"That the Secretary of the Treasury is hereby authorized to issue, in a sum or sums not exceeding in the aggregate $200,000,000, coupon or registered bonds of the United States, in such form as he may prescribe, and of denominations of $50, or some multiple of that sum, redeemable in coin of the present standard value, at the pleasure of the United States, after ten years from the date of their issue, and bearing interest, payable semi-annually in such coin, at the rate of five per cent. per annum; also, a sum or sums not exceeding in the aggregate $300,000,000 of like bonds, the same in all respects, but payable, at the pleasure of the United States, after fifteen years from the date of their issue, and bearing interest at the rate of four and a half per cent. per annum; also, a sum or sums not exceeding in the aggregate $1,000,000,000 of like bonds, the same in all respects, but payable, at the pleasure of the United States, after thirty years from the date of their issue, and bearing interest at the rate of four per cent. per annum."
Resuming my argument, I said:
"It is apparent from these laws, which are fundamental in their character, that the secretary has imposed upon him not merely the privilege but the duty of maintaining or providing for the resumption of specie payments and the maintenance of the specie standard in gold and silver coin. He is also authorized by a subsequent act, which I do not care to have read because it is not necessary, to maintain $100,000,000 in gold in the nature of a redemption fund, or rather that was the minimum limit provided in the law. In order to perform this grave duty the Secretary of the Treasury was authorized, at his discretion, whenever necessary to obtain the coin required, to issue a bond bearing four per cent. interest running for thirty years, or a bond bearing four and a half per cent. interest running fifteen years, or a bond bearing five per cent. interest running ten years.
"It has been feared--I do not say that there has been occasion for this fear--that the Secretary of the Treasury cannot maintain the necessary resumption fund; that he may have to resort to the credit of the government, upon which all the greenback issues of the United States notes and bonds are founded; that he might have to resort to the sale of bonds to obtain money, in order to maintain the parity of the different forms of money in this country and the redemption or payment in coin, when demanded, of the obligations of the United States, especially the United States notes, commonly called greenbacks.
"When I came, in examining this question, to see whether or not the law enacted in 1875 was applicable to the condition of affairs in 1893, it was apparent to me, as it must have been to every man, however ignorant he might be of the principles of finance, that the conditions of our country were such that we would not be justified, by public opinion or by the interests of our people, to sell a bond bearing four or four and a half or five per cent.
interest.
"Therefore, it was manifest to me, as it would be manifest to anyone who would look at the question without any feeling about it at all, that if we could borrow money at three per cent. on bonds running for five years or for a short period of time, always reserving our right to redeem these bonds within a short period, it would save a vast sum to the people of the United States, at least one-fourth of the interest on the bonds, and we would save more by the right to redeem them if a favorable turn in the market should enable us to do so.
"I feel that it is a matter of public duty which I am bound to perform, as being connected with the refunding laws and the resumption act, that I should endeavor to make suitable provision for the next Secretary of the Treasury. I knew this law could not take effect until about the time the present secretary would go out, when the new secretary would come in. Therefore, I drew this amendment as it now stands, and it was submitted to the incoming Secretary of the Treasury. He having been formerly a member of the committee on finance and a Member of the Senate, and being familiar with us all, came before the committee on finance and there stated the reasons why, in his judgment, it might become, in case of exigency, important for him to have the power to issue a cheaper bond.
"He expressed the hope and belief, and I am inclined to agree with him, that it might not be necessary to issue these bonds at all, but that when the emergency came he must meet it as quickly as a stroke of lightning; there must be no hesitation or delay; if there should be a disparity between the two metals, or a run upon the government for the payment of the United States notes, he must be prepared to meet this responsibility in order to obtain coin with which to redeem the notes. That statement was submitted to the committee on finance in the presence of the honorable gentleman who is to hold the high and distinguished office of Secretary of the Treasury."
I proceeded at considerable length to state the difficulties the treasury must meet in consequence of the large increase of treasury notes issued for the purchase of silver bullion. The Senate fully appreciated the importance of the amendment, but in the hurry of the closing days of the session it was said that to attempt to reach a vote upon it in the House of Representatives would endanger the pa.s.sage of the appropriation bill, and therefore the Senate receded from the amendment. It is easy now to see that its defeat greatly embarra.s.sed the new administration and caused the loss of many millions by the sale of long term bonds at a higher rate of interest than three per cent.
On the 4th of March, 1893, Grover Cleveland was sworn into office as President of the United States, and delivered his inaugural address. It was a moderate and conservative doc.u.ment, dealing chiefly with axioms readily a.s.sented to. Its strongest pa.s.sages were in favor of a sound and stable currency. He said that the danger of depreciation in the purchasing power of the wages paid to toil should furnish the strongest incentive to prompt and conservative precaution. He declared that the people had decreed that there should be a reform in the tariff, and had placed the control of their government, in its legislative and executive branches, with a political party pledged in the most positive terms to the accomplishment of such a reform, but in defining the nature or principles to be adopted he was so vague and indefinite that either a free trader or a protectionist might agree with him. He said:
"The oath I now take to preserve, protect, and defend the const.i.tution of the United States, not only impressively defines the great responsibility I a.s.sume, but suggests obedience to const.i.tutional commands as a rule by which my official conduct must be guided.
I shall, to the best of my ability, and within my sphere of duty, preserve the const.i.tution by loyally protecting every grant of federal power it contains, by defending all its restraints when attacked by impatience and resentment, and by enforcing its limitations and restrictions in favor of the states and the people."
This was a promise broad enough to cover the McKinley bill or the Wilson bill. I do not criticise the address, for an inaugural should contain nothing but thanks and patriotism.
The chief interest at this period centered in the World"s Fair at Chicago, to celebrate the quadro-centennial of the discovery of America by Columbus. Such a celebration was first proposed as early as 1887, to be in the nature of an intellectual or scientific exposition that would exhibit the progress of our growth, and to take place at Washington, the political capital, under the charge of the national authorities. As the matter was discussed the opinion prevailed that the exposition should be an industrial one, and the choice of location lay between Chicago, New York and St.
Louis. I was decidedly in favor of Chicago as the typical American city which sprang from a military post in 1837, survived the most destructive fire in history, and had become the second city of the continent, and, more than any other, represented the life, vigor and industry of the American people. The contention about the site delayed the exposition one year, so that the discovery of 1492 was not celebrated in 1892, but in the year following. This was the first enterprise undertaken by Chicago in which it was "behind time," but it was not the fault of that city, but of Congress, which delayed too long the selection of the site. I was a member of a select committee on the quadro-centennial appointed in January, 1890, composed of fifteen Members of the Senate. On the 21st of April, 1890, a bill was pending in the Senate appropriating $1,500,000 from the treasury of the United States to pay the expense of representing the government of the United States in an exposition in Chicago, in 1893. I made a speech in defense of the appropriation and stated the benefits of such an exposition as shown by the one in London and two in Paris that I had attended. While the receipts at the gates for attendance did not in either case cover the expense, yet the benefits derived greatly exceeded all expenses and left great buildings of permanent value, such as the Crystal Palace at Sydenham, and still more valuable buildings at Paris. I referred to the centennial exposition at Philadelphia in 1876, and to the innumerable state, county and city fairs in all parts of the United States, all of which were of great value to the places where held.
These gatherings had revolutionized the social habits and greatly improved the manners and intelligence of our people, and are likely to increase in number in the future. The bill pa.s.sed, but not without serious opposition, and upon terms extremely onerous to Chicago.
This course of opposition continued until August, 1892. The people of Chicago had raised the enormous sum of $11,000,000 without the certainty of any return. All nations had been invited, and were preparing to be represented at this exposition. The attention of mankind was excited by the enterprise of a city only fifty years old, of more than a million inhabitants, erecting more and greater buildings than had ever been constructed for such a purpose. The United States had not contributed to the general expense, but had appropriated a sum sufficient to provide for its own buildings in its own way, precisely on the footing of foreign powers. It became necessary to borrow more money, and Congress was requested to loan the exposition the sum of $5,000,000, to be refunded out of receipts, in the same proportion as to other stockholders. This was declined, but it was enacted that the United States would coin $2,500,000 in silver, and pay the exposition that coin. Whether this was done because silver bullion could be purchased for about $1,500,000 sufficient to coin $2,500,000, or to make a discrimination against the fair, I do not know. On the 5th of August, 1892, I expressed my opposition to this measure. Both Houses were remaining in session to settle the matter, and the President was delayed in Washington, when, by reason of domestic affliction, he ought to have been elsewhere. I said: "Under the circ.u.mstances, I do not see anything better to be done than to allow the bill to pa.s.s. If I was called upon on yea and nay vote I should vote against it."
On the 22nd of October, 1892, I attended the dedication of the building erected by the State of Ohio, on the exposition grounds.
The structure, though not entirely completed, was formally dedicated, and the keys were duly delivered to Governor McKinley. On receiving the keys he made a very appropriate address. I was called for by the crowd, and was introduced by Major Peabody, president of the State Board of Managers. I do not recall the words of my speech, nor was it, or the various speeches made on this occasion, reported; but I no doubt said that the United States was the greatest power on earth, and Ohio was its garden spot. I made a political speech that evening at Central Music Hall, as previously stated.
Among the objects of the greatest interest at the exposition were three Spanish caravels, the exact counterparts of the Santa Maria, the Nina and the Pinta, the vessels with which Columbus made his memorable voyage of discovery. These reproductions were made by Spaniards at the place from which the original vessels sailed, and, manned by Spanish sailors, followed the same course pursued by Columbus to the islands he discovered and from thence sailed to the mouth of the St. Lawrence, and following up that stream pa.s.sed through Lake Ontario, the Welland Ca.n.a.l, Lakes Erie, Huron and Michigan, to Chicago, more than 1,000 miles from the Atlantic Ocean.
I had been invited by the managers of the exposition to deliver an address of welcome to the officers and sailors of these vessels, on their arrival at Chicago on the 7th of July, 1893. They were received by the managers and a great crowd, and conducted to a stand in the park of the exposition, where I made my address, too long to insert here, but I quote a few paragraphs:
"Mr. President, Captain Concas and the Officers and Mariners Under His Command:--You have before you men and women of all races and climes. They have met to share in this great exposition of the industries of all nations. To-day they celebrate the discovery of America by Christopher Columbus and the arrival here of the marine fleet under your command, manned by the countrymen of those who made the discovery of the new world.
"We have before us the reproduction of the Santa Maria, the Pinta and the Nina, the three vessels that made this memorable voyage.
They are sent to us by the same chivalrous and gallant people who built the original craft and manned and sailed them under the command of Columbus. They are striking object lessons that speak more eloquently than voice or words. We welcome them to this exposition of the industries of the world. Here, on the waters of this inland sea, 1,000 miles from the ocean traversed by Columbus, in this city, the most marvelous result of the industry and energy of mankind, we place this mimic fleet side by side with the monsters that have come from the inventive genius of the American people, not to extol our handiwork, but to extol the men who, four hundred years ago, with such feeble means and resources, opened the way to all the achievements of succeeding generations. You can look at them where they quietly rest upon the waters of the great northwest.
In such as these one hundred and twenty men sailed on an unknown ocean, they knew not where. They lived where for two thousand years the pillars of Hercules had marked the end of the world.
They had been taught to believe in the four corners of the earth, and that all beyond was a boundless waste of waters, into which no one had ventured beyond the Canary Islands and the coast of Africa.
"We welcome all the peoples of the earth, with their varied productions, to the full and free enjoyment of their habits at home, and in return exhibit to them the results of our growth and industry. In no boastful spirit this new and marvelous city, which has sprung into existence within the life of men who hear me, has, with the aid of the general government and the states that comprise it, built these great palaces, adorned these lately waste places and brought into them the wonderful facilities of transportation invented in modern times. Welcome all, but on this day we doubly welcome these mementoes of the voyage of Columbus to this western world.
"In the name of the managers of this exposition I give thanks and welcome to all who have brought them here, and especially to the government and people of Spain, who have thus contributed to the interest and success of this exposition."
CHAPTER LXIV.
REPEAL OF PART OF THE "SHERMAN ACT" OF 1890.
Congress Convened in Extraordinary Session on August 7, 1893--The President"s Apprehension Concerning the Financial Situation--Message from the Executive Shows an Alarming Condition of the National Finances--Attributed to the Purchase and Coinage of Silver--Letter to Joseph H. Walker, a Member of the Conference Committee on the "Sherman Act"--A Bill I Have Never Regretted--Brief History of the Pa.s.sage of the Law of 1893--My Speech in the Senate Well Received --Attacked by the "Silver Senators"--General Debate on the Financial Legislation of the United States--Views of the "Washington Post"
on My Speech of October 17--Repeal Accomplished by the Republicans Supporting a Democratic Administration--The Law as Enacted--Those Who Uphold the Free Coinage of Silver--Awkward Position of the Democratic Members--My Efforts in Behalf of McKinley in Ohio--His Election by 81,000 Plurality--Causes of Republican Victories Throughout the Country.
On the 30th of June, 1893, the President issued a proclamation convening Congress in extraordinary session on the 7th of August.
In reciting the reasons for this unusual call, only resorted to in cases of extreme urgency, he said that "the distrust and apprehension concerning the financial situation which pervades all business circles have already caused great loss and damage to our people, and threaten to cripple our merchants, stop the wheels of manufacture, bring distress and privation to our farmers, and withhold from our workingmen the wage of labor;" that "the policy which the executive branch of government finds embodied in unwise laws which must be executed until repealed by Congress;" and that Congress was convened "to the end that the people may be relived, through legislation, from present and impending danger and distress."
Congress met in pursuance of the proclamation, and on the 8th of August the President sent a message to each House, in which he depicted an alarming condition of the national finances, and attributed it to congressional legislation touching the purchase and coinage of silver by the general government. He said:
"This legislation is embodied in a statute pa.s.sed on the 14th day of July, 1890, which was the culmination of much agitation on the subject involved, and which may be considered a truce, after a long struggle, between the advocates of free silver coinage and those intending to be more conservative."
He ascribed the evil of the times to the monthly purchase of 4,500,000 ounces of silver bullion, and the payment therefor with treasury notes redeemable in gold or silver coin at the discretion of the Secretary of the Treasury, and to the reissue of said notes after redemption. He stated that up to the 15th of July, 1893, such notes had been issued for the purpose mentioned to the amount of more than $147,000,000. In a single year over $40,000,000 of these notes had been redeemed in gold. This threatened the reserve of gold held for the redemption of United States notes, and the whole financial system of the government. No other subject was presented in the message of the President, and Congress had to face the alternative of the single standard of silver, or the suspension of the purchase of silver bullion.
I had foreseen this inevitable result and had sought, as far as possible, to avoid it by the inserting of sundry provisions in the act of July 14, 1890. No portion of that act was objected to by the President except the clause requiring the purchase of silver bullion and the issue of treasury notes in payment for it. In this I heartily concurred with him. From the date of the pa.s.sage of that law, to its final repeal, I was opposed to this compulsory clause, but yielded to its adoption in preference to the free coinage of silver, and in the hope that a brief experience under the act would dissipate the popular delusion in favor of free coinage. Joseph H. Walker, of Ma.s.sachusetts, a prominent Member of the House of Representatives, who was one of the conferees with me on the bill referred to, and agreed with me in a.s.senting to it, wrote me a letter, my reply to which was in substantial accordance with the subsequent message of the President and with the action taken by Congress. I insert it here:
"Mansfield, O., July 8, 1893.
"Hon. J. H. Walker.
"My Dear Sir:--Yours of 28th ult., inclosing a copy of your statement of the causes that led Mr. Conger, yourself and me to agree with reluctance to the silver act of 1890, is received. An answer had been delayed by my absence at Chicago. You clearly and correctly state the history of that act. The bill that pa.s.sed the House provided for the purchase of $4,500,000 worth of silver at gold value. The Senate struck out this provision and provided for the free coinage of silver or the purchase of all that was offered at the rate of 129 cents an ounce. As conferees acting for the two Houses, it was our duty to bring about an agreement, if practicable, without respect to individual opinion. The result of the conference was to reject free coinage and to provide for the purchase of four million five hundred thousand ounces of silver at its gold price-- a less amount than was proposed by the House, the provisions declaring the public policy of the United States to maintain the parity of the two metals or the authority to stipulate on the contracts for payments in gold, the limit of the issue of treasury notes to the actual cost of silver bullion at gold value, and the repeal of the act providing for the senseless coinage of silver dollars when we already had 300,000,000 silver dollars in the treasury we could not circulate, were all in the line of sound money.
"Another object I had in view was to secure a much needed addition to our currency, then being reduced by the compulsory retirement of national bank notes in the payment of United States bonds. This would have been more wisely provided by notes secured by both gold and silver, but such a provision could not then be secured. These reasons fully justified the compromise.
"But the great controlling reason why we agreed to it was that it was the only expedient by which we could defeat the free coinage of silver. Each of us regarded the measure proposed by the Senate as a practical repudiation of one-third of the debts of the United States, as a substantial reduction of the wages of labor, as a debas.e.m.e.nt of our currency to a single silver standard, as the demonetization of gold and a sharp disturbance of all our business relations with the great commercial nations of the world. To defeat such a policy, so pregnant with evil, I was willing to buy the entire product of American silver mines at its gold value.
"And that was what we provided, guarded as far as we could. To accomplish our object we had to get the consent of the Republican Representatives from the silver-producing states. This we could only do by buying the silver product of those states. It was a costly purchase. The silver we purchased is not worth as much as we paid for it, but this loss is insignificant compared to our gain by the defeat of the free coinage of silver. It is said there was no danger of free coinage, that the President would have vetoed it. We had no right to throw the responsibility upon him. Besides, his veto would leave the Bland act in force. We did not believe that his veto would dispel the craze that then existed for free coinage. Many people wanted the experiment tried. The result of the experiment of buying four and a half million ounces of silver a month at its market value will be the best antidote against the purchase of the silver of the world at one-third more than its market value.
"I never for a moment regretted the pa.s.sage of the act of 1890, commonly called the "Sherman act," though, as you know, I had no more to do with it than the other conferees. There is but one provision in it that I would change and that is to strike out the compulsory purchase of a given quant.i.ty of silver and give authority to the Secretary of the Treasury to buy silver bullion at its market price when needed for subsidiary coinage. The only position we can occupy in the interests of our const.i.tuents at large is one fixed standard of value and the use of both metals at par with each other, on a ratio as near as possible to their market value.
"Such a policy I believe is right. With reserves both of gold and silver in the proper proportions we can maintain the entire body of our paper money, including coin, at par with each other. For one I will never agree to the revival of state bank paper money, which cannot be made legal tender, and which, on the first sign of alarm, will disappear or be lost in the hands of the holder.
"Very respectfully yours, "John Sherman."
I had expressed similar views in speeches in Congress and before the people and in numerous published interviews, and in the previous Congress had introduced a bill to suspend the purchase of silver bullion, substantially similar in terms to the bill that became a law in November, 1893. During the month of August I took a more active part in the proceedings than usual. On the 8th, the 16th and the 18th I made speeches in the current debate.
A brief statement of the pa.s.sage of this law of 1893 may be of interest. It was introduced as a bill by William L. Wilson, of West Virginia, in the House of Representatives, in the words of the bill introduced by me in the Senate on the 14th of July, 1892, as already stated, and pa.s.sed the House on the 28th of August, by the decisive vote of 239 yeas and 108 nays. It was referred in the Senate to the committee on finance, of which Daniel W. Voorhees was then chairman. It was on the next day reported by him from that committee, with an amendment in the nature of a subst.i.tute, but substantially similar in legal effect to the House bill.
On the next day, August 30, I took the floor and made one of the longest speeches in my congressional life, covering more than forty closely printed pamphlet pages. I quote a few of the opening paragraphs:
"The immediate question before us is whether the United States shall suspend the purchase of silver bullion directed by the act of July 14, 1890. It is to decide this question the President has called Congress together in special session at this inconvenient season of the year. If this was the only reason for an extraordinary session it would seem insufficient. The mere addition of eighteen hundred million ounces of silver to the vast h.o.a.rd in the treasury, and the addition of fourteen millions of treasury notes to the one thousand millions of notes outstanding, would hardly justify this call, especially as Congress at the last session neglected or refused to suspend the purchase of silver. The call is justified by the existing financial stringency, growing out of the fear that the United States will open its mints to the free coinage of silver.
This is the real issue. The purchase of silver is a mere incident.
The gravity of this issue cannot be measured by words. In every way in which we turn we encounter difficulties.
"If we adopt the single standard of gold without aid from silver, we will greatly increase the burden of national and individual debts, disturb the relation between capital and labor, cripple the industries of the country, still further reduce the value of silver, of which we now have in the treasury and among our people over $593,000,000, and of which we are the chief producers, and invite a struggle with the great commercial nations for the possession of the gold of the world.
"On the other hand, if we continue the purchase of 54,000,000 ounces of silver a year, we will eventually bring the United States to the single standard of silver--a constantly depreciating commodity, now rejected by the great commercial nations as a standard of value; a commodity confessedly inconvenient, by its weight, bulk, and value, for the large transactions of foreign and domestic commerce, and detach us from the money standard now adopted by all European nations, with which we now have our chief commercial and social relations. In dealing with such a question we surely ought to dismiss from our minds all party affinities or prejudices; all local or sectional interests, and all preconceived opinions not justified by existing facts and conditions.