"Claim 135" was preferred by J. P. Levy of Wilmington, N. C., for $10,000. After he had sworn to his own loyalty, he was called upon to face some letters found in the rebel archives. The Commission say (p. 33, 1 vol., Digest): "The original letters were furnished the Commission by the War Department from the captured rebel archives, and copies of several of them were filed with this report.... We have in them the claimant at the outbreak of the war calling upon the rebel government to punish the superintendent of his brother's plantation for insulting the rebel flag; and, again, asking the rebel Congress to pass a law granting him his brother's plantation on account of his signal service to the rebel cause; and, again, offering a ship, to be commanded by himself, for the rebel service; also, tendering for the benefit of the rebel army, patent fuse train and soda baking-powders, and boasting and complaining of the large amount due him from the rebel government for supplies for the rebel army. And now this shameless traitor, perjurer and swindler comes before us and swears, with brazen effrontery, that the government of the United States owes him, as a loyal adherent to the cause of the Union and the government throughout the war of the rebellion, for supplies furnished the army, the sum of $10,000. We reject this claim."
CHAPTER XVIII.
THE MAINTENANCE OF A SOUND CURRENCY AND THE PUBLIC FAITH.
In 1873 the bubble of an irredeemable currency, inflated prices, and wild speculation burst in the United States, and the era of universal shrinkage, commercial collapse, and industrial stagnation began. The financial condition of the government and the people at once became the absorbing topic of public discussion, and for five years the questions connected with the currency and the national credit were those which most completely absorbed popular attention. Mr. Chandler's share in the prolonged controversy over the financial problem was a conspicuous one; he came into it equipped with clear ideas and a consistent record; he contended for the causes of rational finance and public honesty without wavering in the face of the strongest opposition, and without any departure from sound doctrine; and he saw the courage and persistence of those with whom he acted finally rewarded by the enlightenment of the people, the restoration of a convertible currency, and the raising of the credit of the United States to the highest standard. For obvious reasons his record upon all the phases of "the financial question" can be most satisfactorily treated in a single chapter. That record will show that he began at a point to which many other public men were brought only by years of education, and it well illustrates the clearness of his conceptions of the principles underlying questions connected with what may be called the practical departments of statesmanship.
Not the least of the difficulties, which at the outset confronted the administration of Abraham Lincoln, was the fact that the public treasury was empty and the national credit impaired. In October, 1860, the government had contracted a five per cent. loan of $7,000,000 at a small premium; four months later, a six per cent. loan had been sold with difficulty at about ninety cents on the dollar. It was true, by way of offset, that the country was in a generally prosperous condition. The commercial wrecks of 1857 had disappeared, crops were abundant, and general business had become again remunerative. This was an element of national strength, but it was not a quickly available resource. War meant large immediate expenditure, for which the means must be promptly provided. There was no time to create and organize upon an extensive scale the machinery of direct taxation, and some doubts were then felt as to whether the people would not grow restive under any general imposition of new burdens. The entire stock of coin in the North was estimated at but about $121,000,000, while the paper money in existence was exclusively composed of the notes of state banks organized under diverse and often insecure systems, and much of it circulated only at a discount. This condition of the currency created the fear that the rapid negotiation of large government loans could not be accomplished without the serious derangement of the money market; the withdrawal of considerable sums from circulation, even temporarily, business men believed would be impossible without great injury to domestic enterprise and commerce. All these circumstances forced the government (which found itself facing absolutely without preparation organized rebellion) to resort at once to the issue of a national paper currency in the form of non-interest-bearing treasury notes of small denominations. Congress, at its extra session in July, 1861, passed the necessary act for this purpose, and $50,000,000 of these notes ($10,000,000 more were subsequently authorized) were placed in circulation; originally they were made redeemable in coin on demand at any United States sub-treasury, and thus violated none of the established principles of sound finance. This expedient facilitated the negotiation of loans, and provided "the sinews of war" for 1861. But, when Congress met in December of that year, it had become plain that the struggle would be of indefinite duration, and that past expenditures would be greatly exceeded in the months to come. To add to the embarrassments of the situation, at about this time the banks of the North suspended specie payments, and the Treasury Department was compelled as a matter of self-protection to also stop redeeming in coin its own notes then outstanding. It was as a means of escape from this emergency, that the first issue of greenbacks was authorized (by the act of Feb. 25, 1862). These notes were not redeemable on demand, but to secure their free circulation they were made a "legal tender" for all purposes except the payment of duties and of the interest on the public debt. The abandonment of the self-operating method of redemption and the resort to the compulsion of the "legal tender" enactment, as a means of keeping these notes in circulation, constituted a step which the Thirty-seventh Congress took with extreme reluctance. A small minority of its members resisted this measure to the last, but what seemed to be the overshadowing necessities of the situation and the earnest appeals of Secretary Chase finally forced the passage of the law. Mr. Chandler was one of those who, without approving of the principle of this legislation, still voted for it, on the ground that it was essential to the public safety at that moment and justified by the urgency of the situation. But he regarded it as a temporary expedient, a mere plan for an emergency, and not as a permanent policy. The first act authorized the issue of $150,000,000 of "greenbacks" and directed the retiring of the $60,000,000 of treasury notes previously paid out; this $150,000,000 Mr. Chandler believed it was possible to so control and use as to avoid the evils inseparable from inflation. But the proposition to double the amount of "greenbacks," which came in less than half a year from the Treasury officials, he strenuously opposed. On June 17, 1862, he offered this resolution in the Senate:
Be it Resolved by the Senate and House of Representatives, That the amount of "legal tender" treasury notes authorized by law shall never be increased.
On the following day he called up this resolution, and said: