12, 1866, an Act authorized the Secretary of the Treasury to retire and
cancel not more than $10,000,000 of these notes within six months of the
passage of the Act, and $4,000,000 per month thereafter. This policy of
contraction was carried out by Secretary McCulloch, who urged still more
rapid contraction; but the policy was resisted by a large influence in
the country, and on February 4, 1868, an Act of Congress suspending the
authority of the Secretary of the Treasury to retire and cancel United
States notes, became a law without the signature of the President.
On March 18, 1869, an "Act to strengthen the public credit" was passed,
which declared that the "greenbacks" were redeemable in coin. This Act
concluded as follows: "And the United States also solemnly pledges
its faith to make provision at the earliest practicable period for the
redemption of the United States notes in coin."
On January 14, 1875, the "Resumption Act" was passed. It declared that
"on and after January 1, 1879, the Secretary of the Treasury shall
redeem in coin the United States legal-tender notes then outstanding,
on their presentation for redemption at the office of the Assistant
Treasurer of the United States in the city of New York, in sums of
not less than fifty dollars." The same Act provided that while the
legal-tender notes outstanding remained in excess of $300,000,000, the
Secretary of the Treasury should redeem such notes to the amount of 80
per cent. of the increase in National Bank notes issued.
On May 31, 1878, an Act was passed forbidding the further retirement of
United States legal-tender notes, and providing that "when any of said
notes may be redeemed or be received into the Treasury under any law
from any source whatever and shall belong to the United States, they
shall not be retired, cancelled, or destroyed, but they shall be
re-issued and paid out again and kept in circulation." When this Act was
passed there were $346,681,016 of United States notes outstanding, and
there has been no change in the amount since.
As to the silver policy of the Government since the war it is expected
that the purport of certain important acts of legislation should be
understood by all who would have an intelligent conception of our
financial controversies.
The Act of February 12, 1873, suspended the coinage of the standard
silver dollar of 412 and 1/2 grains. This Act authorized the coinage of
the trade dollar of 420 grains, making it a legal tender for $5. This
is the Act which has been called the "crime of 1873," on which tomes of
controversy have been called forth. It is discussed at some length in
the speech of Mr. Morrill, found in our text.
On February 28, 1878, the Bland-Allison Act was passed over the veto of
President Hayes. A bill providing for the free and unlimited coinage
of silver, of 412 and 1/2 grains to the dollar, had passed the House
in November, 1877, under a suspension of the rules. At this time the
bullion in the silver dollar was worth about 92 cents. When the Bland
free-coinage Act came to the Senate, it was amended there on report
of Senator Allison, of Iowa, Chairman of the Finance Committee of
the Senate, by a provision that the Government should purchase from
$2,000,000 to $4,000,000 worth of silver bullion for coinage into
dollars. Holders of the coin were authorized to deposit the same with
the United States Treasurer and to receive therefor certificates of
deposit, known as silver certificates. These certificates are not legal
tender, although receivable for customs, taxes, and all public dues, and
are redeemable only in silver. This Act called forth an exhaustive
and able debate. Senator Morrill, of Vermont, opened the debate in
opposition to silver coinage. Senator Beck, of Kentucky, was one of
the ablest advocates of silver coinage, while Mr. Blaine made a notable
contribution to the debate, in which he favored the unlimited coinage of
a silver dollar of 425 grains. Preceding the Congressional action there
had been much public discussion on the subject throughout the country.
A Monetary Commission had been organized, by joint resolution of August
15, 1875, for the purpose of making an examination into the silver
question. This Commission made an exhaustive report to Congress on March
2, 1877, the majority of the Commission recommending the resumption of
silver coinage. Also, previous to the discussion of the Bland-Allison
Act in the Senate, the celebrated Matthews Resolution was passed by that
body. This asserted that "all bonds of the United States are payable in
silver dollars of 412 and 1/2 grains, and that to restore such dollars
as a full legal tender for that purpose, is not in violation of public
faith or the rights of the creditors." The de-bate on this resolution
was a notable one. It was chiefly under these aspects that the financial
question was discussed in the years 1877-1878.
The Bland-Allison Act was in operation from 1878 to 1890, during which
time $2,000,000 in silver were coined per month, the minimum amount
authorized by law. On July 14, 1890, the so-called Sherman Act stopped
the coinage of silver dollars and provided for the purchase of silver
bullion to the amount of 4,500,000 ounces per month. Against this
bullion Treasury notes were to be issued, redeemable in gold or silver
coin at the option of the Secretary of the Treasury. These notes were
made a legal tender in payment of all debts, public and private, and
receivable for all customs, taxes, and all public dues. It was also
declared in this Act to be the established policy of the United States
to maintain the two metals on a parity with each other upon the present
legal ratio, or such ratio as may be provided by law. On account of this
language in the law the Secretary of the Treasury under Mr. Cleveland
has not deemed it advisable to exercise the discretion which the law
gives him to redeem these notes in silver, and these new Treasury notes
have been treated as gold obligations. By November 1, 1893, when the
silver purchase clause of the Act of July 14, 1890, was repealed,
Treasury notes to the amount of $155,000,000 had been issued, though
some of these have since been exchanged for silver dollars at the option
of the holders. It has been by these Treasury notes and the outstanding
greenbacks that gold has been withdrawn from the Treasury, thus
depleting the gold reserve and making bond issues necessary. It has
been deemed advisable by successive administrations of the Treasury
Department to maintain a gold reserve of $100,000,000 against the
$346,681,000 outstanding greenbacks, though no law requires that such
a reserve should be maintained further than that the Act of March 18,
1869, pledges the faith of the United States that its outstanding notes
should be redeemed in coin.
The repeal of the silver purchase clause of the Sherman Act was
accomplished in a special session of Congress, November 1, 1893. Since
this repeal, the silver policy of the Government has been as it
was before the Bland-Allison Act of 1878, which involves a complete
suspension of silver coinage. The Acts of 1878 and of 1890 were
compromise measures, agreed to by the opponents of silver coinage in
order to prevent the passage of a bill providing for full unlimited
coinage of silver at the ratio of 16 to 1. Speaking in his
_Recollections_ of the situation in 1890, Senator Sherman says: "The
situation at that time was critical. A large majority of the Senate
favored free silver, and it was feared that the small majority against
it in the other House might yield and agree to it. The silence of the
President on the matter gave rise to an apprehension that if a free
coinage bill should pass both Houses he would not feel at liberty to
veto it. Some action had to be taken to prevent a return to free silver
coinage, and the measure evolved was the best obtainable. I voted for
it, but the day it became a law I was ready to repeal it, if repeal
could be had without substituting in its place absolute free coinage."
Since 1893 the contention has been carried on by the silver men in a
public agitation in favor of free silver coinage, without compromise or
international agreement, and this year (1896), by our form of political
referendum, the question has been referred to the people for decision.
We have attempted to include four representative orations on this
complex subject, from four of our most prominent public men. The
literature of the subject is unlimited. Mr. Morrill is a representative
advocate of the gold standard. In the same discussion Mr. Blaine offers
a compromise position. Senator Sherman is an international bimetallist
and a pronounced opponent of independent silver coinage. He has given
much attention--probably no one has given more--to financial questions
during a long public life. Senator Jones is recognized as one of the
ablest advocates and one of the deepest students of monetary problems
on the free silver side of the controversy. The extracts from these
speeches will indicate the merits of the long debate on silver
coinage,--the greatest question in our financial history in a quarter of
a century.
The reform of the Civil Service has been a subject of public attention
especially since 1867. The public service of the United States is
divided into three branches, the civil, military, and naval. By the
civil service we mean that which is neither military nor naval, and it
comprises all the offices by which the civil administration is carried
on. The struggle for Civil Service Reform has been an effort to
substitute what is known as the "Merit System" for what is known as the
"Spoils System"; to require that appointment to public office should
depend, not upon the applicant's having rendered a party service, but
upon his fitness to render a public service. It would seem that the
establishment in public practice of so obvious a principle should
require no contest or agitation; and that the civil service should ever
have been perverted and that a long struggle should be necessary to
reform it, are to be explained only in connection with a modern party
organization and a party machinery and usage which were entirely
unforeseen by the framers of the Constitution. The practice of the
early administrations was reasonable and natural. Washington required of
applicants for places in the civil service proofs of ability, integrity,
and fitness. "Beyond this," he said, "nothing with me is necessary
or will be of any avail." Washington did not dream that party service
should be considered as a reason for a public appointment. John Adams
followed the example of Washington. Jefferson came into power at the
head of a victorious party which had displaced its opponent after a
bitter struggle. The pressure for places was strong, but Jefferson
resisted it, and he declared in a famous utterance that "the only
questions concerning a candidate shall be, Is he honest? is he capable?
is he faithful to the Constitution?" Madison, Monroe, and John
Quincy Adams followed in the same practice so faithfully that a joint
Congressional Committee was led to say in 1868 that, having consulted
all accessible means of information, they had not learned of a single
removal of a subordinate officer except for cause, from the beginning of
Washington's administration to the close of that of John Quincy Adams.
The change came in 1829 with the accession of Jackson. The Spoils System
was formally proclaimed in 1832. In that year Martin Van Buren was
nominated Minister to England, and, in advocating his confirmation,
Senator Marcy, of New York, first used the famous phrase in reference to
the public officers, "To the victors belong the spoils of the enemy."
Since then every administration has succumbed, in whole or in part,
to the Spoils System. The movement for the reform of the civil service
began in 1867-68, in the 39th and 40th Congresses in investigations and
reports of a Joint Committee on Retrenchment. The reports were made and
the movement led by Hon. Thomas A. Jenckes, a member of the House from
Rhode Island. These reports contained a mass of valuable information
upon the evils of the spoils service. In 1871 an Act, a section of an
appropriation bill, was passed authorizing the President to prescribe
rules for admission to the civil service, to appoint suitable persons
to make inquiries and to establish regulations for the conduct of
appointees. Mr. George William Curtis was at the head of the Civil
Service Commission appointed by General Grant under this Act, and on
December 18, 1871, the Commission made a notable report, written by Mr.
Curtis, on the evils of the present system and the need of reform. In
April, 1872, a set of rules was promulgated by the Commission regulating
appointments. These rules were suspended in March, 1875, by President
Grant although personally friendly to the reform, because Congress had
refused appropriations for the expenses of the Commission. Appeal
was made to the people through the usual agencies of education and
agitation. President Hayes revised the Civil Service Rules, and Mr.
Schurz, Secretary of the Interior, made notable application of the
principle of the reform in his department. President Garfield recognized
the need of reform, though he asserted that it could be brought about
only through Congressional action. Garfield's assassination by a
disappointed placeman added to the public demand for reform, and on
January, 18, 1883, the Pendleton Civil Service Law was passed. This
Act, which had been pending in the Senate since 1880, provided for
open competitive examinations for admission to the public service in
Washington and in all custom-houses and post-offices where the official
force numbered as many as fifty; for the appointment of a Civil Service
Commission of three members, not more than two of whom shall be of
the same political party; and for the apportionment of appointments
according to the population of the States. Provision was made for a
period of probation before permanent appointment should be made, and no
recommendations from a Senator or member of Congress, except as to
the character or residence of the applicant, should be received or
considered by any person making an appointment or examination. The Act
prohibited political assessments in a provision that "no person shall,
in any room occupied in the discharge of official duties by an officer
or employee of the United States, solicit in any manner whatever any
contribution of money or anything of value, for any political purpose
whatever."
The Pendleton Act was a landmark in the history of the reform and
indicated its certain triumph. The Act was faithfully executed by
President Arthur in the appointment of a Commission friendly to the
cause, and under the Act the Civil Service Rules have since been
extended by Presidents Harrison and Cleveland until the operations of
the reform embrace the greater part of the service, including fully
85,000 appointments. It is not probable that the nation will ever again
return to the feudalism of the Spoils System.
No two men have done more for the cause of Civil Service Reform than
George William Curtis and Carl Schurz. When Mr. Curtis died, in 1892,
the presidency of the Civil Service Reform League, so long held by
him, worthily devolved upon Mr. Schurz. It may be said that in the last
twenty-five years of Mr. Curtis' life is written the history of
this reform. His orations on the subject have enriched our political
literature and they hold up before the young men of America the noblest
ideals of American citizenship. He gave unselfishly of his time and of
his exalted talents to this cause, and his services deserve from his
countrymen the reward due to high and devoted patriotism. Refusing high
and honorable appointments which were held out to him, he preferred to
serve his country by doing what he could to put her public service upon
a worthy plane. The oration from Mr. Curtis included in our text is one
among many of his worthy productions.
J. A. W.
JUSTIN S. MORRILL,
OF VERMONT. (BORN 1810.)
ON THE REMONETIZATION OF SILVER
--UNITED STATES SENATE, JANUARY 28, 1878.
MR. PRESIDENT, the bill now before the Senate provides for the
resuscitation of the obsolete dollar of 412 and 1/2 grains of silver,
which Congress entombed in 1834 by an Act which diminished the weight of
gold coins to the extent of 6.6 per cent., and thus bade a long farewell
to silver. It is to be a dollar made of metal worth now fifty-three and
five-eighths pence per ounce, or ten cents less in value than a
gold dollar, and on January 23d, awkwardly enough, worth eight and
three-fourths cents less than a dollar in greenbacks, gold being only
If per cent. premium, but, nevertheless, to be a legal tender for all
debts, public and private, except where otherwise provided by contract.
The words seem to be aptly chosen to override and annul whatever now
may be otherwise provided by law. Beyond this, as the bill came from the
House, the holders of silver bullion--not the Government or the whole
people--were to have all the profits of coinage and the Government all
of the expense. This, but for the amendment proposed by the Committee on
Finance, would have furnished the power to the enterprising operators in
silver, either at home or abroad, to inflate the currency without limit;
and, even as amended, inflation will be secured to the full extent
of all the silver which may be issued, for there is no provision for
redeeming or retiring a single dollar of paper currency. Labor is
threatened with a continuation of the unequal struggle against a
depreciated and fluctuating standard of money.
The bill, if it becomes a law, must at the very threshold arrest the
resumption of specie payments, for, were the holders of United States
notes suddenly willing to exchange them for much less than their present
value, payment even in silver is to be postponed indefinitely. For years
United States notes have been slowly climbing upward, but now they are
to have a sudden plunge downward, and in every incompleted
contract, great and small, the robbery of Peter to pay Paul is to be
fore-ordained. The whole measure looks to me like a fearful assault upon
the public credit. The losses it will inflict upon the holders of paper
money and many others will be large, and if the bill, without further
radical amendments, obtains the approval of the Senate, it will give
the death-blow to the cardinal policy of the country, which now seeks
a large reduction of the rate of interest upon our national debt.
Even that portion now held abroad will come back in a stampede to be
exchanged for gold at any sacrifice. The ultimate result would be,
when the supply for customs shall have been coined and the first
effervescence has passed away, the emission of silver far below the
standard of gold; and when the people become tired of it, disgusted or
ruined by its instability, as they soon would be, a fresh clamor may
be expected for the remonetization of gold, and another clipping or
debasing of gold coins may follow to bring them again into circulation
on the basis of silver equivalency. In this slippery descent there can
be no stopping place. The consoling philosophy of the silver commission
may then be repealed, that a fall in the value of either or both of the
metals is a "benefaction to mankind." If that were true, then copper,
being more abundant and of lower value, should be used in preference
to either gold or silver. The gravity of these questions will not be
disputed.
The silver question in its various aspects, as involved in the bill
before us, is one of admitted importance, possibly of difficult
solution; and it is further embarrassed by not only the conflicting
views of those entitled to some respect, but by the multifarious
prescriptions intruded by a host of self-constituted experts and by all
of the quack financiers of the land. Every crocheteer and pamphleteer,
cocksure "there's no two ways about it," generously contributes his
advice free of charge; but sound, trust-worthy advice does not roam like
tramps and seldom comes uninvited. Many of the facts which surround
the subject are perhaps of too recent occurrence to justify hasty and
irrevocable conclusions. The service of our own people, however, must
be our paramount concern. Their intercourse with themselves and with
the world should be placed upon the most solid foundation. If any have
silver to sell it is comparatively a small matter, and yet we earnestly
desire that they may obtain for it the highest as well as the most
stable price; but not at the expense of corn, cotton, and wheat; and it
is to be hoped, if any have debts to meet now or hereafter, that they
may meet them with the least inconvenience consistent with plain,
downright, integrity; but, from being led astray by the loud
declamations of those who earn nothing themselves and know no trade but
spoliation of the earnings of others, let them heartily say, "Good Lord,
deliver us."
* * * * *
A stupid charge, heretofore, in the front of debate, has been made,
and wickedly repeated in many places, that the Coinage Act of 1873 was
secretly and clandestinely engineered through Congress without proper
consideration or knowledge of its contents; but it is to be noted that
this charge had its birth and growth years after the passage of the Act,
and not until after the fall of silver. Long ago it was declared by one
of the old Greek dramatists that, "No lie ever grows old." This one is
as fresh and boneless now as at its birth, and is therefore swallowed
with avidity by those to whom such food is nutritious or by those who
have no appetite for searching the documents and records for facts.
Whether the Act itself was right or wrong does not depend upon the
degradation of Congress implied in the original charge. Interested
outsiders may glory in libelling Congress, but why should its own
members? The Act may be good and Congress bad, and yet it is to be hoped
that the latter has not fallen to the level of its traducers. But there
has been no fall of Congress; only a fall of silver. To present the
abundant evidence showing that few laws were ever more openly proposed,
year after year, and squarely understood than the Coinage Act of 1873,
will require but a moment. It had been for years elaborately considered
and reported upon by the Deputy Comptroller of the Currency. The special
attention of Congress was called to the bill and the report by the
Secretary of the Treasury in his annual re-ports for 1870, 1871, and
1872, where the "new features" of the bill, "discontinuing the
coinage of the silver dollar," were fully set forth. The extensive
correspondence of the Department had been printed in relation to the
proposed bill, and widely circulated. The bill was separately printed
eleven times, and twice in reports of the Deputy Comptroller of the
Currency,--thirteen times in all,--and so printed by order of Congress.
A copy of the printed bill was many times on the table of every
Senator, and I now have all of them here before me in large type. It was
considered at much length by the appropriate committees of both Houses
of Congress; and the debates at different times upon the bill in
the Senate filled sixty-six columns of the _Globe_, and in the House
seventy-eight columns of the _Globe_. No argus-eyed debater objected by
any amendment to the discontinuance of the silver dollar. In substance
the bill twice passed each House, and was finally agreed upon and
reported by a very able and trustworthy committee of conference, where
Mr. Sherman, Mr. Scott, and Mr. Bayard appeared on the part of the
Senate. No one who knows anything of those eminent Senators will charge
them with doing anything secretly or clandestinely. And yet more capital
has been made by the silver propagandists out of this groundless charge
than by all of their legitimate arguments.'
* * * * *