No action was taken on the bill, and I only mention it in view of subsequent events.
Immediately after the Senate convened on the 18th of January, 1893, I arose and announced the death of ex-President Hayes in the following terms:
"It becomes my painful duty to announce to the Senate the death of Rutherford Birchard Hayes, at his residence in Fremont, Ohio, last evening at eleven o'clock. By the usage of the Senate, when one who has been President of the United States dies during the session of the Senate, it has been, as a mark of respect to his memory, recorded his death upon its journal and suspended its duties for the day.
"President Hayes held high and important positions during his life, having been a gallant and distinguished Union soldier during the war, a Member of Congress, three times Governor of the State of Ohio, and President of the United States. He was a man of marked ability, untarnished honor, unblemished character, and faithful in the discharge of all his duties in every relation of life, against whom no word of reproach can be truthfully uttered.
"It was my good fortune to know President Hayes intimately from the time we were law students until his death. To me his death is a deep personal grief. All who had the benefit of personal association with him were strengthened in their attachment to him and in their appreciation of his generous qualities of head and heart. His personal kindness and sincere, enduring attachment for his friends, was greater than he displayed in public intercourse. He was always modest, always courteous, kind to everyone who approached him, and generous to friend or foe. He had no sympathy with hatred or malice. He gave every man his due according to his judgment of his merits.
"I, therefore, as is usual on such occasions, move that the Senate, out of respect to the memory of President Hayes, do now adjourn."
In this formal announcement of the death of ex-President Hayes, I followed the usual language, but it did not convey my high appreciation of his abilities, nor my affectionate regard for him. This I have done in previous pages. His life was stainless; his services in the army and in civil life were of the highest value to his state and country; he was an affectionate husband, father and friend, and, in all the relations of life, was a honorable man and a patriotic citizen.
On February 17, I offered an amendment to the sundry civil appropriation bill authorizing the Secretary of the Treasury, at his discretion, to sell three per cent. bonds, redeemable in five years from date, to enable him to provide for and maintain the redemption of United States notes, according to the provisions of the resumption act of January 14, 1875, to the extent necessary to carry that act into full effect. I stated in explanation of this provision that its object was to enable the Secretary of the Treasury, in case an emergency should arise making a sale of bonds necessary, to issue a three per cent. bond redeemable at the pleasure of the United States after five years instead of a four per cent. bond running thirty years, or a four and a half per cent. bond running fifteen years, or a five per cent. bond running ten years, which were the only bonds he could sell under existing law.
After a long debate the amendment was agreed to by the vote of 30 yeas and 16 nays. It was not agreed to by the House and the question presented was whether the Senate would recede from the amendment. I regarded this provision as of vital importance, and urged the Senate to insist upon the amendment, not only as an act of wise public policy, but as one of justice to the incoming administration. In discussing this proposition, on the 1st of March, I said:
"This conference report presents for our consideration again a question of the importance, necessity, and propriety of the amendment known as the bond amendment which I had the honor to offer, and which had the sanction of the committee on finance of this body and of a very large majority of the Senate; but for want of time and the multitude of amendments pending there has been no vote in the House of Representatives which enables us to know what is the real opinion of that body on the subject. I can say no more on that point except to express the confident belief that if the vote had been taken the House would have concurred in the amendment.
"I think it is due to us and due to the committee of which I am a member that the exact history of that amendment shall be stated, and then the Senate may act upon it as it sees proper."
I then quoted the amendment as follows:
"To enable the Secretary of the Treasury to provide for and to maintain the redemption of United States notes according to the provisions of the act approved January 14, 1875, entitled 'An act to provide for the resumption of specie payments,' and, at the discretion of the secretary, he is authorized to issue, sell, and dispose of, at not less than par in coin, either of the description of bonds authorized in said act, or bonds of the United States bearing not to exceed three per cent. interest, payable semi-annually and redeemable at the pleasure of the United States after five years from their date, with like qualities, privileges, and exemptions provided in said act for the bonds therein authorized, to the extent necessary to carry said resumption act into full effect, and to use the proceeds thereof for the purposes provided in said act and none other."
Continuing, I said that the resumption act referred to in the amendment contained an important stipulation, the clause of the resumption act which enabled the secretary to maintain specie payments, and which is as follows:
"To enable the Secretary of the Treasury to prepare and provide for the redemption in this act authorized or required, he is authorized to use any surplus revenues, from time to time, in the treasury, not otherwise appropriated, and to issue, sell, and dispose of, at not less than par, in coin, either of the descriptions of bonds of the United States described in the act of Congress approved July 14, 1870, entitled 'An act to authorize the refunding of the national debt,' with like qualities, privileges, and exemptions, to the extent necessary to carry this act into full effect, and to use the proceeds thereof for the purposes aforesaid."
I then had read to the Senate the character and description of bonds authorized to be issued under what is called the refunding act, referred to in the resumption act, as follows:
"That the Secretary of the Treasury is hereby authorized to issue, in a sum or sums not exceeding in the aggregate $200,000,000, coupon or registered bonds of the United States, in such form as he may prescribe, and of denominations of $50, or some multiple of that sum, redeemable in coin of the present standard value, at the pleasure of the United States, after ten years from the date of their issue, and bearing interest, payable semi-annually in such coin, at the rate of five per cent. per annum; also, a sum or sums not exceeding in the aggregate $300,000,000 of like bonds, the same in all respects, but payable, at the pleasure of the United States, after fifteen years from the date of their issue, and bearing interest at the rate of four and a half per cent. per annum; also, a sum or sums not exceeding in the aggregate $1,000,000,000 of like bonds, the same in all respects, but payable, at the pleasure of the United States, after thirty years from the date of their issue, and bearing interest at the rate of four per cent. per annum."
Resuming my argument, I said:
"It is apparent from these laws, which are fundamental in their character, that the secretary has imposed upon him not merely the privilege but the duty of maintaining or providing for the resumption of specie payments and the maintenance of the specie standard in gold and silver coin. He is also authorized by a subsequent act, which I do not care to have read because it is not necessary, to maintain $100,000,000 in gold in the nature of a redemption fund, or rather that was the minimum limit provided in the law. In order to perform this grave duty the Secretary of the Treasury was authorized, at his discretion, whenever necessary to obtain the coin required, to issue a bond bearing four per cent. interest running for thirty years, or a bond bearing four and a half per cent. interest running fifteen years, or a bond bearing five per cent. interest running ten years.
"It has been feared—I do not say that there has been occasion for this fear—that the Secretary of the Treasury cannot maintain the necessary resumption fund; that he may have to resort to the credit of the government, upon which all the greenback issues of the United States notes and bonds are founded; that he might have to resort to the sale of bonds to obtain money, in order to maintain the parity of the different forms of money in this country and the redemption or payment in coin, when demanded, of the obligations of the United States, especially the United States notes, commonly called greenbacks.
"When I came, in examining this question, to see whether or not the law enacted in 1875 was applicable to the condition of affairs in 1893, it was apparent to me, as it must have been to every man, however ignorant he might be of the principles of finance, that the conditions of our country were such that we would not be justified, by public opinion or by the interests of our people, to sell a bond bearing four or four and a half or five per cent. interest.
"Therefore, it was manifest to me, as it would be manifest to anyone who would look at the question without any feeling about it at all, that if we could borrow money at three per cent. on bonds running for five years or for a short period of time, always reserving our right to redeem these bonds within a short period, it would save a vast sum to the people of the United States, at least one-fourth of the interest on the bonds, and we would save more by the right to redeem them if a favorable turn in the market should enable us to do so.
"I feel that it is a matter of public duty which I am bound to perform, as being connected with the refunding laws and the resumption act, that I should endeavor to make suitable provision for the next Secretary of the Treasury. I knew this law could not take effect until about the time the present secretary would go out, when the new secretary would come in. Therefore, I drew this amendment as it now stands, and it was submitted to the incoming Secretary of the Treasury. He having been formerly a member of the committee on finance and a Member of the Senate, and being familiar with us all, came before the committee on finance and there stated the reasons why, in his judgment, it might become, in case of exigency, important for him to have the power to issue a cheaper bond.
"He expressed the hope and belief, and I am inclined to agree with him, that it might not be necessary to issue these bonds at all, but that when the emergency came he must meet it as quickly as a stroke of lightning; there must be no hesitation or delay; if there should be a disparity between the two metals, or a run upon the government for the payment of the United States notes, he must be prepared to meet this responsibility in order to obtain coin with which to redeem the notes. That statement was submitted to the committee on finance in the presence of the honorable gentleman who is to hold the high and distinguished office of Secretary of the Treasury."
I proceeded at considerable length to state the difficulties the treasury must meet in consequence of the large increase of treasury notes issued for the purchase of silver bullion. The Senate fully appreciated the importance of the amendment, but in the hurry of the closing days of the session it was said that to attempt to reach a vote upon it in the House of Representatives would endanger the passage of the appropriation bill, and therefore the Senate receded from the amendment. It is easy now to see that its defeat greatly embarrassed the new administration and caused the loss of many millions by the sale of long term bonds at a higher rate of interest than three per cent.
On the 4th of March, 1893, Grover Cleveland was sworn into office as President of the United States, and delivered his inaugural address. It was a moderate and conservative document, dealing chiefly with axioms readily assented to. Its strongest passages were in favor of a sound and stable currency. He said that the danger of depreciation in the purchasing power of the wages paid to toil should furnish the strongest incentive to prompt and conservative precaution. He declared that the people had decreed that there should be a reform in the tariff, and had placed the control of their government, in its legislative and executive branches, with a political party pledged in the most positive terms to the accomplishment of such a reform, but in defining the nature or principles to be adopted he was so vague and indefinite that either a free trader or a protectionist might agree with him. He said:
"The oath I now take to preserve, protect, and defend the constitution of the United States, not only impressively defines the great responsibility I assume, but suggests obedience to constitutional commands as a rule by which my official conduct must be guided. I shall, to the best of my ability, and within my sphere of duty, preserve the constitution by loyally protecting every grant of federal power it contains, by defending all its restraints when attacked by impatience and resentment, and by enforcing its limitations and restrictions in favor of the states and the people."
This was a promise broad enough to cover the McKinley bill or the Wilson bill. I do not criticise the address, for an inaugural should contain nothing but thanks and patriotism.
The chief interest at this period centered in the World's Fair at Chicago, to celebrate the quadro-centennial of the discovery of America by Columbus. Such a celebration was first proposed as early as 1887, to be in the nature of an intellectual or scientific exposition that would exhibit the progress of our growth, and to take place at Washington, the political capital, under the charge of the national authorities. As the matter was discussed the opinion prevailed that the exposition should be an industrial one, and the choice of location lay between Chicago, New York and St. Louis. I was decidedly in favor of Chicago as the typical American city which sprang from a military post in 1837, survived the most destructive fire in history, and had become the second city of the continent, and, more than any other, represented the life, vigor and industry of the American people. The contention about the site delayed the exposition one year, so that the discovery of 1492 was not celebrated in 1892, but in the year following. This was the first enterprise undertaken by Chicago in which it was "behind time," but it was not the fault of that city, but of Congress, which delayed too long the selection of the site. I was a member of a select committee on the quadro-centennial appointed in January, 1890, composed of fifteen Members of the Senate. On the 21st of April, 1890, a bill was pending in the Senate appropriating $1,500,000 from the treasury of the United States to pay the expense of representing the government of the United States in an exposition in Chicago, in 1893. I made a speech in defense of the appropriation and stated the benefits of such an exposition as shown by the one in London and two in Paris that I had attended. While the receipts at the gates for attendance did not in either case cover the expense, yet the benefits derived greatly exceeded all expenses and left great buildings of permanent value, such as the Crystal Palace at Sydenham, and still more valuable buildings at Paris. I referred to the centennial exposition at Philadelphia in 1876, and to the innumerable state, county and city fairs in all parts of the United States, all of which were of great value to the places where held. These gatherings had revolutionized the social habits and greatly improved the manners and intelligence of our people, and are likely to increase in number in the future. The bill passed, but not without serious opposition, and upon terms extremely onerous to Chicago.
This course of opposition continued until August, 1892. The people of Chicago had raised the enormous sum of $11,000,000 without the certainty of any return. All nations had been invited, and were preparing to be represented at this exposition. The attention of mankind was excited by the enterprise of a city only fifty years old, of more than a million inhabitants, erecting more and greater buildings than had ever been constructed for such a purpose. The United States had not contributed to the general expense, but had appropriated a sum sufficient to provide for its own buildings in its own way, precisely on the footing of foreign powers. It became necessary to borrow more money, and Congress was requested to loan the exposition the sum of $5,000,000, to be refunded out of receipts, in the same proportion as to other stockholders. This was declined, but it was enacted that the United States would coin $2,500,000 in silver, and pay the exposition that coin. Whether this was done because silver bullion could be purchased for about $1,500,000 sufficient to coin $2,500,000, or to make a discrimination against the fair, I do not know. On the 5th of August, 1892, I expressed my opposition to this measure. Both Houses were remaining in session to settle the matter, and the President was delayed in Washington, when, by reason of domestic affliction, he ought to have been elsewhere. I said: "Under the circumstances, I do not see anything better to be done than to allow the bill to pass. If I was called upon on yea and nay vote I should vote against it."
On the 22nd of October, 1892, I attended the dedication of the building erected by the State of Ohio, on the exposition grounds. The structure, though not entirely completed, was formally dedicated, and the keys were duly delivered to Governor McKinley. On receiving the keys he made a very appropriate address. I was called for by the crowd, and was introduced by Major Peabody, president of the State Board of Managers. I do not recall the words of my speech, nor was it, or the various speeches made on this occasion, reported; but I no doubt said that the United States was the greatest power on earth, and Ohio was its garden spot. I made a political speech that evening at Central Music Hall, as previously stated.
Among the objects of the greatest interest at the exposition were three Spanish caravels, the exact counterparts of the Santa Maria, the Nina and the Pinta, the vessels with which Columbus made his memorable voyage of discovery. These reproductions were made by Spaniards at the place from which the original vessels sailed, and, manned by Spanish sailors, followed the same course pursued by Columbus to the islands he discovered and from thence sailed to the mouth of the St. Lawrence, and following up that stream passed through Lake Ontario, the Welland Canal, Lakes Erie, Huron and Michigan, to Chicago, more than 1,000 miles from the Atlantic Ocean. I had been invited by the managers of the exposition to deliver an address of welcome to the officers and sailors of these vessels, on their arrival at Chicago on the 7th of July, 1893. They were received by the managers and a great crowd, and conducted to a stand in the park of the exposition, where I made my address, too long to insert here, but I quote a few paragraphs:
"Mr. President, Captain Concas and the Officers and Mariners Under His Command:—You have before you men and women of all races and climes. They have met to share in this great exposition of the industries of all nations. To-day they celebrate the discovery of America by Christopher Columbus and the arrival here of the marine fleet under your command, manned by the countrymen of those who made the discovery of the new world.
* * * * *
"We have before us the reproduction of the Santa Maria, the Pinta and the Nina, the three vessels that made this memorable voyage. They are sent to us by the same chivalrous and gallant people who built the original craft and manned and sailed them under the command of Columbus. They are striking object lessons that speak more eloquently than voice or words. We welcome them to this exposition of the industries of the world. Here, on the waters of this inland sea, 1,000 miles from the ocean traversed by Columbus, in this city, the most marvelous result of the industry and energy of mankind, we place this mimic fleet side by side with the monsters that have come from the inventive genius of the American people, not to extol our handiwork, but to extol the men who, four hundred years ago, with such feeble means and resources, opened the way to all the achievements of succeeding generations. You can look at them where they quietly rest upon the waters of the great northwest. In such as these one hundred and twenty men sailed on an unknown ocean, they knew not where. They lived where for two thousand years the pillars of Hercules had marked the end of the world. They had been taught to believe in the four corners of the earth, and that all beyond was a boundless waste of waters, into which no one had ventured beyond the Canary Islands and the coast of Africa.
* * * * *
"We welcome all the peoples of the earth, with their varied productions, to the full and free enjoyment of their habits at home, and in return exhibit to them the results of our growth and industry. In no boastful spirit this new and marvelous city, which has sprung into existence within the life of men who hear me, has, with the aid of the general government and the states that comprise it, built these great palaces, adorned these lately waste places and brought into them the wonderful facilities of transportation invented in modern times. Welcome all, but on this day we doubly welcome these mementoes of the voyage of Columbus to this western world.
"In the name of the managers of this exposition I give thanks and welcome to all who have brought them here, and especially to the government and people of Spain, who have thus contributed to the interest and success of this exposition."
On the 30th of June, 1893, the President issued a proclamation convening Congress in extraordinary session on the 7th of August. In reciting the reasons for this unusual call, only resorted to in cases of extreme urgency, he said that "the distrust and apprehension concerning the financial situation which pervades all business circles have already caused great loss and damage to our people, and threaten to cripple our merchants, stop the wheels of manufacture, bring distress and privation to our farmers, and withhold from our workingmen the wage of labor;" that "the policy which the executive branch of government finds embodied in unwise laws which must be executed until repealed by Congress;" and that Congress was convened "to the end that the people may be relived, through legislation, from present and impending danger and distress."
Congress met in pursuance of the proclamation, and on the 8th of August the President sent a message to each House, in which he depicted an alarming condition of the national finances, and attributed it to congressional legislation touching the purchase and coinage of silver by the general government. He said:
"This legislation is embodied in a statute passed on the 14th day of July, 1890, which was the culmination of much agitation on the subject involved, and which may be considered a truce, after a long struggle, between the advocates of free silver coinage and those intending to be more conservative."
He ascribed the evil of the times to the monthly purchase of 4,500,000 ounces of silver bullion, and the payment therefor with treasury notes redeemable in gold or silver coin at the discretion of the Secretary of the Treasury, and to the reissue of said notes after redemption. He stated that up to the 15th of July, 1893, such notes had been issued for the purpose mentioned to the amount of more than $147,000,000. In a single year over $40,000,000 of these notes had been redeemed in gold. This threatened the reserve of gold held for the redemption of United States notes, and the whole financial system of the government. No other subject was presented in the message of the President, and Congress had to face the alternative of the single standard of silver, or the suspension of the purchase of silver bullion.
I had foreseen this inevitable result and had sought, as far as possible, to avoid it by the inserting of sundry provisions in the act of July 14, 1890. No portion of that act was objected to by the President except the clause requiring the purchase of silver bullion and the issue of treasury notes in payment for it. In this I heartily concurred with him. From the date of the passage of that law, to its final repeal, I was opposed to this compulsory clause, but yielded to its adoption in preference to the free coinage of silver, and in the hope that a brief experience under the act would dissipate the popular delusion in favor of free coinage. Joseph H. Walker, of Massachusetts, a prominent Member of the House of Representatives, who was one of the conferees with me on the bill referred to, and agreed with me in assenting to it, wrote me a letter, my reply to which was in substantial accordance with the subsequent message of the President and with the action taken by Congress. I insert it here:
"Mansfield, O., July 8, 1893."Hon. J. H. Walker.
"My Dear Sir:—Yours of 28th ult., inclosing a copy of your statement of the causes that led Mr. Conger, yourself and me to agree with reluctance to the silver act of 1890, is received. An answer had been delayed by my absence at Chicago. You clearly and correctly state the history of that act. The bill that passed the House provided for the purchase of $4,500,000 worth of silver at gold value. The Senate struck out this provision and provided for the free coinage of silver or the purchase of all that was offered at the rate of 129 cents an ounce. As conferees acting for the two Houses, it was our duty to bring about an agreement, if practicable, without respect to individual opinion. The result of the conference was to reject free coinage and to provide for the purchase of four million five hundred thousand ounces of silver at its gold price— a less amount than was proposed by the House, the provisions declaring the public policy of the United States to maintain the parity of the two metals or the authority to stipulate on the contracts for payments in gold, the limit of the issue of treasury notes to the actual cost of silver bullion at gold value, and the repeal of the act providing for the senseless coinage of silver dollars when we already had 300,000,000 silver dollars in the treasury we could not circulate, were all in the line of sound money.
"Another object I had in view was to secure a much needed addition to our currency, then being reduced by the compulsory retirement of national bank notes in the payment of United States bonds. This would have been more wisely provided by notes secured by both gold and silver, but such a provision could not then be secured. These reasons fully justified the compromise.
"But the great controlling reason why we agreed to it was that it was the only expedient by which we could defeat the free coinage of silver. Each of us regarded the measure proposed by the Senate as a practical repudiation of one-third of the debts of the United States, as a substantial reduction of the wages of labor, as a debasement of our currency to a single silver standard, as the demonetization of gold and a sharp disturbance of all our business relations with the great commercial nations of the world. To defeat such a policy, so pregnant with evil, I was willing to buy the entire product of American silver mines at its gold value.
"And that was what we provided, guarded as far as we could. To accomplish our object we had to get the consent of the Republican Representatives from the silver-producing states. This we could only do by buying the silver product of those states. It was a costly purchase. The silver we purchased is not worth as much as we paid for it, but this loss is insignificant compared to our gain by the defeat of the free coinage of silver. It is said there was no danger of free coinage, that the President would have vetoed it. We had no right to throw the responsibility upon him. Besides, his veto would leave the Bland act in force. We did not believe that his veto would dispel the craze that then existed for free coinage. Many people wanted the experiment tried. The result of the experiment of buying four and a half million ounces of silver a month at its market value will be the best antidote against the purchase of the silver of the world at one-third more than its market value.
"I never for a moment regretted the passage of the act of 1890, commonly called the 'Sherman act,' though, as you know, I had no more to do with it than the other conferees. There is but one provision in it that I would change and that is to strike out the compulsory purchase of a given quantity of silver and give authority to the Secretary of the Treasury to buy silver bullion at its market price when needed for subsidiary coinage. The only position we can occupy in the interests of our constituents at large is one fixed standard of value and the use of both metals at par with each other, on a ratio as near as possible to their market value.
"Such a policy I believe is right. With reserves both of gold and silver in the proper proportions we can maintain the entire body of our paper money, including coin, at par with each other. For one I will never agree to the revival of state bank paper money, which cannot be made legal tender, and which, on the first sign of alarm, will disappear or be lost in the hands of the holder.
"Very respectfully yours,"John Sherman."
I had expressed similar views in speeches in Congress and before the people and in numerous published interviews, and in the previous Congress had introduced a bill to suspend the purchase of silver bullion, substantially similar in terms to the bill that became a law in November, 1893. During the month of August I took a more active part in the proceedings than usual. On the 8th, the 16th and the 18th I made speeches in the current debate.
A brief statement of the passage of this law of 1893 may be of interest. It was introduced as a bill by William L. Wilson, of West Virginia, in the House of Representatives, in the words of the bill introduced by me in the Senate on the 14th of July, 1892, as already stated, and passed the House on the 28th of August, by the decisive vote of 239 yeas and 108 nays. It was referred in the Senate to the committee on finance, of which Daniel W. Voorhees was then chairman. It was on the next day reported by him from that committee, with an amendment in the nature of a substitute, but substantially similar in legal effect to the House bill.
On the next day, August 30, I took the floor and made one of the longest speeches in my congressional life, covering more than forty closely printed pamphlet pages. I quote a few of the opening paragraphs:
"The immediate question before us is whether the United States shall suspend the purchase of silver bullion directed by the act of July 14, 1890. It is to decide this question the President has called Congress together in special session at this inconvenient season of the year. If this was the only reason for an extraordinary session it would seem insufficient. The mere addition of eighteen hundred million ounces of silver to the vast hoard in the treasury, and the addition of fourteen millions of treasury notes to the one thousand millions of notes outstanding, would hardly justify this call, especially as Congress at the last session neglected or refused to suspend the purchase of silver. The call is justified by the existing financial stringency, growing out of the fear that the United States will open its mints to the free coinage of silver. This is the real issue. The purchase of silver is a mere incident. The gravity of this issue cannot be measured by words. In every way in which we turn we encounter difficulties.
"If we adopt the single standard of gold without aid from silver, we will greatly increase the burden of national and individual debts, disturb the relation between capital and labor, cripple the industries of the country, still further reduce the value of silver, of which we now have in the treasury and among our people over $593,000,000, and of which we are the chief producers, and invite a struggle with the great commercial nations for the possession of the gold of the world.
"On the other hand, if we continue the purchase of 54,000,000 ounces of silver a year, we will eventually bring the United States to the single standard of silver—a constantly depreciating commodity, now rejected by the great commercial nations as a standard of value; a commodity confessedly inconvenient, by its weight, bulk, and value, for the large transactions of foreign and domestic commerce, and detach us from the money standard now adopted by all European nations, with which we now have our chief commercial and social relations. In dealing with such a question we surely ought to dismiss from our minds all party affinities or prejudices; all local or sectional interests, and all preconceived opinions not justified by existing facts and conditions.
"Upon one thing I believe that Congress and our constituents agree: That both these extreme positions shall be rejected; that both silver and gold should be continued in use as money—a measure of value; that neither can be dispensed with. Monometallism, pure and simple, has never gained a foothold in the United States. We are all bimetallists. But there are many kinds of bimetallism. One kind favors the adoption of the cheaper metal for the time being as the standard of value. Silver being now the cheaper metal, they favor its free coinage at the present ratio, with the absolute certainty that silver alone will be coined at our mints as money; that gold will be demonetized, hoarded at a premium, or exported where it is maintained as standard money. The result would be monometallism of silver.
* * * * *
"The two metals, as metals, never have been, are not now, and never can be, kept at par with each other for any considerable time at any fixed ratio. This necessarily imposes upon the government the duty of buying the cheaper metal and coining it into money. The government should only pay for the bullion its market value, for it has the burden of maintaining it at par with the dearer metal. If the bullion falls in price the government must make it good; if it rises in value the government gains.
"The government is thus always interested in advancing the value of the cheaper metal. This is the kind of bimetallism I believe in. It is the only way in which two commodities of unequal value can be maintained at parity with each other. The free coinage of silver and gold at any ratio you may fix means the use of the cheaper metal only. This is founded on the universal law of humanity, the law of selfishness. No man will carry to the mint one ounce of gold to be coined into dollars when he can carry sixteen ounces of silver, worth but little more in the market than half an ounce of gold, and get the same number of dollars.
"The free coinage of silver means the single standard of silver. It means a cheaper dollar, with less purchasing power. It means a reduction in the wages of labor; not in the number of dollars, but in the quantity of bread, meat, clothes, comforts he can purchase with his daily wage. It means a repudiation of a portion of all debts, public and private. It means a bounty to all banks, savings institutions, trust companies that are in debt more than their credits. It means a nominal advance in the prices of the produce of the farmer, but a decrease in the purchasing power of his money. Its chief attraction is that it enables a debtor to pay his debt contracted upon the existing standard with money of less value. If Senators want cheap money and to advance prices, free coinage is the way to do it; but do not call it bimetallism. The problem we have to solve is how to secure to our people the largest use of both gold and silver without demonetizing either.
"Now, let us examine the situation in which we are placed. Our country is under the pressure of a currency famine. Industries, great and small, all suspended by the owners, not because they cannot sell their products, but because they cannot get the money to pay for raw material and the wages of their employees. Banks conducted fairly are drained of their deposits and are compelled not only to refuse all loans, but to collect their bills receivable. This stringency extends to all trades and businesses; it affects even your public revenues, all forms of public and private securities, and, more than all, its stops the pay of a vast army of laboring men, of skilled mechanics, and artisans, and affects the economy and comfort of almost every home in the land.
"The strange feature of this stringency is unlike that of any of the numerous panics in our past history. They came from either an irredeemable currency, which became worthless in the hands of the holder, or from expanded credit, based upon reckless enterprises which, failing, destroyed confidence in all industries. Stringency followed failure and reckless speculation. This panic occurs when money is more abundant than ever before. Our circulating notes to- day are sixty millions more than one year ago. It is all good—as good as gold. No discrimination is made between the gold and silver dollar, or between the United States note, the treasury note, the silver certificate, or the gold certificate. All these are indiscriminately hoarded, and not so much by the rich as by the poor. The draft is upon the savings bank, as well as the national or state bank. It is the movement of fear, the belief that their money will be needed, and that they may not be able to get it when they want it. In former panics, stringency followed failures. In this, failures follow stringency.
"Now, as representatives of the people, we are called here in Congress to furnish such measures of relief as the law can afford. In the discharge of this duty I will sweep away all party bias, all pride of opinion, all personal interest, and even the good will of my constituents, if it were necessary; but, fortunately, I believe their opinions concur with my own."
In conclusion I said:
"It is said that if we stop the coinage of silver it will be the end of silver. I have heard that moan from some of my friends near me. I do not think it will be the end of silver. We have proven by our purchases that the mere purchase of silver by us in a declining market, when all the nations of Europe are refusing to buy silver and throwing upon us their surplus, is an improvident use of the public money, and it ought to be abandoned, or at least suspended until a time should come when we may, by an international ratio or by some other provision of law, prevent the possible coming to the single standard of silver. Now, that can be done.
"What do we propose to do now? We simply propose to stop the purchase. We do not say when we will renew it again, but we simply say we believe, in view of a panic or any possibilities of a panic, that it would be idle for us to waste either our credit money or our actual money to buy that which must be put down into the cellar of our treasury and there lie unused, except as it is represented by promises to pay gold. I say that such a policy as that would be foolish and delusive.
"Senators say that this is a blow at silver. Why, silver is as much a part of the industry of my country as it is a part of the industry of the state of the Senator from Colorado, the able exponent of this question. The production of silver is a great interest, and the people of Ohio are as deeply interested in the success of that interest as the people of Colorado. It is true we have not the direct ownership of the property, but it enters into measures of value of our property. There could be no desire on the part of any portion of the people of the United States to strike down silver. That idea ought to be abandoned at once. Therefore, in order to at least give the assurance of honest men that we do not intend to destroy an industry of America, we put upon this bill a provision proposed now by the Senator from Indiana.
"I say that instead of desiring to strike down silver we will likely build it up; and any measure that could be adopted for an international ratio that will not demonetize gold will meet my approbation and favor. But I would not dissever the financial business of this great country of ours, with its 65,000,000 of people, from the standards that are now recognized by all the Christian nations of Europe. I would not have our measure less valuable than the measure of the proudest and haughtiest country of the world.
"This is not a question of the mere interest of Nevada or Colorado. It is not a question about what Wall street will do. They will always be doing some deviltry or other, it makes no difference who is up or who is down. We take that as a matter of course. The question is what ought to be done for the people of the United States in their length and breadth. If Congress should say that in its opinion it is not now wise, after our experience, to continue the purchase of silver bullion, is any injustice done to Colorado or Nevada? Are we bound to build up the interest of one section or one community at the expense of another or of the whole country?
"No. I heartily and truly believe that the best thing we can now do is to suspend for time, at least, the purchase of silver bullion. We should then turn our attention to measures that are demanded immediately to meet the difficulties of the hour. Let this be done promptly and completely. It involves a trust to your officers and great powers over the public funds. I am willing to trust them. If you are not, it is a strange attitude in political affairs. I would give them power to protect the credit of the government against all enemies at home and abroad.
"If the fight must be for the possession of gold, we will use our cotton and our corn, our wheat and other productions, against all the productions of mankind. We, with our resources, can then enter into a financial competition. We do not want to do it now. We prefer to wait awhile until the skies are clear and see what will be the effect of the Indian policy, and what arrangements may be made for conducting another international conference. In the meantime let the United States stand upon its strength and credit, maintaining its money, different kinds of money, at a parity with each other. If we will do that I think soon all these clouds will be dissipated and we may go home to our families and friends with a conscientiousness that we have done good work for our country at large."
I was frequently interrupted, and this led to the discussion of collateral questions and especially the dropping of the silver dollar by the act of 1873, the history of which I have heretofore stated. This speech was a temperate and nonpartisan presentation of a business question of great importance, and I can say without egotism that it was well received and commended by the public press and by my associates in the Senate. Though I sought to repeal a single clause of a bill of which I was erroneously alleged to be the author, I was charged with inconsistency, and my speech was made the text of the long debate that followed. The "silver Senators," so called, attacked it with violence, and appeals were made to Democratic Senators to stand by those who had defeated the election law, and by the position the Democratic Senators had previously taken in favor of free coinage.
On the 28th of September, and on the 2nd, 13th, 17th and 28th of October, I made speeches in the current debate, which extended to every part of the financial legislation of the United States since the formation of the government. I insert here the description given by the Washington "Post" of the scene on the 17th:
"The climax of the remarkable day was now at hand. There is no man in the Senate for whom a deeper feeling of esteem is felt than John Sherman. He saw the Republican party born, he has been its soldier as well as its sage, he has sat at the council table of Presidents. His hair is white, and his muscles have no longer the elasticity of youth, but age has not dimmed the clearness of his intellectual vision, while it has added to the wisdom of his councils. Upon Mr. Sherman, therefore, as he arose, every eye was turned. Personalities were forgotten, the bitterness of strife was laid aside. In a picture which must live in the memory of him who saw it, the spare and bowed form of Mr. Sherman was the central figure. There was not the slightest trace of feebleness in his impassioned tones. Except once or twice, as he hesitated a moment or two for a word to express his thought, there was not a reminder that the brain at seventy may be inert or the fire be dampened in the veins.
"Mr. Sherman spoke, as he himself said, neither in reproach nor anger. It was the appealing tones that gave his speech its power —its convincing earnestness, its lack of rancor, its sober truth that gave it weight. Elsewhere it is printed in detail. Suffice it to say here that he predicted that the rules would have to be changed since they had been made the instrument of a revolutionary minority. Never before had he seen such obstruction in the Senate, never before the force bill had he known of a measure which failed, after due deliberation, to come to a vote. The Republicans had remained steadfast to the President, although under no obligation to him, and now the time had come when the Democrats must take the responsibility.
"In times past, when the Republicans were in the majority, they never shrank from responsibility. They were Republicans because they believed in Republican principles and Republican men and Republican measures, and whenever a question was to be decided they never pleaded the 'baby act' and said 'we could not agree.' They met together and came to an agreement, and in that way they passed all the great measures which have marked the history of the last thirty years of our country, and it was not done by begging votes on the other side.
"'They say they cannot agree, They must agree,' thundered Mr. Sherman, drawing himself to his full height, and pointing his quivering finger to the Democratic side, 'or else surrender their political power!'
"Then Mr. Sherman pointed out the important legislation that was so sadly needed, not the least being some provision for the deficit of the government, which, he quoted Secretary Carlisle as saying, would be $50,000,000 this year. 'These things cannot be evaded,' he said, while the Senate lingered on his words. 'We must decide the silver question one way or the other. If you,' he added, looking the Democrats in the fact, 'cannot do it, then retire from the Senate Chamber, and we will fix it on this side, and do the best we can with our silver friends who belong to us, who are blood of our blood, and bone of our bone. But yours is the proper duty, and, therefore, I beg of you, not in reproach or anger, to perform it. You have the supreme honor of being able to settle this question now, and you ought to do it.'
"Mr. Sherman ceased, but the thrall of his words remained long after his venerable form had disappeared. No Democrat answered him. Mr. Voorhees, who had sat within arm's reach of him on the Republican side, crossed the Chamber to his own seat, and sank down as a man laden with deep care."
The debate continued in the Senate until the 30th of October, when the Senate substitute was adopted by the vote of 43 yeas and 32 nays. Of the yeas 22 were Republicans, and of the nays 20 were Democrats; so that the bill in the Senate was supported by a majority of Republicans and opposed by a majority of Democrats. On this important question the President was acting with a majority of Republicans and a minority of Democrats, and it is to his credit that he firmly held his ground in spite of the opposition in his party.
On the 1st of November, when the amended bill came to the House, Mr. Wilson moved to concur in the amendment of the Senate. A casual debate followed, mostly by Bland and Bryan against the bill, and Wilson and Reed for it. The Senate amendment was agreed to and the bill as amended passed by the decisive vote of yeas 194 and nays 94, and was approved by the President on the same day. The law thus enacted is as follows:
"That so much of the act approved July 14, 1890, entitled 'An act directing the purchase of silver bullion and issue of treasury notes thereon, and for other purposes,' as directs the Secretary of the Treasury to purchase from time to time silver bullion to the aggregate amount of 4,500,000 ounces, or so much thereof as may be offered in each month at the market price thereof, not exceeding one dollar for 371.25 grains of pure silver, and to issue in payment for such purchases treasury notes of the United States, be, and the same is hereby, repealed. And it is hereby declared to be the policy of the United States to continue the use of both gold and silver as standard money, and to coin both gold and silver into money of equal intrinsic and exchangeable value, such equality to be secured through international agreement or by such safeguards of legislation as will insure the maintenance of the parity in value of the coins of the two metals, and the equal power of every dollar at all times, in the markets and in the payment of debts. And it is hereby further declared that the efforts of the government should be steadily directed to the establishment of such a safe system of bimetallism as will maintain at all times the equal power of every dollar coined or issued by the United States, in the markets and in the payment of debts."
Thus the vital principles of the act of July 14, 1890, remained in force, and the provisions for the purchase of silver bullion and for the issue of treasury notes were repealed. The maintenance of the gold standard, the parity of all money whether of gold, silver or paper, and the payment of all bonds of the United States in coin, were preserved.
The free coinage of silver is still upheld by a large body of those who are interested in mining it, or who want to pay their debts with a depreciated coin; but the danger of the adoption of this policy is lessening daily. It received a severe blow by the action of the Ohio Democratic convention in 1895 in rejecting it by a vote of more than two to one. The bimetallic system of maintaining all forms of money at par with gold will probably soon be fully established. To complete this system and to extend it to our paper money it would be wise to gradually withdraw treasury notes and silver certificates and replace them with United States notes supported and maintained by large reserves of gold. Thus all kinds of paper money issued by the United States would be of the same form and value. The great mass of standard silver dollars, amounting on August 1, 1895, to $371,542,531, now held in the treasury represented by $320,355,188 of silver certificates in circulation, is the one great disturbing element in our finances. But 51,746,706 standard silver dollars are in circulation, and experience has shown that a greater amount cannot be kept out among the people. The certificates representing the silver dollars are in circulation and a legal tender for customs dues as well as for all debts, public and private. They must be treated as United States notes, and maintained at par with gold coin, or the parity of our coin and currency will be endangered. They now enter into the general aggregate of our legal tender money and are largely used in the payment of customs duties, and when received are paid out for the current expenses of the government. While supported by the aggregate silver dollars in the treasury, and the pledge of the public faith to maintain them at par with gold coin and United States notes, they are a safe and useful currency, but any measure to increase these certificates, based upon the coining of more silver dollars from bullion alleged to be gain or seigniorage, would seriously impair the ability of the government to maintain their parity with gold. The great depreciation of silver bullion has resulted in a vast loss to the government and its disposition is the most serious problem pending in Congress.
During the entire extra session of 1893 the body of the Democratic Senators and Members were placed in an awkward position. They were desirous of aiding the President, but their constituents behind them were generally in favor of the free coinage of silver. In some of the northern states, especially in Ohio, the Democratic party had declared, in its convention, in favor of free coinage, and now their President demanded, in the strongest language, the repeal of the only provision of law for the purchase or coinage of silver. The House promptly responded to the appeal, but the Democratic Senators hesitated and delayed action until after three months of weary debate. Their party had a majority in each House, and should have disposed of the only question submitted by the President in thirty days. Voorhees was the first Democratic Senator to announce his purpose to vote for the repeal, although previously an advocate of free coinage, and he, as chairman of the committee on finance, reported the bill of the committee, while others lingered in doubt. The Republican Senators, except those representing silver states, as a rule, promptly avowed their purpose to vote for repeal, although they had voted for the law.
After the call for the extra session was issued, I had expressed my opinion of silver legislation, but I did not wish to embarrass the President. When interviewed I refused to answer, saying the people had called upon the present administration to handle these questions, and neither I nor anyone should do aught to add embarrassment, when so much already existed. When Congress met, the Republicans remained quiet, and did not seek to embarrass the administration, but it was soon ascertained that a decided majority of them would vote for the repeal of the purchasing clause of the act of 1890, but against any modification of any other provision of that act. The position of the Republican Senators from the states west of the Mississippi River was also known. They would vote against any change of the law, unless they could secure the free coinage of silver. During this period the position of the Democratic Senators was unknown, but it was rapidly developed, with the result already stated.
Congress adjourned on the 3rd of November. The closing days were memorable for their excitement. For fourteen consecutive days the Senate did not adjourn, but from time to time took recesses. On the 31st of October the journal had not been read for fourteen days.
During this period I was requested by Governor McKinley to take part in the pending canvass in Ohio, which involved his re-election as governor. In the condition of the Senate I did not feel justified in leaving, but immediately upon the passage of the repeal bill started for Columbus to render such service as I could. It had been falsely stated that I was indifferent about McKinley's election, which I promptly denied. But a few days intervened before the election. On the day of my arrival in Ohio, I spoke at Springfield. On the evening of the next day, the 3rd of November, at Central Turner Hall in Cincinnati, I spoke to a very large meeting. This speech was fully reported. It was mostly devoted to the tariff, a struggle over which was anticipated. After paying my usual visit to the chamber of commerce and the Lincoln club, I proceeded to Toledo, where I spoke at Memorial Hall on the evening before the election, and then returned home to Mansfield, where I voted. The result was even more decisive than expected. The 81,000 plurality for McKinley was the best evidence of his popularity, and was regarded as an indorsement of the McKinley tariff law.
On the 8th of November I returned to Washington. Many interviews with me were reported, in which I expressed my satisfaction with the overwhelming victory gained by the Republicans all over the United States, and especially with their success in New York. In response to a request by a leading journal, before the meeting of Congress, I carefully prepared a statement of the causes that led to these results. I undertook to review the political changes in the past four years, but will insert only two paragraphs of this paper.
"It is manifest that the causes of the defeat of the Democratic party in the recent election were general and not local. They extended to Colorado, Dakota, Iowa, Ohio, Pennsylvania, New York, and Massachusetts. If the opposition to the Democratic party in Virginia had been organized and conducted by the Republican party, the results in that state would have been very different. The ideas of the Populists are too visionary and impracticable to be made the basis of a political organization. A canvass conducted in Virginia upon the issues that prevailed in Ohio would, in my judgment, have greatly changed the results in that state. Aside from the memories of the war, the economic principles of the Republican party have great strength in the southern states, and whenever the images of the war fade away the people of those states will be influenced by the same ideas that prevail in the northern states. The leading cause of the enormous Republican majorities in northern states I have mentioned was the united protest of the unemployed against radical changes of our tariff laws. Whatever theories may be proposed, it may be regarded as an axiom that the protective principle is a well established principle in the United States. It has been recommended by all the Presidents from Washington to Harrison, and by none more emphatically than Jefferson, Madison, Monroe, and Jackson. This is and has been the natural and instinctive policy of a new nation with enormous undeveloped resources. While the terms of our tariff laws provided for revenue, their foundation and background were to encourage domestic manufactures and diversify productions. The extent of protection was limited to the want of revenue, but the duties were uniformly so adjusted as, while producing revenue, to encourage manufactures.
* * * * *
"But, after all, we must place as the chief cause of Democratic defeat the profound and settled distrust that the Democratic party will now, having the President and a majority in both Houses, disturb the enormous industries of our country developed by, and dependent upon, our tariff laws, and will seek to substitute the policy of Great Britain, of free trade, as against the example of the leading nations of Europe as well as our own, of a wise and careful protection, and encouragement by tariff laws of all forms of domestic industry that can be conducted with a reasonable hope of profit in this country. The future of parties will depend more largely upon the manner in which this condition of things is met by the present Congress than upon all other causes combined."
The second session of the 53rd Congress commenced on the 4th of December, 1893. The President in his message was especially urgent in his recommendation of a revision of the tariff laws. He said:
"After a hard struggle tariff reform is directly before us. Nothing so important claims our attention, and nothing so clearly presents itself as both an opportunity and a duty—an opportunity to deserve the gratitude of our fellow-citizens, and a duty imposed upon us by our oft-repeated professions, and by the emphatic mandate of the people. After a full discussion our countrymen have spoken in favor of this reform, and they have confided the work of its accomplishment to the hands of those who are solemnly pledged to it.
"If there is anything in the theory of a representation in public places of the people and their desires, if public officers are really the servants of the people, and if political promises and professions have any binding force, our failure to give the relief so long awaited will be sheer recreancy. Nothing should intervene to distract our attention or disturb our effort, until this reform is accomplished by wise and careful legislation.
* * * * *
"Not less closely related to our people's prosperity and well-being is the removal of restrictions upon the importation of the raw materials necessary to our manufactures. The world should be open to our national ingenuity and enterprise. This cannot be while federal legislation, through the imposition of high tariffs, forbids to American manufactures as cheap materials as those used by their competitors."
In view of this message, it was manifest that the tariff would be the chief subject of legislation during the session. It was understood that a bill had been prepared by the committee of ways and means, which had been submitted to the President and Secretary of the Treasury and approved by them. It was reported to the House of Representatives, December 19, 1893. On the 8th of January, 1894, Mr. Wilson, chairman of the committee, made an elaborate speech in its support. The debate continued until the 1st of February, when, with some amendments, it passed the House. In the Senate, on the next day, it was referred to the committee on finance. On the 20th of March it was reported to the Senate, with amendments, by Mr. Voorhees. Mr. Morrill said:
"I desire to say that so far as the Republican members of the committee on finance are concerned they did not object to the reporting of the bill, while they are opposed not only to the proposed income tax, but to the many changes of specifics toad valorems, and to the great bulk of the provisions of the bill."
On the 2nd of April Voorhees made a carefully prepared speech in support of the bill. The debate continued, occupying much the larger part of the time until the 3rd day of July, when the bill passed with radical amendments, which changed it in principle and details. Two conferences of the two Houses were held on amendments disagreed to, but failed to agree, and it appeared, after the long struggle, that he bill would be defeated, when, on the 13th of August, upon motion of Mr. Catchings, the House agreed to the Senate amendments in gross and thus the bill passed Congress. The President refused to approve it and it became a law after ten days without his approval.
This skeleton history of what is now known as the Wilson tariff partly discloses its imperfections. Framed in the House as a tariff for revenue only, and radically changed in the Senate to a tariff with protection to special industries, it was not satisfactory to either House, to the President or to the people. So far as it copied the schedules and the legislative provisions of the McKinley law, it met with approval. Its new features were incongruous, were decidedly sectional, and many of its provisions were inconsistent with each other.
The vital defect of this bill is that it does not provide sufficient revenue to carry on the government. This is the primary and almost the only cause of the financial difficulties of the present administration. The election of Mr. Cleveland in 1892, upon the platform framed by him, naturally created distrust as to the ability of the government to maintain the parity of the different forms of money in circulation. Added to this, the broad declaration of the purpose to reduce taxation led to the reduction of importations and the diminution of the revenue from the McKinley tariff. Importers and dealers naturally reduced their imports in view of the expectation that duties would be reduced. By the 1st of July, 1893, when the Wilson bill was in embryo, the revenues had been so diminished as to yield a surplus of only $2,341,074 during the previous year. It was apparent, when Congress met in August, that the administration, having a majority in each House of Congress, was determined to reduce duties, and yet it made no effort to reduce expenditures. Soon after there was a large deficiency in the revenue, and the Secretary of the Treasury was compelled either to refuse to pay appropriations made by law in excess of receipts or to borrow money to meet the deficiencies.
In my judgment the better way for him would have been not to pay appropriations not needed to meet specific contracts, for an appropriation of money by Congress is not mandatory, but is permissive, an authority but not a command to pay, nor does an appropriation in itself authorize the borrowing of money. When this authority is required Congress must grant it, and, upon its failure to do so, all the Secretary of the Treasury should do is to pay such appropriations as the revenues collected by the government will justify. It is for Congress to provide such sums, by taxation or loans, as are necessary to meet all appropriations made in excess of revenue. If it refuses or neglects to do this, the responsibility is on it, not on the secretary. All he can do is choose what appropriations he will pay. This is a dangerous and delicate power, but it has frequently been employed and has never been abused. His failure to exercise this discretion was a grave mistake.
As revenues diminished deficiencies increased. A doubt arose whether, under the then existing conditions, the government would be able to pay gold coin for United States notes and treasury notes. These were supported by a reserve of $100,000,000 in gold coin and bullion, but this reserve fund was not segregated from the general balance in the treasury, as it ought to have been, but was liable to be drawn upon for all appropriations made by Congress. There was not then, and there is not now, any specific authority invested in the Secretary of the Treasury to sell bonds or to borrow money to meet current deficiencies, and he felt called upon to pay these out of the general fund, embracing that created for the redemption of United States notes under the act of 1875. The result was to create an alarm that the government could not or would not pay such notes and thus maintain the gold standard. The timid, and those whose patriotism is in their purse, were making inroads on the gold reserve, which fell below $100,000,000.
By the resumption act of 1875 the Secretary of the Treasury was authorized, to enable him to pay United States notes on demand, to sell either of three classes of bonds bearing respectively five, four and a half and four per cent. interest, but the question arose, in 1894, whether he could sell these bonds to meet current expenditures. All of them were worth a premium in the market. Bonds bearing three per cent. running a short period could then have been sold at par. In common with many others I foresaw, in February, 1893, that the tariff policy of the then incoming administration would reduce our revenue below our expenditures, and sought to have Congress authorize the sale of bonds bearing three per cent. interest instead of those at a higher rate already authorized. I saw plainly that the incoming administration would enter on precisely the same course as that adopted by Buchanan, of providing insufficient revenue for the support of the government, resulting in the gradual increase of the public debt and the disturbance of our financial system. During each year of Buchanan's administration the public debt increased, as it has been steadily increasing during Cleveland's administration, and great embarrassment grows out of this fact. My friendly suggestion was defeated and the result has been the sale of four per cent. bonds at a sacrifice.
The President recommended the removal of restrictions upon the importation of the raw materials necessary to our manufactures. The tariff bill, as it passed, imposed duties on nearly all raw materials except wool. This important product of the farmer was made duty free. I made every effort to prevent this injustice. Free wool was the culminating atrocity of the tariff law. By it a revenue of over eight millions a year was surrendered for the benefit of woolen manufacturers. I appealed to the Senate to give some protection to this great industry of our country. It was generally classed as the fifth of the industries of the United States, including the manufacture of woolens, and I have no doubt it fully came up to that grade. Over a million farmers were engaged in the growth of wool. It involved an annual product estimated at $125,000,000 under the former prices, but probably under the prices after the passage of the Wilson bill it was reduced to about eighty or ninety million dollars. It was, therefore, a great industry. And yet it was left solitary and alone without the slightest protection given to it directly or indirectly. The manufacture of woolen goods was amply protected. Amendments were proposed and adopted without dissent, adding largely to the protection at first proposed on manufactures of wool.
The value of the wool in woolen goods as a rule is equal to the cost of manufacturing the cloth. The duty on cloth under this law averages 40 per cent., so that the domestic manufacturer of cloth gets the benefit not only of a duty of 40 per cent. on the cost of manufacture, but he gets a duty of 40 per cent. on the cost of the wool in the cloth, thus getting a protection of 80 per cent. on the cost of manufacture, while the farmer gets no protection against foreign competition for his labor and care. This gross injustice is done under the name of free raw materials. When I appealed to the Senate for a duty on wool I was answered by one Senator that free wool was all that was left in the bill of the Democratic doctrines of free raw materials, and, if only for this reason, must be retained. I made two speeches in support of a duty, but was met by a united party vote, every Democrat against it and every Republican for it. In the next tariff bill I hope this decision will be reversed.
On the 31st of May, 1894, I made a long speech in favor of the McKinley law and against the Wilson bill. While the McKinley law largely reduced the taxes and duties under pre-existing laws, yet it furnished ample revenue to support the government. The object of the act was declared to be to reduce the revenue. It was impartial to all sections and to all industries. The south was well cared for in it, and every reasonable degree of protection was given to that section. In growing industries in the north, which it is desirable to encourage, an increase of duty was given. In nearly all the older industries the rates were reduced, and the result was a reduction of revenue to the extent of $30,000,000. There was no discrimination made in the McKinley act between agriculture and mechanical industries. The Wilson bill sacrificed the interests of every farmer in the United States, except probably the growers of rice and of fruit in the south. The McKinley act, I believe, was the most carefully framed, especially in its operative clauses and its classification of duties, of any tariff bill ever passed by the Congress of the United States.
It has been said that the McKinley act was the cause of the deficiency of revenue that commenced about three years after its passage. That is a mistake. Until Mr. Cleveland was sworn into office, March 4, 1893, there was no want of revenue to carry on the operations of the government. Until July, 1893, there was a surplus of revenue, and not a deficiency. The receipts during the fiscal years ending June 30, 1891, 1892, 1893, under the McKinley act, furnished ample means for the support of the government, and it was not until after Cleveland had been elected, and when there was a great fear and dread all over the country that our industries would be disturbed by tariff legislation, that the revenues fell off. The surplus in 1891 was $37,000,000; in 1892, in the midst of the election, it was $9,914,000, and in 1893, up to June 30, the surplus revenue was $2,341,000. Yet in a single year afterwards, after this attempt to tinker with the tariff had commenced, after the announcement as to the tariff had been made by Mr. Cleveland, after the general fear that sprang up in the country in regard to tariff legislation, the revenues under the McKinley act fell off over $66,000,000, and the deficiency of that year was $66,542,000.