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Correspondence Regarding the Address.

IN the long struggle against inflation, and for a return to specie payments, an important and honorable part was borne by the Honest Money League, a confederation of financial societies scattered over the country, and especially the West. As the day fixed by the law of 1875 for resumption drew near, the officers of the League of the Northwest thought it fitting to mark the day and the fact by a public meeting, to be addressed by some man of national reputation, who had been a consistent and intelligent advocate of the resumption policy from the close of the war. This thought led to the following correspondence.

"OFFICE OF THE HONEST MONEY LEAGUE OF THE NORTHWEST,
CHICAGO, ILL., December 20, 1878.

"TO THE HON. JAMES A. GARFIELD: —
"DEAR SIR, — Having been appointed at a recent meeting of the Executive Committee of the Honest Money League of the Northwest to make arrangements to celebrate the event of the resumption of specie payments by a public meeting in the city of Chicago, we beg to invite you to address the gentlemen of the Honest Money League, whom we represent, and other citizens of Chicago and the Northwest, at such time after January 1, 1879, as may be most agreeable to yourself.

"We remain, very truly and respectfully, yours,
"M. L. SCUDDER, JR., Committee."
THOMAS A. BONES,
THOMAS M. NICHOL,

"WASHINGTON, D. C., December 23, 1878.

"M. L. SCUDDER, THOMAS A. BONES, and THOMAS M. NICHOL,
Committee Honest Money League: —

"GENTLEMEN, — I am in receipt of your favor of the 20th instant, inviting me to address a meeting of the Honest Money League of the

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Northwest, to be called for the celebration of the ‘resumption of specie payments,’ I take pleasure in accepting your invitation, and will suggest the evening of January 2, 1879, if agreeable to you.

"Very respectfully, your obedient servant,
"J. A. GARFIELD."

In pursuance of this correspondence, the following address was delivered in Farwell Hall, on the evening of January 2, 1879. Notwithstanding the night was the coldest known in Chicago for ten years, the hall was filled. Judge D. L. Shorey presided, and the address was received with great enthusiasm.

Suspension and Resumption of Specie Payments.

MR. CHAIRMAN AND FELLOW-CITIZENS, — The resumption of specie payments closes the most memorable epoch of our history since the birth of the Union. The years 1861 and 1879 are the opposite shores of that turbulent sea, whose storms so seriously threatened with shipwreck the prosperity, the honor, and the life of the nation. But the horrors and dangers of the middle passage have at last been mastered, and out of the night and tempest the republic has landed on the shore of this new year, bringing with it union and liberty, honor and peace.

We have met to-night to celebrate the close of the war. Battles are never the end of war; for the dead must be buried, and the cost of the conflict must be paid.

The Union men of 1861 enlisted for the whole war. They served on the field of battle until the last rebel flag went down in surrender; they served in the field of legislation, and at the ballot-box, until the last slave was free, and the last of the seceding States re-entered the circle of the Union; they served in the public councils until the perils of our foreign relations were ended by honorable arbitration; they have served during the fierce trials of the public faith; and they will not be mustered out until the equal rights of all citizens are acknowledged and secured, — until the pension of the last disabled soldier of the Union is faithfully paid, and the last war obligation of the government is honorably redeemed.

If the resumption now declared by law be maintained against all assaults, then indeed, so far as our finances are concerned, the war for the Union is ended, the victory is complete. Will our great sovereign, the people of all these States, make the

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decree irreversible? Will resumption be maintained? Believing that, in the long run, the matured and deliberate judgment of this nation is honest and intelligent, I answer, Yes, it will be maintained; and for two reasons. First, because national honesty, good government, and the prosperity of all our people demand it; and second, because we are able to maintain it. The defence of these positions will be the theme of this address.

To the thoughtful business-men assembled here to-night, whose genius and industry have made this city the great commercial centre of the Northwest, I need not argue the proposition that the sanctity of contracts is the foundation of all industrial prosperity. In the complex and delicately adjusted relations of modern society, confidence in promises lawfully made is the life-blood of trade and commerce. It is the vital air which labor breathes. It is the light which shines on the pathway of prosperity. The betrayal of one great business trust by a single private citizen may beggar a thousand families, and paralyze the industry of half a city. An act of bad faith on the part of a State or municipal corporation, like poison in the blood, will transmit its curse to succeeding generations. Examples of this are not wanting. An eminent citizen of Mississippi, a gentleman of national reputation, recently declined an important and honorable business mission to Europe, in behalf of the Southern Board of Trade, on the ground that his usefulness would be seriously impaired by the fact that Europeans still charge Mississippi with financial bad faith in her legislation of 1851. Thus, a single act of repudiation has cast its blighting shadow across a quarter of a century, still clouds the prosperity of a great State, and cripples the influence of its worthiest citizens.

But bad faith on the part of an individual, a city, or even a State, is a small evil in comparison with the calamities which follow bad faith on the part of a sovereign government. The United States is still a debtor nation, mainly, it is true, a debtor to our own people, but also, to a great extent, a debtor to the people of other nations. We are still in the market, soliciting loans with which to refund our great debt at a lower rate of interest. Every dollar thus refunded reduces the annual burden of interest; and, to that extent, the government ceases to be a competitor of private citizens in securing loans. Any act of bad faith, therefore, tends to prevent refunding, tends to

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prevent the reduction of the public burdens, and keeps up the rate of interest, both public and private. Our bonds have become the basis of private interests, involving hundreds of millions of dollars. The vast aggregate of investments by people of small means in savings banks, in fire, marine, and life insurance, and the estates of thousands of widows and orphans, depend largely for their value upon the security and steady value of government obligations; and any law or policy which tends to depreciate these obligations is communicated through all the channels of private business, carrying loss and disaster to millions of citizens.

At the risk of repeating what may be familiar to every one, let us consider the relation of the greenback to the public faith. Whatever new theories of currency may have sprung up since 1862, it will not be denied, as a fact of history and law, that the greenback was a loan without interest, forced upon the people by the overmastering necessities of the war. Its issue as a legal tender for private debts was acknowledged at the time to be an act of doubtful constitutionality, and justified only on the plea of inexorable necessity. The measure was adopted with great hesitation by a small majority, and against the protest and warning of many able and patriotic Senators and Representatives. The law was acknowledged by its supporters to be a radical departure from the traditions, the theory, and the practice of our government. Its strongest supporters acknowledged the great danger of the experiment, and threw around it every safeguard against the evils it would inflict. They embodied in the law, and stamped upon the face of every greenback, this solemn promise, "The United States will pay." They provided a method by which the notes should be funded and ultimately redeemed. They did not propose to create a permanent system of paper money. They declared that the measure was to be a temporary one, — "the medicine of the Constitution, and not its daily bread." They asserted, again and again, that the money of the Constitution was coin, not paper. The greenback itself was a promise to pay coin; but the date of payment was not fixed. It was a government due-bill; and the only excuse in morals or in law for not paying it on demand was inability to pay. The moment the government was able to pay, refusal became dishonor, and reproduced its injustice in every business interest, public and private.

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But the unredeemed greenback produced evils far greater than those which resulted from the ordinary refusal to pay a debt. Besides being a debt, it was a legal-tender currency, and its excessive volume expelled real money from all the channels of internal trade, destroyed the old measure of value, and substituted in its place a standard whose value fluctuated every day and every hour during the seventeen years of suspension. On account of its twofold character as debt and currency, the value of the greenback was changed by every military and political event which affected the fortunes of the war. The march of a hostile army to the near neighborhood of the national Capitol, in 1864, reduced the market value of the greenback forty per cent in a single week. The same year a futile attempt of Congress to abolish the premium on gold, by a penal law, caused an equally violent fluctuation. At first the greenback was received at par with coin; but later every increase of issue reduced its market value. In 1864 the volume was increased one hundred and ninety millions, and the coin value of the whole mass became one hundred and seventy-five millions less than before the increase. Through a series of innumerable and fitful fluctuations, it fell from par to thirty-eight cents on the dollar, reaching its lowest point on the 5th of July, 1864. By a series of changes equally irregular, it has returned, through an ascending scale of fifteen years, to par.

No arithmetic can compute the injustice and loss which these fluctuations have inflicted upon the people and business of this country. The chief mischief resulted from two unequal and varying qualities of the greenback as a currency, — its debt-paying and its purchasing power. The first was arbitrarily fixed by Congress at one hundred cents on the dollar; but the second was controlled by laws which no human legislation can set aside, — the laws of value; and the value of the greenback as a purchasing power suffered all the changes of the market. In July, 1864, a citizen who had loaned his neighbor a hundred dollars in coin three years before was compelled by law to accept as a discharge of the debt a handful of paper notes which he could purchase for thirty-eight dollars in coin. That is, the same note which paid a debt of one hundred cents would buy in the market only thirty-eight cents' worth of merchandise valued in real money. This difference between its debt-paying power and its purchasing power carried confusion

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and injustice into every department of business. During the whole period of depreciation, the creditor was wronged by under-payment; and during the whole period of appreciation, the debtor was wronged by being compelled to make overpayment. During the seventeen years of suspension the payment of every debt inflicted a wrong, either upon the creditor or the debtor; and thus the whole machinery of credit was converted into an engine of injustice. This will always happen when the two functions of currency are of unequal value.

The first great opportunity for putting an end to these evils occurred soon after the close of the war. Probably at no other time in our history was the per capita average of private indebtedness so small as in 1865. Private debts had been paid — in depreciated paper; the government had become the great borrower, and had borrowed nearly all the surplus capital of the country. Two millions of hardy, enterprising men had just been mustered out of the lately hostile armies, and were ready again to become producers of wealth. It was a matter of the utmost importance that the fruits of their labor should be safe when earned, and that ventures in business should be made as free as possible from violent artificial fluctations. The volume of currency then outstanding was nearly four times as great as it had ever been at any one time before the war. It amounted to nearly eight hundred millions of dollars of paper obligations, in various forms, endowed with the quality of legal tender. Even in the midst of the war, this volume was known to be far too great for financial safety. But on the return of peace, when the government ceased to be a great consumer and payments from the treasury were reduced sixty per cent in a single year, it was almost universally admitted that the volume of currency was greatly in excess of the legitimate wants of business.

Under the combined influence of this expanded volume of depreciated currency and the enormous expenditures of the government, prices had risen to an average of ninety per cent above those of 1859-61. They could not continue to rise without great danger to trade, and still greater danger to the interests of labor. We had a surplus revenue of a hundred millions per annum, and were abundantly able to retire, gradually, the excess of legal-tender notes, and thus bring the business of the country safely down from the dangerous height to which war

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and inflation had carried it. Congress should not have compelled the new and aspiring industries of peace to put to sea in a crazy craft, which was all sail and no anchor. The government had itself produced the conditions in which business was placed; and to withdraw from its interference, to undo the mischief it had caused, by allowing business to be governed by the natural laws of trade, was the immediate and imperative duty of Congress. This situation was clearly and ably portrayed by Secretary McCulloch, in his annual report of December, 1865. He demonstrated the fact that we then stood at the parting of the ways; that one path, if followed with wisdom and courage, would lead down from the dangerous heights of war prices to the safe level of solid values and steady business; that the other would lead through increased speculation and still greater expansion of credits to inevitable and measureless disaster.

Studied by the light of subsequent experience, the Secretary's warnings now read like prophecy. At first, his policy was generally approved. In December, 1865, the House of Representatives, with but six dissenting votes, pledged itself to early resumption by reducing the surplus volume of currency. Early in 1866, a bill was prepared which armed the Secretary with the requisite authority. But before the debate closed, many began to shrink from the responsibility of applying so heroic a remedy. Though approving resumption, and admitting the necessity of reducing the volume of currency, they hesitated to adopt any measure which would reduce prices, and for the time being check the activity of trade. The dangers of inaction and delay were clearly pointed out in debate. The citizens of Chicago are not likely to forget the clearness and boldness with which the Hon. John Wentworth, then a member of the House, predicted, the evils which inaction in timid and half-way measures would involve. Late in the session, the bill was passed by a close vote; but the powers conferred upon the Secretary were so restricted that, before the remedy could be fairly applied, the era of wild speculation had begun, and the current was soon too strong to be restricted. In less than two years, Congress, overriding the President, prohibited the further retirement of United States notes; and all attempts to resume specie payments and return to solid values were, for the time, virtually abandoned.

The high prices of all home products, measured as they were by the standard of depreciated currency, made it impossible for

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our manufacturers to sell their wares in any foreign market. Our exports fell off beyond all precedent. Besides the bread-stuffs, which Europe could not buy elsewhere, and the bullion dug from our mines, which was virtually banished by our laws, hardly a product of American industry crossed the ocean. At the same time, ours was the most tempting market in the world for the sale of foreign merchandise. We were paying the highest prices known in modern times. A flood of foreign fabrics poured in upon us, and the great balance against us was paid in bonds of the nation, of the States, and of municipal and private corporations, — bonds bearing the highest rate of coin interest. It is estimated that during the seven years which preceded the panic of 1873 not less than one thousand millions of American bonds were sold abroad. Pay-day was pushed out of sight. The present possession of this vast inflow of borrowed capital led its holders to seek everywhere for investment. The surplus revenues of the National Treasury were applied to extensive and extravagant public works. National, State, municipal, and private credit was devoted to the building of railroads, and to magnificent enterprises which fired the imagination of our people and filled them with crazy enthusiasm.

The saddest and most curious phenomenon of that period, and one which the historian will some day record, was the delusion that we were then in the midst of great prosperity. Visions of wealth danced before the imaginations of enterprising men, and they ventured everything in the wild and exhilarating chase. They revelled in the light of a conflagration which was consuming their wealth, and called it the sunshine of prosperity. They lost sight of the only safe road, the old, hard, rough road upon whose finger-post is written, "In the sweat of thy face shalt thou eat bread." The delusion calls to mind the remark of Secretary Chase, that "an irredeemable legal-tender note was the Devil made manifest in paper."

The fluctuations between the debt-paying and the purchasing power of our currency created the new trade of gold gambling. The Gold Exchange and the Gold Clearing-House of New York will be remembered in history as the Germans remember the robber castles of the Rhine, whose brigand chiefs levied blackmail upon every passer-by. It was a business that never added a farthing to the national wealth, but in which everything gained by one was lost by another. It was simply betting on what the

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difference between coin and paper would be, and then employing every device to win the bet by increasing the fluctuation. In New York alone, for many years, a daily average of sixty millions of capital was withdrawn from industry and invested in this reckless business. Its fascination spread to all parts of the country. Each day some lucky gambler grew suddenly rich by the ruin of another. If these losses had been confined to the gamblers alone, the evils of the gold-room would have been less serious. But all our people who were engaged in honest industry, all producers and consumers of wealth, were made its victims. The great conspiracy of 1869, which culminated in "Black Friday," involved in ruin thousands of firms who were following legitimate business. As all our foreign trade was measured by the coin standard, the business of every importer and exporter of merchandise was at the mercy of the "bulls" and "bears" of the gold-room, — whose chief effort was, by fair means or foul, to create sudden, changes in the price of gold. To insure himself against this additional risk, the importer was compelled to increase his prices. The increase was charged over to the jobber, and again to the retail dealer, until at last its dead weight fell upon the consumer. The exporter could protect himself against loss only by paying lower prices for products to be sent abroad, and so the whole enormous cost of seventeen years of gold gambling has been paid out of the earnings of the American people. But gambling was not confined to gold. The habit engendered by fluctuating currency, which led men to sell what they did not own, and to borrow what they sold, was carried into every department of trade. Bright, ambitious young men, lured from the farm and workshop, sought their fortunes in the seductive chances of the stock board, or in the mysteries of "options," sales, and "corners" in wheat. The population of many agricultural districts actually decreased. The cities and manufacturing centres were overcrowded. Some leading industries, notably railroad-building and iron-making, were greatly overdone. As speculation increased and credits expanded, the cry was raised that there was not currency enough, — that the small measure of contraction effected by Secretary McCulloch had destroyed the people's money and crippled their business. It was the drunkard's cry for more rum to steady his nerves, already shattered by drink. Nothing could resist the downward tendency; and

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the wild dance went on, until at last, when no more could be borrowed, the inevitable pay-day came, and with it the deluge of 1873. The vast fabric of municipal and private debt tottered and fell, involving in general ruin the industries of our people. We have no means of knowing the aggregate of that enormous indebtedness; but we may judge something of its magnitude by a simple example. If the statistics can be trusted, the municipal debts of a hundred and twenty-six chief cities of the Union increased two hundred per cent in ten years, and amounted, in 1876, to six hundred and forty-four million dollars; and private debts had increased in proportion. While the catastrophe might have been prevented in 1865, it was now too late to avert the blow or mitigate its severity.

With such conditions, the crash was inevitable. Its details of loss and suffering need not be recounted. It brought innumerable bankruptcies and losses to capitalists on every hand; but in the whole sad chapter of calamities the laborers of our country have been the greatest sufferers. If the employer grew suddenly rich by speculation in the period of expansion, his workmen did not share his riches; but when he suffered the destruction of his business by the crash, they shared the disaster by losing employment.

In the period of expansion, the wages of labor were somewhat increased, but the cost of living increased still more. When prices declined, wages were the first to fall. The capitalist can take advantage of the market. If he has anything to buy, he is not compelled to buy it to-day; he can wait for lower prices. If he has anything to sell, he is not compelled to sell at once, but can wait on the market and sell at the best advantage. Not so with the laboring man. He goes into the market with just one thing to sell, — his day's work. He must sell it to-day, at to-day's prices, or it will be wholly lost. What he needs to buy, he must buy when necessity compels him. Fluctuation in the standard of values is his worst enemy. It strikes him both ways, and strikes him hard. Therefore, of all men in the world, the laboring man most needs a steady market and an unvarying standard of value. When he has earned his wages, he wants to be paid in currency that will keep over night, — that will be worth as much when he uses it as it was when he received it. I make this plea for the laboring man, not on his account alone, but on account of our national prosperity as well.

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The hand of labor has built this great metropolis, has created its wealth, and to-day supports its half-million of people. Within the memory of men who have hardly passed the meridian of life, Chicago was an Indian trading-post, which sheltered only a dozen white families. In less than half a lifetime, the magical power of labor has made this city what we see it to-day. In our country there is no need of a conflict between capital and labor; for capital is only another name for accumulated labor. Every industrious and intelligent workingman looks forward to the day when his earnings will make him a capitalist. There is no barrier of caste to prevent his rising to the highest place of honor and wealth. He asks no special privilege from the government; but he does ask that the law shall not rob him of employment, nor destroy his earnings by making them the sport of the gold-room, the football of speculation.

If the foregoing analysis is correct, it must be seen that depreciated and fluctuating currency has been the chief cause of our recent disasters; and this view accords with all experience, at home and abroad. The same story has been reported in every language and in every nation. Recovery from such disasters has come in only one way, by economy, reduction of credits, and a return to the basis of real money. By these means, and in the midst of great suffering, our people have been slowly making their way out of the ruins. The illusions of the seven years which preceded the crash have been rudely dispelled, and we have been brought face to face with realities. It has been a period of adjustment and payment. Prices have settled back to the old peace level; the wrecks have been gradually cleared away; the revival has begun. The products of our labor are again finding their way to the markets of the world. Within the last three years, in our foreign trade, we have sold six hundred millions more than we have bought; and the balance in our favor is increasing. Less than two hundred millions of our national bonds are now held in Europe, and more than two thirds of them are long bonds at low interest. The favorable balance of trade has made resumption comparatively easy.

Four years ago Congress saw another opportunity to place the business of the country again on a stable foundation. The law of 1875 fixed the date when the promise of the war should

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be redeemed. It was a great act of national faith, too long delayed, but made doubly necessary by the sufferings of our people. The effort to keep this promise has been fiercely resisted at every stage. Orators in Congress and out of Congress have demonstrated, to their own satisfaction, that resumption was impossible, and the demonstration was repeated even as late as two months ago. Cobbett, the great English pamphleteer, declared in 1816 that resumption in England was impossible; and he publicly offered himself to be broiled on a gridiron on the day when cash payments should be resumed. For years he kept the picture of a gridiron at the head of his paper, to remind his readers of his prophecy. We, too, have had our gridiron prophets; but all their predictions have failed. Against determined opposition and repeated prophecies of evil, resumption has come; and it has come to stay. As I said in the outset, it will stay, because it ought to stay, and because we are able to maintain it. In anticipation of its coming, the business of the country has gradually adjusted itself to the coin standard. Every legitimate enterprise will be benefited by resumption, and all classes of the community will rejoice in it except the gold gamblers and their associates whose craft it has destroyed, and except also those political prophets, whose occupation is gone by the explosion of their theories and the failure of their predictions.

That resumption can now be maintained, intelligent men no longer doubt.

There are locked up in the vaults of the Treasury, to-day, one hundred and forty millions of coin, with no other demand upon it than the maintenance of the greenback at par. All experience declares that this reserve is amply sufficient to maintain resumption. Should it prove insufficient, the Secretary of the Treasury has both the authority and the ability to increase it. The people will have no motive to demand any great amount of coin; for paper at par is more convenient than gold or silver. The banks are bound, both by law and their own interests, to aid in maintaining resumption. The amount of national bonds now held abroad is too small to enable foreign creditors to drain us of our coin. If necessary, we can sell to Europe more of our four per cent bonds than she can send home of our six per cents.

But we must not assume that all danger is past. Resumption can be defeated in one of two ways: first, by great and unexpected

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calamity, like war, or the general failure of our crops, which should turn the balance of trade against us; or, second, by the hostile legislation of Congress. The probability of the former is too remote to be seriously considered; the danger of the latter must be prevented by the intelligence and vigilance of our people.

Though the opposition to resumption has shown great strength in Congress, even down to a very recent date, yet, now that par has been reached, I do not believe it will be longer assailed by direct legislation. The instinct of self-preservation will probably lead politicians to abandon such efforts. The real danger lies in indirect assaults, which may be made in several ways. If the expenditures of the government should be increased by large appropriations for the various schemes which are urged upon Congress, so as to produce a deficit in the revenues, rather than levy additional taxes, Congress will be tempted to issue more greenbacks, and carry expansion to a point at which resumption will break down. Rigorous economy, and a persistent maintenance of revenue sufficient for necessary current expenses, and for the sinking fund, will be our safeguard in this direction.

The most dangerous indirect assault upon resumption is the attempt to abolish the national banks and substitute additional greenbacks in place of bank-notes. This effort will call to its support the sentiment which, to some extent, prevails against moneyed corporations. Should the attempt succeed, it will inevitably result in suspension of specie payments. While the Treasury aided by the banks can now easily maintain at par the outstanding volume of greenbacks, resumption would unquestionably break down if the volume were increased three hundred and twenty millions. We must debate the bank question with our eyes open to the certainty of this result. And this ought to be decisive against the measure. But besides destroying resumption, it would be a most radical and dangerous revolution in our system of government. During the period of war and reconstruction, many good people were alarmed at the tendency to centralize power at Washington; but the proposition we are now considering would result in a centralization of power without a parallel in our history. Before the war, except for the purpose of furnishing small change in the form of subsidiary and token coinage, it was never so much as suggested

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that the government had any right to become the proprietary manufacturer of money. It was the acknowledged duty of Congress to declare the value of coins, and to coin the bullion of private citizens which might be brought to the mint for that purpose; but it had no authority to determine the volume of currency or to regulate its distribution.

The substitution of greenbacks for national bank notes is proposed on the theory that the Treasury should be converted into a workshop for the manufacture and sale of money; that not only its quality, but also its quantity and distribution, shall depend solely upon the will of Congress. To force a citizen into the army, and put him in the front of battle without his consent, was thought by many a violent invasion of private rights; but for Congress to assume the power to raise or depress all prices, to change the value of every purchase and of every private contract, would be a usurpation of power the most despotic and dangerous ever proposed to Americans.

We are told that the people demand a volume of currency sufficient for the wants of trade. So they do. But what man or set of men is wise enough to measure these wants, and declare the exact volume of currency that will meet them. Suppose a hundred wise men of New York should take the contract of housing, clothing, feeding, and supplying the wants of the million people who live on Manhattan Island. Remember that all nations are placed under contribution to supply that city. The ships of every sea are landing at her docks the products of every clime. Railway trains from every quarter of the Union are pouring in their contributions. Millions of people in various parts of the world are at work creating the merchandise which the city needs. Hundreds of thousands of her own people are busy preparing these products for her use. Is it possible to conceive that the wit of man is able to devise any artificial system by which the infinite daily wants of New York shall be accurately measured and constantly and promptly supplied? Extend the scheme till it shall embrace the whole Union, with its forty-five millions of people. Is any Congress wise enough to measure all this vast business, and to determine in advance just how much currency is needed to transact it? To propose it is to ask impossibilities; and yet, by the operation of laws higher and more potent than human legislation, all this is silently and perfectly accomplished. Millions of men,

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acting without concert, each working for his own interest in obedience to the great law of demand and supply, house, clothe, feed, and transport the people of the United States, and carry on their manifold enterprises with perfect harmony and regularity. Any attempt of Congress to adjust the volume of currency to the wants of trade by arbitrary legislation is doomed to certain and disastrous failure.

The national banking system is that part of our financial machinery by which the volume of paper currency may increase or diminish in obedience to the laws of trade. If the volume becomes excessive, their notes are returned to the banks to be issued again, when increasing business requires them. The abolition of the national banks means the destruction of this indispensable self-adjusting principle of our currency system. Surely, intelligent men do not suppose we can get on without a banking system of some kind. The bank is the chief instrument of modern exchange. It is as necessary to trade as the railroad is to transportation. It brings the borrower and lender together, and renders available for the uses of industry the loanable capital of the community. Ninety per cent of all our trade is carried on by means of credits, in the form of drafts, checks, and commercial bills, and only ten per cent by the actual use of money, which has become the small change of commerce. The vast mass of deposits and bank credits is now subjected to searching national inspection. If the power to issue notes be taken from the banks, they will have no inducement to remain under such scrutiny. We shall go back to the wretched system of State banks and private broker-shops, and create three hundred and twenty millions more of paper currency which will escape all taxation. On every principle of public policy the attempt should be resisted. It ought not to succeed, and I do not believe it can succeed. To make resumption sure, we should insist that our present currency and coinage laws shall remain for the present, unchanged. Whether we can safely allow the government to keep $340,000,000 of currency in circulation, and to that extent make the Treasury a bank of issue, remains to be tested by experience. For myself, I doubt its wisdom as a permanent policy. But let the experiment be fairly tried.

Later, some modification may be needed in our coinage law. If other nations persist in their refusal to restore silver to its

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old place of honor, as a part of the world's coinage; if the principle of bi-metallic currency should be practically abandoned by other nations who have long maintained it, — we may by and by encounter serious difficulties, as our coinage of silver increases. I do not believe that our people will allow either metal to drive the other out of circulation. In some wise and just way they will meet and avert the danger when it comes.

Successful resumption will greatly aid in bringing into the murky sky of our politics what the signal service people call "clearing weather." It puts an end to a score of controversies which have long vexed the public mind, and wrought mischief to business. It ends the angry contention over the difference between the money of the bondholder and the money of the plough-holder. It relieves enterprising Congressmen of the necessity of introducing twenty-five or thirty bills a session to furnish the people with cheap money, to prevent gold-gambling, and to make customs duties payable in greenbacks. It will dismiss to the limbo of things forgotten such Utopian schemes as a currency based upon the magic circle of the interconvertibility of two different forms of irredeemable paper, and a currency "based on the public faith," and secured by "all the resources of the nation" in general, but by no particular part of them. We shall still hear echoes of the old conflict, such as "the barbarism and cowardice of gold and silver," and the virtues of "fiat money" ; but the theories which gave them birth will linger among us like belated ghosts, and soon find rest in the political grave of dead issues. All these will take their places in history alongside of the resolution of Vansittart, in 1811, that "British paper had not fallen, but gold had risen in value"; of the declaration of Castlereagh, in the House of Commons, that "the money standard is a sense of value in reference to currency as compared with commodities"; and the opinion of another member, who declared that "the standard is neither gold nor silver, but something set up in the imagination to be regulated by public opinion." When we have fully awakened from these vague dreams, public opinion will resume its old channels, and the wisdom and experience of the fathers of our Constitution will again be acknowledged and followed.

We shall agree, as our fathers did, that the yardstick shall have length; that the pound must have weight; that the dollar

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must have value in itself; and that neither length, nor weight, nor value, can be created by the fiat of law. Congress, relieved of the arduous task of regulating and managing all the business of our people, will address itself to the humbler but more important work of preserving the public peace, and managing wisely the revenues and expenditures of the government. Industry will no longer wait for the Legislature to discover easy roads to sudden wealth, but will begin again to rely upon labor and frugality as the only certain road to riches. Prosperity, which has long been waiting, is now ready to come; if we do not rudely repulse her, she will soon revisit our people, and will stay until another periodical craze shall drive her away.

During the whole period which resumption closes, our Constitution has been on trial for its life. When the greatest rebellion that the world has ever known assailed it, the believers in governments founded on hereditary right, or on sheer force, told us that the bubble of republican government was about to burst. They did not understand the resources of a government based on the national will. They did not understand that in our Constitution the greatest powers — rights too precious to be delegated to the Congress or to the States — are reserved to the people themselves. In the supreme moment of our peril, these voluntary powers were displayed in unsurpassed majesty and strength on a thousand battle-fields, and they preserved the republic from overthrow. Many feared that, in the great struggle to save the Union, personal liberty, freedom of opinion, and respect for law would be lost. But outside of the actual theatre of military operations the orderly course of justice was undisturbed. The rights of persons and property were almost everywhere sacredly preserved.

In the great conflict between Great Britain and the first Napoleon, though no hostile army landed on her territory, yet in England, as we are told by one of her eminent historians, the ordinary course of law was suspended, opinion was gagged, the right of public meeting was curtailed, government indictments for libel and trials for constructive treason were numerous, and other measures were adopted far more repressive than any which prevailed here during the great war on our own soil and among our own citizens. Professor Goldwin Smith has thus noted with admiration the behavior of our people during the crisis: —

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"History can scarcely supply a parallel to this perfect reliance of a government on its moral strength, and the unconstrained loyalty of its people. The second election of Lincoln took place at the acme of excitement, when every other family had a member in the field for the Union, or in a soldier's grave. Yet there was not only perfect order maintained, without any intervention of the police, but perfect respect for every right, not only of voting, speaking, and writing, but of public demonstration. What government in Europe could safely have allowed sympathy with a great rebellion to hang out its banner in all the streets? Never to be forgotten, either, are those predictions of military usurpation and sabre rule as the sure result of civil war, uttered with exultation by enemies, with sorrow by friends, warranted by the experience of history, but belied by the republican loyalty of die generals and the immediate return of the armies to civil life."

This testimony from an eminent foreigner is as important as it is just. The people passed cheerfully and joyfully from the ambition and glory of war to the humbler walks of peace. And finally, notwithstanding the confusion of public opinion, caused by great suffering, the public faith has been preserved, and the national character greatly strengthened. Reviewing the whole period, we have a right to say that the wisdom of our institutions has been vindicated, and our confidence in their stability been strengthened. Legislation has been directed more and more to the enlargement of private rights and the promotion of the interests of labor. It has been devoted, not to the glory of a dynasty, but to the welfare of a people. Slavery, with the aristocracy of caste which it engendered, and the degradation of labor which it produced, has disappeared. Without undue exultation, we may declare that the bells of the new year

"Ring out a slowly dying cause,
And ancient forms of party strife;
Ring in the nobler modes of life,
With sweeter manners, purer laws."

We have learned the great lesson, applicable alike to nations and to men, —

"Self-reverence, self-knowledge, self-control, —
These three alone lead life to sovereign power."

nts

Notes.

1. The Resumption Act, January 14, 1875.

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