S.M. Brice

Financial Catechism

Chapter IX.


The political campaign of the fall of 1878 was a peculiar one.  The voice of the people had been recognized at last to a small extent.  An apparent recognition of their rights must be maintained, or it was evident that the members of Congress to be elected that year would be elected as representatives of the people and not of the old political parties.  The Republican and Democratic parties all over the South and West not only indorsed the acts of Congress remonetizing silver and preventing the further retirement of the legal-tender notes, but many of them demanded the free coinage of the silver dollar and the retirement of the national bank notes and the substitution in their place of full legal-tender Treasury notes, but qualified these declarations with the accompanying statement that such notes should be on a par with gold, thereby declaring themselves in favor of making gold the only standard by which all values should be measured in the United States.

The National Greenback party took the broad ground that the sole power to create money was in the government, and that it was not only its privilege but its duty to exercise that power to a sufficient extent to meet all the legitimate wants of the people, whether such money was made of gold, silver, paper or any other material.  Both the Republican and Democratic parties joined issue with the new party on this question, and raised the cry of “fiat money,” “repudiation money,” “national dishonor,” and every other epithet by which they could appeal to the prejudice of the ignorant and unthinking.  But, notwithstanding all their efforts, the Greenback party obtained enough strength among the members of the House of Representatives elected that year to hold the balance of power in the House for the next two years.  After the election was over both the old parties declared the finance question settled, and denounced all agitation of the subject either in or out of Congress.  They claimed that what the country needed was rest, in order that it might recuperate.

But the great financial problem would not down at their bidding.  Nearly $800,000,000 of bonds, bearing 4, 4½ and 5 per cent. usury, became payable at the option of the government in 1880 and 1881.  What disposition should be made of them ? was the great financial question, to be settled by Congress.  On this question the money power again came to the front.  The leading spirits, Republican and Democratic, in both houses of the National Legislature, without regard to political affiliations, favored refunding this debt into long bonds bearing a lower rate of usury.

The National Greenback party demanded that they should be paid as fast as they could be paid out of the surplus revenue of the country and the money lying idle in the Treasury.

During the session of 1879 Hon. James A. Garfield (Republican), of Ohio, and Hon. Fernando Wood (Democrat), of New York, both introduced bills in the House providing for funding these maturing bonds into 4 per cent bonds, running from twenty to forty years.  These bills were simply referred to the Committee on Finance, where they were held until after the Presidential election in 1880.

During this whole period the representatives of the money power declared the finance question was settled and should not be disturbed.  They raised a contest in Congress between the North and the South on the elective franchise, and pushed that forward as the all-absorbing question, in order to arouse the old spirit of hostility between the sections and array the two old parties solidly against each other and thereby prevent the growth of the Greenback party and the agitation of the question of finance.

About the first of January, 1880, Hon. James B. Weaver, of Iowa, offered the following resolution, which was read and laid upon the table, subject to be called up at any time for discussion by permission of the House.

Resolved.  That it is the sense of this House that all currency whether metallic or paper, necessary for the use and convenience of the people should be issued, and its volume controlled by the government, and not by or through the bank corporations of the country ;  and when so issued should be a full legal-tender in payment of all debts, public and private.

“ 2.  Resolved, That, in the judgment of this House, that portion of the interest-bearing debt of the United States which shall become redeemable in the year 1881, or prior thereto, being in amount $782,000,000, should not be refunded beyond the power of the government to call in said obligations and pay them at any time, but should be paid as rapidly as possible, and according to contract.  To enable the government to meet these obligations, the mints of the United States should be operated to their full capacity in the coinage of standard silver dollars, and such other coinage as the business interests may require.”

Both of the old parties were so determined to prevent any discussion on national finance that every obstacle that could be raised was thrown in the way of the consideration of these resolutions.  Once every week, for thirteen weeks, did the author of these resolutions rise in his place and ask for their consideration, only to be refused recognition by the Speaker, or choked off by the chairman of some committee who claimed priority under the rules of the House.

In the meantime the organs of the money power had been vigorously at work manufacturing public sentiment against them and their author, whom they had cartooned as a jackass and denounced as an addle-brained lunatic, who was endeavoring to ruin the credit of the nation.  In this matter they had done more than they intended ;  for they had aroused public curiosity, which created a demand for action, so that the resolutions might go to the people, and let them decide upon their bearing upon the interest of the country and the public credit.

On the fifth day of April, 1880, on motion of Mr. Weaver, the rules were suspended and the resolutions taken up.  The opposition was determined to have as little discussion on them as possible.

As Hon. James A. Garfield had been the champion of the bond holders and money dealers in the former contests with the representatives of the people, he was selected by his party to attack and demolish these incendiary resolutions, and if possible, their author and the young party of which he was a conspicuous leader.

In order to be just to all parties we insert the discussion which took place in the House before the vote was taken, and the vote by which the resolutions were defeated :

Mr. WEAVER.  “ I move to suspend the rules and adopt the resolutions which I send to the desk.”

The clerk read as follows :

Resolved, That it is the sense of this House that all currency, whether metallic or paper, necessary for the use, and convenience of the people should be issued and its volume controlled by the government, and not by or through the bank corporations of the country ;  and when so issued should be a full legal-tender in payment of all debts, public and private.

“ 2.  Resolved, That, in the judgment of this House, that portion of the interest-bearing debt of the United States which shall become redeemable in the year 1883, or prior thereto, being in amount $782,000,000, should not be refunded beyond the power of the government to call in said obligations and pay them at any time, but should be paid as rapidly as possible, and according to contract.  To enable the government to meet these obligations, the mints of the United States should be operated to their full capacity in the coinage of standard silver dollars, and such other coinage as the business interests of the country may require.”

Mr. Garfield.  “ Mr. Speaker, I never heard the provisions of this resolution until it was read from the desk a few moments ago.  It has, however, attained some historical importance by being talked about a good deal in the newspapers, and by blocking the other business of the House for some weeks.  As I listened to its reading I noticed that it is one of those mixed propositions which has some good things in it which everybody would probably like and vote for if they were separated ;  but the good things are used to sugar over what, in my judgment, is most pernicious.

“ There are three things in this resolution to which I wish to call the attention of the House before they vote.  The first is a proposition of the largest possible proportion, that all money, whether of coin or paper, that is to circulate in this country ought to be manufactured and issued directly by the government.  I stop there.  I want to say on that proposition to the majority in this House, who are so strongly opposed to what they call centralization, that never was there a measure offered to the Congress of so vast and far-reaching centralism.  It would convert the Treasury of the United States into a manufactory of paper money.  It makes the House of Representatives and the Senate, or the caucus of the party which happens to be in the majority, the absolute dictator of the financial and business affairs of this country.  This scheme surpasses all the centralism and all the Cæsarism that were ever charged upon the Republican party in the wildest days of the war or in the events growing out of the war.

“ Now, I say, without fear of contradiction, that prior to 1862 the wildest dreamer in American finance was never wild enough to propose such a measure of centralization as that single proposition implies.  The government should prescribe general laws in reference to the quality and character of our paper-money, but should never become the direct manufacturer and issuer of it.

“ The second point involved in this resolution is that the government of the United States shall pay all its public debts in this manufactured money, manufactured to order at the Treasury factory.  Notwithstanding the solemn and acknowledged pledge of the government to pay the principal and interest of its public debt in coin, this resolution declares that in this legal-tender paper the public debt shall be payable.

“ The third point I wish to call attention to——”

Mr. EWING.  “ Will my colleague allow me to interrupt him for a moment ? ”

Mr. GARFIELD.  “Certainly.”

Mr. EWING.  “ You certainly misunderstand the resolution.  It declares that all public debts of the United States shall be paid in the money of the contract, and not in any coin or money the government may choose to pay them in.”

Mr. GARFIELD.  “ Any money the government may issue is by this resolution declared to be lawful money, and, therefore, is to be made the money of the contract by the legislation proposed to-day.”

Mr. EWING.  “ That is a mere quibble, based on a total misconstruction of the resolution.”

Mr. GARFIELD.  “ Answer in your own time.

“ Now, the third point in this resolution is, that there shall be no refunding of the $782,000,000 to fall due this year and next, but that all shall be paid.  How ?  Out of the resources of the nation ?  Yes ;  but the money to be manufactured at the Treasury is to be called part of these resources.  Print it to death—that is the way to dispose of the public debt, says this resolution.

“ I have only to say that these three make the triple-headed monster of centralization, inflation and repudiation combined.  This monster is to be let loose on the country as the last spawn of the dying party that thought it had a little life in it a year ago.  It is put out at this moment to test the courage of the two political parties ;  it is offered at this moment when the roar of the Presidential contest comes to us from all quarters of the country.  In a few moments we shall see what the political parties will do with this beast.  All I have to say for one is, meet and throttle in, the name of honesty, in the name of the public peace and prosperity, in the name of the rights of individual citizens of this country against centralism, worse than we ever dreamed of, meet it and fight it like men.  Let both parties show their courage by meeting boldly and putting an end to its power for mischief.  Let the vote be taken.”

Mr. WEAVER.  “ I yield two minutes to the gentleman from Pennsylvania.”

Mr. KELLEY.  “ I cannot say much in two minutes.  I can, however, say that the announcement of the gentleman from Ohio [Mr. Garfield] that to require the government to make our money tended to consolidation was idle vapor, as there never was an honest dollar, or franc, or mark, or shilling that was not made by a government.  No other power than government can make money.  Currency there has been which government did not create, bank notes and notes of individuals promising to pay money ;  but money other than that made and issued by a government, by its authority and upon its responsiblity, has never existed here or in any other country.  And all that the gentleman said on that point was, I repeat, balderdash.  So was his allusion to the wildest dreamer that ever lived.  In voting for this resolution I will stand with that wildest of dreamers, to borrow the gentleman’s wild phraseology, Thomas Jefferson, who, when portraying the dangers of using bank notes as money, as was the practice at the time he wrote to Mr. Eppes, said :

“ ‘ The power to issue money should be taken from the banks and restored to Congress and the people, to which it properly belongs.’

“ The gentleman also vociferated against the resolution because it to to put an end to the refunding of our debts.  If there is to be no more refunding of maturing or matured bonds into those which are to have either thirty or fifty years to run, I will thank God, with fervent thanks, for Secretary Chase never said a wiser thing than when he told Congress that the optional control of the debt was of vastly more importance than the rate of interest, unless he at some time exclaimed :  ‘ It is with nations as with men ;  out of debt, out of danger.’

“ Just here I beg leave to tell the gentleman and the House that if we convert redeemable bonds into those which will have thirty or fifty years to run, as is proposed, we will pay in premium to the members of the syndicate, from whom we will be compelled to purchase them if our debt is not to be perpetuated, more than we will seem to save by having reduced the rate of interest on a debt, which since the 8th of November last we have been extinguishing at the rate of $9,000,000 a month.”

[Mr. Ewin addressed the House.  He withholds his remarks for revision.]

Mr. WEAVER.  “ I yield for a minute to the gentleman from Indiana.”

[Mr. Calkins asked, and obtained, leave to print some remarks upon this subject.]

Mr. WEAVER.  “ Mr. Speaker, I reckon myself most happy in having an opportunity of witnessing a vote upon these resolutions which have so attracted the attention of this House and of the country for the past three months.  I am not surprised at the opposition of the gentleman from Ohio [Mr. Garfield].  I understand very well that that gentleman and his party stand in the road blocking the progress of the people toward financial reform.

James B. Weaver“ He assailed these resolutions with two distinct propositions :  First, that they favored centralization ;  second, that they are in violation of the public faith of the nation, in that they propose to pay the public debt in ‘manufactured money,’ as the gentleman styles it.  I call his attention to the resolutions themselves in response to that.  There is not one word in these resolutions looking to a violation of the public faith or to the payment of the public debt in anything not strictly in accordance with the contract.  We all understand very well what the gentleman means when he raises the cry that the public faith is about to be endangered.  He means that it is a violation of the public faith to pay the public debt in silver dollars of 412½ grains.  That is what the gentleman means.  The resolutions propose to pay the bonded debt in silver dollars, if the bondholders prefer coin.  Every man of sense in all this broad land knows that the holders of these bonds do not want them paid in either gold, silver or greenbacks.  They simply want them to be funded perpetually and be exempted from the burdens of the State.

“ I say here and now that the National Greenback party is opposed to the violation of the public faith, and is squarely opposed to the repudiation of any portion of the public debt.  [Applause.]  We are in favor of the payment of the debt according to the contract, and we are the only party that desires ever to pay it.  And while we are in favor of that, we are determined that the moneyed interests of the country shall not repudiate again those features in the contract which are in favor of the people.  We say that the bondholder having specified in the law that he would receive the silver dollar of 412½ grains in payment for his bond, in all good faith he should be held to the strict terms of the contract.  He may have his pound of flesh, but not another drop of American blood.

“ That, I say, is the colossal issue ;  and in it is involved the very existence of this government and the freedom of the people.  ‘ Centralization ! ’  The Congress of the United States, chosen for two years, coming directly from the people and directly responsible to them for their conduct, are not to be trusted ! but the bankers of the country, who are not chosen by the people or elected by them, are to be trusted with this great power involving the happiness and welfare of fifty millions of people, and their countless posterity, without a murmur from the gentleman and with his express approval.  Let me repeat it again, so that the American people may fully understand it.  These bankers are to be trusted, says the gentleman, in preference to the people and their chosen representatives !

“ Is there no centralization, no Cæsarism here ?  In the name of the public peace, in the name of honesty and fair dealing, in the name of the laboring millions, who toil and dig and pay the taxes of the country, I invoke the soft-money Democrats of the United States and the hundreds and thousands of Republicans who have been long looking in vain for economic reform within their party, to join with us in a death-grapple with this corporate monster.  In the name of the humble poor who struggle not for office, and who simply want a fair chance in the race of life, I ask you to give one vote for the Republic.  Let there be no dodging to-day, no hiding in the cloak-room ;  you cannot serve two masters.  You cannot avoid the issue if you would.  It is vital, permeating all classes, and engaging the attention of the people as never before in our history.  This is a supreme moment in the history of men and parties in this House.  Reflect well before you vote.

“ I ask the Congress of the American people to stand up and assert, with Thomas Jefferson, that the issue of the circulating medium should be taken away from the banks and restored to the government, to which it properly belongs.  [Applause.]  I ask my Democratic friends to stand where Jackson stood when he said, in his farewell address, that the banks could not be relied upon to keep the circulating medium uniform in amount.  [Applause.]  I ask you to stand where Calhoun and all the other great leaders of your party stood in the past and purer days of your history.

“ And I ask my Republican friends here to repudiate the doctrine of the gentleman from Ohio.  You owe it to your dignity and to the American people to repudiate the doctrine that you cannot trust yourselves as the people’s representatives.”

Mr. BAYNE.  “ Will the gentleman allow me to ask him a question ?”

Mr. WEAVER.  “ Certainly.”

Mr. BAYNE.  “ Where will the government get the money to pay the matured bonds ?”

Mr. WEAVER.  “ It is very easy to answer.  First, from the surplus revenues properly increased by a judicious income tax ;  second, by the coinage of silver.  The bonds are not mature ;  they are payable at the option of the government.”

Mr. BAYNE.  “ But where will the government get the money to pay when they do mature ?”

Mr. WEAVER.  “ They are only payable at the option of the government, and the government can, coin all the silver that is necessary.”

Mr. BAYNE.  “ And where will the government get the silver ?”

Mr. WEAVER.  “ Where does it get it now ?  It buys it with the surplus revenues, and manufactures silver dollars ;  and $4,000,000 a month, even under the present law, will pay off the principal and interest of the debt now maturing in half the time that it is now proposed to fund it.”

Mr. MORTON.  “ How do you propose to secure the $4,000,000 a month to pay for the silver ?”

Mr. WEAVER.  “ With the surplus revenues of the country.  You are paying the debt now for electioneering purposes at the rate of two millions a week, and do not feel it.  There is ample surplus revenue for the purpose ;  all that is needed is the disposition to pay.”

Mr. CHITTENDEN.  “ Is there any other way that the government can pay for the silver with which you propose to pay off the bonds than by issuing legal-tender greenbacks therefor ?  Will you answer me squarely ?”

Mr. WEAVER.  “ I will.  We can buy the silver bullion with the surplus revenue that is now coming into the Treasury.”

Mr. CHITTENDEN.  “ There is nothing in that answer.  The surplus revenue is in greenbacks.  You dodge the question.”

Mr. KELLEY.  “ The greenbacks are convertible into gold.”

The SPEAKER “rapped to order.”

Mr. CHITTENDEN.  “ Will the gentleman answer me that question ?”

The SPEAKER.  “ The gentleman from New York will be seated.  The gentleman from Iowa has the floor.”

Mr. WEAVER.  “ I dodge no question.  In further and direct answer to the gentleman’s question.  I say that this government has the power to issue and reissue its own currency, as has been held by the highest court of this country ;  and it can issue enough to redeem the national bank circulation, and then it can cancel, having paid the debt of the banks, it can cancel, as fast as they mature, the bonds now held by the banks to secure their circulation—”

Mr. HAZELTON.  “ Will the gentleman yield tome ?”

Mr. WEAVER.  “Not now.  And in that way we can pay $330,000,000 more of the national debt.  There is no trouble about paying the debt.  The trouble with the gentleman from New York [Mr. Chittenden] is that he does not want to pay the public debt it all.”

Mr. CHITTENDEN.  “You admit the paper is to be issued to pay it.”

Mr. WEAVER.  “ The government has the same power to issue paper dollar that it has to issue a gold dollar, the same power to issue a paper dollar that it has to authorize the national backs to issue their circulation.  The gentleman claims that the government cannot even reissue a paper dollar, as a legal tender, after it has been received into the Treasury for public dues.  What supreme folly !”


Mr. GILLETTE.  “Mr. Speaker :  After thirteen weeks of patient waiting, at last the Trojan horse has been admitted into this House.  He has been recognized, and we are to see how many warriors come forth from his loins.

“ The Weaver resolutions are before us.  Every effort has been made to prevent this result, until even the newspapers, without regard to party, were alarmed at the absolute despotism of this House, and called us a Congress of cowards.  My colleague who presents them has been derided, persecuted and cartooned as a jackass by the organs of the capitalists, in order to create prejudice against these resolutions.  Nevertheless, with unbounded faith in the great principles of his party, he has risen, week after week in his place to demand a right, which, has been denied him until this hour, under rules which have well nigh destroyed the representative features of this government.  Is there anything wrong, unfair, or unjust about these resolutions ?  I defy any man to show it.  Men do not appeal to prejudice and abuse, and adjournment, and iron-clad rules for protection until argument and reason fail them.  These resolutions contain doctrines which are fundamental and must prevail, if Democratic principles are to prevail.  They are as conservative as the Constitution ;  and so plain and simple, they can be read and understood of all men.

“ The national bank party pre-eminent has spoken through its leader and chief, the gentleman from Ohio [Mr. Garfield].  In this emergency the ablest advocate on the floor has been called out to crush these resolutions.  He commenced by saying, ‘ I never heard their provisions until they were read from the desk a few moments ago.’  They have been advertised by the Associated Press, commented upon by leading papers of all parties, read to the House by the Clerk over a month since, and printed in the Record at the same time for the information of the House.  The gentleman admits in the next breath, they have, ‘ however, attained some historical importance by being talked about a good deal in the newspapers and by blocking other business of the House for some weeks,’ yet he was ignorant of their contents.

“ In replying to the proposition ‘ that all currency should be issued and its volume controlled by the government, and not by or through the banks,’ he says never was there a measure offered to Congress of so vast and far-reaching centralism.  It would convert the Treasury of the United States into a manufactory of paper money ;  it makes the House of Representatives and the Senate the absolute dictator of the financial and business affairs of the country.  Centralism, indeed !  Every act of sovereignty is an act of centralism, if the issue of the currency is.

“ Like Egypt, we better farm out our taxes, selling them to the highest bidder, for fear of centralism, rather than to farm out our money manufacture ;  for to collect taxes requires an army, a navy, and thousands of officials, but to issue the currency is the simplest, easiest, least expensive duty of the government.  We better give capitalists the power to declare war and make peace, because that power carries with it a thousand-fold more of ‘Cæsarism’ than does the issue of the currency.

“ The Monetary Commission, composed of three Senators and three Representatives, half Democrats and half Republicans, with a Republican Senator for Chairman, said in their report (volume 1, page 10), ‘an increasing value of money and falling prices have been and are more fruitful of human misery than war, pestilence or famine ;  they have wrought more injustice than all the bad laws that we ever enacted;’  yet the gentleman scouts the idea that the American people should through Congress have any control over a subject more fruitful of misery than war, pestilence or famine, and this is the position of his party.  The people must submit in silence while suffering supreme injustice.

“ If this is a republic, our government is simply the people.  Its laws are their voice.  Its officers are constantly changed in order that these laws shall be made and executed precisely as they desire.  The government is their right arm.  It is the people in council.  Can the people fear the people ?  Can the head fear the power of the hand ?  The very object of this government is to protect the masses from the cunning tricks and usurpations of the few.  As Daniel Webster said :  ‘To that very end (the protection of labor), with that precise object in view, power was given to Congress over the currency, and over the money system of the country.’  [Works of Daniel Webster, Vol. III, p. 535.]

“ No power of government is dangerous in a true republic.  To deny this is to affirm that the people may become too strong, the nation too great.  The only centralization to be feared is the centralization of power in the hands of corporations and capitalists, who usurp government authority and fasten themselves like parasites upon the people, and by cunning schemes under the forms of law, defeat the representative character of this government, ‘winning us with honest trifles to betray us in deepest consequence.’  The cry of centralism ill fits the lips of the gentleman from Ohio or his party, just after he has recommended, and they have helped to adopt, rules for the government of this House that practically give a half dozen committees, appointed by one member (the speaker), and hence amenable to him, the control of all important legislation and a veto upon this House.  It comes with poor grace from these advocates of a one-man power in this government who have tied the hands of the majority on this floor in the interest of corporations, to howl centralism.  The founders of this republic well understood where the danger lay.  Jefferson said, in a letter to Mr. Kercheval (Vol. VII, p. 14):

“ ‘ I am not among those who fear the people.  They, and not the rich, are our dependence for continued freedom.  And to preserve their independence, we must not let our rulers load us with perpetual debt.’

“ And again in a letter to John Taylor (Vol. VI., p. 608):

“ ‘ I sincerely believe that banking establishments are more dangerous than standing armies.’

“ The gentleman is alarmed lest our Treasury become a manufactory of paper money.  Will he advise the House what the Treasury now is, if not a vast manufactory of national bank paper money and interest-bearing bonds ?  Over one thousand persons, employed there at government expense, are devoted to his work.  Every paper dollar that circulates in the country is made in that factory.  Every mutilated or worn note is replaced at government expense by this factory.  A legal application from any national bank, new or old, will set every machine and every hand at work printing and preparing bank money.  This is all done in the interest of corporations that already boast greater power than this government, and defy it, and control its officers from President down to many members on this floor.  The gentleman does not object to the Treasury being a great money factory so long as it receives its orders from rich bankers and syndicates, and not from the representatives of the people.  He is afraid Congress will become the master of that department, instead of the bond-holders as now.  And if it should, it would make Congress the ‘absolute dictator’ of the financial and business affairs of this country.  O, yes ;  so the gentleman admits that the power that controls the volume of our currency is the ‘absolute dictator’ of the financial and business affairs of the nation ;  so he acknowledges that we have made the national banks, that now control it, the ‘dictators’ of our affairs !  It is true ! the gentleman’s party has surrendered this government, surrendered the people and their most sacred interests into the hands of national bank ‘dictators.’  It is true ! he who controls the purse controls the nation ;  and the national banks control the purse.

“ It is simply a question whether the people will have a representative government or be governed by self-appointed ‘dictators,’ The National party stands by the people ;  the Republican party stands by the banks.  He says, ‘ without fear of contradiction, that prior to 1862 the wildest dreamer in American finance was never wild enough to propose such a measure of centralization as that single proposition implies.’  What child-like innocence !  ‘ Ah Sin, the ‘heathen Chinese,’ is outdone by the gentleman from Ohio.  Did he never read Thomas Jefferson, so eloquently quoted by the gentleman from Pennsylvania [Mr. Kelley] ?  Did he never hear of Albert Gallatin, Secretary of the Treasury for the first dozen years of this century, who said (Writings of A. Gallatin, Vol. III., p. 429):

“ ‘ The right of issuing paper money as currency, like that of issuing gold and silver coins, belongs exclusively to the nation and cannot be claimed by any individuals.’

“ Or of Daniel Webster, another ‘wild dreamer,’ who said in the United States Senate, January 31, 1833 (Works of Daniel Webster, Vol. III., pp. 527-529):

“ ‘ The constitutional power vested in Congress over the legal currency of the country is one of its very highest powers, and the exercise of this high power is one of the strongest bonds of the union of the States. * * * It is not to be doubted that the Constitution intended that Congress should exercise a regulating power, a power both necessary and salutary, over that which should constitute the actual money of the country, whether that money were coin or the representative of coin.  So it has always been considered ;  so Mr. Madison considered it.’

“ He then quotes from President Madison’s message, December 3, 1816 [Annals of Congress, 14th Congress, 2d Session, p. 16]:

“ ‘ It is essential that the nation should possess a currency of equal value, credit and use wherever it may circulate.  The Constitution has intrusted Congress exclusively with the power of creating and regulating a currency of that description.’

“ He further said in a speech in the Senate, September 28, 1837 (Works of Daniel Webster, pp. 336-340):

“ ‘ The Constitution does not stop with this grant of the coinage power to Congress.  It expressly prohibits the States from issuing bills of credit. * * * The States, therefore, are prohibited from issuing paper for circulation, on their own credit ;  and this provision furnishes additional and strong proof that all circulation, whether of coin or paper, was intended to be subject to the regulation and control of Congress. * * * The Constitution declares that Congress shall have power to regulate commerce, not only with foreign nations, but between the States.  This is a full and complete grant and must include authority over everything which is a part of commerce, or essential to commerce.  And is not money essential to commerce.  No man in his senses can deny that. * * * If Congress, then, has power to regulate commerce, it must have control over that money, whatever it may be, by which commerce is actually carried on, whether that money be coin or paper. * * * The regulation of money is not so much an inference from the commercial power of Congress as it is a part of it.  Money is one of those things, without which, in modern times, we can form no idea of commerce. * * * I insist that the duty of Congress is commensurate with its power. * * * A general and universally accredited currency, therefore, is an instrument of commerce, which is necessary to its just advantages, or, in other words, which is essential to its beneficial regulation.  Congress has power to establish it, and no other power can establish it, and therefore Congress is bound to exercise its own power.  It is an absurdity on the very face of the proposition to allege that Congress shall regulate commerce, but shall nevertheless abandon to others the duty of sustaining and regulating its essential means and instruments.’

“ By the national bank act we have ‘abandoned’ to bondholders the duty and power of ‘regulating’ not only the volume of our currency but also its value, for the value of the circulating medium, of whatever material made, depends upon its volume—hence they are able to control the value of coin by the increase or decrease of its substitute.  Mr. Dallas Secretary of the Treasury, in his report, December 6, 1815, said (Reports on the Finances, 1815 to 1828 p .41):

“ ‘ Whenever the emergency occurs that demands a change of system, it seems necessarily to follow that the authority which was alone competent to establish the national coin is alone competent to create a national substitute.‘

“ Or has the gentleman never heard of President Madison ?  In his annual message, December 5, 1815, he said (Annals of Congress, 14th Congress, 1st Session, 15):

“ ‘ It may become necessary to ascertain the terms upon which the notes of the government (no longer required as an instrument of credit) shall be issued, upon motives of general policy as a common medium of circulation.’

“ Or of John C. Calhoun, who said in the United States Senate, September 18, 1837 (Congressional Debates, Vol. XIV, Part I, 1837, pp. 64-66):

“ ‘ I would ask, then, why should the government mingle its credit with that of private corporations ?  No one can doubt but that the government credit is better than that of any bank—more stable and more safe.  Why, then, should it mix it up with the less perfect credit of those institutions ?  Why not use its own credit to the amount of its own transactions ?  Why should it not be safe in its own hands while it shall be considered safe in the hands of eight hundred private institutions scattered all over the country, and which have no other object but their own private profits ;  to increase which they almost constantly extend their business to the most dangerous extremes ?  And why should the community be compelled to give 6 per cent. discount for the government credit, blended with that of the banks, when the superior credit of the government could be furnished separately, without discount, to the mutual advantage of the government and the community ?  Why, let me ask, should the government be exposed to such difficulties as the present, by mingling its credit with the banks when it could be exempt from all such by using by itself its own safer credit ?  It is time the community, which has so deep an interest in a sound and cheap currency, and the equality of the laws between one portion of the citizens of the country and another, should reflect seriously on these things, not for the purpose of oppressing any interest, but to correct gradual disorders of a dangerous character, which have insensibly in the long course of years, without being perceived by any one, crept into the State.

“ ‘ The question is not between credit and no credit, as some would have us believe, but in what form credit can best perform the functions of a safe and sound currency.  On this important point I have freely thrown out my ideas, leaving it for this body and the public to determine what they are worth, believing that there might be a sound and safe paper currency founded on the credit of government exclusively. * * * My aversion to a public debt is deep and durable.  It is in my opinion pernicious, and is little short of a fraud on the public.  I saw too much of it during the late war not to understand something of the nature and character of public loans.  Never was a country more egregiously imposed on. * * * I shall oppose strenuously all attempts to originate a new debt ;  to create a national bank ;  to reunite the political and money power—more dangerous than that of church and state—in any form or shape.’

“ Time forbids further reference to the ‘wild dreamers’ of the past that believed in the principles of these resolutions.  The gentleman is alarmed lest the government pay its debt in ‘manufactured money,’ a frank confession that he never wants it paid, for neither this nor any other money debt can be paid unless paid with ‘manufactured money.’  He screams, ‘Print it to death !’  He would have the printing-presses all run, but instead of printing it to death he would have them forever continue to print it into new life to suck the blood from the people, and for that purpose has introduced a bill to issue new interest-bearing bonds, to run thirty years before they can be paid, with which to meet the seven hundred and eighty-two millions soon to mature.  He would print new bonds and bank-notes, the tools of oppression, caste, and slavery forever, but greenbacks and silver, the symbols and agents of prosperity and freedom, never !  He proposes this government shall meet its debts with interest-bearing, irredeemable bonds.  He knows every bond could be paid with greenbacks before the silver now in the Treasury would be taken, because bondholders would prefer, as everybody else prefers, legal-tender paper to legal-tender silver.  He knows that bonds are now paid in that way, and so he shouts Repudiation at a proposal to pay these bonds according to contract.

“ The gentleman is pleased to refer to ours as the ‘dying party.’  How strange that these simple resolutions embodying principles, of a ‘dying party’ should create such a flutter in this House, leading it to fight off their consideration by adjournment and other devices, for over three months.  His wish is father of his thought.  Truth never dies.  Our young party, representing principles of justice, will survive old parties that represent only oppressive systems, monopolies and spoils.  The National Greenback party will never die until its principles are ingrafted into the laws of the land, until this government discharges its duty to the people by supplying them with a perfect money and ceases to farm out the labor of the millions to bankers and bondholders.  The only possible way of postponing the day when we shall take control of government is by inflaming anew the sectional prejudices and hatreds of the war.

“ The gentleman closes with an appeal to Democrats and Republicans, in the name of ‘honesty, peace,’ etc., to throttle ‘this beast.’  He in substance said :  if there remains in your bosoms, Republicans and Democrats, one spark of freedom’s fire, a single desire to overthrow this bond-holding, national-bank dynasty, that my party has fastened upon the country, a single hope that you may yet restore to the people their rights under the Constitution, then in the name of honesty and peace, crush it out and throttle it forever.

“ ‘Honesty and peace’ are good.  There never was a despotism that did not appeal to the people for support in the name of ‘honesty and peace.’  American slavery for over two centuries had no stronger prop than ‘honesty and peace.’  Does the gentleman mean to intimate what Joseph Cook and Senator Sharon say in plain English, that before this national bank-oligarchy can be overthrown with the party that created it, this land will again be drenched in blood ?  If he does, let the people understand it ! for come what may, it shall be overthrown !

“ How are the mighty fallen !  I appeal from the Republican party, of to-day, owned and controlled by banking and other corporations, to the Republican party of 1868, when it spoke with no uncertain sound, and in convention in the gentleman’s own State, after pledging itself to the payment of the public debt according to law, and then declaring that the 5.20 bonds were payable in greenbacks, it resolved ‘that we heartily approve the policy of Congress in stopping the contraction of the currency, and believe that the issue of currency should be commensurate with the industrial and commercial interests of the country.’  Similar resolutions were passed in Indiana, Iowa, and other States.  John Sherman was so ‘wild a dreamer’ that in February 27, 1868, in a speech in the United States Senate, he said (Appendix to Congressional Globe, Part V, 2d. second, 40th Congress, p. 189):

“ ‘ The whole public debt should be made to assume such form as to be a part of the circulating capital of the country.’

“ The greatest exhibition of power ever shown by this Republic was in speaking freedom to four millions of slaves.  In one supreme moment the people, Samson-like, broke through the cobwebs of court decisions and precedents and red tape, and their combine voice was truly the voice of God.  For one moment we rose up, shook off the shackles of class, of combinations, of the rich and powerful, and did justice, only to relapse into the toils of an anaconda more dangerous than slavery, because more wealthy, more stealthy, more subtle, and less sectional.  Oh, for a supreme moment now in which Congress shall speak freedom to fifty millions of people from the domination of centralized capital in all its forms !  Will you do it ?  This House can show the world, without violating court decisions, precedents, or laws, whether it most regards the people or their task-masters.  Choose you this day whom you will serve, the people or the banks !  I rejoice that from this hour it can be known who wears the earmark of the national banks.  I call attention to the votes, and shall append them to my remarks, that all may know where the different parties and members stand upon this supreme issue.  Especially do I call the attention of the people of Iowa to the votes of her Representatives, that they may understand in future who have been true and who false to their pledges.  If these resolutions are defeated it can only be by a fusion of the Republicans and the bank wing of the Democracy, whose union will thus be consummated and their marriage should be celebrated.

“ The question was taken ;  and there were—yeas 85, nays 117 ;  not voting 90 ;  as follows :

The contest over the question of using troops at the polls to protect the voters in a free ballot, was that to which the attention of the people was directed, from the fact that it prevented the passage of appropriation bills, at the regular session of 1880 and caused all extra session of Congress to be called for the purpose of providing means to defray the ordinary expenditures of the government.  The leaders of the Republican and Democratic parties continued the struggle in the extra session, and allowed no measure which would have a tendency to allay the burning hatred between the North and the South, which they kindled from its smouldering embers, to be considered if they could possibly avoid it.

The money power was well aware that unless they could manage to array a solid North against a solid South, that it was uncertain into whose hands the control of the government would fall at the ensuing election of that year.  The Republican party having proved true to their interests so far, it was natural for them to desire that no change should be made in the administration, and they consequently done all in their power to so shape and manipulate the canvass as to insure a solid vote of all the Northern states for that party.

General Grant was evidently the first choice of the “Aristocrats” to succeed President Hayes, but the threatening language of some of their leaders in suggesting his name produced a feeling among the Western people, unfavorable to his nomination ;  but his supporters presented his name as a Candidate for President before the National Republican convention, which met in Chicago on the 2d of June 1880, and manifested a determination seldom witnessed in such cases, to force him upon the party as their candidate at all hazards.  But the opposition prevailed after a seven days’ conflict, and James A. Garfield, of Ohio, was nominated for President and Chester A. Arthur, of New York, for Vice President.

The rank and file of the convention had cast the majority of the votes, but the aristocrats were successful, notwithstanding, for Mr. Garfield’s former record, in every case where the interests of the money dealers collided with those of the people, shows that his sympathies were with the former and not the latter.

The National Greenback party met in convention in Chicago on June 9, 1880, and by a unanimous vote nominated James B. Weaver, of Iowa, for President, and Benjamin J. Chambers, of Texas, for Vice President of that party, which was laboring to promote the interests of the whole people, and especially the interests of the laboring man.

On the 27th of June, 1880, the Democratic National Convention met in Cincinnati, and put in nomination W.S. Hancock, of New York, for President, and William English, of Indiana, for Vice-President.

The three parties, having nominated their candidates, published to the world their platforms, or declaration of principles, upon which they asked the suffrage of the voters of the United States, which are as follows :


“ The Republican party, in National Convention assembled, at the end of twenty years since the Federal Government was first committed to its charge, submits to the people of the United States this brief report of its administration :

“ It suppressed a rebellion which armed nearly a million of men to subvert the national authority.

“ It re-cemented the Union with freedom, instead of slavery, as its corner-stone.

“ It transformed four million human beings from the likeness of things to the rank of citizens, and relieved Congress from the infamous work of hunting fugitive slaves, and charged it to see that slavery does not exist.

“ It has raised the value of our paper currency from 38 per cent. to a par with gold.

“ It has restored upon a solid basis the payment in coin of all the national obligations, and has given us a currency absolutely good and equal in every part of our extended country.

“ It has lifted the credit of the nation from the point where 6 per cent. bonds sold at 88 to that where 4 per cent. bonds are sought at a premium.

“ Under its administration the railways have increased from 31,000 miles in 1860 to 80,600 in 1879.

“ Our foreign trade has increased from $700,000,000 to $1,160,000,000 in the same time, and our exports, where $200,000,000 less than our imports in 1860, were $264,000,000 more than our imports in 1879.

“ Without resorting to loans, it has since the war closed defrayed the ordinary expenses of the government, besides the accruing interest on the public debt, and disbursed annually more than $30,000,000 for soldiers’ pensions.

“ It has paid $888,000,000 of the public debt, and by refunding the balance at lower rates has reduced the annual interest charge from nearly $160,000,000 to less than $89,000,000.

“ All the industries of the country have revived ;  labor is in demand ;  wages have increased throughout the country.  There is evidence of a coming prosperity greater than we have ever enjoyed.

“ Upon this record the Republican party asks for the continued confidence and support of the people, and this convention submits for their approval the following statements of the principles and purposes which will continue to guide and inspire its efforts :

“ First.  We affirm that the work of the last twenty-one years as been such as to commend itself to the favor of the nation, and that the fruits of the costly victories which have been achieved through immense difficulties should be preserved ;  that the peace regained should be cherished ;  that the dissevered Union, now happily restored, should be perpetuated ;  that the liberties secured to this generation should be transmitted undiminished to future generations ;  that the order established and the credit acquired should never be impaired ;  that the pensions promised should be paid ;  that the debt so much reduced, should be extinguished by the full payment of every dollar hereof ;  that the reviving industry should be further promoted, and that commerce already encouraged should be further stimulated.

“ Second.  The constitution of the United States is a supreme law and not a mere contract between confederated states.  It makes a sovereign nation.  Some powers are denied to the nation, while others are denied to the states, but the boundary between the powers delegated and those reserved is to be determined by the national and not by the state tribunals.

“ Third.  The work of popular education is one left to the care of the several states ;  but it is the duty of the national government to aid that work to the extent of its constitutional ability.  The intelligence of the nation is but the aggregate of the intelligence of the several states, and the destiny of the nation must be guarded, not by the genius of any one state, but by the average genius of all.

“ Fourth.  The constitution wisely forbids Congress to make any law respecting an establishment of religion ;  but it is idle to hope that the nation can be protected against the influence of sectarianism while each state is exposed to its domination.  We therefore recommend that the constitution be so amended as to lay the same prohibition on the legislature of each state as to forbid the appropriation of the public funds to the support of sectarian schools.

“ Fifth.  We affirm this belief, avowed in 1878, that the duties laid for the purpose of revenue should so discriminate as to favor American labor ;  that no further grant of the public domain should be made to any railway or other corporation ;  that slavery having perished in the states, its twin barbarity, polygamy, must die in the territories ;  that everywhere the protection accorded to a citizen of American birth must be accorded to citizens of American adoption ;  that the obligations of the Republic to the men who preserved its integrity in the days of battle are undiminished by the lapse of fifteen years since their final victory.  Their perpetual honor is and shall forever be the grateful privilege and sacred duty of the American people.

“ Sixth.  Since the authority to regulate immigration and intercourse between the United States and foreign nations rests with the Congress of the United States and its treaty-making powers, the Republican party regard the unrestricted importation of Chinese as an evil of great magnitude, and invoke the exercise of that power to restrain and limit that immigration by the enactment of such just, humane and reasonable provisions as will produce that result.”

The National Greenback party adopted the following platform, at Chicago, June 9, 1880 :

“ Civil government should guarantee the divine right of every laborer to the results of his toil, thus enabling the producers of wealth to provide themselves with the means of physical comfort, and the facilities for mental, social and moral culture, and we condemn, as unworthy of our civilization, the barbarism which imposes upon the wealth-producers a state of perpetual drudgery as the price of bare animal existence.

“ Notwithstanding the enormous increase of productive power, the universal introduction of labor-saving machinery, and the discovery of new agents for the increase of wealth, the task of the laborer is scarcely lightened, the hours of toil are but little shortened, and few producers are lifted from poverty into comfort and pecuniary independence.

“ The associated monopolies, the international syndicates and other income classes demand dear money and cheap labor, a ‘strong , government,’ and hence a weak people.

“ Corporate control of the volume of money has been the means of dividing society into hostile classes ;  of the unjust distribution of the products of labor ;  and of building up monopolies of associated capital, endowed with power to confiscate private property.  It has kept money scarce, and scarcity of money enforces debt trade and public corporate loans—debt engenders usury, and usury ends in the bankruptcy of the borrower.

“ Other results are, deranged markets, uncertainty in manufacturing enterprise and agriculture, precarious and intermittent employment for the laborer, industrial war, increasing pauperism and crime and the consequent intimidation and disfranchisement of the producer, and a rapid declension into corporate feudalism.

“ Therefore, we declare—

“ 1.  That the right to make and issue money is a sovereign power to be maintained by the people for the common benefit.  The delegation of this right to corporations is a surrender of the central attribute of sovereignty, void of constitutional sanction, conferring upon a subordinate, irresponsible power, absolute dominion over industry and commerce.  All money, whether metallic or paper, should be issued and its volume controlled by the government, and not by or through banking corporations, and when so issued, should be a full legal-tender for all debts, public and private.

“ 2.  That the bonds of the United States should not be refunded, but paid as rapidly as practicable, according to contract.  To enable the government to meet these obligations, legal-tender currency should be substituted for notes of the national banks, the national banking system abolished, and the unlimited coinage of silver as well as gold, established by law.

“ 3.  That labor should be so protected by national and State authority as to equalize its burdens and insure a just distribution of its results ;  the eight-hour law of Congress should be enforced ;  the sanitary condition of industrial establishments placed under rigid control ;  the competition of contract convict labor abolished ;  a bureau of labor statistics established ;  factories, mines and workshops inspected ;  the employment of children under fourteen years of age forbidden, and wages paid in cash.

“ 4.  Slavery being simply cheap labor, and cheap labor being simply slavery, the importation and presence of Chinese serfs necessarily tends to brutalize and degrade American labor ;  therefore, immediate steps should be taken to abrogate the Burlingame treaty.

“ 5.  Railroad land grants forfeited by reason of non-fulfillment of contracts should be immediately reclaimed by the government ;  and henceforth the public domain reserved exclusively for homes for actual settlers.

“ 6.  It is the duty of Congress to regulate inter-state commerce.  All lines of communication and transportation should be brought under such legislative control as shall secure moderate, fair and uniform rates for passengers and freight traffic.

“ 7.  We denounce as destructive to prosperity and dangerous to liberty the action of the old parties in fostering and sustaining gigantic land, railroad, and money corporations and monopolies, invested with and exercising powers belonging to the government, and yet not responsible to it for the manner of their exercise.

“ 8.  That the constitution, in giving Congress the power to borrow money, to declare war, to raise and support armies, to provide and maintain a navy, never intended that the men who loaned their money for an interest consideration should be preferred to the soldier and sailor who periled their lives and shed their blood on land and sea in defense of their country, and we condemn the cruel class legislation of the Republican party which, while professing great gratitude for the soldier, has most unjustly discriminated against him and in favor of the bondholder.

“ 9.  All property should bear its just proportion of taxation, and we demand a graduated income-tax.

“ 10.  We denounce as most dangerous the efforts, everywhere manifest, to restrict the right of suffrage.

“ 11.  We are opposed to an increase of the standing army in time of peace and the insidious scheme to establish an enormous military power under the guise of militia laws.

“ 12.  We demand absolute democratic rules for the government of Congress, placing all representatives of the people upon an equal footing, and taking away from committees a veto power greater than that of the President.

“ 13.  We demand a government of the people, by the people and for the people, instead of a government of the bondholders, by the bondholders and for the bondholders ;  and we denounce every attempt to stir up sectional strife as an effort to conceal monstrous crimes against the people.

“ 14.  In the furtherance of these ends we ask the co-operation of all fair-minded people.  We have no quarrel with individuals, wage no war upon classes, but only against vicious institutions.  We are not content to endure further discipline from our present victual rulers, who having dominion over money, over transportation, over land and labor, and largely over the press and machinery of government, wield unwarrantable power over our institutions and over life and property.”


The Socialists submitted the following resolution, which, subsequent to the nominations, was adopted :

“ We declare that land, air and water are the free gifts of nature, to all mankind, and any law or custom of society that allows any person to monopolize more of these gifts of nature than he has a right to we earnestly condemn and demand shall be abolished.”

The following resolution was introduced and referred to the Committee on Resolutions, who recommended it to the favorable consideration of the States :

Resolved, That the rights of self-government inheres in the individual as the fundamental principle of our government ;  and we hereby pledge ourselves to secure a constitutional amendment to give the right of suffrage to the women citizens of the nation.”

Democratic platform, adopted by the National Convention, Cincinnati, June 27, 1880 :

“ The Democrats of the United States, in convention assembled, declare :

“ 1.  We pledge ourselves anew to the constitutional doctrines and traditions of the Democratic party as illustrated by the teachings and examples of a long line of Democratic statesmen and patriots, and embodied in the platform of the last National Convention of the party.

“ 2.  Opposition to centralization and to that dangerous spirit of encroachment which tends to consolidate the powers of all the departments in one, and thus create, whatever be the form of government, a real despotism.  No sumptuary laws ;  separation of church and state for the good of each ;  common schools fostered and protected.

“ 3.  Home rule ;  honest money, consisting of gold and silver, and paper convertible into coin on demand ;  the strict maintenance of the public faith, state and national, and a tariff for revenue only.

“ 4.  The subordination of the military to the civil power, and a general and thorough reform of the civil service.

“ 5.  The right of a free ballot is the right preservative of all rights, and must and shall be maintained in every part of the United States.

“ 6.  The existing Administration is the representative of a conspiracy only, and its claim of right to surround the ballot-boxes with troops and deputy marshals to intimidate and obstruct the electors, and the unprecedented use of the veto to maintain its corrupt and despotic power, insult the people and peril their institutions.

“ 7.  The great fraud of 1878-7, by which, upon a false count of the electoral vote of two States, the candidate defeated at the polls was declared President, and for the first time in American history the will of the people was set aside under a threat of military violence, struck a deadly blow at our system of representative government.  The Democratic party, to preserve the country from a civil war, submitted for a time in firm and patriotic faith that the people would punish the crime in 1880.  This issue precedes and dwarfs every other ;  it imposes a more sacred duty upon the people of the Union than ever addressed the conscience of a nation of free men.

“ 8.  We execrate the course of the Administration in making places in the civil service a reward for political crime ;  and demand a reform by statute which shall make it forever impossible for the defeated candidate to bribe his way to the seat of a usurper by billeting villains upon the people.

“ 9.  The resolution of Samuel J. Tilden, not again to be a candidate for the exalted place to which he was elected by a majority of his countrymen, and from which he was excluded by the leaders of the Republican party, is received by the Democracy of the United States with sensibility, and they declare their confidence in his wisdom, patriotism and integrity unshaken by the assaults of the enemy, and they further assure him that he is followed into the retirement which he has chosen for himself by the sympathy and respect of his fellow-citizens, who regard him as one who, by elevating the standard of public morality, merits the lasting gratitude of his country and his party.

“ 10.  Free ships and a living chance for American commerce on the seas and on the land.  No discrimination in favor of transportation lines, corporations or monopolies.

“ 11.  Amendment of the Burlingame treaty.  No more Chinese immigration, except for travel, education and foreign commerce, and therein carefully guarded.

“ 12.  Public money and public credit for public purposes solely, and public land for actual settlers.

“ 13.  The Democratic party is the friend of labor and the laboring man, and pledges itself to protect him alike against the cormorant and the commune.

“ We congratulate the country upon the honesty and thrift of a Democratic Congress, which has reduced the public expenditure $40,000,000 a year, upon the continuation of prosperity at home and the national honor abroad, and, above all, upon the promise of such a change in the administration of the governwent as shall insure its genuine and lasting reform in every department of the public service.”

Standing upon these platforms, the three parties entered the canvass of 1880.  The Republican and Democratic parties both declaring that the question of finance was settled and not an issue in the campaign.  They vied with each other on the rostrum in proclaiming their undying fealty to a free ballot and a fair count without fraud or intimidation in every part of the United States.  Both parties denounced each other as opposed to such freedom—the Democrats on account of the charges (which were doubtless many of them well-founded) that that party had resorted to violence and intimidation in the South in order to prevent a free expression of the public will at the ballot-box, and that the Republicans, having control of the government, had used the army of the United States for the same base purpose, under pretense of protecting inviolate the rights of the voter, which charges were, perhaps, as fully substantiated by positive evidence as those made against the Democrats.

In their discussions through the campaign there was no perceptible difference in these two parties on the policy to be adopted by the government.  The only controversy between them was, in whose hands it should be intrusted for the next four years.  They both, as far as possible, ignored the existence of the National Greenback party, declaring that the issues upon which it was organized having been fully settled, it had no foundation for further existence.  The appeals were made to party feeling and sectional prejudice, and to those alone, and so bitter were both the old parties against any interference in the campaign that, where they dared to do it, they used threats and intimidation, and in some cases murder, and when they did not dare to resort to such means they adopted the more cowardly plan of persuading their dupes to not listen to any argument offered by the Greenback party, or by destroying posters announcing their meetings.

The Greenback party adopted an aggressive policy, and, standing upon the declarations in its platform, carried the war into the enemy’s country and battled for the rights of the people.

At the close of the struggle the result showed a vote of 9,209,177, of which Mr. Garfield received 4,446,623, Mr. Hancock received 4,443,106 and Mr. Weaver received 306,867 ;  scattering, 12,576.  So that Mr. Garfield, though elected to the Presidency, received 157,960 votes less than a majority of the popular vote of the people of the United States.

The relative strength of the Republican and Democratic parties is distinctly presented in the fact that in this canvass, where more than nine million votes were cast, Mr. Garfield’s plurality over Mr. Hancock was only 3,622.  While the increase in the popular vote from 1876 to 1880 was a little over 8 per cent., the increase in the Greenback vote for the same period was nearly 400 per cent.

While it was the constant endeavor during this canvass of both the Republican and Democratic parties to shove the finance question entirely out of sight by refusing to discuss it, the speakers and press of the Greenback party held it before the people in all its important bearings on the present and future prosperity of the country, and by so doing created a public sentiment which, though not sufficiently strong to cause many to disregard the party lash, so far as to break the shackles that bound them to the old organizations, it was felt at Washington when Congress convened in December and Congressional work commenced.

The bills introduced by the leaders of the Republican and Democratic parties in the House—Hon. James A. Garfield and Hon. Fernando Wood—during the previous session, providing for the refunding of the $780,000,000 of bonds which became payable at the option of the government in 1881, were looked forward to as the most important business devolving upon Congress.

These bills provided for funding the whole amount of these bonds into twenty and forty years bonds at 4 per cent, usury.

Mr. Garfield having been taken out of the House by his election to the Presidency, and the leaders of the two parties in the interest of those who were striving to perpetuate the bondage of the people, placed Mr. Wood in charge of this measure as Chairman of the Committee on Finance of the House.  During the deliberations of that committee they became satisfied that the greenback leaven had been at work among the people to that extent that such a bill could not be passed, or, if passed, would seal the political doom of those who supported it.

The committee, therefore, prepared a substitute for the Wood bill, providing for funding at 3½ per cent., but retaining the time at twenty and forty years.  A strenuous effort was made to carry this bill through the House, but such was the effect of the agitation of the subject by the Greenback party, both in and out, of Congress, that it was so amended as to place the whole amount not liquidated by the 1st of July, 1881, at the option of the government in from one to ten years, with usury at the rate of 3 per cent., with a further provision repealing the law of 1874, which permitted the national banks to at any time deposit legal-tender notes to the amount of their own notes in circulation and withdraw their bonds upon which their notes were based, thus giving them the power to contract the currency and create a panic whenever it suited their convenience.

This bill passed the House after a stormy and long-protracted discussion, showing clearly that a majority of that body had been fully awakened to a sense of the fact that the great majority of the people of the United States were in no temper to submit to the yoke of perpetual bondage.

During the whole period the bill was under consideration in the House the subsidized press of the money power used all its power and influence to manipulate public sentiment against any change from the twenty-forty year bonds ;  but when it passed the House and went to the Senate they clamored more urgently for its defeat by that body.

They denounced the bill as vicious in its tendency and ruinous to the best interests of the country if it should be enacted into law, and went so far as to suggest that the President ought to forestall the action of the Senate by notifying it in advance that if passed by that body he would certainly veto it.

While this role of intimidation was being played by the press the national banks made a demonstration of the very power of which this bill proposed to deprive them, and deposited nineteen millions of legal tender money for the retirement of their circulation, with the threat that in case the bill passed a very large amount would be immediately retired.

The money dealers in the eastern cities cried panic, and brokers loaned money on call at one per cent. per day.  But the Senate stood firm, and passed the bill as it came from the House without any material alteration.

When it went to the President it met the fate to which the previous course of that functionary on the finance question unmistakably pointed.  He returned it to the House from whence it originated without his signature, and with it his objections in a veto message.

We append the bill and message as found in the Congressional Record of March 4, 1881, pp. 36 and 37 :


Be it enacted by the Senate and House of Representatives in Congress assembled :  That all existing provisions of law authorizing the refunding of the national debt shall apply to any bonds of the United States bearing a higher rate of interest than 4% per cent. per annum, which may hereafter become redeemable :  Provided, That in lieu of the bonds authorized to be issued by the act of July 14, 1870, entitled, ‘ An act to authorize the refunding of the national debt;’  and the acts amendatory thereto and the certificates authorized by the act of February 26, 1879, entitled ‘ An act to authorize the issue of certificates of deposit in aid of the refunding of the public debt,’ the Secretary of the Treasury is hereby authorized to issue bonds to the amount of not exceeding $400,000,000 of denominations of $50, or some multiple of that sum, which shall bear interest at the rate of 3 per cent. per annum, payable semi-annually, redeemable at the pleasure of the United States after five years, and payable twenty years from the date of issue, and also treasury notes to the amount of $300,000,000 in denominations of $10, or some multiple of that sum not exceeding $1,000, either registered or coupon, bearing interests a rate not exceeding 3 per cent. per annum, payable semi-annually, redeemable at the pleasure of the United States after one year, and payable in ten years after the date of issue, and no treasury note of a less denomination than $100 shall be registered.

“ The bonds and treasury notes shall be in all other respects of like character and subject to the same provisions as the bonds authorized to be issued by the act of July 14, 1870, entitled ‘An act to authorize the refunding of the national debt,’ and acts amendatory thereto ;  Provided, That nothing in this act shall be so construed as to authorize an increase of the public debt ;  Provided further, that interest on the 6 per cent, bonds hereby authorized to be refunded shall cease at the expiration of thirty days after the publication of notice that the same have been designated by the Secretary of the Treasury for redemption.  It shall be the duty of the Secretary of the Treasury, under such rules and regulations as he may prescribe, to authorize public subscriptions, at not less than par, to be received at the depositories of the United States and at all national banks, and such other banks as he may designate, for the bonds and for the treasury notes herein provided for, for thirty days before he shall contract for or award any portion of said bonds or treasury notes to any syndicate of individuals or bankers, or otherwise than under such public subscriptions ;  and if it shall happen that more than, the entire amount of said bonds and treasury notes, or of either of them has been subscribed within the said thirty days, he shall award the full amount subscribed to all persons who shall have made bona fide subscriptions for the sum of $2,000 or less, at rates most advantageous to the United States, and the residue ratably among the subscribers in proportion to the amount by them, respectively subscribed at rates most advantageous to the United States.

“ SEC. 2.  The Secretary of the Treasury is hereby authorized, in the process of refunding the national debt, to exchange, at not less than par, any of the bonds or treasury notes herein authorized for any of the bonds of the United States outstanding and cancelled bearing a higher rate of interest than 4½ per cent. per annum, and on the bonds so redeemed the Secretary of the Treasury may allow to the holders the difference between the interest on such bonds from the date of exchange to the time of their maturity, and the interest for a like period on the bonds or treasury notes so issued ;  and the bonds so received and exchanged in persuance of the provisions of this act, shall be cancelled and destroyed, but none of the provisions of this act shall apply to the redemption or exchange of any of the bonds issued to the Pacific Railway Companies.

“ SEC. 3.  The Secretary of the Treasury is hereby authorized to make suitable rules and regulations to carry this act into effect, and the expense of preparing, issuing, advertising and disposing of the bonds and treasury notes authorized to be issued shall not exceed one-half of 1 per cent.

“ SEC. 4.  That the Secretary of the Treasury is hereby authorized, if, in his opinion, it shall become necessary, to use temporarily not exceeding $50,000,000 of the standard gold and silver coin in the Treasury in the redemption of the 5 and 6 per cent. bonds of the United States authorized to be refunded by the provisions of this act, which shall, from time to time, be repaid and replaced out of the proceeds, of the sale of bonds or treasury notes authorized by this act, and he may at any time apply the surplus money in the Treasury, not otherwise appropriated, or so much thereof as he may consider proper, to the purchase or redemption of the United States bonds or treasury notes authorized by this act ;  Provided, That the bonds and treasury notes so purchased or redeemed shall constitute no part of the sinking fund, but shall be cancelled.

“ SEC. 5.  From and after the first day of July, 1881, the 3 per cent. bonds authorized by the first section of this act shall be the only bonds receivable as security for national bank circulation, or as security for the safekeeping and prompt payment of the public money deposited with such banks ;  but when any such bonds, deposited for the purposes aforesaid, shall be designated for purchase or redemption by the Secretary of the Treasury ;  the Banking Association depositing the same shall have the right to substitute other issues of the bonds of the United States in lieu thereof :  Provided, That no bond upon which interest has ceased shall be accepted, or shall be continued on deposit as security for circulation, or for the safe-keeping of the public money ;  and in case bonds so deposited shall not be withdrawn, as provided by law, within thirty days after interest has ceased thereon, the Banking Association depositing the same shall be subject to the liabilities and proceedings on the part of the Comptroller provided for in Section 5,234 of the Revised Statutes of the United States :  And provided, further, That Section 4 of the act of June 20,1874, entitled ‘An act fixing the amount of United States notes, providing for a redistribution of the national bank currency, and for other purposes, be, and the same is hereby, repealed, and Sections 5,159 and 5,160 of the Revised Statutes of the United States be, and the same are hereby, re-enacted.

“ SEC. 6.  That the payment of any of the bonds hereby authorized after the expiration of five years, shall be made in amounts to be determined from time to time by the Secretary of the Treasury at his discretion, the bonds so to be paid to be distinguished and described by the dates and numbers of the time of which intended payment or redemption the Secretary of the Treasury shall give public notice, and the interest on the particular bond, so selected at any time to be paid shall cease at the expiration of thirty days from the publication of such notice.

“ SEC. 7.  That this act shall be known as ‘ The funding act of 1881;’  and all acts and parts of acts inconsistent with this act is hereby repealed.”


To the House of Representatives :  Having considered the entitled “An act to facilitate the refunding of the National debt,” I am constrained to return it to the House of Representatives, in which it originated, with the following statement of my objections to its passage :

The imperative necessity for prompt action, and the pressure of public duties in the closing week of my term of office, compel me to refrain from any attempt to make a full and satisfactory presentation of the objections to the bill.

The importance of the passage at the present session of Congress of a suitable measure for the refunding of the national debt, which is about to mature, is generally recognized.  It has been urged upon the attention of Congress by the Secretary of the Treasury and in my last annual message.  If successfully accomplished it will secure a large decrease in the annual interest payments of the nation, and I earnestly recommend if the bill before me shall fail, that another measure for this purpose be adopted before the present Congress adjourns.

While in my opinion it would be wise to authorize the Secretary of the Treasury, in his discretion, to offer to the public bonds bearing 3½ per cent. interest in aid of refunding, I should not deem it my duty to interpose my constitutional objection to the passage of the present bill if it did not contain in the fifth section provisions which, in my judgment, seriously impair the value, and tend to the destruction of the present national banking system of the country.

This system has now been in operation almost twenty years.  No safer or more beneficial banking system was ever established.  Its advantages as a business is free to all who have the necessary capital.  It furnishes a currency to the people which for convenience and the security of the bill-holder has probably never been equaled by that of any other banking system.  Its notes are secured by the deposit with the government of the interest bearing bonds of the United States.

The section of the bill before me which relates to the national banking system, and to which objection is made is not an essential part of a refunding measure.  It reads as follows :

“ SEC. 5.  From and after the first day of July, 1881, the 3 per cent. bonds authorized by the first section of this act shall be the only bonds receivable as security for national bank circulation, or as security for the safekeeping and prompt payment of the public money deposited with such banks ;  but when any such bonds, deposited for the purposes aforesaid, shall be designated for purchase or redemption by the Secretary of the Treasury ;  the Banking Association depositing the same shall have the right to substitute other issues of the bonds of the United States in lieu thereof :  Provided, That no bond upon which interest has ceased shall be accepted, or shall be continued on deposit as security for circulation, or for the safe-keeping of the public money ;  and in case bonds so deposited shall not be withdrawn, as provided by law, within thirty days after interest has ceased thereon, the Banking Association depositing the same shall be subject to the liabilities and proceedings on the part of the Comptroller provided for in Section 5,234 of the Revised Statutes of the United States :  And provided, further, That Section 4 of the act of June 20,1874, entitled ‘An act fixing the amount of United States notes, providing for a redistribution of the national bank currency, and for other purposes, be, and the same is hereby, repealed, and Sections 5,159 and 5,160 of the Revised Statutes of the United States be, and the same are hereby, re-enacted.”

Under this section it is obvious that no additional banks will hereafter be organized, except, possibly, in a few cities or localities where the prevailing rates of interest in ordinary business are extremely low.  No new banks can be organized, and no increase of the capital of existing banks can be obtained except by the purchase and deposit of 3 percent. bonds.  No other bonds of the United States can be used for the purpose.  The one thousand millions of other bonds recently issued by the United States, and bearing a higher rate of interest than 3 per cent., and therefore a better security for the bill-holder cannot, after the 1st of July next, be received as security for bank circulation.  This is a radical change in the banking law.  It takes from the banks the right they have heretofore had under the law to purchase and deposit, as security for their circulation, any of the bonds issued by the United States, and deprives the bill-holder of the best security which the banks are able to give, by requiring them to deposit bonds having the least value of any bonds issued by the government.  The average rate of taxation of capital employed in banking is more than double the rate of capital employed in other legitimate business.  Under these circumstances, to amend the banking law so as to deprive the banks of the privilege of securing their notes by the most valuable bonds issued by the government will, it is believed in a large part of the country, be a practical prohibition of the organization of new banks, and prevent the existing banks from enlarging their capital.  The national banking system, if continued at all, will be a monopoly in the hands of those already engaged in it, who may purchase government bonds having a more favorable rate of interest than the 3 per cent. bonds prior to next July.  To prevent the further organization of banks is to put in jeopardy the whole system of taking from it that feature which makes it, as it is now, a banking system, free upon the same terms to all who wish to engage in it.  Even the existing banks will be in danger of being driven from business by the additional disadvantages to which they will be subjected by this bill.  In short, I cannot but regard the fifth section of the bill as a step in the direction of the destruction of the national banking system.

Our country, after a long period of business depression, has just entered upon a career of unexampled prosperity.  Believing hat a measure for refunding the national debt is not necessarily connected with the national banking law, and that any refunding act would defeat its own object if it imperiled the national banking system or seriously impaired its usefulness, and convinced that Section 5 of the bill before me would, if it should become a law, work great harm, I herewith return the bill to the House of Representatives for that further consideration which is provided for in the Constitution.



Remarks :

In the foregoing message we find its spirit and animus expressed in the following language :

“ Which would, in my judgment, seriously impair the usefulness and tend to the destruction of the present national banking system of this country.”

Q.  In what way would such a bill produce this effect ?

A.  In the language of the President :

“ Under this section (Section 5) it is obvious that no additional banks will hereafter be organized, except possibly in a few cities or localities where the prevailing rates of interest in ordinary business are extremely low.”

And, as a further reason for thus using his constitutional prerogative to thwart the will of the people expressed through their representatives, be says :

“ It takes from the banks the right they have heretofore had under the law to purchase and deposit, as security for their circulation, any of the bonds issued by the United States, and deprives the bill-holders of the best security which the banks are able to give by requiring them to deposit bonds having the least value of any bonds issued by the government. ”

This statement of the President is false in theory and false in fact.  Previous to 1874 the national banks were compelled to keep on deposit in the Treasury of the United States one thousand dollars of the interest-bearing bonds of the government for every nine hundred dollars of their circulation, and could only withdraw those bonds when they called in their circulation and surrendered it to the government.

The act of June 20, 1874, permitted the banks at any time to withdraw their interest-bearing bonds and deposit non-interest bearing legal-tender notes as security for their circulation.  Section 5 of the bill, to which the President objects in his veto message, proposes to re-enact the law which was repealed by the act of 1874, and compel the banks to keep on deposit interest-bearing bonds as security for their notes, instead of legal-tender notes, which bear no interest.  If it is the amount of interest that gives the bill-holder the greater security, this bill provided for 3 per cent. better security than was provided by law as it then stood.

Q.  Is it a fact that the bill-holder is any more secure with a government bond bearing 6 per cent. interest than he would be with one bearing 3 per cent. deposited in the Treasury as security ?

A.  No !  The bonds of the government are not deposited in the Treasury of the United States for the purpose of securing the bill-holder, but to secure the government in case it has to redeem the bills of the banks.  The government agrees that in case the banks fail to redeem their circulation, it will redeem it with legal-tender notes, and holds its own bonds to the amount of 10 per cent. more than the circulation of the banks in order to indemnify it against loss in case it has them to pay.  The security of the bill-holder rests in the ability and willingness of the government to redeem the national bank notes, and not on the value of the bond in the market, measured by the rate of interest it bears.  But if this was really the security of the bill-holder, and the credit of the government was so good as to float its bonds at 3 per cent. per annum, such a bond would certainly be better security than the bond of the same government whose credit was so poor that its bonds stood at a discount of 10 or 20 per cent.  Both the law and the facts are against the statement of the President.

The President’s idea of the object of a refunding bill is very clearly stated in his objections to this bill, in the following words :  “And that any refunding act would defeat its own object if it imperiled the national banking system or seriously impaired its usefulness.”

Q.  How would a refunding bill defeat its own object, even if it should drive every national bank in the United States put of existence ?  Was it that it would destroy the market for the bonds ?

A.  If the destruction of the national banking system would defeat the object of a funding bill, the object of that bill must be the perpetuity of that system, which could not be perpetuated without making the national debt perpetual as its basis.  Logically, then, the sole object of such a funding bill as would meet the approbation of President Hayes and the national bankers, whose cause he was advocating in this message, was one so framed as to rivet the chains of perpetual bondage on the limbs of the American laborers for the benefit of a few aristocrats who should govern them.

Immediately after the adjournment of Congress, the Secretary of the Treasury, Mr. Windom, adopted the idea of compromising with the bondholders and continuing the 5 and 6 per cent. bonds then falling due at 3½ per cent., payable at the option of the government.

There was no law providing for any such refunding, but the bondholders promptly accepted the proposition and surrendered their bonds to the amount of $870,000,000, which the Secretary received and issued more bonds, bearing 3½ per cent., payable as above stated, and gave them in exchange for the old ones.

This was an unwarranted assumption of legislative power by an executive officer, but, as it saved a large amount of usury to the people, and placed the bonds at the option of the government, this exercise of arbitrary power was tolerated ;  not, however, without very sharp criticism by Congress in 1882.

Early in the above named session, Mr. Crapo, of Massachusetts, introduced a joint resolution authorizing national banking associations to extend their corporate existence for another twenty years.

This resolution met with strong opposition in the House, but was finally passed and sent to the Senate for consideration ;  when, after full discussion, it was returned to the House with about twenty amendments, to all of which the House agreed, with the exception of a few on which it non-concurred, and returned it to the Senate.  That body refused to recede from its amendments and requested the House to appoint a committee of conference to meet with a similar committee of the Senate to agree in perfecting the bill.  Messrs. Allison, Morrill and Beck were appointed on the part of the Senate, and Messrs. Crapo, Dingley and Buckner on the part of the House.

This committee agreed upon the bill, with but little change from what it was when it passed the Senate, and the two Houses accepted it as modified by the Conference Committee.

This ill was approved by the President, and became a law on the 12th of July, 1882, and shows that the bank power is not broken, that it runs every department of the government and controls legislation in its interest as completely as though the whole power of the government was given over to that institution.