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

“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.