The Financial Lesson of the Civil War--Approaching Bankruptcy of
the Government near the Close of the War--The Legal-Tender Notes
an Injury to the Public Credit--A Vicious Clause in the Constitution
--No Prejudice in the Army Against Officers Not Educated at West
Point--The Need of a Law Reforming the Relations Between the
President and the Commander of the Army--Devotion to the Chosen
Leader in Times of Public Peril.
Another great lesson taught by our Civil War, perhaps even more
important than any other, is the financial lesson. An established
government which has a place to maintain among the commercial
nations of the world must maintain its credit. It must purchase
its supplies and munitions of war and pay its troops in _money_.
In a great and prolonged war it is not possible for the people to
contribute all the means required at the time. The amount of
taxation would be greater than any people could bear. Hence the
government must borrow the necessary money. This cannot be done
without national credit. If credit declines, rates of interest
and discount on securities increase until the national debt reaches
its limit and no more money can be borrowed. In short, the nation
becomes bankrupt. This was the condition of the United States
before the close of the late Civil War. With a million of men on
the muster- and pay-rolls, including several great armies of veteran
troops in the field, while the Confederate army was reduced to a
very small fraction of that number, the Union cause was on the very
verge of failure, because the government could no longer raise
money to pay its troops, purchase supplies, or make any further
use of its magnificent armies. This astounding fact was confided
to the generals of the army in the winter of 1864-5 by the Secretary
of War, who then said the rebellion must be suppressed in the coming
spring campaign, or the effort abandoned, because the resources of
the treasury were exhausted. In corroboration of my recollection
of this subject, I now find the following in a private letter
written by me at that time:
"Washington, February 3, 1865.
"There is much excitement here over the peace rumors, and it would
seem there must be good foundation for it. The President has
actually gone to Fort Monroe to meet the rebel commissioners. I
do not, however, indulge much faith in the result of these
negotiations. We will probably have to beat Lee's army before we
can have peace. There is much commotion among politicians, and
there will be a storm of some kind on the political sea if peace
is made now. On the other hand, if the war continues long, the
treasury will most likely become bankrupt. It has got far behind
already. There is no money to pay the army, and no one can tell
where it is to come from. I have succeeded in getting enough to
pay my troops, which was obtained by special arrangement with the
treasury, and as a special reward for their distinguished services.
No other troops in the country have been paid for five months, and
there is no money to pay them."
The reasons for the deplorable condition of the United States
treasury are understood by all financiers. Yet a very large
proportion of the voting population do not appear to understand
it, or do not know the fact. People engaged in an effort to throw
off their dependency or political connection, and establish their
own independence, or a country defending itself against a powerful
adversary, may be compelled to resort to forced loans, in the
absence of national credit, to carry on the war. But in a great
country with unlimited resources, like the United States, resort
to forced loans would seem to be entirely unnecessary. However
this may be, and whatever may be the necessity in any case, a forced
loan, _without interest_, is simple robbery to the extent of unpaid
interest, even if the principal is paid. And a robber cannot expect
to have much credit left after his character becomes known to the
world.
THE FINANCIAL LESSON OF THE CIVIL WAR
The issue of legal-tender notes during the Civil War was of this
character. The country received a deadly blow to its financial
credit when that policy was adopted. Nations or peoples cannot,
any more than individuals, violate the established rules of honest
dealing without suffering the just penalty. If money is needed
beyond current revenues, there is no other honest way to get it
but by borrowing it at such rate of interest and upon such security
as can be agreed upon. Besides, to leave any room for doubt or
cavil about the conditions of a loan, or about the standard of
money in which principal and interest are to be paid, necessarily
arouses suspicion of bad faith, and hence destroys or seriously
injures national credit. It is now perfectly well known to all
who have taken the pains to study the subject that this false and
practically dishonest policy, however innocently it may have been
conceived, cost the United States many hundreds of millions of
dollars, and came very near bringing disaster upon the Union cause.
One of the most astounding spectacles ever presented in the history
of the world was that presented by this country. It went into the
war practically free from debt, and come out of it with a debt
which seemed very large, to be sure, and was in fact nearly twice
as large as it ought to have been, yet so small in comparison with
the country's resources that it could be paid off in a few years.
It went into the war practically without an army, and came out of
the war with its military strength not even yet fully developed.
It had more than a million of men, nearly all veterans, in the
ranks, and could have raised a million more, if necessary, without
seriously interfering with the industries of the country. Yet in
four short years a false financial policy destroyed the national
credit, brought its treasury to bankruptcy, and thus reduced a
great people to a condition in which they could no longer make any
use of their enormous military strength! This lesson ought to be
taught in every school-house in the United States, until every
child is made to understand that there is no such thing in the
world as paper money; that the only real money in the world is
standard gold and silver; that paper can be used in the place of
money only when it represents the real gold or silver in which it
can at any time be redeemed; that even gold and silver can be used
together as standard money only under the real intrinsic values as
recognized by all the world; that any attempt to force either gold
or silver into unlimited circulation, under any arbitrary ratio
different from their real ratio, is not honest; and that dishonesty
is the worst of all financial policies, as well as the most unworthy
of a civilized people.
The laws of finance, like the laws of military strategy, were never
invented by anybody, any more than the law of gravitation or the
law of electrical attraction and repulsion. They have all been
learned by the experience and study of mankind since the dawn of
civilization. All alike are parts of the great laws of nature.
They should be carefully and diligently studied and taught in all
the schools, until the rising generation understand that all the
affairs of mankind are governed by the uniform laws established by
the great Creator and Ruler of the universe; and that self-appointed
"leaders of the people" who would entice them to follow their own
inventions cannot save them from the penalties which naturally
follow the violation of any of the laws of the universe. In short,
education,--wisely directed education,--both in science and in
morals, is the one indispensable foundation of good popular
government. The relative importance to be attached to the many
branches of popular education demands the careful consideration of
all educators, and still more the _purity_ of the doctrines taught
in all the schools. There is good reason for believe that this
last duty has been much neglected, especially in respect to financial
theories.
A VICIOUS CLAUSE IN THE CONSTITUTION
In this connection, it is worthy of serious consideration whether
one of the teachings of a corrupt age has not found its way into
that almost sacred writing, the Constitution of the United States.
What right has Congress, or any other department of government, or
any government on earth, to "regulate the value" of money, any more
than that of wheat or corn? Is not the real value of money, like
that of everything else, regulated by the general law of supply
and demand throughout the world? Ought not the value of money,
and what shall constitute money, be left, without governmental
interference, to be determined by the common consent of mankind?
Must not commercial intercourse among all the countries of the
world necessarily regulate all this, in spite of the decrees of
government? Ought not the function of government in this regard
to be limited to the coining of money and stamping on its face its
real value--that is, in effect, the amount of gold or silver it
actually contains? In short, is not the attempt of government to
make a certain weight of one thing equal to a certain weight of
another thing a plain violation of a natural law, and hence
necessarily vicious? Is not all our serious monetary controversy
in this country the result of vicious teaching to be found in our
own Constitution, inherited from a corrupt age, when the fiat of
a prince was thought sufficient to make a coin worth more than it
was in fact? Where did so many of the people of the United States
learn the heretical doctrine of fiat money? Is it not taught in
the Constitution of the United States? It so seems to me, and
hence it seems to me that the people should at once strike at the
very root of the evil, and eradicate from their fundamental law
the theory that the value of anything can be regulated by arbitrary
fiat, in violation of natural law. Let the people restore to
themselves their inalienable right to liberty of trade, so that
they can deal with each other in gold, or in silver, or in cotton,
or in corn, as they please, and pay in what they have agreed to
pay in, without impertinent interference from legislators or anybody
else. Then, and only then, can the monetary system of this country
be placed on a sound foundation, and all the gold or silver of our
mines, as well as all the other products of human industry, and
the people who produce or own them, become truly free.
Another important lesson taught by our experience since the Civil
War, no less than at the commencement of that period, is that prompt
and vigorous action, in accordance with established military methods,
whenever military force must be employed, necessarily presupposes
such knowledge of the laws on the part of department and army
commanders as will justify the President in intrusting them with
discretionary authority to act without specific orders in each
case. Such emergencies as that of 1894, for example, give striking
proof of the necessity for the higher education to fit men for high
command in the army. It is not mainly a question of _military_
education. Early deficiencies in that respect may soon be overcome
by the constant practice afforded by active service. The indispensable
necessity is for _education in general_, and especially in those
things which army officers are not habitually required to know,
but which are of vital importance to those who must, in great
emergencies, by intrusted with great responsibilities and with
discretionary authority. That very emergency of 1894 gave examples
of officers, not educated at West Point nor at any other military
school, distinguished for gallant and efficient military service
in the field, who proved to be perfectly familiar with the principles
of constitutional and military law which ought to govern the action
of troops under circumstances like those of 1894; while others,
distinguished as commanders in the field, seemed strangely ignorant
of both constitutional and military laws. It is also worthy of
remark that such necessary legal education did not appear to be
universal among the West Point graduates at that time. Some men
who are not graduates of West Point are much better qualified for
high command than some who are.
OFFICERS NOT EDUCATED AT WEST POINT
Much has been said about a supposed prejudice in the army against
officers who have not enjoyed the advantages of education at the
military academy. I aver, emphatically that I have never seen any
evidence of any such feeling, and I do not believe it has ever
existed to any appreciable extent. On the contrary, the general
feeling has been that of just and generous consideration for officers
who were at first laboring under that disadvantage. Some of the
most popular men in the army have been among those appointed from
civil life or from the volunteers. General Alfred H. Terry was a
fair example of this. He was a ripe scholar, a thorough lawyer,
a very laborious student of the art and science of war,--more so
than most West Point graduates,--and so modest that he hesitated
to accept the appointment of brigadier-general in the regular army,
although it had been given for so distinguished a service as the
capture of Fort Fisher, on the ground that older officers who had
devoted their whole lives to the military service were better
entitled to it.
The general feeling in the army has no special reference to West
Point. It is a feeling, and a very strong one, in favor of
_education_, of qualification in all respects for the service which
may be required, and of that dignified self-respect and becoming
modesty which prevent an officer from desiring a position for
which he is not fully qualified, and, above all, that manly delicacy
which makes it impossible for an officer to _seek_ a position which
ought to be left to _seek him_. As well might a maiden ask a man
to marry her, or get some one else to do it for her, as a soldier
to seek in the same way a position on the staff of a general or of
the President.
This is especially true in respect to the position of the "commanding
general," or general-in-chief, of the army. The President being,
by the Constitution, commander-in-chief of the army and navy, no
law of Congress, even with his own consent, could relieve him from
that responsibility. There is no law, and there could not
constitutionally be any law passed, establishing any such office
as that of commanding general of the army, and defining the duties
and authority attached to it. Such a law would be a clear encroachment
upon the constitutional prerogatives of the President. The only
constitutional relation in which the so-called "commanding general,"
or "general-in-chief," of the army can occupy is that usually called
"chief of staff"--the chief military adviser and executive officer
of the commander-in-chief. He cannot exercise any command whatever
independently of the President, and the latter must of necessity
define and limit his duties. No other authority can possibly do
it. In this regard the President's power and discretion are limited
only by his constitutional obligation to exercise the chief command
himself. He can give his general-in-chief as much authority as he
pleases consistently with that obligation. Hence it is entirely
in the discretion of the President to define and fix the relations
which should exist between the general and the Secretary of War--
a very difficult thing to do, no doubt,--at least one which seems
never to have been satisfactorily done by any President. The
Secretary and the general appear to have been left to arrange that
as best they could, or to leave it unarranged. However this may
be, the relations of the general to the President are, or ought to
be, of the most confidential character, no less so than those of
any member of the cabinet. And the necessity of that confidential
relation is far more important than in the case of any cabinet
officer, for the reason that it is brought into prominence in times
of great emergency, when questions of peace and war are involved,
and when the President is required to act upon momentous military
operations about which he cannot, in general, have much knowledge,
and hence must trust to the ability, judgment, discretion, and
scientific military knowledge of the general-in-chief. In such
cases the general becomes, as it were, the "keeper of the President's
conscience" in respect to the most momentous questions he can ever
have to decide.
THE PRESIDENT AND THE COMMANDER OF THE ARMY
It is necessarily extremely embarrassing to the President to be
compelled to place or retain in that close, confidential, and
important relation to himself an officer in whom he has not entire
confidence in all respects; or else, as the only alternative, by
selecting another, to cast a reflection upon the senior in rank,
whose soldierly character and services may have entitled him to
the highest distinction. The situation is no less embarrassing,
under the existing law and custom, to the officer who may at any
time happen to be the senior in commission. He may be compelled
to submit to the humiliation of being superseded by some junior in
rank, or else to occupy a confidential position of great importance
in the absence of that confidence which is necessary to make such
a position even tolerable to himself or to the army, which must
inevitably be deprived of his legitimate influence for good if he
does not enjoy the confidence of the President and the Secretary
of War. There can be no relief from this dilemma, so embarrassing
to both the President and the general, except by appropriate
legislation.
The most important military reform now required in this country is
a law authorizing the President, "by and with the advice and consent
of the Senate," to appoint, not a commander of the army, but a
"general-in-chief," or "chief of staff," to aid him (the commander-
in-chief) in the discharge of his military duties. The President
ought to have the power to retire such officer at any time, with
due regard for his rank and service, and to appoint another in the
same manner. The title "commanding general of the army" is
inappropriate and misleading. There never has been any such office
in this country, except that created especially for General Grant
in 1864. The old title of "general-in-chief," given to the officer
at the head of the army before the Civil War, is the appropriate
title in this country. That officer is, in fact, the chief general,
but does not command the army.
If it be considered the best policy to reserve the two highest
military grades,--those of general and lieutenant-general,--to be
conferred only by special act of Congress for distinguished services,
appropriate distinction may be given to the officer at the head of
the army at any time by the title of general-in-chief, with such
additional compensation as is necessary to defray his living expenses
in Washington. Neither the rank nor the pay of an officer in a
subordinate position can possibly be regarded as appropriate to
one in a higher grade of duty. Every grade of public service should
have an officer of appropriate rank and compensation, certainly
the highest in any department even more than any other. The
government of this country has not been duly regardful even of its
own dignity and self-respect, in denying to its chief military
officer appropriate rank, and in requiring him to expend all the
savings of a lifetime to maintain his official position for a few
years at the seat of government.
THE PRESIDENT AND THE COMMANDER OF THE ARMY
Not by any means the least benefit to be expected from a law
authorizing each President to select his chief general, would be
the education thus given to officers of the army in respect to the
relation in which they stand to the commander-in-chief, and in
respect to the reasonable limits of military ambition in a republic
where the President is and must be commander-in-chief, whether he
is a man of military education and experience or not.
So strongly were those views impressed upon my mind by my studies
of the subject, made at the request of General Grant and General
Sherman many years ago, that when I became the senior officer of
the army I refrained scrupulously from suggesting to the President
or the Secretary of War or anybody else that I had any expectation
of being assigned to the command, or regarded myself as having any
claim to it. It seemed to me solely a question for the President
himself to decide whether or not he wanted me as his chief military
adviser and assistant, and it would have been impossible for me to
consent that anybody should try to influence his decision in my
favor.
The duties of patriotic citizenship in time of war have not always
been duly appreciated, even by those most zealous in their loyalty
to the government. I would not detract one iota from the honor
and fame of the wise, brave, and patriotic statesmen who upheld
the hands of the great Lincoln in his struggle against the avowed
foes of the Union, and his still harder struggle with professed
patriots who wielded national influence only for evil, though under
the guise of friends of the Union. But if many thousands of those
zealous and "truly loyal Union men," many of whom I knew, could
have managed in some way to get into the ranks and get killed in
battle in the first year, I firmly believe the Union would have
been restored much sooner than it was.
When the people have chosen their chief to lead them through the
fierce storms of civil war, he alone must guide the ship, or else
all must perish. After the storm has burst upon them it is too
late to select another pilot. Then partizan opposition, impairing
the popular strength and confidence of the leader and embarrassing
his military operations or public policy, becomes treason, and a
far more dangerous treason than any which the open sympathizers
with the public enemy could possibly commit. Those powerful leaders
of public opinion who hounded Lincoln on to measures which his far
greater wisdom and his supreme sense of responsibility told him
were unwise, deserved to be hanged, or at least to be imprisoned
until the war was over. That some of them died in shame and disgrace
upon the failure of their own selfish schemes for personal or
political aggrandizement, was only a mild measure of righteous
retribution.
In the calm atmosphere of these later years I still think that the
course of the young soldier who had not learned any of the arts or
of the ambitions of partizan leaders, but whose only motto was "the
President's policy is my policy; his orders my rule of action,"
was much more in accord with the plain duty of every citizen of
the republic. I can find in my mind or heart only contempt for
that theory of patriotic duty which sends one citizen to the front,
freely to give his life, without question, to enforce the orders
of the chosen leader of the nation, and permits another to stay at
home and bend all his efforts toward forcing the substitution of
his own egotistical views upon the country, in lieu of those which
the great leader has decided to be most wise.
Let the names of the great war governors, and of the statesmen in
Congress and cabinet who gave all of their strength to the support
of the measures of Lincoln, stand by the side of the foremost
commanders of armies on the roll of national honor. Let the others
be covered by the mantle of charity, and quietly pass into oblivion.