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THE SALE OF SURPLUS GOLD.

REMARKS MADE IN THE HOUSE OF REPRESENTATIVES,
FEBRUARY 18 AND MARCH 15, 1864.

On the 18th of February, 1864, a joint resolution was reported to the House from the Committee of Ways and Means, authorizing the Secretary of the Treasury from time to time, at his discretion, to sell any gold coin in the treasury over and above the amount which, in his opinion, might be required by the government for the payment of interest on the public debt. Mr. Garfield made the following remarks, the first that he made upon a financial subject in the House of Representatives.

MR.

R. SPEAKER, -I propose to detain the House but a few moments on the question before it, as all I wish is to state, as clearly as possible, the conditions of the proposition as they exist in the resolution.

By the present law gold can come into the treasury of the United States through the customs and various other avenues. But there is only one avenue by which it goes out, namely, the payment of the interest on the public debt. There was in the treasury on Saturday last $18,900,000 in gold. It is coming into the treasury at the rate of four or five hundred thousand dollars a day; at the lowest estimate it is four hundred thousand dollars. If this rate continues until the 1st of July next, we shall have $74,107,213.

MR. BOUTWELL. I wish to ask the gentleman whether the Secretary of the Treasury, in his estimate of the receipts and expenditures for the fiscal year 1864-65, does not show that our interest account, which is to be met by the payment of specie, will exceed $85,000,000, while our receipts through the custom-house will amount to but $70,000,000, showing a deficiency for the fiscal year 1864-65 of $15,000,000.

I should have answered the gentleman in my next sentence had he not interrupted me. The Secretary of the Treasury re

ports that there will become due at various times, ending with the 1st of July next, $23,601,943, to be paid in gold. That is every dollar of coin which the treasury of the United States will be obliged to pay up to that time. Now, there will remain a surplus in the treasury, on the basis of the present receipts, -and the receipts have greatly exceeded the estimates,-on the 1st of July next, of $50,505,270, and, according to the present practice of the government, no disposition of it will be made.

MR. FERNANDO WOOD. I desire to ask the gentleman upon what basis, or upon what data, he estimates the receipts of gold from the customhouse, or any other sources, up to the 1st of July next.

The estimates are based upon what we have been receiving for several months past, and the fact that the months immediately to come are always better than the winter months. I base the estimates upon what we have been receiving from day to day for many weeks. These estimates may be too large, but that would not alter the principle involved. No one doubts. that there will be a surplus.

I say, then, that by taking the average, or a sum rather below the present average, and we have every indication that the average will rather increase than decrease in the coming months,

we shall have on the 1st of July $50,500,000 in gold in the treasury, with no law for paying it out. Now, what is the result? There is, probably, according to the estimates of gentlemen, scattered through the country in the feet of old stockings, locked up in trunks, put away in bureaus, laid away under the heads of beds and in vaults of banks, $200,000,000 of gold. I suspect that to be a large estimate, judging from the statements of trade.

Now, sir, on the 1st of July next one quarter of all the gold in the United States will be locked up in the vaults of the United States Treasury, and lying there as dead matter. Every dollar that goes in there leaves the amount in circulation a dollar less, raises the price of gold, disturbs the market, and disgraces our credit; and yet, because it is locked up in the treasury, and we will not pass a law sending it out, our credit must go down and down, further and further, as Mr. Lamar and his coadjutors in the Rebel States desire it shall go down, and as his coadjutors in the Northern States seem to desire it shall go down. They

are talking in the most anxious manner here-witness the last speech to which we have listened — of returning to a specie basis. Do not gentlemen upon this floor know that no great war was ever waged in modern times with specie? It is one of the settled and inevitable laws of trade, that great wars must be conducted with a paper currency, and not with gold.

Now, why do we ask that this great amount of capital shall be, from time to time, liberated? For the best reason in the world. Generally I would not interfere with the laws of trade; they are as immutable as the laws of nature; but I would now interfere with them because they are not in a natural and normal condition; they are in a condition superinduced by the necessities of war, and it is to counteract this abnormal state of trade that we are disposed to let loose this gold so as to keep up the credit of the government. What has so changed the character of gold? It is hardly to be called the representative of value; it is fast becoming a commodity, instead of a medium of exchange; and if the war continues very much longer it will be merely a commodity, and not a circulating medium. It is well known that, when paper currency comes into general use, it expels gold, and that such is its natural tendency. Our gold is scattered over the border, driven to Canada, sent abroad, and the amount actually in use in the business of the country is so small that, if we reduce it by locking up $50,000,000 in the vaults of the treasury, we shall create a panic that will ruin the business of the country.

The gentleman from Ohio1 has offered an amendment, that this surplus shall be paid to the soldiers in the field. I remember the political capital that some gentlemen on the other side of the House attempted to make on the subject of paying sailors and soldiers in coin; and I remember a remark which was made, and which what I see in the galleries this morning almost prohibits me from repeating, but that a sense of justice requires that I should repeat. It was charged on the other side of the House, that, if we did not pay our sailors and soldiers in gold, their wives would become prostitutes. I stood here as a man. abashed; I stood amazed and ashamed that I belonged to a body in which such an utterance could be made about the loyal women of this country.

Every gentleman upon this floor knows well that it is impos

1 Mr. Long.

sible now to return to a specie basis. Every man who has looked into the condition of the country knows that it is impossible, without utter prostration and ruin, to attempt to return to a specie basis at this time. It becomes us, then, to use the gold that we have to keep up the credit of the country, and not to destroy it; and I do not propose to be deterred by references to all those laws and resolutions that have been passed hitherto in regard to the policy of the country.

I am not in such unfortunate circumstances as the gentleman from New York who has just spoken. I am under no pressure from any quarter, from any particular source, from any particular person; I am under no instructions from any man, in office or out of office, how to vote, think, or act upon this subject. I have not been honored with that pressure, and I am therefore free to act as it seems to me the pressure of the country and its interests require; and I ask gentlemen now whether they are willing to help to carry out the scheme of Lamar, of Georgia, to help to reduce the value of our paper currency, until we shall be ruined, as the Southern Confederacy is being ruined, by its finances, rather than by its battles.

There are two elements which decide the question of war. One is military, the other is financial. The man who destroys the finances of a country ruins it as thoroughly as he who destroys its army. It becomes us, therefore, while we replenish our armies on the one hand, to maintain the credit of the treasury on the other. For that purpose I believe this measure is wise. I know it ought to be guarded; and any amendment that will make it more carefully worded, and that will protect us from all chances of fraud or corruption on the part of government officials, I shall be glad to vote for. But I am unwilling that we should defeat the purpose of the resolution, and lock up this money, on the old idea that money locked in vaults is as good as money in circulation.

On the 15th of March following, the measure having been to the Senate and returned to the House, Mr. Garfield made these remarks. As finally adopted and approved, the joint resolution authorized the Secretary of the Treasury to anticipate the payment of interest, and to "dispose of any gold in the treasury not necessary for the payment of inter

1 Mr. Brooks.

est on the public debt," provided the obligation to create the sinking fund should not be impaired.

MR. SPEAKER, I design to detain the House but a few minutes with what I have to say on this subject; but I wish to state what seems to me the present condition of the question. There have been so many things said, we have wandered so far from the proposition before the House, that I wish to restate the question as it now lies before us.

This House passed a joint resolution authorizing the Secretary of the Treasury to dispose of the surplus gold by anticipating the payment of interest on the public debt. There were two principal reasons assigned why we should dispose of this gold: first, that it was accumulating on our hands faster than we had any legal means of using it; and secondly, that, by thus accumulating, it was causing a continually increasing stringency in the gold market, with a consequent rise of price. It seemed therefore just, that, as by law we had interfered with the gold market, we should by law provide for curing that interference. We all recognize the fact, that, if gold continues to advance, it very much injures, not only the people at large, but also the government and its securities. It has been proved by more accurate statistics than we had before us on the 8th of March, when the House acted on this matter, that by the 17th of July next there will be nearly thirty million dollars of surplus gold in the treasury. That has been tested by the most careful estimates possible, not only here, but in the other wing of the Capitol.

Now, Mr. Speaker, three ways for returning this gold into the general circulation have been proposed. The first is by direct sale, the proposition that comes to us from the Senate. The second is by anticipating the payment of interest. And the third is by creating a sinking fund, as already provided for by law. As to the second and third, I have only a word to say.

To create a sinking fund as provided by law is at present simply an absurdity. I see no wisdom in buying up the bonds of the government when we are now borrowing $2,000,000 a day to meet our current expenses. It makes the government enact the farce of borrowing money of itself. It is true that we are required by law to create a sinking fund, but no one can charge

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