SEVEN FINANCIAL CONSPIRACIES
SHERMAN VERSUS EMERY.
John Davis Replies to the Hon. Shermans Latest Letter on Finance.
---[In 1862 greenbacker John Sherman advocated for an hour in favour of the legal-tender clause, then voted for it; and voted for the legal tender bill as well. Unlike Sarah Emery, or any of the future Greenback Party members, Senator Sherman was in the position to say and act nay or yea; without John Sherman's vocal support and vote, the legal-tender clause would not have passed]
Since the days of John Brown, Kansas has never ceased to be the stamping ground of reform. Ushered into statehood on the eve of a terrible civil war, her baptism in blood fitted her peculiarly for the growth of liberty and equality.
Never since the days of John Brown have the liberty loving men of Kansas ceased in their determination to hallow the soil made sacred by the life and death of their illustrious martyr.
That soil harrowed by the intelligence of truth loving men and fertilized by the blood of thousands of patriotic soldiers, was well fitted to receive the seeds of historic truth embodied in Seven Financial Conspiracies, and when in the campaign of 1888 fifty thousand copies of the little book were scattered broadcast over the state, the enemies of freedom seeing that it would yield an everlasting harvest to liberty, rushed forth and attempted to destroy the sower and the seed.
Preparatory to their onslaught their chiefs met in council and evolved two monumental documents which were launched upon the public under the captaincy of Messrs. Ady and Kelley.
Again in the campaign of 1891 when ten thousand of these little messengers were scattered over Ohio, the book and its author were again assailed.
The veritable John Sherman whose villainous acts had made possible such a record of crime induced by the solicitude of his political friends came out with an open letter published in the Cincinnati Enquirer and addressed to Chas. F. Stokey of Canton, O., in which he denounces the book as wild and visionary, and declares that the Shylock to which the author alludes is a phantom of her imagination.
The documents of Ady and Kelley, as also the letter of Senator Sherman were immediately met by the indomitable John Davis through the columns of his paper The Junction City (Kan.) Tribune.
These replies of Mr. Davis are so replete with historic truth that we present the one in reply to Senator Sherman for the consideration of our readers :
A few years ago Mrs. S.E.V. Emery of Michigan emptied a quiver of arrows into the ranks of the peoples enemies. The darts seemed light and feathery, and the bow string was drawn by the weak arm of a woman. Yet the shafts were winged and pointed with truth and justice, and the womans arm was nerved with an earnest patriotism. Very soon the wounded birds began to flutter and the broken wings were trailing in the dust.
In the year 1888, 50,000 copies of Mrs. Emerys little book were showered among the people of Kansas. Under their fructifying influence the seeds of thought began to spring up in every heart. The rage of the enemy knew no bounds. Great lawyers and judges of courts wrote pamphlets and newspaper broadsides which were circulated by Republican committees and corporation newspapers as campaign documents. Smaller men called the little book The Union Labor Bible. They cursed it in their speeches, tore it to pieces in he presence of their audiences, dashed it to the floor, spat upon it, trampled it under foot. All this but proved the rage of the lion that had been wounded, the pain of the whale that was pierced, or the bird that was hit. Next comes the emptying of another quiver of shafts by the same arm that showered Kansas. This time further East. And, promptly, is produced the same results. A Senator of the United States from Ohio deems it worth his while to confess the pain of the arrow in his breast by a review of the situation in the usual corporation attorney style. A copy of that review is before me, over the name of John Sherman. I beg to quote and discuss portions of it :
MANSFIELD, OHIO, Oct. 12, 1891.Mr. Charles F. Stokey, Canton, Ohio :
MY DEAR SIRYours of the 8th, accompanied by Mrs. S.E.V. Emerys pamphlet, called Seven Financial Conspiracies Which Have Enslaved the American People, is received. Some time since this wild and visionary book was sent to me, and I read it with both amusement and astonishment that any one could read it with approval or be deceived by its falsehoods. The Seven Financial Conspiracies are the seven great pillars of our financial credit, the seven great financial measures by which the government was saved from the perils of war and by which the United States has become the most flourishing and prosperous nation in the world. The first chapter attributes the Civil War to an infamous plot of capitalists to absorb the wealth of the country at the expense of the people, when all the world knows that the Civil War was organized by slaveholders to destroy the national government and to setup a slave-holding confederacy in the South upon its ruins. The Shylock described by Mrs. Emery is a phantom of her imagination. The Shylocks of the war were the men who furnished the means to carry on the government and to put down the rebellions and included in their number the most patriotic citizens of the Northern States, who, uniting their means with the services and sacrifices of our soldiers, put down the rebellion, abolished slavery and preserved and strengthened our government. The first of her conspiracies she calls the exception clause in the act of February 25, 1862, by which the duties on imported goods were required to be paid in coin in order to provide the means to pay the interest on our bonds in coin. This clause had not only the cordial support of Secretary Chase, but of President Lincoln, and proved to be the most important financial aid of the government devised during the war. * * * This exception clause saved our public credit by making a market for our bonds and was paid by foreigners for the privilege of entering our markets.
Like most men with a bad case on hand, the Senator appears to have little regard for truth, and sets out with a misstatement. Mrs. Emerys book does not attribute the Civil War to all infamous plot of capitalists, etc. The book plainly states (page 11) that African slavery was the cause of secession and consequent war. Mrs. Emery and the Senator agree as to the cause of the Civil War, and both state it plainly in their own words, about which there can be no disagreement. Mrs. Emery then takes the ground that the great capitalists were pleased with the opportunity to speculate on the needs of the country, and that they proceeded to profit by the situation, as we shall see in the course of this discussion. The little book uses plain language to suit the plain common people, and hence calls the London and Wall Street speculators Shylocks. This the Senator condemns, saying that the Shylocks of the war were the men who furnished the means to carry on the government, etc., as above quoted. In this matter Mrs. Emery is in good company.
She agrees with Thaddeus Stevens, Senator Wilson, Andrew Jackson, Thomas Jefferson, Senator Benton and others in calling men and things by their proper names. But this will appear more plainly in the course of the discussion. I now call attention to the Senators remarks concerning the First Financial Conspiracy.---[while practicing law, Thaddeus Stevens was an attorney of the Bank of the United States; when he was a representative in Pennsylvania, he was opposed to President Andrew Jackson and Senator Thomas Benton and their policies. From 1833, Thaddeus Stevens was the able leader of the Pennsylvania Legislature where he organized Whigs (pro-Bank) and Anti-Masons (anti-Jackson, pro-Bank) to vote together. On January 19, 1836, it was Stevens who reported the bill in the Pennsylvania House of Representatives that re-chartered the Bank of the United States as a State bank...... Jackson, Jefferson, Benton considered gold and silver alone the money of the United States]
Fortunately we are not left in the dark as to the causes and agencies which placed the exception clause on the greenback. Prominent actors in the matter have left their words and acts on record.
The legal tender Bill was introduced in the House by E.G. Spaulding of Buffalo, N.Y., Chairman of the Sub-committee of Ways and Means, December 31, 1861. It was discussed in the House, and perfected, until February 6, 1862. It passed the House by a vote of 93 to 59. It provided for a full legal-tender money with no exception clauses.
After passing the House, the Legal-tender Bill went to the Senate. The Senate amended the bill by providing that the contemplated money should be legal tender for all purposes except duties on imports and interest on the public debt. Mrs. Emery claims that those exceptions were the work of the bankers. Mr. Stevens, Chairman of the Ways and Means Committeethe grand old commoner from Pennsylvaniatells how the crime of wounding the greenback was committed :
TESTIMONY OF THADDEUS STEVENS.
MR. SPEAKER :I have a very few words to say. I approach the subject with more depression of spirits than I ever approached any question. No personal motive influences me. I hope not at least. I have a melancholy foreboding that we are about to consummate a cunningly-devised scheme, which will carry great injury and great loss to all classes of people throughout this Union, except one. With my colleague, I believe that no act of legislation was ever hailed with as much delight throughout the length and breadth of this Union, by every class of people without exception, as the bill which we passed and sent to the Senate. Congratulations from all classesmerchants, traders, manufacturers, mechanics and laborerspoured in upon us from all quarters. The Boards of Trade from Boston, New York, Philadelphia, Cincinnati, Louisville, St. Louis, Chicago and Milwaukee approved its provisions and urged its passage as it was. I have a dispatch from the Chamber of Commerce, Cincinnati, sent to the Treasurer, and by him to me, urging the speedy passage of the bill as it passed the House. It is true there was a doleful sound came up from the caverns of bullion brokers and from the salons of the associated banks. Their cashiers and agents were soon on the ground and persuaded the Senate, with but little deliberation, to mangle and destroy what it had cost the House months to digest, consider and pass. They fell upon the bill in hot haste, and so disfigured and deformed it that its father would not know it. Instead of being a beneficient and invigorating measure, it is positively mischievous. It has all the bad qualities which its enemies charged on the original bill, and none of its benefits. It now creates money, and by its very terms declares it a depreciated currency. It makes two classes of money : one for banks and brokers, and another for the people. It discriminates between the rights of different classes of creditors, allowing the capitalists to demand gold, and compelling the ordinary lender of money on individual security to receive notes which the government had purposely discredited. * * * * * * All classes of people shall take these legal-tender notes at par for every article of trade or contract, unless they have money enough to buy United States bonds, and then they shall be paid in gold. Who is that favored class ? The banks and brokers and nobody else.
That is the statement of the chairman of the committee that originated the bill. He and Mrs. Emery agree that the brokers and bankers are responsible for the exception clause that depreciated the greenback money.---[Unfortunately, Mr. Stevens made other statements: "I procured to be inserted a provision making the duties on imports payable in gold." --Thaddeus Stevens, December 19, 1862.
Senator Sherman says it is one of the great pillars of our financial credit.
TESTIMONY OF HENRY WILSON.
It is a contest between the brokers, jobbers and money-changers on the one side, and the people of the United States on the other. I venture to express the opinion that ninety-nine of every hundred of the loyal people of the United States are for this legal-tender clause.
Wilsons Speech in the Senate, February 13, 1862.
---[In 1866 Mr. Wilson voted FOR the reduction of currency;
in 1869 he voted FOR the credit strengthening act]
THE VOICE OF HISTORY.
The [legal tender] bill was no sooner made public than delegations of bankers from New York, Boston and Philadelphia hurried to Washington to oppose it. They organized in a formal manner by selecting a chairman (S.A. Mercer of Philadelphia), and invited the finance Committee of the Senate and the Committee of Ways and Means of the House to meet them at the office of the Secretary of the Treasury January 11, 1862. The invitation was accepted. At the meeting which followed the bankers spoke in opposition to the bill. * * * The bank delegates remained in Washington and held further consultation with Secretary Chase extending through several days, which resulted in an arrangement with him to the effect, among other things, that Congress should be urged to pass the National Bank Bill, etc.Berkeys Monetary System, 1876.
TESTIMONY OF WM. D. KELLEY.
I remember the grand old commoner Thaddeus Stevens, with his hat in his hand and his cane under his arm, when he returned to the House after his final conference (on the exception clause) and shedding bitter tears over the result. Yes, said he, we had to yield ; the Senate was stubborn. We did not yield until we found that the country must be lost or the banks gratified, and we have sought to save the country in spite of the cupidity of its wealthier citizens.Judge Wm. D. Kelley, Philadelphia, January 15, 1876.
Let us now analyze the vote on the Legal-tender Bill. When voted on in the House on its first passage, authorizing a full legal-tender money, it passed by a vote of 93 to 59. Among the voters in the majority we find the names of Stevens, Spaulding, Windom, Wilson, Hale, Fessenden, Colfax, Bingham, Hooper and a majority of the great Union Congressmen, who were then in favor of a full legal-tender currency. In the minority, we find Vallandigham, Voorhees, Pendleton, Wm.H. English and S.S. Cox. Vallandigham of Ohio was very emphatic in his denunciation of legal-tender paper. He said :
Cheap in materials, easy of issue, worked by steam, signed by machinery, there will be no end to the legion of paper devils which shall pour forth from the loins of the Secretary.
Vallandigham insisted that these notes were not money, that they would not circulate as money :
Though you should send them forth bearing ten times the image and superscriptionthe fair face and form of ABRAHAM LINCOLN, now President and CÆSAR of the American Republic. * * * I utterly deny, sir, the right of the Federal government to provide a paper currency, intended primarily to circulate as money and meet the demands of business and commercial transactions and to the exclusion of all other paper.---[Had you bothered to read Vallandigham's speech of February 3rd, 1862, and not just what B.S. Heath rehashed from Spaulding's book, you would have noticed that everything Mr. Vallandigham said the purpose of that bill was became a reality: centralized government, permanent national debt, national banking system, national currency. If you had really analized the vote on the legal-tender bill you would have noticed that John Sherman spoke for an hour on behalf of the legal tender clause, and voted for it; without Mr. Sherman's support there would not have been legal-tender clause.]
But when the bill was returned from the Senate, mutilated and depreciated by the infamous exception clause, we find Vallandigham, Voorhees, Cox, Pendleton, English, et hoc genus omne, voting for the mutilated bill authorizing a crippled and depreciated money. * * * They did not agree with Secretary Chase, Wilson, Stevens, Hale and Windom, those great and noble patriots who tried to give to the country a legal-tender money without any mutilation and exceptions ; and as these men who have been styled traitors voted in the House, so voted John Sherman in the Senate. Neither Sherman, Vallandigham nor Voorhees agreed with Secretary Chase, Wilson, Stevens, Hale, Windom and all those great and noble patriots who tried to give to the country a legal-tender money without any mutilations and exceptions. (See Spauldings History, 1869).
The object of the exception clause on the greenback was to cause its depreciation so that the holders of gold could buy up the currency at half-price and then invest it in bonds at face value. Senator Sherman himself once explained the whole matter in a single sentence. He said : It became necessary to depreciate the notes in order to create a market for the bonds. That is, the great rich men, whom Thomas Jefferson called the traitorous class, would not invest in the bonds unless they could double their money by so doing.---[It was not the "exception clause" but the flooding of the market with Treasury notes that depreciated them; Thaddeus himself stated (on February 6th) that he expects no more than 100,000,000 of them, and that more of them would be injurious. In his Report of December 9th 1861, Secretary Chase's plan had already contained the exception clause !!]
Having beaten the government in the exception-clause fight, which Mr. Stevens called the first victory of the money power over the country, the Shylocks determined to take further advantage of the necessities of the government and the exigencies of the times. So in 1863 they procured the passage of
THE NATIONAL BANKING LAW.
Under this law the bondholders could place the bonds which had cost them about 50 cents on the dollar, in the United States Treasury, without sacrificing any of the interest-income, and receive back 90 per cent of the bonds in bank currency to loan to the people, as bankers. This gave the bankers two interest-incomes from one investment. With $50,000 in gold they could become the happy owners of $100,000 of interest-bearing bonds and $90,000 of currency, all free from taxes under State or local authority. This was a big bonanza, or, in fact, two bonanzas combined. This law was passed during one of the darkest periods of the war, when patriots, statesmen, generals, soldiers and people were straining every nerve to save the country. It pounced upon its prey like a panther when the victim was bleeding at every pore. Moultons History of American Finances, page 131, states the case as follows :
Mr. Sherman now introduced the National Bank Bill. After a lengthy debate, it passed the Senate by a vote of 23 to 21. In the meantime there had been several bills for the same purpose introduced and referred to the committee in the House. When the Senate Bill came down it was not referred, as usual, but brought before the House without consideration in committee with other similar bills. It was not discussed in Committee of the Whole, but under a motion to refer, which cut off all amendments, the friends of the bill debated its general merits. When by parliamentary tactics it was forced to a final vote, it passed under the gag rule of the previous question by a vote of 78 to 64.
And thus was fulfilled the prediction of Senator Thos. Benton, when, on the victory of President Jackson over the United States Bank, said that Jackson had beaten the bank ; yet the bank power was not conquered, but, like a royal tiger driven to the jungles, he will return again. He returned in 1863 to prey upon the prostrate form of a bleeding Republic, when neither President, Congress nor people had the power to resist his coming. With 3,000 whelps and an aggregate capital of $700,000,000, much of it furnished by the government, this ROYAL TIGER has been for twenty-five years preying upon the fortunes and liberties of the people, through this system of legalized robbery.
Seven times the people of the United States have voted on this national bank question at Presidential elections. Five times out of the seven they declared, by their votes, that a national bank is unconstitutional and dangerous to liberty. That sentiment was a regular plank in Democratic platforms prior to 1860, and five times that platform was approved by the people at the Presidential elections.
Peter Cooper tells us that, in 1793, President Washington signed a resolution of the American Senate declaring that a holder of bank stock should not have a seat in Congress. And when John Quincy Adams was elected to Congress he refused to qualify until he had disposed of his bank stock. And yet Senator Sherman is in favor of the national banking system, and his party regularly send to the United States Senate numerous bank presidents, just as if this great country has no other interests worth attention except stock gambling, coupon clipping and usuary collecting.
And at this moment the President of the United States Senate is not only a banker, but a BRITISH BANKER, doing business in London as Morton, Rose & Co. And, further, should President Harrison die, we would have a LONDON BANKER AS PRESIDENT OF THE UNITED STATES ! Verily Thomas Jefferson was right when he said : Banking institutions are more dangerous than standing armies.
The exception clause on the Greenback Bill and the national banking law are all the conspiracies mentioned in Mrs. Emerys book that were enacted during the administration of President Lincoln. I have shown that they were perpetrated by the money power while Mr. Lincoln and the country were so terribly pressed by the exigencies of the war that Mr. Lincoln had no option or responsibility in the matter. He submitted to them under coercion ; he approved them to placate one enemy while he battled with another ; being unable, as he himself said, on one occassion, to fight two wars at once. He submitted to the inevitable, as Washington, Jefferson, Adams, Henry and other champions of liberty in their day submitted to the existence of slavery and the slave tradebecause there was no other alternative !
It will be remembered that Secretary Chase favored the legal-tender law, and that it required several days of meetings and threats of financial coercion by the bank delegates, who remained in Washington after the exception clause, to induce Mr. Chase to recommend the bank law. Mr. Chase lived long enough to bitterly regret the part he took in the matter, and is reported as expressing himself as follows :
My agency in procuring the passage of the National Bank Act was the greatest financial mistake of my life. It has built up a monopoly that affects every interest in the country. It should be repealed. But before this can be accomplished, the people will be arrayed on one side and the banks on the other in a contest such as we have never seen in this country.Salmon P. Chase.
To show the undoubted facts in the case, and the usual treason of the money power in all great emergencies, I call the especial attention of Senator Sherman and all Republicans to the following from Senator Ingalls :
No people in a great emergency ever found a faithful ally in gold. It is the most cowardly and treacherous of all metals. It makes no treaty it does not break. It has no friend it does not sooner or later betray. Armies and Navies are not maintained by gold. In times of panic and calamity, shipwreck and disaster, it becomes the agent and minister of ruin. No nation ever fought a great war by the aid of gold. On the contrary, in the crisis of the greatest peril, it becomes an enemy more potent than the foe in the field ; but when the battle is won and peace has been secured gold reappears and claims the fruits of victory. In our own Civil War it is doubtful if the gold of New York and London did not work us greater injury than the powder and lead and iron of the South. It was the most invincible enemy of the public credit. Gold paid no soldier or sailor. It refused the national obligations. It was worth most when our fortunes were the lowest. Every defeat gave it increased value. It was in open alliance with our enemies the world over, and all its energies were evoked for our destruction. But as usual, when danger had been averted and the victory secured, gold swaggers to the front and asserts the supremacy.Ingalls speech in the United States Senate, February 15, 1878.
That is a short but fair description of the men whom Mrs. Emery calls Shylocks. Senator Sherman says they were the men who furnished the means to put down the rebellion. Thomas Jefferson called them the traitorous class. Senator Wilson called them brokers, jobbers and money-changers. Thaddeus Stevens called them bullion brokers; who sent their cashiers and agents into Congress to influence legislation in their own interest ; also, sharks and brokers.
It appears, then, that Shylock is not a phantom of Mrs. Emerys brain, but a living reality, who, according to Mr. Spaulding, would only loan his currency to the government for big interest, on good security, and interest and principal payable in gold.
Mr. John A. Anderson, an orthodox Republican member of Congress for twelve years, and now Consul General to Cairo under the present Republican administration, said :
By the Charter Act the system was to terminate in twenty years. It was never intended to continue it ; the original design was to stop it at the end of twenty years ; but the power of the banks had then (46th Congress) become greater than that of Congress. The system was not stopped at the end of twenty years, and may now go on forever so far as the original and organic safeguard has anything to do with it.
Senator Shermans defense of the national banking system is extremely weak. He merely compares it with other banks of issue, and says : It is now conceded to have been the best form of paper money ever issued by banks that has ever been devised.
Mr. Anderson shows that there need not be any form of paper money issued by banks, but that the true paper money is the legal-tender greenback, issued by the general government. Mr. Anderson agrees with Thomas Jefferson that bank currency should be suppressed and the circulation restored to the nation where it belongs.
Senator Sherman dares not controvert that position. He prefers, rather, to erect a man of straw at which to aim his darts. As the old State bank system of paper issues have now no friends he feels very safe in fighting them, in order to justify this great pillar of our financial credit, which Mr. Anderson says is now too strong for Congress, and which is always on the wrong side in matters of legislation.
The Third Conspiracy under discussion is the contraction of the currency. Strange to say, the Senator denied that there has been any contraction, and says :
It has been demonstrated by official documents that, from the beginning of the war to this time, the volume of our currency has been increasing year by year more rapidly than our population.
This statement is palpably false, as shown by the official documents of 1865, 1866 and later, and by the leading Republican speakers, including the Senator himself, Senator Logan and others. Senator Shermans change of front, between the years 1869 and 1874, was so notorious and shameless that Senator Logan publicly charged him with the change without eliciting a denial.
The Senator tries to sustain his statement of the non-contraction of the currency by the recent falsehood of his party leaders that the 7-30 Treasury notes did not circulate as money.
But Secretary McCullough in his report for December, 1865, says we have now about $2,000,000,000 nearly all in circulation among the people. While in March, 1874, General Logan says Contraction has gone on until the whole amount of currency of every kind now outstanding is only $742,000,000.
It will be noticed that Secretary McCullough and General Logan both classed the $830,000,000 of 7-30 notes among the active currency of the country, Senator Sherman to the contrary, notwithstanding. In reply to a note of inquiry General Spinner, ex-United States Treasurer, stated as follows :
MOHAWK, August 17, 1876.Sir :Your letter of the 15th inst. has been received. In answer I have to say that the 7-30 notes were intended, prepared, issued and used as money.
Very respectfully yours,
Senator Sherman does not agree with McCullough, Logan and Spinner. Who is right ?
I call attention to the following table and remarks from the Chicago Inter-Ocean, a leading Republican paper of Illinois in 1878 :
1875....... ..... ..
The 7-30 three-year notes, whose circulation as currency is most scouted, were outstanding on the, 1st of September, 1865, to the amount of $830,000,000, every dollar of which was legal tender for its face value under the terms of the law, to the same extent as United States notes.
Secretary Fessendens report of December 6, 1864, says he caused to be paid out to the soldiers in the field over $20,000,000 of these 7-30 notes at one time.
President U.S. Grants message of December 2, 1873, indorses the fact of contraction up to the time as follows :
During the last four years the currency has been contracted directly by the withdrawal of the 3 per cent certificates, compound interest notes, and 7-30 bonds outstanding on the 4th of March, 1869 (all of which took the place of legal tenders in bank reserves), to the extent of $63,000,000.
Here is a letter from the president of a national bank and a member of the Forty-third Congress :
OFFICE OF FIRST NATIONAL BANK.NEW JERSEY, August 12, 1878.In compliance with your request of the 18 inst., that I should define the relative position of the 7-30 Treasury notes to the general volume of currency in 1865, I have to say that I was then daily in the habit of receiving and paying out the same in the conduct of my ordinary business the same as greenbacks, and I esteemed their peculiar characteristics (being conducive of elasticity) as not only forming a currency, but a currency of special merit.
Testimony like this may be produced from the official documents of the government and other reliable sources to any desirable extent, and yet, in the face of it all, Senator Sherman says the 7-30 Treasury notes did not circulate as money and that there has been no contraction of the currency !
Senator John A. Logan, in his great speech of March 17, 1874, discussing the panic of 1873, said :
But, sir, that the panic was not due to the character of the currency is proved by the history of the panic itself. * * * No, sir, the panic was not attributable to the character of the currency, but to a money famine, and to nothing else. In the very midst of the panic we saw the leading bankers and business men of New York pressing and urging the President and the Secretary of the Treasury to let loose twenty or twenty-five millions more of the same paper for their relief. The very same men who today denounce it as a disgrace to our government. It was good enough for them when they were in trouble.
On the subject of the panic of 1873 to 1877, the United States Monetary Commission says :
The true and only cause of the stagnation in industry and commerce, now everywhere felt, is the fact everywhere existing of falling prices, caused by a shrinking volume of money. * * * * This is the great cause. All others are collateral, cumulative or really the effects of that primal cause. Practical men see what the mischief is, and they all see it alike, and without formulating their ideas into set words and phrases, they state it alike. Capitalists, large and small, give one and only one reason for refusing to invest in productive enterprises. Uniformly and universally the reason given is that prices are falling and may continue to fall, and that money is the best thing to get and hold while that state of things continues. * * * Falling prices, is only another expression for an increasing value of money, by contracting its volume.
In order to throw some light on the question as to who or what class of society is interested in a scanty volume of money and low prices of labor and the products of labor, I call attention to an extract from the Inter-Ocean of February 28, 1874, quoted and approved by General Logan in his speech of March 17, 1874. The Inter-Ocean said :
In the national Senate Chamber a bitter contest is in progress by the representatives of the moneyed aristocracy on the one hand, and by the representatives of the masses of the people on the other. The proposition on the part of the capitalists is to grasp and firmly hold the largest possible percentage of the profits of all the labor of the country. They want high rates of interest whereby they may tax traffic, and low rates of wages whereby they may tax labor. By contracting the currency they secure both of these objects, for they force traffic to supplicate the banks for loans, and drive labor to beggary ; and as the necessities of merchants render more pressing their importunities for loans, the rate of interest is advanced to cover the increased risk, and as the demand for labor declines the price also declines. On the other hand, the proposition of the people, those who live by labor and traffic, is to extend the volume of currency, thereby cheapening money, and so stimulating manufacturing and other industries into such activity as will insure employment to the laboring classes at remunerative rates of wages. No contest was ever more clearly defined. At no time in the history of our country, not even in the history of the rebellion, has it been more evident that the interest of the many clash with those of the few.
It would seem from this view of the case that Senator Sherman, at first, was on the side of the people, but that the side of the oppressor became more fascinating to him, for some reason almost obvious to common mortals.
The contraction of the currency was not at first a Republican measure. It was bitterly opposed by the leading Republicans of the time and for years afterward. They condemned it in the severest terms. Senator Sherman said it would be an act of folly without example for evil in modern times. Senator Wade said it would be as bad as a fire. And in 1874, when the country was struggling with bankruptcy and general distress, Senator Logan said : It is a money famine and nothing else.
I do not speak at random. Mr. Rutherford B. Hayes, afterward Republican President of the United States, has told us all about how contraction was enacted while he and the best Republicans voted against it.
In his speech at Sydney, Ohio, September 4, 1867, Mr. Hayes said :
The very measure which was intended to carry out this policy of Secretary McCulloughs, to enable him to take up the greenback currency with interest-bearing bonds, was introduced into Congress in March, 1866. I have here the votes upon that question, and I say that the Democratic party in both Housesall the members of the Democratic Party in both Housesvoted for Secretary McCulloughs plan, and that Mr. Jullian, Judge Schofield, Mr. Lawranceall of whom I see hereand myself, a majority of the Republican members, voted against the scheme, and it became a law because a minority of the Union Party, with a unanimous vote of the Democratic Party, supported it, and because, when it was submitted to Andrew Johnson, instead of vetoing it as he did all Union Party measures, he wrote his name on the 12th of April at the bottom : Approved, Andrew Johnson. I think, then, I am authorized in saying that these gentlemen are mistaken when they accuse the Union Party of being in favor of taking up the greenback currency and putting in the place of it interest-bearing, non-taxable bonds.Howards Life of Hayes, p. 206.
During the election campaign of 1868 Republicans had every intention to lie, and did lie, to the public as to how the 5/20s should be redeemed; and to blame Democrats for all the ills of the country. Unfortunately for Mr. Hayes, the voting record is available:
YEAS-- Messrs. Alley, Ancona (D), Anderson, James M. Ashley, Baldwin, Banks, Barker, Baxter, Bergen (D), Bidwell (R), Blaine, Boyer (D), Brooks (D), Conkling, Shelby M. Cullom (R), Darling, Dawes, Dawson, Ignatius Donnelly (R), Eldridge, Eliot, Farnsworth (R), Farquhar, Finck, Garfield, Glossbrenner, Grider (D), Hale, Aaron Harding, Hogan, Holmes, John H. Hubbard, James M. Humphrey (R), Ebon C. Ingersoll (R), Jones, Kasson, Kerr, Ketcham, Kuykendall, Laflin, Latham, George V. Lawrence (R), Le Blond, Marshall, Marston, Marvin, Hiram McCullough (D), McRuer (R), Mercur (R), Moorhead, Morrill, Morris, Moulton, Myers, Nicholson, Noell, Perham, Pike, Samuel J. Randall (D), John H. Rice, Ritter (D), Rogers, Rollins, Ross, Sawyer, Glenni W. Scofield (R), Smith, Spalding, Stilwell (R), Strouse (D), Taylor, Thornton, Upson, Burt Van Horn, Robert T. Van Horn, Ward, Elihu B. Washburne (R), Henry D. Washburn, William B. Washburn, Wentworth (R), Windom, Winfield, and Wright --83.On March 12, 1869, all three of above mentioned gentlemen voted FOR the Credit Strenghtening Act.
NAYS-- Messrs. Allison (R), Baker, Beaman, Benjamin, Bingham, Bromwell, Broomall, Buckland, Bundy, Reader W. Clarke, Cook (R), Dixon, Driggs, Eckley, Eggleston, Ferry, Griswold, Abner C Harding (R), Hart, Hayes, Higby (R), Hill, Samuel Hooper, Asahel W. Hubbard, Chester D. Hubbard, Demas Hubbard, Edwin N. Hubbell, James R. Hubbell, Julian, Kelley (R), Kelso, William Lawrence (R), Loan, Lynch, McClurg, McKee, Miller (R), O'Neill (R), Orth (R), Paine, Phelps, Price (R), Shellabarger, Stevens (R), Thayer (R), Francis Thomas, John L. Thomas, Trowbridge, Van Aernam (R), Welker, Williams, James F. Wilson (R), and Stephen F. Wilson --53.
NOT VOTING-- Messrs. Ames, Delos R. Ashley, Blow, Boutwell, Brandegee (R), Chanler (D), Sidney Clarke (R), Cobb, Coffroth, Culver, Davis, Defrees (R), Delano, Deming (R), Denison (D), Dumont, Goodyear, Grinnell (R), Harris, Henderson, Hotchkiss, Hulburd, James Humphrey, Jenckes, Johnson, Longyear, McIndoe, Newell, Niblack, Patterson, Plants, Pomeroy, Radford, William H. Randall, Raymond, Alexander H. Rice, Rousseau, Schenck, Shanklin, Sitgreaves, Sloan, Starr, Taber (D), Trimble (D), Warner (R), Whaley, and Woodbridge --47.
In the Senate 23 Republicans voted for the bill
On February 28, 1878, President Hayes vetoed the proposed act to coin silver and reinstate its legal-tender status.
And that scheme, opposed by all true Union men at the time, including Senator Sherman, the same Senator now says, is one of the great pillars of out financial credit.
Senator Logan continues the discussion of contraction as follows :
It was the contraction and increased want of currency, and not a superabundance, which produced the necessity for running in debt, of which there is so much said on this floor. Why, sir, the people were never freer from debt in proportion to the business done than in 1865, at the close of the war, when Mr. McCullough began his system of contraction, and at the very time eleven millions more people were to be supplied. Was it to be supposed that the activity and energy which the adequate supply of money had put into operation, and which was giving prosperity and happiness to the country, would suddenly dwarf itself to suit financial notions without a severe struggle ? The inevitable result was an expedient to meet the consequent want, and credit was expanded. At the very moment, above all others, when adequate supply was needed, the opposite course was adopted ; and right hear lies the true cause of the late panic, which resulted from a money famine, and not from an excessive supply.
Senator Logan discusses the subject still further, as follows :
Sir, turn this matter as we will, and look at it from any side whatever, and it does present the appearance of being a stupendous scheme [Mrs. Emery calls it a conspiracy] of the moneyholders to seize this opportunity of placing under their control the vast industries of the nation. Therefore I warn Senators against pushing too far the great conflict now going on between capital and labor. It is not our duty to legislate exclusively for either, but, as far as possible, to try and harmonize the interests of the two. Capital rests upon labor ; but when it attempts to press too heavily upon that which supports it in a free Republic, the slumbering volcano, whose mutterings are beginning already to be heard, will burst forth with a fury that no legislation will quell.
The Senator quotes and approves the following from the Berrien County (Mich.) Record :
It is a lamentable fact that the financial question is leading to a conflict between capital and labor, money and production. The capitalists, the possessors of money, who stand isolated from the laboring and producing classes, are getting themselves in hostile array to oppose with might and main every effort to increase the currency of this country to something like an equal ratio with other commercial nations. The East, especially the Wall Streeters and banks, want no more money. They prefer to have the volume of currency limited so that combinations may be entered into and the money cornered. Every time a few millions of the currency are locked up in the East, the West suffers, the products of the West decline in price, and the Western producer suffers, while the Eastern capitalist makes money. The time has come when this state of affairs should and must be remedied. The interest of the South and West are identical on this point, and, unless the East will yield to that which is just and right, the result cannot be otherwise than disastrous in the end. This the money-lenders of New York will learn, but, perhaps, not until it is too late.
I have dwelt at length on this subject of contraction because it is the central Conspiracy around which the others cluster, and because the greatest traitor of the day denies its existence. I will ask attention to but one more Republican statement and contradiction :
If I were deciding this case upon what I considered the best evidence, I would be bound to say that I believed the money in actual circulation did not much, if at all, exceed $500,000,000, * * * or a trifle over $8 per capita.P.B. Plumb in United States Senate, June 1890.
Mr. J.K. Hudson, a leading Republican editor, in April, 1890, stated that the amount of currency at one time was $2,242,576,028.41, a per capita circulation of $64 at the close of the war, July 1, 1865.
I leave the stalwarts to settle their diverse statements in their own way. It seems as if the Republicans had recently entered into a bold conspiracy to deceive the people on this money question, even though they made themselves ridiculous by eating their own words and by contradicting each other.
The First Conspiracy, wounding the greenback, was to enable the great fund-holders of the world to obtain United States bonds on easy terms. The Second, known as the national banking system, was to make the bonds very profitable to the holders, enabling them to draw double interest on one investment. The Third Conspiracy was to render money so scarce that the bonds would, probably, not be paid, making the investment perpetual.
The conspiracy of 1869 was to make the bonds payable in coin only, so that their payment would be still more burdensome and less probable.
It was with considerable difficulty that Congress passed the laws of 1869 and 1870, making the 5-20 currency bonds payable in coin, and refunding bonds so that no future Congress could undo the work. Those measures were vehemently opposed and condemned by John Sherman, Senator Doolittle, Oliver P. Morton, Henry Wilson and others. Senator Sherman called the Act of 1869 extortion and repudiation. Senator Morton said that, in its passage, four distinct laws were violated ! But the money power was all-powerful. It was unscrupulous, and, of course, it again triumphed.
In 1873 a coinage law was passed for the coinage of trade dollars and subsidiary silver. It in no way referred to the standard dollar, which had been the unit of account and the standard of value since the beginning of the government. It was an innocent and useful law, yet on this law was founded a revision, adopted in bulk, June, 1874, as follows :
The silver coins of the United States shall be a legal tender at their nominal value for any amount not exceeding $5 in any one payment.
That language demonetized all the silver coins of the United States for amounts above $5, including the standard silver dollar. The United States Monetary Commission Report of 1877, Vol. I, page 90, says :
No law was ever passed by Congress of which this language can be considered a revision.
The report then adds :
Whoever may be responsible for this error in the Revised Statutes, the ancient money of the country, instead of being intentionally legislated out of existence by Congress, was revised out of existence.
The law of 1875the Resumption Lawwas intended to redeem and retire the remaining greenbacks, making gold coin the money of the rich bondholders, and bank currency and subsidiary silver the moneys of trade and business. But the sufferings of the people and danger to the peace of the country became so great that Congress, in 1878, passed a law that redeemed greenbacks would not be canceled, but should be paid out again. This defeated the resumption scheme and saved to the people $346,000,000 of greenbacks. Another law was passed in 1878 restoring the full legal-tender quality of the silver dollar, and requiring its coinage at the rate of two to four millions per month. These were the first financial laws passed in the interests of the people since 1862. They were the first check to the money power since the passage of the exception clause on the greenback, which Thaddeus Stevens pronounced the first victory of the money power over the country.
The remedial laws of 1878 were an immediate and immense relief to the people, showing that General Logan was right when he called the period from 1873 to 1878 a money famine and nothing else.
The great Wall Street Journals were very much disgusted with the passage of the remedial measures of 1878. They unanimously ascribed their passage to the influence of the greenback sentiment of the West and South.
I have now sketched the manner and spirit of the enactment of the Conspiracies of the great money power of London and New York against the liberties of the American people, robbing them, with unseen hands, through the manipulations of the finances, as no highwaymen of ancient of modern times could have done it. And these are the crimes which Senator John Sherman says are the seven great pillars of our financial credit.
The Senator denies that he ever had any interest in the First National Bank of New York. Of course it cannot be proven that he had. But circumstances are a little suspicious against him. I have on my table a Political Manual for 1880. Discussing Secretary Shermans Favorite Financial Agency, on page 146, I find this remark :
The deposits controlled by the First National Bank [New York] were equal to nearly two and one-half times the entire deposits in all of the other seventy banks where such deposits were held.
Now if Senator Sherman was not financially interested in the First National Bank of New York, why did he thus favor it with the deposits of public moneys when he was Secretary of the Treasury under President Hayes ? Why should that particular bank receive deposits in the year 1878, from April to December, amounting to much more than all the other fiscal banks of the country ? I ask in all candor, whether the circumstances are not suspicious against the Senator ? Or was this conspiracy with that bank another great pillar of our countrys financial credit ? We have the Senators statement that there has been no contraction of the currency since the war, and that he never had any pecuniary interest in his pet bank. But the facts and circumstances against him in both cases are rather ugly ! He will next tell us, perhaps, that he became a millionaire by the honest savings from his salary as a public officer !
Member of Congress from Kansas.