In coin. The third course necessarily involved all the disor-

ders caused by a depreciation of the money that served the

community in its economic relations as a standard of value.

But the demand for fresh issues to facilitate borrowing was

Virtually a recommendation of this third course.

One amendment to the bill, destined in later years to be

the subject of much criticism was made during the discus-

sion in committee of the whole. Despite Secretary Chase's

urgent recommendation, the "conversion" clause, permitting

holders of greenbacks to exchange them at par for 6 per

cent, bonds was retained in the bill as reported by the Com-

mittee of Ways and Means. 3 Near the end of the debate,

however, Mr. Horton moved to strike out this clause. "It

simply leaves the option in the hands of the secretary of the

1 Ibid., p. 287. 2 Ibid., p. 391. 3 Sec. 3, Ibid., p. 284.

116 History or the greenbacks

treasury," he said in explaining the proposed amendment,

"instead of the holders of the currency." * Very little atten-

tion was paid to the change. Shellabarger and Stevens

showed a disposition to question its wisdom, but it was

accepted in committee of the whole without a division,' and

when Shellabarger called for the yeas and nays upon it in

the House they were not ordered. 3

Three substitutes were proposed for the bill brought in

by the Committee of Ways and Means. Thaddeus Stevens

proposed one, of which the characteristic features were the

issue of $300,000,000 in United States notes, payment of

Interest on bonds in "lawful money " instead of in coin, and

repeal of the legislation authorizing the acceptance of deposit

loans. 4 When this substitute was rejected by a vote of 39 to

66, 5 Mr. Stevens imperturbably proposed a second. 8 As the

House was disposed to insist upon payment of interest in

coin a measure which seemed to Mr. Stevens to destroy

"the simplicity and harmony " of the paper-money system 7

he accepted this principle and proposed that any part of

$900,000,000 might be borrowed on treasury notes bearing

3.65 Per cent, interest in coin, a legal tender to the same

extent as greenbacks and redeemable at the pleasure of the

government. 8 This proposition was defeated by a yea and

nay vote of 37 to 91. 9 The third substitute, introduced by

Mr. Hooper, reproduced with a few modifications of wording

a bill submitted by Secretary Chase at their request to the

Committee of Ways and Means, but not accepted by them. 10

As Chase observed in his letter to the committee, "the pro-

vision in respect to loans is very general." In order to

secure $900,000,000 the bill authorized the secretary of the

treasury to issue 6 per cent, bonds running twenty years or

i Conffressional Globe, 37th Cong., 3d Sess., p. 455. Ibid., loc. cit.

> Ibid., p. 522. * For text see ibid., p. 284. s n>id., p. 487.

Ibid., p. 490. 1 1bid., p. 145. For text see ibid., p. 520.

Ibid., p. 522. 10 See Hooper's explanations, ibid., p. 485. " Ibid., loc. cit.

THE THIKD LEGAL-TENDER ACT 117

less, or 6 per cent, treasury notes running not more than

three years, or United States notes, without specifying any

limit to the amount of these various securities to be issued

beyond the provision that the aggregate of bonds, treasury

notes, and United States notes should not exceed $900,000,-

000. l This bill met a fate similar to Stevens's by an equally

emphatic majority 32 to 67. 2 After these substitutes had

been rejected the bill of the committee was passed without a

division and sent to the Senate. 3

In the Senate the finance committee proposed several

amendments, of which the most important was the reduction

of the issue of greenbacks from $300,000,000 to $150,000,-

000. 4 Why the House Committee of Ways and Means had

set the issue at $300,000,000 is not clear. Mr. Hooper,

after a conference with Chase, told the House that the secre-

tary seemed not to consider so large an issue necessary. 5 Yet

the amount was not reduced, nor was there any discussion of

the subject. However, no objection was raised to the Sen-

ate's amendment reducing the issue by one-half. Appar-

ently, the House was proceeding on Amasa Walker's maxim

that in such an emergency it was "not worth while ....

to be very particular." 6 Had it not been for the action of

Senator Fessenden's committee the amount of greenbacks

authorized during the war would have been $600,000,000

instead of $450,000,000.

The debate in the Senate was brief, and even more largely

devoted to the clause taxing bank notes than had been the

case in the House. The final vote was yeas 32, nays 4. 7

March 3, 1863, the bill received President Lincoln's

approval.

This law authorized the secretary of the treasury to bor-

1 For the text see ihnl., p. 484.

2 Ibid., p. 487. 3 ibid., p. 522. * Ibid., p. 927.

6 Ibid., p. 366. Ibid., p. 392. 7 ibid., p. 945.

118 HISTORY OF THE GREENBACKS

row on the credit of the United States $900,000,000. He

could sell 6 per cent, coin-interest, ten-forty bonds on such

terms as he might "deem most advisable." Of this sum

$400,000,000 might be in three-year treasury notes bearing

not more than 6 per cent, interest payable in " lawful money."

These notes were to be a legal tender for their face value,

excluding interest, of denominations not less than ten dollars

and could be sold " on the best terms that can be obtained,"

or paid to creditors willing to accept them at par. Further,

the secretary was empowered "if required by the exigencies

of the public service, for the payment of the army and navy,

and other creditors of the government, to issue .... the

sum of $150,000,000 of United States notes, including the

amount of such notes [$100,000,000] heretofore authorized

by the joint resolution approved January 17, 1863." The

clauses in the first and second legal-tender acts restrict-