Letters and Literary Memorials of Samuel J. Tilden, v. 1

by Samuel J. Tilden

J. E. COOLEY TO TILDEN

"Palazzo Cooley, 2 Via dei Pucci,
"Florence, Italy, Oct. 20th, 1875.
"Hon. Samuel J. Tilden.

"Dear Sir,—Allow me to congratulate you on the success and popularity of your administration as Governor of the State of New York. It seems to have the true Bentonian and Silas Wright tone or ring in it. I like it, and wish you the most perfect and entire success in the noble and patriotic efforts you are making to ferret out and punish thieves, without regard to party, and bring back the administration of the public affairs in the State of New York to the splendid condition they were in when confided to the guidance and care of such men as Wright, Marcy, and others of their best and most influential days. May God give you health and strength to carry out your noble purposes to the utmost limit of your commendable aspirations.

"I rejoice to hear of the signal defeat of the Democratic party of Ohio on their shameful inflation platform; and I am prayerfully hopeful that a similar result may accrue to the silly, not to say dishonest, inflationists of Pennsylvania. However much it may be regretted that the foolish inflationists of the Democratic party should have had sufficient influence to insure its defeat this fall in those two States, it will have the good effect to tumble out of the Presidential path several aspirants and possible candidates for that high office.

"The Democrats in the United States have once more the political cards in their own hands, and they are mostly trumps. Two-thirds, I may venture to say, of the Republican party, are wearied, not to say disgusted, with Grant's administration and sigh for a change, which would have been affected at the last Presidential election but for the inconceivable folly of the Democratic party in nominating Greeley, who for forty years had exerted himself to the utmost of his ability to destroy the party and malign and blacken the character of the most pure-minded and patriotic members of it.

"'Free trade, reform, and speedy return to specie payments' should be the conspicuous rallying or watchwords of the Democratic party in the future; and it must follow, as the night the day, that, with that insignia inscribed upon its banners, and with candidates truly representing the sentiment or policy it indicates, the party will next year triumphantly sweep the country from one extremity to the other.

"Protective duties, Civil War, and excessive issues of paper money have done much to demoralize the character of our people and waft the country towards the brink of ruin! It is high time to bring these destructive measures to an end; and to the Democratic party, rightly directed, is reserved the noble and patriotic mission of effecting this incalculable benefit to the United States, which would bring back the party itself to the enjoyment of all of its pristine power and the warm affection of an overwhelming majority of the people.

"The war is happily at an end, and protective duties may be abolished by repealing the ruinous acts that authorize their unjust exactions. But a return to specie payments cannot be effected by simply passing resolutions or empty and vague enactments of Congress. Something more grave and important is required to insure this great and much-needed reform in the deplorable financial condition of the country.

"In an extremity, and as a war measure, the government, having undertaken to furnish a paper currency declared to be equal in value to gold; and having made that currency the basis of a system of banking, which has been generally adopted throughout the country, it cannot now withdraw itself from the full responsibility of that position without great detriment to the best interests of the country, and incurring lasting dishonor, until it shall have, as it is abundantly able to do, appreciated that currency and brought it up to par in gold. This being done, the government will have returned to specie payments; and greenbacks, being the basis of banking, the banks themselves will also have resumed specie payments, if in a solvent condition, with an augmented appreciation of the whole volume of the currency, including the greenbacks and the bills of the national banks equal to the difference between the current value of the depreciated currency and the price of gold in the American market, which I perceive by the last quotations is 16 per cent. This agio or premium, calculated on the whole amount of paper currency now issued by the national banks and the government (equal, I suppose, to no less than $700,000,000), would amount to $112,000,000; and this large sum is simply what would, in that event, justly accrue to the possessors or holders of the depreciated currency of the government and the national banks.

"How, it may be asked, can this desirable result be easily attained? Evidently in no other way than by the government taking such steps and adopting such measures as will surely bring into its possession an amount of gold sufficient to enable it to deal in its own currency for all government transactions. How is this to be done? Simply by a six-per-cent. 'redemption loan,' having 30 years to run, and to an amount equal to the full volume of the greenback currency now afloat. I say six per cent. because I would make the absorption of the loan speedy and sure, though it is not unlikely that a loan of the kind might be slowly negotiated at 5 or even 4½ per cent. interest. But a government loan at 6 per cent., having thirty or even twenty years to run, would be caught up with avidity by capitalists on both sides of the Atlantic at a large premium; and it would at once throw the balance of trade in favor of the United States, so that there would be no immediate demand for gold abroad. It would, also, break down at once the mischievous ring speculations in gold at home, and obviate the necessity of buying gold for the payment of customs; and as gold could be obtained at any time for greenbacks or the bills of specie-paying banks, the demand for it would become so small that gold, instead of commanding, as it does at present, a ruinously high premium, would most likely become a drug!

"Such a loan as I have indicated should be put upon the principal money markets of the United States and in Europe and bid for simultaneously, and payable in gold.

"Should such a condition of monetary affairs be attained the government might withdraw the greenbacks from circulation, so fast as the volume of currency necessary to meet the requirements of commerce should be supplied by sound specie-paying banks, until the whole amount ($400,000,000) shall have been retired, without disturbing materially the general current of trade or adding a single dollar to the present indebtedness of the United States. The interest on the new loan would, of course, have to be provided for; but that would be more than compensated by the saving of gold premium, now annually required in payments for foreign importations, which, whatever may be the amount, is added to the price or cost of all foreign commodities consumed by the people of the United States. The loan, moreover, would doubtless be taken at a premium of 10 to 15 per cent.; if so, $40,000,000 to $60,000,000 would be realized by the government by the operation.

"The glory of this great and patriotic achievement may be made to redound to the honor of the Democratic party is aroused to a proper sense of justice, and stimulated to a faithful performance of its obvious duty to the country; and, above all, inspired with a firm determination to be true to its own self.

"I have the honor to remain, with great respect,

"Very truly, your friend,
"J. E. Cooley."