Rothschild-Morgan Contract. This agreement entered into this 8th day of February, 1895, between the Secretary of the Treasury of the United States, of the first part, and Messrs. August Belmont & Co., of New York, on behalf of Messrs. N. M. Rothschild & Sons, of London, England, and themselves, and Messrs. J. P. Morgan & Co., of New York, on behalf of Messrs. J. S. Morgan & Co., of London, and themselves, parties of the second part. Witnesseth: Whereas it is provided by the Revised Statutes of the United States (section 3700) that the Secretary of the Treasury may purchase coin with any of the bonds or notes of the United States authorized by law, at such rates and upon such terms as he may deem most advantageous to the public interests; and the Secretary of the Treasury now deems that an emergency exists in which the public interests require that, as hereinafter provided, coin shall be purchased with the bonds of the United States, of the description hereinafter mentioned, authorized to be issued under the act entitled "An act to provide for the resumption of specie payments," approved January 14, 1875, being bonds of the United States described in act of Congress approved July 14, 1870, entitled "An act to authorize the refunding of the national debt." Now, therefore, the said parties of the second part hereby agree to sell and deliver to the United States 3,500,000 ounces of standard gold coin of the United States, at the rate of $17.80441 per ounce, payable in United States 4 per cent. thirty-year coupon or registered bonds, said bonds to be dated February 1, 1895, and payable at the pleasure of the United States after thirty years from date, issued under the acts of Congress of July 14, 1870, January 20, 1871, and January 14, 1875, bearing interest at the rate of 4 per cent. per annum, payable quarterly. First. Such purchase and sale of gold coin being made on the following conditions: I. At least one-half of all coin deliverable hereinunder shall be obtained in and shipped from Europe, but the shipments shall not be required to exceed 300,000 ounces per month, unless the parties of the second part shall consent thereto. 2. All deliveries shall be made at any of the subtreasuries or at any other legal depository of the United States. 3. All gold coins delivered shall be received on the basis of 25.8 grains of standard gold per dollar, if within limit of tolerance. 4. Bonds delivered under this contract are to be delivered free of accrued interest, which is to be assumed and paid by the parties of the second part at the time of their delivery to them. Second. Should the Secretary of the Treasury desire to offer or sell any bonds of the United States on or before the 1st day of October, 1895, he shall first offer the same to the parties of the second part; but thereafter he shall be free from every such obligation to the parties of the second part. Third. The Secretary of the Treasury hereby reserves the right, within ten days from the date hereof, in case he shall receive authority from Congress therefor, to substitute any bonds of the United States, bearing 3 per cent. interest, of which the principal and interest shall be specifically payable in United States gold coin of the present weight and fineness for the bonds herein alluded to; such 3 per cent. bonds to be accepted by the parties of the second part at par, i. e., at $18.60465 per ounce of standard gold. Fourth. No bonds shall be delivered to the parties of the second part, or either of them, except in payment for coin from time to time received hereunder; whereupon the Secretary of the Treasury of the United States shall and will deliver the bonds as herein provided, at such places as shall be designated by the parties of the second part. Any expense of delivery out of the United States shall be assumed and paid by the parties of the second part. Fifth. In consideration of the purchase of such coin the parties of the second part, and their associates hereunder, assume and will bear all the expense and inevitable loss of bringing gold from Europe hereunder; and, as far as lies in their power, will exert all financial influence and will make all legitimate efforts to protect the Treasury of the United States against the withdrawals of gold pending the complete performance of this contract. In witness whereof the parties hereto have hereunto set their hands in five parts this 8th day of February, 1895. J. G. CARLISLE, Secretary of the Treasury. AUGUST BELMONT & CO., On behalf of Messrs. N. M. Rothschild & Sons, London, and themselves. J. P. MORGAN & CO., Attest: On behalf of Messrs. J. S. Morgan & Co., London, and themselves. W. E. Curtis. Francis Lynde Stetson. I felt that the issue of bonds payable specifically in gold would establish a very dangerous precedent, and therefore took a deep interest in the defeat of the proposition. I believed that the issuance of gold. bonds would be followed by a demand upon the part of the bond holding class for another credit strengthening act, like the one passed in 1869, except that this one would declare all bonds payable in gold. On February 14, 1895, I submitted the following argument in opposition to the bill: Against Gold Bonds. The House having under consideration the joint resolution (H. Res. 275) authorizing the issue of $65,116,275 of gold 3 per cent. bonds. Mr. Speaker: This resolution embodies two purposes. It proposes to ratify the contract made by the Executive by authorizing the substitution of gold bonds to the amount of $65,116,275, bearing interest at a rate not exceeding 3 per cent., and payable not more than thirty years after date, in accordance with the request made in the President's message, and it also provides that greenbacks and Treasury notes redeemed with the gold purchased with these bonds shall not be re-issued. I desire to call the attention of the House to the fact that the latter provision is intended to lock up in the Treasury $65,000,000 of legal-tender paper without making any provision whatever to supply the place of that currency. If we vote for this proposition, we vote to retire that much money without filling the void. Mr. Warner. Will the gentleman allow me to ask him a question? Mr. Bryan. I hope I shall not be interrupted. Mr. Warner. Does not the gold fill the void? Mr. Bryan. Mr. Speaker, the House knows that when I have time I never object to questions, and it is only because of my limited time today that I ask gentlemen not to interrupt me. In answer to the question, however, I would say that unless the greenbacks and Treasury notes are reissued they will accumulate and a few more bond issues will retire all of them and deprive the country of that much of its circulating medium. For all practical purposes it is equivalent to a cancellation of this money and will offer a constant temptation to those who oppose greenbacks to draw out the gold and force further issues of bonds for the purpose of getting this kind of money out of the way. But the main question presented by this resolution is whether we shall ratify the contract made by the Executive and issue gold bonds in order to save about a half million a year in interest. The supporters of this resolution urge us to consider it as a business proposition and I shall discuss it as a business proposition. One gentleman has suggested that Democrats ought not to criticise the Administration. I want it understood that, so far as I am concerned, when I took the oath of office as a member of Congress, there was no mental reservation that I would not speak out against an outrage committed against my constituents, even when committed by the President of the United States. The President of the United States is only a man. We intrust the administration of government to men, and when we do so, we know that they are liable to err. When men are in public office we expect them to make mistakes-even so exalted an official as the President is liable to make mistakes. And if the President does make a mistake, what should Congress do? Ought it to blindly approve his mistake, or do we owe it to the people of the United States, and even to the President himself, to correct the mistake so that it will not be made again? But some gentlemen say that the Democratic party should stand by the President. What has he done for the party since the last election to earn its gratitude? I want to suggest to my Democratic friends that the party owes no great debt of gratitude to its President. What gratitude should we feel? The gratitude which a confiding ward feels toward his guardian without bond who has squandered a rich estate. What gratitude should we feel? The gratitude which a passenger feels toward the trainman who has opened a switch and precipitated a wreck. What has he done for the party? He has attempted to inoculate it with Republican virus, and blood poisoning has set in. What is the duty of the Democratic party? If it still loves its President, it is its duty, as I understand it, to prove that it has at least one attribute of divinity left by chastening him whom it loveth. Mr. Speaker, I do not intend to question the motives of the officials who are responsible for this contract. We might criticise the conduct of the President in excluding all other advisers and consulting only with the magnates of Wall street; and we might even suggest that he could no more expect to escape unharmed from such associations than one could expect to escape asphyxiation if he locked himself up in a room and turned on the gas-but without questioning the motive of the President, I say, we have a right to express our judgment as to whether the discretion vested in the President has been wisely exercised. We are told that this is not only a business proposition but a very insignificant question-just a little matter of saving half a million a year, that is all. Mr. Speaker, I desire to ask these gentlemen who are always coming here with these "business propositions," why it is that no advocate of the gold standard dares to stand before the American people and unfold the full plan of the gold conspiracy. Why is it that our opponents keep bringing up one proposition at a time and saying, “An emergency is upon us; let us adopt this proposition at once and leave the final settlement of the money question until some other time?" Why is it that we never reach a time when these gentlemen are willing to consider the greatest of all the questions which are demanding settlement at the hands of the American people? Save $16,000,000 in thirty years? Why, sirs, this is a bigger question than $16,000,000. Will you set a price upon human life? Will you weigh in the balance the misery of the people? What is the value of civilization to the human racebecause the settlement of this "little question" may enormously affect the welfare of mankind. And yet, gentlemen talk about its being a matter of small consequence, a little question, the mere saving of half a million dollars a year. Save the people $16,000,000 in thirty years-twenty-five cents apiece-by this resolution and $16,000,000,000 will not measure the damage which may result to them in a third of that time. What is this contract? I am glad that it has been made public. It is a contract made by the Executive of a great nation with the representatives of foreign money loaners. It is a contract made with men who are desirous of changing the financial policy of this country. They recognize by their actions that the United States has the right to pay coin obligations in either gold or silver and they come to us with the insolent proposition, "we will give you $16,000,000, paying a proportionate amount each year, if the United States will change its financial policy to suit us." Never before has such a bribe been offered to our people by a foreign syndicate, and we ought to so act that such a bribe will never be offered again. By this contract we not only negotiate with foreigners for a change in our financial policy but give them an option on future loans. They are to have the option on all bonds which may be issued before the first of next October. What would be the effect of such a condition? Do you suppose that anybody else will care to bid when it is known that these men have the refusal of all bonds at any price? It makes a popular loan impossible. If these men alone bid for the next issue they can insist upon a condition that they shall have an option on a still further issue of bonds. Shall we bind ourselves to these men perpetually? I shall not raise the question, because I am not prepared to discuss it from a legal standpoint, whether the President has a right to sell an option on bonds which may be hereafter issued, but, sirs, I will say that, if he has the right, I believe he has made an inexcusable use of the discre tion vested in him. We cannot afford to put ourselves in the hands of the Rothschilds, who hold mortgages on most of the thrones of Europe. The press dispatches stated that the French steamer, La Gascogne, when she came into port a few days ago, had three red lanterns on her foremast. signifying: "Get out of the way, I cannot control my course." The President may be persuaded that this country has reached a point where it cannot control its own course and must supplicate foreign financiers to protect our treasury, but he mistakes the sentiment of the American people if he thinks that they share with him in this alarm. The United States is able to take care of itself. It can preserve its credit and protect its people without purchasing at a high price the "financial influence" or the "legitimate efforts" of banking corporations, foreign or domestic. I call attention also to the fact that these bonds may be made payable in thirty years. The contract does not call for thirty-year bonds; it says that "any bonds of the United States," payable in gold, and drawing 3 per cent. interest, may be substituted in the place of the coin bonds. But there seems to be a fear that the bond buyers may insist that the spirit of the contract would compel the issue of thirty-year bonds. In describing this contract, Mr. Speaker, I find in "The Merchant of Venice" language more expressive than any I can command. That language fits the contract which we are asked to ratify, and is as follows: Shylock. This kindness will I show: Go with me to a notary, seal me there Of your fair flesh, to be cut off and taken Antonio. Yes, Shylock, I will seal unto this bond. Mr. Bowen. Who wrote that, Shakespeare or Bacon? Mr. Bryan. I shall leave Mr. Donnelly and Mr. Ingersoll to settle the question of authorship. But, Mr. Speaker, it was decided that Shylock's bond, while it called for a pound of flesh, did not include any blood. The difference between the construction placed upon that bond and the construction which this House is asked to place upon the contract before us is, that we are asked to make the construction so liberal as to include the blood with the flesh. We have a right, according to the terms of the contract, to substitute a short-time bond, and yet the resolution permits the Secretary to issue a thirty-year bond. This House is not prepared to give its sanction to a policy which contemplates a permanent public debt, but the rule adopted allows no opportunity for an amendment limiting the bonds to five or ten years. If we give the Secretary of the Treasury authority to issue a thirty-year bond, he is powerless to resist the demands of the bond purchasers, because the contract is made; ten days only are given for the exercise of the option; he can not negotiate with anybody else; he can not offer bonds to anybody else; he is in their hands; he must make a thirty-year bond if they ask it-and who doubts that they will ask it? |