Financial CatechismChapter VIII.
THE RESUMPTION ACT.
The bankers and money dealers had so far controlled Congress as to cripple the greenback in 1862, and provide for its withdrawal from circulation in 1865, which was fortunately countermanded in 1868. They had succeeded in having all the notes and bonds of the government which were used as money, except the greenbacks, withdrawn from circulation and converted into bonds bearing usury in 1867 ; they had secured a pledge from Congress in 1869 that these bonds should all be paid in coin or its equivalent, and that the remaining greenbacks should be paid in coin at the earliest possible period. In 1870 they obtained legislation authorizing the funding of the outstanding currency and option bonds into coin bonds of the then standard value of the United States, and in 1871, had the proportion of 5 per cent. bonds increased from two hundred millions to five hundred millions, adding three millions of dollars to the annual interest charge.
They had procured the repeal of the income tax law in 1870, to take effect in 1872, and so modified the revenue law as to despoil the government of $200,000,000 of annual revenue, and, in 1873, secured the passage of the law demonetizing the silver dollar, thereby depriving the people of one-half of their power to fulfill the promise made by Congress (without their consent) to pay these bonds in coin.
This was the crowning act of perfidy in class legislation yet reached by the American Congress. The great panic of that and succeeding years was its immediate successor ; not that it was generally known to the people, but it was understood in financial circles, and confidence was driven from the legitimate channels of commerce, and the great crash came like a terrible tornado ; sweeping over the land and devouring everything that came within its path. Enterprise was strangled, industry paralyzed, hope covered with the black mantle of despair, fortunes vanished before its withering blast like flax in the burning furnace ; wealth, competence and comfort gave place to bankruptcy, poverty and misery. The prosperous merchant, who had spent an active life in the pursuit of an honest calling, and had gathered around him what seemed to be sufficient to provide for his little family the comforts of life, saw himself bankrupted and turned out upon the world with his loved ones, to beg employment to save them from starvation. The manufacturer, who had for years given employment to hundreds or thousands of laborers, was robbed of his possessions and those thousands of anxious workers were driven by dire necessity from the sacredness of the humble hearth and the endearing ties of the family circle, to wander as tramps to and fro in the stricken country, seeking employment by which they might save their wives and innocent children from the horrible pangs of death for the want of food to sustain even animal life. The thrifty farmer, who had in former years been able to support his family and save a few dollars each year for the improvement of his farm, or to furnish it with stock or implements of husbandry, found no market for his produce sufficient to pay for cultivation, and in the hope of better times mortgaged his farm for money and doubled his energy for another year, only to find himself more deeply involved, and his only alternative to give up his home, with all its endearments, for which he had toiled for years, and go out empty-handed and commence again the battle with the forest or the prairie, in order to secure a spot where he and his could be laid away when death should relieve them from the sordid oppression of those who recognize no humanity that labors, and worship no god but gold. No branch of industry escaped from the terrible effects of this relentless, grinding process of reducing everything to a gold basis ; but the money lords demanded it and it must be donethough more disastrous to the common weal than war, pestilence or famine.
The number of failures of business men and firms reported for 1873 is, failures 5,183, amounting to $228,499,000, and this is but a trifling sum compared with the amount of actual loss sustained by the people on that memorable year by this suicidal policy. Yet it was persistently adhered to by the party in power, with a full knowledge of its disastrous effects ; and the people, always slow to assert their rights, submitted to the oppression until 1878, when, forbearance having ceased to be a virtue, they issued their fiat that the destruction of their money should proceed no further. Congress understood its meaning and obeyed the command. But we will not anticipate. Sufficient unto the day is the evil thereof.
During this terrible ordeal of calamity and suffering the banker, the broker, and the coupon-clipper sat at ease in their parlors, their faces wreathed in sardonic smiles, while they saw the wealth of the people vanishing from their hands and hiding itself in their own worse than highway-robbers coffers.
In order to satisfy the people beyond a peradventure that their interests were not to be considered, in that very year of 1873, when the cry of distress was heard all over the land, the Congress of the United States passed a law increasing the salary of its members from $5,000 to $7,000 a year, and that of the President of the United States from $25,000 to $50,000 a year. And to cap the climax of heartlessness and dishonesty, they made the law retroactive, so as to enable them to filch from the people this extra amount of money as the price of their own duplicity. And President Grant signed the bill legalizing the theft at the same session of Congress that he vetoed the bill asking for an equalization of the bounties of the soldiers who had served in the ranks under him during the war.
History informs us that Nero set fire to Rome, and their sat in his parlor and played the fiddle as an accompaniment to the hissing of the flames and the shrieks of anguish and despair produced by the burning city. For this act he has been branded by the civilized world as an unfeeling monster.
What shall be said of President Grant and the American Congress who could first legislate to ruin the business of the nation, bankrupt its people, and then, with the cry of suffering greeting their ears from all parts of the stricken country, legislate to further rob the sufferers and put the money in their own pockets ?
Language would fail to describe the measure of infamy embodied in this diabolical transaction.
Not satisfied with the advantages already obtained, the bankers still feared the greenback, and while it had been used by the Secretary of the Treasury, in 1873, to save the banks from failure, they saw the possibility that its circulation might be increased to save the people from the wreck to which they were determined to drive them. In order to prevent this they appealed to Congress for assistance, and that body, ever ready to respond to such reasonable (?) demands as were made by the money power, on the 20th of June, 1874, passed an act, Section 6 of which reads as follows :
That the amount of the United States notes outstanding and to be used as a part of the circulating medium shall not exceed the sum of $382,000,000, which said sum shall appear in each monthly statement of the public debt, and no part thereof shall be held or used as a reserve.
In this act they obtained the assurance that, however the people might suffer in consequence of the contraction of the money volume of the country, they should not be assisted by the additional issue of legal-tender notes which were laying idle in the Treasury without additional legislation, and this legislation they were determined they should not have. Every year since the commencement of the contraction policy our revenue had been decreasing. In ten years, from July 1, 1865, when it amounted to $558,032,620.06, it had fallen, on July 1, 1875, to $288,000,051.10, robbing us annually of the power of paying our bonds to the amount of $270,032,568.96.
It would appear that this should have been sufficient to satisfy the most avaricious greed, but the object was not yet accomplished. The perpetuity of the bond system must be secured beyond any doubt. How should this be done ? The answer was at hand. An act must be passed establishing a resumption of specie payment within a given time, and the redemption and withdrawal of all the legal-tender notes from circulation. This would throw the currency entirely into the hands of the national bankers and enable them to so manipulate it as to forever prevent the accumulation of money in the Treasury to pay the outstanding bonds, and thereby give the debt perpetuity.
Q. How could they dare attempt to retire the greenback, circulation when the former attempt met with such a thorough rebuke in 1868 ?
A. Seven years had elapsed, and in that time five hundred and fifty new banks had been established, making an addition of $91,918,029 to the associated banking capital. Thus reinforced, they made a determined charge upon Congress, with reasons which were so appreciated by that sensitive body, that on the 14th of January, 1875, it enacted a law with the following title : An act to provide for the resumption of specie payment. This title was deceptive, as was the title of the Credit-Strengthening act of 1869. Neither title expressed the intention of the law. The main objects of this law was the retirement from circulation of the whole amount of the legal-tender currency, and the removal of all restrictions with regard to the amount of national bank currency. The first section of the law provides for the coinage of subsidiary silver and its exchange for the national fractional paper currency (which was the most convenient change the people ever had), and this, too, at a cost of two million five hundred thousand per year as usury on fifty millions of 5 per cent. bonds, sold in order to obtain gold to buy bullion to be used for this purpose. This was the only real specie resumption there was about the law ; it authorized the Secretary of the Treasury to establish local depositories throughout the country, at the postoffices and other public places, so that the coin would be in the reach of all, and to continue this exchange until the whole amount of the outstanding fractional currency is redeemed. The second section repealed so much of section 3524 of the United States Revised Statutes, as provided for a charge by the Mint of 1-5th of 1 per cent. for converting standard gold bullion into coin, thus giving to the holders of gold bullion free coinage.
The silver dollar had been demonetized in 1873 ; the first section of the law of 1875, provided for retiring the fractional currency and replacing it with subsidiary silver coin, 7 per cent. light, which was not money for any amount over five dollars ; the second section provided for giving gold free coinage, thus removing all restrictions from it as the only metallic money of the nation. Having thus cleared the way of every other obstacle, the third section takes off all restrictions from national banks, and authorizes the Secretary of the Treasury to retire the legal-tender circulation until the whole amount outstanding does not exceed $300,000,000, and on and after the first day of January, 1879, he shall commence redeeming this remainder in coin at the office of the Assistant Treasurer in the city of New York, when presented in sums of fifty dollars.
The animus and intent of this act can only be understood by critical examination. The third and last section reads as follows :
Sec. 3 That Section 5177 of the Revised Statutes of the United States, limiting the aggregate amount of circulating notes of national banking associations, be, and the same is hereby repealed, and each existing banking association may increase its circulating notes in accordance with existing law, without respect to said aggregate limit ; and the provisions of law for the withdrawal and redistribution of national bank currency among the several States and Territories are hereby repealed. And whenever, and so often, as circulating notes shall be issued to any such banking association, so increasing its capital or circulating notes, or so newly organized as aforesaid, it shall be the duty of the Secretary of the Treasury to redeem the legal-tender United States notes in excess of $300,000,000 to the amount of 80 per cent. of the sum of national bank notes so issued to any such banking association as aforesaid, and to continue such redemption as such circulating notes are issued, until there shall be outstanding the sum of $300,000,000 of such legal-tender United State notes and no more. And on and after the first day of January, 1879, the Secretary of the Treasury shall redeem, in coin, the United States legal-tender notes, then outstanding, on their presentation for redemption at the office of the Assistant Treasurer, in the city of New York, in sums of not less than $50.00. And to enable the Secretary of the Treasury to prepare and provide for the redemption in this act authorized, to use any surplus revenues, from time to time in the Treasury, not otherwise appropriated, and to issue, sell, and dispose of, at not less than par, in coin, either of the descriptions of bonds of the United States, described in the act of Congress approved July 14, 1870, entitled An act to authorize the refunding of the national debt, with like qualities, privileges and exemptions, to the extent necessary to carry this act into full effect, and to use the proceeds for the purposes aforesaid. And all provisions of law inconsistent with the provisions of this act, are hereby repealed.
It was not only the withdrawal of all the legal-tender notes from circulation and their conversion into bonds bearing usury that this act provided for, but for placing the entire control of the circulating medium in the hands of the national banking associations, by granting them unlimited power to expand and contract the volume of the currency at any time, regardless of the needs of commerce or the wants of the people. It gave them the power to create a panic (and reap the harvest which always follows) at any time, by allowing them to deposit legal-tender notes in the Treasury, withdraw their bonds, and call in their circulating notes.
This is the most dangerous feature of the banking law, and the one on which the national bankers most depend for controlling the legislation of the country, as will be shown when considering the legislation of 1881.
The passage of this bill was a signal success for the money power. While it did not propose to further contract the currency, but rather to inflate it, by the provision that only eighty thousand dollars in legal-tenders should be withdraw from circulation for each one hundred thousand dollars national bank notes issued, so that in the withdrawal of the legal-tender notes outstanding, exceeding $300,000,000, and replacing them with national bank notes, the volume of the currency would be increased 20 per cent.
This was one of the tricks of the bankers to hoodwink the people and lead them to believe that the resumption act would increase rather than diminish the amount of money in circulation, and would consequently relieve them from the suffering which they were then feeling so keenly.
The advocates of this measure declared that it was the panacea which would heal all the wounds which the people had received from former legislation ; give health, vitality and vigor to the prostrated industries of the country and place the nation on the highway to prosperity.
Many were deceived by the siren songs of sophistry and deception with which their ears were constantly greeted from the heads of departments in the government, reports of the banking associations, a subsidized press and the assurances of paid stump orators and bar-room politicians that the resumption of specie payments would more than compensate for all the suffering through which the people had passed, and for all they might endure in order to reach so grand an object.
A few of the more thoughtful of the members of both the Republican and Democratic parties saw the deception and had independence enough to declare it. They saw that this law, if strictly obeyed, must retire all the legal-tender money of the United States, and thereby hand over to the national bankers the entire control of the finances, and consequently the destiny of the American people. They knew that the United States treasury note was the only money upon which the nation could rely in an emergency, in the future as it had been in the past, and boldly declared that the Constitution gave Congress the full power to issue such notes and make them a full legal-tender for all debts, and that it was its duty to do so and to make such notes the only paper currency of the United States. Upon this issue they organized the Greenback party, and nominated the venerable Peter Cooper, of New York, for President of the United States, and went before the people in the canvass of 1876.
The young party was at once assailed by the money power. The leaders of both the Republican and Democratic parties being enlisted in favor of the national banks, many of them being large stockholders, directors and presidents of banks, they denounced the greenback party as repudiationists, lunatics, communists, whose aim it was to destroy the credit of the nation by repudiating its national debt ; to rob and plunder those who had by industry acquired capital, and divide it among the lazy, idle rabble. And when their vocabulary of abusive epithets was exhausted, as a last resort, they charged the new party with being fiatists. This last charge, though intended for a stigma and a disgrace to the intelligence of the party, was literally true. Every intelligent, thinking person knows that it is by the fiat of the government, and nothing else, that money is made, whether of gold, silver, paper, or any other material. No material is money, as has been previously shown, until made so by the fiat of some government.
The Republican and Democratic parties took the position that gold is the money of the world, that it is the money that God made, and that the value of everything should be measured by it, all obligations redeemable in it, and nothing else. They denounced the proposition for the government to issue its own money instead of issuing it for national banks, and going security for its payment, as rank treason to the principles of free government. They held up before the public gaze the South Sea bubble of John Law, the French Assignats, based on the confiscated estates of banished priests and nobles, and the continental money of the American colonies, and declared that treasury notes, issued directly by the government, would be as worthless as these had proved to be.
Upon these two lines of argument the parties went before the people. The two old parties, while battling with each other, with all the venom and rancor of the ins, with the tremendous advantage of the power of patronage and the assessment system for raising campaign funds, and a determination to hold its grasp upon the spoils of office at all hazards, while the outs were as fully determined, if it laid within the range of possibility, to dislodge the ins and again enjoy the honor and perquisites of official position from which they had been debarred for so many years. But on the question of finance, they were both equally bitter against the Greenback party. The result of the election showed the Republican and Democratic parties so nearly of equal strength, that both had been guilty of intrigue and chicanery unparalleled in the history of the United States, and the question of who was elected was not settled as provided by the Constitution of the United States, but Rutherford B. Hayes, the Republican candidate, was declared elected by an Electoral Commission created by Congress for the occasion.
At that election, Peter Cooper received 81,740 votes for President of the United States.
President Grant, in his message to Congress on December 3, 1874, indicated the policy of the Republican party to be to deliver the finances of the nation wholly into the hands of the national banking associations. In that document he says : The legal-tender clause of the law authorizing the issue of currency by the national government should be repealed.
Q. Why should President Grant wish to have the legal-tender clause of this law repealed ?
A. The history of finance teaches us that since banking has been established as a means to furnish a circulating medium, the bankers have always been hostile to issues of currency of any kind by the government, and that no government where banks exist has ever been able to maintain its notes at par unless they were made legal-tender.
The banks refuse to receive them unless at a discount, and thereby drive them out of circulation. It was to give the banks this power that President Grant recommended the repeal of this law. But, lest we should be accused of misconstruing the language of the President, we will let him speak for himself. Further on in his message, while on the same subject, he says :
The experience and judgment of the people can best decide how much currency is required for the transaction of the business of the country. It is unsafe to leave the settlement of this question to Congress, the Secretary of the Treasury, or the Executive.
Who, let us ask, are the people to whom the President refers as the only safe guardians of the finances of the country ? It is not the people of whom Congress is elected to be the representative. It is not the Secretary of the Treasury, who is the custodian of the peoples money. It is not the Executive, who has been chosen by the people to see that the law is faithfully executed. It is not the people thus referred to that the President had in his mind, for he further says :
Congress should make the regulations under which banks may exist, but should not make banking a monopoly by limiting the amount of redeemable currency that shall be authorized.
The bankers, then, are the people to whom the Republican President referred in 1874, to whom it should be left to say how much currency was demanded to meet the wants of commerce. It was this small class of the people who have always been found in open hostility to the government when it has dared to refuse the terms offered to it by them and issued its own notes as currency. It was to this class alone that the President was willing to trust the finances of the country, and not to the great mass (who produce all the wealth), through their representatives in Congress, as guaranteed to them by the Constitution.
How well those suggestions were followed by the Congress, of the United States, is seen in the fact that on the 14th of January, 1875, only five weeks after, the Resumption act was passed which took off all restrictions in reference to the amount of currency issued by the national banks, and provided for the entire withdrawal of the legal-tender notes from circulation.
There was now no full weight silver coin provided for in the coinage law of 1873, except the trade dollar of 420 grains. This coin was a legal-tender to the amount of five dollars, the same as the subsidiary coin, which is seven per cent. light. These trade dollars, though ostensibly coined for the Chinese trade, had become scattered through the country to the amount of several millions. They were in the hands of small dealers and laborers, as they were only money in small transactions, and being thus scattered they could not be converted into other money only through the banks or the brokers. Here was an opportunity for a speculation. This dollar must be demonetized, in order that the bankers and brokers might buy it at a discount, return it to the treasury and withdraw it from circulation.
The Congress of the United States was politely requested to assist them in this laudable enterprise (?), and, in accordance with their usage, the two Houses, on the 22d of July, 1876, passed an act demonetizing the trade dollar, but still permitting its coinage to whatever amount the Secretary of the Treasury might deem advisable. This bill also had a provision for the withdrawal of legal-tender notes from circulation. The first section provided :
That the Secretary of the Treasury, under such limits and regulations as will best secure a just and fair distribution of the same through the country, may issue the silver coin at any time in the Treasury, to an amount not exceeding $10,000,000, in exchange for an equal amount of legal-tender notes, and notes so received in exchange shall be kept as a special fund, separate and apart from all other money in the Treasury, and be reissued only upon the retirement and destruction of a like sum of fractional currency received at the Treasury in payment of dues to the United States ; and said fractional currency, when so substituted, shall be destroyed and held as part of the sinking fund, as provided in the act of April 17, 1876.
Ten millions of dollars in legal-tender notes were so retired and withheld from circulation, and are still so held as a reserve to redeem fractional currency which has been lost or destroyed, and this takes it out of circulation as completely as if it had been cancelled and burned. Immediately after the passage of this act the bankers put a discount on the trade dollar of twenty per cent., and it ranged from ten to twenty per cent. until very nearly all of them were retired from circulation. This loss was sustained by the laboring people, while the bankers and brokers made the profit.
Everything that was in the reach of the money power had now been accomplished to secure the complete control of the finances of the country. If the law had been carried out as it was intended, the country would have been robbed of all of its coin except gold and subsidiary silver, and all of its legal-tender notes, so that gold would have been the only legal-tender money in circulation, and national bank notes, which are not money in private contracts, would have been the only medium of exchange in all the commercial transactions of the United States. Having no competition to regulate their action, they could, and would, have so managed as to swallow up all the wealth produced in the country, except the smallest possible amount upon which production could be continued. There was no further legislation bearing directly on the subject in 1877.
Each year, since 1873, the withering influence of the contraction policy was more severely felt by the people. Year after year the products of labor was growing less in value. Every year the people practiced closer economy, because they were less able to buy, and this still reduced the demand for the products of their labor. The people were becoming slowly but painfully aware that, notwithstanding the protestations of politicians and self-styled financial economists, that the government was pursuing a wise policy, that every year their burdens increased and their sufferings became more unbearable.
Driven by this experience they began to inquire for the causewhen the bankers, the money dealers, the politicians, and even college professors, come to the sage conclusion that all our miseries was the result of over production. They argued that since the return of peace the vast army of soldiery having become producers, the market was overstocked with our products, and they were consequently of no value. But the common people could not see how it could be possible that an extraordinary production of breadstuffs should place millions of citizens at the very threshold of starvation ; how the production of a large amount of cotton, wool and flax would clothe the people in rags, or leave them naked and destitute. They became convinced that there was no truth in such arguments ; that it was the want of money, commensurate with the production, that was needed to give life and energy again to the industries of the country, and food to the starving, and clothes to its naked and destitute inhabitants. The Republican party, having been in power, and having inaugurated and sustained the contraction policy, lost the confidence of the people to such an extent that in 1876, though the Republican President was declared elected, Congress was decidedly Democratic. The people hoped, by a change in the political character of their law makers, to be delivered from the system of oppression and wrong under which they had been so long suffering ; but they were mistaken. It proved that the most prominent leaders of the tat party were as fully in accord with the banking interest as the Republican leaders. No step was taken for the relief of the people until the early part of the session of 1878.
By this time they had become so aroused that revolution was imminent. Wages were reduced to starvation prices ; and laborers, in the vain attempt to compel their employers to increase their wages, or to prevent their further reduction, inaugurated strikes and stopped business to their own injury, as well as the injury of the business of others. Employers condemned this course as an attempt of the laborers to take control of their business, and closed their shops and factories, which filled the country with starving tramps, and produced the desperate condition that prevailed during the Pennsylvania and other riots of that year.
This was a most critical and dangerous period in our nations history. Poverty and suffering was seething and hissing like a pent-up volcano, liable at any moment to burst its restraints and engulf all opposition in a common ruin. Wealth was deaf to all appeals of the distressed and suffering people, and appeared to gloat over the misery which was every day increasing among them. That feeling, as expressed by individuals and a subsidized press and pulpit, though a disgrace to the name of America, should be ever preserved as an enduring monument of the arrogance and cold-blooded heartlessness which prevailed in the bosoms of those who had been instrumental in producing the wide-spread misery from which the great mass of the people were suffering.
They had no sympathy with the people or a peoples government, as the following expressions show. The Indianapolis Journal (Democratic) said : There is too much freedom in this country rather than too little. Thomas Scott, one of the great railroad kings, in speaking of the starving tramps, said : Give them the rifle diet for a few days, and see how they will like that kind of bread. The New York Tribune (Republican) said : The capital of the country is organized at last, and we shall see whether Congress will dare to fly in its face. The Indianapolis News said : If the working men had no vote they might be more amenable to the teachings of the hard times. The Chicago Times (independent Democrat) said : The old English system of imprisonment for debt would doubtless be far preferable to our present bankrupt law. Jay Gould, another railroad king, said : We shall shortly find ourselves living under a monarchy. I would give a million dollars to see Grant back in the White House. The New York Herald (Democratic) said : The best meal that can be given to a regular tramp is a leaden one, and it should be supplied in sufficient quantity so satisfy the most voracious appetite. The Chicago Times, upon another occasion, said :
Hand grenades should be thrown among those who are striving to obtain higher wages, as by such treatment they would be taught a valuable lesson, and other strikers would take warning by their fate.
Scribners Monthly (miscellaneous) made use of this language :
He (the tramp) has no right but that which society may see fit of its grace to bestow upon him. He has no more rights than the sow that wallows in the gutter, or the lost dogs that hover around the city square.
The Cincinnati Commercial (independent), says :
One wonders why Mathews wanted to bother himself about the eight-hour theory. Should government employés be raised to the rank of favorites, and classified for pampering at the public Treasury ?
The New York Independent (politico-religious), in commenting upon the condition of those unfortunates who had been robbed of their all and forced to appeal for bread to prevent starvation until they could find employment by which they could earn it by their labor, said :
We should recommend the farmers to take the law into their own hands, and organize themselves into vigilance committees, and turn sharp-shooters, and bring down at least one of these bread-or-blood gentry with every fire.
The New York Times (Republican), in commenting upon the condition of things at that time, said :
There seems to be but one remedy, and it must comea change of ownership of the soil and a creation of a class of landowners on the one hand and of tenant-farmers on the othersomething similar to what has long existed in the older countries of Europe.
Rev. Henry Ward Beecher, in his discourse delivered in his church in Brooklyn, said, from his pulpit :
Is not a dollar a day enough to buy bread ? Water costs nothing ; and a man who cannot live on bread is not fit to live. A family may live, laugh, love and be happy that eats bread in the morning with good water, and water and good bread at noon, and water and bread at night.
The Chicago Tribune, on another occasion, said :
The simplest plan, probably, when one is not a member of the Humane Society, is to put a little strychnine or arsenic in the meat and other supplies furnished tramps. This produces death within a comparatively short time, is a warning to other tramps to keep out of the neighborhood puts the coroner in a good humor, and saves ones chickens and other portable property from constant depredations.
William Dorsheimer, Democratic Lieutenant-Governor of New York, when descanting upon the tendency of our government toward centralized power, expressed himself in this way :
There are those who seem to fear that many of our people will be educated beyond their station, and thus be made discontented with the duties they will have to perform in life. I will not stop to comment on this most un-American suggestion. The difference of condition every day becoming wider and deeper, gives ample security.
Hon. J.C. Burrows, member of Congress from Michigan, said in a speech delivered by him on the question of finance :
To-day, the best thing that could happen to the financial interests. and to the business interests, would be for Congress to pass a law, at its very next session, to punish with death any member of Congress that would make a speech on finance for the next twenty years. What we want is to be let alone, and we are on the high road to prosperity.
Rev. Joseph Cook, in a public speech, used this remarkable language :
The strongest of this generation wants a dictator. I say, cone on with your schemes of confiscation and forced loans, and graded income taxes, and irredeemable currency, under universal suffrage, and if you are sufficiently frank in proclaiming the doctrines of your ringleaders, then, under military necessity, and even here in the United States, we must get rid of universal suffrage, and we shall. Rather than allow these things we will have one of the fiercest of civil wars.
And these un-Christian, un-American and inhuman sentiments were loudly applauded by the aristocratic audience who was listening to him.
The Richmond (Va.) State (Democratic), in speaking of General Butlers defeat in Massachusetts, said :
The defeat of Butler, in Massachusetts, is entirely due to the bulldozing of the workingmen of that State by the employers and capitalists, and yet who thinks of indicting the best people of Massachusetts for resorting to this means of protecting the beat interests of society from the irresponsible rabble ? There are defects in our institutions which can only be remedied by irregular means, and the most defective portion of the machinery of our government is the elective. The best must govern in every state, and will, regardless of any attempt to deprive them of that right.
The New York Herald, when commenting on our suffrage system, gave utterance to this language :
Our people please themselves with the fancy that they are free, because they have the right to meddle a little with politics now and then. In conventions, in legislatures, and in similar places they chatter and twaddle and scream like so many crows and jays over the eternal principles of freedom, as secured in the political fabric, and, meanwhile, the great economical facts of lifethe facts which are, and always were, the really shaping and controlling forces in the political destinies of a people, sweep rapidly and certainly forward on lines that indicate the will and movement of a despotic spirit. In that movement a great collision with the popular will is in preparation.
Senator Sharon said, through his organ, the Nevada Chronicle :
We need a stronger government. The wealth of the country demands it. Without capital and the capitalists, our government would not be worth a fig. The capital of the country demands protection ; its rights are as sacred as the rights of the paupers who are continually prating of the encroachments of capital and against centralization. We have tried Grant, and we know him to be a man for the place above all others. He has nerve. As President he would be commander-in-chief of the army and navy, and when the communistic tramps of the country raised mobs to tear up railroad tracks and to sack cities on the sham cry of bread or blood, he would not hesitate to turn loose upon them canister and grape. The wealth of the country has to bear the burden of government, and it should control it. The people are becoming educated up to this theory rapidly, and the sooner the theory is recognized in the Constitution and laws, the better it will be for the people. Without blood, and rivers of it, there will be no political change of administration. The moneyed interests, for self preservation, must sustain the Republican party. The railroads, the banks, the manufacturers, the heavy importers, and all classes of business in which millions are invested, will sustain the supremacy of the Republicans party.
To avert fearful bloodshed a strong central government should be established as soon as possible.
In speaking of the power of the banks and other financial corporations, the New York Tribune used this strikingly significant language :
The time is near when they (the banks) will feel themselves compelled to act strongly. Meanwhile a very good thing has been done. The machinery is now furnished by which, in any emergency, the financial corporations of the east can act together at a single days notice with such power that no act of Congress can overcome or resist their decision.
These are a few selections from the sentiments expressed by the leading spirits of the money power and a subsidized press and hired clergy. They all bowed down before the golden calf and prayed for power to be placed in the bands of a dictator of their own choosing. They could not trust a peoples government. The old idea of the divine right of kings to rule, was the predominating sentiment among the large capitalists, and especially with that class who had acquired fabulous fortunes in a few years by legalized robbery. Whatever the kings of the rail, the shylocks of the banks, or the lords of the corporations demanded, must be submitted to without complaint.
No feeling of sympathy for the distress of the masses found lodgment in the breasts of this class, nor was any sympathetic expression permitted to escape from their paid organs.
The people were at last convinced that the time had come when they, without regard to party, must demand of Congress such legislation as would stop the further reduction of the volume of the currency, and provide means for increasing it sufficiently to satisfy the immediate demands of trade.
Q. Had not the national banks power to so increase the circulation by the issue of their own notes ?
A. All limitation with reference to the amount of currency to be issued by the banks was removed in 1874, but instead of using the privilege thus given them to increase the amount of currency and relieve the distress of the people, they contracted their circulation, as shown by the statement of the Secretary of the Treasury, from $357,981,032 in 1874, to $317,048,872 in 1877, making a reduction in that period of $34,895,130.
The legal-tender circulation had been reduced in the same period from $382,000,000 in 1874 to $357,000,000 in 1877, amounting to $22,245,668, making an actual reduction in the volume of the currency from July 1, 1874, to July 1, 1877, of $57,140,798.
The national banks refused to respond to the call of the people for relief, and was hoarding their money in the hope of still further prostrating the business of the country in order to enable them to foreclose the mortgages which they then held, and appropriate to their own use the result of years of labor and sacrifice by the toiling millions of the people. But the voice of those millions became a power which Congress dared not withstand.
On the 20th of January, 1878, Mr. Fort, of Illinois, introduced into the House of Representatives a bill forbidding the further retirement and destruction of the United States legal-tender notes, and Mr. Bland, of Missouri, had, as early as December, 1876, introduced a bill providing for the re-monetization of the silver dollar of 412½ grains and its restoration to its legal-tender property.
This bill had been discussed in both Houses in the Forty-fourth and Forty-fifth Congresses, but final action had been deferred until the winter of 1878. Both of these bills met with powerful opposition from the advocates of the money power in both branches of the National Legislature.
The opponents of the Bland bill exhibited all the arrogance and insult which characterized the Southern chivalry in its palmiest days. No epithet in their vocabulary was sufficiently strong to express the contempt they felt for those who dared to demand that the silver dollarthe original unit of valueshould be restored to its place in the coinage of the United States, from which it had been villainously dislodged by a conspiracy of traitors more dangerous to the liberties of the people than those which withdrew from the government in 1861. Reason, justice and equity were ignored. The burden of the argument against the passage of the bill was the injustice it would work to public creditors ; that there could be no just standard of coin but gold ; that the old silver dollar of 412½ grains was a dishonest dollar, and to re-establish it would ruin the credit of the nation ; that in order to preserve its credit the government must adhere to the gold basis and resume specie payment in 1879.
The sacrifices which must necessarily be made by the wealth-producing people in order to reach this result were not recognized by that class of statesmen which represented the gold ring. The paramount question with them was, how much of the peoples toil and sweat and suffering could be crowded into the gold dollar, and how that dollar could be most effectually placed beyond their reach.
The argument from the representatives of the peoples interests was plain, strong, clear and forcible. They showed that the act of demonetization of 1873 was a fraud and a swindle, practiced upon the people without their knowledge or consent, and that justice demanded its repeal ; that in addition to the great injury done by reducing the volume of the currency, and thereby reducing the value of labor and all its products, it was legislating directly against one of our most important industriessilver mining, and that as a practical result specie payments could not be maintained in this or any other civilized nation, even if we had both gold and silver.
While this bill was under consideration in the Senate, Hon. John J. Ingalls, Senator from Kansas, in a speech delivered in the Senate on the 14th of February, 1878, used the following clear and concise language :
If by any process all business were compelled to be transacted on a coin basis, and actual specie payments should be enforced, the whole civilized world would be bankrupt before sunset. There is not coin enough in existence to meet in specie one-thousandth part of the commercial obligations of mankind. Specie payments, as an actual fact, will never be resumed, neither in gold nor silver in January, 1879, nor at any other date, here nor elsewhere. The pretense that they will be is either dishonest or delusive.
Again, in the conclusion of his speech, he says :
We cannot disguise the truth that we are on the verge of an impending revolution. Old issues are dead. The people are arraying themselves on one side or the other of a portentious contest. On one side is capital, formidably intrenched in privilege, arrogant from continued triumph, conservative, tenacious of old theories, demanding new concessions, enriched by domestic levy and foreign commerce, and struggling to adjust all values to its own standard. On the other is labor, asking for employment, striving to develop domestic industries, battling with the forces of nature, and subduing the wilderness ; labor, starving and sullen in the cities, resolutely determined to overthrow a system under which the rich are growing richer and the poor are growing poorer; a system which gives to a Vanderbilt the possession of wealth beyond the dreams of avarice, and condemns the poor to a poverty which has no refuge from starvation but the grave.
Our demands for justice have been met with indifference or disdain. The laborers of the country asking for employment are treated like impudent mendicants begging for bread. The Senator from Connecticut informs us that hundreds of millions of dollars are lying idle in New York and Hartford, which can be borrowed, on good security, at 4 per cent., and asks, with something like a sneer, how the coinage of a dollar worth 80 cents will benefit the poor unless they can give good security for their loan. The laborers of the West do not want to borrow ; they want to earn. They do not wish to pay interest on other peoples capital, but to sell their labor, and, if possible ; acquire some capital of their own.
The producers of the West want a market in which the value of their products will not be consumed by the cost of transportation over railroads that pool their earnings and combine to keep their rates at a point where the carrier grows rich and the farmer grows poor. The Senator from Wisconsin, in that admirable speech which left so little for others to say, declared that it was not a contest between the East and the West.
Let us see. Against silver, as indicated by the vote on the Matthews resolution, are New York, New Jersey, New Hampshire, Maine, Connecticut, Massachusetts, Vermont and Rhode Island. For it are every Western State but Michigan, California and Oregon, and every Southern State but Maryland and Delaware, and all these are divided. The senator from Wisconsin was right. It is not the East against the West. It is the East against the West and South combined.
It is the corn and wheat and beef and cotton of the country against its bonds and its gold ; its productive industries against its accumulations. It is the men who own the public debt against those who are to pay it, if it is paid at all. If the bonds of this government are paid, they will be paid by the labor of the country, and not by the capital. They are exempt from taxation and bear none of the burdens of society.
The alliance between the West and South upon all matters affecting their material welfare hereafter is inevitable. Their interests are mutual and identical. With the removal of the causes of political dissension that have so long separated them they must coalesce, and united they will be invincible.
The valleys of the Mississippi and their tributaries form an empire that must have a homogenous population and a common destiny from the Yellowstone to the Gulf. These great communities have been alienated by factions that have estranged them only to prey upon them and to maintain political supremacy by their separation. Unfriendly legislation has imposed intolerable burdens on their energies ; invidious discriminations have been made against their products ; unjust tariffs have repressed their industries.
While vast appropriations have been made to protect the harbors of the Atlantic, and to erect beacons on every frowning headland to warn the mariner with silent admonition from the merchant-marring rocks, the Mississippi was left choked with its drifting sands till the daring genius of Eads undertook the gigantic labor of compelling the great stream to dredge its own channel to the sea.
The opening of this area marks the epoch of the emancipation of the West and South from their bondage to the capital of the East, and in asking the passage of this bill they are asking less than they will ever ask again.
When I reflect upon the burdens they have borne, the wrongs they have suffered, I am astonished at their moderation. (Congressional Record, February 15,1878, pages 1054-1055).
Hon. Daniel Voorhees, Senator from Indiana, on the 14th of January, 1878, delivered a speech in the Senate on this subject, the closing part of which we subjoin on account of the truthfulness of its statements and the accuracy of its description of the situation. Mr. Voorhees says :
Sir, thus far I have spoken in pointing out what I conceive to be the ruinous legislation of this country on the great and paramount question of its finances. There are two opposing ideas on this subject now thoroughly aroused into vigilance and activity. On the one hand is the vast money-power, in all its various developments of bonds, banks and loaning associations, and on the other are the great industries, the active business, and the laboring people. The issue has been years in making up, but is now joined. Nobody need be deceived. All the widespread influences of capital are organized and combined. The holders of public securities in America and in Europe work together. They think and act in concert.
The national banks of the United States have a solid organization to protect what they have and to get as much as possible. They are asking now to be relieved from paying taxes on their circulation and deposits in order that they may enjoy their enormous profits free from all burdens for the support of the government.
Associations of capitalists engaged in obtaining mortgages at 12 per cent. interest on Western farms, on account of the scarcity of money in that section, are not only striving to make all such mortgages payable in gold a year hence, but they are threatening those in pecuniary distress that they shall have no further favors at the same rates unless they agree in advance to pay gold in return for greenback loans. The power of money in the midst of times like these is very great, but I am much deceived in the people if they have not turned at last in defiance and bold warning upon their oppressors. They are not in favor of repudiating a single dollar of their public or private debts. They intend to pay everything they owe, but they intend to submit to no more changes of contracts, violations of obligations, and breaches of public faith in order to increase their indebtedness or to take away their means to pay it. They demand, too, that certain specific wrongs shall be redressed.
First, those for whom I speak demand the restoration of the silver dollar exactly as it stood before it was touched by the act of February, 1873. They desire that it shall have unlimited coinage, not fearing that it will become too plenty for their wants, and that it be made a full legal-tender, believing that it is as good now with which to pay all debts, both public and private, as it was during eighty-one years of American history.
Second, they demand the repeal, unconditionally, of the act of January 14, 1875, compelling a resumption of specie payment in January, 1879, holding that the question of a return to specie basis for our currency should be controlled entirely by the business interests of the country. They do not believe that the country should he dragged through the depths of ruin, wretchedness and degradation in order to reach a gold standard for the benefit alone of the income classes.
Third, they demand that the national banking system be removed and a circulating medium provided by the government for the people without taxing them for the privilege of obtaining it. And they ask that the amount thus placed in circulation shall bear a reasonable and judicious proportion to the business transactions and the population of the United States.
Fourth, they demand that the currency circulated on the authority of the government shall be made a legal-tender in the payment of all debts, public and private, including all dues to the government, well knowing that it will then be at par with gold, or more likely, at a premium over it.
And, fifth, that hereafter the financial policy of the country be framed permanently in their interest ; that they shall not be discriminated against in future legislation as in the past, and that their prosperity, and not the mere growth of incomes to retired capitalists, shall be the primary duty of the government.
In my judgment, these demands are just and moderate. I implore Senators not to suppose they can be disregarded with safety. If they are rejected now they will be renewed hereafter with still greater determination, and perhaps with others added. I plead for the financial credit of the government. It rests on the popular will alone, and that can no longer be defied or menaced with impunity. The people are sovereign, and they can bind and they can loosen. If the money power is advised with wisdom it will stop and retrace its steps. It confronts a power now mightier than itself ; a free people at the ballot-box, influenced with a sense of injustice and oppression. If, however, it is joined to its golden idol ; if its heart is hardened and its neck stiffened by its vast possessions ; if the burning lust of avarice has made it deaf to the voice of reason and blind to all human experience, it will push on in its career, until it works its own destruction ; for, sooner or later, the people, irrespective of party names, will unite in their own defense and establish justice. They have been slow to believe that there was a deliberate purpose to degrade and impoverish the great producing classes, but they are being rapidly educated now. The condition of the country is a teacher whose awful lesson is engraved on all their hearts. They have, also, recently read the proclamations of the great organs, of the money power, removing all disguise as to the meaning of our financial legislation and the misery it has entailed. In the columns of one they have read that : The American laborer must make up his mind henceforth not to be so much better off than the European laborer. Men must be content to work for low wages. * * * In this way, the workingman will be nearer to that station in life to which it has pleased God to call him.
In the columns of another organ of consolidated capital they have read the following revolting sentiment : There seems to be but one remedy. It is a change in the ownership of the soil, and the creation of a class of land owners on the one hand and of tenant farmers on the other. Something similar in both cases to what has long existed and now exists in the older countries of Europe. And in every form in which the English language can be used the American people, and especially the people of the West, have been notified, not that their consent will be asked, but that they will be compelled to submit to the legislation which results in the British system of baronial landed estates, a dependent tenantry and pauper wages for the working man. Sir, I have no word of menace to utter on this floor, but, in behalf of every laborer and every owner of the soil whom I represent, I warn all such, as they value their investments, that when these doctrines of despotism are sought to be enforced this fair land will again be convulsed in agony and the fires of liberty will blaze forth again as they did a hundred years ago, in defense of the natural rights of man.
May the wisdom of our fathers and the benignity of our God avert such an issue ; but if it shall come, if infatuation has seized our councils, the result will only add one more instance to the long catalogue of human crime and folly, when avarice, like ambition, overleaps itself, and in its unholy attempts to rob others of their possessions loses its own.
In contrast with the foregoing we give extracts from the speeches of Hon. James Garfield, one of the most constant and consistent advocates of the interests of the money power and the gold standard, when speaking on the same subject.
During the discussion in the House of Representatives in 1869, of the Credit Strengthening act, Mr. Garfield took the ground that the law authorizing the issue of the 5.20 bonds required their payment in gold, and that the bill under consideration was simply declaratory of the meaning of the original act. On page 1880, Congressional Globe, part 3, Fortieth Congress, is recorded a speech made by him, March 3, 1869, in which he said :
Now, sir, I favor the first section of the bill because it declares plainly what the law is. I affirm again, what I have often declared in this hall, that the law does now require the payment of these bonds in gold.
On page 1883, of the same volume of the Globe, he is recorded as making the following statement : I stated is every speech I made from the beginning to the end of the campaign that those bonds were payable in gold.
In the same speech, on page 1881, he states clearly and unmistakably in whose interest he was laboring. He says :
Whenever this law is carried out in its letter and spirit, no injustice can possibly result. The whole power of the law is in the hands of the creditor, and he alone is supposed to be in danger of suffering wrong.
The second section of the act to strengthen the public credit, as originally introduced, provided that in case any contract was hereafter made specifically payable in coin, the price of which is carried into the contract, may have been adjusted on the basis of the coin value thereof at the time of such sale, or the rendering of such service, shall be legal and valid, and may be enforced according to its terms, and on the trial of a suit brought for the enforcement of such contract, proof of the real consideration may be given.
The object to be gained by this clause was, that in case silver should be demonetized, and the government should attempt to enforce coin payment, including silver, which, although par at the time the contract was made, might be at a discount when payment was due, the creditor could demand and collect a gold dollars worth of silver, no matter how much it might be depreciated in consequence of adopting the simple gold standard. This discloses the fact that as early as 1868, the demonetization of silver had been determined upon by the money power, and their secret agents and attorneys were advised of the fact and were making arrangements for such a contingency, but were withholding all knowledge of it from the people, whose interests they were sworn to protect. During the discussion of this bill Mr. Garfield was absent one day, and when he returned, he said :
I would like to ask whether any substantial change has been made in the second section of the bill relating to gold contracts ?
Upon being answered in the negative, he replied :
I am very glad to learn that that section is retained. I cannot better express my approval of it than by stating the fact that I introduced this proposition into this House as a separate measure more than a year ago, and have earnestly urged its passage.
Thus Mr. Garfield advocated the payment in coin, at their full face value, those bonds which were made payable in currency and had not cost the holders to exceed fifty cents on the dollar in specie, and when they should become coin bonds and payable in either gold or silver, or both, the bondholders should not be compelled to receive silver except at its gold value, thus forcing gold payment of the bonds, whether silver was demonetized or not.
By referring to the Congressional Record of July 13, 1876, page 4561, we find that Mr. Garfield took the ground that even before 1861, when the government promised to pay coin, it meant gold coin, for he says, in speaking of the law prior to 1861 :
And when Congress promised to pay in coin, it was a promise to pay gold coin or silver coin of equal value to the same nominal sum in gold.
Again he says :
Congress saw a few years ago, that it was going to be difficult to keep up the equality or equivalency of the dollar in the two metals ; so it dropped one of the metals, except as a subsidiary coin, and left the national standard embodied in the other, namely in gold.
Mr. Landers, of Indiana, on the 13th of July, 1876, offered the following amendment to House resolution No. 109 :
And provided, further, that the Secretary is directed to authorize the coinage of a standard silver dollar of the same weight and fineness as that in use January 1, 1861, and that said dollar shall be a legal-tender in payment of all debts, public and private.
In speaking on this resolution, Mr. Garfield said :
Let it be remembered that we are solemnly bound by the act of 1869 to pay in coin or its equivalent. Dare any man say that we can pay in this so greatly depreciated silver and really obey the law of equivalency, which was the basis and spirit of the law of 1869. * * * If you insist on paying in silver, then I insist that your silver dollar must be equivalent to your gold dollar. * * It is proposed by the amendment of the gentleman from Indiana (Mr. Landers) that at one fell stroke one-fifth of all this enormous sum shall be wiped off, repudiated, and that this process shall be called honest legislation ! Since I have been in public life I have never known any proposition that contained so many of the essential elements of vast rascality, of colossal swindling as this.Congressional Record, p 4561.
During the discussion on House Bill No. 1572, to amend the several acts providing for a national currency and to establish free banking and for other purposes, in speaking of the legislation by members who had preceded him in the debate, Mr. Garfield said, as shown by the Congressional Record of April 9, 1874, page 2972 :
This legislation is framed to answer a demand for what several gentlemen here have called cheap money. I hope they will take no offense if I say they would more fitly characterize the thing they are aiming at if they would apply to it the old, homely epithet of CHEAP AND NASTY.
We have selected the foregoing extracts from speeches of the ablest members of both Houses in order to give our readers, at a single glance, the spirit in which the finance question has been met and argued by the representatives of the money power on the one side and the advocates of the peoples interests on the other, and leave them to draw their own conclusions as to which is based on the standard of justice.
The original bill introduced by Mr. Bland was reported upon adversely by the Senate Committee on Coinage, Weights and Measures, to which it was referred, and a substitute presented in its place, which was as little like the original bill as was the law passed in 1862 providing for the issue of legal-tender notes, with the exception clause pinned to their backs, like the original bill which passed the House, and provided for making these notes full legal-tender.
The Bland bill simply provided for the restoration of the silver dollar of 412½ grains to its former place in our currency with free coinage and full legal-tender property. The Senate Committees substitute provided for the purchase by the government of bullion to the amount of not more than $4,000,000 and not less than $2,000,000, and the coinage of the same each month into standard silver dollars of 412½ grains, which should be a legal-tender for all dues, unless otherwise expressed in the contract. It also provided for a monetary commission to be appointed for the purpose of considering, with other nations, the feasibility of adopting a uniform silver standard. While this bill left the permanency of the silver dollar entirely unsettled and gave the bankers the power to refuse to make contracts in which it should be a legal-tender, so positive was its opponents that the power of money would prevail in that conservative body that they hoped to defeat it to the last. But when all parliamentary strategy had been exhausted it was passed by both Houses and sent to the President for his signature.
On the 28th of February, 1878, the bill was returned to the House with the Presidents veto.
So determined was that functionary to set up his individual will against that of the people, which he should have respected and obeyed, that in his veto message the only objection made is that the coinage of silver, for which it provided, would impair the obligation of contracts and affect the public credit. But in order that we may do Mr. Hayes no injustice we will give him and our readers the benefit of the bill and the message :
AN ACT (H.B. NO. 1093) TO AUTHORIZE THE COINAGE OF THE STANDARD SILVER DOLLAR AND TO RESTORE ITS LEGAL-TENDER CHARACTER :
Be it enacted by the Senate and House of Representatives in Congress assembled, That there shall be coined at the several mints of the United States silver dollars of the weight of 412½ grains troy, of standard silver, as provided in the act of January 18, 1837, on which shall be the devices and superscriptions provided by this act ; which coins, together with all silver dollars heretofore coined by the United States of like weight and fineness, shall be a legal-tender at their nominal value for all debts and dues, public and private, except where otherwise expressly stipulated in the contract. And the Secretary of the Treasury is authorized and directed to purchase, from time to time, silver bullion at the market price thereof, not less than two million dollars worth per month, nor more than four million dollars worth per month, and cause the same to be coined monthly, as fast as so purchased, into such dollars ; and a sum sufficient to carry out the foregoing provisions of this act is hereby appropriated out of any money in the Treasury not otherwise appropriated. And any gain or seigniorage arising from the coinage shall be accounted for and paid into the Treasury, as provided under existing laws relating to the subsidiary coinage : Provided, That the amount of money invested at any time in such silver bullion, exclusive of such resulting coin, shall not exceed $500,000. And, provided further, That nothing in this act shall be construed to authorize the payment in silver of certificates of deposit issued under the provisions of Section 254 of the Revised Statutes.
Sec. 2. That immediately after the passage of this act the President shall invite the European governments of the countries composing the Latin Union, so-called, and of such other European nations as he may deem advisable, to join the United States in a conference to adopt a common ratio between gold and silver for the purpose of establishing internationally the use of bi-metallic money and securing fixity of relative value between those nations ; such conference to be held at such place in Europe or the United States, at such time, within six months, as may be mutually agreed upon by the executives of the governments joining in the same, whenever the governments so invited, or any three of them, shall have signified their willingness to unite in the same.
The President shall, by and with the advice and consent of the Senate, appoint three commissioners, who shall attend such conference on behalf of the United States, and shall report the doings thereof to the President, who shall transmit the same to Congress.
Said Commissioners shall each receive the sum of $2,500, and their reasonable expenses, to be approved by the Secretary of State, and the amount necessary to pay such compensation and expenses is hereby appropriated out of any money in the Treasury not otherwise appropriated.
Sec. 3. That any holder of the coin authorized by this act may deposit the same with the Treasurer or any Assistant Treasurer of the United States, in sums not less than $10, and receive therefor certificates of not less than $10 each, corresponding with the denominations of the United States notes. The coin deposited for or representing the certificates shall be retained in the Treasury for the payment of the same on demand. Said certificates shall be receivable for customs, taxes, and all public dues, and when so received may be re-issued.
Sec. 4. All acts and parts of acts inconsistent with the provisions of this act are hereby repealed.
This was not the law the people had demanded, but it was the best that could be obtained from that Congress. But with all its shortcomings it was too liberal and too much in the interest of the common people to meet with favor with the aristocratic ideas of President Hayes. His veto message which he sent to the House, is as follows :
TO THE HOUSE OF REPRESENTATIVES :
After a very careful consideration of the House Bill No. 1093. entitled : An act to authorize the coinage of the standard silver dollar, and to restore its legal-tender character, I feel compelled to return it to the House of Representatives, in which it originated, with my objections to its passage.
Holding the opinion which I expressed in my Annual Message, that neither the interests of the government nor the people of the United States would be promoted by disparaging silver as one of the two precious metals which furnish the coinage of the world, and that legislation which looks to maintaining the volume of intrinsic money to as full a measure of both metals as their relative commercial values would permit, would be neither unjust nor inexpedient. It has been my earnest desire to concur with Congress in the adoption of such measures to increase the silver coinage of the country as would not impair the obligation of contracts, either public or private, nor injuriously affect the public credit. It is only upon the conviction that this bill does not meet these essential requirements that I feel it my duty to withhold from it my approval.
My present official duty as to this bill permits only an attention to the specific objections to its passage, which seem tome so important as to justify me in asking from the wisdom and duty of Congress, that further consideration of the bill for which the Constitution has, in such cases, provided.
The bill provides for the coinage of silver dollars of 412½ grains each, of standard silver, to be a legal-tender at their nominal value, for all debts and dues, public and private, except where otherwise expressly stipulated in the contract. It is well known that the market value of that number of grains of standard silver during the past year has been from ninety to ninety-two cents, as compared with the standard old dollar. Thus the silver dollar authorized by this bill is worth eight to ten per cent. less than it purports to be worth, and is made a legal-tender for debts contracted when the law did not recognize such coin as lawful money.
The right to pay duties in certificates for silver deposits will, when they are issued in sufficient amount to circulate, put an end to the receipt of revenue in gold, and thus compel the payment of silver for both the principal and interest of the public debt. One billion one hundred and forty-three million four hundred and ninety-three thousand four hundred dollars of the bonded debt, now outstanding, was issued prior to February 1, 1873, when the silver dollar was unknown in circulation in this country, and was only a convenient form of silver bullion for exportation ; $583,440,350 of the funded debt has been issued since February, 1873, when gold alone was the coin for which the bonds were sold, and gold alone was the coin in which both parties to the contract understood that the bonds would be paid. These bonds entered into the markets of the world. They were paid for in gold when silver had greatly depreciated, and when no one would have bought them if it had been understood that they would be paid in silver. The sum of $225,000,000 has been sold during my administration, for gold coin, and the United States received the benefit of these sales by a reduction of the rate of interest to 4 per cent. During the progress of these sales a doubt was suggested as to the coin in which payment of these bonds would be made. The public announcement was thereupon authorized that it was not to be anticipated that any future legislation of Congress, or any action of any department of the government would sanction or tolerate the redemption of the principal of these bonds, or the payment of the interest thereon in coin of less value than the coin authorized by law at the time of the issue of the bonds, being the coin exacted by the government in exchange for the same.
In view of these facts it will be justly regarded as a grave breach of public faith to undertake to pay these bonds, principal or interest, in silver coin, worth in the market less than the coin received for them. It is said that the silver dollar made a legal-tender by this bill will, under its operation, be made equivalent to the gold dollar. Many supporters of the bill believe this, and would not justify an attempt to pay debts, either public or private, in coin of inferior value to the money of the world. The capital defect of the bill is that it contains no provision protecting from its operation pre-existing debts in case the coinage which it creates shall continue to be of less value than that which was the sole legal-tender when they were contracted. If it is now proposed for the purpose of taking the advantage of the depreciation of silver in the payment of debts to coin and make a legal-tender a silver dollar of less commercial value than any dollar, whether of gold or paper, which is now lawful money in this country. Such measure, it will hardly be questioned, will, in the judgment of mankind, be an act of bad faith. As to all debts heretofore contracted, the silver dollar should be made a legal-tender only at its market value. The standard of value should not be changed without the consent of both parties to the contract. National promises should be kept with unflinching fidelity.
There is no power to compel a nation to pay its just debts. Its credit depends on its honor. The nation owes what it has led or allowed its creditors to expect. I cannot approve a bill which in my judgment, authorizes the violation of sacred obligations. The obligation of the public faith transcends all questions of profit or public advantage. Its unquestionable maintenance is the dictate as well of the highest expediency as of the most necessary duty, and should ever be carefully guarded by the Executive, by Congress, and by the people.
It is my firm conviction that if the country is to be benefited by a silver coinage, it can be done only by the issue of silver dollars of full value, which will defraud no man. A currency worth less than it purports to be worth will, in the end, defraud not only creditors, but all who are engaged in legitimate business, and none more surely than those who are dependent on their daily labor for their daily bread.R. B. HAYES.
EXECUTIVE MANSION, February 28,1878.
On motion of Mr. Stephens, of Georgia, the House proceeded to the business on the speakers table, for the purpose of taking up and considering the foregoing message. After it was read by the clerk, the speaker stated that : The question before the House is, Will the House, on reconsideration, agree to pass the bill ? Upon that, Mr. Stephens moved the previous question, which was sustained by the House, and the main question was put, which was : Will the House, on reconsideration, agree to pass the bill ? The question was taken, and there wereyeas, 196 ; nays, 73 ; not voting, 23 ; as follows :
The result of the vote was then announced, as above stated.
THE SPEAKER Two-thirds having voted for the passage of this bill upon its reconsideration, the bill is passed, the objections of the President to the contrary notwithstanding. [Great applause.]Congressional Record, February 28, 1878, pages 1418-1420.
On the same day the bill went to the Senate, which body, after a few dilatory motions, came to a vote. The yeas and nays being called for, the secretary called the roll, and the following Senators answered to their names and voted yea :
Being a majority of over two-thirds voting in the affirmative, the bill passed and became a law, notwithstanding the objections of the President. (See Congressional Record, p.1411.)
The passage of this bill was a compromise with wrong which its always of doubtful expediency, but the friends of remonetization, seeing that this was the best they could get, concluded to accept it and trust to future legislation for its improvement.
The President, the Secretary of the Treasury and the Comptroller of the Currency were all bitterly opposed to the law, and only obeyed it in the most tardy manner.
The Secretary only provided for the coinage of the minimum amount provided for in the law, and refused to pay it out to government creditors unless they demanded it, reversing the law of the debtors option, which is recognized in all civilized nations.
The banking associations at once organized against it, and availed themselves of the benefit of the clause in the law excepting special contracts, and refused to receive the silver dollar on deposit unless the depositor agreed to receive the same kind of money in return, and the Clearing House Association of New York refused to receive it in settlement of balances.
With this evidence of hostility, Secretary Sherman made the United States Treasury a member of that association, and as such entered into a conspiracy with the enemies of the people to discredit and degrade the coin of the government of which he was the financial agent.
The agents of the money power, both in and out of Congress, attacked the new coin. It was caricatured by a venal press, and held up to public gaze as the clipped dollar, the buzzard dollar, the ninety-cent dollar and the dishonest dollar, while kid-gloved Congressmen, gold-spectacled bankers and their paid attorneys and lesser tools all over the country shouted themselves hoarse with the cry of dishonest dollar, repudiation dollar, the dollar of the lunatics. But the people had made up their minds to have their original unit of value restored to its former position, and, having secured a partial restoration, they were not to be driven from their purpose by the foam and froth of a few aristocrats and their hired minions.
The great field of productive industry in the West was ready to receive them for their corn, wheat, beef, pork and all the vast products of the soil or the shop which labor had brought forth in profusion. The dollar of 412½ grains was not a ninety-cent dollar with them.
They received it as honest people for an honest dollar, and was willing to return an honest consideration therefor. Notwithstanding this fact, Secretary Sherman complained that he could not get these dollars into circulation ; that the people did not want them ; the holders of government bonds did not want them ; the bullion brokers and bankers of Wall street did not want them ; the national bankers, who had conspired against them, of course did not want them, and these were the people who appeared to come within the range of the financial vision of the Secretary, while the great mass of the wealth-producing people were apparently too insignificant to make a shadow on the horizon of his financial economy. He did propose to bankers in the interior of the country to furnish enough to fill their orders, delivered at their banks at the cost of the government. But the bankers, being unfriendly to the law, ordered no more than enough to silence the clamor of the people.
He did for a time pay officials and employés of the government at Washington 10 per cent. of their salaries in silver dollars, but during the whole period of his administration of the Treasury Department he refused to exercise the government option to pay debts in this legal-tender money of the United States, and continued to pay interest on bonds while millions of silver dollars were accumulating in the Treasury, until he was compelled to ask of Congress an appropriation of money to provide additional room for storage.
The law providing for the issue of silver certificates, placed it within the power of any one receiving silver dollars, to deposit them in the Treasury and receive certificates therefor, and the certificates being more convenient for circulation, a large share of those dollars which were paid on salaries went directly back into the Treasury and the certificates went into circulation ; but the result was the same on the volume of the currency, as if every dollar of the silver thus returned had remained in active circulation. The people do not want gold and silver for a circulating medium ; what they want is paper money, based on all the wealth of the nation, and a full legal-tender for all dues in all transactions, either of a public or private character, anywhere within the limits of the United States.
When the Silver bill was passed over the veto of the President, the money power saw that that Congress could not be relied on to do all their bidding, and when Mr. Forts bill to prevent the further retirement and destruction of the legal-tender notes was called up, it did not meet with the arrogant opposition that was offered to the passage of the bill to re-monetize the silver dollar ; but the vote in both Houses on the two bills, shows more of a disposition to shirk responsibility on this, than on the Silver bill.
When the question was taken on Mr. Forts bill in the House, there wereyeas, 177 ; nays, 35 ; not voting, 79 ; as follows :
The result of the vote was announced and the bill passed. (Congressional Record, April 29, 1878, pages 2928-2929). It was sent to the Senate and held by that body until the 28th of May, 1878, before it was called up for final consideration. After due consideration and discussion, in Committee of the Whole, the bill was reported to the Senate without amendment, put upon its third reading, read a third time and passed. The roll-call having been concluded, the result was announcedYeas, 41 ; nays, 18 ; not voting, 17 ; as follows :. . . . . . .
So the bill was passed. (Congressional Record, May 28, 1878, page 3871.)