sire to say a word. This is a private bill for the benefit of a railroad company. I have been endeavoring since February last to obtain action upon a bill of great importance to the banking interests of the country, but I have utterly failed up to this time, although it has been reported to the Senate by the unanimous vote of the Committee on Finance, and although it contains provisions of the greatest importance to the banking system, to correct some abuses that are gross and scandalous, and some of its provisions at least ought to receive, and will receive the assent of the Senate. I have been struggling day after day and week after week to get the consideration of the Senate to this bill. The Senator from Illinois [Mr. YATES] gave way on the Colorado bill, with the understanding that I was to call up this bill to-day. Now, it is to be pushed aside with all the other business of the Senate pressing upon us, in order to give to a branch Pacific railroad another gratuity. I ask the Senate whether public measures of great importance ought to be thus thrust aside? The Senator from California no doubt will have an opportunity to get up his bill, but I think I ought to be allowed to present this important public bill now. If it can be assigned as the special order for one o'clock, I do not want to interfere with any other busi'ness, but it is manifest that the Committee on Finance cannot get their measures considered.

Mr. WILLIAMS. Make that motion, that the banking bill be made the special order for one o'clock.

Mr. SHERMAN. If that can be done, if the bill I have mentioned, Senate bill No. 440, can be assigned as the special order for to-day at one o'clock, and taken up then, I have no objection to the Senator from California proceeding with his bill. But the idea of comparing a private grant to a railroad company for a depot with a bill which affects the whole circulation of the country, a matter of great public interest, I think is preposterous.

Mr. CONNESS. There can be no objection to the proposition of the Senator.

Mr. SHERMAN. Then I move that the bill to which I have referred be made the special order for to-day at one o'clock, to be considered as the unfinished business.

Mr. CHANDLER. I hope that order will not be made. Last Saturday was set apart for the consideration of bills from the Committee on Commerce, but was devoted to other business; and I desire to ask the Senate to give me to-day for the consideration of bills reported from the Committee on Commerce. If that is objected to, then I ask the Senate to assign me to-morrow.

Mr. SHERMAN. I shall have no objection to the Senator taking any day after the passage of this bill.

Mr. CHANDLER. I move, then, that tomorrow be set apart for the consideration of bills from the Committee on Commerce.

Mr. SHERMAN. We cannot accumulate motions to make special orders in this way. The PRESIDENT pro tempore. The motion really pending is the motion of the Senator from California, which was first in order, to take up his bill; but if there be no objection to assigning one o'clock to-day for the consideration of the bill mentioned by the Senator from Ohio, it can be done. As no objection is made, it will be considered that that order is made.

Mr. SHERMAN. Very well.

WESTERN PACIFIC RAILROAD.

The PRESIDENT pro tempore. The question now is on the motion of the Senator from California.

The motion was agreed to; and the Senate, as in Committee of the Whole, resumed the consideration of the bill (S. No. 156) relating to the Western Pacific railroad.

The PRESIDENT pro tempore. The bill will be read through.

Mr. CONNESS. The bill has been heretofore read and amended.

Mr. EDMUNDS. Let it be read for inform

ation as it stands. We do not know anything about it.

The Chief Clerk read the bill, as amended, as follows:

That the Western Pacific Railroad Company of California be, and is hereby, permitted to occupy for the purposes of a depot, store-houses, and other necessary fixtures, so much of the island known as Yerba Buena or Goat Island, in the bay of San Francisco, California, as may, within one year from the time this act shall take effect, be designated by the General of the Army of the United States, with the approval of the Secretary of War, as not being required in time of peace for military purposes; which United States shall be engaged in war or in imminent privilege shall, however, be suspended whenever the danger thereof, and notice of such suspension shall be given to said company, its successors or assigns, by the Secretary of War, with the approval of the President. And in case of such suspension of said privilege it shall be the right of the United States to take possession of the part of said island subject to said privilege, together with all buildings and other fixtures erected thereon by said company, and to occupy and use the same for military purposes during the war, and so long thereafter as shall be deemed necessary by the Secretary of War, with the like approval; and the United States shall pay to said company, their successors or assigns, such sum as may be reasonably due for such use and occupation thereof. The said Western Pacific Railroad Company are also hereby authorized to locate and construct a railroad thence, by the shortest and most practicable route, to a point on its present line at or south of the city of Stockton, and they are hereby enfranchised with all the grants, privileges, and benefits, and made subject to all the conditions of the several acts of Congress relating to the said company and its railroad and telegraph line: Provided, however, That nothing herein contained shall be so construed as to increase the subsidies in bonds, beyond that accruing under existing lines of location and laws heretofore passed providing for the construction of the Pacific railroad.

Mr. MORRILL, of Vermont. I move to amend the bill on page 2, line thirty, by striking out after the word "approval" the following

words:

And the United States shall pay to said company, their successors or assigns, such sum as may be reasonably due for such use and occupation thereof.

Mr. President, when the United States give this company so valuable a possession as this, if it shall thereafter for merely temporary use require its occupation, it seems to me that it is a pretty bold proposition to ask that the United States shall pay this railroad company a price for its temporary occupancy, when we give up the whole, a most valuable possession, without any consideration whatever, in addition to what we have heretofore given to this road. I take it that no one will have any objection to the amendment I propose.

Mr. CONNESS. The objection to the amend ment is this: the terminus or great depot of the Pacific railroad near the city of San Francisco, to accommodate not only the trade involved in the necessities of the States on the Pacific coast, but also involved in the receipt and shipment of merchandise from the East Indies, which we all hope to be of the greatest extent, will need necessarily very costly constructions in the way of buildings, &c. The probability is that the buildings to be erected and the work to be done at this depot will cost several million dollars to utilize and make it adequate for public business. The question involved here is whether, if the Government in time of war should take possession of all these works and buildings, they should not allow such a rent or allowance as would be fair

and equitable for their use. It appears to me that to adopt the amendment of the Senator from Vermont would be to do what the Government has never done in any case that I have any knowledge of. As I stated before when this bill was under discussion, land owned by the Government to such an extent as was needed for so great a public purpose as this, has not been denied to any company or party; and this is a question as to whether the Government shall confiscate, take possession, of the structures reared at an immense expense by this company, without allowing any consideration therefor. Having stated it, as I think, clearly, I am perfectly willing that the Senate shall vote upon it.

Mr. HOWARD. I wish merely to add that the Committee on the Pacific Railroad had this subject under consideration at several meetings, and after reflecting upon it as care.

fully as they were able they came to the conclusion to report the bill back with the amendment which has been read, out of which the Senator from Vermont proposes to strike the clause which he has moved to strike out. I trust that that motion will not prevail. It will be necessary, as has been remarked by the Senator from California, that this company, if they occupy the island for such a purpose, shall erect buildings which must be considerably costly. What amount it may be necessary for them to expend in the way of storehouses, depots, &c., on the island, of course we cannot now ascertain; but the amount will necessarily be very large.

The effect of the amendment is to authorize the Government in case of war to take possession of the whole of the island and the whole of the buildings which may have been erected by the company upon the island for purposes of their own, and to use these buildings or structures, whatever they may be, for the use and benefit of the United States during the war and until such time after the war as the Secretary of War may find it necessary. I

submit to the Senate that to authorize the Government to take possession of these costly buildings and hold them for any considerable time, thus necessarily suspending the business of the company during that time upon the island, would be or might be a very serious damage to the company, and that they ought, fairly and honestly, to be compensated for such a use. No sum is fixed in the bill which is to be paid for such use and occupation. That is to be left for future consideration, and to be time may see fit to designate. But this bill settled in such way as Congress at the proper simply promises to the company on the part of the Government that in case it shall so use the buildings which may be erected upon the island, it will give them a reasonable compensation for the use and occupation of them. I submit that that is nothing more than simple justice.

Mr. MORRILL, of Vermont. If that is the only explanation of this provision it does not amount to anything at all. We cannot take property of private citizens under the Constitution of the United States without compensation. This is no concession at all on the part of the company to the United States. In case of war we could go and take possession of it by paying for its use, whether this provision was in the bill or not. I submit that it ought not only to stipulate that there shall be no pay, but even that it shall be free. How much does the Senator from Michigan-I suppose he has investigated the subject-suppose the value of this island to be at the present time? What would it sell for?

It is

Mr. HOWARD. It is not possible to furnish any estimate of the value of the island. of no value to any person for agricultural pur-* poses, as I have been informed. It is valuable only as a military station in the harbor of San Francisco, and as a depot for the termination of the Union Pacific railroad. It is impossible, therefore, to answer the question which the Senator puts to me as to the actual value of the island. I beg to say, however, now that I am up, if the Senator will allow me, that the bill itself does not convey to the company the title to the island. The Government does not assume to part with the title to the island to the company, but simply to grant to the company a license to occupy such portion of the island as may not be deemed by the General of the Army of the United States necessary for military purposes, for the erection of store-houses, &c., subject to be reoccupied by the Government of the United States in time of war.

Mr. MORRILL, of Vermont. I have had handed to me by my colleague the report of A. A. Humphreys, brigadier general of engineers, wherein he says:

"The value of this island, over and above the cost of the works necessary to develop it, must be many millions of dollars."

Now, Mr. President, if we do not propose

to give the title to this island to this company, but propose to give them its use and occupancy, why should the United States be required | to pay rent for it whenever the emergency may arise that they require it, and especially for war purposes? It seems to be admitted by the very face of the bill that it will be so required in case of war, because it is specially provided that in such a case the United States may resume its possession.

Mr. CONNESS. There is one point, if the Senator will permit me

Mr. MORRILL, of Vermont. I desire to occupy but a moment's time. I merely rose to call the attention of the Senate to this provision. It seems to me that the common judg ment of any man should say that this portion of the bill should be stricken out; and I am somewhat surprised that the Senator from California does not concede it. He is generally a fair man. He is not disposed to be very much of a Yankee, to take advantage and get a smart, sharp bargain; and certainly it seems to me that this goes beyond any Yankee operation that I have ever seen yet: that we are to give to this company a possession which in its value is worth hundreds of thousands of dollars every year, and if we shall merely require it for our own temporary occupancy in case of a great emergency we are to be called upon to repay this company to whom we have given so many largesses, so many benefits, the uttermost farthing for any value that we may derive from the use and occupancy of our own property.

Mr. NYE. Being somewhat familiar with the exact location of this island, I desire to say a few words on this subject. The view which the honorable Senator from Vermont takes, it seems to me, is a narrow one, not justified by the facts. In the first place, the outlay upon the island will be several millions of dollars to enable it to be occupied for military purposes by the Government itself; for I assert, with an entire familiarity with its locality, that it is unavailable as a military depot in the sense in which the Government will require it without that outlay being made by the Government itself or by some one else. On one side of the island the channel is very narrow indeed, and without this land connection it will be entirely unavailable, or to a large extent unavailable, for military purposes, and it is good for nothing else. This company agree to go on and make this large outlay, which will not be less than two million dollars certainly, to get upon this island.

There is another view of this case which the Senate of the United States should take, which it seems to me controls it, and I wish to have the attention of the Senate while I state it. The Government has gone on at great expense and aided in the construction of this railroad. To make it available, to make the securities ample upon which the Government rests for the return of the advances made and to be made to construct the road, it needs this terminus to accommodate the public commercial interests of the country. The Senator from Vermont and his constituents are as much interested in it as the people of the State of California or Nevada, and more, for turn this map whichever way you may, the wealth of the West and of the East all centers upon this Atlantic coast. In a commercial point of view, for great commercial convenience to this enterprise and to the shipping interests of the world, this terminus is demanded. It is no gift to this company.

There is another view which I wish to present, and then I shall have done; and that is the point of economy. I think what is now proposed will save the construction of something like forty-seven miles of road. No such convenience for public commerce can be found as upon this island. We have now reached a new era in the commerce of the world. We have seen in the other branch of this Congress, standing in their Hall, within this week, the representatives of a population of four hundred million people, who bring us the fruits of

the sun, and they are to find their great depot at this island. It is of national importance to furnish commercial convenience to our great continental enterprise that this island should be so dedicated, and not one inch of the title passes and the Government can reclaim it whenever it is needed for its purposes.

Now, sir, I come to the "Yankee" part of the argument. Being a legitimate descendant of the Yankees I have a right to speak of that branch of the case. Sir, there is no Yankeeism in this. It is broad gauge. As my friend from Maine [Mr. MORRILL] the other day told the Senator from Michigan, [Mr. CHANDLER,] there is no flat bottom and center-board commerce in this; it is keels that navigate the world.

What does the Government part with? Nothing. It simply gives consent to occupy that portion of the island which it does not require for military purposes. It makes doubly valuable the portion of the island reserved for those purposes. It makes it, indeed, what the Government requires, absolutely defensive in its position; and if it shall become necessary in time of war that the country shall use the whole island it may take it all. This company are willing to say that in that contingency the Government shall take it. Under these limitations I can see no objection to the bill. And now I ask my friend from Vermont is it at all likely that in his day or mine that exigency will arise? No, sir; the power of the arms of this country so demonstrated itself to the world that no nation and no combination of nations will dare

invade our soil or create the emergency for which this provision is to provide.

Mr. CAMERON. Mr. President, I hope this amendment will be adopted, and after that, whether it be adopted or not, I have another one to offer. For the present I simply desire to say that this is a much more important question to the country and to the Treasury of the country than Senators seem to imagine. I have before me a report made by officers of the Engineer corps under the direction of the War Department which shows that this prop erty is indispensably necessary to the defense of the great city of San Francisco. The report says further in regard to its value, that if the Government were disposed to sell it they could get $5,000,000 for it. I have no doubt this is true. As I understand it, the island now above water and the shoal water there may be made to contain three hundred acres of land. After awhile, as the city of San Francisco grows toward its magnitude, for it is growing every year-and I agree with the Senator from Nevada that at some future time it will be one of the great cities of the world-as it progresses the value of this island will every year become greater.

If this island is to be used by a railroad all the railroads which shall terminate in San Francisco ought to have the same right there. You have now the Central Pacific railroad approaching completion; you have the Pacific railroad, eastern division, far advanced toward its termination. I hope that in a year or two we shall have a great Northern Pacific railway started also. All these railroads of course will terminate in San Francisco. There are besides various railroads in the State of California made by private individuals and by the bounty of the State which are approaching this great city. All of them ought to have a portion of this territory, if it is to be granted to

any.

We have at all our great towns found difficulty in having proper locations for the termini of our roads. They have been constantly changing their depots, because in the early start of their operations they did not know the amount of property they would need, nor where the centers of trade would be.

This is in some measure a new place; and we, the national representatives, ought to do something to make it a place worthy of the great city of which it is to be the entrepôt and of the whole nation that is going to give this bounty. The amendment which I shall offer as soon as this is disposed of, is to give all the

railroads which may terminate at San Fraucisco a right to go there.

It is said by the Senator from Nevada that this is not a Yankeeism. True, for the Yankees always pay for what they get. This is one of those schemes which are to make money out of the Government without giving a compensation for it. The railroad companies in the East have paid for not only the land upon which they erected their depots, but for every foot of the land upon which they built their roads. Here the Government gives the company the soil, gives them the right of way, and pays them for occupying it. It gives to every one of these Pacific railroad companies more than principalities in land, and besides that pays them money enough to make the railroads, and more than enough.

Mr. CONNESS. How?

Mr. CAMERON. By the subsidy. I do not object to that; I vote for these roads because I desire to have the great West and the great Pacific coast settled, and to encourage the people who desire to go to reside there. I desire to see inducements held out to send people across there to populate that great country. But I do not desire to see the Government lose all its property for the benefit of an already bloated corporation, for it is bloated, and all those connected with it are making. princely fortunes out of it. Why should they not pay for the ground they use as the terminus of their road, as other corporations have done? Especially should we not allow them to take from the Government an island which, as your engineers say, is absolutely necessary to the defense of the city of San Francisco. It is true that we may not have a war this year or next, and perhaps not in our generation; but ages and generations are but small periods in the history and growth of the world. The time will come when there will be a war there just as sure as time turns round, and then the Government will need this property.

I shall not detain the Senate longer now; but when this amendment is voted on, I shall offer the amendment I have indicated.

Mr. CONNESS. Mr. PresidentMr. FESSENDEN. I should like to hear the document read which the Senator from Pennsylvania has in his hands.

Mr. CAMERON. I am much obliged to the Senator for the suggestion, and I send it to the desk and ask that it be read.

Mr. CONNESS. I believe I have the floor. The PRESIDENT pro tempore. The time has arrived when the special order should be taken up.

Mr. CONNESS. This will only take a few minutes. I have but a few words to say.

Mr. FESSENDEN. Will the Senator consent to allow a motion to be made that that document be ordered to be printed?

Mr. CONNESS. That document may be printed, and it may be read from end to end; have no objection; but I hope the Senator will not undertake to jerk me from the floor when I rise.

Mr. FESSENDEN. Certainly not.

Mr. CONNESS. Mr. President, I shall only occupy one minute, and then it will be time to stop at present, as the hour for the special order is at hand.

There appears to me to be several holes, so to speak, in the logic of my friend from Pennsylvania. Allow me to let him look through them without the aid of glasses. The whole island, he says, is necessary for war purposes, and therefore it should not be given, or any part of it, to one company, and hence he proposes that it shall be given to all companies; for the honorable Senator has amendment as long as my arm giving the island for the purposes to all companies.

an

Mr. CAMERON. The Senator will allow me to correct him. I said if it is given at all it should be given to all of them.

Mr. CONNESS. Mr. President, if the outrage is to be committed of allowing the great Pacific railway to have a depot there, then every

railroad in the land must have it, and the outrage must be multiplied and quadrupled!

Mr. CAMERON. That is not logic. Mr. CONNESS. No, Mr. President, it is not logic. That is what I began to say. I understand what the Senator aims at very well; but if he were as well acquainted with the localities and the demands of these other roads as we happen to be he would not bring forward the amendment which he proposes.

But, sir, I promised not to occupy the time of the Senate, and I intend to abide by that promise. I give notice to the Senate that I shall call this bill up again, perhaps later in the day, when opportunity offers, or to-mor row, and I desire it to be exposed to the closest scrutiny; and I invite the close examination as well as the most forcible arguments of my honorable friend from Pennsylvania to sustain his proposition.

Mr. HOWARD. I merely wish to say, in reply to a suggestion made by the honorable Senator from Pennsylvania, that if in case it shall turn out that in the judgment of the Secretary of War and the President the whole of this island ought to be retained for military purposes they may so retain it, and this company cannot get a foot of it. The military authorities are to determine the question whether any portion of this island can be spared for the purposes contemplated in the bill.

Mr. FESSENDEN. I move that the document which has been laid on the table by the Senator from Pennsylvania be printed.

The motion was agreed to.

Mr. CONNESS. There is a map accompanying it. Let it be printed without the map. Mr. FESSENDEN. Yes; the original map can be returned with the printed document.

ENROLLED BILL SIGNED.

A message from the House of Representatives, by Mr. MCPHERSON, its Clerk, announced that the Speaker of the House had signed the enrolled bil (H. R. No. 601) making appropriations for the naval service for the year ending June 30, 1869; and it was thereupon signed by the President pro tempore.

NATIONAL BANKS.

The PRESIDENT pro tempore. The time has arrived for the consideration of the special order.

Mr. CHANDLER. With the leave of the Senator from Ohio, I desire to make the motion which I proposed to make a while ago, that to-morrow be set apart for the consideration of bills from the Committee on Commerce.

Mr. SHERMAN. I have no objection to that motion being made, if it does not lead to debate.

Mr. HARLAN. I shall have to interpose an objection.

Mr. SHERMAN. Then I hope we shall proceed with the regular order.

4

Mr. HARLAN. I shail want to call up the District business to-morrow.

Mr. CHANDLER. Let the vote be taken on my motion.

The PRESIDENT pro tempore. The Sen⚫ator from Michigan moves that to-morrow be set apart for the consideration of bills reported from the Committee on Commerce.

Mr. HARLAN. I desire to say something before that question is put.

Mr. SHERMAN. A single objection makes the motion out of order at this time.

Mr. CHANDLER. Then I give notice that I shall to-morrow ask the Senate to take up for consideration the bills from the Committee on Commerce. Last Saturday was set apart for those bills, but they then went over, and I shall now ask that to-morrow be substituted. Mr. SHERMAN. I insist that we go on with the regular order.

The PRESIDENT pro tempore. The Senator from Ohio calls for the special order, which is the bill (S. No. 440) supplementary to an act entitled "An act to provide a national currency secured by a pledge of United States

to be certain about. I was afraid there might be some doubt as to it.

Mr. SHERMAN. There can be none. The

The Chief Clerk read the words proposed to be inserted, as follows:

And the limitation prescribed in section twentynine of said act, which restricts the liabilities of individuals, companies, corporations, or firms, for money borrowed of national banking associations to one tenth of the capital of such associations, is hereby made applicable to all deposits made by such associations with the private bankers or brokers or banking associations not organized under the national currency act.

The amendment was agreed to.

The next amendment was to insert the following as the third section of the bill:

SEC. 3. And be it further enacted, That section fortytwo of said act be so amended as to provide that within ninety days from the date of the notice served upon the Comptroller of the Currency by any national banking association that its shareholders have voted to go into liquidation as provided in said section, the said association shall pay over to the Treasurer of the United States the amount of its outstanding notes in lawful money of the United States, and take up the bonds which said association has on deposit with the Treasurer for the security of its cir culating notes, which bonds shall be assigned to the bank in the manner specified in the nineteenth seetion of this act; in default of which the Comptroller of the Currency shall sell said bonds to the highest bidder at publie auction in the city of New York, and from the proceeds thereof shall pay over to the Treasurer of the United States, in lawful money, an amount equal to the outstanding circulation of such association, and shall pay over any surplus remaining to the officers of the association. And any association which has heretofore gone into liquidation under the provisions of the section to which this is an amendment shall pay over to the Treasurer lawful money equal in amount to its outstanding circulation within thirty days from the date of the passage of this act, in default of which its bonds shall be sold as above provided. And from that time the outstanding notes shall be redeemed at the Treasury of the United States, and the said association and the shareholders thereof shall be discharged from all liability therefor: Provided, That any association winding up its affairs for the purpose of consolidation with another bank shall not be compelled to pay to the Treasurer of the United States the amount of its outstanding circulation in lawful money, nor shall its bonds be sold as above provided.

Mr. CORBETT. I ask the Senator from Ohio what will be the result of this amendment, if it is adopted, in case the Government should return to specie payments and adopt such measures as to redeem its own outstanding notes, the legal tenders. Provision is here made for disposing of the bonds held by banks and paying the amount realized from them in currency to the Government to reimburse it and turning over the balance to the bank. If the Government shall have returned to specie payments so as to redeem its legal tenders in specie at any time, will it not, be obliged to redeem those notes with gold? It seems to me that when these bonds are disposed of and national bank bills paid out the Government will be obliged to redeem them. Can it redeem them in bank bills, or will it have to pay gold for them, provided it shall then have no legal-tender notes in circulation? I ask the Senator from Ohio what would be the effect of the amendment in that view.

Mr. SHERMAN. The Senator will see that no such case can possibly arise, because before the bank can withdraw its bonds it must deposit with the Treasurer lawful money of the United States to the full amount of its circulation. That "lawful money" is not bank notes; "lawful money" is greenbacks or gold. Consequently, if specie payments were resumed, and our notes were as good as gold, they would have to deposit gold, or greenbacks, which would then be equal to gold.

Mr. CORBETT. The question in my mind was whether this section would allow them to deposit other bank bills.

Mr. SHERMAN. No, sir; the section expressly says the amount of its outstanding notes in lawful money of the United States." "Lawful money of the United States" is a technical term which applies only to legal tenders or gold.

Mr. CORBETT. That was the point I wished

nite.

Mr. FERRY. In the twelfth line of this amendment there is a reference to "the nine

teenth section of this act." I suppose the word "this" should be changed to the word "said."

Mr. SHERMAN. It ought to be "the nineteenth section of said act.'

Mr. FERRY. I move that amendment. The PRESIDENT pro tempore. That modification will be made without a formal vote if there be no objection.

The Chair hears no objection.

Mr. HOWE. The amendment says these bonds are to be sold "at public auction." Would that require them to be sold at the regular stock sales?

Mr. SHERMAN. The national bank act provides the mode and manner of selling bonds; it is to be done at public auction. They are sold at the stock exchange, I sup

pose.

Mr. HOWE. Would they necessarily be sold in that way?

Mr. SHERMAN. Yes, sir; because the original bank act requires it. This only repeats its language. The provision is that they must be sold in New York at public auction. If the Senator thinks there is any doubt about it, I have no objection to putting in the words "at the stock exchange."

Mr. HOWE. I simply asked the question. There may be public auctions in New York entirely independent of the stock exchange.

Mr. SHERMAN. But I take it the Treas urer of the United States, as a matter of course, would sell these bonds at the place where all such things are sold.

Mr. HOWE. I should think he would.

Mr. SHERMAN. But if the Senator has any doubt about it he may put in the words "at the stock exchange" after the words "public auction."

Mr. JOHNSON. That had better be done. Mr. SHERMAN. I have no objection. Mr. HOWE. I think it would be well to put in those words.

Mr. SHERMAN. Very well, let them be inserted.

Mr. HOWE. I move to insert the words "at the stock exchange" after "auction." The amendment to the amendment was adopted.

The amendment, as amended, was agreed to. The next amendment of the Committee on Finance was to insert the following as the fourth section of the bill:

SEC. 4. And be it further enacted, That there shall be allowed to receivers of national banking associations, appointed in accordance with the provisions of the national currency act, in full compensation for their services, a salary of $1,500 per anuum, and in addition thereto a commission of three per cent. upon the first $100,000; a commission of one per cent. upon all sums above $100,000 and not exceeding $500,000, and a commission of one half of one per cent. on all sums over $500,000 that may be collected; which salary and commission shall be paid by the Comptroller of the Currency out of any moneys realized from the assets of the bank so in the hands of the receiver: Provided, That the payment of one half of the commissions may be reserved, in the discretion of the Comptroller, until the affairs of the bank are finally closed. And all receivers, appointed as aforesaid, shall be considered officers or agents of the Government, and shall have the right to bring suits in the United States courts. And the judge of the United States district court for the district in which such suits are brought, shall fix the fees or compensation to be allowed to the attorneys for such receivers, having due reference to the amount of labor performed and to the interests of the creditors of the bank.

Mr. CAMERON. I move to amend the amendment by making "three" in the sixth line "two," ""one" in the seventh line " one half;" and " one half" in the ninth line "one quarter," so as to make the commission two per cent. on the first $100,000, one half of one per cent. beyond that up to $500,000, and one quarter of one per cent. on all above $500,000. The amendment of the committee

We

would give a receiver for collecting $100,000, $4,500; my amendment will make it $3,500. Mr. SHERMAN. So far as I am concerned I have no objection to the Senator's amendment; but I will state the reason why the Committee on Finance proposed the compensation for which the section provides. This compensation is precisely the compensation of the collectors of internal revenue. copied from the internal revenue act the rates of compensation now fixed by law for such officers. It will be remembered that the Comptroller of the Currency, in calling attention to the necessity of legislation on this subject, says that the courts in the State of New York have allowed five per cent. on all sums, even in one case where the amount of capital involved was $1,200,000, amounting to an extortionate sum. This section is for the purpose of reducing the allowances made by the courts, the fees of receivers being now fixed by the State courts. In arriving at what would be a proper compensation we came to the conclusion that the amount allowed now by law to the collectors of internal revenue would be about fair. The duties to be performed by these officers are generally of a high character, often very difficult. Banks are usually broken on account of frauds or peculations or misconduct, and frequently the assets are very difficult to be collected. It was thought, therefore, that on the amount collected a reasonable commission should be given. If the Senator from Pennsylvania, who knows more about the subject than I do, thinks that $1,500 a year salary, and two per cent. on the first $100,000 collected is sufficient, I shall make no special objection; but the committee considered the matter fully, and came to the conclusion that we had better leave the rates at the amount proposed by the Comptroller of the Currency, being the rates fixed by law for collectors of internal revenue.

Mr. CAMERON. In the case of collectors of internal revenue, it will be remembered that they collect in small sums from various persons in different parts of the district, and sometimes the districts are very large. Here it is all one business and will be done under the same roof. According to my amendment, if $100,000 should be collected, the compensation of the receiver would be $3,500. I think that is sufficient. If the assets are good, they are generally collected almost immediately; and if bad not at all. Then the percentage is increased as the amount enlarges. I think the compensation above $200,000 is too much, even as I propose to leave it; but I am willing to agree to the reduction proposed. My experience in banking has been that when a bank breaks up the gentlemen who settle its affairs generally get pretty much all that is left. I want to save something for the stockholders, if possible.

Mr. WILLIAMS. Mr. President, I know that it is an unthankful and an unprofitable business to undertake to oppose any proposition here to reduce the pay of anybody who is expected to perform public duties; but I very much doubt the propriety of reducing the amount which is specified in this section as a compensation to receivers appointed to settle up the affairs of national banks. I doubt in the first place the propriety of appointing men to discharge responsible duties and then giving them a starvation salary; and it is to that cause as much as to any other that we may attribute the great demoralization that has crept into the public service of this country. We suppose that we are consulting economy when we appoint men to office and deny them a reasonable compensation for their services, when in point of fact we are endangering, not only the Government, but the people generally who are concerned in the transaction of the public business.

To be a receiver, as it seems to me, in settling up the affairs of a delinquent or broken bank, requires not only a business man, but it requires a man who understands questions of law, who can not only engage in the collection of such debts as may be due the bank, but in

the adjustment of all legal questions that grow out of the settlement. Now, to provide that such a receiver shall receive only $1,500 a year, and then $2,000 more for collecting $100,000, which would make $3,500 salary for one year's labor, is to provide that no man fit to do the work will undertake it. If a bank was to break in any considerable city, no merchant would undertake the business for that pay; no lawyer would undertake the business for that pay; and you must procure some shyster who expects to make up what he lacks in fees by stealing the assets of the bank. That will probably be the result unless you give to those officers such pay as will induce respectable and honorable men to engage in the business. The courts, while the business has been in their hands of fixing the fees of these officers, have allowed them much morefive per cent. perhaps more than they ought to have received. It may be supposed that a court is honest in this allowance, and that a court understands what is really due a man for the transaction of such business; and a court conversant with the man and the business he has done has allowed much more than this amendment provides.

It seems to me that it is desirable that these persons should be good, honest men, competent men, men in whom the community can confide; and although I am not much of a banker, and know very little about settling up the affairs of broken banks, I did suppose that a receiver had something else to do besides doing business inside of the bank. I supposed that there was usually a large amount of money due to the bank from a great variety of persons, and that it was the business of the receiver to collect the debts due the bank, to marshal the assets, make arrangements for the payment of the debts of the bank, and take the whole responsibility of settling up the busiThat I understand to be the duty of a receiver; and although I of course feel no interest in this matter any further than the public is concerned, I think that this compensation is not an unreasonable one, and that we shall not gain anything by reducing it as suggested by the Senator from Pennsylvania.

ness.

Mr. CATTELL. The rate of compensation fixed for receivers by the amendment of the committee is precisely the same as that fixed for collectors of internal revenue, $1,500 per annum salary and the same percentage upon the amount collected. The Comptroller of the Currency recommended this rate himself, and submitted it to the committee. and it was a subject of discussion there. After looking at it in all its aspects, the responsibilities connected with the handling of so much money and the talent required to settle up the affairs of an institution and the integrity and honesty requisite, we thought a receiver ought at least to command as high a salary as that of one of our collectors of internal revenue, and it was with that view that this amount was fixed.

Mr. CAMERON. I endeavored to explain before, but I believe the Senator from New Jersey was not in, that the duties of a receiver are much lighter than those performed by a collector of internal revenue. The latter collects from individuals various sums, small sums and large ones, all over his district; sometimes he has to go all over a congressional district to make the collections. Here it is all done at one place, the banking office, or some house in the town where it is located. I know how difficult it is to succeed here in a proposition to reduce compensation for lawyers, because the Senate is largely composed of lawyers, and they naturally have a sympathy for each other when you talk about reducing the pay of their brethren. It is supposed that a layman, as I was called some time ago, has a prejudice against them; but I am not one of that kind, for I generally pay my lawyers pretty well, though I do not often have to employ them. This is a different affair from ordinary legal business. It requires integrity; it requires a knowledge of accounts; but it does not require any great legal knowledge. A man may not

be fit to be chief justice even of the State of Pennsylvania or New York, and yet he may be a very good commissioner to settle up the affairs of a broken bank. I think the compensation is enough if fixed at the rate I propose, which would give for a bank of $500,000 assets $5,250; and I think that is a good sum. It will take him, probably, between two or three months.

The PRESIDENT pro tempore. The question is on the amendment of the Senator from Pennsylvania to the amendment of the Committee on Finance.

Mr. CAMERON called for the yeas and nays; and they were ordered.

Mr. DRAKE. I did not intend to say a word about this matter, but if the honorable Senator from Pennsylvania insists upon having the yeas and nays on his amendment I will say a word or two.

The question presented by the honorable Senator from Pennsylvania is whether, when the stockholders of a bank show that they cannot conduct their bank in such a way as to keep it out of liquidation, cannot manage it in such a way as to keep it from breaking, we should put the man that does wind up their affairs upon what the honorable Senator from Oregon has correctly called starvation compensation, in order to save some little for the stockholders. I do not see the thing in any such light. I think if a bank cannot manage its affairs so as to keep out of the hands of a receiver, the receiver ought to be paid a decent compensation for winding up its affairs.

The honorable Senator from Pennsylvania. draws a distinction between this case and that of a collector of internal revenue, but he does not state the whole difference. A collector of internal revenue, though he has to collect from a large number of people in different localities, does it through his deputies, while he sits and does nothing, or very little. This receiver has to have everything pass through his own hands, and be individually responsible for everything, from the beginning to the end. I think that the measure of compensation in the bill is perfectly just, and it ought not to be reduced.

Mr. CAMERON. I generally listen with great instruction to my friend, the Senator from Missouri; but this morning, as I think, he is entirely out of the way. He says that because the stockholders of a bank have not been able to manage their affairs, therefore, when some one who is fit gets hold of it, he ought to be paid. The Senator ought to know that stockholders very seldom have much to do with managing the affairs of a bank. If he has ever been a stockholder, as I dare say he has been, he must remember that somebody managed the affairs of the bank, and not himself. It is the shifting of responsibility in banks and other establishments that causes banks and individuals to break.

But the Senator spoke of the collector, and said the collector does his business through deputies. He does to some extent; but much more of his time is employed in his business than a receiver of a bank occupies, because his whole time is given to the duties of his office, and while he has deputies he has himself to travel throughout the district often to make a portion of the collections. It is not so with the receiver who may be employed to do this business. I think the Senator was entirely out of the way this morning. I wish he had gone with me to Pennsylvania last week, and I think he would have different ideas about banking.

Mr. DRAKE. Mr. President, the honorable Senator from Pennsylvania is perfectly aware of that maxim of law which says qui facit per alium facit per se.

Mr. CAMERON. I am no lawyer.

Mr. DRAKE. What a man does through another he does by himself. And if the stockholders elect directors who are not capable of managing the affairs of a bank so as to keep it out of liquidation it is their act; and when they by their own act in electing such men

put their bank in liquidation a man that has to take their affairs and wind up the concern ought to be paid at least a decent compensation for doing it.

Mr. CHANDLER. I think this amendment ought to prevail, or otherwise the amount should be reduced even more than is proposed by the Senator from Pennsylvania. A bank going into liquidation of course has what is known in the bank parlors as live paper; that is, paper that is paid at maturity. The receiver employs his teller to receive this money when paid. He is to get an annual salary of $1,500, and there is no reason on earth why $3,000 should be paid him on the first $100,000 he collects in addition to the $1,500 a year. One per cent. would be a very high rate. Take a bank of $500,000 or $1,000,000 capital; $100,000 would be paid in in three days in the regular course of business, paid to the teller of the bank. Now, tell me why ought this receiver to have three per cent. upon that money which is paid to the teller of the bank in the regular course of business, upon live paper? I desire, if it be in order, to move an amendment to the Senator's amendment, substituting one per cent. in place of the two per cent. which he proposes to insert instead of three per cent. in the section.

The PRESIDENT pro tempore. That is not in order, as this is an amendment to an amendment.

Mr. CHANDLER. The proposed rate is too high altogether. All the live paper of the bank, actual business paper, will be paid at maturity, and paid to the teller, so that there will be no responsibility on the receiver any more than on the president or cashier of any

bank.

the way of costs; they ought to be saved for the benefit of the people who make their little deposits.

Mr. CHANDLER. I ask the Senator from Pennsylvania if he will not amend his amendment by accepting my suggestion to make the commission one per cent. instead of two upon the first $100,000.

Mr. SHERMAN. In line fourteen: Provided, That the payment of one half the commissions may be reserved in the discretion of the Comptroller until the affairs of the bank are finally closed.

Mr. CORBETT. "In the discretion of the Comptroller." If the Comptroller does not reserve that one half, the receiver, after collect

Mr. CHANDLER. This whole thing is wrong-end foremost. The Senator from Indiana is perfectly correct in his statement that this is a question between the creditors and the receiver rather than between the stockholder and the receiver. A bank that goes into liquidation has very little left, seldom any. thing, for the stockholders; and it is really a question between the creditors of the bank and the receiver. If you are dealing out strict justice in this matter the arrangement here made should be reversed. The first $100,000 comes in without any care or trouble whatever, and there should not be over one quarter of one per cent. paid on the first $100,000, and then you should increase the rate on subsequent collections; because the bad debts, those that are difficult to collect, are the last to come in, and a higher commission should be paid on those deferred payments that come in at the last end of the collection of the assets. Take a bank of $1,000.000 capital in the city of New York; the first $100,000 would probably be paid in within three days; perhaps the first $500,000 would probably be received within sixty days; within ninety days certainly; and there is no reason on earth why two per cent. should be paid a receiver on that. Take the banks all over the country, and $1,000 is considered a fair salary for a cashier. It is not so in the cities where it is expensive to live; but in the country a large majority of the banks pay salaries less even than to their presi

It is a

Mr. HENDRICKS. Mr. President, I do not understand this to be a question between the stockholders and the receiver. question between the creditors of a broken bank and the receiver; between the depositors, in the main, from the men of large business who make large deposits down to the persons who may deposit the savings of their daily labor; it is a question between that class of persons and the receiver, and it is not a question between that class of persons and a lawyer, because if the appointment were left to a wise court a lawyer would not be appointed receiver. A good lawyer, an able lawyer is not fit to be receiver. A man that would make a good collector, to go around and by impor tunity and persistent efforts collect the debts that are due the bank, would not be likely to be a good lawyer. If the bank has claims that ought to be collected that are disputed, then of course the receiver must employ a lawyer, and he ought to employ a good one, of course, when that case arises. We ought to provide simply for the payment of a reasonable coinpensation to a careful business man. Perhaps the clerk or cashier of the bank would make a very excellent one. I do not believe in following the policy, when we legislate upon these questions, that is mostly adopted by the wealthy banks. Ordinarily, in the cities, when one of the banks fails, the president of a neighboring bank is appointed the assignee, and of course, as between gentlemen of that grade in the financial world, the little matter of compensation is not to be regarded, and he will receive $10,000 for doing that which some clerk would do for $2,000 much more promptly and efficiently for the benefit of the depositors.

That is my notion about this business, and I shall vote for the proposition of the Senator from Pennsylvania. I do not believe that when banks fail all the assets ought to go in

your salary to start with for a receiver.

I hope that the Senator from Pennsylvania will accept my suggestion and amend his proposition to make the commission on the first $100,000 one per cent., and I feel very sure the Senate will vote that that is sufficient compensation.

Mr. CORBETT. Mr. President, I concur with the Senator from Michigan that this ought to be reversed. The amendment of the committee provides that on the first $100,000 collected, in which there is really no labor incurred, the receiver shall be allowed three per cent., while upon the last $100,000, where nearly all the labor is incurred, he shall only receive one half per cent., and under the amendment of the Senator from Pennsylvania he would receive less than that.

Mr. SHERMAN. If my friend will allow me to explain—

Mr. CORBETT. I wish to suggest that after the first $100,000 is collected, and you get to the small percentage, the person who is intrusted with the collection may resign his office and say that he cannot afford to wind up the affairs for the compensation allowed.

Mr. SHERMAN. The Senator has evidently got on the wrong tack. This discrim ination is simply that in the small banks, where the assets are $100,000, the compensation shall be $4,500 or $3,500, as proposed by the Senator from Pennsylvania; and where it is a very large bank the lower rates of percentage operate upon the very large sums collected. I will state also that in order to prevent the receiver from resigning when he has collected the cream of the assets we have inserted a provision that one half the commissions shall be retained until the whole matter shall be closed up, so that there is no object in being receiver for a while and then retiring. One half the gross commissions are to be kept back until the whole matter is settled up.

Mr. CORBETT. I did not read the provision in that manner. Where is that inserted?

lars. can resign his office and receive the large commission. It may be that if the Comptroller was required to reserve one half, it would be sufficient to prevent the receiver resigning before closing up the affairs of the institution; but it seems to me that if a person appointed receiver was not competent to close up the affairs, he would be very likely to resign, or the institution desire that he should resign, and then he would be entitled to the large commissions on the first one or two hundred thousand dollars. If he should conduct himself in such a manner as to prove him to be incapable, those interested would desire that he should resign, and that somebody else should be placed in his position, and in that event the incompetent person would get a larger amount than the next person who came in and had the greatest trouble and did the most work. I think the system should be reversed, and the larger commissions paid upon the last amounts

collected.

Mr. CONKLING. Mr. President, I am inclined to think that the Senator from Pennsylvania is entirely right in the proposition which he makes. In the first place, it is not true that the receivers of these banks perform even the services attributed to them by the Senator from Michigan. Receivers appointed by courts in cases of small insolvencies, do personally very often, and usually superintend and transact the business; but one of these receivers practically does no such thing. He gives a bond and assumes the responsibility, and then one of the first things he does is to retain an attorney, and this very section provides that the court is to allow him the expense of the attorney. The next thing he does is to have a book-keeper, or clerk, or both, and the book-keeper or clerk is the visible presence of the receivership. The receiver is responsible, but the business is transacted by other persons who are paid aside from this commission, for doing it.

I understood some Senator to speak of the impropriety of establishing starvation prices for the benefit of the stockholders of an insolvent bank. What distinction is that which occurs to any mind? Who are the stockholders of an insolvent bank? They are innocent persons whose trustees and representatives have wrecked their investment; and I should like to know what class of creditors are more meritorious than they? They are simply the cestui que trusts of a trust fund; and if strict morals in law is not demanded in their case, for whose benefit, I inquire, is it demanded? They are as meritorious as bill-holders, and no creditors of a bank are more meritorious than they. A man who in good faith invests his money in a bank, and then committing it

to a board of directors is so unfortunate as to lose it through the recreancy of a cashier or president, or the carelessness of somebody else which does not attach to him, is, I repeat, as meritorious a creditor, and a person having rights as sacred as any pecuniary rights which you can respect. Therefore I submit that this compensation ought to be fixed at what are called starvation prices; that is at the lowest figure which is remunerative, and that I submit is as low a sum as the Senator from Pennsylvania proposes, when you remember that the real business is transacted by attorneys, bookkeepers, and clerks, who are paid aside from the compensation given to the receiver.

Mr. MORTON. I believe with the Senator from Oregon [Mr. WILLIAMS] that very low salaries are the cause of much dishonesty in the administration of the Government. In other words, I believe that very low salaries for places where first-rate abilities are required,