the
refunding act at par one with the other. The Secretary of the
Treasury could sell the bonds provided for by the refunding act at
par, and with the proceeds pay off the then existing securities as
they became redeemable. In the discussion of this bill in the
Senate, on the 28th of February, 1870, I made a carefully prepared
speech, giving a detailed history of the various securities
outstanding, and expressed the confident opinion that the existing
coin bonds bearing six per cent. interest, and other securities
bearing interest in lawful money, could be refunded into bonds
running for a short period, bearing a reduced rate of interest.
I said:

"After a long and memorable debate of over two months in both Houses
of Congress, the act of February 25, 1862, was adopted. That was
a revolutionary act. It was a departure from every principle of
the financial policy of this government from its foundation. It
overthrew, not only the mode and manner of borrowing money, but
the character of our public securities, and was the beginning of
a new financial system, unlike anything that had been ventured upon
by any people in the world before. This new policy was adopted
under the pressure of the severest necessities, and only because
of those necessities, and was intended to meet a state of affairs
never foreseen by the framers of the constitution.

"Now, sir, it is important to understand the principles of this
act; for this act was the foundation of all the financial measures
during the war. It was upon the basis of this act, enlarged and
modified from time to time, that we were enabled to borrow
$3,000,000,000 in three years and to put down the most formidable
rebellion in modern history. This act was based upon certain
fundamental conditions.

"Extraordinary power was conferred upon the Secretary of the Treasury
to borrow money in almost any form, at home or abroad, practically
without limitation as to amount, or with limits repeatedly enlarged.
Every form of security which the ingenuity of man could devise was
provided for by this act or the acts amending it. Under these acts
bonds were issued, payable in twenty years, treasury notes were
issued, certificates of indebtedness, compound-interest notes, and
other forms of indebtedness, with varying rates of interest. There
were, however, distinct limitations upon the nature and character
of these loans. It was stipulated first, that more than six per
cent. inte