound notes would not exchange for five sovereigns?--I do
not know, as compared with sovereigns; that, I think, is of no
consequence in the world. We want it for our internal commerce,
and we want it to pay Government their taxes.”[184]

Two other questions and answers may be given.

“You have been asked about the French assignats. Is not the
difference between the currency which you recommend and the
assignats just this, that the Government are bound to take
back whatever they issue?--Precisely; and that makes all the
difference.

“And, with the French assignats, they refused to take back
what they had issued?--Yes. A corrupt Government may commit
such an excess as they did in France, where the amount of
their assignats was, if I remember right, about £300,000,000
sterling. They could not receive them back; they could not get
their taxation, on account of the revolution which was going
on; therefore the assignats fell to nothing.”[185]

Another witness was Mr. Edward Capps, who described himself as engaged in the surveying and building trade for thirty years, so that his attention had been directed to the influence of credit on the manner in which buildings are erected in London. He, too, testified in favor of inconvertible paper. Here are some of his answers.

“Would you recommend the issue of an inconvertible paper
currency, with the view of remedying the evils which you
describe?--I was present and heard the examination of Mr.
Twells, and he was mentioning a project, by which he thought,
that, instead of the £14,000,000 of paper which the Bank issues
upon securities, you might go to the extent of £20,000,000 of
an inconvertible paper. I think I understood the proposition
rightly, as being to that effect. Though it is not exactly the
proposition which I should make, yet I cannot see any objection
to that proposition myself.”[186]

“Do you believe that the paper which you recommend would be, on
the average, of the same value as the present bank-note, which
is convertible into gold?--I think that very shortly it would
be of a higher value than our present standard. If any person
had to be paid £10,000 fifteen years hence, and had the option
whether it should be paid in that way or in the standard of
gold, I think he would exercise a wise discretion in choosing
the paper.”[187]

“You are not in favor of what is called inconvertible paper, in
the sense of worthless paper, are you?--Not at all.

“How do you distinguish between your paper and the rags which
have in other cases been issued?--Unless I know the principle,
I cannot say.

“Take the French assignats.--The French assignats were issued
upon no principle at all, because no provision was made for
their redemption.”[188]

Against these witnesses was the testimony of a person perhaps the highest living authority on this question. I refer to Lord Overstone, known before his elevation to the peerage as Mr. Jones Loyd, the eminent banker, whose life makes him practically acquainted with this subject, while his liberal studies and various experience add to the solidity of his judgment. His testimony on this occasion, extending over almost three days, occupies nearly one hundred folio pages. Writers on finance have quoted it ever since, and practical men have accepted it as a guide. In reply to questions by the Committee, he declared himself strongly opposed to the issue of Government notes not payable in specie on demand. In his opinion “they would generate a state of utter confusion which could not be tolerated for three months.”[189] Then again:--

“It is quite clear that there would be a discount upon these
notes in the first place; they would not answer the purpose of
a circulating medium; it would throw everything into confusion
in the very first stage of the process: that would be the first
difficulty.”[190]

Here are his answers to other questions.