Consider for a moment the condition of this country at the time when
this amazing piece of legislation was enacted.
The Republic was but just recovering from an exhausting war, which
loaded it with a national debt approaching $3,000,000,000. There were
also State, county, city, and town debts aggregating many more thousands
of millions, with railroad and other corporate bonds and debts
aggregating yet other thousands of millions and private debts of
indefinite and unascertainable amount, represented largely by mortgages
on real estate. This constituted an aggregate whose burden might
naturally be presumed to be sufficient to tax all the resources of the
people. Although some portion of those debts has been liquidated and the
national bonds have been refunded at lower rates of interest, yet we all
know that in this age all municipal and corporate debts, if not national
debts, are practically perpetual. No sooner is one form of bond
liquidated than another takes its place; no sooner is one public
improvement completed than another is begun.
At the time silver was demonetized it might well have been supposed
that a sufficiently large unearned increment had already been realized
by the foreign and domestic holders of United States bonds. The greater
portion of the debt of the Government was, when incurred, made payable
simply in "lawful money"--the interest alone being payable in coin. Yet
in March, 1869, the bond-holders secured the passage of an act of
Congress, entitled "An act to strengthen the public credit," containing
a pledge to pay in coin or its equivalent not merely the interest, but
the principal of all national obligations not specially provided to be
paid otherwise.