In consequence of the opposition, the proclamation was postponed. On the 22nd of September, the President, having fully made up his mind, announced to the cabinet his purpose to issue the proclamation already quoted. What he did, he said, was after full deliberation and under a heavy and solemn sense of responsibility.
The effect of this proclamation upon the pending elections in Ohio was very injurious. I was then actively engaged in the canvass and noticed that when I expressed my approbation of the proclamation, it was met with coldness and silence. This was especially so at Zanesville. The result was the election in Ohio of a majority of Democratic Members of Congress. This, following the overwhelming Republican victory in 1861, when Tod was elected governor by a majority of 55,203, was a revolution which could only be ascribed to the events of the war and to the issue of the proclamation. It may be also partially ascribed to the discontent growing out of the appointments, by Governor Tod, of officers in the volunteers. The same discontent defeated the renomination of Governor Dennison in 1861. Such is the usual result of the power of appointment, however prudently exercised.
The House of Representatives was promptly organized on the 7th of December, 1863, by the election of Schuyler Colfax as speaker. The session of Congress that followed was perhaps the busiest and most important one in the history of our government. The number of measures to be considered, the gravity of the subject-matter, and the condition of the country, demanded and received the most careful attention. The acts relating to the organization of the army and the one increasing the pay of soldiers, made imperative by the depreciation of our currency, as well as the draft and conscription laws, received prompt attention. The enrollment act, approved February 24, 1864, proved to be the most effective measure to increase and strengthen the army. The bounty laws were continued and the amount to be paid enlarged. The laws relating to loans, currency, customs duties and internal taxes required more time and occupied a great portion of the session. The revenue bill enacted at that session was far more comprehensive and the rates much higher than in any previous or subsequent law. It provided for an increase of all internal taxes contained in previous laws, and added many new objects of taxation, so as to embrace nearly every source of revenue provided for by American or English laws, including stamp duties upon deeds, conveyances, legal documents of all kinds, certificates, receipts, medicines and preparations of perfumery, cosmetics, photographs, matches, cards, and indeed every instrument or article to which a stamp could be attached. It also provided for taxes on the succession to real estate, legacies, distributive shares of personal property, and a tax of from five to ten per cent. on all incomes above $600, upon all employments, upon all carriages, yachts, upon slaughtered cattle, swine and sheep, upon express companies, insurance companies, telegraph companies, theaters, operas, circuses, museums and lotteries, upon all banks and bankers, brokers, and upon almost every article of domestic production. It placed a heavy tax upon licenses, upon dealers in spirits, upon brokers, lottery-ticket dealers and almost every employment of life.
It largely increased the tax on spirits, ale, beer, porter, and tobacco in every form. Not content with this, on the last day of the session, Congress levied a special income tax of five per cent., to provide for the bounties promised to Union soldiers. This drastic bill occupied the attention of both Houses during a considerable portion of the session, and became a law only on the 30th of June, 1864, within four days of the close of the session. It was greatly feared that the law could create discontent, but it was received with favor by the people, few if any complaints being made of the heavy burden it imposed. The customs duties were carefully revised, not in the interest of protection but solely for revenue. Nearly all the articles formerly on the free list were made dutiable, and they proved to be copious sources of revenue, especially the duties on tea, coffee, spirits of all kinds, wines, cigars, and tobacco in every form.
During that session Congress passed two important loan bills, which practically confided to the Secretary of the Treasury the power to borrow money in almost any form that could be devised. The first act, approved March 3, 1864, authorized him to borrow, on the credit of the United States, $200,000,000 during the current fiscal year, redeemable after any period not less than five years, and payable at any period not more than forty years from date, in coin, and bearing interest at six per cent. per annum. It also provided for the issue of $11,000,000 5-20 bonds which had been sold in excess of the $500,000,000 authorized by law. By the act approved June 30, 1864, the Secretary of the Treasury was authorized to borrow, on the credit of the United States, $400,000,000, on bonds redeemable at the pleasure of the United States after a period of not less than five, nor more than forty, years from date, bearing an annual interest of not exceeding six per cent., payable semi-annually in coin. He was authorized to receive for such bonds lawful money of the United States, or, at his discretion, treasury notes, certificates of indebtedness or certificates of deposit, issued under any act of Congress. These bonds were similar in general description to the 5-20 bonds already provided for, but bore interest at five per cent. instead of six.
By these measures the people of the United States had placed in the power of the government almost unlimited sources of revenue, and all necessary expedients for borrowing. Strange as it may appear, under the operation of these laws the country was very prosperous. All forms of industry hitherto conducted, and many others, were in healthy operation. Labor was in great demand and fully occupied. This will account for the passage of several laws that would not be justified except in an emergency like the one then existing. Among these was an act to encourage immigration, approved July 4, 1864. This act grew out of the great demand for labor caused by the absence of so many men in the army. A commission of immigration was provided. Immigrants were authorized to pledge their wages, for a term not exceeding twelve months, to repay the expense of their immigration. These contracts were declared to be valid in law and might be enforced in the courts of the United States or of the several states and territories. It provided that no immigrant should be compulsorily enrolled for military service during the existing insurrection, unless such immigrant voluntarily renounced, under oath, his allegiance to the country of his birth, and declared his intention to become a citizen of the United States. This law could only be justified by the condition of affairs then existing.
Another law, alike indefensible, but considered important at the time, regulating the sale of gold, was approved June 17, 1864. It declared unlawful a contract for the purchase or sale and delivery of any gold coin or bullion, to be delivered on any day subsequent to the making of the contract. It also forbade the purchase or sale and delivery of foreign exchange, to be delivered at any time beyond ten days subsequent to the making of such contract, or the making of any contract for the sale and delivery of any gold coin or bullion, of which the person making such contract was not at the time of making it in actual possession. It also declared it to be unlawful to make any loans of money or currency to be repaid in coin or bullion or to make any loan of coin or bullion to be repaid in currency. All these provisions were made to prevent what were regarded as bets on the price of gold. This law, however, proved to be ineffective, as all such laws interfering with trade and speculation must be, and was soon repealed.
The national banking act, which passed at the previous session, was carefully revised and enacted in a new form, and it still remains in force, substantially unchanged by subsequent laws. By this new act the office of comptroller of the currency was created. Under its provisions, aided by a heavy tax on the circulating notes of state banks, such banks were converted into national banks upon such conditions as secured the payment of their circulating notes.
The financial measures, to which I have referred, were the work of the committees of ways and means of the House and on finance in the Senate. They occupied the chief attention of both Houses, and may fairly be claimed by the members of those committees as successful measures of the highest importance. I was deeply interested in all of them, took a very active part in their preparation in committee, and their conduct in the Senate, and, with the other members of the committee, feel that the measures adopted contributed largely to the final triumph of the Union cause. Certainly, the full power of the United States, its credit and the property of its people were by these laws intrusted to the executive authorities to suppress the rebellion.
In addition to military and financial measures, that session was prolific in many other measures of primary importance. The Union Pacific Railroad Company, which had been chartered by the previous Congress, found itself unable to proceed, and appealed to Congress for additional aid. This was granted by the act of July 2, 1864. Under this act, the first lien of the United States for bonds advanced to the company, provided for by the act of 1862, was made subordinate to the lien of the bonds of the company sold in the market—a fatal error, which led to all the serious complications which followed. The proceeds of the sale of the first mortgage bonds of the company, with a portion of those issued by the United States in aid of the company, built both the Union and Central Pacific, so that the constructors of those roads, who were mainly directors and managers of the company, practically received as profit a large portion of the bonds of the United States issued in aid of the work, and almost the entire capital stock of the company. If the act had been delayed until after the war, when the securities of the United States rapidly advanced in value, it could not have passed in the form it did. The construction of the road was practically not commenced until the war was over. The constructors had the benefit of the advancing value of the bonds and of the increasing purchasing power of United States notes.