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originally recommended the policy of assumption with regard to the revolutionary debt, he did not view it simply from the stand-point of justice to the States, but quite as much from motives of sound policy touching the interests of the Federal Treasury. To quote his own language, he declared that "the assumption of the State debts was no less a measure of sound policy than of substantial justice, and that it would contribute in an eminent degree to an orderly, stable, and satisfactory arrangement of the national finances." The communities that are oppressed with these local debts are the same that pay almost the entire national revenue collected under the excise law, and the latter is felt as an infinitely greater burden because of its coming in addition to the heavy direct tax levied by the local authorities. Could this local tax be relieved to the extent which this bill would relieve it, the Federal tax could be paid with great ease, even if largely increased beyond its present rate. To illustrate my position by pertinent figures, let me say that the pending bill if adopted would add some one hundred and eighteen millions to the national debt, or, in other words, it would increase it a trifle more than four per cent., and would call for a corresponding increase in the amount raised to pay interest. But the immense relief that would be experienced throughout the loyal States by the removal of these enormous direct taxes would enable them to pay the increased excise with comparative ease. And in this way the General Government would have the field to itself, and could regulate its system of taxation with far greater efficiency and far greater equity. Competing and conflicting systems of taxation can but produce mutual injury, and if the power can be lodged wholly or mainly in one, a larger amount of money can be raised with less burden to the people than where each is compelled to make the utmost exaction to meet the demands upon it.

If there be any correctness in the view just suggested, the assumption of the State debts would make a nominal rather than a real addition to the national debt. The States and communities which owe these debts are precisely the same States and communities upon which must rest the maintenance of the national credit during the entire period that it may be said to be on trial before the world. While this oppressive burden of local indebtedness is upon them, it impairs their resources and their ability to carry the national debt by even a larger amount. And if the national debt is increased by refunding to the States, the local burdens are, to say the least, cor

relatively and proportionally reduced. This fact is so palpable and undeniable that it is only a waste of time to repeat it. Bankers and money-lenders would everywhere recognize it; and the tendency of such a policy would be to strengthen the national credit throughout the world. The change of securities does not change the amount to be raised by taxation, it only simplifies the mode of obtaining it. And this phase of the case presents another striking parallel to the first assumption as proposed and accomplished by Mr. Hamilton. In discussing the identical point to which I have just referred, that great master of finance dismissed it summarily with the following brief and conclusive comment:

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Admitting that a provision must be made in some way or other for the entire debt, it will certainly follow that no greater revenues will be required, whether that provision be made wholly by the United States or partly by them and partly by the States separately."

Another point, Mr. Chairman, in this connection, for the special attention of those gentlemen who fear that the adoption of the pending measure would injure the national credit. Nothing is so injurious to credit as uncertainty. It is the apprehension to-day of what our debt may be rather than the knowledge of what it is that prevents our bonds selling at a premium in gold, both at home and abroad. One source of uncertainty is found in this very question of the war debts of the States. Will they be assumed, or will they not, and if assumed, to what amount? are questions asked at all financial centers, with anxious concern. So long as nothing is done the worst is feared, and the anticipated amount of assumption will expand with the agitation of the question. It is natural to exaggerate the unknown. Omne ignotum pro magnifico. We can put an end to injurious surmises as to what may be done, by adopting at once the very moderate and well-guarded proposition now under discussion. Refusing to pass this bill will not quiet agitation nor remove alarm. Agitation will go on and injury to our national credit will be the inevitable result.

Should the policy of assuming these debts be rejected, an act of injustice would be done entirely without precedent thus far in the dealings between the General Government and the States. The strange spectacle would be presented of less than one-third of the prospective number of States bearing in its most oppressive form an enormous debt, every dollar of which was contracted as much for the benefit of the other two thirds of the Union as for themselves.

The prejudicial effect which this would have on the States subjected to the burden need not be described. It would in a great degree cripple their energies and retard their growth, and the climax of its baleful influence would be made odiously and cruelly manifest in the emigration from the old to the new States, and from the North to the South, for the purpose of escaping the very tax which was incurred that the new States might be born and that the South might be saved from suicide. I could not, by any reasoning, enhance the force of such a fact as this, nor strengthen the plea which it makes for the equalization of the entire debt created by the war.

If further argument were needed to show the justice of reimbursing the States for their advances in support of the war, it would be found in the fact that Congress, in devising a system of taxation for the Union, has deprived the States of all the means of raising money except through the instrumentality of a direct levy on real and personal property. Many of the States had previously enjoyed the advantage of certain forms of excise, tolls, and other indirect taxes, which enabled them to lighten, if not entirely remove, the burden of local government. In Massachusetts, I believe, the tax derived from the State banks for a long series of years almost supported the State government; and other States had similar sources of revenue, if not proportionally so large; but the General Government, through its constitutional right to levy impost and excise, has absorbed all the easy and ready available channels of taxation, throwing back the States, as I have said, to the severest form of raising revenue. It is an inevitable hardship that, for necessary local purposes, the States must procure revenue by direct tax, but it is a hardship rendered almost unendurable by its injustice when the States have in this way to raise a large sum to pay the interest and principal of a debt contracted for the good of the whole Union. The power to meet the burden having been taken from the States, common equity demands that the burden should be taken away also. And the burden to which I have just referred, Mr. Chairman, falls with increased severity on the farmers and other holders of real estate, from the fact that so vast a proportion of the personal property in many communities has sought investment in Government securities, which are specially exempt from State and municipal taxation. I should certainly be among the last to countenance a breach of the national faith in the slightest degree. We must stand by the terms "nominated in the bond," no matter how onerous and

oppressive they may be. No hardship can arise to any of us from observing good faith on the part of the Government, at all comparable with the hardship that would ensue to all of us by violating that faith even by the remotest hint. But while we all agree, I trust, on this point, I submit that as the policy of the Government has made the war debt of the States bear unequally on different classes of the community, and most oppressively on the specially meritorious class, it is the imperative duty of the Government to equalize the burden by assuming an equitable share of the debt.

I am not willing, Mr. Chairman, to be understood as making in these remarks a supplicating appeal for relief on behalf of my own State, or the other loyal Commonwealths that have “borne the heat and burden of the day" throughout the great contest that has resulted so auspiciously for all the interests of humanity. Supplication is the language of those who have no right to use a stronger phrase. But standing here to-day as one of the Representatives of the people, I have a right to demand that equal and exact justice be done to all the States of the Union, and that the Government of the Union should without cavil or hesitation pay the debts which were contracted on its own account and for its own benefit. Justice is all that the loyal States ask, and in the grand language of Mr. Hamilton, already quoted, "justice is not completely fulfilled until the entire debt of every State contracted in relation to the war is embraced in one general and comprehensive plan of payment."

In a speech delivered the 7th of March, 1868, Mr. Blaine discussed the subject of the currency in connection with the finances of the country. A statement had been made that the Republican party, or the Republican leaders, designed to pay the five-twenty bonds in gold. This statement he refuted. As none of those bonds were due and payable previous to the year 1882, he counseled delay, and upon the ground that long before that time the United States notes would be as valuable as coin, and that the bonds would be paid in the currency then used in business. But he denounced the scheme of paying the bonds in greenbacks. These are his words: 'Does any sane man doubt that the inflation of the currency would speedily result in its depreciation? If so, he shuts his eyes to the prominent facts of history, to our own experience as a nation, and to the plainest deductions of common sense. An excess of irredeemable money at once raises the price of all commodities necessary for daily consumption. Clothing becomes higher and food becomes

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higher, without a corresponding increase of those of limited means to purchase these articles. The rich can stand it, but what would become of the poor? The man who lives by his daily toil would find the necessaries of life run up in price far beyond any increase he could hope to secure for his labor; and it would soon become a struggle for existence with him and his family. I do not think any imagination can picture or foretell the misery that would be inflicted on this country if the currency should be inflated to the extent necessary to pay the five-twenties in greenbacks, as advocated by the gentleman from Massachusetts (Mr. Butler), and the gentleman from Ohio, not now a member of this House (Mr. Pendleton). And in this connection I desire further to say that it is an immense delusion to attribute any of the dullness now prevalent in business circles to a scarcity of money. We have over seven hundred million dollars of paper money now in circulation-nearly three times as much as the entire bank circulation of the United States prior to 1861, while it is quite notorious that the money markets in our business centers were rarely known to be easier, or more abundantly supplied than during the whole of this winter. Moreover, business of all kinds in France and England at this time is far duller than with us; and yet in both these countries the plethora of money is in excess of what was ever known before. The Bank of France alone holds a surplus of $200,000,000, and a corresponding amount is held in the Bank of England, and by the large banking-houses at Frankfort-on-the-Main. In view of these facts, it seems to me that no delusion is so absurd as to suppose that any relief could come from an inflation of the currency. Misery, wide-spread and hopeless, would be its only and inevitable result.

"Nor do I see how any gentleman can consistently propose an inflation of the currency in the face of an express and solemn pledge to the contrary by Congress. When the Government was very hard pressed for money, and when the great fear was that our whole financial fabric, like the continental system of our Revolutionary ancestors, might be utterly and hopelessly ruined by a deluge of paper money, Congress, by deliberate enactment of June 30, 1864, pledged to all the public creditors that 'the total amount of treasury notes issued or to be issued should never exceed $400,000,000.' We are now within $40,000,000 of that amount, and if we were ever so eager to pay off our five-twenties in greenbacks, we are absolutely estopped by the $400,000,000 pledge. If we disregard that pledge

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