SPEECH HON. FREDERICK A. PIKE, OF MAINE TAXATION OF NATIONAL BONDS; DKUVKKED IN THE HOUSE OF REPRESENTATIVES, DECEMBER 17, 18G7. WASHINGTON: PRINTED AT THE CONGRESSIONAL GLOBE OFFICE. 1867. - -L.'_,/ : .,,- ^ VTA rf A " " TAXING OF NATIONAL BONDS. SPEECH HON, FREDERICK A, PIKE, OF MAINE, IN THE HOUSE OF REPRESENTATIVES, DECEMBER 17, 1867. The House being in Committee of the Whole on the state of the Union Mr. PIKE said: Mr. CHAIRMAN: Several days since I intro- duced a resolution looking to the taxation of national bonds, and I propose now to make some brief remarks upon it. I prefer doing this now, because when the revenue bill comes before the House for action the brief time allowed for discussion will not permit the exhibition of this proposition in its true light. I shall then ask a vote upon it ; and unless something better is suggested meanwhile to compass the same object I shall hope the meas- ure will meet the approbation of the House. In my judgment we have already postponed this taxation too long. In the Thirty-Ninth Congress I urged the necessity of it. Then it could have been done more readily, because it had not been the subject of popular discussion, and consequently the terms of it would have been more easily fixed upon. But Congress, like an individual, seldom does anything so long as it can be postponed, and so the propo- sition was thrown into the future to take its chances. Now the necessity is upon us. We must act or refuse to act in the midst of an unusual activity of financial discussion, both in Congress and in the country, and with the feeling strong upon us that the difference is very great between action and non- action. It is not to be disguised that public atten- tion has been largely turned toward this mat- ter. But I would not have the House act from popular clamor. I am quite sure it will not. There is courage enough in this House to resist popular influences when they are wrong. And I I know the members of this body will not refrain from acting because they may subject themselves to the charge of seeking the popular favor. I speak of the popular feeling because that is a strong reason why the subject should be examined. That fact brings the matter prop- erly before Congress for discussion. Let that consideration be given to the matter now which its importance demands. We certainly cannot go wrong in giving time to the investigation of a question which more than any other pertain- ing to taxation or finance occupies the public thought. Nor am I to be deterred from acting upon the subject because a large party has already in many sections perhaps everywhere in the country attempted to create a partisan advan- tage for themselves out of the non- taxability of these bonds. As a party, the Republican party has taken rio position upon this subject. Individual mem- bers of it differ, and as an organization having the control of legislation we must either acqui- esce in propositions for taxation or give the reasons for not doing it. We cannot answer the other side of the House with a sneer at its loyalty. The shake of Lord Burleigh's head was said to have contained a great deal of wis- dom in his day, but that day has passed. If we attempt to slough off those who propose this species of taxation as demagogues, as persons who would set class against class, or repudiate debts for the sake of votes, we shall make a mistake, and this is a time when we can hardly afford many blunders in financial legislation. If, as I believe after a patient examination of the subject, the soundest maxims of political economy and the highest practical wisdom demand action on this subject at our hands, we can hardly afford to refrain because the other side of the House votes with us. It would be but a sorry excuse to give constituents. Those of us who voted against impeachment had the unhappiness of having such associates, although we had the high satisfaction of know- ing that a majority of our political friends went with us. The public debt should not be a matter of partisan discussion. It arose out of the dire necessities of the country. It is a portion of the money price paid for our nationality. But it will be thrown into the canvass, and I care not if it is. I shall not mourn if it prove to be one of the immortal creations of the war. Let it remain as a huge, unsightly monument of the decay and corruption of a great party to whom for long years the people generously intrusted the management of their national concerns, and who, when rebuked for their many crimes against the public good and ejected from place, wickedly attempted to destroy the Government they could no longer control. It would be a beaconTof warning to the voters of the Republic not to intrust its destinies again to the hands of those who have proved so unworthy, and so run the risk of their plunging the country into another war and causing the creation of an- other debt. But I am not disposed to view the matter altogether as a partisan. We have the debt upon us. We must carry it along in good faith, as we agreed to do, and in due time we must pay it or renew it, feeling well assured that as the years go by the rapidly increasing property of the country will form an ampler base upon which to rest its burdens. The hundred mil- lion inhabitants that are by and by to con- stitute the people of the Republic, with the incalculable wealth that will be theirs, will bear this debt too easily to make it a subject of complaint. Our business is to "tide it over ;" and when the country has once settled upon the proper methods of carrying it we shall find our prosperity too elastic to be cramped by its weight. This debt now constitutes a great property a property recognized by our courts, subject to our laws of conveyance and descent, and protected by the national and State authorities. It is subject only to the laws of Congress, and Congress itself is bound by the terms of the acts which brought it into existence. The immense magnitude of this property has become so familiar to us that we fail to appreciate it except by comparison. It ex- ceeds in value the whole property of New England, New Jersey, and Delaware in I860, and is very considerably more than double the census valuation of the eight northern States lying west of the Mississippi. The whole property of the country in 1860, except slaves, was $14,000,000,000, and allowing an increase of fifty per cent., the great property repre- sented by this debt is worth one eighth of the whole of it. By the terms of its creation this property is "exempt from taxation by or under State authority." All the acts creating it in various but explicit terms exempt it from any but con- gressional taxation ; and had it not been so stated in the loan bills the decisions of the Supreme Court would have brought about the same result. So far as I am aware no question has arisen as to the authority of Congress to tax this property as it pleases and to the extent it chooses to tax it. The only restraint over the power of Congress in this respect is that which controls all legislation whether financial or other and that is, that Congress shall exercise its authority for the public good. We are not embarrassed either by lack of constitutional authority or by expressed or implied faith toward those who bought this property in accordance with our legislation. The agree- ment not to allow States or towns to tax it so far as anything either way be implied from it is rather in the nature of notice to the pur- chasers and holders that Congress did not in- tend to relinquish its own rights in the premises, but should exercise them if it deemed proper. And without objection on the part of any- body Congress has exercised its rights in this respect. By the act of July 1, 1862, an income tax of three per cent, was authorized upon the gains of all property except bonds, and upon incomes from bonds the tax was one and a half per cent. By the acts of June 30, 1864, and March 3, 1865, incomes from bonds were placed upon the same footing as -from other property, and that is the present law. These acts asserted the right. But the tax in proportion to the other taxation of the coun- try was very slight. In 1862 it was but nine cents on the hundred dollars, and now but thirty cents on the same sum. But to this there were exceptions. The per- son who has $16,000 of property all in Gov- ernment bonds escapes national taxation alto- gether, because incomes to the amount of $1,000 are exempt from taxation ; so he shirks the burdens both of the State and national Governments. What the percentage of taxation may be upon the actual value of the property of the country it is quite impossible to say. We all know the unreliability of the census returns when the result was a mere matter of opinion. In many instances the census agents blundered when it was simply a question of numbers. Of course when they had to exercise their judg- ment as to so difficult a matter as the value of property they are still less to be depended upon. But from the data that every one has that of his own neighborhood and State it is but a moderate estimate to say that the average tax upon every species of property in the country at its full market value for State and municipal purposes is one per cent. For national purposes we are now raising about four hundred millions a year, and it is estimated that the laws now in force will give that sum in future. Of course this is unequally distributed some of it specific, but chiefly in- direct but in the aggregate, as a charge against the property of the country, it amounts to two per cent, on a valuation of $20,000,000,000. So that for State, national, and municipal purposes we are paying annually three per cent, on a fair valuation of the property of the whole country. The immediate question before us is whether under these circumstances this great property of bonds paying no local taxes and but three tenths of one per cent, of national taxation shall be made to contribute more liberally to- ward defraying the public charges? I say it contributes three tenths of one per cent, to- ward the national taxation. But that is only in certain cases. The exemption that I have already stated is so large that in the majority of instances no tax is collected. I have in- quired at the Bureau of Internal Revenue how much the present tax on bonds yields, but they are unable to inform me. It is not thought there, however, that any considerable sum is drawn from them, and that practically the bonds escape national as well as State taxation by means of the exemption. I am at a loss, sir, to know how, consistently with proper theories of taxation, we shall con- tinue the present discrimination in favor of this great property. Let me call the attention of the House to the present operation of the revenue laws. The director of the Bureau of Statistics has kindly furnished them to me. We tax tea the sum of $8,723,956 31 ; cof- fee, $7,901,847 99 ; molasses, $3,037,452 10 ; sugar, $27,774,096 80. This is for the fiscal year ending June 30, 1866. For the last year they are about the same. This is by means of the tariff. But they are almost purely revenue taxations. The result to the consumer is the same as if each man who purchased was charged by the internal revenue officer a certain price for his tea, cof- fee, molasses, sugar, and an additional sum in proportion to the quantities consumed. There is no question of incidental benefit from protection in it it is bald, naked assessment. By means of the internal revenue officers we tax railroads $4,000,000 annually and allow them to assess it upon the public. This sum is necessarily paid by all classes, and perhaps comes as near a per capita tax upon people of moderate means as any that can be laid. Revenue stamps yield $16,000,000, and the tax is an assessment in great part upon the business men of the country. Wholesale and retail merchants pay nearly six million dollars annually for licenses to trade, and get it back from their customers if they can. Besides these taxes, affecting particular classes of the community, we have the great manufacturing tax, which draws according to consumption from every man, woman, and child in the country. I do not speak of these taxes complainingly the internal revenue system of taxation was a wise one and has answered the purpose of its creation most admirably but I use v them for the purpose of comparison. And I may here as well as elsewhere disavow all feelings against bond-holders. The gentle- man from Illinois [Mr. Ross] the other day talked about "rich bond-holders." It is an unfair use of terms. It is an attempt to excite prejudice in the country against persons who deserve other treatment at the hands of the members of this House. The bond-holders are of all classes. Rich people hold the larger quantity of bonds because they hold the larger amount of all the most desirable kinds of prop- erty. But large sums are held by men and women of small property. Orphans and widows are largely interested in what they have been taught to believe the best investment in this country. And I protest that it is no feeling against bond-holders that induces me to propose this taxation any more than it was a feeling against tea-drinkers that caused me to vote twenty-five cents per pound upon tea. The instances of taxation that I have given, as well as many others that will occur to any- body who thinks upon the subject, sustain the position that this property in bonds can as well bear taxation as any that I have enumerated, and that if it be proper to assess the larger tax- ation upon those best able to bear it if it be good political economy to collect from accu- mulations rather than burden processes for crea- tion of wealth if it be fit to tax luxuries rather than necessaries, then should this great prop- erty in bonds contribute as well as tea and coffee, railroad fares, or revenue stamps. We are not destitute of authorities for this taxation. The first is the Revenue Commission author- ized by the Thirty-Eighth Congress. One of the members of that commission, Mr. Hays, was specially charged with this subject. He took testimony upon it. The statements of Mr. Astor and some fifteen or twenty leading bank- ers and brokers and financial men of New York is given in his report, and it is favorable to tax- ation. After a full examination of the whole matter Mr. Hays recommended a tax of one per cent. But the more important authority is the Sec- retary of the Treasury, who in his last report recommends a tax of one per cent. He is peculiarly charged by virtue of his office with the guardianship of the financial honor of the country, and has special facilities for knowing the best subjects of taxation. He gives the discusion in a former report, (1865,) and says: "The views of the Secretary thus expressed have undergone no change, but the exemption from taxa- tion of any kind of property by which special privi- leges are, or seem to be, granted to any class of citi- zens is odious to the heavily burdened masses in all classes, and is especially so in a republic like ours. Local taxes in all the States are heavy, and no mat- ter what the law may say upon the subject, no mat- ter what the contract may have been under which they were negotiated, there is a general sentiment among tax-payers that the exemption of Govern- ment bonds from local taxation is not exactly right, and that it ought to be in some way avoided in future issues. The Secretary has no hesitation in admitting that he is in sympathy with this senti- ment." And the Secretary proposes to issue new six per cent, bonds in lieu of those now out- standing, and to tax them one per cent. He proposes to convert the outstanding bonds into these new ones, and entertains no doubt of his ability to do it. How this is to be done he does not say. He gives the bond-holders a five per cent, bond instead of the one they now hold. Why should they take it ? Will he ask for authority to stop payment of inter- est until the exchange is made ; or will he alarm the public creditor by fears of popular discontent and wrest from his timidity the more valuable property ? And, in order to satisfy the States that his operations with the bond-holders are legitimate, he offers to pay them the amount he takes out of the bond- holders. Apparently he would scare one and bribe the other. And it is an attractive list the Secretary presents to Congress for its consideration. Each member can see his own State with the sum in gold set opposite her name. My own State leads the list with the respectable sum of $385,609 76 set opposite, and Oregon winds up the golden column with $96,000 76. The thirty-seven States are all there I Why the Territories are excluded I do not perceive. They are obliged to pay their share of the general taxation. Why should not they have the proper dividend? Why should Brig- ham Young and his wives and children be excluded in the golden distribution ? Aliaska, too, will need her share as much as any por- tion of the Republic. When she is fairly in- corporated and the Secretary's golden shower begun, the gentleman from Wisconsin, [Mr. WASHBUBN.] who has so ably taken the affairs of that forlorn Territory in hand, should see that her interests are not overlooked. But if the Secretary has shunned the Terri- tories he has not omitted the rebel States. He proposes to pay Virginia $730,662 50 an- nually, and South Carolina $431,905 13, and the other rebel States in proportion to popu- lation "without regard to race or color!" and all in gold ! Of course the Secretary does not expect us to believe that this generous sum of $20,000,000 annually will come out of the bond-holders. No such thing. It comes out of the tax-payers of the country. It is simply taxing the country $20,000,000 in gold annually for the purpose of distributing it among the States in propor- tion to population. How equal this would be can be seen from the fact that the rebel States pay but small amounts into the Treasury, burdened with full charges of collection, and yet it is proposed by the Secretary to distribute among them the sum of $4,812,281 annually in gold. Before the recent extension of the postal ser- vice into those States the Department was nearly self-sustaining, but now I notice by the report of the Postmaster General there is a deficit of about five millions. I do not object to paying this sum, now that the mails are free to carry whatever of information may be intrusted to them. But to add to this an equal sum for no other reason, apparently, than that the Secre- tary has a strong feeling against the injustice of not taxing the national debt, is a kind of financial wisdom that I do not appreciate. Those States last year did contribute about twenty million dollars for the cotton tax. This the House has hastened to relieve them of. Leaving all other oppressed industrial interests to take care of themselves as well as they could, the House has made a specialty of the cotton tax. I could not concur in the vote. There were, in my estimation, other interests equally worthy of immediate attention by the Com- mittee of Ways and Means. Not to mention others, the great navigation interests of the country, confessedly suffering intensely from adverse legislation, need looking after. The Secretary of the Treasury has twice called the attention of Congress to them. I had the honor of submitting propositions for their relief at the first session of the Thirty-Ninth Congress and urged them during the pendency of the tariff bill, where they properly belong. My colleagues have renewed those propositions by resolutions of inquiry at the present session. But I had no idea of asking special legislation for this suffering interest, and it would have availed nothing if I had. I shall be well content if the House, when the tariff and internal revenues come before them shall apply the proper rem- edies to existing troubles. It is certainly of national interest that our ships shall not be driven from the ocean and our whole trade abroad, if not coastwise, be placed in the hands of foreigners. And unless Congress shall act speedily we shall be so far second to Great Britain on the ocean as to find it impossible in our generation to come into active competition with her. Certainly it was unwonted magna- nimity iniCongress to give local interest the precedence over those of national importance, when a remedy for the evils that afflict both should be applied before it is necessary to prepare for the next crop either of ships or cotton. I have had the curiosity to obtain from the Bureau of Internal Revenue a statement of amounts paid by the rebel States, and I give some of them for the last two years, together with a statement of the amount the Secretary would repay them if his proposition obtains : Secretary proposes Receipts to pay in 1867. annually $58.343 00 690,290 60 118,518 37 471,792 28 431,556 28 529,772 40 110,814 96 267.259 98 It will be recollected that the receipts from internal revenue in 1866 were $310,906,984 17, and in 1867 they were $265,920,474 65. And it should not be forgotten that the receipts were in currency while the Secretary proposes to pay the States in gold. It is suggested in some of the papers that the Secretary's plan would win the good- will of the rebel States and attach them to the Union. I should think it would. One of the Secretaries proposes that we buy the continent for the purpose of rulingthe world, and another that we pay an annuity to the rebel States to keep them good-natured. But how about the tax-payers? Is there no end of their forbear- ance? If the Secretary of the Treasury had proposed to assume the war debts of the loyal States and then applied the one per cent, tax to discharge the liabilities assumed for that purpose, I should have been more willing to accept his proposi- tion. As he presents it the Secretary's plan should not be adopted, and if it could be put in force it is plain that it would be speedily repealed . I voted to make a liberal allowance to the Freed- men's Bureau for the purpose of organizing Receipts from all sources except cot- ton in 1866. Florida $726 98 Mississippi 24,631 76 Texas 176,026 48 ^Arkansas 53,069 53 6 and protecting labor, and in that way produce the accustomed crop of cotton. In my judg- ment it was a wise appropriation. But having accomplished that purpose, and the House hav- ing voted to abolish the cotton tax, it is clear the bureau must go with it, and so should all other special appropriations. I have heretofore looked to an exchange of bonds as the ready way to accomplish the pur- pose of making the property in them subject to the same burdens as other less favored property ; and for that, among other reasons, I have hoped for a speedy resumption of specie payments, and constantly voted to bring it about. It is plain to my mind that we have the ability to put the finances of the Government, where they should be, on a specie basis almost when- ever we will. The short loans will all very soon be provided for, and nothing be left for the Secretary but to arrange for interest and cur- rent expenses. These the accruing income will take care of, so that he will have merely to keep his greenbacks afloat by the specie at his command. It is the problem the banks have dealt with so many years, of keeping out three or four times as much paper as they had specie, and have generally found no difficulty in doing it. But whether this view be right or wrong, I think I cannot err in believing that the House does not desire to go to specie at once. The decisive vote the other day withdrawing the present authority of the Secretary to destroy greenbacks indicates this purpose, and I shall be very happily disappointed if the House stops where it is and does not authorize and direct a new issue of paper. The road toward specie is getting to be a weary one. The House has apparently indicated its purpose to stop traveling it for the present. It will do well if it does not actually slide back and trust to luck to retrace its up-hill steps at some future day. We shall not resume specie payments at present, and we shall not, therefore, pay off that portion of the debt now under our control in gold. It is proposed to pay it in paper. That would be well enough if we had the paper. I should have no hesitation in doing BO if we could. I should have no fear of shocking the sensibilities of the holders of our bonds or staining our financial honor if, in the absence of any bargain to the contrary, we paid cred- itors in exactly the currency they loaned to the Government. I do not propose to discuss a subject which has already been treated so ably and elabo- rately by gentlemen in both Houses of Con- gress, but I desire to remind the House that all of the greenback legal-tender currency was authorized by Congress before any consider- able part of either issue of the five-twenty loan was taken. There were three acts, and but three, au- thorizing the greenback legal-tender currency. Each authorized the issue of $150,000,000. The dates were February 25, 1862, July 11, 1862, and March 3, 1863. At the time of the passage of the last of these acts but $25,000,- 000 of the five-twenty loan authorized the year before had been taken. So that this money which gentlemen now call "depreciated currency" had long been the "lawful money" of the statutes before the public took these bonds. It had become the favorite currency of commerce. All of our States except Massachusetts and California paid the interest on debts contracted on a gold basis in this paper. My own State, if I mis- take not, paid principal as well as interest of public debt in greenbacks. Corporations every- where and individuals of the highest finan- cial honor did not hesitate to pay debts long antecedently contracted in Government legal tenders then recognized by courts and in com- mon use everywhere. Are all these subject to the reproach of being scoundrels and repudiators ? Of course, if there were a bargain or author- itative agreement to pay these bonds in coin the circumstances I have mentioned would not be of moment. But when the bond and the act authorizing it are both silent upon the subject, neither specifying in what the principal of the bond shall be paid, although stipulating that the interest shall be paid in coin, then I say Congress keeps good faith with the public creditor when it pays him back the money it received from him money which then consti- tuted almost the entire circulating medium of the country. And if these bonds had been payable abso- lutely in five years, and the public creditor was now asking the Secretary for the payment of the principal, does anybody suppose he could not take the same ground with reference to these bonds that previous Secretaries did with regard to the short bonds of 1861 ? The bonds of 1861, payable in three years, although issued on a gold basis, were paid in 1864 in green- backs or new bonds. No reason was given for this except that they did not belong to the permanent loan. A poor reason is said to be better than none. But whether this view of the matter be cor- rect or not is of small importance. We cannot pay the principal of these bonds either in specie or paper. We have no money to do it, and we ought not to tax our people further in order to obtain money for this purpose. We cannot sell new bonds and obtain paper with which to do it. We should find no market for such bonds, and we ought not to issue one new dol- lar in paper for that or any other purpose, except it may be to substitute greenbacks for national bank currency. These facts leave no other remedy for the gross wrong which the Secretary describes, no other way of satisfying that sense of right which he says he is "in sympathy with," than to tax the property in bonds, as I propose. I propose to tax the bonds one per cent, of their value annually, the tax to be assessed and collected by the officers of the internal rev- enue department. It is true that this will not reach foreign holders. I do not know why it should. The bond is personal property. Unlike a certificate of stock in a bank, it does not represent prop- erty elsewhere, but it is property in itself. Like all other personal property, if owned in this country let it be taxed here ; if owned abroad let it be taxed there. Our ships are taxed here so long as they have American owners. When they are sold abroad and take a foreign regis- ter we cease to tax them. How much this would deduct it is difficult to say. Probably one eighth of the bonds are held abroad. If we get seven eighths of the tax we should have we shall do better from this than from the majority of taxations. This is the present method of taxation of this property when the income tax is assessed. The change I propose is one of amounts and not of principle. If it be said that this property will escape taxation, and that if it be taxed at all it should be by retaining one per cent, of the interest we agreed to pay, my reply is that we agreed to pay the interest specified in the bonds, and a rebate of interest is, so far, a repudiation of the contract. If we agreed to pay six per cent, let us pay it. Let us not pay five, and tell the creditor we have taken the other one per cent, and put it into the national Treasury. That is not keeping the public faith. We may as well deduct from the principal as from the interest. It is true that the whole of this tax will not be collected. If that be a reason why a tax should not be laid then we should strike off the larger share of tax on articles from our list. The income tax is very largely avoided, and yet we collect some fifty or sixty millions annually from it. I do not believe the holders of our bonds are cheats and knaves. They are at least an average of American tax-payers. We shall get as good a proportion of tax from this source as from any of the numerous arti- cles on the list. No one believes that whisky cheats will be duplicated by bond-holders. The mode I propose is precisely that adopted by the States in the taxation of State bonds. They are taxed in the same manner as other property. No one proposes to exempt them from taxation, and no one would have the State deduct from the stipulated interest by way of taxation. The immense values of property in town, city, county, and State bonds are all taxed just as I propose to tax the national bonds, except that as they are issued under State authority they are taxed by the State authority. Those issued under national authority are to be taxed by national officers. If the objection be made that the effect of this tax will be to drive the bonds abroad I reply that that will not be the worst of evils. They will not be sold unless the holders receive fair equivalents, and the money received from these bonds will go into business channels and aid in the development of the great resources of the country. There is little danger of a plethora of money capital in the country for some time to come. Ex- Secretary Walker thinks a foreign loan the grand panacea for our financial evils, and the present Secretary last Congress asked for authority to make bonds payable abroad in order to sell them the more readily in the European markets. It may be that holders of bonds rather than pay this tax to the General Government will prefer to pay a local tax in the place of their residence. To meet this case I would author- 8 ize the Secretary to issue bonds not subject to national taxation and subject to State and municipal taxation, and direct him to ex- change at the pleasure of the holder. It is not improbable that in this way by the consent of bond-holders the present discontent on the score of non-taxation may be relieved. Perhaps it would be well to limit this amount to one per cent. When it is considered that this prop- erty is to be taxed at full value, and that for taxable purposes other property is usually valued much less than the sum for which it would be marketable, a limit of one per cent, would be advisable. It would prevent excessive taxation on the part of unfriendly local officers, and would at the same time give a fair average of the local taxation of the country. I know of no other objection to the proposed measure except that it will have a bad effect on the national credit and depreciate the national bonds. But no one has a right to say this. The opinions of the largest bond-holders in this country, as given in Mr. Hays' s report, do not sustain such an idea. And. what is of more importance, the facts in relation to State bonds are not at all in accordance with this view of the subject. Except Massachusetts and Cali- fornia, they are all currency bonds, and yet State bonds subject to all sorts of taxes are quoted and sold in all the principal markets as high as national bonds, making the proper allowance for the difference of interest. Very frequently they go higher. The fact that they are subject to taxation makes no apparent difference in the price. And it is a consideration worthy of attention that some such measure as this, satisfactory to Congress and the tax-payers of the country, will quiet discussion and stop agitation on the subject. That will be a great gain, and the result may well be looked for that instead of depreciation the national bonds will rise in value as a consequence. I have no idea that the measure I propose will antagonize any plan of funding that may be suggested at low rates of interest. I presume no one supposes we shall be obliged to carry the debt long at six per cent. It is not in accord- ance with the experience of other Governments less able than our own to pay either interest or principal. Reasoning from their experience we may with some assurance expect to place the debt at four per cent, rather than five, as the Secretary proposes. Whether now is the proper time to make the attempt may well be questioned. The most intelligent financiers in the country think it is not. They think it best to keep the debt well in hand and wait for specie payments and a full return to the normfcl condition of affairs in the country. What will aid both a return to specie and the desirable placing of the debt, is the full and free exercise of the spirit of economy, now happily uppermost in the House. I cannot but hope that it will not exhaust itself in general reso- lutions, but that when we come to the detail of expenditure it may be found in full force. I believe it will, and I look to this source with much hope for aid in the solution of these diffi- cult financial problems. Printed at the Congressional Globe Office.