“On the first of September, 1868, the price of gold was one hundred and forty-five. During the autumn and winter it continued to decline, interrupted only by occasional fluctuations, till in March, 1869, it touched one hundred and thirty and one-fourth (its lowest point for three years), and continued near that rate until the middle of April, the earliest period to which the evidence taken by the committee refers. At that time, Mr. Jay Gould, president of the Erie Railroad Company, bought seven millions of gold, and put up the price from one hundred and thirty-two to one hundred and forty. Other brokers followed his example, and by the twentieth of May had put up the price to one hundred and forty-four and seven-eighths, from which point, in spite of speculation, it continued to decline, and on the last day of July stood at one hundred and thirty-six.
“The first indication of a concerted movement on the part of those who were prominent in the panic of September was an effort to secure the appointment of some person who should be subservient to their schemes, as Assistant Treasurer at New York, in place of Mr. H. H. Van Dyck, who resigned in the month of June. In this effort Mr.Gould and Mr. A. R. Corbin, a brother-in-law of President Grant, appear to have been closely and intimately connected. If the testimony of the witnesses is to be believed, Mr. Corbin suggested the name of his stepson-in-law, Robert B. Catherwood, and Mr. Gould joined in the suggestion.
“On what grounds Mr. Catherwood declined to be a candidate does not appear. The parties next turned their attention to General Butterfield, and, both before and after his appointment, claimed to be his supporters. Gould and Catherwood testify that Corbin claimed to have secured the appointment, though Corbin swears that he made no recommendation in the case. General Butterfield was appointed Assistant Treasurer, and entered upon the duties of that office on the first of July. It is, however, proper to state that the committee has no evidence that General Butterfield was in any way cognizant of the corrupt schemes which led the conspirators to desire his appointment, nor that their recommendations had any weight in securing it. In addition to these efforts, the conspirators resolved to discover, if possible, the purposes of the President and the Secretary of the Treasury in regard to the sales of gold. The first attempt in this direction, as exhibited in the evidence, was made on the 15th of June, when the President was on board one of Messrs. Fisk and Gould’s Fall River steamers, on his way to Boston. At nine o’clock in the evening, supper was served on board, and the presence at the table of such men as Cyrus W. Field, with several leading citizens of New York and Boston, was sufficient to prevent any suspicion that this occasion was to be used for the benefit of private speculation; but the testimony of Fisk and Gould indicates clearly the purpose they had in view. Fisk says:
“‘On our passage over to Boston with General Grant, we endeavored to ascertain what his position in regard to finances was. We went down to supper about nine o’clock, intending, while we were there, to have this thing pretty thoroughly talked up, and, if possible, to relieve him from any idea of putting the price of gold down.’”
“Mr. Gould’s account is as follows:
“‘At this supper the question came up about the state of the country, the crops, prospects ahead, etc. The President was a listener; the other gentlemen were discussing; some were in favor of Boutwell’s selling gold, and some opposed to it. After they had all interchanged views, some one asked the President what his view was. He remarked that hethought there was a certain amount of fictitiousness about the prosperity of the country, and that the bubble might as well be tapped in one way as another. We supposed, from that conversation, that the President was a contractionist. His remark struck across us like a wet blanket.’
“It appears that these skillfully-contrived efforts elicited from the President but one remark, and this opened a gloomy prospect for the speculators. Upon their return to New York, Fisk and Gould determined to bring a great pressure upon the administration, to prevent, if possible, a further decline in gold, which would certainly interfere with their purposes of speculation. This was to be effected by facts and arguments presented in the name of the country and its business interests; and a financial theory was agreed upon, which, on its face, would appeal to the business interests of the country, and enlist in its support many patriotic citizens, but would, if adopted, incidentally enable the conspirators to make their speculations eminently successful. That theory was, that the business interests of the country required an advance in the price of gold; that, in order to move the fall crops and secure the foreign market for our grain, it was necessary that gold should be put up to 145. According to Mr. Jay Gould, this theory, for the benefit of American trade and commerce, was suggested by Mr. James McHenry, a prominent English financier, who furnished Mr. Gould the data with which to advocate it.”
This plan was tried vigorously. Hired newspapers filled their editorial pages with arguments. Every mail brought pamphlets, papers, memorials, arguments, etc., to the silent President. Wherever he turned, some one was at hand to pour into his ear a plea for the poor country. If the Government would sell no gold, the conspirators would have the market in their own hands. Men having contracts to furnish gold would have to buy of them at any price. There was no word from Grant, but the conspirators continued to buy up gold. Gould took in a partner:
“Fisk was told that Corbin had enlisted the interests of persons high in authority, that the President, Mrs. Grant, General Porter, and General Butterfield were corruptly interested in the movement, and that the Secretary of the Treasury had been forbidden to sell gold. Though these declarations were wickedly false, as the evidence abundantly shows, yetthe compounded villainy presented by Gould and Corbin was too tempting a bait for Fisk to resist. He joined the movement at once, and brought to its aid all the force of his magnetic and infectious enthusiasm. The malign influence which Catiline wielded over the reckless and abandoned youth of Rome, finds a fitting parallel in the power which Fisk carried into Wall Street, when, followed by the thugs of Erie and the debauchees of the Opera House, he swept into the gold-room and defied both the Street and the Treasury. Indeed, the whole gold movement is not an unworthy copy of that great conspiracy to lay Rome in ashes and deluge its streets in blood, for the purpose of enriching those who were to apply the torch and wield the dagger.
“With the great revenue of the Erie Railway Company at their command, and having converted the Tenth National Bank into a manufactory of certified checks to be used as cash at their pleasure, they terrified all opponents by the gigantic power of their combination, and amazed and dazzled the dissolute gamblers of Wall Street by declaring that they had in league with them the chief officers of the National Government.
“They gradually pushed the price of gold from one hundred and thirty-five and one-half, where it stood on the morning of the thirteenth of September, until, on the evening of Wednesday, the twenty-second, they held it firm at one hundred and forty and one-half.
“The conspirators had bought sixty millions of gold up to that date. Every thing depended on Grant’s preventing the sale of gold by the Treasury. Brother-in-law Corbin was to manage that. Every cent advance in gold added $15,000 to Corbin’s profit. On the 17th, it was determined to have Corbin write a long letter to the President.
“The letter contained no reference to the private speculation of Corbin, but urged the President not to interfere in the fight then going on between the bulls and bears, nor to allow the Secretary of the Treasury to do so by any sales of gold. The letter also repeated the old arguments in regard to transportation of the crops.
“While Corbin was writing it, Gould called upon Fisk to furnish his most faithful servant to carry the letter. W. O. Chapin was designated as the messenger, and early on the following morning went to Mr. Corbin’s house and received it, together with a note to General Porter. He was instructed to proceed with all possible haste, and telegraph Fisk as soon as the letter was delivered. He reached Pittsburgh a little after midnight, and, proceeding at once by carriage to Washington, Pennsylvania,thirty miles distant, delivered the letter to the President, and, after waiting some time, asked if there was any answer. The President told him there was no answer, and he hurried away to the nearest telegraph office and sent to Mr. Fisk this dispatch: ‘Letters delivered all right,’ and then returned to New York. Mr. Fisk appears to have interpreted the ‘all right’ of the dispatch as an answer to the doctrine of the Corbin letter, and says he proceeded in his enormous purchases upon that supposition. This letter, which Corbin had led his co-conspirators to trust as their safeguard against interference from Mr. Boutwell, finally proved their ruin. Its effect was the very reverse of what they anticipated. The letter would have been like hundreds of other letters received by the President, if it had not been for the fact that it was sent by a special messenger from New York to Washington, Pennsylvania, the messenger having to take a carriage and ride some twenty-eight miles from Pittsburgh. This letter, sent in that way, urging a certain policy on the administration, taken in connection with some rumors that had got into the newspapers at that time as to Mr. Corbin’s having become a great bull in gold, excited the President’s suspicions, and he believed that Mr. Corbin must have a pecuniary interest in those speculations; that he was not actuated simply by a desire to see a certain policy carried out for the benefit of the administration. Feeling in that way, he suggested to Mrs. Grant to say, in a letter she was writing to Mrs. Corbin, that rumors had reached her that Mr. Corbin was connected with speculators in New York, and that she hoped that if this was so he would disengage himself from them at once; that he (the President) was very much distressed at such rumors. She wrote a letter that evening. It was received in New York on the evening of Wednesday, the twenty-second. Late that night Mr. Gould called at Corbin’s house. Corbin disclosed the contents of the letter, and they sat down to consider its significance. This letter created the utmost alarm in the minds of both of these conspirators. The picture of these two men that night, as presented in the evidence, is a remarkable one. Shut up in the library, near midnight, Corbin was bending over the table and straining with dim eyes to decipher and read the contents of a letter, written in pencil, to his wife, while the great gold gambler, looking over his shoulder, caught with his sharper vision every word.”
Corbin tried to get Gould to buy him out, so as to tell the President he had no interest in the market. Gould, too, plotted to savehimself by ruining his co-conspirators. They held a meeting. Gould secretly sold to Fisk and his associates. The latter, of course, had no idea that it was Gould they were buying out. The meeting resolved to force gold up to 160 on the next day (“Black Friday”), publish a list of all firms who had contracts to furnish gold, offer to settle with them at the price named before three o’clock, but threatening higher prices to all who delayed:
“While this desperate work was going on in New York, its alarming and ruinous effects were reaching and paralyzing the business of the whole country, and carrying terror and ruin to thousands. Business men everywhere, from Boston to San Francisco, read disaster in every new bulletin. The price of gold fluctuated so rapidly that the telegraphic indicators could not keep pace with its movement. The complicated mechanism of these indicators is moved by the electric current carried over telegraphic wires directly from the gold-room, and it is in evidence that in many instances these wires were melted or burned off in the efforts of the operators to keep up with the news.
“The President returned from Pennsylvania to Washington on Thursday, the twenty-third, and that evening had a consultation with the Secretary of the Treasury concerning the condition of the gold market. The testimony of Mr. Boutwell shows that both the President and himself concurred in the opinion that they should, if possible, avoid any interference on the part of the Government in a contest where both parties were struggling for private gain; but both agreed that if the price of gold should be forced still higher, so as to threaten a general financial panic, it would be their duty to interfere and protect the business interests of the country. The next morning the price advanced rapidly, and telegrams poured into Washington from all parts of the country, exhibiting the general alarm, and urging the Government to interfere, and, if possible, prevent a financial crisis.”
At 11:42A. M.came the crack of doom.
Treasury Department, September 24, 1869.
Treasury Department, September 24, 1869.
Treasury Department, September 24, 1869.
Treasury Department, September 24, 1869.
“Daniel Butterfield, Assistant Treasurer, United States, New York:
“Daniel Butterfield, Assistant Treasurer, United States, New York:
“Daniel Butterfield, Assistant Treasurer, United States, New York:
“Daniel Butterfield, Assistant Treasurer, United States, New York:
“Sell four millions (4,000,000) gold to-morrow, and buy four millions (4,000,000) bonds.
George S. Boutwell, Sec’y Treasury.
George S. Boutwell, Sec’y Treasury.
George S. Boutwell, Sec’y Treasury.
George S. Boutwell, Sec’y Treasury.
“Charge to Department. Sent 11:42A. M.”
“Charge to Department. Sent 11:42A. M.”
“Charge to Department. Sent 11:42A. M.”
“Charge to Department. Sent 11:42A. M.”
“Within the space of fifteen minutes the price fell from one hundredand sixty to one hundred and thirty-three, and in the language of one of the witnesses, half of Wall Street was involved in ruin.
“It was not without difficulty that the conspirators escaped from the fury of their victims and took refuge in their up-town stronghold—the office of the Erie Railroad Company.
“During the day and morning previous, the conspirators had succeeded in forcing many settlements at rates ruinous to their victims.”
On March 14, 1870, General Garfield spoke on the subject of the civil service. The speech abounded in details, and was pointed with references to classes of salaries which were too high. On April 1st of the same session, he delivered a great speech on the tariff question. It was characterized by its conservative avoidance of extremes, and will stand as the best expression of modern scholarship, practical statesmanship on this most important public question. It is probable that there can nowhere be found an argument on the subject of the tariff which more nearly approaches perfect legislative wisdom.
In 1870, the total amount of national bank circulation being limited by law to $300,000,000 and largely absorbed in the East, a cry arose in the South and West against this injustice. General Garfield drew up and presented a bill which became a law, increasing the limit $54,000,000, and providing for the cancellation of the surplus of notes in States having more than their quota, as fast as the Southern and Western States, having less than their quota, organized national banks and commenced to issue currency. It was a just measure, and was exactly in the line of future legislation, but the Western and Southern States had no capital to invest for banking purposes, and consequently availed themselves but slightly of the opportunity. The measure, however, was of a character to allay public clamor, demonstrate the folly of the outcry against the existing law, and facilitate the progress toward resumption. It was the forerunner of the law, removing all limit to national bank circulation, and making the volume of the currency adjustable to the demand. General Garfield’s great speech on the bill, delivered June 7, 1870, has been the inexhaustible quiver from which most of the arrows of financial discussion have since been drawnby all smaller marksmen. A second speech on the same subject on June 15th, was but little its inferior.
The last day of the Forty-First Congress witnessed a remarkable attempt of the Senate to encroach upon the constitutional prerogative of the House to originate all bills for raising revenues, the claim being that the measure was one toreducerevenue instead ofraisingit. It was a bill to abolish the income tax. Garfield favored the reduction, but an encroachment which might become a dangerous precedent had to be resisted. His argument covered the vast field of the history of the House of Commons, the debates of the Constitutional Convention, and the precedents of Congress. His conclusions were:
First.—That the exclusive right of the House of Commons of Great Britain to originate money bills, is so old that the date of its origin is unknown; it has always been regarded as one of the strongest bulwarks of British freedom against usurpation of the King and of the House of Lords, and has been guarded with the most jealous care; that in the many contests which have arisen on this subject between the Lords and Commons, during the last three hundred years, the Commons have never given way, but have rather enlarged than diminished their jurisdiction of this subject; and that since the year 1678, the Lords have conceded, with scarcely a struggle, that the Commons had the exclusive right to originate, not only bills for raising revenue, but for decreasing it; not only for imposing, but also for repealing taxes; and that the same exclusive right extended also to all general appropriations of money.
Second.—The clause of our Constitution, now under debate, was borrowed from this feature of the British Constitution, and was intended to have the same force and effect in all respects as the corresponding clause of the British Constitution, with this single exception, that our Senate is permitted to offer amendments, as the House of Lords is not.
Third.—In addition to the influence of the British example, was the further fact, that this clause was placed in our Constitution to counterbalance some special privileges granted to the Senate. It was the compensating weight thrown into the scale to make the two branches of Congress equal in authority and power. It was first put into the Constitution to compensate the large States for the advantages given to the small States in allowing them an equal representation in the Senate;and, when subsequently it was thrown out of the original draft, it came near unhinging the whole plan.
“It was reinserted in the last great compromise of the Constitution, to offset the exclusive right of the Senate to ratify treaties, confirm appointments, and try impeachments. The construction given to it by the members of the Constitutional Convention, is the same which this House now contends for. The same construction was asserted broadly and fully, by the First Congress, many of the members of which were framers of the Constitution. It has been asserted again and again, in the various Congresses, from the First till now; and, though the Senate has often attempted to invade this privilege of the House, yet in no instance has the House surrendered its right whenever that right has been openly challenged; and, finally, whenever a contest has arisen, many leading Senators have sustained the right of the House as now contended for.
“Again, if the Senate may throw their whole weight, political and moral, into the scale in favor of the repeal or reduction of one class of taxes, they may thereby compel the House to originate bills, to impose new taxes, or increase old ones to make up the deficiency caused by the repeal begun in the Senate, and thus accomplish by indirection, what the Constitution plainly prohibits. What Mr. Seward said in 1856, of the encroachment of the Senate, is still more strikingly true to-day.
“The tendency of the Senate is constantly to encroach,—not only upon the jurisdiction of the House, but upon the rights of the Chief Executive of the nation. The power of confirming appointments is rapidly becoming a means by which the Senate dictates appointments. The Constitution gives to the President the initiative in appointments, as it gives to the House the initiative in revenue legislation. Evidences are not wanting that both these rights are every year subjected to new invasions. If, in the past, the Executive has been compelled to give way to the pressure, and has, in some degree yielded his constitutional rights, it is all the more necessary that this House stand firm, and yield no jot or tittle of that great right intrusted to us for the protection of the people.”
This speech was absolutely conclusive on the question, and must take its place with all the immortal arguments and efforts putforth in the past to preserve the rights of the popular branch of national legislature. February 20, 1871, General Garfield delivered a powerful speech against the McGarraghan claim, one of the many jobs of which Congress was the victim.
General Garfield was by this time recognized as the highest authority on the intricate subjects of finance, revenue, and expenditure, in the House. It will be seen that these topics fall within the general head of political economy, “the dismal science.” Of these he was the acknowledged master. Accordingly, at the beginning of the Forty-Second Congress, in 1871, Garfield was made chairman of the Committee of Appropriations. It is probable that in this capacity he never had an equal. Something must be said of his work.
In order to master the great subject of public expenditures, he studied the history of those of European nations. He read the “budget speeches” of the English chancellors of the exchequer for a long period. He refreshed his German, and studied French, in order to read the best works in the world on the subjects, the highest authorities being in those languages. He examined the British and French appropriations for a long period. After an exhaustive study of the history of foreign nations, he commenced with our own country at the time of the Revolution. Charles Sumner was the greatest reader, and had the longest book list at the Congressional Library of any man in Washington. The library records show that General Garfield’s list was next to Sumner’s, being but slightly below it. After Sumner’s death, the man who was second became first. This gathering of facts was followed by wide inductions. National expenditures were found by him to be subject to a law as fixed as that of gravitation. There was a proportion between population, area of country, and the necessary outlay for public expenses, which was fixed. Any thing beyond this was waste. No covering could hide official robbery from the reach of such a detective as the establishment of this law. Every miscreant left a tell-tale track.
The results of his studies were embodied in an elaborate speechon January 22, 1872, in the introduction of his appropriation bill. The close study of political economy, however, did not divert him from other questions. He kept himself thoroughly versed on every question of public importance and was always equal to every demand.
On April 4, 1871, he delivered a speech in opposition to a Republican bill for the enforcement of the Fourteenth Amendment. At the time it brought down upon him the censure of his party. But he was firm. There could be no doubt of his loyalty to the nation, and his distrust of the malignant South. But he was too conservative for the war leaders and politicians. A compromise was effected, with which, however, his opponents were much dissatisfied.
Another notable speech was made on the bill to establish an educational fund from the proceeds of the sale of public lands. The speech abounded in citations from English, French, and German authorities on the subject of education. One doctrine enunciated was that matters of education belong to the State governments, not to the nation; that Congress made no claim to interfere in the method, but only to assist in the work.
In the summer of 1872, General Garfield undertook a delicate mission to the Flat-Head Indians. Their removal was required by the Government. But the noble red man refused to stir an inch from his ancestral hunting-grounds. Garfield’s mission was to be the last pacific effort. He was successful when the department had given up hope in any resource but war.
On his return from the West, General Garfield found the Credit Mobilier scandal looming up like a cyclone in the Congressional sky. Living a life of study, research, and thought, of spotless character and the purest intention, he was inexpressibly pained. A private letter of December 31, 1872, to his bosom friend Hinsdale, is indicative of his feelings:
“The Credit Mobilier scandal has given me much pain. As I told you last fall, I feared it would turn and that the company itself was a bad thing. So I think it will, and perhaps some members of Congress were conscientiously parties to its plans. It has been a new form of trialfor me to see my name flying the rounds of the press in connection with the basest of crimes. It is not enough for one to know that his heart and motives have been pure and true, if he is not sure but that good men here and there, who do not know him, will set him down among the lowest men of doubtful morality. There is nothing in my relation to the case for which the tenderest conscience of the most scrupulous honor can blame me. It is fortunate that I never fully concluded to accept the offer made me; but it grieves me greatly to have been negotiating with a man who had so little sense of truth and honor as to use his proposals for a purpose in a way now apparent to me. I shall go before the committee, and in due time before the House, with a full statement of all that is essential to the case, so far as I am concerned. You and I are now nearly in middle life, and have not yet become soured and shriveled with the wear and tear of life. Let us pray to be delivered from that condition where life and nature have no fresh, sweet sensations for us.”
His correspondence at this time with President Hinsdale, in which he uncovers his secret heart, is full of expressions of disgust with politics, “where ten years of honest toil goes for naught in the face of one vote,” as he says. Once he declares: “Were it not for the Credit Mobilier, I believe I would resign.” How plainly his character appears in the following little extract:
“You know that I have always said that my whole public life was an experiment to determine whether an intelligent people would sustain a man in acting sensibly on each proposition that arose, and in doing nothing for mere show or for demagogical effect. I do not now remember that I ever cast a vote of that latter sort. Perhaps it is true that the demagogue will succeed when honorable statesmanship will fail. If so, public life is the hollowest of all shams.”
In another letter to Colonel Rockwell, he speaks from his heart:
“I think of you as away, and in an elysium of quiet and peace, where I should love to be, out of the storm and in the sunshine of love and books. Do not think from the above that I am despondent. There is life and hope and fight in your old friend yet.”
It is hardly possible to understand the tortures which his sensitive nature underwent at this time. To an honest man the worstpain comes from the poisoned dagger of mistrust. At a later day, General Garfield was to make his defense to his constituents.
During this plague of heart and brain, there was no remission of the enormous activity in the chosen field of finance, revenue, and expenditure. But we can only plant foot upon the mountain peaks as we pass over the Alps of General Garfield’s Congressional labors. March 5, 1874, he delivered another great speech on “Revenues and Public Expenditures.”
On April 8, 1874, the first great “inflation” bill, by which the effects of the terrible panic of 1873 were to be relieved or cured, came up for discussion. General Garfield exhausted history in his opposition to the bill. It must be remembered that his constituents were clamoring for the passage of this bill which was to make money plenty. Taking his political life in his hand, he fought it with all his power. As in 1866, 1868, 1869, 1870, and 1871, so, in 1874, he said that “next to the great achievements of the nation in putting down the rebellion, destroying its cause, and reuniting the Republic on the principle of liberty and equal rights to all, is the task of paying the fabulous expenses of the war, the funding of the debt, the maintenance of public credit, and the launching of the nation on its career of prosperity.” The speech contains citations of authority against inflation and irredeemable paper currency from John Stuart Mill, Benjamin Franklin, R. H. Lee, Washington, Adams, Peletiah Webster, Alexander Hamilton, Jefferson, Madison, Webster, Gonge, Calhoun, and Chase. The reader will remember that the measure passed the House and the Senate by overwhelming majorities, but was struck dead by the veto of President Grant.
On June 23, 1874, General Garfield spoke at length on the subject of appropriations for the year. In this address, as in all others upon this topic, he handled figures and statistics with the greatest skill and familiarity. The House had come to rely upon his annual speech on this subject for its information on the expenses of the Government.
Almost at the same time he delivered a speech on the Railway Problem. The pending question was upon making certain appropriationsfor River, Harbor, and Canal Surveys, as a preliminary to cheaper transportation. General Garfield endeavored to have a similar commission organized on the Railway question. He felt that any investigation of cheap transportation was lame which did not include “the greatest of our modern means of transportation, the Railway.” We quote a part of his discussion, which must be of interest to every reader: