Reminiscences of Sixty Years in Public Affairs, Vol. 2

by George S. Boutwell

In March, 1869, I was appointed Secretary of the Treasury by President Grant. Soon after my appointment Mr. McCulloch, the retiring Secretary, said to me that I should find the department in excellent order, and that in his opinion the financial difficulties of the Government had been overcome. The first of these statements was true in part, and in part it was very erroneous.

The accounting branch of the service was properly administered practically, but there were about one hundred persons on the pay rolls who had no desks in the department, and who performed but little work at their homes, where some of them ostensibly were employed in copying.

Several heads of bureaus were notoriously intemperate. This condition of things was due in part to the war and to the exigencies of the department consequent upon the war; and in part it was due to the constitutional infirmities of Mr. Chase and Mr. McCulloch. In some respects they resembled each other. They were phlegmatic in temperament, lacking in versatility, and lacking in facility for labor and business.

Mr. McCulloch was diligent, industrious and conscientiously devoted to his duties. He had been crippled in his administration by the conflict between Congress and the President. The head of the Treasury needs the confidence of the President, and the confidence and the support of Congress. The latter Mr. McCulloch did not enjoy, and there were indications that in some respects he differed with the President. He was hampered by the fact that any change in the personnel of his department would be followed by inquiries from one party or the other, coupled oftentimes with complaints and criticisms.

Great evils existed in the revenue system. The controversy between Congress and the President led to many removals of collectors of customs and of internal revenue. Their places were supplied by persons who could accommodate themselves to both parties. The President was made to believe that the applicants were his friends, but that their relations with Republican Senators were such that they could secure confirmation. When nominated these men represented themselves as good Republicans and friendly to the Congressional policy. From such persons an honest performance of duty could not have been expected. Hence gross frauds upon the revenue were perpetrated and in most instances by the connivance of those in office.

The returns for the last year of Johnson's administration, and the first years of Grant's administration, showed that the loss on whisky in the first named period was not less than thirty million dollars.

That there were other great losses was proved by the facts that the payments on the public debt were less than thirty million dollars during the last year of Johnson's administration and that the payments were one hundred million dollars during the first year of Grant's administration, and that without any additional sources of revenue.

If Mr. McCulloch's first statement had been true in the most important particulars, his second claim would not have been open to debate. It was true that the department had passed the point where there was any exigency for money. The Government was no longer a borrower. Payments on the public debt had been made, but otherwise nothing had been done to relieve the country of the interest account, nor was the credit of the Government such that any practicable movement in that direction could have been made.

The six per cent bonds were worth only 83 or 84, and no step had been taken to redeem the pledge of the Government in regard to the Sinking Fund made in the act of February 25, 1862. The interest account exceeded two hundred and thirty-three million dollars.

Mr. S. M. Clark was the chief of the Bureau of Printing and Engraving and everything was confided to him. It is to be said after the lapse of thirty years for examination, that not a tittle of evidence has been found warranting any imputation upon his integrity. It is true that in one instance a dishonest plate printer took an impression of a bond upon a sheet of lead for use in counterfeiting. The possibility of such an act was due to a lack of system and not to any want of fidelity in Mr. Clark. One of my first acts was to remove Mr. Clark, and then to open a new set of books. The printing of the old issues was suspended permanently, and new plates were prepared. Mr. Clark had had control of the manufacture of the paper, the control of the engravers, the control of the plates, the control of the printers, of the counters, and he had had the custody of the red seal. The postal currency was printed under his direction. The pieces were not numbered, they were due bills only. At the end of twenty years the books showed an issue of about fifteen million dollars in excess of the redemptions.