the balance due to us resulting from the usual interchange of commodities. This stream of gold and the large amounts that are made at home and taken from our mines is seeking investment. Large sums have fallen into the hands of capitalists of great wealth, many of whom do not desire to risk their fortunes upon speculation or upon the chances of an active business, and they naturally seek, even at a low rate of interest, first-class investments that are perfectly safe and free from taxation.

Not only is this true of the capitalists of large means, who invest heavily in the securities of the United States, but it is also true of a vast number of our best citizens and laboring people, who are making something to invest and who desire to place it where it will be secure. And a bond on the United States, perfectly secure, if it is not taxable, which pays 3 per cent. interest, is a better investment for even a small capitalist than he finds in most of the channels into which he can put his capital. I think I may venture to say that a large proportion of the farmers of the United States, after they have paid all the expenses attending the production of their crops, and all the taxes assessed by the Government of the United States, the governments of the States, and of the counties where they reside, do not make clear more than 3 per cent. upon the capital invested. The same is true of a large proportion of the holders of real estate in our villages, towns, and cities. Real estate, when in the hands of men who manage well, where it is well located and properly improved, pays a better per cent.

But in every city, town, or village in the Union it would be found that much of the real estate is unimproved, and the owners are paying tax upon it without income. And of the improved real estate there is a large proportion that is not in the best location or under the best management, that does not pay 3 per cent. after all expenses of repairs, insurance, and State, county, and municipal taxation have been paid. Nor do I believe that the whole capital invested in railroads or in mining in this country has paid 3 per cent. net to the owners. Some railroads and some mines have paid largely, but I speak of the average, of the whole sum invested. And our people in this condition are beginning to calculate and properly to estimate their true situation. Hence it is that whenever the bonds of the United States have been offered, as on a late occasion, to the populace, they have taken them readily at the ruling prices even as low as 4 per cent. when our bonds brought no such premium as they now bring. And I have no hesitancy in saying that if this loan is offered to the people of the United States, and is placed within their reach in the different cities and larger towns all over the Union for as much as thirty days after having been advertised, that the country will be astonished at the amount that will be taken by citizens of small means, who desire to lay by something that they can calculate upon as positively certain, and that is absolutely free from the demands of the tax gatherer.

Senators doubt whether we can place bonds redeemable after five years at the option of the Government, but which the Government is not under obligation to redeem until the end of twenty years, usually called fivetwenties, upon the market successfully at 3 per cent. I do not entertain any doubt on this subject. Fifteen years ago if the United States wanted to borrow money they had to pay 6 per cent. Then came a loan of 5 per cent., that was readily taken; and a loan at 41, and then a 4 per cent. bond, and now the 4 per cent. bonds are selling in the market at 113 to 114. This shows the increased confidence of our people in our public securities, and their increased ability to purchase them. And the immense increase in the productions and the manufactures of the country, and the vast increase in the balance of trade in our favor, have placed in the hands of our people

the means to gratify their disposition to invest in the bonds of their Government at a rate which, while it seems low, pays them a better income with absolute certainty than they can find elsewhere.

Reference has been made to the English consols, which at 3 per cent. have been most of the time a little under par. Yet it is admitted that within the last few years they have reached par. It is said, however, that this is on account of the long term they have to run, or, rather, on account of the fact that they run perpetually; and the owner is simply entitled to his 3 per cent. interest on the investment. That, with a certain class of wealthy men who desire to invest, is in their favor, and causes them to bear a better price. But another large class who would rather see the end of the loan occasionally, and know a particular day in the future, when they can demand, not what may be the market price of the consol, but the par value of it, would prefer that it should have some fixed period to run.

But there is another reason why United States bonds are naturally worth more in the market than British consols. The incomes from consols are taxable; our bonds are absolutely free from taxation. Again, this Government has a territory immensely larger and more productive than the British Government possesses. I do not speak now of the British colonies, many of which, when you deduct the expense of their wars, are not very remunerative to their mother country; but I speak of the domain that properly belongs to the British Government, and constitutes its home territory. There is not, therefore, room with them for the great expansion that we have in this country. There is nothing like so large a population in the British Isles as we have here. And while, on account of the fact that the country is much older, there has been a larger accumulation of wealth in proportion to numbers, there is no reasonable prospect that the wealth of that country will remain, as now, in excess of the wealth of this country in proportion to numbers.

But there is still another significant fact. The British Government, with all its strength and its naval power, is all the time engaged in war with somebody, which compels it to maintain large armies and navies. Those wars are expensive, and it cannot be denied that in the British Islands there is a growing discontent with the government.

At this very time the Irish question is one of great difficulty, and no one can say that the inhabitants of the British Islands may not be cutting each other's throats within the next six months. The tenants and peasantry everywhere in the islands are becoming restless at the present land laws and the present high rents they have to pay. This restlessness is also permeating the laboring masses in the iron and coal mines and the manufacturing districts; and stable and powerful as the British Government has been for a long while its prospects for future peace, prosperity, and stability are not, probably, as great as those of the United States. Its old land system and its aristocracy are in danger. We have passed through our internal struggle. It is not at all probable that we shall have another such struggle within a century or probably centuries to come. All patriots unite in the hope that we may never have another. Our country, then, with a well established government, and with resources unequalled by any other country, offers to the world assurances of peace, prosperity, stability, and ability to pay, that neither the British Government nor any other government offers.

We feel that we have an exemption from future foreign wars possessed by few other governments. Prior to the late war between the States, this Government was considered by the leading governments of Europe as a second class power in a military point of view. But our own struggle developed on each side immense strength, gallantry, and skill. The Southern Confederacy,

notwithstanding the great disadvantages under which it labored, brought into the field its half a million of gallant men. The Northern States, after a long struggle of four years, brought into the field an army of sufficient power to crush the Confederate armies and dictate terms of peace. We have now laid down our past differences. The two armies and the two sections are now united, and in case of a foreign war the troops who fought under opposing banners in the late struggle would rally together, as a united force, grand and invincible, under the old flag of the Union. Our Government, with all its sections and all the States again cordially united, can put 5,000,000 men into the field if the exigencies should require it. And while we lack a navy, and on that account might be exposed to temporary inconvenience in case of a foreign war with a naval power, still the final result could not be doubtful. It is not the interest of any foreign power to attack us with our present united strength, nor is it our disposition unjustly to attack any other power. Therefore we have a freedom from war and the expenses of large armies and navies for a long period to come, which it is not likely Great Britain or any other of the great powers will enjoy. We naturally have a right therefore to expect, these points being all understood, that capitalists and persons generally who seek investment would pay a little higher price for United States bonds than they would for the securities of any other government.

In view of our vast territory, our great population, our immense resources, our unbounded facilities for transportation, our rapidly increasing crops, our growing manufactures, our limitless mineral wealth, the growth of our educational, moral and religious institutions, our freedom from prospective wars, the heavy balance of trade in our favor, and for other reasons that I might assign, but which I will not weary the Senate by giving at present, I shall vote for a 3 per cent. bond, redeemable at any time after five years and payable at the end of twenty. And I do not entertain the slightest doubt that the bonds can be negotiated in the market and disposed of at par without any difficulty.

One word about another point connected with the bill before I take my seat. On pages three and four I find the following language: "And the expense of preparing, issuing, advertising, and disposing of the bonds and Treasury notes authorized to be issued shall not exceed one-half of 1 per cent."

What is the meaning of this, and what is the amount here given? It means that this one-half of 1 per cent. upon the whole amount is to be given or used for the preparation and negotiation of the bonds.

In other words it means that we are to pay for the printing, executing, advertising and disposing of the bonds one-half of 1 per cent. The House of Representatives fixed it at one-fourth of 1 per cent.; but the Finance Committee of the Senate has thought proper to change it to one-half of 1 per cent., and we were told by the honorable chairman of the committee, on day before yesterday, in substance, that he would not desire to take the responsibility of possibly defeating the loan by refusing to pay as much as one-half of 1 per cent. for negotiating it; and he called upon senators to know whether they would desire to incur such responsibility. For one, I have no hesitation in responding that I will with pleasure take the responsibility of voting to pay a smaller sum for that service. What is the sum we propose to pay? The whole issue of bonds and Treasury notes which are interest-bearing, which it is proposed to put upon the market, amounts to $700,000,000. One-half of 1 per cent. for preparing and negotiating the bonds is to be paid on this whole amount. What is it? The snug little sum of $3,500,000. Now, I will be pardoned for expressing the belief that it will not cost half a million to pay for engrav

ing, printing, issuing, and advertising these securities. Then what do we pay the other three millions for? For disposing of the bonds?

In other words, we give that amount as a bonus; or, in steamship phrase, which has been so often used here within the last few days, we give it as a subsidy to a certain syndicate of bankers for the trouble of negotiating this loan for us.

Now, if I were not a senator, I should like very much to take this contract, and guaranty the negotiation of the whole loan at par. And rather than miss the contract I might be willing to pay out of this bonus or subsidy, if it becomes necessary, to the national Democratic executive committee or to the national Republican executive committee, whichever may be in power and have the right to expect it, the sum of a million of dollars to aid in conduct ing the campaign of 1884, if party exigencies should require it. And I should feel then that I had made the handsome sum of about two millions for my trouble. And if I could not succeed with the present syndicate, with $700,000,000 of United States securities under my control, I could readily form one with which I would succeed. And if my syndicate, after the populace had been served, should have the good fortune to take a large proportion of the bonds, I should not entertain any doubt that within the next twelve months we would make more than another one-half of one per cent. in premiums upon the bonds so taken.

But we are warned by senators that if we should offer a 3 per cent. bond and the negotiations should fail, and we were unable to dispose of it at par, we should lose within the next year $12,000,000 in interest, being the difference between the rate we are now paying on the bonds and the rate of 3 per cent. And this is held over us, probably not as a rod, but as a strong reason why we should issue a 33 per cent. bond instead of a 3 per cent. But there is another side to this picture. Suppose we should issue a 3 per cent. bond, when we could readily sell a 3 per cent. bond, what would this cost us? It would be an addition of three and a half millions per annum to the interest we would pay on the new loan. If the bond is a 5-20 we would be obliged to pay interest on it at this rate for five years. That would amount to $17,500,000. And if we could not at the end of the five years exercise the option given to the Government, and redeem the bond for another five years, it would add $17,500,000 more to the burdens of the people. In other words, in the event we should issue a 3 per cent. bond, when we could negotiate a 3 per cent. bond, we would pay out of the taxes raised from the people $35,000,000 more interest in ten years than we would pay upon the 3 per cent. loan. And there would be no way of getting rid of $17,500,000 of this amount, and we would be obliged to pay it. Therefore the chances for loss to the Treasury are greater if we issue a 34 per cent. bond than if we issue a 3 per cent. bond. In the one case we might possibly lose $12,000,000 of interest; in the other case we would lose $17,500,000 of interest; and if the bonds should run ten years we would lose $35,000,000 in interest. Taking into the account the chances in favor of the negotiation of a 3 per cent. loan, the prospects for loss are much greater in the event we determine to issue a 3 per cent. bond.

But it is intimated that the credit of the Government would suffer in that case. Why so? It would simply show that we had not been able to do that which other nations have not been able to do-float at par a 3 per cent. bond. But how would this injure our credit? Would it make our four per cents. now in the market less valuable? The only effect would be that we must continue to pay the present rate of interest on the bonds until another loan is offered to the country at a rate that could be negotiated.

But I am so thoroughly satisfied that there will be no difficulty about the

negotiation of a 3 per cent. loan that I shall, as already stated, not hesitate to cast my vote in favor of 3 per cent. We have no right to tax the labor of this country or the property of this country to pay the capitalists or anybody else a higher rate of interest than the lowest rate at which the bonds of the Government can be readily negotiated.

And if we retain section 5 of the bill as it came from the House of Representatives, and compel the national banks in future to deposit the 3 per cent. bonds, and no others, as security for their issues, we will make assurance doubly sure.

SPEECH OF HON. JOSEPHI E. BROWN, OF GEORGIA, Delivered in the SENATE OF THE UNITED STATES, MARCH 28, 1881, IN REPLY TO SENATOR MAHONE, OF VIRGINIA, ON THAT PECULIAR COINCIDENCE.

The Senate having under consideration the resolution submitted by the Senator from Massachusetts [Mr. Dawes] for the election of officers of the Senate.

Mr. Brown said:

Mr. President: I had hoped I should see the speech of the senator from Virginia [Mr. Mahone] which was delivered yesterday, in the Record this morning. I predicated that hope on the fact that the senator seemed to read his speech, not from written manuscript as is often done, but from printed slips. The natural supposition was, therefore, that it had been revised and that there was no good reason why it should not go into the Record this morning after such careful preparation. I was, however, disappointed in that reasonable expectation, and I am left to make some remarks in reply to-day without having that rather remarkable production before me.

One of the points the senator dwelt upon with most satisfaction was what he considered a dissection of my own record. Possibly it is not very interesting to the country, although the senator thought proper to bring it before the country and grossly to misrepresent it. He took the position that I had been inconsistent. I must admit that most men who have been long in public life have sometimes been placed in positions that appear to be inconsistent with each other, and I must admit that the position that I now occupy on certain questions is not the position I occupied at the commencement of the war, now known as the war of the rebellion. I went into that contest to maintain slavery and State sovereignty. These were the two cardinal points upon which we planted ourselves. I sincerely believed we were right in both. The war, however, has settled both questions. Slavery is abolished and I am now content that it is abolished. Then I was a pro-slavery man. To that extent, therefore, I may be said to be inconsistent, or to have changed position, growing out of the results of the war. I honestly and earnestly advocated then and believed in State sovereignty. The results of the war and the amendments to the Constitution have so changed our situation that I cannot and do not contend to-day that the States are sovereign in the sense in which I then claimed that they were sovereign. Therefore, on these ques tions I may be properly said to be, as most Southern men are, inconsistent. I do not contend now for what I claimed then.

The senator said, as he is a readjuster, that I had a very happy faculty of readjusting myself to fit the circumstances. I do not know with how much justice I might claim that faculty; but there is one point of readjustment I can never attain. I would be wholly unable to readjust myself so as to occupy the position that the senator from Virginia occupies to-day before this Senate and this country. I may readjust myself to many circumstances, but I could not afford to be a party to that kind of readjustment. If he enjoys