The Life and Work of James A. Garfield, Twentieth President of the United States / Embracing an Account of the Scenes and Incidents of His Boyhood; the Struggles of His Youth; the Might of His Early Manhood; His Valor As a Soldier; His Career As a Statesman; His Election to the Presidency; and the Tragic Story of His Death.

by John Clark Ridpath

EQUIPOISE OF OUR GOVERNMENT.

“The records of time show no nobler or wiser work done by human hands than that of our fathers when they framed this Republic. Beginning in a wilderness world, they wrought unfettered by precedent, untrammeled by custom, unawed by kings or dynasties. With the history of other nations before them, they surveyed the new field. In the progress of their work they encountered these antagonistic ideas to which I have referred. They attempted to trace through that neutral ground the boundary line across which neither force should pass. The result of their labors is our Constitution and frame of government. I never contemplate the result without feeling that there was more than mortal wisdom in the men who produced it. It has seemed to me that they borrowed their thought from Him who constructed the universe and put it in motion. For nothing more aptly describes the character of our Republic than the solar system, launched into space by the hand of the Creator, where the central sun is the great power around which revolve all the planets in their appointed orbits. But while the sun holds in the grasp of its attractive power the whole system, and imparts its light and heat to all, yet each individual planet is under the sway of laws peculiar to itself.

“Under the sway of terrestrial laws, winds blow, waters flow, and all the tenantries of the planet live and move. So, sir, the States move on in their orbits of duty and obedience, bound to the central Government by this Constitution, which is their supreme law, while each State is making laws and regulations of its own, developing its own energies, maintaining its own industries, managing its local affairs in its own way, subject only to the supreme but beneficent control of the Union. When States Rights ran mad, put on the form of secession, and attempted to drag the States out of Union, we saw the grand lessons taught, in all the battles of the late war, that a State could no more be hurled from the Union, without ruin to the Nation, than could a planet be thrown from its orbit without dragging after it, to chaos and ruin, the whole solar universe.

“Sir, the great war for the Union has vindicated the centripetal power of the Nation, and has exploded, forever I trust, the disorganizing theory of State Sovereignty, which slavery attempted to impose upon this country. But we should never forget that there is danger in the opposite direction. The destruction, or serious crippling of the principle of local government, would be as fatal to liberty as secession would have been fatal to the Union.

“The first experiment which our fathers tried in government-making after the War of Independence was a failure, because the central power conferred in the Articles of Confederation was not strong enough. The second, though nobly conceived, became almost a failure, because slavery attempted so to interpret the Constitution as to reduce the nation again to a confederacy, a mere league between sovereign States. But we have now vindicated and secured the centripetal power; let us see that the centrifugal force is not destroyed, but that the grand and beautiful equipoise may be maintained.

“It will not be denied that before the adoption of the last three amendments, it was the settled interpretation of the Constitution that the protection of the life and property of private citizens belonged to the State governments entirely.... Now three amendments have been added to the Constitution, and it will not be denied that each of these amendments has changed the relation of Congress to the citizens of the States.”

Garfield spoke with his eye on the future: “This debate will become historic as the earliest legislative interpretation of the Fourteenth Amendment,” he said. He reviewed the debates accompanying the adoption of the Fourteenth Amendment. Two propositions had been before Congress. The essential parts of the one adopted were—

“The Congress shall have power to enforce by appropriate legislation, the following provisions, to wit:

“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.

“And this is the rejected clause:

“The Congress shall have power to make all laws which may be necessary and proper to secure to the citizens in these several States equal protection in the rights of life, liberty, and property.

“The one exerts its force directly upon the States, laying restriction and limitations upon their power, and enabling Congress to enforce these limitations. The other, the rejected proposition, would have brought the power of Congress to bear directly upon the citizens, and contained a clear grant of power to Congress to legislate directly for the protection of life, liberty, and property within the States. The first limited, but did not oust the jurisdiction of the State over these subjects. The second gave Congress plenary power to cover the whole subject with its jurisdiction, and, as it seems to me, to the exclusion of the State authorities.

“Mr. Speaker, unless we ignore both the history and the language of these clauses we can not, by any reasonable interpretation, give to the section as it stands in the Constitution, the force and effect of the rejected clause.”

Then followed an exhaustive discussion of the different clauses of the Fourteenth Amendment, after which he passed to the provisions of the pending bill. Southern outrages had been stated by the President to exist. The trouble was not unequal laws, but their maladministration and denial of protection under them. This demanded legislation. But Congress had no power to assume original jurisdiction of the matter. It could only define and declare the offense, and should employ no terms which asserted the power of Congress to take jurisdiction, until such denial of rights was clearly made. Passing then to the extreme and most objectionable parts of the bill he said:

“But, Mr. Speaker, there is one provision in the fourth section which appears to me both unwise and unnecessary. It is proposed not only to authorize the suspension of the privileges of the writ of habeas corpus, but to authorize the declaration of martial law in the disturbed districts.

“I do not deny, but I affirm, the right of Congress to authorize the suspension of the privileges of the writ of habeas corpus whenever, in cases of rebellion or invasion, the public safety may require it. Such action has been, and may again be, necessary to the safety of the Republic; but I call the attention of the House to the fact that never but once in the history of this Government has Congress suspended the great privileges of this writ, and then it was not done until after two years of war had closed all the ordinary tribunals of justice in the rebellious districts, and the great armies of the Union, extending from Maryland to the Mexican line, were engaged in a death-struggle with the armies of the rebellion. It was not until the third day of March, 1863, that the Congress of the United States found the situation so full of peril as to make it their duty to suspend this greatest privilege enjoyed by Anglo-Saxon people. Are we ready to say that an equal peril confronts us to-day?

“My objections to authorizing this suspension implies no distrust of the wisdom or patriotism of the President. I do not believe he would employ this power were we to confer it upon him; and if he did employ it, I do not doubt he would use it with justice and wisdom. But what we do on this occasion will be quoted as a precedent hereafter, when other men with other purposes may desire to confer this power on another President for purposes that may not aid in securing public liberty and public peace.

“But this section provides no safeguard for citizens who may be arrested during the suspension of the writ. There is no limit to the time during which men may be held as prisoners. Nothing in the section requires them to be delivered over to the courts. Nothing in it gives them any other protection than the will of the commander who orders their arrest.”

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“But, sir, this fourth section goes a hundred bow-shots farther than any similar legislation of Congress during the wildest day of the rebellion. It authorizes the declaration of martial law. We are called upon to provide by law for the suspension of all law! Do gentlemen remember what martial law is? Refer to the digest of opinions of the Judge Advocate-General of the United States, and you will find a terse definition which gleams like a flash of a sword-blade. The Judge Advocate says: ‘Martial law is the will of the general who commands the army.’ And Congress is here asked to declare martial law. Why, sir, it is the pride and boast of England that martial law has not existed in that country since the Petition of Right in the thirty-first year of Charles II. Three years ago the Lord Chief-Justice of England came down from the high court over which he was presiding to review the charge of another judge to the grand jury, and he there announced that the power to declare martial law no longer existed in England. In 1867, the same judge, in the case of the Queen vs Nelson, uttered this sentence:

“‘There is no such law in existence as martial law, and no power in the Crown to proclaim it.’

“In a recent treatise, entitled The Nation, a work of great power and research, the author, Mr. Mulford, says: ‘The declaration of martial law, or the suspension of habeas corpus, is the intermission of the ordinary course of law, and of the tribunals to which an appeal may be made. It places the locality included in its operations no longer under the government of law. It interrupts the process of rights and the procedure of courts and restricts the independence of civil administration. There is substituted for these the intention of the individual. To this there is in the civil order no formal limitation. In its immediate action it allows beyond itself no obligation and acknowledges no responsibility. Its command or its decree is the only law; its movement may be secret, and its decisions are opened to the inquiry of no judge and the investigation of no tribunal. There is no positive power which may act, or be called upon to act, to stay its caprice or to check its arbitrary career since judgment and execution are in its own command, and the normal action and administration is suspended and the organized force of the whole is subordinate to it.’

“Sir, this provision means war, or it means nothing; and I ask this House whether we are now ready to take this step? Shall we ‘cry havoc and let slip the dogs of war?’

“I have taken a humble part in one war, and I hope I shall always be ready to do any duty that the necessities of the country may require of me; but I am not willing to talk war or to declare war in advance of the terrible necessity. Are there no measures within our reach which may aid in preventing war? When a savage war lately threatened our Western frontiers we sent our Commissioners of Peace in the hope of avoiding war. Have we done all in our power to avoid that which this section contemplates? I hope the committee will bring a companion measure that looks toward peace and enable us to send the olive branch with the sword.”

This speech marked the separation of General Garfield from the Stalwart wing of the Republican party. It was never forgiven nor forgotten. It showed his balance of mind, his avoidance of extremes. The time when he delivered it was one of extremes. It was an epoch of reaction. It was verging toward the period when Sumner and Adams and Greeley were to forsake the party they had helped to create. It was a time when the fierce passions of war were beginning to find an opponent in the struggling instinct of reunion and peace. It was a time when the great radicals, who had fought slavery to its death, were to swing to the other extreme of loving gush and apologetic forgiveness toward a South which sat crouching in the Temple of Liberty, still maddened with the wild insanity of war. It was a time, on the other hand, when the great war leaders, gorged with the bloody spoils of victory, were to know no forgiveness, no forgetfulness, but to plant the iron heel of despotism upon the prostrate and bleeding foe. In this time of extremes General Garfield took the middle course. He remained a true Republican, but he recoiled from brutalism toward the South. Now that the passions of the hour have passed away, we believe that his speech on the enforcement of the Fourteenth Amendment will stand as the wisest utterance of the times. It rises above the level of partisanship to that of statesmanship. In the midst of the tempest of popular excitement over Southern outrages he was calm. As he afterwards said in his nominating speech at Chicago:

“It is not the billows, but the calm level of the sea from which all heights and depths are measured. When the storm has passed and the hour of calm settles on the ocean, when sunlight bathes its smooth surface, then the astronomer and surveyor takes the level from which he measures all terrestrial heights and depths.”

This was the secret of all of Garfield’s views. In spite of political fears and dogmas, in spite of partisan doubts and dismay, he was right. Therefore, in his answers to the great questions affecting the nationality of the United States, James A. Garfield is entitled to the historic rank of statesman.

We will next inquire to what rank Garfield’s utterances on questions affecting the Financial and Monetary systems of the United States belong. It has been noticed that this and the succeeding topic formed General Garfield’s specialty. In the epoch in which he lived they were the paramount themes of politics. He himself called the financial question the modern political Sphinx. For the last eight years, inflation, hard money, greenbacks, etc., had been discussed from every point of the compass, in every key and to every tune. Men thought it was a new thing. Years before the public clamor, General Garfield took his position on the financial question. He foresaw and foretold the experience of the country before the public mind had rolled its heavy eyes toward the subject. It has been claimed that on the financial question Garfield was ten years ahead of his generation; that he was a pioneer and leader in every sense in the advance toward the resumption of specie payments and a stable currency. Not in 1874, when the first great inflation bill ran its rapid career, nor in 1876, nor 1878, when the advocates of paper money had organized themselves into a political party, did he come forward with arguments on the currency for the first time. It was in 1866 that he turned the first furrow in Congress. On March 16th of that year, he enunciated, in a short but vigorous speech, the basal principles of finance, which in later efforts he was to elaborate and fortify with every argument or authority which could appeal to the human understanding. From that first position Garfield never receded. Not for a moment did he cease to regard irredeemable and inflated paper currency an unmixed evil, and resumption as the main end of the legislation of the epoch. His speeches on finance cover the entire field, and are very numerous. From two or three we present copious extracts. On May 15, 1868, he delivered a speech which was, and is, a complete manual of the principles of sound financial policy:

“I am aware that financial subjects are dull and uninviting in comparison with those heroic themes which have absorbed the attention of Congress for the last five years. To turn from the consideration of armies and navies, victories and defeats, to the array of figures which exhibits the debt, expenditure, taxation, and industry of the nation, requires no little courage and self-denial; but to these questions we must come, and to their solution Congress, political parties, and all thoughtful citizens must give their best efforts for many years to come.

“In April, 1861, there began in this country an industrial revolution, not yet completed, as gigantic in its proportions, and as far-reaching in its consequences, as the political and military revolution through which we have passed. As the first step to any intelligent discussion of the currency, it is necessary to examine the character and progress of that industrial revolution.

“The year 1860 was one of remarkable prosperity in all branches of business. For seventy years no Federal tax-gatherer had ever been seen among the laboring population of the United States. Our public debt was less than sixty-five million dollars. The annual expenditures of the Government, including interest on the public debt, were less than sixty-four million dollars. The revenues from customs alone amounted to six-sevenths of the expenditures. The value of our agricultural products for that year amounted to $1,625,000,000. Our cotton crop alone was two billion one hundred and fifty-five million pounds, and we supplied to the markets of the world seven-eighths of all the cotton consumed. Our merchant marine engaged in foreign trade amounted to two million five hundred and forty-six thousand two hundred and thirty-seven tons, and promised soon to rival the immense carrying trade of England.

“Let us now observe the effect of the war on the various departments of business. From the moment the first hostile gun was fired, the Federal and State governments became gigantic consumers. As far as production was concerned, eleven States were completely separated from the Union. Two million laborers, more than one-third of the adult population of the Northern States, were withdrawn from the ranks of producers, and became only consumers of wealth. The Federal Government became an insatiable devourer. Leaving out of account the vast sums expended by States, counties, cities, towns, and individuals, for the payment of bounties, for the relief of sick and wounded soldiers and their families, and omitting the losses, which can never be estimated, of property destroyed by hostile armies, I shall speak only of expenditures which appear on the books of the Federal Treasury. From the 30th of June, 1861, to the 30th of June, 1865, there were paid out of the Federal Treasury $3,340,996,211, making an aggregate during these four years of more than $836,000,000 per annum.

“From the official records of the Treasury Department it appears that, from the beginning of the American Revolution in 1775 to the beginning of the late rebellion, the total expenditures of the Government for all purposes, including the assumed war debts of the States, amounted to $2,250,000,000. The expenditure of four years of the rebellion were nearly $1,100,000,000 more than all the other Federal expenses since the Declaration of Independence. The debt of England, which had its origin in the revolution of 1688, and was increased by more than one hundred years of war and other political disasters, had reached in 1793 the sum of $1,268,000,000. During the twenty-two years that followed, while England was engaged in a life and death struggle with Napoleon (the greatest war in history save our own), $3,056,000,000 were added to her debt. In our four years of war we spent $300,000,000 more than the amount by which England increased her debt in twenty-two years of war; almost as much as she had increased it in one hundred and twenty-five years of war. Now, the enormous demand which this expenditure created for all the products of industry stimulated to an unparalleled degree every department of business. The plow, furnace, mill, loom, railroad, steamboat, telegraph—all were driven to their utmost capacity. Warehouses were emptied; and the great reserves of supply, which all nations in a normal state keep on hand, were exhausted to meet the demands of the great consumer. For many months the Government swallowed three millions per day of the products of industry. Under the pressure of this demand, prices rose rapidly in every department of business. Labor every-where found quick and abundant returns. Old debts were canceled, and great fortunes were made.

“For the transaction of this enormous business an increased amount of currency was needed; but I doubt if any member of this House can be found bold enough to deny that the deluge of Treasury notes poured upon the country during the war was far greater even than the great demands of business. Let it not be forgotten, however, that the chief object of these issues was not to increase the currency of the country. They were authorized with great reluctance, and under the pressure of overwhelming necessity, as a temporary expedient to meet the demands of the Treasury. They were really forced loans in the form of Treasury notes. By the act of July 17, 1861, an issue of demand notes was authorized to the amount of $50,000,000. By the act of August 5, 1861, this amount was increased $50,000,000 more. By the act of February 25, 1862, an additional issue of $150,000,000 was authorized. On the 17th of the same month, an unlimited issue of fractional currency was authorized. On the 17th of January, 1873, an issue of $150,000,000 more was authorized, which was increased $50,000,000 by the act of March 3d of the same year. This act also authorized the issue of one and two years’ Treasury notes, bearing interest at five per cent., to be a legal tender for their face, to the amount of $400,000,000. By the act of June 30, 1864, an issue of six per cent. compound-interest notes, to be a legal tender for their face, was authorized, to the amount of $200,000,000. In addition to this, many other forms of paper obligation were authorized, which, though not a legal tender, performed many of the functions of currency. By the act of March 1, 1862, the issue of an unlimited amount of certificates of indebtedness was authorized, and within ninety days after the passage of the act there had been issued and were outstanding of these certificates more than $156,000,000. Of course these issues were not all outstanding at the same time, but the acts show how great was the necessity for loans during the war.

“The law which made the vast volume of United States notes a legal tender operated as an act of general bankruptcy. The man who loaned $1,000 in July, 1861, payable in three years, was compelled by this law to accept at maturity, as a full discharge of the debt, an amount of currency equal in value to $350 of the money he loaned. Private indebtedness was every-where canceled. Rising prices increased the profits of business, but this prosperity was caused by the great demand for products, and not by the abundance of paper money. As a means of transacting the vast business of the country, a great volume of currency was indispensable, and its importance can not well be overestimated. But let us not be led into the fatal error of supposing that paper money created the business or produced the wealth. As well might it be alleged that our rivers and canals produce the grain which they float to market. Like currency, the channels of commerce stimulate production, but can not nullify the inexorable law of demand and supply.

“Mr. Chairman, I have endeavored to trace the progress of our industrial revolution in passing from peace to war. In returning from war to peace all the conditions were reversed. At once the Government ceased to be an all-devouring consumer. Nearly two million able-bodied men were discharged from the army and navy and enrolled in the ranks of the producers. The expenditures of the Government, which, for the fiscal year ending June 30, 1865, amounted to $1,290,000,000, were reduced to $520,000,000 in 1866; to $346,000,000 in 1867; and, if the retrenchment measures recommended by the Special Commissioner of the Revenue be adopted, another year will bring them below $300,000,000.

“Thus during the first year after the war the demands of the Federal Government as a consumer decreased sixty per cent.; and in the second year the decrease had reached seventy-four per cent., with a fair prospect of a still further reduction.

“The recoil of this sudden change would have produced great financial disaster in 1866, but for the fact that there was still open to industry the work of replacing the wasted reserves of supply, which, in all countries in a healthy state of business, are estimated to be sufficient for two years. During 1866, the fall in price of all articles of industry amounted to an average of ten per cent. One year ago a table was prepared, at my request, by Mr. Edward Young, in the office of the Special Commissioner of the Revenue, exhibiting a comparison of wholesale prices at New York in December, 1865, and December, 1866. It shows that in ten leading articles of provisions there was an average decline of twenty-two per cent., though beef, flour, and other breadstuffs remained nearly stationary. On cotton and woolen goods, boots, shoes, and clothing, the decline was thirty per cent. On the products of manufacture and mining, including coal, cordage, iron, lumber, naval stores, oils, tallow, tin, and wool, the decline was twenty-five per cent. The average decline on all commodities was at least ten per cent. According to the estimates of the Special Commissioner of the Revenue in his last report, the average decline during 1867 has amounted at least to ten per cent. more. During the past two years Congress has provided by law for reducing internal taxation $100,000,000; and the act passed a few weeks ago has reduced the tax on manufactures to the amount of $64,000,000 per annum. The repeal of the cotton tax will make a further reduction of $20,000,000. State and municipal taxation and expenditures have also been greatly reduced. The work of replacing these reserves delayed the shock and distributed its effects, but could not avert the inevitable result. During the past two years, one by one, the various departments of industry produced a supply equal to the demand. Then followed a glutted market, a fall in prices, and a stagnation of business, by which thousands of laborers were thrown out of employment.

“If to this it be added that the famine in Europe and the drought in many of the agricultural States of the Union have kept the price of provisions from falling as other commodities have fallen, we shall have a sufficient explanation of the stagnation of business, and the unusual distress among our people.

“This industrial revolution has been governed by laws beyond the reach of Congress. No legislation could have arrested it at any stage of its progress. The most that could possibly be done by Congress was, to take advantage of the prosperity it occasioned to raise a revenue for the support of the Government, and to mitigate the severity of its subsequent pressure, by reducing the vast machinery of war to the lowest scale possible. Manifestly nothing can be more absurd than to suppose that the abundance of currency produced by the prosperity of 1863, 1864, and 1865, or that the want of it is the cause of our present stagnation.

“In order to reach a satisfactory understanding of the currency question, it is necessary to consider somewhat fully the nature and functions of money or any substitute for it.

“The theory of money which formed the basis of the ‘mercantile system’ of the seventeenth and eighteenth centuries has been rejected by all leading financiers and political economists for the last seventy-five years. That theory asserted that money is wealth; that the great object of every nation should be to increase its amount of gold and silver; that this was a direct increase of national wealth.

“It is now held as an indisputable truth that money is an instrument of trade, and performs but two functions. It is a measure of value and a medium of exchange.

“In cases of simple barter, where no money is used, we estimate the relative values of the commodities to be exchanged in dollars and cents, it being our only universal measure of value.

“As a medium of exchange, money is to all business transactions what ships are to the transportation of merchandise. If a hundred vessels of a given tonnage are just sufficient to carry all the commodities between two ports, any increase of the number of vessels will correspondingly decrease the value of each as an instrument of commerce; any decrease below one hundred will correspondingly increase the value of each.

“The functions of money as a medium of exchange, though more complicated in their application, are precisely the same in principle as the functions of the vessels in the case I have supposed.

“If we could ascertain the total value of all the exchanges effected in this country by means of money in any year, and could ascertain how many dollars’ worth of such exchanges can be effected in a year by one dollar in money, we should know how much money the country needed for the business transactions of that year. Any decrease below that amount will correspondingly increase the value of each dollar as an instrument of exchange. Any increase above that amount will correspondingly decrease the value of each dollar. If that amount be doubled, each dollar of the whole mass will perform but half the amount of business it did before; will be worth but half its former value as a medium of exchange.

“Recurring to our illustration: if, instead of sailing vessels, steam vessels were substituted, a much smaller tonnage would be required; so, if it were found that $500,000,000 of paper, each worth seventy cents in gold, were sufficient for the business of the country, it is equally evident that $350,000,000 of gold substituted for the paper would perform precisely the same amount of business.

“It should be remembered, also, that any improvement in the mode of transacting business, by which the actual use of money is in part dispensed with, reduces the total amount needed by the country. How much has been accomplished in this direction by recent improvements in banking may be seen in the operations of the clearing-houses in our great cities.

“The records of the New York Clearing House show that from October 11, 1853, the date of its establishment, to October 11, 1867, the exchanges amounted to nearly $180,000,000,000; to effect which, less than $8,000,000,000 of money were used, an average of about four per cent.; that is, exchanges were made to the amount of $100,000,000 by the payment of $4,000,000 of money.

“It is also a settled principle that all deposits in banks, drawn upon by checks and drafts, really serve the purpose of money.

“The amount of currency needed in the country depends, as we have seen, upon the amount of business transacted by means of money. The amount of business, however, is varied by many causes which are irregular and uncertain in their operation. An Indian war, deficient or abundant harvests, an overflow of the cotton lands of the South, a bread famine or war in Europe, and a score of such causes entirely beyond the reach of legislation, may make money deficient this year and abundant next. The needed amount varies also from month to month in the same year. More money is required in the autumn, when the vast products of agriculture are being moved to market, than when the great army of laborers are in winter-quarters, awaiting the seed-time.

“When the money of the country is gold and silver, it adapts itself to the fluctuations of business without the aid of legislation. If, at any time, we have more than is needed, the surplus flows off to other countries through the channels of international commerce. If less, the deficiency is supplied through the same channels. Thus the monetary equilibrium is maintained. So immense is the trade of the world that the golden streams pouring from California and Australia in the specie circulation, are soon absorbed in the great mass and equalized throughout the world, as the waters of all the rivers are spread upon the surface of all the seas.

“Not so, however, with an inconvertible paper currency. Excepting the specie used in the payment of customs and the interest on our public debt, we are cut off from the money currents of the world. Our currency resembles rather the waters of an artificial lake, which lie in stagnation or rise to full banks at the caprice of the gate-keeper.

“Gold and silver abhor depreciated paper money, and will not keep company with it. If our currency be more abundant than business demands, not a dollar of it can go abroad; if deficient, not a dollar of gold will come in to supply the lack. There is no legislature on earth wise enough to adjust such a currency to the wants of the country.

“Let us examine more minutely the effect of such a currency upon prices. Suppose that the business transactions of the country at the present time require $350,000,000 in gold. It is manifest that if there are just $350,000,000 of legal-tender notes, and no other money in the country, each dollar will perform the full functions of a gold dollar, so far as the work of exchange is concerned. Now, business remaining the same, let $350,000,000 more of the same kind of notes be pressed into circulation. The whole volume, as thus increased, can do no more than all the business. Each dollar will accomplish just half the work that a dollar did before the increase; but as the nominal dollar is fixed by law, the effect is shown in prices being doubled. It requires two of these dollars to make the same purchase that one dollar made before the increase. It would require some time for the business of the country to adjust itself to the new conditions, and great derangement of values would ensue; but the result would at last be reached in all transactions which are controlled by the law of demand and supply.

“No such change of values can occur without cost. Somebody must pay for it. Who pays in this case? We have seen that doubling the currency finally results in reducing the purchasing power of each dollar one-half; hence every man who held a legal-tender note at the time of the increase, and continued to hold it till the full effect of the increase was produced, suffered a loss of fifty per cent. of its value; in other words, he paid a tax to the amount of half of all the currency in his possession. This new issue, therefore, by depreciating the value of all the currency, cost the holders of the old issue $175,000,000; and if the new notes were received at their nominal value at the date of issue, their holders paid a tax of $175,000,000 more. No more unequal or unjust mode of taxation could possibly be devised. It would be tolerated only by being so involved in the transactions of business as to be concealed from observation; but it would be no less real because hidden.

“But some one may say: ‘This depreciation would fall upon capitalists and rich men, who are able to bear it.’

“If this were true, it would be no less unjust. But, unfortunately, the capitalists would suffer less than any other class. The new issue would be paid in the first place in large amounts to the creditors of the Government; it would pass from their hands before the depreciation had taken full effect, and, passing down step by step through the ranks of middle-men, the dead weight would fall at last upon the laboring classes in the increased price of all the necessaries of life. It is well known that in a general rise of prices, wages are among the last to rise. This principle was illustrated in the report of the Special Commissioner of the Revenue for the year 1866. It is there shown that from the beginning of the war to the end of 1866, the average price of all commodities had risen ninety per cent. Wages, however, had risen but sixty per cent. A day’s labor would purchase but two-thirds as many of the necessaries of life as it would before. The wrong is, therefore, inflicted on the laborer long before his income can be adjusted to his increased expenses. It was, in view of this truth, that Daniel Webster said, in one of his ablest speeches:

“‘Of all the contrivances for cheating the laboring classes of mankind, none has been more effectual than that which deludes them with paper money. This is the most effectual of inventions to fertilize the rich man’s field by the sweat of the poor man’s brow. Ordinary tyranny, oppression, excessive taxation, these bear lightly on the happiness of the mass of the community, compared with a fraudulent currency and the robberies committed by depreciated paper.’

“The fraud committed and the burdens imposed upon the people, in the case we have supposed, would be less intolerable if all business transactions could be really adjusted to the new conditions; but even this is impossible. All debts would be canceled, all contracts fulfilled by payment in these notes—not at their real value, but for their face. All salaries fixed by law, the pay of every soldier in the army, of every sailor in the navy, and all pensions and bounties, would be reduced to half their former value. In these cases the effect is only injurious. Let it never be forgotten that every depreciation of our currency results in robbing the one hundred and eighty thousand pensioners, maimed heroes, crushed and bereaved widows, and homeless orphans, who sit helpless at our feet. And who would be benefited by this policy? A pretense of apology might be offered for it, if the Government could save what the people lose. But the system lacks the support of even that selfish and immoral consideration. The depreciation caused by the over-issue in the case we have supposed, compels the Government to pay just that per cent. more on all the contracts it makes, on all the loans it negotiates, on all the supplies it purchases; and to crown all, it must at last redeem all its legal-tender notes in gold coin, dollar for dollar. The advocates of repudiation have not yet been bold enough to deny this.

“I have thus far considered the influence of a redundant paper currency on the country when its trade and industry are in a healthy and normal state. I now call attention to its effect in producing an unhealthy expansion of business, in stimulating speculation and extravagance, and in laying the sure foundation of commercial revulsion and widespread ruin. This principle is too well understood to require any elaboration here. The history of all modern nations is full of examples. One of the ablest American writers on banks and banking, Mr. Gouge, thus sums up the result of his researches:

“‘The history of all our bank pressures and panics has been the same in 1825, in 1837, and in 1843; and the cause is given in these two simple words—universal expansion.’

“There still remains to be considered the effect of depreciated currency on our trade with other nations. By raising prices at home higher than they are abroad, imports are largely increased beyond the exports; our coin must go abroad; or, what is far worse for us, our bonds, which have also suffered depreciation, and are purchased by foreigners at seventy cents on the dollar. During the whole period of high prices occasioned by the war, gold and bonds have been steadily going abroad, notwithstanding our tariff duties, which average nearly fifty per cent. ad valorem. More than five hundred million dollars of our bonds are now held in Europe, ready to be thrown back upon us when any war or other sufficient disturbance shall occur. No tariff rates short of actual prohibition can prevent this outflow of gold while our currency is thus depreciated. During these years, also, our merchant marine steadily decreased, and our ship-building interests were nearly ruined.

“Our tonnage engaged in foreign trade, which amounted in 1859–’60 to more than two and a-half million tons, had fallen in 1865–’66 to less than one and a-half millions—a decrease of more than fifty per cent.; and prices of labor and material are still too high to enable our shipwrights to compete with foreign builders.

“From the facts already exhibited in reference to our industrial revolution, and from the foregoing analysis of the nature and functions of currency, it is manifest:

“1. That the remarkable prosperity of all industrial enterprises during the war was not caused by the abundance of currency, but by the unparalleled demand for every product of labor.

“2. That the great depression of business, the stagnation of trade, the ‘hard times’ which have prevailed during the past year, and which still prevail, have not been caused by an insufficient amount of currency, but mainly by the great falling off of the demand for all the products of labor, compared with the increased supply since the return from war to peace.

“I subjoin a table, carefully made up from the official records, showing the amount of paper money in the United States at the beginning of each year from 1834 to 1868 inclusive. The fractions of millions are omitted:

1834	$ 95,000,000
1835	104,000,000
1836	140,000,000
1837	149,000,000
1838	116,000,000
1839	135,000,000
1840	107,000,000
1841	107,000,000
1842	84,000,000
1843	59,000,000
1844	75,000,000
1845	90,000,000
1846	105,000,000
1847	106,000,000
1848	129,000,000
1849	115,000,000
1850	131,000,000
1851	155,000,000
1852	150,000,000
1853	146,000,000
1854	205,000,000
1855	187,000,000
1856	196,000,000
1857	215,000,000
1858	135,000,000
1859	193,000,000
1860	207,000,000
1861	202,000,000
1862	218,000,000
1863	529,000,000
1864	636,000,000
1865	948,000,000
1866	919,000,000
1867	852,000,000
1868	767,000,000

“The table I have submitted shows how perfect an index the currency is of the healthy or unhealthy condition of business, and that every great financial crisis, during the period covered by the table, has been preceded by a great increase, and followed by a great and sudden decrease, in the volume of paper money. The rise and fall of mercury in the barometer is not more surely indicative of an atmospheric storm, than is a sudden increase or decrease of currency indicative of financial disaster. Within the period covered by the table, there were four great financial and commercial crises in this country. They occurred in 1837, 1841, 1854, and 1857. Observe the volume of paper currency for those years: On the first day of January, 1837, the amount had risen to $149,000,000, an increase of nearly fifty per cent. in three years. Before the end of that year, the reckless expansion, speculation, and over-trading which caused the increase, had resulted in terrible collapse; and on the first of January, 1838, the volume was reduced to $116,000,000. Wild lands, which speculation had raised to fifteen and twenty dollars per acre, fell to one dollar and a-half and two dollars, accompanied by a corresponding depression in all branches of business. Immediately after the crisis of 1841, the bank circulation decreased twenty-five per cent., and by the end of 1842 was reduced to $58,500,000, a decrease of nearly fifty per cent.

“At the beginning of 1853 the amount was $146,000,000. Speculation and expansion had swelled it to $205,000,000 by the end of that year, and thus introduced the crash of 1854. At the beginning of 1857 the paper money of the country reached its highest point of inflation up to that time. There were nearly $215,000,000, but at the end of that disastrous year the volume had fallen to $135,000,000, a decrease of nearly forty per cent. in less than twelve months. In the great crashes preceding 1837 the same conditions are invariably seen—great expansion, followed by a violent collapse, not only in paper money, but in loans and discounts; and those manifestations have always been accompanied by a corresponding fluctuation in prices.

“In the great crash of 1819, one of the severest this country ever suffered, there was a complete prostration of business. It is recorded in Niles’s Register for 1820 that, in that year, an Ohio miller sold four barrels of flour to raise five dollars, the amount of his subscription to that paper. Wheat was twenty cents per bushel, and corn ten cents. About the same time Mr. Jefferson wrote to Nathaniel Macon:

“‘We have now no standard of value. I am asked eighteen dollars for a yard of broadcloth which, when we had dollars, I used to get for eighteen shillings.’

“But there is one quality of such a currency more remarkable than all others—its strange power to delude men. The spells and enchantments of legendary witchcraft were hardly so wonderful. Most delusions can not be repeated; they lose their power after a full exposure. Not so with irredeemable paper money. From the days of John Law its history has been a repetition of the same story, with only this difference: No nation now resorts to its use except from overwhelming necessity; but whenever any nation is fairly embarked, it floats on the delusive waves, and, like the lotus-eating companions of Ulysses, wishes to return no more.

“Into this very delusion many of our fellow-citizens and many members of this House have fallen.

“The chief cause of this new-born zeal for paper money is the same as that which led a member of the Continental Congress to exclaim:

“‘Do you think, gentlemen, that I will consent to load my constituents with taxes, when we can send to the printer and get a wagon-load of money, one quire of which will pay for the whole?’

“It is my clear conviction that the most formidable danger with which the country is now threatened is a large increase in the volume of paper money.

“Shall we learn nothing from experience? Shall the warnings of the past be unheeded?”

Here followed a brilliant historical review of the experience of the Colonies, of the Continental Congress, and of England, with paper money.

“From these considerations it appears to me that the first step toward a settlement of our financial and industrial affairs should be to adopt and declare to the country a fixed and definite policy, so that industry and enterprise may be based upon confidence; so that men may know what to expect from the Government; and, above all, that the course of business may be so adjusted that it shall be governed by the laws of trade, and not by the caprice of any man or of any political party in or out of Congress....

“On the 10th of February, I introduced a bill which, if it should become a law, will, I believe, go far toward restoring confidence and giving stability to business, and will lay the foundation on which a general financial policy may be based, whenever opinions are so harmonized as to make a general policy possible.

“As the bill is short, I will quote it entire, and call attention for a few moments to its provisions: