A Trip to the Rockies

by B. R. Corwin

The most important topic for consideration before the Association was the proposition to substitute Silver Certificates for “Legal-Tender and National Bank Notes.” The speech of ex-Comptroller John Jay Knox, who was one of our party, was unanswerable, and should be recorded as an incident of our journey. We say, like the boy blowing the organ to the professor at the key-board: “We did that nicely, sir.”

“The proposition of Mr. St. John involves the withdrawal of the legal-tender notes, the disbursement of the $100,000,000 of gold, pledged as security for the redemption of these notes, the increased issue of silver coinage and of silver certificates from $2,000,000 worth to $4,000,000 per month, and finally the giving of these silver certificates the quality of legal tender.

“Mr. St. John, we all know, is sincere, is honest in the advocacy of his opinions; but to me it is as clear as the light of day, that every one of these propositions is unwise and impracticable, if not grievously, flagrantly wrong. Do the gentlemen of the convention know that the proposition giving the legal-tender quality to circulating notes was discussed by the people of this country previous to the adoption of the Constitution; and that it was, perhaps, the most difficult question that was considered by the Fathers in the convention that prepared and finally adopted the Constitution of the United States.

“The question involves such serious, such far-reaching consequences that its discussion has been avoided by all the great financiers, by all the public men of this country from the outset. From time to time it has been brought before Congress and laid aside as impracticable and unwise,[A] but finally placed upon the statute-book, not as a measure of choice, not because any considerable number of members of Congress believed in it, but because they reluctantly came to the conclusion that it was a measure necessary to provide for carrying on a civil war unequalled in the history of nations.

“Does this convention propose to decide in an hour or a day, a new question of legal tender when it is known that the original proposition has been under consideration ever since the organization of this government, and finally passed only as a means of salvation in the midst of a great war? Does this convention in a moment propose to consider and decide a new question of legal tender, when it is known that the original question was before the Supreme Court of the United States for consideration for weeks and months? The Supreme Court of the United States, presumed to be composed of the greatest men in this country and of the greatest jurists of these times, have twice reversed their own judgment on this subject. First, they decided that the legal-tender act was unconstitutional; secondly, they decided that the constitutionality of the legal-tender notes was based upon the war powers of Congress; and their third decision—to the surprise of the country—was that Congress has power to issue legal-tender circulating notes to an unlimited extent in time of peace as well as in time of war.

“The legal-tender note which we have is a promise to pay. It is a promise to pay one hundred cents in gold, and every man in and out of Congress knows that it is a promise to pay one hundred cents in gold, and also that we have held almost from the date of the issue of the legal-tender note to the present time $100,000,000 of gold in the Treasury with which to pay or redeem these notes. This $100,000,000 of gold was first set aside for that purpose by a Republican Administration, but subsequently by a Democratic Administration, so that both of the great parties of the country are thoroughly committed to it. First, a Republican Administration has set aside this $100,000,000 in the Treasury sacred for the purpose of redeeming every dollar of legal-tender paper money which may be presented for payment. Secondly, the Secretary of the Treasury, Daniel Manning, and Conrad N. Jordan, the Treasurer of the United States, devised a new system of debt statement. The Treasury statement prepared by John Sherman was not satisfactory to the Democratic Administration of President Cleveland. For that reason his Secretary of the Treasury and his Treasurer of the United States devised a new statement, and took this $100,000,000 out of the general fund in which it was placed by their predecessors, thus proclaiming to all the world that it was not to be even thought of as available for general expenditures thereafter, but was to be left there as a sacred fund in gold to be paid to every man in this country upon the presentation of these legal-tender notes.

“And what now does the gentleman propose to substitute for these legal-tender notes which are secured[B] not only by $100,000,000 of gold, but by your property and my property, and by the property of every citizen, by the resources of the whole country. What does he propose to substitute for this promise to pay? This promise made by this great nation, which it is bound to keep or be disgraced, as you or I would be disgraced if we should not meet our obligations? He proposes to substitute warehouse receipts—these are his words, not mine—warehouse receipts, which he himself acknowledges to-day to have an intrinsic value of but 71½ cents.

“He proposes a new doctrine, never before heard of either in or out of Congress, to make, not a promise to pay (of the nation) a legal tender, but what he calls a silver warehouse receipt, a legal tender, which you and I shall be forced to take in full payment no matter what may be its value.

“This is a new doctrine, gentlemen; it is a doctrine that we should go slow about; that should be well considered by the best financial minds of this country. I venture to say that if it goes before Congress it will not be decided in one session; it will not get out of the hands of committee in one session; it involves the financial history of this country from the time of Thomas Jefferson down to the present date. Gentlemen who suppose that they can, upon hearing one paper read with a few figures, come to an intelligent conclusion upon the subject, deceive themselves. Such a subject should be considered seriously in all its bearings, and if so considered, mark my words, it will be declined.

“Furthermore, what else does this proposition seek to do?