On January 14, 1875, the "Resumption Act" was passed. It declared that "on and after January 1, 1879, the Secretary of the Treasury shall redeem in coin the United States legal-tender notes then outstanding, on their presentation for redemption at the office of the Assistant Treasurer of the United States in the city of New York, in sums of not less than fifty dollars." The same Act provided that while the legal-tender notes outstanding remained in excess of $300,000,000, the Secretary of the Treasury should redeem such notes to the amount of 80 per cent. of the increase in National Bank notes issued.
On May 31, 1878, an Act was passed forbidding the further retirement of United States legal-tender notes, and providing that "when any of said notes may be redeemed or be received into the Treasury under any law from any source whatever and shall belong to the United States, they shall not be retired, cancelled, or destroyed, but they shall be re-issued and paid out again and kept in circulation." When this Act was passed there were $346,681,016 of United States notes outstanding, and there has been no change in the amount since.
As to the silver policy of the Government since the war it is expected that the purport of certain important acts of legislation should be understood by all who would have an intelligent conception of our financial controversies.
The Act of February 12, 1873, suspended the coinage of the standard silver dollar of 412 and 1/2 grains. This Act authorized the coinage of the trade dollar of 420 grains, making it a legal tender for $5. This is the Act which has been called the "crime of 1873," on which tomes of controversy have been called forth. It is discussed at some length in the speech of Mr. Morrill, found in our text.
On February 28, 1878, the Bland-Allison Act was passed over the veto of President Hayes. A bill providing for the free and unlimited coinage of silver, of 412 and 1/2 grains to the dollar, had passed the House in November, 1877, under a suspension of the rules. At this time the bullion in the silver dollar was worth about 92 cents. When the Bland free-coinage Act came to the Senate, it was amended there on report of Senator Allison, of Iowa, Chairman of the Finance Committee of the Senate, by a provision that the Government should purchase from $2,000,000 to $4,000,000 worth of silver bullion for coinage into dollars. Holders of the coin were authorized to deposit the same with the United States Treasurer and to receive therefor certificates of deposit, known as silver certificates. These certificates are not legal tender, although receivable for customs, taxes, and all public dues, and are redeemable only in silver. This Act called forth an exhaustive and able debate. Senator Morrill, of Vermont, opened the debate in opposition to silver coinage. Senator Beck, of Kentucky, was one of the ablest advocates of silver coinage, while Mr. Blaine made a notable contribution to the debate, in which he favored the unlimited coinage of a silver dollar of 425 grains. Preceding the Congressional action there had been much public discussion on the subject throughout the country. A Monetary Commission had been organized, by joint resolution of August 15, 1875, for the purpose of making an examination into the silver question. This Commission made an exhaustive report to Congress on March 2, 1877, the majority of the Commission recommending the resumption of silver coinage. Also, previous to the discussion of the Bland-Allison Act in the Senate, the celebrated Matthews Resolution was passed by that body. This asserted that "all bonds of the United States are payable in silver dollars of 412 and 1/2 grains, and that to restore such dollars as a full legal tender for that purpose, is not in violation of public faith or the rights of the creditors." The de-bate on this resolution was a notable one. It was chiefly under these aspects that the financial question was discussed in the years 1877-1878.
The Bland-Allison Act was in operation from 1878 to 1890, during which time $2,000,000 in silver were coined per month, the minimum amount authorized by law. On July 14, 1890, the so-called Sherman Act stopped the coinage of silver dollars and provided for the purchase of silver bullion to the amount of 4,500,000 ounces per month. Against this bullion Treasury notes were to be issued, redeemable in gold or silver coin at the option of the Secretary of the Treasury. These notes were made a legal tender in payment of all debts, public and private, and receivable for all customs, taxes, and all public dues. It was also declared in this Act to be the established policy of the United States to maintain the two metals on a parity with each other upon the present legal ratio, or such ratio as may be provided by law. On account of this language in the law the Secretary of the Treasury under Mr. Cleveland has not deemed it advisable to exercise the discretion which the law gives him to redeem these notes in silver, and these new Treasury notes have been treated as gold obligations. By November 1, 1893, when the silver purchase clause of the Act of July 14, 1890, was repealed, Treasury notes to the amount of $155,000,000 had been issued, though some of these have since been exchanged for silver dollars at the option of the holders. It has been by these Treasury notes and the outstanding greenbacks that gold has been withdrawn from the Treasury, thus depleting the gold reserve and making bond issues necessary. It has been deemed advisable by successive administrations of the Treasury Department to maintain a gold reserve of $100,000,000 against the $346,681,000 outstanding greenbacks, though no law requires that such a reserve should be maintained further than that the Act of March 18, 1869, pledges the faith of the United States that its outstanding notes should be redeemed in coin.
The repeal of the silver purchase clause of the Sherman Act was accomplished in a special session of Congress, November 1, 1893. Since this repeal, the silver policy of the Government has been as it was before the Bland-Allison Act of 1878, which involves a complete suspension of silver coinage. The Acts of 1878 and of 1890 were compromise measures, agreed to by the opponents of silver coinage in order to prevent the passage of a bill providing for full unlimited coinage of silver at the ratio of 16 to 1. Speaking in his Recollections of the situation in 1890, Senator Sherman says: "The situation at that time was critical. A large majority of the Senate favored free silver, and it was feared that the small majority against it in the other House might yield and agree to it. The silence of the President on the matter gave rise to an apprehension that if a free coinage bill should pass both Houses he would not feel at liberty to veto it. Some action had to be taken to prevent a return to free silver coinage, and the measure evolved was the best obtainable. I voted for it, but the day it became a law I was ready to repeal it, if repeal could be had without substituting in its place absolute free coinage."
Since 1893 the contention has been carried on by the silver men in a public agitation in favor of free silver coinage, without compromise or international agreement, and this year (1896), by our form of political referendum, the question has been referred to the people for decision.
We have attempted to include four representative orations on this complex subject, from four of our most prominent public men. The literature of the subject is unlimited. Mr. Morrill is a representative advocate of the gold standard. In the same discussion Mr. Blaine offers a compromise position. Senator Sherman is an international bimetallist and a pronounced opponent of independent silver coinage. He has given much attention—probably no one has given more—to financial questions during a long public life. Senator Jones is recognized as one of the ablest advocates and one of the deepest students of monetary problems on the free silver side of the controversy. The extracts from these speeches will indicate the merits of the long debate on silver coinage,—the greatest question in our financial history in a quarter of a century.
The reform of the Civil Service has been a subject of public attention especially since 1867. The public service of the United States is divided into three branches, the civil, military, and naval. By the civil service we mean that which is neither military nor naval, and it comprises all the offices by which the civil administration is carried on. The struggle for Civil Service Reform has been an effort to substitute what is known as the "Merit System" for what is known as the "Spoils System"; to require that appointment to public office should depend, not upon the applicant's having rendered a party service, but upon his fitness to render a public service. It would seem that the establishment in public practice of so obvious a principle should require no contest or agitation; and that the civil service should ever have been perverted and that a long struggle should be necessary to reform it, are to be explained only in connection with a modern party organization and a party machinery and usage which were entirely unforeseen by the framers of the Constitution. The practice of the early administrations was reasonable and natural. Washington required of applicants for places in the civil service proofs of ability, integrity, and fitness. "Beyond this," he said, "nothing with me is necessary or will be of any avail." Washington did not dream that party service should be considered as a reason for a public appointment. John Adams followed the example of Washington. Jefferson came into power at the head of a victorious party which had displaced its opponent after a bitter struggle. The pressure for places was strong, but Jefferson resisted it, and he declared in a famous utterance that "the only questions concerning a candidate shall be, Is he honest? is he capable? is he faithful to the Constitution?" Madison, Monroe, and John Quincy Adams followed in the same practice so faithfully that a joint Congressional Committee was led to say in 1868 that, having consulted all accessible means of information, they had not learned of a single removal of a subordinate officer except for cause, from the beginning of Washington's administration to the close of that of John Quincy Adams.