In the House of Representatives, composed of 128 Democrats, 92 Republicans and 14 Americans, the bill was defeated by the adoption of an amendment which provided that the Lecompton constitution should be submitted to a vote of the people of Kansas, but this amendment was disagreed to by the Senate, and the disagreement was referred to a committee of conference. The result was the adoption of a substitute known as the English bill. This bill, though faulty, and partisan, provided for the admission of Kansas under the Lecompton constitution, but provided also for a submission of the English bill to a vote of the people of Kansas. On the 2nd of August a vote was taken in Kansas, and 11,300, out of a total vote of 13,088, were cast against the English proposition. Thus the Lecompton constitution and the English bill were defeated, the exclusion of slavery made absolute, and the State of Kansas admitted into the Union as a free state, under a constitution approved by the people, but not until January 29, 1861.
This memorable result was the turning point of the slavery controversy. The people of the south hastened preparations for a dissolution of the Union and a civil war. The Confederate congress, meeting four days later, on February 9, elected Jefferson Davis as its president, he having resigned as United States Senator, January 21, 1861, eight days before Kansas was admitted to the Union.
I have given much space to this Kansas controversy, for I wish to impress upon the readers of this volume that the war was not caused by agitation for the abolition of slavery, but by aggressive measures for the extension of slavery over free territory. A large and influential class of southern men were born politicians, and were mainly slaveholders. They had, from the beginning of the government, a large influence, and held more public offices of chief importance than their northern associates. They were constantly complaining of opinions expressed by a comparatively few Abolitionists against slavery, while the great body of the north were either indifferent to or sympathized with them in their opposition to the Abolitionists.
CHAPTER VII. RECOLLECTIONS OF THE FINANCIAL PANIC OF 1857. Its Effect on the State Banks—My Maiden Speech in Congress on National Finances—Appointed a Member of the Committee on Naval Affairs—Investigation of the Navy Department and its Results—Trip to Europe with Mrs. Sherman—We Visit Bracklin's Bridge, Made Famous by Sir Walter Scott—Ireland and the Irish—I Pay a Visit to Parliament and Obtain Ready Admission—Notable Places in Paris Viewed With Senator Sumner—The Battlefield of Magenta—Return Home.
In the summer of 1857 there occurred one of those periodical revulsions which seem to come after a term of apparent prosperity. On the 24th of August the Ohio Life Insurance & Trust Company failed. That single event, in itself unimportant, indicated an unhealthy condition of trade, caused by reckless speculation, high prices, the construction of railroads in advance of their need, a great increase of imports, and the excessive development of cities and towns. All credits were expanded. The immediate results of the panic were the suspension of credits, the diminution of imports, the failure of banks, and the general or partial suspension or lessening of all industries. The revenues of the government were greatly diminished.
On the 1st of July, 1857, the balance in the treasury was $17,710,000. On the 1st of July, 1858, the balance was reduced to $6,398,000, and during the year preceding, the United States borrowed $10,000,000. On the 1st of July, 1859, the surplus was reduced to $4,320,000, and during the year preceding the United States borrowed $20,774,000. This sudden change in the financial condition of the treasury was an indication of a like or greater change in the condition of every person engaged in productive industries.
The panic especially affected the state banks. These banks were authorized by the laws of several states to issue notes as money payable on demand, with no common system or methods of redemption, and varying in value according to the solvency of the banks issuing them. The banks in a few of the states maintained their notes at par, or at a small discount, but the great body of the notes could circulate only in the states where issued, and then only because their people could get no other money in exchange for their products. The necessities created by the Civil War compelled the United States to borrow large sums, and to aid in this a national currency was provided, concerning which a statement of the measures adopted will be made hereafter. It is sufficient here to state that the national currency adopted proved one of the most beneficial results of the war.
The financial stringency of 1857 led to a careful scrutiny of appropriations for the support of the government.
On the 27th of May, 1858, I expressed my views in respect to the expenditures of the United States. This speech was the first effort I made in Congress to deal with the finances of the national government. In the previous Congresses I had devoted my time to the struggle in Kansas. At the meeting of the 35th Congress, I naturally turned to the condition of the finances, then the paramount subject of interest in the country, and, especially in Ohio, devoting most of my time to a careful study thereof. The speech referred to on national finances was the result of much labor, and I believe it will bear favorable scrutiny even at this late day. It certainly attracted the attention of my colleagues, and no doubt led to my transfer, at the next Congress, to the committee of ways and means.
In this speech I state fully the increase of expenditures and the diminution of the revenues, and the then condition of the treasury. I quote as follows: