The success of reconstruction in the South carried with it the ratification of the Fourteenth Amendment by the requisite number of States. The result was duly certified by Mr. Seward as Secretary of State, on the twenty-eighth day of July, 1868, and the Amendment was thenceforward a part of the organic law of the nation. It had been carried, from first to last, as a party measure—unanimously supported by the Republicans, unanimously opposed by the Democrats. Its grand and beneficent provisions failed to attract the vote of a single Democratic member in any State Legislature in the whole Union. Wherever the Democrats were in majority the Legislature rejected it, and in every Legislature where the Republicans had control the Democrats in minority voted against it. Not only was this true, but the States of Ohio and New Jersey, which had ratified it in 1866-67 when their Legislatures were Republican, formally voted in 1868, when the Democrats had come into power, to recall their assent to the Amendment and to record their opposition to its adoption. It is very seldom in the history of political issues, even when partisan feeling is most deeply developed, that so absolute a division is found as was recorded upon the question of adopting the Fourteenth Amendment. It has not been easy in succeeding years to comprehend the deep-seated, all-pervading hostility of the Democratic party to this great measure. Even on the Thirteenth Amendment, containing the far more radical proposition to abolish slavery, a few Democrats, moved by philanthropic motives, broke from the restraint of party and honored themselves by recording their votes on the side of humanity and justice; but on the Fourteenth Amendment the line of Democratic hostility in Nation and in State was absolutely unbroken.
It seems incredible that Democrats can be satisfied with the record made by their party on this most grave and important question. Every one of the many objects aimed at in the Fourteenth Amendment is founded upon a basis of justice, of liberty, of an enlarged and enlightened nationality. Its minor provisions might be regarded as temporary in their nature, but its leading provisions are permanent and are essential to the vitality of a true republic. Even those which may be held as temporary deeply affect more than one generation of American citizens, and are of themselves sufficiently important to justify a great struggle for their adoption.
It was certainly of inestimable concern to the honor of the country that those who had shed their blood and those who had given their treasure for its defense, should have their claims upon the national justice placed beyond the whim, or the caprice, or the malice of an accidental majority in Congress. Nor would it have been wise to leave open to those who in the conflict of arms had lost their slaves, the temptation to besiege Congress and the Legislatures of their States for compensation. Such an opportunity would have been a menace to the public credit, and would have proved a constant source of corruption. The Republican therefore said, "We shall incorporate the right of the soldier to repayment, in the very Constitution of the Republic; and shall in the same solemn manner decree that as slavery instigated the drawing of the sword against the life of the nation, and justly perished by the sword, its assumed value shall not be placed upon the free people of the United States as a mortgage whose payment may be exacted from their property and their toil." Against these just provisions, which in their nature are limited as to time, the Democrats in Congress and in every Legislature of the Union recorded an absolutely unanimous vote.
Another provision of the Fourteenth Amendment, temporary in its application, indeed necessarily limited to the existing generation, was demanded by the Republicans. The great mass of those engaged in the Rebellion were pardoned the moment their arms were laid down. But the leaders who, in official position before the war, had solemnly sworn to support the Constitution, were held to be far more guilty than the multitude who followed them. They deliberately rebelled against a government to which, on their consciences and on their oaths, they had given their personal pledge of fidelity. The Republicans did not propose to visit even these chief offenders with pains and penalties; but they resolved to place in the Constitution a prohibition upon their holding office under the National government until after two-thirds of both branches of Congress, satisfied of their good intentions, should remove their disabilities. The Democrats unanimously voted against even this mild discipline to those who precipitated the desperate war, thereby declaring their willingness, if not their desire, that the most guilty should fare as well as the innocent; that for example Mr. Toombs might resume his seat as a senator from Georgia, Mr. Breckinridge as a senator from Kentucky, Mr. Benjamin as a senator from Louisiana, Mr. Jefferson Davis as a senator from Mississippi.
Still another provision of the Amendment which might prove temporary in its application, or might prove permanent, as the South should decide, was that relating to representation in Congress. On this point the Republicans held, as has been so often repeated, that the negro should not be included in the basis of representation until he was admitted to suffrage. There is such absolute justice and fair dealing in this proposition, that no reply which deserves to be called an argument has ever been made to it. The original provision in the Constitution by which three-fifths of the slaves were enumerated in the basis of representation, agreed to originally as a compromise in connection with the subject of direct taxation, had lost its relevancy by reason of emancipation as decreed in the Thirteenth Amendment. The question now before Congress was therefore a new one. It affected the rights of States and the equality of citizens. To concede four and a half millions of negroes to the basis of Southern representation, and at the same time to confine the suffrage to the whites, was not merely a harsh injustice to the colored race, but it was an insulting discrimination against Northern white men. It gave, as was well said at the time, a far greater influence in National affairs to the vote of the Confederate solider in the South than to the vote of the Union soldier in the North. In Congressional districts where the colored race constituted one-half of the total population (and in many instances the proportion was even larger), the vote of one white man offset the vote of two in a Northern district where suffrage was impartial. This ratio of influence went into the Electoral College, and gave to the white men of South Carolina, Mississippi and Louisiana double the power of that enjoyed by white men in New York, Illinois and California. The loss of Representatives to the Northern States, or more properly speaking the gain to the Southern States on existing numbers, would be nearly one-eighth of the entire House, and fully one-quarter of those likely to occupy seats on the Democratic side of the chamber. In the Electoral College, the loss to the North and the gain to the South would be nearly in the same ratio. In the rapid increase of the negro race the offensive discrimination against the North would be continually enlarging in its proportions. The corrective provision in the Fourteenth Amendment was designed to prevent this grave injustice both to the negro and to the white man—but every Democrat in Congress and in the State Legislatures voted against it through all the stages of its enactment and its ratification, and thereby expressed a willingness to give an unfair advantage to the Southern white man, and to establish an unfair discrimination against the Northern white man.
Important and essential as are the provisions of the Fourteenth Amendment just cited, indispensable as they have proved in the system of Southern Reconstruction, they are relatively of small consequence when compared with that great provision which is for all time:—that provision which establishes American citizenship upon a permanent foundation, which gives to the humblest man in the Republic ample protection against any abridgment of his privileges and immunities by State law, which secures to him and his descendants the equal protection of the law in all that relates to his life, his liberty, and his property. The first section of the Constitutional amendment which includes these invaluable provisions is in fact a new charter of liberty to the citizens of the United States; is the utter destruction of the pestilent heresy of State-rights, which constantly menaced the prosperity and even the existence of the Republic; and is the formal bestowment of Nationality upon the wise Federal system which was the outgrowth of our successful Revolution against Great Britain.
Before the adoption of this Amendment citizenship of the United States was inferred from citizenship of some one of the States, for there was nothing in the Constitution defining or even implying National citizenship as distinct from its origination in or derivation from a State. It was declared in Article IV, Section 2, of the Federal Constitution, that "Citizens of each State shall be entitled to all the privileges and immunities of citizens in the several States;" but nothing was better known than that this provision was a dead letter from its very origin. A colored man who was a citizen of a Northern State was certain to be placed under the surveillance of the police if he ventured south of the Potomac or the Ohio, destined probably to be sold into slavery under State law, or permitted as a special favor to return at once to his home. A foreign-born citizen, with his certificate of naturalization in his possession, had prior to the war no guarantee or protection against any form of discrimination or indignity, or even persecution, to which State law might subject him, as has been painfully demonstrated at least twice in our history. But this rank injustice and this hurtful inequality were removed by the Fourteenth Amendment. Its opening section settled all conflicts and contradiction on this question by a comprehensive declaration which defined National citizenship and gave to it precedence of the citizenship of a State. "All persons born or naturalized in the United States and subject to the jurisdiction thereof are citizens of the United States and of the States wherein they reside." These pregnant words distinctly reversed the origin and character of American citizenship. Instead of a man being a citizen of the United States because he was a citizen of one of the States, he was now made a citizen of any State in which he might choose to reside, because he was antecedently a citizen of the United States.
The consequences that flowed from this radical change in the basis of citizenship were numerous and weighty. Nor were those consequences left subject to construction or speculation. They were incorporated in the same section of the Amendment. The abuses which were formerly heaped on the citizens of one State by the legislative and judicial authority of another State were rendered thenceforth impossible. The language of the Fourteenth Amendment is authoritative and mandatory: "No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws." Under the force of these weighty inhibitions, the citizen of foreign birth cannot be persecuted by discriminating statutes, nor can the citizen of dark complexion be deprived of a single privilege or immunity which belong to the white man. Nor can the Catholic, or the Protestant, or the Jew be placed under ban or subjected to any deprivation of personal or religious right. The provision is comprehensive and absolute, and sweeps away at once every form of oppression and every denial of justice. It abolishescasteand enlarges the scope of human freedom. It increases the power of the Republic to do equal and exact justice to all its citizens, and curtails the power of the States to shelter the wrong-doer or to authorize crime by a statute. To Congress is committed the authority to enforce every provision of the Fourteenth Amendment, and the humblest man who is denied the equal protection of the laws of a State can have his wrongs redressed before the Supreme Judiciary of the Nation.
It is perhaps not strange that the Democrats of the South were hostile to the great results wrought for freedom, for justice, and for popular rights by the Fourteenth Amendment. Their education, their prejudices, their personal interests had all been in the opposite direction, and it was doubtless too much to hope that all these would be overcome by a victory for the Union—a victory which carried to their minds a sense of personal humiliation and of remediless ruin. If their course was unwise it is not altogether unintelligible. But the action of the Northern Democrats cannot be accounted for and cannot be excused. They stood stubbornly, solidly, without reason, without justification, against a great enlargement of popular rights. It is a matter of wonder that a political organization which claims Jefferson for its founder and Jackson for its exemplar, should have surrendered to its rival the sole glory of an achievement which may well be compared with that increase of liberty attained by our ancestors, when the dependence of Colonies was exchanged for the independence of States.
Two eminent judges of the Supreme Court who died after the close of the war are entitled to the admiration and gratitude of the loyal citizens of the United States. When Mr. Lincoln was inaugurated there were three judges on the Supreme Bench from the States which afterwards formed the Confederacy,—James M. Wayne of Georgia, John Catron of Tennessee, and John A. Campbell of Alabama. The last-named was placed upon the bench in 1853, and was undoubtedly the choice of Jefferson Davis, who as the leading Southern member of President Pierce's Cabinet exerted large influence, if not absolute control, over appointments from the slave-holding States. The personal and political associations of Judge Campbell led him to resign his position on the Supreme Bench, and to give the weight of his name and his learning to the Confederate cause.
Judge Wayne was appointed by President Jackson in 1835, and Judge Catron by President Van Buren immediately after his inauguration in 1837, under a bill enlarging the Court, which had been approved by General Jackson. Judge Catron had long been a favorite of General Jackson in Tennessee, and it was understood that in appointing him to the Bench Mr. Van Buren was carrying out the expressed wishes of his predecessor. Both judges came from that earlier and better school of Southern Democracy which resisted the injurious heresies of State-rights and Nullification, sustained the Force Bill under President Jackson, and stood loyally by the Union of the States. They were allied to the South by birth, by education, and by the associations of a lifetime. Their friends, their kindred, even members of their own families, joined in the Rebellion. But these patriotic men, one of whom was born during the Revolutionary war and the other during the first term of Washington's Presidency, maintained their judicial positions and were unshaken in their loyalty to the Union. Their example was followed by few officials from the states that seceded, but the steadfastness of their faith was a striking illustration of the difference between the South of Jefferson and Jackson and the South of Calhoun and Davis. They sat on the Bench throughout the entire civil struggle,—Judge Catron dying in May, 1865, in the eighty-seventh year of his age, and Judge Wayne in July, 1867, in his seventy-eighth year.
The conduct of these venerable judges is all the more to be praised because they did not personally sympathize in any degree with the Republican leaders. They did not believe in the creed or the policies of the party, and feared the result of its administration of the National Government. Their views in regard to the Constitutional rights of the slave-holders were the same as those held by the Confederate chieftains. They had both concurred with Chief Justice Taney in the Dred Scott decision. But it was enough for them now to know that Mr. Lincoln had been Constitutionally chosen President of the United States, and had been Constitutionally installed in his great office. It was not for them as Justices of the Supreme Court to know any thing of his Executive acts, except as they might properly come for review before their high tribunal. They illustrated the honorable line of duty for a Judge under the Government of the United States. Off the Bench, his right to political opinions is no more to be questioned than that of any other citizen. On the Bench, he falls short of the full measure of his exalted duty if by any way or any expression he discloses his sympathy with one political party or his prejudice against another.
It is a tribute of honor to the Supreme Court that through all the mutations of its existence only a single Justice has proved unfaithful to the Union of the States; and prior to the war three-fifths of all the Justices were appointed from the South. Southern men in all other departments of the Public Service—those eminent in our Congressional annals, in the Army, in the Navy, in the field of Diplomacy, and even one who had occupied the Presidential chair—followed the lead of their States in rebellion against the Union; or rather it may with truth be said, they led their States into rebellion against the Union. Judge Campbell, in furnishing the sole exception to the record of judicial loyalty, did not yield without a struggle. He was surrounded with peculiar embarrassments, and was not strong enough to overcome them. He realized his position, and did what he could to avert war; but when war was inevitable, he upheld the Confederate cause and became one of its directing minds. In contrast with the fall from his high estate and over against all the evil influences which forced Judge Campbell to his fate, the names of Catron and Wayne will shine in history as examples of the just judge and the incorruptible patriot.
[(1) The President's personal hostility to some of the officers thus assigned was well known, and surprise was expressed that he did not countermand or qualify the order of General Grant when first issued. He was especially unfriendly to General Sheridan, and late in the summer of 1867 relieved him from his command. General Hancock was gazetted as Sheridan's successor, but he did not reach his post until late in November, the district meanwhile being under the command, first, of General Charles Griffin, and, second, of General Joseph A. Mower. General Hancock's order assuming command, issued on the 29th of November, had a certain political significance. He expressed gratification "that peace and quiet reign in the Department," and that in his purpose to preserve this condition of things, he regarded "the maintenance of the civil authorities in the faithful execution of the laws as the most efficient under existing circumstances." He said that when insurrectionary force had been overthrown and peace established, "the military power should cease to lead, and the civil administration resume its natural and rightful dominion." "Solemnly impressed with these views," the General announced that "the great principles of American liberty are still the lawful inheritance of the people and ever should be. The right of trial by jury, thehabeas corpus, the liberty of the press, the freedom of speech, the natural rights of persons, and the rights of property, must be preserved."
General Sheridan had issued an order defining the qualifications of those who might sit on juries during the period of Reconstruction. One of the first acts of General Hancock was to annul this order. He declared "that the determination of who shall and who shall not be jurors appertains to the legislative power," and he indicated his intention of carrying out the existing law of Louisiana in regard to the selection of juries. General Sheridan had distributed certain memoranda of disqualification, together with questions to be proposed, for the registrars. Their effect in substance was to disqualify all persons who, having acted, prior to January 26, 1861, asUnited-States senators and representatives, electors, officers of the Army and Navy, civil officers of the United States, and State officers provided for by the Constitution of the State, had afterwards engaged in the Rebellion; and also all those who in 1862 and 1864 claimed the protection of foreign powers. General Hancock set aside this action, declaring that he dissented from the construction given to the Reconstruction laws therein, and ordered the registrars to be guided by their own interpretation of the laws and of the Fourteenth Amendment. It was the popular understanding that General Hancock, in these successive steps, was acting in full sympathy with the wishes and designs of the Administration, in all of which he readily concurred as a Democrat.
The appointment of General Pope for the District of Georgia, Alabama, and Florida, had not been agreeable to the President. General Pope's political convictions were of a very positive character, and they were not at all in sympathy with the National Administration. He administered the Reconstruction laws, therefore, in their full spirit and with an entire belief in their justice and equity. He insisted on fair dealing, and suppressed all interference with voters by violence or threats of violence on the part of the late rebels. He would not permit the menace of military organizations, and expressly refused to allow any parading of armed men, except of United-States troops. It was General Pope's opinion that the South had seen quite enough of men in arms within the past four years, and he believed that safety and order would be best maintained by having no uniform worn except that of the Army of the United States, and no other flag shown than the flag of the Union. Holding these pronounced views, aggressively loyal in every thought and action, General Pope was naturally in antagonism with the policy of the President. Towards the close of the year he was relieved of his command and General Meade ordered to take his place.
General Sickles, of the District of North Carolina and South Carolina, was relieved of his command early in September (1867), and General E. R. S. Canby appointed as his successor. General Sickles had been very energetic in the administration of affairs in his department, and had shown remarkable aptitude and efficiency in the discharge of his peculiar duties,—exhibiting in his administration the very qualities most likely to prove offensive to the President. He had perhaps the most difficult command of any of the generals on duty in the South, as the State of South Carolina had from the beginning of the Rebellion presented certain phases of disobedience to Federal authority peculiar to her population and naturally arising from her antecedent history. General Sickles had some trouble with Attorney-General Stanbery, and asked for a court of inquiry, that he might vindicate himself from the accusations of that official.
General Schofield and General Ord alone of the original commanders in the Southern military districts were left to carry through the work of Reconstruction. They both discharged their duties with intelligence and fidelity. Nor was the work of Reconstruction essentially hindered by the changed in other departments. It is the trained habit of the officers of the United-States Army to carry out their orders with implicit faith, and there is seldom a conflict as to the line of duty to be followed. If there was any exception, it was in regard to the course pursued by General Hancock. His conduct became a subject of controversy, and the popular division respecting its merits was on the political line. The National Administration and the Democratic party, both North and South, applauded every thing which General Hancock said and did in Louisiana. The Republican party throughout the country, and the General commanding the army, who was about to be nominated for the Presidency, united in strong disapproval of his course. But General Hancock's construction of the laws under which he was acting was the same as that held by the Attorney-General of the United States, and he thus felt abundantly justified and fortified in his position. He disobeyed no specific order of the General commanding the army, and, even if there had been a difference between them, General Hancock was sure of the sympathy and support of their common superior—the President of the United States.
It was however the subsequent opinion of General Grant that much of the disorder and bloodshed in the State of Louisiana during the national election of 1868 had resulted from the military government of General Hancock. It was not his belief that General Hancock had the slightest desire or design to produce such results, but that they were the outgrowth of the encouragement which the rebels of Louisiana received from the changes which General Hancock inaugurated in the manner of administering the Reconstruction Laws. Aside however from the conduct of General Hancock, the removal of General Sheridan from the Louisiana District was unqualifiedly offensive to General Grant in a personal sense, and contrary to his best judgment on ground of public policy and safety. His attachment to Sheridan was very strong, and a wrong against the latter was sooner or later sure to be resented by General Grant. His feelings of the question were promptly and significantly shown when he became President. Inaugurated on the 4th of March, he caused an army order to be issued on the morning of the 5th, restoring General Sheridan to his former command in Louisiana, and ordering General Hancock to the remote and peaceful Department of Dakota.]
The financial experience of the Government of the United States in the years following the war is without precedent among nations. When Congress first met after the close of hostilities (December, 1865), it was as a ship sailing into dangerous and unknown seas without chart of possible channels. The Reconstruction problem before the country seemed at the time to be less difficult than the financial problem. Other nations had incurred great expenditures for war purposes, but had always left them in chief part as a heritage for the future. Great Britain will probably never pay the total principal of her public debt. France will be burdened perhaps as long as her nationality endures by the debts heaped upon her through the ambition of her sovereigns, and in her own struggles to enlarge the liberty of her people. But in this country the purpose was early formed, not simply to provide for the interest upon the debt incurred in the war for the Union, but to begin its payment at once, and to arrange for its rapid liquidation. In view of the magnitude of the sum involved this was a new undertaking in the administration of Government finances.
The difficulties of the situation were undoubtedly aggravated and complicated by the questions which arose from the condition of the Southern States. Could Congress expect at once that the populations in those States would begin to contribute to the revenue, would cease to require large expenditures for the maintenance of the National authority, would again add to the volume of our exports, to our commerce, and our general prosperity? Serious re-action had in other lands followed the financial expansion created by great wars, even without complications similar to those which the disturbed condition of the South seemed to render unavoidable. Ought Congress to accept such a re-action as the necessary condition of the restoration of our currency, of return to a normal situation, of adjustment of expenditure to revenue on a peace footing? Could the possibility be entertained of such a return and such an adjustment, without panic, without paralysis of industry, without temporary interruption and prostration of commerce? Grave apprehensions were felt as to the possible effect upon production and trade of the legislation required to maintain the National credit. These apprehensions derived force and peculiar seriousness from the growing conflict between President Johnson and Congress upon measures of Reconstruction and upon removals from office.
In spite however of all suggested fears and doubts, a feeling of confidence pervaded the country, and was fully shared by Congress, that the power which had saved the Union could re-establish its credit without panic and without dangerous and prolonged depression. Faith in the resources which had equipped and supported the National armies, now embraced the plainer and less exciting duties of funding and paying the debt and of protecting the notes of the United States. The loans had been placed, the money borrowed, under the excitement of war,—sometimes under the pressure of defeat, sometimes in the exaltation of victory. Without this pressure, without this exaltation, could money be secured at a rate adequate to build up a National credit worthy to be compared with that of the older and richer nations beyond the Atlantic?
The intrepidity with which Congress met its task will always compel the admiration of the student of American history. While the war lasted, the contributions by taxes and by loans had been on a munificent scale. The measures adopted at the close of the Thirty-eighth Congress, after four years of desperate struggle and on the very eve on National victory, showed as great readiness to make sacrifices, as little disposition to count the cost of saving the Union, as had marked previous legislation. Less than six weeks before the surrender of Lee the internal taxes were increased, the duties on imports were adjusted to that increase, and a new Loan Bill was enacted. The bill provided for borrowing, in addition to the authority given by previous Acts, any sum not exceeding $600,000,000 in bonds, or treasury notes convertible into bonds, at six per cent interest in coin or seven and three-tenths per cent interest in currency. This provision was found to be so comprehensive that it not only provided a strong instrumentality for meeting the immense demands incident to the disbanding of the armies and the final settlement of claims connected with that momentous change in our affairs, but also laid the foundation for the policy of funding the debt at a reduced rate of interest. These results testify to the magnificent proportions of the financial legislation during the period of hostilities.
When the Thirty-ninth Congress met in December, 1865, gold stood at 147-7/8 @ 148½. A month later, on the 1st of January, 1866, the legal-tender notes and fractional currency amounted to $452,231,810; notes bearing 7-3/10 per cent interest, to $830,549,041; compound-interest notes payable three years from date (a considerable proportion of which time had elapsed), to $188,549,041; certificates of indebtedness, payable at various dates within the current year, to $50,667,000; and the temporary loan, practically payable on demand, had reached the large sum of $97,257,194. These might all be called floating and pressing obligations, and their grand aggregate was $1,618,705,045. At the same time the amount represented by bonds (6's of 1861, 5-20's, and 10-40's) was $1,120,786,700,—showing a total National debt on New-Year's Day, 1866, of $2,739,491,745. If the National credit was to be maintained these sixteen hundred millions of floating obligations must be promptly placed on a basis that would give time to the Government to provide means for their ultimate redemption. President Johnson, in his message at the opening of the session, spoke of the debt not as a public blessing, but as a heavy burden on the industry of the country, to be discharged without unnecessary delay. This was the popular sentiment in all sections of the country, although in financial circles arguments were frequently heard in favor of creating interminable obligations and of adjusting the debt on a basis of permanency, after the European fashion. The reduction had indeed already begun, since the maximum of debt had been attained in the preceding August.
The Secretary of the Treasury, Mr. Hugh McCulloch, estimated that for the fiscal year ending with June, 1867 (for which Congress was about to provide), the revenue would exceed the expenditures by $111,682,818, and that the whole of our vast debt could be liquidated by annual payments within thirty years. Mr. McCulloch's plans were to take from the compound-interest notes their legal-tender quality, from the date of their maturity, and to sell six per cent bonds, redeemable at the pleasure of the Government, for the purpose of retiring both the compound-interest notes and the plain legal-tenders. He believed that the entire debt might be funded at five per cent, while the average of the annual interest now stood at 6-62/100 per cent. He pointed to harmony between the different parts of the Union and to the settlement of the relations of labor in the Southern States, as essential conditions to the best management of the National obligations.
The leading feature of Mr. McCulloch's financial policy was the immediate and persistent contraction of the currency. His argument in support of the policy, as given in his annual report, was not accepted by the country or by Congress without serious reservation; but his belief in the theory was strong and determined, and so far as the laws permitted he went on reducing the volume of paper in circulation until on the 12th of April, 1866, the sum of legal-tenders was brought down to $421,907,103. Financiers of the Eastern cities favored the policy of contraction, although the logical plea was urged against them that the country would grow up to the volume of currency if not harried and disturbed by new legislation. Manufacturers and the holders of their products, and many who had incurred pecuniary obligations in the expanded currency, took alarm at the rapidity with which the Treasury notes were withdrawn. The argument was urged that the heavy taxes could not be met if the withdrawal were so rapid, and that industry and trade would in consequence be paralyzed by the enforced fall in prices.
These opinions and apprehensions were developed in the debate which led to the passage of the Act of April 12, 1866. The subject was first introduced by Mr. Alley of Massachusetts. On the 18th of December (1865) he offered a resolution concurring in the views of the Secretary of the Treasury, in relation to the necessity for a contraction of the currency, with a view to as early a resumption of specie payment as the business interests of the country would permit. Under a suspension of the rules, without debate, 144 voted for the resolution, 6 against it, and 32 were not recorded. Two months later, on the 21st of February, 1866, Mr. Morrill, from the Committee on Ways and Means, reported a bill which, as he explained, would expand the authority provided by the Act of March 3, 1865, for funding interest-bearing obligations, so as to include non-interest-bearing obligations. The measure authorized the Secretary to exchange the bonds prescribed by the Act for notes or certificates, and power was given to negotiate them and make them payable either in the United States or elsewhere, but if beyond the sea at not over five per cent interest.
—Mr. Thaddeus Stevens declared that the bill put oversixteen hundred millionsof Government paper under the absolute and uncontrolled discretion of the Secretary of the Treasury. "This is a tremendous bill," said he. "It proposes to confer more power upon Mr. McCulloch than was ever before conferred upon any one man in a government claiming to have a constitution."
—Mr. Hooper of Massachusetts magnified the financial achievements of the Government, urged the policy embodied in the bill, and insisted on the importance of restoring the currency to a sound condition at the earliest practicable moment. He controverted the suggestion which had been made to increase United-States notes to $1,000,000,000, on the ground that the value of that dollar would be constantly fluctuating. A minority of the commissioners appointed by the preceding Congress to inquire into the state of trade and commerce had presented a specious argument in favor of debasing the coinage, but Mr. Hooper dismissed the proposition summarily and argued strongly for a contraction of legal-tender notes.
—Mr. Hulburd of New York maintained that taxation could not be increased to meet the existing and maturing obligations of the Government. He held that under the Acts of June, 1864, and March, 1865, the Secretary had power to sell at home or abroad six per cent coin bonds in any amount to meet short obligations of the Government. "Under the proposed measure," he said, "authority is specifically asked to withdraw the fractional currency and legal-tender notes, in whole or in part, and to substitute bonds for them. The like power was never asked for Neckar or for Pitt. As a principle the proposition is dangerous." He protested vigorously against making any part of the public debt payable in foreign countries.
—Mr. John Wentworth of Illinois argued in favor of contraction, maintaining that the purpose of the pending bill was to make the Secretary of the Treasury master of the situation. "If we expect him to compete successfully with the most desperate body of men in the world we must confer upon him the necessary powers. The real question is, Shall our Government pay its pensions and all its employees and creditors in depreciated paper, when by borrowing a little money at six per cent it can bring its paper to par?" He charged that an immense lobby against the bill had thronged the hall, and was surprised to find importers among them. "But the importers have found," said he, "that a bloated currency bloats the fashions." He earnestly indorsed Mr. McCulloch as a cautious man, who would not be precipitate, no matter what power might be conferred upon him: "If we adopt his policy we shall wake up some morning and find the paper of our country at par."
—Mr. Pike of Maine doubted the necessity of enforced contraction; but if contraction was necessary, he was for taxing the circulation of national banks out of existence, and afterwards retiring greenbacks. "Once upon a specie basis," said he, "let the business of the country regulate itself." He proposed also to allow the States to tax the bonds of the United States.
—Mr. Price of Iowa asked: "Would any prudent and sensible business man who had given his note payable at his own option, without interest, be likely to give for it another note for the same amount payable at a certain time, with interest at six per cent semi-annually, in gold coin?"
—Mr. Scofield of Pennsylvania asked if the legal-tender notes were not, upon their face, payable on demand.
—Mr. Allison of Iowa insisted that "the Secretary of the Treasury does not propose to return to specie payments immediately, but he expresses the opinion that the reduction of greenbacks by the sum of one hundred million dollars will secure that result."
—Mr. Boutwell of Massachusetts was content to try the experiment of converting the interest-bearing obligations into long bonds, but was unwilling to go farther.
—Mr. Sloan of Wisconsin proposed an amendment to make "bonds and all other obligations of the United States hereafter issued payable in lawful money," but the suggestion met with no favor.
—Mr. Roscoe Conkling maintained that "in the first place, the Secretary of the Treasury has now the power, under the Act of March 3, 1865, to exchange any securities of the Government which bear interest for any other securities which bear interest. In the second place, he has the power to call in, to cancel, to annihilate, so that it shall never go out again, every particle of currency issued prior to June 30,1864; and the truth is, that substantially if not literally the whole of the currency was issued previous to that time." . . . "Only one power," said Mr. Conkling, "remains to be conferred upon him; and that is, the power to put his bonds upon the market when he pleases, where he pleases, as he pleases, sell them for money, and with that money purchase the outstanding obligations of the Government."
—Mr. Garfield argued that "under existing law, the Secretary can issue compound-interest notes and 7-30 bonds to meet current indebtedness; but these are the most expensive forms of government obligations, and therefore he ought not to use the power." He thought the proposed bill was necessary in the interest of the Government. He would "trust the Secretary to proceed cautiously in the path required by honor, to place our currency on a sound basis. . . . We have travelled one-third of the way since Congress met. Gold was then 148. It is now 130. Defeat this bill, and there will be a jubilee on Wall Street."
—Mr. Lawrence of Ohio opposed the bill, and presented a letter from Mr. Freeman Clarke, then Comptroller of the Currency, saying, "We have full power to fund every dollar of the floating debt without any legislation, and with no occasion for making any loan whatever."
—Mr. Morrill closed debate on the 16th of March; and the bill coming to a vote, was defeated,—ayes65;noes70. But on a motion to reconsider, it was again brought before the House on the 19th of March, and after brief debate was recommitted. When it re-appeared, four days later, it contained aproviso"that the Secretary of the Treasury shall not retire more than ten million dollars of legal-tender notes in the first six months after the passage of the Act, and not more than four million dollars a month afterwards; and shall make a report to Congress of his action under this provision." Mr. Morrill submitted a letter from Mr. McCulloch, expressing the opinion that "it will be a national calamity if Congress shall fail to grant additional powers to the Secretary." He added, that "the apprehension which exists, that if power is given to the Secretary to retire legal-tender notes the circulation will be ruinously contracted, is without any special foundation." The effect of the discussion was to strengthen the bill in the House where it was passed byayes83;noes53.
The bill was favorably reported to the Senate from the Finance Committee, and came up for consideration on the 9th of April, under the charge of Mr. Fessenden.
—Mr. Sherman re-affirmed the objections made in the House, that the power conferred was greater than had ever been granted to any Secretary of the Treasury since the foundation of the Government. "The power," said he, "is absolute. The Secretary may sell securities of any form at any time and fund the whole debt. No present necessity exists for such grant of authority. Theprovisofor restricting contraction is not adequate for that purpose. By retaining a large balance in the Treasury, the Secretary can contract the currency without violating theproviso." He deemed it unwise "to place in the hands of any mortal man this absolute and extreme control over the currency."
—Mr. Fessenden said the true principle of this bill was, "that as soon as it can be done with safety, Congress means that we shall get back to the old system of specie payments. That is about all there is of it. The effect of rejecting the measure will be to say to everybody that the Government intends to keep depreciated paper in the financial market."
—Mr. Chandler of Michigan believed the measure "to be evil, and evil only; containing dangerous powers which should not be conferred, and which no man should be willing to accept." Mr. Howe of Wisconsin agreed with him.
—Mr. Guthrie of Kentucky (Secretary of the Treasury under PresidentPierce) pronounced it "necessary and proper to give this power to theSecretary." And Mr. Morgan of New York, agreeing with him, declaredthat he desired the bill "just as it is."
—An amendment to strike out the words authorizing the sale of the bonds elsewhere than in the United States was overwhelmingly defeated,ayes7,noes35. The bill was then passed byayes32,noes7, and by the President's signature became a law on the 12th of April, 1866.
The discussion of this important financial measure illustrates the various phases of opinion prevailing both in Congress and in the country. The desire to return to a specie basis was general, and yet not a few clung to the legal-tender notes as a permanent and standard currency. While the argument in favor of contraction was prosecuted with great force, the possibility of going too fast, even in the right direction, was conceded by the wisest financiers. The natural disinclination of the American people to entrust unrestricted power to any officer was frequently and forcibly expressed. The policy of funding the obligations bearing interest was admitted on all hands, and for this purpose the sale as well as the direct exchange of bonds was approved. But the repugnance to accepting less than par, or allowing the possibility of such a rate, had its origin and support in the patriotic instincts and in the sound judgment of the people. The requirement of a report from the Secretary and the limitation of the extent of contraction, were the essential changes which made the measure acceptable.
The enactment of this bill presents in an instructive light the character of our financial legislation and the methods by which it is accomplished. As originally presented the bill had the approval of the Secretary of the Treasury and came before the House with the favorable report of the Committee on Ways and Means. Yet it had no such standing as in the British Parliament is given to a financial project of the Government. There, such a proposition would be definitely framed at the Treasury, and its details would be elaborated when first presented. The Chancellor of the Exchequer would state the full character of the measure and the reasons for asking its adoption. Opposition or question would be expected only from the benches of the rival party. Here, on the other hand, after the House, using its own judgment, had modified the bill, criticism and hostility came from the Treasury that had originally proposed it. Several prominent members of the dominant party were pronounced in opposition. Saved by parliamentary strategy when once defeated, the bill was started into new life by the adoption of restrictions upon the power and the action of the Secretary of the Treasury. These restrictions were shown to be necessary in the progress of the debate. Individual judgment asserted itself and the Act became the harmonious resultant of the conflicting opinions of the entire House.
Congress therefore did not enact anybody's theory. It put into the statute the prudent, cautious sense of the people. Recognizing the principle of funding the floating obligations, and of contraction as a means to resumption, Congress only responded to the common sense of its great constituency, in forbidding reckless haste, and in defining the rate of speed. The purpose of keeping in Congress the control of the rate of contraction was only a part of the general determination that the representatives of the people and of the States shall prescribe the methods of conduct as well as the principles and broad measures of administration. Every Government finds by practice the system of legislation and administration best adapted to its own wants. While ministerial power and a trained following, such as obtain in England, may possess advantages under the circumstances existing in the British Empire, it is the settled judgment of this country that a perfectly free discussion, enlightened but not restrained by departmental recommendation or by dictation of committees, is best adapted to the varied and conflicting wants of the whole people. And this was never better illustrated than in the financial bill whose important provisions have been under consideration.
The revenue laws received careful attention during this session. The chief measure was the Act of July 13, 1866. It came before the House with the assurance from the Ways and Means Committee that it would steadily and materially reduce internal taxes. The system of internal revenue which had been so elaborately and intelligently constructed for war purposes, yielded $310,906,984 for the fiscal year ending June 30, 1866. Reduction were now made in the taxes on several hundred articles of manufacture, on savings banks, on the gross receipts of certain corporations; and the income tax was in some degree mitigated. The total reductions were estimated at $75,684,000, but an increase was proposed on raw cotton amounting to nearly one-third of this sum. Prolonged discussion arose over this tax and resulted in a disagreement between the two Houses. The bill was finally perfected in a conference committee and ended by reducing the total internal revenue to $265,920,474 per annum—with all allowance made for the growth of the country and the elasticity of Government receipts.
Not satisfied with the large reduction of taxes made at the first session after the close of the war, Congress resumed the subject at the second session. Early in February, 1867, Mr. Morrill, from the Committee of Ways and Means, reported a bill for the further reduction of taxes, which became a law on the 2d of March. The taxes removed were returning a yearly revenue of more than $36,000,000 to the National Treasury. The principal reductions were $19,500,000 from the income tax; $4,000,000 from clothing; $3,500,000 from woolens; $3,250,000 from leather; $1,000,000 from engines; $600,000 from sugar-refiners; $600,000 from tinware; $500,000 from castings; $500,000 from doors, sashes and blinds; with many others yielding less sums. All these formed a part of what were termed war taxes, and the steady purpose of Congress was to remove them as rapidly as the obligations of the Treasury would permit. As matter of fact they were removed long before such action was expected by the people, and before the special interests subjected to the burden had time to petition for relief or even to complain of hardship.
During the winter of 1866-67 there was a prolonged discussion in Congress over an Act finally passed March 2, 1867, authorizing the Secretary of the Treasury to exchange three per cent certificates of indebtedness for compound-interest notes, and allowing these certificates to be counted as a part of the reserve of National Banks. The first proposition was to allow interest at 3-65/100 per cent. The exchange of notes not bearing interest for those bearing compound interest was proposed by Mr. Stevens, and at first supported by a majority, but on reconsideration it was defeated. Objections was made to the bill that it was a scheme for giving to the banks interest on their reserves, which they could not otherwise receive when the compound-interest notes should be retired. Of these notes the banks held $90,000,000 and the limit proposed for the certificates was $100,000,000. Congress finally limited the amount of certificates to $50,000,000 at three per cent, and allowed them to stand for two-fifths of the reserve of any bank.
While this arrangement was an obvious advantage to the National banks, no such motive inspired Congress in passing the bill. Quite another object was aimed at in its enactment. The influence of contraction, which had gone into operation by the Act of the preceding summer, was already felt in the business of the country. The real significance of the Act just passed was that to a certain degree it checked and even neutralized the operation of the statute which ordered contraction. The compound-interest notes served the National banks as a part of their reserve, and as rapidly as they were cancelled, legal-tender notes were to be held in their stead. Their withdrawal from circulation for this purpose led therefore to a direct and forcible contraction of the actual currency of the country. By substituting the certificates of indebtedness as available for reserve this contraction was prevented, and by the concession of interest, even at three per cent, the banks were induced to surrender the securities which cost the Government a higher rate. The limit of these certificates was subsequently raised to $75,000,000,—a limit which in fact was often reached,—but as legal-tenders were needed the certificates were surrendered to the Treasury.
This is substantially the history of contraction, or of attempts at contraction made by the Thirty-ninth Congress. The successful effort to parry its effect, as already described, shows how unwelcome it had proved to the business community, and how Congress, without resorting at once to an absolute repeal of the act, sought an indirect mode of neutralizing its effect. Mr. McCulloch, in trying to enforce the policy of contraction, represented an apparently consistent theory in finance; but the great host of debtors who did not wish their obligation to be made more onerous, and the great host of creditors who did not desire that their debtors should be embarrassed and possibly rendered unable to liquidate, united on the practical side of the question and aroused public opinion against the course of the Treasury Department. An individual, by an effort of will, can bring himself to endure present inconvenience and even suffering, for a great good that lies beyond, but it was difficult for forty millions of people to adopt this resolve. Nor were the cases quite similar in motive and influence, for although it might be admitted that the entire nation would be benefitted by the ultimate result, the people knew that the process would bring embarrassment to vast numbers and would reduce not a few to bankruptcy and ruin. It was easy to see, therefore, that as each month the degree of contraction was made public, the people more and more attributed their financial troubles to its operation. Perhaps, in large degree, this was the result of imagination, and of that common desire in human nature to ascribe one's faults and misfortunes to some superior power. The effect nevertheless was serious and lasting. In the end, outside of banking and financial centres, there was a strong and persistent demand for the repeal of the Contraction Act.
The process of funding and paying the National debt, and of contracting the currency, went on with vigor and persistency during the summer and autumn of 1867. The Treasury statements for the year showed that up to November 1, 1867, the long obligations of the Government had been increased to $1,781,462,050; while the short obligations, other than currency, had been reduced to $441,655,120.63, and the currency in greenbacks, fractional notes and certificates of deposit for gold, to $402,385,677.39. The Treasury held $133,998,398.02; so that the National debt, less this cash, stood at $2,491,504,450. It thus exhibited an average reduction of the debt from its maximum, August 31, 1865, to November 1, 1867, of more than $10,000,000 per month.
Gold was lower than it had been, but great disappointment was felt because the premium, which had ranged in January, 1867, at 32-1/8 @ 37-7/8, was in November 37½ @ 48-5/8, and the latter figure was higher than the quotation at the beginning of the first session of the Thirty-ninth Congress. The charge was current, and was believed by many, that the premium had been advanced by speculators to compel Congress to enforce the policy of contraction. On the other hand, it was declared to be demonstrably true that the reduction of the volume of paper did not lower the premium on gold. It only depressed production and placed the markets of every kind under the control of reckless operators. Surely, it was argued, the contraction had been severe enough to satisfy the advocates of the most stringent Procrustean policy. The short obligations had been cut down nearly one-half since January, 1866. If account were taken of compound-interest notes the reduction in currency ought to be reckoned at $100,000,000, and even at twice that sum, since the cash held by the Treasury had been taken from the circulation of the country.
The Secretary of the Treasury still adhered to the policy of contraction, and yet was charged with putting into circulation legal-tender notes that had been once withdrawn, in order to affect the market. Thus in August, 1866, between the 8th and the 23d inclusive, he had withdrawn and destroyed $12,530,111, and of the 31st of that month he issued $12,500,000. He had again in October, 1866, cancelled $500,000 on the 24th, and issued anew the same sum on the 25th. On the 31st of January, 1867, he had issued anew $4,000,000, May 31 $2,500,000, and during December, 1867, $1,842,400. In answer to remonstrance against this practice the Secretary maintained that the authority to contract and to cancel the legal-tender notes did not require him to do it, but left it within his discretion. This was unquestionably the law of the case.
Mr. McCulloch in his official report insisted on the funding or payment of the balance of interest-bearing notes, and upon a continued contraction of the currency, as the first measure for promoting the National prosperity; and he presented a strong argument in favor of permanent specie payment. He reported that he had not always retired notes in each month to the extent permitted, but he declared that the effect of the policy as carried out had been salutary and that its continuation would be obviously wise. Yet he feared that financial views were inculcated, which if not corrected might lead to its abandonment. The truth was that the Secretary's policy was counter to the popular wish, and evidence was accumulating that Congress would not sustain him in its continued enforcement. The Secretary had confidently relied upon the bankers and commercial men of the country; but the serious fact was now developed, that many of the most prudent financiers had concluded that the changes in the volume of the currency were causing mischief, and that the process of contraction had been carried as far as was desirable.
The Secretary argued bravely and wisely in his report, in favor of paying the principal and interest of the Government bonds in coin. His argument was designed to meet heresies which had found favor in unexpected quarters. The plea was urged by the new and short-lived school of finance that the notes of the National banks should be withdrawn and greenbacks substituted for them, that all payments by the Government on the principal of the bonds should be in its own paper. It was admitted by these novel theorists that the bonds on their face promised coin for interest; but they maintained that the bonds had been issued in large part when gold was at a heavy premium for paper, and could rightfully be liquidated in paper at its advanced value. Propositions were frequently presented to stop the issue of bonds and to pay out notes for any obligations of the Government offered at the Treasury on becoming due in any form. The pressure of rapid contraction secured a hearing for every extravagant proposition. Prejudice against speculators in gold, who during the war had grown rich on the disasters of the Union, was added to the discussion, especially while the premium was maintained and the National credit charged with odium on its account.
At the opening of the second session of the Fortieth Congress (December, 1867) numerous resolutions and bills demanding the stoppage of contraction were referred to the Committee on Ways and Means. Five days afterwards Mr. Schenck reported a bill of four lines, by which the "further reduction of the currency by retiring and cancelling United-States notes is prohibited." It had the unanimous approval of the Committee on Ways and Means, and was passed by the House,—ayes127,noes32. The minority included a goodly number of leading Republicans. In the Senate Mr. Sherman, in supporting the bill, stated the amount of contraction since August 1, 1866, at $140,122,168. He argued from these figures that "contraction should go no farther while industry is in a measure paralyzed, and that Congress ought to resume control of the currency, which should not be delegated to any single officer." He declared that the measure was entirely preliminary to other legislation, "which must include the banking system, the time and manner of resuming specie payments, the payment of the debt and the kind of money in which it may be paid, and the reduction of expenditures and taxes." Debate was somewhat prolonged, and a conference committee gave final form to the measure, which failed to receive the President's signature, but became a law without it. It is known as the "Act of February 4, 1868, prohibiting any further reduction of the currency, and authorizing the replacing of mutilated notes." By this Act the minimum limit of legal-tender notes was fixed at $356,000,00,—the volume then afloat after Mr. McCulloch's policy of contraction had done its work.
The actual legislation of the second session of the Fortieth Congress included also the repeal of the tax on raw cotton, and the further reduction of internal revenue, by the Acts of March 31 and July 20 (1868). Great relief was given to manufactures by the abolition of the five per cent tax on a variety of products. The surrender of revenue was estimated at $23,000,000 on cotton at $45,000,000 on manufactures. These concessions were much needed, for the producers of cotton were crippled by the condition of their States, and manufacturers found that prices did not justify the payment of these war charges.
In his annual message to Congress in December, 1868, President Johnson argued "that the holders of our securities have already received upon their bonds a larger amount than their original investments, measured by the gold standard. Upon this statement of fact it would seem but just and equitable that the six per cent interest now paid by the Government should be applied to the reduction of the principal, in semi-annual installments, which in sixteen years and eight months would liquidate the entire National debt." This bold and shameless advocacy of repudiation was less mischievous than it would have been if Mr. Johnson had held a longer lease of power, and if the people had not in the Presidential election pronounced so clear and positive a verdict in favor of the maintenance of the National credit. The Senate deemed it worth while to put on record a resolution condemning this part of Mr. Johnson's message. Mr. Hendricks of Indiana moved a substitute indorsing the statement in the message, and closing with the words of the Democratic National Convention in favor of paying the bonds inlawfulmoney. Only seven senators supported his substitute, while forty-five opposed it; and President Johnson's proposal for repudiation was, by the action of the Senate, "utterly disapproved and condemned," —ayes43,noes6. In the House of Representatives a similar resolution was passed by a vote of 155ayesto 6noes, 60 not voting. No Democratic member in that body seemed willing to assume the objectionable position taken by Mr. Hendricks in the Senate, and a declaration "that all forms of repudiation are odious to the American people" was adopted without a division.
The financial achievement of the National Government herein reviewed, for the four years following the war, may be briefly summarized. The National debt was reduced by the sum of nearly $300,000,000, while at the same time the Government reduced its revenue to the amount of $140,000,000 per annum by the repeal of a long series of internal taxes. During this period more than $35,000,000 had been paid from the Treasury towards the construction of the Union and Central Pacific Railroads, and $7,200,000 was paid to the Russian Government on account of the purchase of the Territory of Alaska. It is also to be noted that within this period were embraced all the expenses incident to the disbandment of the Union army, and also a very large addition to the pension-list. Notwithstanding all these enormous expenditures the business interests of the country continued prosperous, and the fact that so large a reduction had been made in internal taxes gave promise that within a comparatively short period the Government would be able to remove all levies that were in any degree oppressive or even vexatious to private interests.
By reason of his official and personal connection with the President, Mr. McCulloch had failed to secure cordial support from Congress, and had moreover given offense by his obvious sympathy with the free-traders, who were already beginning to assault the protective tariff which the necessities of war had led the country to adopt. The Secretary had also gone far beyond the popular wish and the best business judgment of the country in regard to the rapid contraction of the currency. But while his politics and his policies were not acceptable to Congress or to the people, he is entitled to high credit for his direct, honest, intelligent administration of the Treasury Department. In the peculiar embarrassments to the administration of the Government, caused by the course of President Johnson, it was a matter of sincere congratulation that a Secretary of the Treasury, so competent and trustworthy as Mr. McCulloch had approved himself, was firmly in place before the serious political disturbances began—a congratulation in which his most ardent Republican opponents were ready to join, knowing how fatal it might prove if President Johnson had the opportunity to nominate his successor.
Throughout the more difficult period of his administration of the department, Mr. McCulloch was aided by two most intelligent and efficient officers. Mr. William E. Chandler, though only twenty-nine years of age, was appointed First Assistant Secretary in March, 1865, and exhibited great aptitude, discrimination, and ability in his position. He developed an admirable talent for details, a quick insight into the most difficult problems that came before the Department, and at all times an honorable devotion to public duty. The Bureau of Internal Revenue, the most important of the Treasury Department, was under the direction of another citizen of New Hampshire, Edward Ashton Rollins. The Bureau for a time collected more than half the revenue of the United States, and required in its Commissioner integrity, administrative talent, and singular skill in providing against every form of fraud. No department of the Government had to contend against so many corrupt combinations to rob the Government, and the slightest relaxation of vigilance on the part of the Commissioner might involve at any time a loss of millions to the National Treasury. In the complex and difficult duties of this station, Mr. Rollins proved himself equal to every requirement.
The purchase of Alaska was completed by the Act of July 27, 1868, which appropriated the amount agreed upon in the treaty of March 30, 1867,— negotiated by Mr. Seward on behalf of the United States, and by Baron Stoeckl representing the Emperor of all the Russias. The Russian Government had initiated the matter, and desired to sell much more earnestly than the United States desired to buy. There is little doubt that a like offer from any other European government would have been rejected. The pressure of our financial troubles, the fact that gold was still at a high premium, suggested the absolute necessity of economy in every form in which it could be exercised; and in the general judgment of the people the last thing we needed was additional territory. There was, however, a feeling of marked kindliness towards Russia; and this, no doubt, had great weight with Mr. Seward when he assented to the obvious wishes of that government. But while there was no special difficulty in securing the ratification of the treaty by the Senate, a more serious question arose when the House was asked to appropriate the necessary amount to fulfill the obligation. Seven million two hundred thousand dollars in gold represented at that time more than ten million dollars in the currency of the Government; and many Republicans felt, on the eve, or rather in the midst, of a Presidential canvass, that it was a hazardous political step (deeply in debt as the Government was, and with its paper still at a heavy discount) to embark in the speculation of acquiring a vast area of "rocks and ice," as Alaska was termed in the popular and derisive description of Mr. Seward's purchase.
When the bill came before the House, General Banks, as Chairman of the Committee on Foreign Affairs, urged the appropriation with great earnestness, not merely because of the obligation imposed upon the Government by the treaty, which he ably presented; not merely by reason of the intrinsic value of the territory, which he abundantly demonstrated; but especially on account of the fact that Russia was the other party to the treaty, and had for nearly a century shown a most cordial disposition towards the United States. General Banks maintained that at every step of our history, from 1786 to the moment when he was speaking, Russia had been our friend. "In the darkest hour of our peril," said he, "during the Rebellion, when we were enacting a history which no man yet thoroughly comprehends, when France and England were contemplating the recognition of the Confederacy, the whole world was thrilled by the appearance in San Francisco of a fleet of Russian war vessels, and nearly at the same time, whether by accident or design, a second Russian fleet appeared in the harbor of New York. Who knew how many more there were on their voyage here? From that hour France, on the one hand, and England on the other, receded, and the American Government regained its position and its power. . . . Now, shall we flout the Russian Government in every court in Europe for her friendship? Whoever of the representatives of the American people in this House, on this question, turns his back, not only upon his duty, but upon the friends of his country, upon the Constitution of his Government, and the honor of his generation, cannot long remain in power."
Mr. Cadwalader C. Washburn answered the speech of General Banks on the succeeding day (July 1, 1868). He assumed the leadership of the opposition to the treaty. He proposed to demonstrate to the satisfaction of the House five distinct propositions: "First, that at the time the treaty for Alaska was negotiated, not a soul in the whole United States asked for it;second, that it was secretly negotiated, and in a manner to prevent the representatives of the people from being heard;third, that by existing treaties we possess every right that is of any value to us, without the responsibility and never-ending expense of governing a nation of savages;fourth, that the country ceded is absolutely without value;fifth, that it is the right and duty of the House to inquire into the treaty, and to vote or not vote the money, according to its best judgment." Mr. Washburn made an able speech in support of his radical propositions.
General Butler sustained Mr. Washburn's position in a characteristic speech, especially answering General Banks's argument that we should pay this amount from a spirit of friendship for Russia. "If," said General Butler, "we are to pay this price as usury on the friendship of Russia, we are paying for it very dear indeed. If we are to pay for her friendship, I desire to give her the seven million two hundred thousand dollars in cash, and let her keep Alaska, because I think it may be a small sum to give for the friendship if we could only get rid of the land, or rather the ice, which we are to get by paying for it." He maintained that it was in evidence before the House officially, "that for ten years the entire product of the whole country of Alaska did not exceed three million dollars."
—Mr. Peters of Maine pronounced the territory "intrinsically valueless; the conclusive proof of which is found in the fact that Russia is willing to sell it." He criticised the action of the Senate in negotiating the treaty. "If the treaty-making power can buy, they can sell. If they can buy land with money, they can buy money with land. If they can buy a part of a country, they can buy the whole of a country. If they can sell a part of our country, they can sell the whole of it!"
—Mr. Spalding of Ohio, on the other hand, maintained that "notwithstanding all the sneers that have been cast on Alaska, if it could be sold again, individuals would take it off our hand and pay us two or three millions for the bargain."
—General Schenck thought the purchase in itself highly objectionable, but was "willing to vote the money because the treaty has been made with a friendly power; one of those that stood by us,—almost the only one that stood by us when all the rest of the powers of the world seemed to be turning away from us in our recent troubles."
—Mr. Stevens supported the measure on the ground that it was a valuable acquisition to the wealth and power of the country. He argued also in favor of the right of the Senate to make the treaty.
—Mr. Leonard Myers was sure that if we did not acquire Alaska it would be transferred to Great Britain. "The nation," said he, "which struggled so hard for Vancouver and her present Pacific boundary, and which still insists on having the little island of San Juan, will never let such an opportunity slip. Canada, as matters now stand, would become ours some day could her people learn to be Americans; but never, if England secures Alaska."
—Mr. Higby of California answered the objections relating to climate. "I do not know," said he, "whether the people of the East yet believe what has been so often declared, that our winters on the Pacific are nearly as mild as our summers, and yet such is the fact. In my own little village, situated over fourteen hundred feet above the level of the ocean, I have seen a plant growing in the earth green through all the months from October to April."
—Mr. Shellabarger opposed the purchase. He said those nation which had been compact and solid had been the most enduring, while those which had the most extended territory lasted the least space of time.
—Mr. Price of Iowa thought that it was "far better to expend the $7,200,000 in improving the Mississippi River, in order that bread-stuffs may be transported cheaply from the West to the seaboard." He had no faith in the value of the territory proposed to be purchased.
—Mr. McCarthy of New York rejected the plea that we should purchase Alaska because Russia is a friendly power. "I ask this House," said he, "whence this friendship comes. It comes from self-interest. She is the absorbing power of the Eastern continent, and she recognizes us as the absorbing power of the western continent; and through friendship for us she desires to override and overbalance the governments of Europe which are between her and us."
—General Butler moved a proviso, that "the payment of $500,000 of said appropriation be withheld until the Imperial Government of Russia shall signify its willingness to refer to an impartial tribunal all such claims by American citizens against the Imperial Government as have been investigated by the State Department of the United States and declared to be just, and the amounts so awarded to be paid from said $500,000 so withheld."
—General Garfield, presiding at the time over the Committee of the Whole, ruled it out of order, and on an appeal being taken the decision was sustained byayes93,noes27. After dilatory motions and the offer of various amendments, which were rejected, the bill was passed byayes113,noes43.