A School History of the United States

by John Bach McMaster

SUMMARY

1. What the discovery of gold did for California in 1849, it did for the "Great American Desert" in 1858.

2. The consequences were the founding of Denver, the establishment of a stagecoach line from the Missouri to Denver, the pony express to the Pacific; the overland coach; and the Pacific Railroad.

3. Gold, the railroad, and the silver mines led to the organization of Colorado, Nevada, Montana, Idaho, and Wyoming, and the admission of Nebraska and Nevada into the Union.

4. Other causes led to the organization of Arizona and Dakota.

New States (1860-1870).

Kansas, 1861.
West Virginia, 1863.
Nevada, 1864.
Nebraska, 1867.
Total number of states in 1870, 37.

New Territories (1860-1870).

Colorado, 1861.
Dakota, 1861.
Idaho, 1863.
Arizona, 1863.
Montana, 1864.
Wyoming, 1868.

THE ECONOMIC STRUGGLE

CHAPTER XXXII

POLITICS FROM 1868 TO 1880

%494. New Issues before the People.%—Five years had now passed since the surrender of Lee, and nine since the firing on Sumter. During these years the North, aroused and united by the efforts put forth to crush the Confederacy, had entered on a career of prosperity and development greater than ever enjoyed in the past. With this changed condition came new issues, some growing out of the results of the war, and some out of the development of the country.

%495. Amnesty.%—In the first place, now that the war was over, the people were heartily tired of war issues. Taking advantage of this, certain political leaders began, about 1870, to demand a "general amnesty" [1] or forgiveness for the rebels, and a stoppage of reconstructive measures by Congress.

[Footnote 1: In 1863, Lincoln offered "full pardon" to "all persons" except the leaders of the "existing rebellion." Johnson, in 1865, again offered amnesty, but increased the classes of excepted persons; and, though in the autumn of 1867 he cut down the list, he nevertheless left a great many men unpardoned.]

%496. The National Finances.%—A second issue resulting from the war was the management of the national finances. January 1, 1866, the national debt amounted to $2,740,000,000, including (1) the bonded debt of $1,120,000,000, and (2) the unbonded or floating debt of $1,620,000,000, that part made up of "greenbacks," fractional currency, treasury notes, and the like. Two problems were thus brought before the people:

1. What shall be done with the national bonded debt?

2. How shall the paper money be disposed of and "specie payment" resumed?

As to the first question, it was decided to pay the bonds as fast as possible; and by 1873 the debt was reduced by more than $500,000,000.

As to the second question, it was decided to "contract the currency" by gathering into the Treasury and there canceling the "greenbacks." This was begun, and their amount was reduced from $449,000,000 in 1864 to $356,000,000 in 1868.

By that time a large part of the people in the West were finding fault with "contraction." Calling in the greenbacks, they held, was making money scarce and lowering prices. Congress, therefore, in 1868 yielded to the pressure, and ordered that further contraction should stop and that there should not be less than $356,000,000 of greenbacks.

%497. "The Ohio Idea"; the Greenback Party.%—But there was still another idea current. To understand this, six facts must be remembered. 1. In 1862 Congress ordered the issue of certain 5-20 bonds; that is, bonds that might be paid after five years, but must be paid in twenty years. 2. The interest on these bonds was made payable "in coin." 3. But nothing was said in the bond as to the kind of money in which the principal should be paid. 4. When the greenbacks were issued, the law said they should be "lawful money and a legal tender for all debts, public and private, within the United States, except duties on imports and interest as aforesaid." 5. This made it possible to pay the principal of the 5-20 bonds in greenbacks instead of coin. 6. Fearing that payment of the principal in greenbacks might have a bad effect on future loans, Congress, when it passed the next act (March 3, 1863) for borrowing money, provided that both principal and interest should be paid in coin.

At that time and long after the war "coin" commanded a premium; that is, it took more than 100 cents in paper money to buy 100 cents in gold. Anybody who owned a bond could therefore sell the coin he received as interest for paper and so increase the rate of interest measured in paper money. The bonds, again, could not be taxed by any state or municipality.

Because of these facts, there arose a demand after the war for two things—taxation of the bonds and payment of the 5-20's in greenbacks. This idea was so prevalent in Ohio in 1868 that it was called the "Ohio idea," and its supporters were called "Greenbackers."

%498. Opposition to Land Grants to Railroads.%—Much fault was now found with Congress for giving away such great tracts of the public domain. In 1862 a law known as the Homestead Act was passed. By it a farm of 80 or 160 acres was to be given to any head of a family, or any person twenty-one years old, who was a citizen of the United States or, being foreign born, had declared an intention to become a citizen, provided he or she lived on the farm and cultivated it for five years. Under this great and generous law 103,000 entries for 12,000,000 acres were made between 1863 and 1870. This showed that the people wanted land and was one reason why it should not be given to corporations.

%499. The Election of 1868.%—The questions discussed above (pp. 437-439) became the political issues of 1868.

The Republicans nominated Grant and Schuyler Colfax and declared for the payment of all bonds in coin; for a reduction of the national debt and the rate of interest; and for the encouragement of immigration.

The Democrats nominated Horatio Seymour and Francis P. Blair, and demanded amnesty; rapid payment of the debt; "one currency for the government, and the people, the laborer, and the office holder"; the taxation of government bonds; and no land grants for public improvements.

The popular vote was 5,700,000. In the electoral college Grant had 214 votes, and Seymour 80.

%500. Troubles in the South; the Ku Klux Klan.%—Grant and Colfax began their term of office on March 4, 1869, and soon found that the reconstruction policy of Congress had not been so successful as they could wish, and that the work of protecting the freedman in the exercise of his new rights was not yet completed. Three states (Virginia, Mississippi, and Texas) had not yet complied with the conditions imposed by Congress, and were still refused seats in the House and Senate. No sooner had the others complied with the Reconstruction Act of 1867, and given the negro the right to vote, than a swarm of Northern politicians, generally of the worst sort, went down and, as they said, "ran things." They began by persuading the negroes that their old masters were about to put them back into slavery, that it was only by electing Union men to office that they could remain free; and having by this means obtained control of the negro vote, they were made governors and members of Congress, and were sent to the state legislature, where, seated beside negroes who could neither read nor write, but who voted as ordered, these "carpetbaggers," [1] as they were called, ruled the states in the interest of themselves rather than in that of the people.

[Footnote 1: As the men were not natives of the South, had no property there, and were mostly political adventurers, they were called "carpetbaggers," or men who owned nothing save what they brought in their carpetbags.]

Now, you must remember that in many of the Southern states the negro voters greatly outnumbered the white voters, because there were more black men than white men, and because many of the whites were still disfranchised; that is, could not vote. When these men, who were property owners and taxpayers, found that the carpetbaggers, by means of the negro vote, were plundering and robbing the states, they determined to prevent the negro from voting, and so drive the carpetbaggers from the legislatures. To do this, in many parts of the South they formed secret societies, called "The Invisible Empire" and "The Ku Klux Klan." Completely disguised by masks and outlandish dresses, the members rode at night, and whipped, maimed, and even murdered the objects of their wrath, who were either negroes who had become local political leaders, or carpetbaggers, or "scalawags," as the Southern whites who supported the negro cause were called.

%501. The Fifteenth Amendment.%—To secure the negro the right to vote, and make it no longer dependent on state action, a Fifteenth Amendment was passed by Congress in February, 1869, and, after ratification by the necessary number of states, was put in force in March, 1870. As the Ku Klux were violating this amendment, by preventing the negroes from voting, Congress, in 1871, passed the "Ku Klux" or "Force" Act. It prescribed fine and imprisonment for any man convicted of hindering, or even attempting to hinder, any negro from voting, or the votes, when cast, from being counted.

[Illustration: U. S. Grant]

%502. Rise of the Liberal Republicans.%—This legislation and the conflicts that grew out of it in Louisiana kept alive the old issue of amnesty, and in Missouri split the Republican party and led to the rise of a new party, which received the name of "Liberal Republicans," because it was in favor of a more liberal treatment of the South. From Missouri, the movement spread into Iowa, into Kansas, into Illinois, and into New Jersey, and by 1872 was serious enough to encourage the leaders to call for a national convention which gathered at Cincinnati (May, 1872), and, after declaring for amnesty, universal suffrage, civil service reform, and no more land grants to railroads, nominated Horace Greeley, of New York, for President, and B. Gratz Brown, the Liberal leader of Missouri, for Vice President. The nomination of Greeley displeased a part of the convention, which went elsewhere, and nominated W. S. Groesbeck and F. L. Olmsted. The Republicans met at Philadelphia in June, and nominated Grant and Henry Wilson. The Democrats pledged their support to Greeley and Brown; but this act displeased so many of the Democratic party, that another convention was held, and Charles O'Conor and John Quincy Adams were placed in the field.

%503. The National Labor-Reform Party.%—From about 1829, when the establishment of manufactures, the building of turnpikes and canals, the growth of population, the rise of great cities, and the arrival of emigrants from Europe led to the appearance of a great laboring class, the workingman had been in politics. But it was not till the close of the war that labor questions assumed national importance. In 1865 the first National Labor Congress was held at Louisville in Kentucky. In 1866 a second met at Baltimore; a third at Chicago in 1867; and a fourth at New York in 1868, to which came woman suffragists and labor-reform agitators. The next met at Philadelphia in 1869 and called for a great National Labor Congress which met at Cincinnati in 1870 and demanded

1. Lower interest on government bonds.

2. Repeal of the law establishing the national banks.

3. Withdrawal of national bank notes.

4. Issue of paper money "based on the faith and resources of the nation," to be legal tender for all debts.

5. An eight-hour law.

6. Exclusion of the Chinese.

7. No land grants to corporations.

8. Formation of a "National Labor-Reform Party."

The idea of a new party with such principles was so heartily approved,
that a national convention met at Columbus, O., in 1872, denounced
Chinese labor, demanded taxation of government bonds, and nominated
David Davis and Joel Parker. When they declined, O'Conor was nominated.

%504. Anti-Chinese Movement.%—The demand in the Labor platform for the exclusion of Chinese makes it necessary to say a word concerning "Mongolian labor."

Chinamen were attracted to our shore by the discovery of gold in California, but received little attention till 1852, when the governor in a message reminded the legislature that the Chinese came not as freemen, but were sent by foreign capitalists under contract; that they were the absolute slaves of these masters; that the gold they dug out of our soil was sent to China; that they could not become citizens; and that they worked for wages so low that no American could compete with them.

The legislature promptly acted, and repeatedly attempted to stop their immigration by taxing them. But the Supreme Court declared such taxation illegal, whereupon, the state having gone as far as it could, an appeal was made to Congress. That body was deaf to all entreaties; but the President through Anson Burlingame in 1868 secured some new articles to the old Chinese treaty of 1858. Henceforth it was to be a penal offense to take Chinamen to the United States without their free consent. This was not enough, and in order to force Congress to act, the question was made a political issue.

%505. The Prohibition Party.%—The temperance cause in the United States dates back to 1810. But it was not till Maine passed a law forbidding the sale of liquor, in 1851, and her example was followed by Vermont and Rhode Island in 1852, by Connecticut in 1854, and by New York, New Hampshire, Michigan, and Iowa, in 1855, that prohibition became an issue. The war turned the thoughts of people to other things. But after the war, prohibition parties began to appear in several states, and in 1869 steps were taken to unite and found a national party. In that year, the Grand Lodges of Good Templars held a convention at Oswego, N.Y., and by these men a call was issued for a national convention of prohibitionists to form a political party. The delegates thus summoned met at Chicago in September, 1869, and there founded the "National Prohibition Reform party." The first national nominating convention was held at Columbus, O., in 1872, when James Black of Pennsylvania was nominated for President, and John Russell of Michigan for Vice President.

%506. Campaign of 1872.%—At the beginning of the campaign there were thus seven presidential candidates before the people. But some refused to run, and others had no chance, so that the contest was really between General Grant and Horace Greeley, who was caricatured unmercifully. The benevolent face of the great editor, spectacled, and fringed with a snow-white beard, appeared on fans, on posters, on showcards, where, as a setting sun, it might be seen going down behind the western hills. "Go west," his famous advice to young men, became the slang phrase of the hour. He was defeated, for Grant carried thirty-one states, and Greeley six.

In many respects this was a most interesting election. For the first time in our history the freedmen voted for presidential electors. For the first time since 1860 the people of all the states took part in the election of a President of the United States, while the number of candidates, Labor, Prohibition, Liberal Republican, Democratic, and Republican, showed that the old issues which caused the war or were caused by the war were dead or dying, and that new ones were coming forward.

%507. Panic of 1873.%—Now, all these things, the immense expansion of the railroads, and the great outlay necessary for rebuilding Chicago, much of which had been burned in 1871, and Boston, which suffered from a great fire in 1872, absorbed money and made it difficult to get. Just in the midst of the stringency a quarrel arose between the farmers and the railroads in the West, and made matters worse. It stopped the sale of railroad bonds, and crippled the enterprises that depended on such sale for funds. It impaired the credit of bankers concerned in railroad building, and in September, 1873, a run on them for deposits began till one of them, Jay Cooke & Co., failed, and at once a panic swept over the business world. Country depositors demanded their money; the country banks therefore withdrew their deposits with the city banks, which in turn called in their loans, and industry of every kind stopped. In 1873 there were 5000 failures, and in 1874 there were 5800. Hours of labor were reduced, wages were cut down, workingmen were discharged by thousands.

%508. The Inflation Bill.%—In hope of relieving this distress by making money easier to get, a demand was now made that Congress should issue more greenbacks. To this Congress, in 1874, responded by passing the "Inflation Bill," declaring that there should be $400,000,000 in greenbacks, no more, no less. As the limit fixed in 1868 was $356,000,000, the bill tended to "inflate" or add to the paper currency $44,000,000. Grant vetoed the bill.

%509. Resumption of Specie Payments.%—What shall be done with the currency? now became the question of the hour, and at the next session of Congress (1874-75) another effort was made to answer it, and "an act to provide for the resumption of specie payments" was passed.

1. Under this law, silver 10, 25, and 50 cent pieces were to be exchanged through the post offices and subtreasuries for fractional currency till it was all redeemed.

2. Surplus revenue might be used and bonds issued for the purchase of coin.

3. That part of an act of 1870 which limited the amount of national bank notes to $354,000,000 was repealed.

4. The banks could now put out more bills; but for each $100 they put out the Secretary of the Treasury must call in $80 of greenbacks, till but $300,000,000 of them remained.

5. After January 1,1879, he must redeem them all on demand.

%510. The Political Issues of 1876.%—The currency question, the hard times which had continued since 1873, the rise of the Labor and Prohibition parties, the reports of shameful corruption and dishonesty in every branch of the public service, the dissatisfaction of a large part of the Republican party with the way affairs were managed by the administration, combined to make the election of 1876 very doubtful. The general displeasure was so great that the Democratic party not only carried state elections in the North in 1874 and 1875, but secured a majority of the House of Representatives.

%511. Nomination of Presidential Candidates.%—When the time came to make nominations for the presidency, the Prohibition party was first to act. It selected Green Clay Smith of Kentucky and G.T. Stewart of Ohio as its candidates, and demanded that in all the territories and the District of Columbia, the importation, exportation, manufacture, and sale of alcoholic beverages should be stopped. Two other demands—the abolition of polygamy (which was practiced by the Mormons in Utah), and the closing of the mails to the advertisements of gambling and lottery schemes—have since been secured.

Next came the Greenback or Independent National party, which nominated Peter Cooper of New York and Samuel F. Cary of Ohio, and called for the repeal of the Resumption of Specie Payment Act, and the issue of paper notes bearing a low rate of interest.

In June, the Republicans met in Cincinnati, and nominated Rutherford B. Hayes of Ohio, and William A. Wheeler of New York. They endorsed the financial policy of the party, demanded civil service reform, protection to American industries, no more land grants to corporations, an investigation of the effect of Chinese immigration, and "respectful consideration" of the woman's rights question.

The Democrats nominated Samuel J. Tilden and Thomas A. Hendricks, and called for reforms of every kind—in the civil service, in the administration, in expenditures, in the internal revenue system, in the currency, in the tariff, in the use of public lands, in the treatment of the South.

%512. Result of the Election.%—While the campaign was going on, Colorado was admitted (in August, 1876) as a state. There were then thirty-eight states in the Union, casting 369 electoral votes. This made 185 necessary for a choice; and when the returns were all in, it appeared that, if the Republicans could secure the electoral votes of South Carolina, Florida, Louisiana, and Oregon, they would have exactly 185. In these states, however, a dispute was raging as to which set of electors, Republican or Democratic, was elected. Each claimed to be; and, as the result depended on them, each set met and voted. It was then for Congress to decide which should be counted.

Now, the framers of the Constitution had never thought of such a condition of affairs, and had made no provisions to meet it. Congress therefore provided for an

%513. "Electoral Commission,"% to decide which of the conflicting returns should be accepted. This commission was to be composed of five senators, five representatives, and five justices of the Supreme Court. The Senate chose three Republicans and two Democrats; the House, three Democrats and two Republicans. Congress appointed two Democratic and two Republican justices, who chose the fifth justice, who was a Republican. The Commission thus consisted of eight Republicans and seven Democrats. The decision as to each of the disputed states was in favor of the Republican electors, and as it could not be reversed unless both houses of Congress consented, and as both would not consent, Hayes was declared elected, over Tilden, by one electoral vote; namely, Hayes, 185; Tilden, 184.

[Illustration: Rutherford B. Hayes]

%514. Financial Policy of Grant's Administration.%—The inauguration of Hayes was followed by a special session of Congress. In the House was a great Democratic majority, pledged to a new financial measure—a pledge which it soon made good.

The financial policy of Grant's eight years may be summed up briefly:

1. (1869) The "Credit Strengthening Act," declaring that 5-20 bonds of the United States should be paid "in coin."

2. (1870) The Refunding Act, by which $1,500,000,000 in bonds bearing five and six per cent interest were ordered to be replaced by other bonds at four, four and a half, and five per cent. In this refunding, the 5-20's, whose principal was payable in greenbacks, were replaced by others whose principal was payable "in coin."

3. (1873) The act of 1873, by stopping the coinage of silver dollars, and taking away the legal tender quality of those in circulation, made the words "in coin" mean gold.

4. (1875) All greenbacks were to become redeemable in specie on January 1, 1879.

5. To get specie, bonds might be issued.

%515. Bland Silver Bill; Silver remonetized.%—Against the continuance of this policy the majority of the House stood pledged. Before the session closed, therefore, two bills passed the House. One repealed so much of the act of 1875 as provided for the retirement of greenbacks and the issue of bonds. The second was brought in by Mr. Bland of Missouri, and is still known by his name. It provided

1. That the silver dollar should again be coined, and at the ratio of 16 to 1; that is, that the same number of dollars should be made out of sixteen pounds of silver as out of one pound of gold.

2. That silver should be a legal tender, at face value, for all debts, public and private.

3. That all silver bullion brought to the mints should be coined into dollars without cost to the bringer. This was "free coinage of silver."

The House passed the bill, but the Senate rejected the "free coinage" provision and substituted the "Allison" amendment. Under this, the Secretary of the Treasury was to buy not less than $2,000,000, nor more than $4,000,000, worth of silver bullion each month, and coin it into dollars.

The House accepted the Senate amendment, and when Hayes vetoed the bill Congress passed it over his veto and the "Bland-Allison Bill" became a law in 1878.

%516. Silver Certificates.%—Now this return to the coinage of the silver dollar was open to the objection that large sums in silver would be troublesome because of the weight. It was therefore provided that the coins might be deposited in the Treasury, and paper "silver certificates" issued against them.

A few months later, January 1, 1879, the government returned to specie payment, and ever since has redeemed greenbacks in gold, on demand.

%517. Foreign Relations; the French in Mexico.%—The statement was made that with the exception of Russia the great powers of Europe sympathized with the South during the Civil War. Two of them, France and Great Britain, were openly hostile. The French Emperor allowed Confederate agents to contract for the construction of war vessels in French ports,[1] and sent an army into Mexico to overturn that republic and establish an empire. Mexico owed the subjects of Great Britain, France, and Spain large sums of money, and as she would not pay, these three powers in 1861 sent a combined army to hold her seaports till the debts were paid. But it soon became clear that Napoleon had designs against the republic, whereupon Great Britain and Spain withdrew. Napoleon, however, seeing that the United States was unable to interfere because of the Civil War, went on alone, destroyed the Mexican republic and made Maximilian (a brother of the Emperor of Austria) Emperor of Mexico. This was in open defiance of the Monroe Doctrine, and though the United States protested, Napoleon paid no attention till 1865. Then, the Civil War having ended, and Sheridan with 50,000 veteran troops having been sent to the Rio Grande, the French soldiers were withdrawn (1867), and the Mexican republican party captured Maximilian, shot him, and reëstablished the republic.

[Footnote 1: See Bullock's Secret Service of the Confederate States in
Europe.]

%518. The Alabama Claims; Geneva Award.%—The hostility of Great Britain was more serious than that of France. As we have seen, the cruisers (Alabama, Shenandoah, Florida) built in her shipyards went to sea and inflicted great injury on our commerce. Although she was well aware of this, she for a long time refused to make good the damage done. But wiser counsel in the end prevailed, and in 1871, by the treaty of Washington, all disputed questions were submitted to arbitration.

The Alabama claims, as they were called, were sent to a board of five arbitrators who met at Geneva (1872) and awarded the United States $15,500,000 to be distributed among our citizens whose ships and property had been destroyed by the cruisers.

%519. Other International Disputes; the Alaska Purchase.%—To the Emperor of Germany was submitted the question of the true water boundary between Washington Territory and British Columbia. He decided in favor of the United States (1872).

To a board of Fish Commissioners was referred the claim of Canada that the citizens of the United States derived more benefit from the fishing in Canadian waters than did the Canadians from using the coast waters of the United States. The award made to Great Britain was $5,500,000 $5,500,000 (1877).

In 1867, we purchased Alaska from Russia for $7,200,000.