TREASURY DEPARTMENT.
OFFICE OF THE TREASURER,
WASHINGTON, D. C.
_January_ 25, 1900.
HONORABLE GEORGE S. BOUTWELL,
Boston, Massachusetts.
_My Dear Mr. Secretary:_ It gives me pleasure to enclose to you a
table showing by classes of bonds the percentage of interest paid by
checks. The interest on all registered bonds is now so paid. Only
the coupon bonds, by their nature, are differently treated.
Your plan has worked admirably, and the drift is slowly from the coupon
to the registered form, and so to an increase of the payment of
interest by checks.
With kind regards, Yours very truly,
(Signed) ELLIS H. ROBERTS,
_Treasurer of the United States._
The plan has been adopted by corporations that are borrowers of large
sums of money upon an issue of bonds, and the use of the system is
very general in the United States.
In my report to Congress in December, 1869, I made recommendation of
the Funding Bill, and I placed copies of the bill that I had prepared
in the hands of the Finance Committee of the Senate, and in the hands
of the Committee of Ways and Means of the House of Representatives.
When the bill became a law, the authorized issue of five per cent
bonds was limited to two hundred million dollars, and the issue of four
per cent was raised to twelve hundred million. Simultaneously with the
passage of the Funding Bill of July, 1870, the war between France and
Prussia opened, and the opportunity for negotiations was postponed
until the early months of the year 1871. In these later years, when
bonds of the United States have been sold upon the basis of their par
value at two per cent income, it is difficult to realize that in 1869
the six per cent bonds of the United States were worth in gold only
83-5/10 cents to the dollar. The first attempt to dispose of the five
per cent bonds was made by the Treasury Department through an
invitation to the public to subscribe for the bonds, payment to be
made in the currency of the country, or by an exchange of outstanding
five-twenty bonds which bore interest at the rate of six per cent.
The subscriptions reached the sum of sixty-six million dollars, of
which the national banks were subscribers to the amount of sixty-four
million, leaving two million only as the loan to the general public.
A portion of the amount taken by the banks was for the account of
patrons and clients. This experience justified the opinion that future
efforts with the general public would be unsuccessful, while the credit
of the country was not established and placed beyond the influence of
cavilers and doubters.
It was under such circumstances that the aid of banks and bankers
became important for the furtherance of subscriptions, in view of the
fact that they could give personal service of a nature not possible in
the case of salaried officers of the Government, nor compatible with
their daily duties.
It is not easy, in this age of comparative freedom and power in
financial affairs, to comprehend that in the year 1871 the long
established bankers of New York, Amsterdam, and London, either declined
or neglected the opportunity to negotiate the five per cent coin bonds
of the United States upon the basis of their par value. It may not be
out of place for me to mention Mr. Morton, of the house of Morton,
Bliss & Co., as an exception, to the bankers of Europe and the United
States.
It was in the same months of 1871 that I recommended the issue of a
four per cent fifty-year bond as the basis of the currency to be issued
by the national banks. This proposition, which would have been
advantageous to the banks, in an increasing ratio as the value of money
diminished, was defeated by the organized opposition of the banks
through an effective lobby that was assembled in the city of
Washington. Such was the public sentiment in the year 1871, even in
the presence of these important facts, that in the month of December
I was able to say in my annual report that the debt had been diminished
during the next preceding year in the sum of ninety-four million
dollars, and that the total decrease from March 1, 1869 to December 1,
1871, was over two hundred and seventy-seven million dollars.
It was in this situation of affairs that Messrs. Jay Cooke & Co.
proposed to undertake the sale in London, by subscription, of one
hundred and thirty-four million five per cent bonds then unsold.
Authority was given to Cooke & Co. to proceed with the undertaking,
and when the books were closed, September 1, I was informed that the
loan had been taken in full. By the terms prescribed by Cooke & Co.,
the subscribers deposited five per cent as security for the validity
of their subscriptions. The bonds were to be delivered the first day
of December.
Upon the receipt of the information that the undertaking had been a
success, the bonds were prepared, and the Hon. William A. Richardson,
then an assistant secretary of the Treasury, was designated as the
agent of the department for the delivery of the bonds. The bonds were
placed in safes, on each of which there were three locks. The clerks
were sent over in different vessels, and the keys were so distributed
among them, that there were not keys in any one vessel by which any
one of the safes could be opened.
The success of the subscription gave rise to an unexpected difficulty.
At that time there were outstanding one hundred and ninety-four million
ten-forty United States bonds that carried interest at the rate of
five per cent.
It was a singular coincidence, and a coincidence probably not due to
natural causes, that some five per cent bonds, having fifteen years to
run, should be at par, and that other five per cent bonds that might
run thirty years should fall below par in the same market. In the
three months from August to December, these ten-forties were quoted
as low as ninety-seven, or even for a time at ninety-six. Cooke became
anxious, if not alarmed, lest the rate should fall below ninety-five,
and consequently lest the subscribers should refuse to meet their
obligations. Early on the morning of the first Monday in December, I
received the information that the bonds were taken as soon as the
offices were open. I may mention in passing that Cooke & Co. paid for
the bonds as they were delivered, either in coin or in five-twenty
bonds.
As bonds were taken, and as payments were made, a difficulty appeared
which had been anticipated, but not in its fullness. The proceeds from
the sales of the five per cent bonds were pledged to the redemption of
the six per cent five-twenty bonds, reckoned at their par value.
It was provided by the statute that whenever five-twenty bonds were
called, a notice of ninety days should be given, when interest would
cease. Thus it happened that whenever a bond was called it was worth
par and interest to the end of the ninety days. Of the called bonds
some were in America, and the owners did not choose to present them in
London in exchange for five per cent bonds, nor for coin. Hence it
happened that the total proceeds of the five per cent bonds, about
twenty million dollars were paid in gold coin by Cooke & Co. This
coin was deposited in the Bank of England, but upon such terms as
were imposed by the governors:
(1) The deposits must be made in the name of William A. Richardson.
This was done, but a statement was made by Judge Richardson that the
deposit was the property of the United States.
(2) The gold was not to be taken out of the country. This stipulation
was in the line of our policy, which was to invest the entire sum in
five-twenty bonds, whenever they could be bought at par. The
opportunity came in a manner that was not anticipated. The documents
referred to are of historical value, and they are therefore inserted
as follows:
_(a)_ A declaration of trust by William A. Richardson, Assistant
Secretary of the Treasury, dated at London, December 28, 1871.
_(b)_ Letter of William A. Richardson, Assistant Secretary of the
Treasury, to John P. Bigelow, Chief of the Loan Division of the
Treasury, dated also at London, December 28, 1871.
_(c)_ Letter of George Forbes, Chief Cashier of the Bank of England,
to Judge Richardson, dated January 4, 1872.
_(d)_ Letter of Judge Richardson to George Lyall, Governor of the
Bank of England, dated January 15, 1872.
_(e)_ Reply to the same by George Forbes, Chief Cashier, dated
January 17, 1872.
_(f)_ William A. Richardson's report of January 25, 1872.
_(a)_ DECLARATION BY WILLIAM A. RICHARDSON
Whereas, I have this day deposited in my name, as Assistant Secretary
of the Treasury, U. S. A., in the Bank of England, two million five
hundred and fifty thousand pounds sterling, and shall probably
hereafter make further deposits on the same account:
Now I hereby declare that said amount and deposits, present and future,
are official and belong to the Government of the United States, and not
to me personally that the moneys so deposited are the proceeds of the
sale of five per cent bonds of the "Funded Loan"; that whatever money
I may at any time have in said Bank under said account, will be the
property of the United States Government, held by me officially as
Assistant Secretary of the Treasury, acting under orders from the
Secretary; that the same is, and will continue to be subject to the
draft, order, and control of the Secretary of the Treasury,
independently of, and superior to my authority, whenever he so elects,
and that upon his assuming control thereof, my power over the same
will wholly cease. In case of my decease before said account is
closed, the money on deposit will not belong to my estate, but to the
Government of the United States.
Witness my hand and seal,
(Signed) WILLIAM A. RICHARDSON,
_Assistant Secretary of the Treasury, U. S. A._
LONDON, ENGLAND, _December_ 28, 1871.
_Witnesses:_
JNO. P. BIGELOW, E. W. BOWEN, GEO. L. WARREN.
_(b)_ JUDGE RICHARDSON TO JOHN P. BIGELOW
41 LOMBARD ST., LONDON, ENGLAND,
_December_ 28, 1871.
_To_ JOHN P. BIGELOW, _Chief of the Loan Division, Secretary's Office,
Treasury Department, U. S. A._
I have this day deposited in the Bank of England, in my name as
Assistant Secretary of the Treasury, two million five hundred and fifty
thousand pounds sterling money, belonging to the United States,
received in payment of five per cent bonds of the Funded Loan delivered
here in London.
All money hereafter received for future delivery of bonds will be
deposited to the same account.
Herewith I hand you a declaration of trust signed by me declaring that
said account and moneys belong to the United States, and not to me
personally, also the Deposit Book and a book of blank checks numbered
from 35,101 to 35,150, both inclusive, received from said Bank, all of
which you will take into your custody and carefully keep in one of the
iron safes sent here from the department in the same manner as the
books are kept.
This money, and all the money deposited in said bank on the account
aforesaid, will be drawn and used only in accordance with the orders of
the Secretary of the Treasury to redeem or purchase five-twenty bonds
and matured coupons, or such other and further orders as he may make
in relation thereto.
When money is to be drawn to pay for bonds or coupons, it must be drawn
only by filling up a check from the book of checks above referred to,
and you will open an account in which you will enter the amount of all
deposits, the number and amount of each check drawn, specifying also to
whom the same is made payable and on what account it is drawn.
The checks will be filled up by Mr. Prentiss of the Register's Office,
who will place his check mark on the upper left corner, and will enter
the same in the book. You will then carefully examine the check, see
that it is correctly drawn for the amount actually payable for bonds or
coupons received and properly recorded, and you will, when found
correct, place your check mark on the right hand upper corner before
the same is signed by me. All checks will be signed by me with my
full name as Assistant Secretary of the Treasury, as this is signed.
(Signed) WILLIAM A. RICHARDSON,
_Assistant Secretary of the Treasury, U. S. A._
_(c)_ MR. FORBES TO JUDGE RICHARDSON
BANK OF ENGLAND, E. C.,
_January_ 4, 1872.
HON. W. A. RICHARDSON, _Assistant Secretary of the Treasury of the
United States_, 41, _Lombard Street_.
_Sir:_ To preclude any possible misunderstanding hereafter as to the
character of the drawing account opened in your name, I am instructed
by the Governors to communicate to you in writing that, in conformity
with the rule of the Bank, the account is considered a personal one;
that the Governors have admitted the words appended to your name merely
as an honorary designation; and the bank take no cognizance of, or
responsibility with reference to the real ownership, or intended
application of the sums deposited to the credit of the account.
I am, sir,
Your obedient servant,
(Signed) GEORGE FORBES,
_Chief Cashier_.
_(d)_ JUDGE RICHARDSON TO MR. LYALL
41 LOMBARD STREET, LONDON, ENGLAND,
_January_ 15, 1872.
GEORGE LYALL, ESQ.,
_Governor of the Bank of England._
_Dear Sir:_ Referring to the several conversations which I have had
with you, and with your principal cashier, Mr. Forbes, relative to the
manner and form of keeping the account which I desire to have in the
bank, I beg leave to renew in writing my request heretofore made
orally, that the account of money deposited by me may stand in the
name of Hon. George S. Boutwell, Secretary of the Treasury, U. S. A.,
and myself, Assistant Secretary, jointly and severally, so as to be
subject to a several draft of either, and of the survivor, in the
case of death of either one.
I suppose I must regard the letter of Mr. Forbes to me, dated January
4, 1872, and written under instructions from the Governors of the Bank
as expressing your final conclusion that the account in whatever form
it may be kept, must be considered a personal one.
You know my anxiety to have by deposits received by the Bank, and
entered in such way that in case of my death the balance may be drawn
at once by the Secretary of the Treasury or some other officer of the
Government, and although you are unwilling to regard the account as an
official one, I hope that on further consideration you will allow it
to be opened in the name of Mr. Boutwell and myself jointly and
severally as above stated. I am, sir,
Your obedient servant,
(Signed) WILLIAM A. RICHARDSON,
_Assistant Secretary of the United States Treasury Department._
_(e)_ MR. FORBES TO JUDGE RICHARDSON
BANK OF ENGLAND, E. C.
_January_ 17, 1872.
HON. W. A. RICHARDSON,
_Assistant Secretary of the Treasury
of the United States_, 41, _Lombard St._
_Sir:_ I am directed by the Governor to acknowledge the receipt of
your letter of the 15th inst., requesting that the account of money
deposited by you in the Bank may stand in the name of the Hon. George
S. Boutwell, Secretary of the Treasury, U. S. A., and yourself, the
Assistant Secretary, jointly and severally, so as to be subject to
the several draft of either, and of the survivor in case of death of
either one.
I am to inform you that the Bank is prepared to open an account in this
form, as a personal account; but it is essential that Mr. Boutwell
should join in the request and concur in the conditions proposed before
each party can in that case draw upon the account. I am, sir,
Your obedient servant,
(Signed) GEORGE FORBES,
_Chief Cashier._
_(f)_ JUDGE RICHARDSON'S REPORT
41, LOMBARD STREET, LONDON,
_January_ 25, 1872.
HON. GEORGE S. BOUTWELL,
_Secretary of the Treasury._
_Dear Sir:_ It is my purpose in this letter to give you an account of
the way in which I have kept the money arising from the sale of the
Funded Loan, and the manner in which it has been drawn from time to
time to pay for bonds purchased and redeemed.
Immediately after the first of December, 1871, the money began to
accumulate very rapidly. Up to the first of December no money whatever
had been received, all bonds delivered having been paid for by the
called bonds and coupons or secured by deposit of other bonds; but on
the second day of that month nearly two and a half millions of dollars
cash were paid to me; then on the fourth, nearly five millions of
dollars more; and on the fifth, above three millions, and so on in
different sums till the present time.
Of course it was wholly impracticable to receive, handle, count and
keep on hand such large amounts of gold coin, weighing between a ton
and three quarters and two tons to each million of dollars. At one
time my account showed more than sixteen millions of dollars on hand,
and to have withdrawn from circulation that amount of coin would have
produced a panic in the London market; and the risk in having it
hoarded in any place within my reach would have been immense,
especially as it would have soon been known where it was.
I ascertained that there would be some difficulty in keeping an
official Government account in the Bank of England, and I did not feel
authorized, or justified in my own judgment, in entrusting so much
money to any other banking institution in this city. I found, also,
that the Bank of England never issues certificates of deposit, as do
our banks in the United States. But it issues "post notes," which are
very nearly like its ordinary demand notes, but _payable to order,_ and
on seven days' time, thus differing only in the matter of time from
certificates of deposit. Availing myself of this custom of the Bank
of England, I put all the money into post notes, and locked them up in
one of the safes from which the bonds had been taken. This I regarded
as a safe method of keeping the funds, and I anticipated no further
difficulty.
But when the Bank made its next monthly or weekly return of its
condition, and published it in all of the newspapers as usual, the
attention of all the financial agents, bankers, and financial writers
of the daily money articles in the journals was immediately attracted
to the sudden increase of the "post notes" outstanding, and the
unusually large amount of them, so many times greater than had ever
been known before. They were immensely alarmed lest the notes should
come in for redemption in a few days, and the coin therefor should be
withdrawn from London and taken to a foreign country; and lest there
should be a panic on account thereof. Some of the financial writers
said they belonged to Germany, and that they represented coin which
must soon be transmitted to Berlin. The Bank officers themselves,
although they knew very well that these notes belonged to the United
States, were not less alarmed because they feared that I would
withdraw the money to send it to New York, which they knew would make
trouble in the London Exchange. Money, which for a short time before
had been at the high rate of interest, for this place, of five per
cent, had become abundant, and the people were demanding of the Bank
a reduction in the rate; but so timid were they about these post
notes that they did not change the rate until I took measures to
allay their fears. This I did because I thought it would be injurious
and prejudicial to the Funded Loan to have a panic in London, in which
the market price of the new loan would drop considerably below par
just at a time when its price and popularity were gradually rising,
and just as it was coming into great favor with a new class of
investors in England, the immensely rich but timid conservatives.
I determined to open a deposit account with the Bank of England, and in
doing so experienced the difficulties which I anticipated. I assured
the officers that the money was Government (U. S.) money, which I did
not intend, and was not instructed to take home with me; but which I
should use in London in redeeming bonds and coupons, and should leave
in the bank on deposit unless by the peculiarity of their rules, I
should be obliged to withdraw it. They objected to taking the money
as a Government deposit, or as an official deposit in my name, having
some vague idea that if they took it and opened an official Government
account they should be liable for the appropriation of the money unless
documents from the United States were filed with them taking away
that liability, but they could not tell me exactly what documents
they wanted nor from whom they must come. They did, however, agree to
open an account with me, and that was the best I could do. In signing
my name to their book, I added my official title, and when, some time
after, I came to drawing checks, I signed in the same way. This
brought from the officers a letter which I annex hereto, saying that
my deposit would be regarded as a private and personal one.
What I was most anxious to provide for was the power in some United
States officer to draw the money in case of my death (knowing the
uncertainty of life), without the delay, expense, and trouble which
must necessarily arise, if it stood wholly to my personal credit. I
asked the officers to allow it to stand in your name as Secretary and
mine as Assistant Secretary, jointly and severally, so as to be drawn
upon the several check of either, and by the survivor in case of the
death of either one. I suggested other arrangements which would have
had the same result, but they said their rules prevented their
agreeing to my requests, that they were conservative and did not like
to introduce anything new into their customs.
On the 15th day of January, 1872, I renewed my request in writing,
after having had several conversations with the officers on the
subject, and received an answer which, with the letter of request, is
hereto annexed.
In this, their most recent communication, they express a willingness
to enter the account in our joint names as I suggested, regarding it,
however, as a "personal account" and requiring that you should "join
in the request and concur in the conditions proposed before either
party can in that case draw upon the account."
As I must now almost daily draw from the account for money with which
to pay bonds, I cannot join your name therein until you have sent me
a written compliance with the conditions which they set forth, because
to do so would shut me out from the account altogether for several
weeks.
Besides, having no instruction from you on the subject, I don't know
that you would care to give written directions as to the deposit. I
know very well that, in case of my sudden decease, you would be glad
enough to find that you could at once avail yourself of the whole
amount of money here on deposit, and so I should have joined your name
as I have stated. Now you can do as you please. I have taken every
possible precaution within my power, and have no fear that the
arrangements are insufficient to protect the Government in any
contingency whatever. With the correspondence which has passed between
the officers of the Bank and myself, and our conversation together, the
account is sufficiently well known to them as a U. S. Government
deposit, and is fully enough stamped with that character, as I intended
it should be, however much they may ignore it now.
But for still greater caution, I made the written declaration of trust
on the very day of the first deposit, signed and sealed by me,
declaring the money and account as belonging to our Government, and not
to me, a copy of which is hereto annexed.
I also gave written instruction to Messrs. Bigelow and Prentiss to
draw all the checks, and how to draw them and keep an account thereof.
As I make all my purchases through Jay Cooke, McCullough & Co., every
check is in fact payable to that house, so that the account is easily
kept, and the transactions cannot be mingled with others, for there
are no others. I annex a copy of these instructions.
This, I believe, will give you a pretty correct idea of the
difficulties which have been presented to me in the matter of taking,
keeping, and paying out the money arising from the sale of the bonds,
and the manner in which I have met them.
I may add that when the officers of the Bank were satisfied that I was
not to withdraw the money and take it to New York, they reduced the
rate of interest and there has been an easy market ever since.
There are now on deposit more than twelve million dollars; but I hope
it will be reduced very fast next month. Had you not sent over the
last ten million of bonds, we should have been able to close up very
soon. I hope now that you will make another call of twenty million at
least, because I think it would enable us to purchase more rapidly.
I annex:
(1) Copy of declaration of trust.
(2) Copy of instructions for drawing checks.
(3) Copy of letter from Cashier of Bank of England, stating that the
account would be considered personal.
(4) Copy of my letter to the Governor of the Bank, asking that your
name might be joined.
(5) Copy of reply to last mentioned letter.
I am, very respectfully,
Your obedient servant,
(Signed) WILLIAM A. RICHARDSON.
When Cooke & Co. had completed their undertaking, the deposits in the
Bank of England exceeded fifteen million dollars, and for three months
they were for the most part unavailable, as the five-twenty bonds which
had not matured under the calls that had been made were above par in
the market. It was a condition of the loan that the five-twenty bonds
redeemed should equal the 5 per cent bonds that had been issued, both
issued to be reckoned at their par value.
In the month of April, 1872, the Commissioners who had been designated
under the Treaty of Washington of 1871 to ascertain and determine the
character and magnitude of the claims that had been preferred by the
United States against Great Britain, growing out of the depredations
committed by the "Alabama" and her associate cruisers, were about to
meet at Geneva for the discharge of their duties.
The administration had appointed the Hon. J. C. Bancroft Davis, the
most accomplished diplomatist of the country, as the agent of the
United States, and the preparation of "the Case of the United States"
was placed in his hands.
The British Ministry discovered--or they fancied that there was
concealed in covert language--a claim for damages, known as
"consequential or indirect damages"--in other words, a claim to
compensation for the value of American shipping that had been driven
from the ocean and made worthless through fear of the cruisers that had
been fitted out in British ports.
This claim, in the extreme form in which it had been presented by Mr.
Sumner, had been relinquished by the Administration, and a present
reading of "the Case of the United States" may not justify the
construction that was put upon it by the British Ministry.
Nevertheless, the Administration received notice that Great Britain
would not be represented at the Geneva Conference.
The subject was considered by the President and Cabinet on three
consecutive days at called sessions. At the final meeting I handed
a memorandum to the President, which he passed to the Secretary of
State. The memorandum was not read to the Cabinet.
Mr. Adams, the Commissioner for the United States, had not then left
the country. By a despatch from the Secretary of State Mr. Adams
was asked to meet me at the Parker House in Boston, on the second day
after the day of the date of the despatch.
What occurred at the meeting may be best given through an extract from
the diary of Mr. Adams, which has been placed in my hands by Mr.
Charles Francis Adams, Jr., with the privilege of its full and free
use by me.
The first entry is under date of Saturday, April 20, 1872, and is in
these words: "Charles brought me a telegram from Governor Fish,
desiring me to meet Mr. Boutwell, who will be at the Parker House
at eleven o'clock on Monday." The second entry is under date of
"Monday, 22d of April."
"At eleven o'clock called on Mr. Boutwell, the Secretary of the
Treasury, at Parker's Hotel, according to agreement. Found him
alone in his minute bedroom. He soon opened his subject--handed over
to me a packet from Governor Fish, and said that it was the desire of
the Government, it I could find it consistent with what they
understood to be my views of the question of indirect damages, that I
would make such intimation of them to persons of authority in London
as might relieve them of the difficulty which had been occasioned by
them. I told them of my conversation held with the Marquis of Ripon,
in which I had assumed the heavy responsibility of assuring him that
the Government would not press them. I was glad now to find that I
had not been mistaken. I should cheerfully do all in my power to
confirm the impressions consistently with my own position."
Thus, through Mr. Adams, the claim for "indirect damages" was
relinquished. When the fact of the disturbed relations between the
United States and Great Britain became public there was a panic in
the London stock market, and in the brief period of eight and forty
hours our deposit of twelve million or more in the Bank of England was
converted into five-twenty United States 6 per cent bonds, purchased
at par.
In my annual report for December, 1872, I was able to make this statement:
"Since my last annual report the business of negotiating two hundred
million of 5 per cent bonds, and the redemption of two hundred million
6 per cent five-twenty bonds has been completed and the accounts have
been settled by the accounting officers of the Treasury.
"Further negotiations of 5 per cent bonds can now be made on the basis
of the former negotiation."
XXXVII
GENERAL GRANT'S ADMINISTRATION
The greatness of General Grant in war, in civil affairs, and in
personal qualities which at once excite our admiration and deserve our
commendation, was not fully appreciated by the generation to which he
belonged, nor can it be appreciated by the generations that can know
of him only as his life and character may appear upon the written
record. He had weaknesses, and of some of them I may speak; but they
do not qualify in any essential manner his claim to greatness in the
particulars named. He was not fortunate in the circumstances incident
to the appointment of his Cabinet. The appointment of Mr. Washburne
as Secretary of State for the brief period of one or two weeks was not
a wise opening of the administration, if the arrangement was designed,
and was a misfortune, if the brief term was due to events not
anticipated. The selection of Mr. Fish compensated, and more than
compensated, for the errors which preceded his appointment. The
country can never expect an administration of the affairs of the
Department of State more worthy of approval and eulogy than the
administration of Mr. Fish. Apparently we were then on the verge of
war with Great Britain, and demands were made in very responsible
quarters which offered no alternative but war. The treaty of 1871,
which was the outcome of Mr. Fish's diplomacy, re-established our
relations of friendship with Great Britain, and the treaty was then
accepted as a step in the direction of general peace.
In the month of February, 1869, I received an invitation from General
Grant to call upon him on an evening named and at an hour specified.
At the interview General Grant asked me to take the office of Secretary
of the Interior. As reasons for declining the place, I said that my
duties and position in the House were agreeable to me and that my
services there might be as valuable to the Administration as my
services in the Cabinet. General Grant then said that he intended to
give a place to Massachusetts, and it might be the Secretary of the
Interior or the Attorney-Generalship. He then asked for my advice as
to persons, and said that if he named an Attorney-General from
Massachusetts, he had in mind Governor Clifford, whom he had met.
Governor Clifford was my personal friend, he had been the Attorney-
General of the State during my term as Governor, he was a gentleman of
great urbanity of manner, a well-equipped lawyer, and as an advocate he
had secured and maintained a good standing in the profession and through
many years. He had come into the Republican Party from the Webster
wing of the Whig Party. To me he was a conservative, and I was
apprehensive that his views upon questions arising, or that might
arise, from our plan of reconstruction might not be in harmony with the
policy of the party. Upon this ground, which I stated to General
Grant, I advised against his appointment. I named Judge Hoar for
Attorney-General and Governor Claflin for the Interior Department. I
wrote the full address of Judge Hoar upon a card, which I gave to
General Grant. Judge Hoar was nominated and confirmed.
At the same time, Alexander T. Stewart, of New York, was nominated
and confirmed as Secretary of the Treasury. It was soon discovered
that Mr. Stewart, being an importer, was ineligible for the office.
Mr. Conkling said there were nine statutes in his way. A more
effectual bar was in the reason on which the statutes rested, namely,
that no man should be put in a situation to be a judge in his own
cause. The President made a vain effort to secure legislation for the
removal of the bar. Next, Judge Hilton, then Mr. Stewart's attorney,
submitted a deed of trust by which Mr. Stewart relinquished his
interest in the business during his term of office. The President
submitted that paper to Chief Justice Cartter of the Supreme Court of
the District of Columbia. The Chief Justice gave a brief, adverse,
oral opinion, and in language not quotable upon a printed page.
We have no means of forming an opinion of Mr. Stewart's capacity for
administrative work, and I do not indulge in any conjectures. His
nomination was acceptable to the leading business interests of the
country, and in the city of New York it was supported generally. He
was a successful man of business and an accumulator of wealth, and at
that time General Grant placed a high estimate upon the presence of
talents by which men acquire wealth.
Following these events, there were early indications that Mr. Stewart's
interest in the President had been diminished, and gradually he took
on a dislike to me. When I knew of his nomination, or when I knew it
was to be made, I met him in Washington and assured him of my
disposition to give my support to his administration. On two occasions
when I was in New York I made calls of civility upon him, but, as he
made no recognition in return, my efforts in that direction came to an
end.
At a dinner given by merchants and bankers in the early part of
September, 1869, at which I was a guest, Mr. Stewart made a speech in
which he criticized my administration of the Treasury. In the canvass
of 1872 the rumor went abroad that Mr. Stewart had given $25,000 to
the Greeley campaign fund. In the month of October of that year, the
twenty-eighth day, perhaps, I spoke at the Cooper Union. Upon my
arrival in New York, I received a call from a friend who came with a
message from Mr. Stewart. Mr. Stewart would not be at the meeting,
although except for the false rumor in regard to his subscription to
the Greeley fund, he should have taken pleasure in being present. As
General Grant was to be elected, his attendance at the meeting might
be treated by the public as an attempt to curry favor with General
Grant and the incoming Administration.
As I was passing to the hall, a paper was placed into my hands by a
person who gave no other means of recognizing his presence. When I
reached the hall and opened the paper, I found that it was a summons
to appear as a defendant in an action brought by a man named Galvin,
who claimed damages in the sum of $3,000,000. At the close of the
meeting and when the fact became known one gentleman said to me: "I
do not see how you could have spoken after such a summons."
I said in reply: "If the suit had been for $3,000 only, it might have
given me some uneasiness, as a recovery would have involved payment.
A judgment of $3,000,000 implies impossibility of payment."
I had no knowledge of Galvin, but his letters of advice were found on
the files of the Treasury. Even after the suit, I did not examine them
for the purpose of forming an opinion of their value or want of value.
Galvin alleged in his declaration that he had furnished the financial
policy that I had adopted, that it had benefitted the country to the
amount of $300,000,000 and more, and that a claim of $3,000,000 was a
moderate claim. Under the statute, the Department of Justice assumed
the defence. The case lingered, Galvin died, and the case followed.
At the election of 1872, I voted at Groton in the morning, and in the
afternoon I went to New York, to find that General Grant had been
re-elected by a sufficient majority. On the morning of the next day, I
left the hotel with time for a call upon General Dix, who had been
elected Governor, and for a call upon Thurlow Weed. General Dix was
not at home. Notwithstanding the criticisms of Thurlow Weed as a
manager of political affairs in the State of New York and in the
country, I had reasons for regarding him with favor, although I had
never favored the aspirations of Mr. Seward, his chief. When I was
organizing the Internal Revenue Office in 1862-1863, Mr. Weed gave me
information in regard to candidates for office in the State of New
York, including their relations to the factions that existed--usually
Seward and anti-Seward--and with as much fairness as he could have
commanded if he had had no relation to either faction.
As I had time remaining at the end of my call upon Mr. Weed, and as I
had in mind Mr. Stewart's message at the Cooper Union meeting, I drove
to his down-town store, where I found him. He received me with
cordiality, but in respect to his health he seemed to be already a
doomed man. He was anxious chiefly to give me an opportunity to
comprehend the nature and magnitude of his business. As I was about
to leave, he took hold of my coat button and said: "When you see the
President, you give my love to him, and say to him that I am for him
and that I always have been for him." Still holding me by the button,
he said: "Who buys the carpets for the Treasury?"