"I beg to offer my best wishes and belief that the reputation he has already achieved in the Senate will be increased in the cabinet; and to say how glad I was that the unanimity of his late compeers showed that they were of the same mind.

"With great respect, I am, my dear sir,

"Very faithfully yours,
"Adam Badeau."

CHAPTER XXIX. I BEGIN MY DUTIES AS SECRETARY OF THE TREASURY. Legislative Training of Great Advantage to Me in My New Position— Loan Contract in Force When I Took the Portfolio—Appointment of Charles F. Conant as Funding Agent of the Treasury Department in London—Redeeming Called Bonds—Sale of Four Per Cent. Bonds Instead of Four and a Half Per Cents.—Popularity of the New Loan—Great Saving in Interest—On a Tour of Inspection Along the Northern Atlantic Coast—Value of Information Received on This Trip—Effect of the Baltimore and Pittsburg Railroad Strikes in 1877 Upon Our Public Credit.

When I assumed the office of Secretary of the Treasury I had the advantage of some of my predecessors in that I was acquainted with the organization and duties of the treasury department. Ever since 1859 my connection with the committee of ways and means in the House and with the committee on Finance in the Senate had brought me into official relations with the head of that department. This legislative training gave me a full knowledge of the several laws that were to be executed in relation to public revenue, to all forms of taxation, to coinage and currency, and to the public debt. The entire system of national finance then existing grew out of the Civil War, and I had participated in the passage of all the laws relating to this subject. My intimate association with Secretaries Chase, Fessenden and McCulloch, and my friendly relations with Secretaries Boutwell and Richardson, led me, as chairman of the Senate committee on finance, to have free and confidential intercourse with them as to legislation affecting the treasury. Secretary Bristow had not had the benefit of experience either in Congress or the department. He was a good lawyer and an able man. He doubted whether resumption would be effective without a gradual retirement of United States notes, a measure that Congress would not agree to. Congress repealed even the limited retirement of such notes provided for by the resumption act. Secretary Morrill, of Maine, my immediate predecessor, was in hearty sympathy with the policy of Congress, of which he had been a useful Senator, and but for his failing health would have been an efficient secretary. Upon my assuming the duties of secretary, and for some time before, he had been confined by illness to his lodgings in Washington. The treasury department was then well organized. Most of the principal officers had been long in the service. But few changes were made by President Hayes or by myself, and only as vacancies occurred or as incompetency was demonstrated. The following loan contract was in force at the beginning of my administration of the treasury department:

"This agreement, entered into this 24th day of August, in the year of our Lord, 1876, between the Secretary of the Treasury of the United States of America, of the first part, and Messrs. August Belmont & Co., of New York, in behalf of Messrs. N. M. Rothschild & Sons, of London, England, and associates, and Messrs. J. & W. Seligman & Co., of New York, for themselves and associates, and Messrs. Drexel, Morgan & Co., on behalf of Messrs. J. S. Morgan & Co., of London, England, and Messrs. Morton, Bliss & Co., of New York, representing the First National Bank of the city of New York, the American Exchange National Bank of New York, the Merchants' National Bank of New York, the Third National Bank of New York, Messrs. Kuhn, Loeb & Co., of New York, the Bank of New York National Banking Association, and Messrs. Morton, Rose & Co., of London, and themselves, of the second part:

"Witnesseth, That the said Messrs. August Belmont & Co. of New York, on behalf of Messrs. N. M. Rothschild & Sons and associates, hereby agrees to purchase from the Secretary of the Treasury sixteen million five hundred thousand dollars ($16,500,000) of the United States bonds known as the four and a half per cent. funded loan of 1891, issued under the acts of July 14, 1870, and January 20, 1871; and that Messrs. J. & W. Seligman & Co., for themselves and their associates, hereby agree to purchase from the Secretary of the Treasury six million seven hundred and fifty thousand dollars ($6,750,000) of the bonds hereinbefore described; and that Messrs. Drexel, Morgan & Co., on behalf of Messrs. J. S. Morgan & Co., of London, England, hereby agree to purchase from the Secretary of the Treasury six million seven hundred and fifty thousand dollars ($6,750,000) of the bonds hereinbefore described; and that Messrs. Morton, Bliss & Co., of New York, representing the First National Bank of the city of New York, to the extent of four million dollars ($4,000,000); the American Exchange National Bank of New York, to the extent of one million and fifty thousand dollars ($1,050,000); the Merchants' National Bank of New York, to the extent of six hundred thousand dollars ($600,000); the Third National Bank of the city of New York, to the extent of seven hundred and fifty thousand dollars ($750,000); Messrs. Kuhn, Loeb & Co., of New York, to the extent of one million and fifty thousand dollars ($1,050,000); the Bank of New York National Banking Association, to the extent of three hundred thousand dollars ($300,000); Messrs. Morton, Rose & Co., of London, to the extent of one million one hundred and twenty-five thousand dollars ($1,125,000), and Messrs. Morton, Bliss & Co., of New York, to the extent of one million one hundred and twenty-five thousand dollars ($1,125,000), hereby agree, to the extent severally for each as above stated, to purchase from the Secretary of the Treasury ten million dollars ($10,000,000) in the aggregate of the bonds hereinbefore described, making a total aggregate of forty million dollars ($40,000,000), upon the terms and conditions following, to-wit:

"First. Of the said aggregate amount, not less than ten million dollars ($10,000,000) are hereby subscribed for, the subscription to take effect on the 1st day of September, 1876, and the remaining amount, namely, thirty million dollars ($30,000,000), may be divided at the pleasure of the parties of the second part into several successive subscriptions of not less than five million dollars ($5,000,000) each, to be made prior to the 4th day of March, 1877.

"Second. The parties of the second part shall have the exclusive right to subscribe, in the same proportion to each of the subscribers, for the remainder, namely, two hundred and sixty million dollars ($260,000,000), or any portion of said loan authorized to be issued by the acts of Congress aforesaid, by giving notice thereof to the Secretary of the Treasury on or before the 30th day of June, 1877; but the party of the first part reserves the right to terminate this contract at any time after March 4, 1877, by giving ten days' notice thereof to the parties of the second part.

"Third. That the Secretary of the Treasury shall, when subscriptions are made by the said parties of the second part, issue calls with even date with said subscriptions for the redemption of an equivalent amount of six per cent. 5-20 bonds of the United States, as provided by said act of July 14, 1870.