FINANCIAL PROBLEMS.
604. Relations of Gold and Silver.—Public opinion during Hayes’s term was seriously agitated in regard to the relations of silver and gold. In 1873, during Grant’s administration, a law had been passed, in consequence of a general advance in the price of silver, discontinuing the coinage of silver dollars, which had long been practically out of circulation. But by 1878 the price of the metal had fallen on account of the large output of the Western mines, and Congress decided to remonetize silver by providing that a certain amount should be purchased and coined each month. An act was passed, known as the “Bland-Allison Bill,” which provided for the purchase and coinage into dollars of not less than two million, nor more than four million, dollars’ worth of silver each month. The coining was to be at the rate of sixteen to one; that is to say, sixteen pounds of silver was to be coined into the same number of dollars as one pound of gold. As so much silver in circulation would prove inconvenient, Congress provided for depositing the silver thus coined in the Treasury and issuing silver certificates as currency in its place. This legislation, which was passed over the President’s veto and was regarded by economists as unsound, stimulated the production of silver and greatly encouraged the new mining industries in Colorado, Nevada, and the other states of the far West.
605. Resumption of Specie Payments.—Ever since the first year of the war, the paper money which has already been described (§ [596]) had been the only currency in common use. Greenbacks and national bank notes had been made legal tender for most purposes; but the Supreme Court had at one time decided against, and at another time in favor of, the power of Congress to make a legal tender out of paper not redeemable in coin. In consequence there was a feeling of uncertainty with regard to the value of the currency in which business was transacted, and this was harmful to the commercial interests of the country. The paper had depreciated in value as compared with gold, and many people urged that the government should pay its debts in it. This hurt the national credit. Accordingly, in January, 1875, an act was passed providing for resumption of specie payments on the 1st of January, 1879. In other words, after the latter date, any person could get coin from the Treasury in exchange for the paper he offered. In the course of the four intervening years, the government accumulated a large amount of gold and silver in the Treasury and prepared itself to meet such demands as might be made. It happened, however, as it usually does under similar conditions with local banks, that so long as the people knew that the government was able and ready to pay, they had no desire for actual payment. They at once settled into the belief that paper was more convenient than coin. The chief credit for this financial legislation belongs to John Sherman, brother of the famous general, who long represented Ohio in the Senate, and at the time of resumption was Secretary of the Treasury.
POLITICAL AFFAIRS.
606. Causes of Dissatisfaction.—Though President Hayes’s administration was free from scandals and was one of uniform excellence, it presented very few characteristics that appealed to the enthusiastic admiration of the people. Nor was the President popular with the political managers, who thought that greater energy on his part would have secured such popular favor as to overcome the Democratic majority in Congress. As the time for the next Republican nomination drew near, it became evident, therefore, that Hayes, who did not seek a second term, would not be renominated.
General Winfield S. Hancock.
607. Nomination and Election of Garfield and Arthur.—The Republican Convention, which met at Chicago in 1880, after a long struggle between the supporters of J. G. Blaine and of General Grant, nominated, as a compromise, James A. Garfield of Ohio for President, and Chester A. Arthur of New York for Vice President. Garfield, having distinguished himself in military service and in the House of Representatives, had recently been elected to the Senate. Arthur, without legislative experience, had been Collector of the Port of New York. The Democrats met at Cincinnati, and nominated General Winfield S. Hancock[[277]] of Pennsylvania for President, and William H. English of Indiana for Vice President. There was no such heated contest for the nominations as there had been among the Republicans, for the general prosperity of the country indicated that the party in power would not be turned out. This forecast proved to be correct, for at the election Garfield and Arthur received two hundred and fourteen electoral votes, while Hancock and English received one hundred and fifty-five. The defeated candidates received their main vote from what began to be called “the Solid South,”—that is to say, not only the states that had seceded, but all those in which slavery had existed at the time of the war. Until the election of 1896, this solid mass of electoral votes went to Democratic candidates.
James A. Garfield.