POLICY OF THE HAYES ADMINISTRATION.
Reception at my Home in Mansfield--Given by Friends Irrespective
of Party--Introduced by My Old Friend and Partner, Henry C. Hedges
--I Reply by Giving a Résumé of the Contests in South Carolina and
Louisiana to Decide Who Was Governor--Positions Taken by Presidents
Grant and Hayes in These Contests--My Plans to Secure the Resumption
of Specie Payments--Effects of a Depreciated Currency--Duties of
the Secretary of the Treasury--Two Modes of Resuming--My Mansfield
Speech Printed Throughout the Country and in England--Letters to
Stanley Matthews and General Robinson--Our Defeat in Ohio--An Extra
Session of Congress--Bills Introduced to Repeal the Act Providing
for the Resumption of Specie Payments--They All Fail of Passage--
Popular Subscription of Bonds All Paid For.
About the 10th of August I made my usual visit to my home at
Mansfield. Soon after my arrival I received the following invitation,
signed by a great number of my neighbors and friends, without
respect to party, expressing a desire to tender me a reception:
"Hon. John Sherman.
"Dear Sir:--The undersigned, your townsmen, and fellow-citizens of
Richland county, desire to give you some manifestation of the very
high regard in which we hold your public services. We are glad to
know that you are permitted to again be at your own home, and for
a week or two mingle with us in all the unrestrained freedom of
friends and townsmen.
"Financial and other public questions are, however, of importance
to us always, and especially now. We recognize your great ability
and long experience, and cannot but think that an expression of
your views on these questions will be very highly prized by the
people of Ohio, irrespective of party. We therefore desire, with
your sanction, on some day during the next week, to give you a
hearty welcome to your old home, and shall be glad to have you, on
the occasion, give your views on the public questions, now of such
vast importance to all. With our kindest regards, we are,
"Your friends, etc., etc."
I replied as follows:
"Mansfield, O., August 13, 1877.
"Gentlemen:--I received with much pleasure your kindly letter of
the 10th inst., signed by so many of my old friends and neighbors
of Mansfield, and assure you of my high appreciation of your generous
words of courtesy and regard.
"I always return with satisfaction to my home on the western slope
of our little city, and always enjoy the fresh air and picturesque
country around us, but, more than all, the cordial greetings of
old friends, with whom I have been acquainted since boyhood. It
will give me much pleasure, at any time or place, to meet you, and
to speak to you on current public questions, and I venture to name
next Friday evening.
"Very truly yours,
"John Sherman."
The gathering was one of the largest that had come together in
Mansfield for years. The evening was delightful, cool and balmy,
a bright moonlight adding attraction to the scene. A stand decorated
with flags had been erected near the center of the park, with seats
in front, and lights gleamed on either hand. I was introduced to
the audience by my old friend and partner, Henry C. Hedges, whose
remarks were too flattering for me to insert. In closing he said:
"Regarding you as our friend, our neighbor, our townsman, we are
glad and rejoice. We welcome you home, though your stay may be
only a few days, and we sincerely trust that, rested by your stay,
you may go back to your work reinvigorated, and that frequently we
may have the pleasure of your temporary visits, and in the future,
when your labors are finished, among us you may spend your old age,
honored and happy."
As my speech expressed my views upon important questions of that
time, I think it well to embody extracts from it as part of the
history of the then recent events, and my anticipations for the
future:
"The kindly words of welcome uttered by my friend and associate of
many years move me beyond expression. They recall to me the scene
of the early time when I came to Mansfield, then a scattered hamlet
of about 1,100 inhabitants, without pavements and without any of
the modern conveniences of cities and towns. As Mr. Hedges has
told you, very many of those I then met here are dead and gone.
I was a boy then. A generation has passed away, and the sons of
those I met then as citizens of Richland county now fill places of
trust and responsibility. I have every reason in the world for
being strongly attached to this town of Mansfield. You have always
been kind to me. Here I studied law, here I practiced my profession
for several years, here I married my wife, a native of your town,
here I have lived ever since, and when this mortal coil shall be
shuffled off, here, probably, will my body rest with your fathers.
But pardon me, fellow-citizens, if, under the kinds words of welcome
of your spokesman, my old and honored friends, Mr. Hedges, I had
forgotten that we are not here merely to exchange courtesies, but
to discuss grave matters of far more importance than the life or
memories of an individual.
"In doing so I wish it distinctly understood that I speak for myself
alone, as a citizen of Ohio, to you my fellow-citizens and my
neighbors, to whom I am under the highest obligations of gratitude
and duty.
"The President authorized me to say one thing, and one thing only,
for him, and in his name, and that is that all reports that impute
to him any participation whatever in the nomination of candidates
on your state ticket, or any desire or purpose to influence in any
way the senatorial contest in Ohio, are utterly groundless.
"These are your matters, and I can assure you for him, that he does
not and will not, interpose in any such contest between political
friends.
"You all know that I am now, and have been, warmly attached to the
Republican party. I believe in its principles and honor its work.
With my strong convictions I could not conceal my partisan bias,
or my earnest hope for the success of the Republican party, but
the subjects of which I intend to speak to you to-night will not
lead me to say much of former political struggles, or to fight our
old battles over again, but chiefly to discuss the actual administrative
questions of the day as they have arisen since the 4th of March
last, and in all of which you are alike interested, whether you
may call yourselves Republicans or Democrats. As to those questions
I wish fairly to appeal to the candor and good judgment of honest
men of both parties, only asking for the administration of President
Hayes that considerate charity of judgment which must be extended
to all human agents.
"When Mr. Hayes was inaugurated as President he found thirty-six
states in the full and uncontested exercise of all the powers of
states in the Union. In two states only there were contests as to
who was governor. Both contests had existed from January to March,
1877, while General Grant was President.
"In South Carolina Governor Chamberlain claimed to have been elected
on the Republican ticket, and General Hampton on the Democratic
ticket. The President is not made the judge of who is elected
governor of a state, and an attempt to exercise such a power would
be a plain act of usurpation. The constitution of South Carolina
is much like that of Ohio. The count of the vote was to be made
by the general assembly of the state. Unfortunately for Chamberlain
a controlling question in the contest had been decided against him
by a Republican court, and he was only kept in possession of the
state house by the actual presence of United States troops in the
building. He had appealed again and again to President Grant to
recognize him as governor and give him the aid of Federal troops
in the enforcement of his claim, which General Grant had refused,
seeking only to preserve the public peace.
"When President Hayes was inaugurated both contestants were called
to Washington and both were patiently heard and the questions
presented were patiently and carefully examined. The President
held that a case was not presented in which, under the constitution
and the laws, he was justified in using the army of the United
States in deciding a purely local election contest. The soldiers
and bayonets of the United States were then withdrawn from the
state house--not from the state, nor the capital of the state--but
from the building in which the legislature, that alone could lawfully
decide this contest, must meet. This was all that was done by the
President, and Governor Chamberlain, without further contesting
his claim, abandoned it and left the state.
"I say to you now that, strongly as I desired the success of Governor
Chamberlain and the Republican party in South Carolina, the President
had not a shadow of right to interpose the power of the army in
this contest, and his attempt to do so would have been rash and
abortive as well as without legal right.
"The case of Louisiana was far more difficult. The local returning
officers of that state had, after a full examination, certified to
the election of the legislature, showing a Republican majority in
both houses. This had been done by excluding from their return
the votes of certain parishes and counties wherein intimidation,
violence and fraud had prevailed to an extent sufficient to change
the result of the election. I was present, at the request of
General Grant, to witness the count, and I assure you, as I have
said officially, that the proof of this intimidation, violence and
fraud, extending to murder, cruelty, and outrage in every form,
was absolutely conclusive, showing a degree of violence in some of
those parishes that was more revolting and barbarous than anything
I could conceive of. It was plain that the returning officers had
the legal right to pass upon and certify, in the first instance,
who were elected members of the legislature, and that they were
justified by the evidence in excluding bulldozed parishes, but it
was equally clear that their return was not conclusive upon the
members elected, and that each house had the constitutional right
to pass upon the returns and elections of its members, and to set
aside the action of the returning board. The two houses, when
organized, had also the power to pass upon the returns of the
election of governor, and they alone and no one else. Neither the
President of the United States nor the returning board has any
power or right to pass upon the election of governor. And here
the difficulty in the Louisiana case commences.
"Governor Packard contends that a majority of the two houses, as
duly returned, did pass upon the election of the governor, and did
return that he was duly elected, but this was stoutly denied by
Governor Nichols. This vital point was strongly asserted and denied
by the adverse parties, and the legislature of Louisiana divided
into two hostile bodies, holding separate session, each asserting
its legal power, and denouncing the other as rebels and traitors.
Governor Packard and his legislature called upon President Grant
for the aid of the army to put down insurrection and domestic
violence; and here I confess that if I had been President, instead
of General Grant, I would have recognized Packard and sustained
him with the full power of the general government. My intense
feeling, caused by the atrocities in Louisiana, may have unduly
influenced me. But General Grant did not think this was his duty.
I do not criticise his action, but only state the facts, He would
only maintain the peace. He would not recognize Packard as governor,
but I know, what is now an open secret, the strong bent of his
mind, and at one time his decision was to withdraw the troops, to
recognize Nichols and thus end this dangerous contest. He did not
do this, but kept the peace.
"But during these two months the whole condition of affairs had
slowly changed in Louisiana. The government of Packard had dwindled
away until it had scarcely a shadow of strength or authority, except
at the state house, where it was upheld by federal bayonets. The
government of Nichols had extended its authority over the state
and was in full existence as the _de facto_ government of Louisiana,
supported by the great body of the white men and nearly all the
wealth and intelligence of the state, and by the tired acquiescence
of a large portion of the colored people, some of whom deserted
Packard's legislature and entered that of Governor Nichols. The
delay and hesitation of General Grant had been fatal to Packard,
and when Hayes became President the practical question was greatly
changed. One thing was clear, that a legislature had been duly
elected in November previous, and was then in existence, though
separated into two parts. If the members lawfully elected could
be convened, they alone could decide the question of who was
governor, without the intervention of troops, and their decision
could be supported, if necessary, by the general government.
"The most anxious consideration was given to this question. Days
and weeks of anxious deliberation were given to it by the President
and his cabinet. But one way seemed open for a peaceful solution,
and that was to gather, if possible, a single legislature that
could be recognized as the depositary of the representative will
of the people of Louisiana. If this could be done it had the
unquestioned right to decide who had been elected governor, and
all other questions would settle themselves. To aid in this object,
a commission of the most eminent men, high in position, from
different states, and distinguished for judicial impartiality, was
selected and the result is known to all. They went to Louisiana,
and, with great difficulty, brought together these hostile legislatures
which met, organized, promptly settled the question in dispute in
favor of the government of Nichols, and thus ended this most
dangerous controversy. No other change was made, no other act done
except, when the solution was almost accomplished, the few troops
which had then occupied that state house were withdrawn a few
squares away, to their barracks. Thus, in this peaceful appeal to
the legislature of Louisiana, this controversy, which not only
endangered the peace and safety of this state, but the peace and
safety of the whole people of the United States, was settled. This
is the sum and substance of all that was done in the southern
policy, as it is called, of the President.
"Perhaps I ought to state that his policy has a broader motive than
a mere settlement of a local election contest. It seeks to bring
the north and south again into conditions of harmony and fraternity,
and, by a frank appeal to the generous impulses and patriotic
feeling of all classes of people in the south, to secure, not only
peace among themselves, but the equal protection of the laws to
all, and security in the enjoyment of political and civil rights.
"No doubt the result in Louisiana caused some disappointment to
many Republicans throughout the United States, who deeply sympathized
with their Republican brethren in that state. In that feeling I
did, and do, share, and yet I feel and know that every step taken
by President Hayes was right, in strict accordance with his
constitutional duty, and from the highest motives of patriotism.
Some are foolish enough to talk of his abandoning the colored people
and their constitutional rights. President Hayes, from his early
manhood, has been an anti-slavery man; his life was imperiled on
many battlefields in the great cause of liberty, he sympathizes
more and will do more for the equal rights of the colored people
than those who falsely accuse him, and I believe this day, that
the policy he has adopted will do more to secure the full practical
enforcement of those rights than the employment of an army tenfold
greater than the army of the United States."
In this speech I stated the action I proposed to take to secure
the resumption of specie payments. The plan was executed in all
its parts by me, and my remarks may, in one sense, be said to be
a history of resumption. Continuing I said:
"And now, fellow-citizens, this brings me to the question upon
which there is so much diversity of opinion, so many strange
delusions, and that is the question of specie payments. What do
we mean by this phrase? Is it, that we are to have no paper money
in circulation? If so, I am as much opposed to it as any of you.
Is it that we are to retire our greenback circulation? If so, I
am opposed to it and have often so said. What I mean by specie
payments is simply that paper money ought to be made equal to coin,
so that when you receive it, it will buy as much beef, corn or
clothing as coin.
"Now the importance of this cannot be overestimated. A depreciated
paper money cheats and robs every man who receives it, of a portion
of the reward of his labor or production, and, in all times, it
has been treated by statesmen as one of the greatest evils that
can befall a people. There are times when such money is unavoidable,
as during war or great public calamity, but it has always been the
anxious care of statesmen to return again to the solid standard of
coin. Therefore it is that specie payments, or a specie standard,
is pressed by the great body of intelligent men who study these
questions, as an indispensable prerequisite for steady business
and good times.
"Now, most of you will agree to all this, and will only differ as
to the mode, or time, and manner; but there is a large class of
people who believe that paper can be, and ought to be, made into
money without any promise or hope of redemption; that a note should
be printed: 'This is a dollar,' and be made a legal tender.
"I regard this as a mild form of lunacy, and have no disposition
to debate with men who indulge in such delusions, which have
prevailed to some extent, at different times, in all countries,
but whose life has been brief, and which have ever shared the fate
of other popular delusions. Congress will never entertain such a
proposition, and, if it should, we know that the scheme would not
stand a moment before the Supreme Court. That court only maintained
the constitutionality of the legal tender promise to pay a dollar
by a divided court, and on the ground that it was issued during
the war, as in the nature of a forced loan, to be redeemed upon
the payment of a real dollar; that is, so many grains of silver or
gold.
"I therefore dismiss such wild theories, and speak only to those
who are willing to assume, as an axiom, that gold and silver, or
coined money, have been proven by all human experience to be the
best possible standards of value, and that paper money is simply
a promise to pay such coined money, and should be made and kept
equal to coined money, by being convertible on demand.
"Now, the question is as to the time and mode by which this may be
brought about, and on this subject no man should be dogmatic, or
stand, without yielding, upon a plan of his own, but should be
willing to give and take, securing the best expedient that public
opinion will allow to be adopted. The purpose and obligation to
bring our paper money to the standard of coin have been over and
over again announced by acts of Congress, and by the platforms of
the great political parties of the country. If resolutions and
promises would bring about specie payments, we would have been
there long ago; but the diversity of opinion as to the mode now--
twelve years after the close of the war--still leaves our paper
money at a discount of five per cent. Until this is removed, there
will be no new enterprises involving great sums, no active industries,
but money will lie idle, and watch and wait the changes that may
be made before we reach the specie standard.
"In 1869, Congress pledged the public faith that the United States
would pay coin for United States notes. Again, in January, 1875,
after more than a year's debate, Congress declared that on and
after the 1st of January, 1879, the United States would pay its
notes in coin.
"The Secretary of the Treasury is expressly required to prepare
for, and maintain, the redemption of all United States notes
presented at the treasury on and after that date, and for that
purpose he is authorized to use all the surplus revenues, and to
sell bonds of the United States bearing four, four and a half, and
five per cent. interest, at par in coin. It is this law, called
the resumption act, now so much discussed in the papers, that
imposes upon the office I hold most difficult and important duties,
and without replying to any attacks made upon me, I am anxious to
convey to you personally, what I have done, and what I must do, in
obedience to the provisions of this act. It is said that the law
is defective, but, if the great object and policy of the law is
right, the machinery of the law could easily be changed by Congress.
That resumption can be secured, and ought to be secured, under this
law, it will be my purpose to show you, and I shall not hesitate
to point out such defects in the law as have occurred to me in its
execution.
"There are two modes of resumption; one is to diminish the amount
of notes to be redeemed, which mode is commonly called a contraction
of the currency; the other is to accumulate coin in the treasury,
to enable the secretary to maintain the notes at par."
Objection had been made that under the first mode resumption would
be a process of converting a non-interest bearing note into an
interest bearing note, and that was true, but what right had we,
as a nation, or had any bank, or individual, to force in to
circulation, as money, its note upon which it paid no interest?
Why ought not anyone who issued a promise to pay on demand be made
to pay it when demanded, or pay interest thereafter? What right
had he, in law or justice, to insist upon maintaining in circulation
his note, which he refused to pay according to his promise, and
which he refused to receive in payment of a note bearing interest?
A certain amount of United States notes could be, and ought to be,
maintained at par in coin, with the aid of a moderate coin reserve
held in the treasury, and to the extent that this could be done
they formed the best possible paper money, a debt of the people
without interest, of equal value with coin, and more convenient to
carry and handle. Beyond this the issue of paper money, either by
the government or by banks, was a dangerous exercise of power,
injurious to all citizens, and should not continue a single day
beyond the necessities that gave it birth. I added:
"The one practical defect in the law is, that the secretary is not
a liberty to sell bonds of the United States for United States
notes, but must sell them for coin. As coin is not in circulation
among the people, he is practically prohibited from selling bonds
to the people, except by an evasion of the law, or through private
parties. Bonds are in demand and can readily be sold at par in
coin, and still easier at par, or at a premium, in United States
notes. The process of selling for United States notes need not go
far before the mere fact that they are receivable for bonds would
bring them up to par in coin, and that is specie payments.
"But the reason of the refusal of Congress to grant this authority,
often asked of it, was that it would contract the currency, and
this fear of contraction has thus far prevented Congress from
granting the easiest, plainest, and surest mode of resumption. To
avoid contraction, it provided that national bank notes may be
issued without limit as to amount and that, when issued, United
States notes might be retired to the extent of four-fifths of the
bank notes issued. This was the only provision for redeeming United
States notes that Congress made or would make, and this, it was
supposed, would reduce the United States notes to $300,000,000
before January 1, 1879. The actual experiment only proves the
folly of the cry we had for more money, more money."
The second mode of resuming was by accumulating coin gradually, so
that when the time fixed for resumption should arrive, the treasury
might be able to redeem such notes as should be presented. In this
respect the resumption act was as full and liberal as human language
could frame it. The secretary was authorized to prepare for
resumption, and for that purpose to use the surplus revenue and
sell either of the three classes of bonds, all of which in 1877
were at or above par in coin. I said: "The power can be, ought
to be, and will be, executed if not repealed."
This speech was printed in the leading papers in the United States
and in England, and was regarded by the public at large as a
declaration of the policy of the administration, to enforce the
resumption law, whatever might be the current of opinion developed
at the approaching elections, which, as they occurred, were generally
against the Republican party. The Democratic party had taken
position against the resumption act, in favor of the enlarged issue
of United States notes and the free coinage of silver. The strikes
led to the organization of labor unions, which, though independent
of political parties, chiefly affected the Republican party then
in power.
Among many letters received by me, after this speech, I insert one
from Mr. Evarts:
"Windsor, Vt., Aug. 30, 1877.
"The Hon. John Sherman, Secretary of the Treasury.
"Dear Mr. Sherman:--I congratulate you upon the excellence and
success of your speech in Ohio. The difficulty of the undertaking
justly enhances the credit of its prosperous treatment.
"I inclose a remonstrance from an 'Injustice' on the subject of a
new arrangement in the _weighing_ at the customhouse. It was sent
to me at Washington and forwarded from there here. I know nothing
of its source and have no opinion on the subject of the supposed
project.
"The President's visit has pleased the people in New England
amazingly. I hope to see you all in Washington early next week.
"I am very truly yours,
"Wm. M. Evarts."
On the 14th of September, 1877, I sent to Hon. Stanley Matthews
the following letter, giving my view of the position taken by
General Ewing and Mr. Pendleton:
"At the request of General Robinson I have directed to you, in the
care of Bickham, a number of documents for reference in your debate
with Ewing, and as Robinson says you wish me to make suggestions,
I venture to do so, but without any confidence that they can be of
assistance, though they can do no harm.
"The most beneficial financial act of the administration is the
reduction of the interest on the public debt. The amount already
accomplished is stated in my printed speech. The rapidity of this
process depends entirely upon the credit of the government. Ewing's
policy would destroy our credit and stop the process. The very
doubts created by him and Pendleton have already damaged the
government very largely. Confidence is so sensitive that when
prominent men like Ewing and Pendleton talk as they do, the injury
is immediate.
"The whole difference between the amount of silver and gold at this
moment is eight per cent., so that the payment of the debt in silver
would lessen the burden of the debt eight per cent., but under the
funding operations, which would be entirely destroyed by anything
that alarmed the market, we are enabled to save thirty-three per
cent. Whatever may be our right to pay our bonds, either in
greenbacks or in silver, this question of expediency, as you very
properly said in one of your speeches, is to be considered apart
from the question of legal power.
"Refunding would go on with greatly accelerated speed if we could
sell bonds for greenbacks. We make discrimination against the
greenbacks by refusing to take them in payment of bonds. If I had
the power to sell bonds for greenbacks I could make greenbacks
equal to coin with scarcely a perceptible change. That is the
advice of the most sagacious men in the country. I know it. There
is talk about the bondholder being a privileged person. He ought
to be so no longer, and the moment that a bond could be bought with
currency at par in gold, all discrimination in favor of the bondholder
would disappear.
"The differences among Republicans about silver will be settled by
the use of the silver dollar to the extent that it can be kept in
circulation at par with greenbacks, and is a pure question of
detail. The difference in the Democratic party about interconvertible
currency is vital, and Ewing's doctrine overthrows the whole
Democratic theory of finance before the war.
"The existence of the national banks is a question simply of policy
and not a question of principle. The right conferred upon banks
to issue circulation is not conferred for their profit, but for
the public convenience, and all Republicans can agree that that
right should never be permitted to exist except when it is for the
public convenience. The office of bank notes is simply to supply
the ebb and flow of currency made necessary by the wants of business.
The United States cannot lend United States notes, and therefore
cannot meet this want. Ewing proposes to destroy the whole national
bank system, interwoven with all the business of the country. I
send you the last statement of the national banks. You can very
easily show the effect upon the reviving industry of the country
of the withdrawal of these loans and disturbing all this business.
As at present organized the circulation is the vital thing, and if
the bonds held by the banks to secure circulation were thrown upon
the market, it would stop funding and compel also the withdrawal
of loans, and create distress compared with which our present
troubles are mere moonshine.
"I am afraid you will think I am going on to make a speech for you,
so I will stop abruptly, with the promise that if I can furnish
you any documents or information that may be of service to you I
will do so with pleasure.
* * * * *
"I inclose the last statement of the national banks containing many
points that may be of use.
"Upon the question of resumption I believe we are all agreed that
it must come, and that the only standard of value is gold or silver
coin. The time and manner are the points of disagreement. Ewing
is opposed to all resumption, but believes in printing a dollar
and saying it is a dollar, while all the world would know that the
declaration is a lie. The fact that we have advanced the greenbacks
six per cent. in one year, by the movements made under the resumption
act, shows that it is working pretty well. I send you a statement
showing the changed condition in a year of our finances.
"While the people differ about the resumption act there is time to
change it if it needs change, but Ewing would go back and commence
the process over again. I am disposed to be tolerant about
differences on the resumption act, for I think it will demonstrate
its success or failure before Congress is likely to tamper with it."
On the 21st of September I wrote to General J. S. Robinson the
following letter, evincing my anxiety as to the result of the
canvass in Ohio, as it was then conducted:
"I am so deeply impressed with the importance of the campaign in
Ohio that it makes me uneasy and restless that I cannot participate
in it.
"What a magnificent chance the Republican party in Ohio now has,
not only to place itself in the vanguard in the United States, but
to do this country a service as great as any victory won by the
Union army during the war. Here it is demonstrated by the cordial
reception of the President in the south, by his hearty indorsement
in Massachusetts, and by a public sentiment now growing and spreading
with amazing rapidity, that in his southern policy he has opened
the means of order, safety, peace and security in all the southern
states.
"Now, when it is demonstrated that the difficulties in the way of
resumption were myths conjured up by the fantasies of demagogues,
when our notes are worth within three per cent. of gold, when
Providence has favored us with boundless crops, and prosperity is
again coming upon us after a dreary time of distress and trial
caused by inflated paper money, why is it that we cannot see all
these things and avail ourselves of the advantage they give us in
our political contest? It seems to me that we ought to carry the
state by an overwhelming majority, and if we do so we will establish
the beneficial principles of our party beyond danger of overthrow
by reaction, and we will secure the peaceful and orderly development
of industry without a parallel in our previous history.
"I wish it were in my power to impress every Republican in Ohio
with my earnest conviction about this matter, but here, constantly
occupied by official duties, I can only remain watching and waiting
in anxious suspense lest the great advantages we possess shall be
frittered away or lost by inaction or mistakes.
"I know you will do your utmost for success, and only write you
this to show you how earnestly I sympathize with you in your
efforts."
The election in Ohio, in October, resulted in the defeat of William
H. West, Republican, for governor, mainly on account of his position
as to labor unions, but no doubt also because of a feeling of
opposition against the resumption of specie payments. Richard M.
Bishop, Democrat, was elected governor, with a Democratic legislature
in both branches, which subsequently elected George H. Pendleton
as United States Senator.
The following letter expresses my view of the election, and the
causes which led to our defeat:
"Washington, October 17, 1877.
"Dear Sir:--Your letter of the 13th inst. is received.
"Your statement of the causes of our defeat in Ohio seems to me
reasonable, though probably I would not agree with you in many
points stated.
"It is not worth while now to bother ourselves about what we cannot
help. All we can do is to inquire how far we have been right, and
to that extent pursue the right, whether victory or defeat is the
result. No party can administer a government, that will not take
the risk of temporary defeat when it is pursuing what, in the
opinion of the great masses of it, is a beneficial policy for the
country.
"So far as the southern question is concerned, I feel that the
President did right. The wisdom of his executive order as to office
holders depends upon the construction given to it, and he is not
responsible for a perverted construction not authorized by its
words or terms. As to the resumption policy, the law is plain and
mandatory, and, more than all, the law is right, and the Republican
party might as well understand first as last, that the question of
resumption is one higher than any party obligations and will be
pursued by our adversaries if we do not. We can gain the credit
of success, but we can gain no credit by retreating on this vital
question. While the law stands nothing is left but to execute it,
and for one I never would aid to alter the law, except to make it
more effective, and would be very willing to retire on this question
rather than to surrender.
"The only way is for us to go steadily forward, with a certainty
that public opinion in the end will sustain us if we do what is
substantially right. The Republican party has been in this position
many times and has never won success by retreat and cannot do so
now.
"Very truly yours,
"John Sherman.
"A. P. Miller, Esq., Toledo, Ohio."
It became necessary for the President to call an extra session of
Congress, on account of the failure of the passage of the army bill
at the previous session. Though the proclamation was issued on
the 5th of May, 1877, Congress was not convened until the 15th of
October following. Both Houses met on the day appointed. The
Senate was organized by the election of Thomas W. Ferry, of Michigan,
as president _pro tempore_, and Samuel J. Randall, a Democratic
Member from Pennsylvania, was elected speaker of the House by a
majority of seventeen over James A. Garfield, the Republican
candidate.
The message of the President was confined mainly to the circumstances
connected with the failure of the previous Congress to provide for
the support of the army, and to certain deficiencies in appropriations
required for the government, the President stating that as certain
acts of Congress, providing for reports of the government officials,
required their submission at the regular annual session, he deferred
until that time any further reference to subjects of popular
interest.
Congress, however, not being confined in its powers, and having
full jurisdiction of all legislative questions, proceeded at once
to discuss financial questions and especially the measures taken
for the resumption of specie payments. No less than four bills
were introduced in the Senate and fourteen in the House, providing
for the repeal, in whole or in part, of the act for the resumption
of specie payments. One of these bills was reported from the
committee on banking and currency, by Mr. Ewing, on the 31st of
October. It was the subject of debate during the remaining period
of the session, and finally passed the House on the 23rd of November,
by the vote of 133 yeas and 120 nays. It repealed all that part
of the resumption act which authorized the Secretary of the Treasury
to dispose of United States bonds, and to redeem and cancel the
greenback currency, or practically all the resumption act except
the clauses for the substitution of silver coin for fractional
currency. It was sent to the Senate on the 26th of November, and
referred to the committee on finance. No action was taken upon it
during that session, which adjourned on the 3rd of December. The
regular session convened on the same day, with this bill still
pending in the committee on finance. On the 17th of April, 1878,
Mr. Ferry, from that committee, reported back the bill with an
amendment to strike out all after the enacting clause, and insert
new matter. After a long debate ending on the 13th of June, the
following amendment was adopted as a substitute for Mr. Ferry's
amendment, by a vote of yeas 30, nays 29:
"That from and after the passage of this act United States notes
shall be receivable the same as coin in payment for the four per
cent. bonds now authorized by law to be issued; and on and after
October 1, 1878, said notes shall be receivable for duties on
imports."
The bill, as amended, passed the Senate by a large majority. In
this form it had no proper relevancy to the bill as it passed the
House, and the action of the Senate was regarded as a practical
defeat of the bill. It was taken up in the House on the 14th of
June, and the question being taken on concurring in the amendment
of the Senate, the vote was yeas 112, nays 122, so the motion was
disagreed to. On the 17th of June, a motion was made to suspend
the rules and proceed to the consideration of the bill, but as two-
thirds did not vote in favor of the motion it was not adopted, and
the bill was not called up for action until the next session of
Congress, when Mr. Ewing, on February 22, 1879, reported it from
the committee on banking and currency, and moved to concur in the
Senate amendments, with amendments changing the date on which the
act should take effect, and also adding, "that the money hereafter
received from any sale of bonds of the United States shall be
applied only to the redemption of other bonds bearing a higher rate
of interest, and subject to call."
This motion came too late, as the whole subject-matter had been
disposed of by the resumption of specie payments on the 1st of
January previous. It led, however, to a considerable debate in
which Mr. Garfield participated. He made a humorous allusion to
the revival of controversies that were past and gone since the 1st
of January, and moved to lay the bill and the amendments upon the
table. That was adopted by a vote of yeas 141, nays 118.
I have given the official history of the efforts to repeal the
resumption act, but it would be beyond the limits of this book to
quote, or even state, the copious speeches for and against resumption.
I felt secure, for if such a bill should pass, the executive veto
would prevent any action by Congress that would interfere with the
execution of the law. My principal effort was to convince Congress
that it ought not to interfere with what the House called a
destructive experiment, but what I regarded as an easy and beneficial
execution of existing law. A large part of the opposition was
purely political. The resumption act was a Republican measure,
voted for only by Republicans. The Democratic party had, by the
elections just previous to its taking effect, secured a majority
in the House, and, with the aid of a few Republican Senators, with
strong "greenback" proclivities, had the control of the Senate on
the financial question.
This political condition in the fall of 1877 tended to prevent the
sale of four per cent. bonds after the close of the popular loan.
My official correspondence with members of the syndicate, and with
Mr. Conant, published by order of the House of Representatives in
the volume "Specie Resumption and Refunding of the National Debt,"
shows fully the earnest effort made by me to sell the four per
cent. bonds. This was successful to a slight degree in August and
September, but sales were substantially suspended after that date,
until it became manifest that the two Houses could not agree upon
the repeal of the resumption act, or the remonetization of silver.
The threatened measure for the free coinage of silver, and the fear
that the bonds would be paid in silver coin less valuable than the
gold coin paid for them, tended, more than the efforts to repeal
the resumption, to prevent the sale of bonds.
"Mansfield, Ohio, August 18, 1877.
"Dear Mr. Conant:--Your letter of the 4th was forwarded to me here.
I notice what you say about the calls, but you must remember that
out of the sales of four per cent. bonds we must provide five
millions gold for each of the months of September and October, so
that for ten millions of bonds there must be no calls. I should
have informed you of this sooner, but neglected to do so before
leaving. The parties in New York, and no doubt the Rothschilds,
have been advised of it and agree to it. Until the popular
subscription is paid for it will be difficult to press the sale of
the four per cents., but I hope in September the sales will commence
and be pushed rapidly. The movement of the crop has already
commenced. The strike seems to be ended, with a better feeling
among laborers, and some advance in freight. The necessity of the
trunk lines combining on freight is so clear that it is likely to
result in some agreement that will stand.
"I made a speech here yesterday, which no doubt will be received
by you in the New York papers in due time, and which contains some
matters affecting your operations. It is substantially in conformity
with the general wish of the administration as to financial affairs,
and it might be well for you to call the attention of the Rothschilds
to that part of it relating to our loans and the basis of our
credit.
"I return next week to Washington, where I will again be happy to
hear from you.
"Very truly,
"John Sherman, Secretary."
Mr. Conant answered as follows:
"New Court, St. Swithin's Lane, }
"London, E. C., England, August 23, 1877.}
"Dear Mr. Secretary:--I was very glad indeed to receive your letter
of the 6th instant. I at once informed the contracting parties of
what you had written in reference to the strikes and riots at home.
The sale of our bonds has not been directly interfered with on
account of the riots. In fact, the occurrence of the riots has
almost been forgotten. The London 'Times,' of this morning, has,
however, revived the subject by printing a letter from its Philadelphia
correspondent, in which he says that the strikers, it is evident,
are to get into politics through the organization of a party, to
be called the 'Workingmen's party;' and he predicts that mischief
will come out of it through the control of state governments which
the mob element may gain; and the consequent enactment of bad laws,
etc., especially against capital. Another letter is also printed
(written by a Mr. Connolly), by which it is made to appear that
American is in a terrible financial condition. These two letters
are made the subject of an editorial which, on the whole, is not
very complimentary to us, nor calculated to improve our credit.
The 'Times' of last Monday's date had an editorial on the speech
which you made in Ohio on Friday last. I send you a copy, and
think, if you can find time, you will rather enjoy reading the
article. Nearly all of the English people, as you are aware,
believe in the principle of 'free trade,' and it is but natural
that they should, for the reason that England depends upon her
great commerce and her markets in every part of the globe for the
employment and maintenance of her people. People here think that
our protectionist tariffs are not only detrimental to the commercial
interest of our own country, but that they are of a suicidal
character so far as our fiscal policy is concerned. They think,
in other words, that it would be vastly better for the real interest
of the people of the United States if they would trade more
extensively with the people of England. What the 'Times' editor
has to say about the balance of trade will amuse you, and yet people
talk about the advantages of a balance of trade as being an exploded
idea. English interests are laboring to effect a new treaty with
France, under which large reductions in duties are proposed.
"I note what you are pleased to say in regard to sales of bonds
during the present month. With the price of bonds at the present
moment they cannot of course be sold. The parties will find it
necessary to use great caution as well as care in managing the
market, so as to get control of it. Any attempt to force the sale
of the bonds during this, and, I think, next month will only operate
to keep the price so low that they cannot be sold at all. I am
firm in the belief that the premium on gold will go gradually lower,
and that the balance of trade in our favor will keep forcing it
down.
"I remain your obedient servant,
"Chas. F. Conant.
"Hon. John Sherman."
He again wrote on the 30th of August:
"On Tuesday last a further amount of gold (£130,000) was withdrawn
from the Bank of England for shipment to the United States, and
for the purpose of protecting its stock of bullion the bank
immediately advanced its rate to three per cent., and also increased
the price of American eagles.
"Great Britain must obtain from us this season a large supply of
breadstuffs and grain, larger than has been required in any one
year during several years past, and at higher prices than those
heretofore paid, and, in the present condition of trade between
the two countries, gold, to quite an extent, will have to be sent
over in payment for these articles. Therefore, advancing the rate
of interest may check for a time, but will not stop altogether,
the shipment of bullion, but it may attract here some of the gold
held by the Bank of France. The bank rate does not govern the
street rate, and a further advance by the bank, which it is very
likely may be made, is not to be considered as indicating that we
are to have a dearer money market. I inquired to-day of Mr. Morgan
and the Messrs. Rothschild what they thought of the prospects of
making any sales during next month, and their answer was: 'Wait
patiently for the market to recuperate.' I am satisfied that good
investment securities are scarce here; that they have been cleared
from the market, and that as soon as the question of cheap or dear
money is settled, sales of the four per cent. consols will be
resumed. The amount of the sales will of course depend upon which
way the question is settled. There were times during the placing
of the five per cent. and four and a half per cent. bonds when, as
you are aware, operations were suspended for quite a time, the
condition of the market being such as to prevent anything being
done. From semi-official accounts it appears that the famine in
India is a very serious affair, and it is quite possible that large
sums of money will be required from here with which to purchase
supplies."
My experience thus far convinced me that it was bad public policy
to continue the sale of bonds for refunding purposes through a
syndicate of bankers, the chief of whom resided in London. I could
see no reason why this function could not be performed by national
banks, better than by bankers at home or abroad. A question arose
whether the Secretary of the Treasury had the power to designate
national banks as public depositaries of the proceeds of bonds sold
under the resumption and refunding acts. The object to be gained
by this designation was to prevent the withdrawal of coin from
circulation, and the undue accumulation of coin in the treasury of
the United States. If the exchange of one bond by another could
be directly effected through the banks without the payment of coin,
it would facilitate the process of refunding. I submitted this
inquiry to Attorney General Devens, and on the 30th of August he
stated his opinion and closed as follows:
"In answer to your inquiry, I have, therefore, the honor to say
that the Secretary of the Treasury, if he deems it expedient as a
matter of administrative policy, may sell bonds under the act known
as the 'refunding' and 'resumption' acts, depositing the amounts
received therefrom with such public depositaries as he may select
under the national bank act, taking such security as is required
by the statutes."
The last of the popular subscriptions for the four per cent. bonds
became due on the 16th of October, and all were paid for but three
subscriptions aggregating $1,600, and these were assumed by the
syndicate. The bonds had been paid for by the syndicate either by
called six per cent. bonds, which were canceled, or in gold coin
deposited in the treasury, without the loss of a dollar. The called
session of Congress, which met on the 15th of October, and the
agitation of the repeal of the resumption act and the remonetization
of silver, prevented for the time any further sales of the four
per cent. bonds by the government.
JOHN SHERMAN'S
RECOLLECTIONS
OF
FORTY YEARS
IN
THE HOUSE, SENATE AND CABINET
AN AUTOBIOGRAPHY.
VOLUME II.
ILLUSTRATED
WITH PORTRAITS, FAC-SIMILE LETTERS, SCENES, ETC.
GREENWOOD PRESS, PUBLISHERS
NEW YORK 1968
Copyright, 1895, By John Sherman
First Greenwood reprinting, 1968
LIBRARY OF CONGRESS catalogue card number: 68-28647
Printed in the United States of America
ILLUSTRATIONS
VOLUME II.
Mr. Sherman in His Library at Washington, D. C., 1895. _Frontispiece_
Rutherford B. Hayes
President Hayes and Cabinet
John Sherman (Chamber of Commerce Portrait.)
Inauguration of President Garfield
Thurman, Sumner, Wade, Chase (Group.)
James A. Garfield
Chester A. Arthur
Invitation to Blaine's Eulogy of Garfield
United States Senate Chamber
Invitation to Washington Monument Dedication
Meeting of the Surviving Members of the Sherman Family
John A. Logan
James G. Blaine
Surviving Members of the 34th Congress (Taken in 1888.)
Representative Ohio Men--Schenck, Cox, Pendleton
Court House at Mansfield, Ohio. 1895
Mr. Sherman's Washington Residence, "K" Street
Hallway in Mr. Sherman's Washington Residence
Dining Room in Mr. Sherman's Washington Residence
AUTOGRAPH LETTERS
VOLUME II.
J. M. Rusk, April 14, 1878
Jay Gould, October 17, 1878
Whitelaw Reid, March 29, 1878
John Jay, February 3, 1879
John W. Foster, December 15, 1878
James G. Blaine, July 3, 1879
George Bancroft, February 22, 1881
John G. Whittier, February 8, 1885
U. S. Grant, January 27, 1885
S. S. Cox, January 23, 1886
W. T. Sherman, February 3, 1891
TABLE OF CONTENTS.
VOLUME II.