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JAMES G. BLAINE, by Edward Stanwood.
JOHN SHERMAN, by Thbodorb £. Burton.

Each, with portrait, xamo, #1.25, 9ut. Postage la oenta.

HOUGHTON MIFFLIN COMPANY

Boston and Nbw York ,

AMERICAN STATESMEN
SECOND SEBIES

IN SHERiMAN

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IK) HE E. B''UTO\'

'■ MON AND Nrw YORK
MiTON" MIFFUN COMPANY

JOHN SHERMAN

BY .\

THEODORE E.' :feURTON

BOSTON AND NEW YORK

HOUGHTON MIFFLIN COMPANY

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Published December iqob

CONTENTS

I. Ancestry, Eablt Life, and Subround-

INGB 1

II. SiAYEHT Agitation : Election to Con-
gress .... 20

in. A Member of thb House of Repre-
sentatives 34

IV. The Thirty-Sixth Congress .... 61
V. Member of the Senate — The Civil

War and its Problems 80

VI. Taxation AND Loans — National Bank-
ing System 116

VII. The Reconstruction Period .... 142
VIII. Financial Conditions after the Civil

War — The Currency — Public Debt 172
IX. Reduction of Taxation — Tariff — In-
ternal Revenue 191

X. National Debt — Refunding of Bonds 202
XI. Final Accomplishment of Legislation

for Resumption 226

Xn. Secretary of the Treasury — Refund-
ing — Silver Legislation — Resump-
tion 252

Xin. Return to the Senate — Three Times
A Candidate for the Presidential
Nomination 298

vi CONTENTS

XIV. Foreign Affaibs — Legisiation per-
taining TO Interstate Commerce —
Further Tariff Discussion . . . 826
XV. In the Senate — Administration of

President Harrison, 1869-1898 . . 858
XVI. Senator during Cleveland's Second

ADMiNierrRATioN, 1898-1897 ... 886
XVn. Secretary of State — His Last Days . 409

XVin. Summary and Conclusion 418

Index 481

JOHN SHERMAN

ANCESTRY, EARLY LIFE, AND SURROUNDINGS

John Sherman was bom at Lancaster, Fairfield
County, Ohio, on the 10th day of May, 182S. He
died at Washington, October 22, 1900, having
reached the ripe age of seventy-seven years. His
public career as a member of the House of Repre-
sentatives and of the Senate, Secretary of the Treas-
ury, and Secretary of State extended from March
4, 1855, to April 27, 1898, a period of more than
forty-three years. When he left the Senate in March,
1897, his membership in that body, though not
continuous, had been longer than that of any other
senator.

His ancestry on both sides belonged to a pure
English stock. Samuel Sherman, his paternal an-
cestor of the sixth preceding generation, came from
Essex County, England, in 1634, when sixteen
years of age, and after a sojourn in Massachusetts,
settled in Connecticut. His five intermediate an-
cestors were bom in the western part of the latter
state. The Sherman family of Essex County made
important contributions to the citizenship of the

« JOHN SHERMAN

New World. The descendants of Samuel Sherman,
and of his cousin John, who migrated at the same
time, include not only John Sherman, and his illus-
trious brother William Tecumseh, but also Roger
Sherman, George F. and Ebenezer R. Hoar, Wil-
liam M. Evarts, and Chauncey M. Depew.

The effect of heredity as a favoring influence in
the lives of American statesmen is not clearly ap-
parent. Neither inherited predilection for a public
career nor the prestige of a family name has been
a requisite for gaining exalted official station. Along
with the unequaled possibilities which our country
affords, there also exists the nearest approach to
equality of opportunity, and the highest political
rewards have been obtained by industry, ability, and
the possession of popular qualities. While instances
have not been lacking in which successive mem-
bers of the same family have maintained a promi-
nent position in public affairs for three, and even
four, generations, many more have been at the fore-
front who were the sons of ancestors who never
held office. Among these may be counted Wash-
ington and Madison, who were the sons of prosper-
ous landed proprietors. The fathers of John Adams,
Van Buren, and Polk were thrifty farmers. In con-
trast with those mentioned, that unsurpassed quar-
tet, Jackson, Clay, Lincoln, and Garfield, were the
children of poverty.

There is another list, however, quite as numerous
which tends to show that an inherited bias for pub-
lic service is not without advantage. It is made up

ANCESTRY S

of those whose fathers held office, but in a theatre
of action very much limited in area, in many cases
including only a township or a county, preferment
having been given because of their sturdy common
sense and unswerving integrity. Whatever inspira-
tion descended to their sons, impelling them to par-
ticipate in public affairs, was derived from such
sources as the town meeting, the county court,
the colonial or state legislature, or the command
of the local militia. An unusual proportion of these
ancestors held petty judicial positions, in which it
was their duty to decide conflicting claims of their
neighbors. In this list may be counted Jefferson,
Marshall, Webster, Calhoun, Seward, and Blaine.
With them may be classed Patrick Henry, whose
father, notwithstanding unsustained accounts of
his son's illiteracy, had enjoyed better educational
advantages than the parents of any of the others
named.

The history of Mr. Sherman's lineage identifies
him more nearly with the latter group and fur-
nishes an argument in support of the importance
of heredity. His paternal ancestors held office al-
most continuously from the day when Samuel Sher-
man landed in New England, and several of them
for a very long time. Two of them were mem-
bers of the Court of Assistants, or Upper House of
Connecticut, a position the most honorable in the
gift of the electors of the colony. After Samuel
Sherman, four of the five intervening ancestors held
similar positions, including those of judge of the

4 JOHN SHERMAN

county court, probate judge, and member of the
legislature. The first ancestor bom in this countiy
was speaker of the Lower House for two sessions;
and it is an interesting coincidence that he held the
position of associate county judge for forty-four
years, a slightly longer period than that during which
his illustrious descendant held office under the
national government. Another, Daniel Sherman,
who lived in the time of the Revolution, was for
sixty-five semi-annual sessions the representative
of his native town in the Greneral Assembly. Tay-
lor and Charles Robert Sherman, grandfather and
father, respectively, of John Sherman, were law-
yers and held judicial and other offices.

Mr. Sherman's father, Charles Robert, went forth
from Connecticut to seek a home in Ohio in the
year 1810. The so-called " Fire Lands," now com-
prising the counties of Erie and Huron, would have
seemed the natural location for him, because his
father was the owner of a considerable tract of land
in that locality, where a township had been named
after him; also, the main stream of emigration from
Connecticut lay toward the northern part of the
state in the direction of the Western Reserve; but
the fear of hostile Indians deterred him from going
there, and he chose Lancaster for his home. He re-
turned to Connecticut to bring with him his wife
and an only son, then an infant, establishing him-
self in Ohio in 1811. Lancaster was the seat of one
of the most intelligent communities of the West,
and became especially celebrated for the eminence

ANCESTRY 5

of the lawyers who resided there. He acted suc-
cessively as major in the militia, collector of internal
revenue, and as one of the four judges of the Su-
preme Court of Ohio. In this last position he seems
to have maintained an excellent reputation for abil-
ity and fairness; and as the court in those days
traveled from county to county, he acquired a large
acquaintance which in later years was of material
benefit to his son. He was prematurely taken away
by a sudden illness, June 24, 1829, when forty years
of age. A widow and eleven children survived him,
of whom two rose to eminence, — William Tecum-
seh, and John, the eighth child, the subject of this
sketch. The former was nine and the latter six years
of age. A weighty responsibility was placed upon
the widow, who seems to have been a woman of
strong character, well educated, and possessed of
great tact and resourcefulness. Her limited means
made it desirable to separate her children, and
William Tecumseh was adopted into the family of
the Honorable Thomas Ewing, who, in the year
1836, procured for him an appointment to West
Point.

John Sherman studied at private schools for eight
years, two years at Lancaster, then four years at
Mount Vernon, and again two years at Lancaster.
During the four years at Mount Vernon he was in
the family of a cousin of his father. Although it was
intended that he should take a college course at
Kenyon College, and relatives of the family offered
the necessary assistance, it appears that his own

6 JOHN SHERMAN

preference was to engage in active life, when only
fourteen years of age. In later life he gave as his
reason that his chief desire at the time was to help
his mother. His education was of a routine char-
acter, of the kind much in vogue at that time, though
marked by thoroughness and rendered more help-
ful by his aptness as a pupil. No one of his instruct-
ors appears to have made any great impression
upon him; certainly none exerted any guiding or
inspiring influence akin to that of Dr. William
Small upon Thomas Jefferson, or of Rev. Hugh
Knox upon Hamilton. Unlike the placid and un-
excitable John Sherman of mature years, the boy
seems to have been of a rollicking and rather care-
less disposition. He recounts his schoolboy fights,
and tells of resisting a teacher at the academy at
Lancaster who sought to punish him, an incident
which led to his expulsion, though he was readmit-
ted later. If the early days of the two brothers are
to be contrasted, it would seem that the future gen-
eral was a quiet and industrious student, resorting
to hunting for his favorite amusement, while the
future senator was especially fond of more sociable
sports, and remembered in after life his pleasant
associations with his schoolmates more vividly than
the instruction of his teachers. In the course of his
studies he learned little Latin and no Greek. At no
time was the study of languages, ancient or modem,
an agreeable task for him. The native bent of his
mind was very manifestly toward mathematical
und scientific studies. He mastered the former with

EARLY LIFE AND SURROUNDINGS 7

ease; algebra, Euclid, and especially surveying, were
his favorites. To the end of his life he kept near
him a complete set of surveyor's instruments, and
in hours of leisure it afforded him sincere delight
to make plats of his landed properties.

His first employment, when he was only fourteen
years of age, was upon the construction by the State
of Ohio of the Muskingum River Improvement, by
means of which the river was to be made navigable
from Zanesville to its mouth, at Marietta. His po-
sition was that of junior rodman. After the measure-
ment of levels and the making of computations were
completed, he was given a minor place in the di-
rection of the work. He showed such competency,
however, that on the discharge of one of the super-
intendents, his budding capacity was recognized
by placing him, notwithstanding his tender years,
in charge of the construction of a lock and dam.

The termination of this employment was destined
to make a profound impression upon him and
to exercise a controlling influence upon his choice
of a profession. The keen satisfaction which he
found in pursuits of this nature, and the gratifica-
tion derived from his rapid promotion, might have
caused him to become a surveyor or contractor;
but after two years his aspirations received a rude
shock. The election of a Democratic governor
of Ohio in 1838 was followed by the discharge, in
June of the following year, of the chief super-
intendent. A letter of confidence and good will
addressed to him by young Sherman and other

8 JOHN SHERMAN

saboidiiiates led to their disduuge also. SSiennan's
leanings toward the VFhig party, whicfa could hardly
have been veiy well defined up to that time, were so
strengthened that he became a strong partisan. The
event also gave a new direction to his ambitions
and caused him to decide to study law, a profession
to which he was strongly predisposed because his
father had been a lawyer, and Judge Faiker, the
husband of an aunt, and his oldest brother, were
members of the bar at Mansfield.

His services on the public works of Ohio and his
surroundings at that time could not faQ to give bent
to his inclinations, even at the eaiiy age of sixteen.
He was in the midst of a community eminently pro-
gtessive, where evidences of growth and material
prosperity were visibk on every side. Ohio en-
joyed a marvelous increase of wealth and popula-
tion in the decade beginning in 1831. During these
ten years, its gain in population was greater than
that of any otiier state of the Union, and greater also
than that of any state or colony in any previous
decade since the settlement of America. It was
essentially an era of development, in which canals
and better highways played an important part, nor
was the awakening limited to portions of the state
inmiediately affected by the construction of these
improvements.

All this tended to make of Sherman an early ex-
ample of that type of the American citizen so com-
mon in recent years; men intensely practical, who
are absorbed in concrete problems of financial and

EARLY LIFE AND SURROUNDINGS 9

commercial endeavor and possessed of the greatest
ability in devising means to originate and maintain
great business enterprises. When barely fifteen
years of age he had purchased a quantity of salt
and apples on the Muskingum with the thought of
obtaining large profits by transporting them by barge
to Cincinnati. The absence of the usual autunm
rise, and an early freezing of the river, made the ven-
ture a losing one, and gave his brother and other
relatives opportunity for good-natured chaffing.
At the same time they recognized that his plan was
well devised. Even after his admission to the bar,
his preferences were manifestly for a career in which
he could share the advantages arising from the in-
dustrial and commercial growth of the country. In
1853, his brother, William Tecumseh, wrote him
of a plan to resign his commission in the army and
engage in banking business in San Francisco. In
response, he wrote: "The spirit of the age is pro-
gressive and commercial, and soldiers have not that
opportunity for distinction which is the strongest
inducement in favor of that profession. From your
business habits and experience, you ought in a few
years to acquire a fortune which will amply com-
pensate you for the loss of the title of colonel."

It was not merely by favorable surroundings in a
material way that his early life was influenced. The
State of Ohio was an excellent training-school for
learning the duties of citizenship, and for education
in the science of government. Much has been writ-
ten of the prominence of the State of Ohio in na-

10 JOHN SHERMAN

tional affairs during the last half of the nineteenth
century. It has been alleged that no territorial di-
vision which includes so inconsiderable a share of
the population of a great nation has contributed so
large a quota of men who have attained leadership
in civil and military affairs. Not infrequently this
has been ascribed to chance, or facetiously explained
as the result of superior qualifications in seeking
official station. An examination of the history of
the state will, however, disclose substantial grounds,
if not for assuming the position of the leading com-
monwealth, at least for making a most substantial
contribution to the upbuilding of the nation.

In many respects conditions in Ohio were not
different from those in other states. The citizens
of all alike displayed striking characteristics in the
early days of the Republic. They enjoyed a con-
sciousness of superiority, based upon victory in a
long and unequal contest in which they had achieved
independence and found themselves destined to
be predominant in the western hemisphere. They
displayed a boldness in initiative and a desire for
the greatest possible freedom of action, tempered
by the ingrained conservatism of the Anglo-Saxon
race. The framers of American constitutions had
read the writings of Montesquieu and the more
radical utterances of Voltaire and Rousseau. Later,
the people had before them the striking object-les-
son afforded by the French Revolution. But as they
pondered upon theory and history, they had a clear
vision enabling them to avoid extravagances and

EARLY LIFE AND SLTIROUNDINGS 11

to detennine the legitimate bound at which liberty
of action should stop. The movement which created
this nation was materially different from the French
Revolution and a majority of similar uprisings. As
distinguished from them, the American Revolu-
tion was a successful attempt to establish the prin-
ciples of freedom and equality, while the others were
actuated by that bitterness against authority which
is aroused by grievous oppression and wrong. While
certain fundamentals were observed in all the states,
there was an infinite variety of opinion concerning
the relation of the state to the nation and of the
state to the individual. Education, though by no
means as conmion as in the last half of the nine-
teenth century, was highly prized, and was suffi-
ciently maintained to secure a very high average
of general intelligence and to give excellent training
to those who desired it. With improvements in
means of transportation, all parts of the country
alike were benefited, as these had a tendency to
do away with any spirit of narrowness and to give
a new impetus to progress.

Ohio, however, had distinctive features of her
own, first of which was the cosmopolitan quality
of her citizenship. Physiologists and ethnologists
alike have asserted that for the maintenance of
the most vigorous physical and intellectual stock,
a mingling of various peoples is necessary. If this
assertion is true, Ohio certainly was destined to be
the abode of a most vigorous people. To say that
the Puritan and the Cavalier met upon the soil of

12 JOHN SHERMAN

Ohio does not adequately describe the mingling of
forces which influenced her early settlement. Penn-
sylvania made her contribution not merely from
her population of Gerpian descent, but by a large
representation of Quakers and Scotch-Irish as well.
Virginians occupied large areas of territory around
Chillicothe and elsewhere. New York gave many
of her most energetic citizens. Connecticut and
Massachusetts sent representatives of the best New
England stock to the Western Reserve and to Mari-
etta. New Jersey planted a settlement at Cincin-
nati. Maryland furnished a migration which, in
1850, the date of the first enumeration according
to nativity, numbered a half more than the more
influential contingent from Connecticut. North
Carolina contributed her quota of Scotch-Irish.
Kentucky sent many stalwart and adventurous
settlers across the Ohio. A French settlement was
established at Gallipolis. The Revolutionary sol-
dier was still prominent when Mr. Sherman was
bom, and before he had entered politics many im-
migrants from Europe had located in Ohio, includ-
ing a considerable contingent of German refugees
of the later " forties " who came to be numbered
among his most ardent political supporters.

The local statutes and institutions of the con-
tributing communities were carefully compared,
and discriminating efforts were made to select the
best from all. In such a state there was no place
for provincialism or a one-sided development.
There was a constant attrition of conflicting ideas.

EARLY LIFE AND SURROUNDINGS IS

The visionary and the idealist were granted a most
respectful hearing, but all theories were subjected
to the test of practicability and the probability of
substantial benefit from their acceptance. In other
portions of the Union free discussion was a constant
source of instruction, but nowhere were the springs
from which to draw inspiration and direction so
abundant or so varied.

Some of the colonies were settled by migration
from a single state or foreign country; others —
where the settlement was derived from two or more
sources — suffered from conflicts between inhar-
monious elements. Ohio was settled in peace, and
no commonwealth ever witnessed the mingling of
so diverse and mutually helpful elements with less
friction.

The state had other advantages which could not,
fail to improve the quality of her citizenship. In
distinction from other states and colonies, a con-
stitution was provided before the beginnings of set-
tlement in which were embodied the fundamental
ideas upon which American institutions rest. While
the Constitutional Convention was in session at
Philadelphia, in 1787, another body assembled at
New York, composed of men less known to fame,
the last of the Continental Congresses, framed the
Ordinance of 1787 for the government of the ter-
ritory northwest of the Ohio. This Ordinance in-
cluded two classes of provisions: one temporary,
to terminate with the admission of the territory de-
scribed; the other regarded as compacts which

14 JOHN SHERMAN

could be terminated only by the joint consent of
the original states and the people of the states to be
created from the new territory. The first class in-
cluded regulations for the disposition of property,
including the abolition of primogeniture, and for
the establishment of a territorial government; the
second included provisions preventing molestation
of any person because of his mode of worship or re-
ligious sentiments, establishing the writ of habeas
corpus, also declaring the importance of religion,
morality, and knowledge, and last of all, forbidding
slavery. This exclusion of slavery was not merely
of incalculable benefit to social and economic con-
ditions in the new state, but it attracted from the
whole country a class of citizens, who, in that early
day, realized the evils which must arise from this
unnatural institution.

Under this Ordinance, or laws adopted in pur-
suance of it, land titles were free from doubt or
controversy, and a considerable quantity of land was
reserved by the general government which was open
to entry by any person who desired to settle in the
new territory.

The Indians were at first troublesome in some^
localities, and were victorious in several contests,
but there was not the long harassment from that
source which impeded the development of some of
the older states. Conflicts with them arose to the
dignity of battles and were few and decisive. The
victories of the white man kept them in awe and
treaties were made as the land was required for

•

EARLY LIFE AND SURROUNDINGS 15

settlement. But if the adventurous character which
comes from warfare was lacking it was not the less
true that none but those of courage and endurance
could bear up under the hardship of the journey
from the older communities to the new state, and
thus the early settlers were of a stalwart type, shrink-
ing from no obstacles. To a peculiar degree they
were persons not merely of resolution but of pa-
triotism and excellent moral principles, who sought
the new commonwealth with a view to bettering
their condition and building up a state. A lady liv-
ing until a few years ago remembered the departure
of the Shermans from Norwalk, Connecticut, in
1811, and recalled vividly that the day of their leave-
taking was made the occasion for religious services
held at the church from which Charles Robert Sher-
man and his wife, with their infant child, commenced
their journey on horseback.

The public school system was organized early,
and Ohio was the first state to receive a general
endowment by land grants set apart for the pur-
pose of education. From such a state it is natural
that leaders should arise who would play a most
important part in the nation's affairs. More notable
still was the general quality of the population, which
was characterized by a high standard of intelligence
and of moral ideals. Manifestly generals cannot win
battles without private soldiers behind them who
are courageous and unflinching under the fire of
the enemy, nor can statesmen mould a nation's
decrees without an intelligent and high-minded

16 JOHN SHERMAN

electorate which will sustain or condemn them as
they shall deserve.

From the very beginning political parties in Ohio
were often very evenly balanced, and thus no party
could remain in control unless its principles and
management of public affairs were such as to com-
mend themselves to the voters of the state. In this
regard there was a check upon political manipula-
tion, which proved a salutary feature.

In March, 1840, Mr. Sherman removed to Mans-
field and commenced the study of law there. He
was admitted to the bar of Ohio on May 10, 1844,
his twenty-first birthday, and was engaged in the
practice of law for ten years before entering poli-
tics. Both as student and as lawyer he was char-
acterized by intense application to his work, and by
a control of his habits and impulses which almost
amounted to asceticism. His acquaintances of that
time especially recall his careful avoidance of all
demoralizing and unprofitable associations. There
are few men who have maintained, at least from so
early an age, so intelligent or so well sustained ef-
forts to gain all possible results commensurate with
native qualifications. The question of the promi-
nence which he might have assumed at the bar has
been given little investigation, because a few years
after his election to Congress his legal practice was
practically abandoned and the questions with which
he had to do in his public career were not so much
legal or constitutional as financial and administra-
tive. In his " Recollections'* he relates that imme-

EARLY LIFE AND SURROUNDINGS 17

diately upon his admission he entered into partner-
ship with his oldest brother; that even before he
was admitted he drew the necessary pleadings in
the oflBice, and was active in such petty litigation
as was prosecuted before justices of the peace; and
that inmiediately after his admission he took an
active part in the trial of cases. In 1847, after three
years, he says that he had accumulated property
of a value of $10,000 and was a partner in a suc-
cessful business establishment at Mansfield. It was
rare in those days that members of the legal profes-
sion achieved pecuniary success in a rural county,
at least in so short a time; but in ten years he had
acquired what at that time was regarded as a mod-
est competence. He had shown that he possessed
the qualifications of a strong man, so versatile and
forceful in his make-up as to promise marked suc-
cess in whatever career he might adopt.

Throughout his life he was favored with the best
of health. He was rarely detained from active duty
by any form of indisposition. In physical stature
he was six feet, two inches in height, and, though
apparently slender, he was strong and muscular.
When near to his seventy-seventh birthday, in tak-
ing a wa;lk around the city of Washington with one
of his former colleagues, who was one of the younger
members of the Senate, he protracted it to such
length as to prove wearisome to his companion.

While at Washington he maintained a great deal
of interest in his farming property near Mansfield,
and, even when most absorbed in public business,

18 JOHN SHERMAN

gave directions relating to its management. An
expression once used by him on a visit to Ohio,
about ** coming to fix his fences " was much quoted
as a euphemism for attention to political chances.
He manifested great fondness for travel, and dur-
ing his vacations visited almost all portions of the
United States and also took several trips to Europe.

At his death he left a fortune, amounting to some-
what more than two million dollars. His accu-
mulations were the result of careful and fortunate
investments, the most profitable of which was the
purchase of a large tract of land on the Heights in
the suburbs of Washington, which he obtained with
others while a member of President Hayes' cabinet.

On Sherman's first settlement in Mansfield, his
grandmother, the wife of Taylor Sherman, was liv-
ing there. Later in 1844 his mother, who had until
then Uved at Lancaster, also removed to Mansfield,
where she made her home with her son John and
her two youngest daughters until they were married.
Both his grandmother and his mother exercised a
very considerable influence upon him. The former
died in 1848, the latter in 1852.

On the 31st day of August, 1848, Mr. Sherman
married Margaret Cecelia Stewart, the only child
of Judge Stewart of Mansfield, who was actively
engaged in the practice of law when Sherman set-
tled there in 1840, and was afterward chosen, first
by the legislature of Ohio, and later by popular elec-
tion, a judge of the Court of Common Pleas. Dur-
ing Mr. Sherman's early services at Washington,

EARLY UFE AND SURROUNDINGS 19

correspondence between him and Judge Stewart
was quite voluminous, and he seems to have relied
upon his father-in-law for counsel in the import-
ant political movements of the time. The married
life of Mr. and Mrs. Sherman was ideal. It con-
tinued for over fifty years, she dying only a few
months before him. She was a woman of singular
poise and dignity, well educated, a valuable help-
meet, rather averse to public life, and was no
doubt sincere in saying that she did not desire
her husband's election to the presidency. No
children were bom of this marriage, but a daughter
was adopted by them, upon whom they bestowed,
and from whom they received, the affection and
constant attention which should exist between
parents and children.

Mr. and Mrs. Sherman, after their marriage,
lived for a time in a modest home at Mansfield, but
later removed to a more commodious mansion lo-
cated on a height commanding a beautiful view of
Mansfield and the valleys in that locality. Almost
every year he spent a considerable share of his time
in this home. In 1864 he purchased a house in
Washington and afterwards built forhimself a more
spacious mansion beside it. In these he made his
home when there. His domestic life, like that of
many public men, was the sphere of his greatest
happiness, notwithstanding the eh joyment which he
derived from the achievements of his public career.
He was a most affectionate son, a faithful husband,
and a kind father.

SLAVERY agitation: ELEC?nON TO CONGRESS

In the autumn of 1853 Mr. Sherman sought a
larger field and arranged for the opening of a kw
office at Ckveland, wherein two associates were
located, with the expectation that he would join
them in the following year. But the reopening
of the slavery question exercised a decisive in-
fluence upon his future, causing him to abandon
his former plans and enter upon a public ca-
reer.

Slavery as an institution in the United States was
at the zenith of its power in the year 1853. The
number of slaves and the product of their labor may
have been greater in later years of the decade, but
at no subsequent time was there the same absence
of active opposition. The philanthropic hope which
had been cherished at the time of the framing of the
Constitution, that slavery would gradually disap-
pear without legislative or political action, had been
entirely abandoned. Slave labor had become very
profitable and was closely interwoven with social
and political conditions in the states of the far
South. Not only were the earlier opinions dis-
carded, but the enslavement of the blacks was
• justified as beneficial to them as well as to their

SLAVERY AGITATION «1

owners. Mr. Jefferson Davis found for it a justifi-
cation in every book of the Bible» from Genesis to
Revelation.

Conditions in 1853 were altogether favorable to
the permanent continuance of the institution. Every
effort was made to destroy further agitation upon
the subject. Mr. Clay in January, 1851, had joined
with forty-four senators and representatives in
signing a manifesto declaring they would support
no one for public office who sought to reopen the
question. In 1852 the two contending parties, the
Whigs and the Democrats, had each unequivocally
declared in their party platforms in favor of ac-
quiescence in the compromises of 1850, and had
specifically approved the Fugitive Slave Law. A
most influential contingent in the presidential elec-
tion of that year was made up of those who desired
to put an end to the disturbing discussions which
had prevailed. In a country in which commercial
prosperity is eagerly sought, and where men are
occupied with business pursuits, there is always a
lai^ conservative element which is seriously alarmed
at the disquieting strife of bitter political contests.
The weight of its influence was brought to bear
against further controversy over the slavery ques-
tion. The abolitionist and the outspoken anti-
slavery man were regarded as disturbers who should
be suppressed. Multitudes voted for Pierce because
they thought the Democratic party could be more
safely trusted for the maintenance of tranquillity,
•and he was elected by an overwhelming majority.

22 JOHN SHERMAN

only four states giving their votes to his opponent,
Greneral Scott.

There was one principle, however, to which the
anti-slavery radicals and conservatives alike still
strongly adhered, and that was the absolute ob-
servance of the compromise of 1820, under which
provision was made for the admission of Missouri
as a slave state with a prohibition of slavery in all
the remainder of the Liouisiana Purchase north of
latitude 36® 30'. While they conceded that slavery
in the respective states was absolutely under state
control, and the federal government had no right
to interfere there, — they maintained that Congress
did have authority to introduce or exclude it in the
territories, and such authority had been recognized
in the Act of 1820. This Act, passed after a stormy
discussion, had been acquiesced in as a finality by
all parties for more than thirty years. Stephen A.
Douglas in a speech at Springfield, Illinois, in 1849,
had referred to the compromise of 1820 as having
**an origin akin to the Constitution," and as having
become ** canonized in the hearts of the American
people as a sacred thing which no ruthless hand
would ever be reckless enough to disturb." It only
required an interference with this commonly ac-
cepted understanding to arouse again the slumber-
ing opposition to slavery.

The developments of the twelve years from 1853
until the final adoption of the Thirteenth Amend-
ment, abolishing slavery, show that no great wrong
can be so strongly intrenched as to prevent its over-

SIAVERY AGITATION 23

throw. The successive events which led to the ex-
tinction of slaveiy followed each other in a mannei
as orderly, and yet as striking, as the unfolding of
the plot of an absorbing drama. Nevertheless, the
early destruction of this institution, apparently so
impregnably grounded, can be ascribed not so much
to the zeal of its opponents as to the undue sensi-
tiveness and apprehension, the mistakes, and the
exorbitant demands of its supporters. In 1853 it
was difficult to convince the pro-slavery element in
the Southern States that the citizens of the North
were not eagerly interested in the abolition of
slavery. Even so early as 1836 Calhoun had said
that Webster would in time yield to influences
which would make of him an abolitionist. No doubt
he was correct in forecasting a probable awakening
of public opinion which in time would render the
abolition sentiment all-powerful, but Webster lived
sixteen years after this prediction, and by no means
became an abolitionist. General W. T. Sherman,
who prior to the Civil War was superintendent of
an educational institution in Liouisiana, wrote to
his brother that it was impossible to make the peo-
ple of Louisiana believe that all Republicans were
not abolitionists.

This misapprehension of Northern sentiment had
created a settled conviction among slaveholders
that if the people of the Northern States gained pre-
ponderance in the government they would destroy
their property in slaves. As against such a result
they favored disunion, and had reached the con-

24 JOHN SHERMAN

elusion that they must either resort to separation
from the central government, or gain a sufficient
number of slave states to protect and maintain their
favorite institution.

On the other hand, it must be conceded that they
were not without grievances and certainly not with-
out grounds of apprehension. Their wealth was
derived from agricultural products which must for
the most part be sold abroad, yet the supplies which
they required in exchange were subjected to tariff
duties, which, as was maintained, materially in-
creased their cost. The compromisers had sought
to preserve a balance in the number of free and
slave states admitted to the Union. This unwritten
law had been carefully observed for many years,
slave commonwealths usually having a slight ad-
vantage, which was, however, not so much in-
creased by the acquisitions from Mexico as had been
anticipated. Although Texas would surely afford
a great field for the exploitation of the slave regime,
and there was a provision in the resolution of an-
nexation allowing a division which should create
four additional states, it was not probable that this
provision would ever be acted upon, and the other
territory acquired from Mexico had proved a dis-
appointment. California, three eighths of which
was south of 36° 30', the division-line prescribed
for slavery in the Louisiana Purchase, had already
been admitted as a free state, and there was little
hope of slavery expansion in New Mexico or Utah.
The chief danger of a loss of power to maintain

SLAVERY AGITATION «5

slavery arose from the very large territory north of
36^ 30' which in a short time would be settled and
must afford a considerable number of states which,
if organized as free commonwealths, would give
preponderating influence to states where slavery
did not exist.

The Southern planters had come to feel that for
economic as well as for political reasons there must
be an extension of the territory in which slavery was
allowed. The annoyance to them from the escape
of fugitives to the free states was a constant source
of irritation, although it appears to have been less
at this time than in previous years. From a survey
of the whole situation, however, they insisted iipon
increasing the amount of slave territory.

Three distinct views of the right to adopt or ex-
clude slavery in territory not yet admitted as states
were entertained at this time. The first was that
adopted by the Republican party, that Congress
had full power to stipulate whether slavery should
exist there and might make slavery or freedom a
condition when the territory was admitted. This
view had been maintained and apparently prevailed
in 1820. The second was that the residents of a ter-
ritory might determine this question, and when
their determination was made, admission as a state
should follow with a recognition of the choice made
by the inhabitants. This right to decide the ques-
tion was styled ** Squatter Sovereignty." In support
of this position Mr. Alexander H. Stephens in advo-
cating the Kansas-Nebraska Bill in 1854 said:

26 JOHN SHERMAN

"Do you consider it democratic to exercise the high
prerogative of stifling the voice of the adventurous pioneer
and restricting his su£Frage in a matter concerning his own
interest, happiness, and government, which he is much
more capable of deciding than you are ? As for myself and
the friends of the Nebraska Bill, we think that our fellow
citizens who go to the frontier, penetrate the wilderness,
cut down the forests, till the soil, erect schoolhouses and
churches, extend civilization, and lay the foundation of
future States and Empires do not lose by their change
of place, in hope of bettering their condition, either their
capacity for self-government or their just rights to exer-
cise it conformably to the Constitution of the United
States. . . . That is a matter that we believe the people
there can determine for themselves better than we can
for them. We do not ask you to force Southern institutions
or our form of civil polity upon them, but to let free emi-
grants to our vast public domain, in every part and par-
cel of it, settle this question for themselves, with all" the
experience, intelligence, virtue, and patriotism they may
carry with them."

The third view was that entertained by Mr. Davis
and by a majority of those who supported Breck-
inridge and Lane in the campaign of 1860, viz.:
that a territory could not decide the question, but
that it remained for the state, after its admission, to
determine whether slavery should exist or not, free
from any restriction or promise made at the time
of its admission.

No time seemed so favorable for the extension
of slavery as that succeeding the election of Presi-
dent Pierce. He was pliant to the wishes of its sup-
porters. There was an overwhelming Democratic

SLAVERY AGITATION 27

majority in both branches of Congress. The excite-
ment over the Fugitive Slave Law, while still con-
tinning and causing occasional outbreaks, had
greatly diminished since the first cases under the
act, and was more and more confined to particular
localities. The leaders of the slave power were con-
fident that their better organization and more per-
fect unity would give them a great advantage in
any contest which might occur.

It should be stated that the oflFensive legislation
of 1854, and the years preceding, had not been in-
itiated by those most interested in the continuance
of slavery. The Border States, with the somewhat
reluctant acquiescence of the far South, had de-
manded the Fugitive Slave Law. Mr. Jefferson
Davis, then Secretary of. War, gave his support to
the Kansas-Nebraska Bill under protest, and at a
later time referred to the doctrine of squatter sov-
ereignty as a theory founded on transparent falla-
cies and leading to paradoxical conclusions. The
legislation of 1854 was first proposed by Mr. Stephen
A. Douglas with a view to the development of new
fields for slavery, and to establish what he regarded
as a proper rule for a decision of the question of
its existence. His leadership secured, in May, 1854,
the passage of the Kansas-Nebraska Act, by which
the compromi^ of 1820, fixing 36° 30' as the bound-
ary-line between free and slave territory, in states
thereafter to be admitted, was nullified, and, in its
place, the rule was established that the decision
as to the existence of slavery should, in each terri-

«8 JOHN SHERMAN

toiy, be left to the inhabitants. Under this Act
slavery had eveiytiiing to gain and nothing to lose.
It was the hope of its advocates that states might
be admitted with slavery from portions of the pub-
lic domain from which at that time it was regarded
as excluded. They were willing to take their chances
of obtaining a majority in the territories where local
sovereignty was to be recognized. The result was
a violent reaction in the North. The feeling which
had been dormant was again aroused and acquired
a strength far greater than that which was aroused
by the passage of the Fugitive Slave Act. As a re-
sult, in the elections in the autumn of 1854 a Demo-
cratic majority in the House of Representatives
was changed to a minority.

In a government by the people there is no force
more potent than the inevitable reaction against the
party in power, which must maintain a definite, af-
firmative policy against all opposing views. Again,
every political party is made up of men representing
various shades of opinion. There will certainly be
two divisions, the more radical and the more con-
servative. One or the other will be dissatisfied with
the policies of the party it has supported. Those
who have no well-defined political affiliations will
be displeased because they believe their opinions
or interests have been neglected. An army of voters
will rally to the party banner before election, which
will surely disband when its members come to see
the difference between expectation and realization.
The disappointed office-seeker increases the pre-

SLAVERY AGITATION 99

vailing discontent. To all these influences must be
added an indefinable desire for a change, the source
and operation of which defy analysis. The reaction
is less when an administration is succeeded by one
of the same political complexion, because the dis-
appointment arising from unrealized hopes will not
then be so great. This tendency is forcibly illus-
trated in the election of members of the House of
Representatives, the body in closest touch with the
people. In every administration, beginning with
that of Andrew Jackson, to the present time, the
dominant poUtical party at the presidential election
has, in the succeeding mid-presidential election,
shown a falling-oif in the proportion of members
elected. This falling-off has been especially notable
when the preceding majority has been greatest, or
when the victory of the presidential year has been
accepted as a mandate to enact extreme or unex-
pected legislation. This was well illustrated in the
elections of 1854 after 1852, of 1874 after 1872, of
1890 after 1888, and of 1894 after 1892.

In an important sense the unprecedented victory
of 1852 sealed the doom of slavery. Its advocates
were intoxicated with triumph. They interpreted
a vote of confidence, given when there was really
no other party to which the people could go, as
a license to place the radicals in the saddle. The
wisest statesmanship was required to prevent such
unwise action as would be the sure precursor of
overthrow. Such statesmanship was lacking and
political sagacity was lost. The opposition to the

30 JOHN SHERMAN

Kansas-Nebraska Act in the North and West was
deep and enduring. Complaint over the Fugitive
Slave Law and the other objectionable measures of
1850 was ephemeral in comparison. It is difficult
to understand how a man of the keen foresight of
Stephen A. Douglas could be misled into the belief
that such a measure would be popular, or even be
tolerated, in the North.

Sherman was nominated for Congress less than
two months after the passage of the Kansas-Ne-
braska Bill. No more fortunate time could have
been selected for beginning a public career. The
popular mind was aroused; a great moral question
determined the issue. Perhaps the patriotic and
intelligent citizen is more needed in public life at
a time when no great burning question occupies
the popular thought; but in 1854 the occasion was
favorable, not only for those who aspired to give
patriotic service to the country, but also for the
opportunist. The Whigs were discredited and de-
moralized. The Free-Soilers, although they had a
clear vision of the trend of events, were considered
as factional and without prospect of affording a way
out of the troubled situation. Former issues with
which Whig leaders had been identified were sub-
ordinated or else appeared in a new form. Sherman
was practically a new man in politics, so that in
addition to advantages based upon his youth and
ability he was free from the record of failures
and mistakes for which the Whig party was held
accountable.

SLAVERY AGITATION SI

Up to this time he had taken no inconsiderable
interest in political contests. In speaking of his
early party affiliations, he says: **I shouted for
Harrison in the campaign of 1840. In 1842 I was
enthusiastic for * Tom Corwin, the wagon boy/ the
Whig candidate for Governor of Ohio." It seems
he took but little part in the campaign of 1844, al-
though in the absence of the speaker who had been
assigned, he addressed a political audience for the
first time. In 1848, as well as in 1852, he was a dele-
gate to the National Whig convention, and at the
former was chosen secretary. In 1852 he was an
ardent supporter of Scott as against Webster, who
received the vote of New England, and as against
Fillmore, who received the support of the Southern
Whigs. His views during these years, as stated by
himself, were strongly in favor of a protective tariff
and in opposition to the attitude of the Democratic
party, which was becoming more and more com-
mitted to the extension of slavery. He had heartily
supported the compromise measures of 1850, prob-
ably with the disposition of all conservative mem-
bers of the Whig party, who were anxious above
all things to avoid sectional strife and put an end
to the agitation of the slavery question. Neverthe-
less, he does not seem to have been imbued with
any strong desire to enter the political arena. The
chief objection to him both at the nominating con-
vention in July, 1854, and in the campaign which
followed was that he was not sufficiently radical
in his opposition to slavery.

8« JOHN SHERMAN

The canvass between nomination and election-
day in this as well as in the three succeeding cam-
paigns in which he was elected to the House of
Representatives, was conducted by addressing
meetings in public halls, schoolhouses, and, in the
first campaign especially, in churches, which were
freely opened for advocates of the anti-Nebraska
cause. The candidate drove from town to town in
a buggy. It is probable that at no time in the his-
tory of popular elections has there been a greater
freedom from corrupt influences or the use of money
than in the years 1854 and 1856. Mr. Sherman
•related that on one occasion he received word from
the chairman of the political committee in one of
the counties of his district to the effect that they
were very much in need of money with which to
conduct the campaign, and that the lack of it was
emphasized by the loss of the activity of the leading
county candidate, who was unable to take a promi-
nent part in the contest by reason of sickness in his
family. In response to an inquiry from him about
the amount required and the use to which it would
be applied, a reply was soon received that the cam-
paign could be successfully prosecuted if a dona-
tion of twenty-five dollars was given, which was
needed to hire conveyances to bring voters to the
polls. He said this was the first and only time he
was asked for a political contribution during his
service in the House of Representatives. He was
elected by a majority of 2823 in a congressional
district which for some years preceding had elected

ELECTION TO CONGRESS S3

a Democrat. In the following year he? was chosen
chairman of the first State Republican Convention
held in Ohio. On this occasion freedom from the
entanglements which belonged to members of the
old parties was urged in his favor. Salmon P. Chase
was nominated for governor and elected in the fol-
lowing autumn. From this time until Chase's death
in 1873, although he and Sherman differed on many
questions of public policy, the relations between
them were of a very cordial nature. So late as 1868
Sherman preferred Chase as the Republican can-
didate for the presidency.

A MEMBER OF THE HOUSE OF REPRESENTATIVES

The House of Representatives of the Thirty-fourth
Congress was made up of groups. No political or-
ganization commanded a majority. One hundred
and eight members were classed as Republicans,
eighty-three as Democrats, and forty-three as Amer-
icans. Changing conditions arose from the gradual
disintegration of the old Whig party, and the form-
ation of the Republican, or anti-Nebraska, as well
as the American, or Know-Nothing, party, which
latter for seven or eight years attracted a consider-
able following. In the re-alignment of parties the
Whigs had not yet settled upon their political as-
sociations. Presumably those in the North event-
ually joined the Republican party, and those in
the far South the Democratic party. In the inter-
vening country, and particularly in the States of
Tennessee and Kentucky, a considerable number,
after first acting with the American organization,
adhered to the so-called Constitutional Union
party, which nominated Bell and Everett in 1860.
In 1856 tlie Whigs went through the form of holding
a national convention, and of framing a platform,
yet they could do no better than to ratify the nominees
of the American party, although on vital questions
their platforms were widely diflperent.

MEMBER OF CONGRESS 35

A majority of the House of Representatives in
the Thirty-fourth 0)ngress were regarded as op-
posed to the administration of President Pierce,
but there was not that coherence in the opposition
which would make it possible to act in harmony
upon any affirmative policy. The existence of groups
made itself manifest at the very beginning, in the
failure to elect a Speaker. The House met Decem-
ber 3, 1855, but although there was no adjournment
for the usual hoUday recess, a Speaker was not se-
lected until February 2, 1856. The anti-Nebraska
forces, or a majority of them, at first supported
Lewis D. Campbell of Ohio, and the Democrats,
William A. Richardson of Illinois. A great variety
of methods for breaking the deadlock were pro-
posed, such as voting by ballot; that each party
should select a Speaker pro tempore, to preside
alternately; that no motion to adjourn should be
in order until a choice had been made. The tedious
hours of delay were interspersed with propositions
of a humorous nature, such as that no member be
allowed to indulge in the use of meat, drink, fire, or
other refreshments, gaslight and water only ex-
cepted, until an election should be effected. At
another time in the midst of a parliamentary tangle,
Mr. Schuyler Colfax proposed, as a substitute for
a series of grandiloquent resolutions, a declaration
that the House would heartily approve of the an-
nexation of that part of Oregon which was sur-
rendered to Great Britain by the administration
of James K. Polk. A proposition, first made on

38 JOHN SHERMAN

December 10, 1855, was finally agreed upon Feb-
ruary 2, 1856, viz. : that if after the roll had been
called three times there should be no election, it
should again be called, and the member receiving
the largest number of votes be declared Speaker.
On the day of the adoption of this plan N. P. Banks,
who, although classed as an American, was sup-
ported by the anti-Nebraskan element, was chosen.
While the House was thus without a head, of
course no business was transacted. On the 22d of
December, a limit of ten minutes was placed upon
speeches. There was a snappy and at times able
debate, in which, to an unusual degree, new men
were heard, of whom there was an exceptionally
large proportion. The candidates for Speaker were
called upon to answer questions relating to their
records and intentions, which, for directness, and
it may be said for impertinence, would have been
appropriate to be asked by a police-court lawyer.
A custom was tolerated, almost fatal to orderly
procedure, of allowing members to address the
House during a roll-call, on the calling of their
names. Partisanship was very manifest, but for the
most part it was tempered with good-nature and
a spirit of fairness. After a choice had been made
under the plurality rule, it was moved that the vote
be regarded as a mere declaratory resolution, not
binding until confirmed by a majority vote of the
House; but one of the most pronounced opponents
of Mr. Banks resisted this motion, stating that
before the adoption of the proposition, which he

MEMBER OF CONGRESS 37

had opposed, he was an elector, but now he was
a judge.

The failure to elect a Speaker until after long
delay forecast the diflSculty of enacting any legis-
lation contested by either of the two leading parties.
Even if a measure had passed the House in line
with the sentiments of the anti-Nebraska members,
it would have failed in the Senate, where there was
still a very considerable Democratic majority. The
most which could be done was to prevent oflFensive
action by the administration. There is always a
handicap which rests upon coordinate legislative
bodies when not in political harmony. One may
pass a measure more extreme than the sentiments
of a majority of its members really approve, know-
ing it will fail in the other body, but hoping to reach
some compromise or gain political advantage thereby ;
or it will proceed in a halting, doubtful manner,
adopting a mild measure in the hope that, notwith-
standing its opposition, the other House may con-
cur. In either case there will not be that carefully
prepared legislation which would be framed in case
there were a prospect of success in accord with the
sentiments which a majority of the members would
maintain.

Mr. Sherman took an active part in the proceed-
ings. On the 19th of December, sixteen days after
the beginning of the session, he appeared as an
interlocutor of one of the candidates for Speaker,
and made clear by questions his unalterable op-
position to the further extension of slavery. On the

38 JOHN SHERMAN

16th of January, 1856, he stated his position very
clearly in these words:

"I am no Abolitionist in the sense in which the term is
used; I have always been a conservative Whig. I was
willing to stand by the compromises of 1820 and 1850;
but when our Whig brethren of the South allow this ad-
ministration to lead them ofiP from their principles, when
they abandon the position which Henry Clay would have
taken, forget his name and achievements and decline any
longer to carry his banner — they lose all their claims
on me. And I say now, that until this wrong is righted,
until Kansas is admitted as a free state, I cannot act in
party association with them. Whenever that question is
settled rightly I will have no disposition to disturb the
harmony which ought to exist between the North and
South. I do not propose to continue agitation; I only
appear here to demand justice — to demand compliance
with compromises fully agreed upon and declared by
law. I ask no more, and I will submit to no less."

Questions relating to Kansas were uppermost
in the public mind. The strongest argument made
for the Kansas-Nebraska Bill had been that the
principle of popular sovereignty would be recog-
nized by its passage, and that to leave the decision
relating to slavery within the States of Kansas and
Nebraska to a vote of the inhabitants themselves,
was most in accordance with the fundamental ideas
upon which our government rests. Between the
passage of this Bill in 1854, and the meeting of
the Thirty-fourth Congress in 1855, it had become
evident that the principle of local control in Kansas
had been utterly disregarded. An influx of men from

MEMBER OF CONGRESS S9

IVfissouri had prevented the free and untmmmeled
exercise of the elective franchise by the inhabitants
of Kansas. The pro-slavery adherents in Missouri
were intensely interested in the decision whether
the new commonwealth should be a free state. A
representative convention^ held at Lexington, Mis-
souri, in July, 1855, had declared that the enforce-
ment of the restriction of slavery in the settlement
of Kansas was virtually the abolition of slavery in
Missouri. This declaration was, no doubt, the con-
viction which was general in the latter state.

An era of disorder and bloodshed arose in Kansas,
the like of which had never been known in any
community in the country since the beginning of
the Republic. In these contests, while neither side
was free from blame, it was manifest that attempts
were made to rule Kansas by force from outside,
and especially by those who lived across the Mis-
souri border. On the 19th of IVIarch, 1856, a reso-
lution was passed by the House of Representatives
that a committee, to be composed of three mem-
bers, should investigate conditions in iCansas and
report the evidence to the House. Mr. Howard of
Michigan and Mr. Sherman were selected as the
Republican members of this committee, and Mr.
Oliver of Missouri, a Democrat, as the minority
member. The investigation continued two months
or more, most of which time was spent in the lo-
caUties where the disturbances complained of had
occurred. The members of the committee saw
marching bands of armed men entering the tern-

40 JOHN SHERMAN

toiy from Missouri, and many other indications of
the lawless proceedings which were prevalent. At
times they were in actual danger; nevertheless they
were able to take a large amount of testimony, in
which they were aided by representatives of all
parties. On the completion of the trip Mr. Howard,
the senior Republican member, was in ill health,
and so it fell to Mr. Sherman to draw the report.
The testimony taken filled nearly twelve hundred
pages, more than half of which related to elections
in the territory.

Two elections had been held under proclama-
tions of the Governor, A. H. Reeder, appointed by
President Pierce. One of these elections, on Novem-
ber 29, 1854, was for the selection of a delegate to
Congress; the other, on March 30, 1855, was called
to elect members for a territorial legislature. These
two elections were characterized by unheard-of
force and fraud, most of the voters coming in armed
companies from Missouri. J. W.* Whitfield, pro-
slavery, received four fifths of the votes cast for
delegate to Congress, and pro-slavery members
were elected to the territorial legislature in every
district but one. The Free-State settlers held dele-
gate conventions at Big Springs and Topeka,
respectively, the former of which designated the
second Tuesday of October for electing a delegate
to Congress, and the latter, the same day, for choos-
ing members of a constitutional convention. Gov-
ernor Reeder, who had been removed by President
Pierce for noncompliance with the wishes of the

MEMBER OF CONGRESS 41

pro-slaveiy party, was elected delegate, and the
members elected to the constitutional convention
framed a Free-State constitution under which the
admission of Kansas as a state was asked.

The elections held by the pro-slavery party were
conducted under the semblance of legal authority,
but in a palpably illegal manner; those held by the
Free-State party entirely lacked legal authority, but
those selected were the choice of an undoubted
majority of the settlers of the territory.

The majority report, written by Mr. Sherman,
and occupying soine sixty-seven pages, though
largely made up of a summary of the evidence re-
lating to election frauds in the terrifory, contains
a succinct history of the settlement of the territory,
and the reign of bloodshed and violence which had
prevailed. This report concluded with a brief and
very temperate summary, which was, in substance,
to the effect that each election in the territory held
under the organic or alleged territorial law had been
carried by organized invasion from the State of
Missouri; that the alleged territorial legislature
was an illegally constituted body, and that their
enactments were therefore null and void; that the
alleged laws had not as a general thing been used
to protect persons and property and to punish wrong,
but for unlawful purposes; that the election under
which the sitting delegate, Whitfield, a Democrat,
held his seat, was not held in pursuance of any valid
law; that the election also of the contesting dele-
gate, Beeder, was not held in pursuance of law»

42 JOHN SHERMAN

though he received a greater number of votes of
resident citizens than Whitfield; that under exist-
ing conditions a fair election could not be held with-
out a new census, a stringent and well-guarded
election law, the selection of impartial judges, and
the presence of United States troops; that the va-
rious elections held by the people of the territoiy
as a preliminary step to the formation of a state
government had been as regular as the disturbed
conditions of the territory would allow; and that
the constitution framed by the convention held in
pursuance thereof embodied the will of a majority
of the people. Tliis report was presented to the
House of Representatives on the 1st of July, 1856,
and was read on that day. It created a profound
impression. One hundred thousand copies of the
majority and minority reports were ordered to be
printed and were circulated during the presidential
campaign, when political discussion was already
at fever heat. The majority report was extensively
distributed as a campaign document.

On the 31st of July Mr. Sherman made some
remarks on the Kansas contested election case,
favoring the unseating of Mr. Whitfield, the ac-
credited delegate from the territory, in which he
dwelt at length, and with marked ability, upon the
conditions in Kansas. In making his closing appeal
he referred to the possibility of civil war, and said :
**The worst evil that could befall our country is
civil war; but the outrages in Kansas cannot be
continued much longer without producing it." The

MEMBER OF CONGRESS 48

House decided that Whitfield was not entitled to a
seat, but also refused to seat Reeder.

The pro-slavery legislature of Kansas had met
and enacted some most remarkable laws relating
to slavery. On the 28th of July Sherman intro-
duced an amendment to the Army Appropriation
Bill to the eflpect that no part of the military force
of the United States should be employed in aid of
the enforcement of the enactments of the alleged
legislative assembly until G>ngress should decide
whether it was, or was not, a valid legislative
assembly; and further, that it should be the duty
of the President to use the military forces in said
territory to preserve peace, suppress insurrection,
repel invasion, etc. ; further, that the President be
required to disarm the present organized militia of
the Territory of Kansas, and to prevent armed men
from going into said territory. This amendment
was adopted, though by a very close vote. The
Senate struck it out, but the House insisted, and an
adjournment of the session was had on the 18th of
August without agreement. The President imme-
diately reconvened Congress in extra session, and in
his message urged the abandonment of the amend-
ment. At this special session the House proposed
a substitute modifying the original amendment,
and providing that no part of the military force of
the United States should be employed in aid of the
enforcement of any enactment theretofore passed
by the bodies claiming to be the territorial legis-
lature of Kansas. The Senate stubbornly resisted.

44 JOHN SHERMAN

and at last the House yielded in its contention by
a vote of 101 to 98.

Sherman's achievements in the first session of
the Thirty-fourth Congress gave an assured be-
ginning for a great political career. He acquired
an almost unequaled prominence, for a new mem-
ber, and showed the development of those qualities
which were the basis of his future advancement.
He excelled in concise logical statement and was
a master of excellent diction. He also showed a
clear judgment in interpreting the significance of
events, and boldness in initiative when new meas-
ures were required to meet existing conditions. The
amendment of the Army Bill restricting the employ-
ment of federal troops in Kansas was his concep-
tion, and among all the leaders of the movement
against slavery there was no one who grasped the
situation more thoroughly than he, or who was a
better master of practical plans for the furtherance
of the objects to be gained.

Buchanan was elected President in November,
1856, and, with him, a Democratic majority in the
House of Representatives. There was also a Demo-
cratic majority in the Senate, though somewhat
diminished. Early in the campaign indications
pointed to victory for Fremont, Buchanan's Re-
publican opponent, who received a most enthusi-
astic support, including that of many who had there-
tofore taken no active interest in politics, but who
were aroused by what they regarded as the moral
issues involved in the contest. As the campaign

MEMBER OF CONGRESS 45

progressed, however, a variety of circumstances
diminished the chances of the Republican candi-
date. Among them was a growing conviction of his
personal unfitness for the exalted position of chief
magistrate, a conviction which was certainly sup-
ported by his later career as general in the Union
army. The constantly recurring fear of disunion
caused conservatives to consider the prospect of his
election with apprehension. Another fact which
diminished his chances was a change in Kansas
which made conditions there more tolerable and
less oflFensive to the voters of the country. Governor
Shannon, the successor of Reeder, who had proved
extremely pliant to pro-slavery interests, was com-
pelled to resign, in the month of August. He was
succeeded by Governor Geary, a man of excellent
character, who was disposed to manage with abso-
lute fairness. For a few weeks preceding the elec-
tion, disorder in Kansas had very much decreased,
and excesses on the part of the Free-State men were
not lacking. The Free-State cause suffered from the
course of erratic or unduly radical leaders, such as
James H. Lane and John Brown.

Buchanan was advocated because he was trusted
as a statesman and a man of large experience in
public Ufe. No one had been elected President, up
to that time, who had a more varied preparation
for the position. He had been a member of the
House of Representatives for ten years and of the
Senate for an equal period; for four years he had
been Secretary of State, and had also held the po-

46 JOHN SHERMAN

sitions of Minister to Russia and to Great Britain.
In the length of his services under the national gov-
ernment, he surpassed the record of any of his
predecessors who had been candidates for the presi-
dency. In addition, for nearly three years he had
been occupying the dignified position of Minister
to Great Britain, and had thus been removed from
the hurly-burly of politics, which in time of bitter
partisanship is prone to diminish the respect en-
tertained for a public man; while at the same time
his absence had relieved him from the necessity
of coDunitting himself upon some troublesome
questions in which the public were interested. It
was nevertheless believed that he would be entirely
fair to Kansas. In Pennsylvania, where the political
battle was hottest and state pride was aroused,
banners were carried at Democratic mass meetings
on which was inscribed: ''Buchanan, Breckinridge,
and Free Kansas."

The last session of the Tliirty-fourth Congress
met in December, 1856, under circumstances more
hopeful for the anti-slavery cause than the first.
Notwithstanding the defeat of Fremont, the new
party had made a surprising showing of strength.
The three governors who had been sent to Kansas,
with the possible exception of Shannon, had be-
come either converts to the Free-State cause, or
else unwilling instruments for the execution of the
plans of the administration. Many Northern emi-
grants were ready to enter the territory in the fol-
lowing spring. A considerable share of the more

MEMBER OP CONGRESS 47

judicious and moderate of the pro-slavery leaders
had come to concede that Kansas would enter the
Union with a free constitution. Some bent all their
energies toward making it a free state, with Demo-
cratic majorities.

President Pierce, on the other hand, showed
himself one of the irreconcilables. His annual mes-
sage was more radical in its pro-slavery utterances
than any message ever transmitted by a chief magis-
trate to Congress. He accused the Republican
party of seeking to dismember the country. A bit-
ter debate upon this message followed in Congress.
Sherman addressed the House on the 8th of De-
cember. He took up the arguments and statements
of the President — especially those to the effect that
the Republican party was seeking to abolish slavery
in the states where it then existed — and answered
them with great skill and vigor. He accused the
President of going beyond his constitutional duty,
devoting " one half of his message to an arraign-
ment of a great and growing party which the errors
of his administration have caUed into being/* and
said: **This course, ... if followed by his suc-
cessors, will convert a document heretofore looked
for by all our people as an impartial state paper into
a mere partisan manifesto." In contradicting the
allegation of the President that sectional prejudice
eaUed the Republican party into being, he ascribed
the origin of the existing agitation to the Kansas-
Nebraska Act repealing the Missouri Compromise,
and added : " Sir, the very existence of the Repub-

48 JOHN SHERMAN

Bean party, which the President so much deplores,
is one of the effects of this measure. If it forebodes
all the evils he predicts, remember that he rubbed
the magic lamp which called it into being." He
expressly opposed any interference by the Northern
people with slavery in the slave states, and declared :
** If I had my voice, I would not have one single
political Abolitionist in the Northern States."

While this speech was free from the gross and
undignified abuse which characterized much of the
political discussion of that time, it was a scathing
criticism of the President. In closing, he said : **The
President, having committed his last great political
blunder, now, like a criminal, — I use the term in
no oflFensive sense, — seeks to defend himself after
he has been condemned. I hope he may live to a
hale old age, and have time to reflect that in poli-
tics, as well as in morals, honesty is the best policy."
In after years he expressed some compunctions
upon the temper of his remarks, but they were quite
in keeping with the bitter partisan feeling which
prevailed in and out of Q)ngress. Other Repub-
licans made speeches at that memorable time, but
it must be conceded that, for a comprehensive state-
ment of the position of his party, and as a reply to
the arguments of President Pierce and his party
associates, Sherman's speech was surpassed by
none.

Prior to the meeting of the Thirty-fifth Congress in
December, 1857, important events had intervened.
The inaugural address of President Buchanan was

MEMBER OF CONGRESS 49

disappointing to the opponents of slavery. His
reference to an expected decision of the Supreme
G>urt was regarded as ominous. Two days later,
on March 6, 1857, the Dred Scott decision, sup-
ported by a majority of the court, and most elab-
orately explained in the opinion of Chief Justice
Taney, was rendered. Of the points decided in this,
which has been styled the most famous of all Amer-
ican decisions, only two are necessary to be men-
tioned: first, that a negro was not and could not be
a citizen; second, that the Missouri Compromise
Act was not warranted by the Constitution because
property of every description was protected by that
instrument, and, as the Constitution recognized
property in slaves, and gave to Congress no greater
or other power over slave property than over any
other, that the right of the master to his property
in a slave was as vaUd in Kansas, or in any of the
territories, as in a slave state. Justice Curtis, in an
able dissenting opinion, pointed out that nothing
further was before the court after deciding that
Dred Scott was not a citizen, and hence it had no
jurisdiction to pass upon the validity of the Missouri
Compromise. A few brief sentences would have
disposed of the case, but apparently the members
of the court favoring the decision, with the best of
intentions, concluded to express opinions which, in
their judgment, would have the far-reaching result
of settling the slavery question. Futile efforts for
the cessation of the agitation had been put forth by
leading public men. Clay died in the pleasing hope

50 JOHN SHERMAN

that the compromises of 1850 had accomplished
a permanent settlement; Webster lost the support
of lifelong friends by his advocacy of legislation
which he hoped would destroy sectional irritation.
It was evidently the thought of Chief Justice Taney,
and his associates who joined with him in the ma-
jority opinion, that now, after the legislative and
executive branches had failed, all that was needed
for the permanent acquiescence of all parties was
the awe-inspiring declaration of the Supreme G)urt.
In December, 1856, in response to a question
whether, if the Supreme G>urt should decide that
the G>nstitution carried slavery into the territories,
he would acquiesce, even Sherman had said: '*I
answer, yes." But the opposition to slavery was so
aroused that it would not stop with disapproval of
the action of the legislative and executive branches.
It even treated the judiciary with despite, and re-
garded this opinion as but another indication of the
hold which had been gained by a nefarious insti-
tution.

The decision afforded the strongest possible
reason why the all-pervading influence of slavery
should be checked. If it should be accepted, the
question of the status of Kansas would assume
a new and unfavorable stage. The first defense
against slavery there was based upon the Missouri
Compromise, forbidding slavery north of 36° SO'.
This defense was overthrown by the Kansas-
Nebraska Bill, by which the decision was to be
left to the people of the territory. After dis-

MEMBER OF CONGRESS 51

turbances amounting to civil war, it was manifest
that the preference of the people was for a free
state; but when victory was clearly within their
grasp their triumph was to be nullified by a decision
which protected slave property within their bor-
ders, and made compromises of former years and
popular sovereignty alike nugatory. The only hope
for Kansas was to throw off the limitations which
pertained to a territorial status, and assume the
position of a sovereign state. Recognizing that state-
hood must soon be granted, eveiy effort was made
by the pro-slavery element to secure its admission
with a slave constitution. -

Succeeding events in Kansas may be briefly sum-
marized. Delegates to a constitutional convention
were elected in June, 1857, the Free-State party
abstaining from voting. In October, at Lecompton,
the delegates framed a constitution maintaining the
inviolable right of the owner of a slave to such
slave and "its increase." Although in the plan for
the submission of the constitution the question of
slavery or no slavery was submitted, there was no
opportunity to vote upon the constitution as a
whole, which in the provision referred to permitted
the continuance of the institution. This form of
submission was denounced by Senator Douglas as a
mockery and an insult; also as a trick and a fraud
upon the rights of the people. He parted company
with the President on this issue. Governor Walker,
who had been appointed Governor of Kansas by
President Buchanan, violently opposed the pro-

52 JOHN SHERMAN

posed action, saying : ^ I consider such a submission
of the question a vile fraud, a base counterfeit and
a wretched device to prevent the people voting even
on the slavery question. ... I will denounce it,
no matter whether the administration sustains it
or not."

This constitution with slavery was adopted at an
election in December, 1857, at which the Free-State
men again abstained from voting. In the territo-
rial legislature, however, the Free-State men had
a majority, and an election was ordered for Janu-
ary 4, 1858, at which the constitution itself was to
be voted upon. This* vote was overwhelmingly
against the Lecompton Constitution; nevertheless.
President Buchanan recommended to Congress the
admission of Kansas under it. A bill introduced
in pursuance of his recommendation passed the
Senate, March 23, 1858, by a vote of 33 to 25. The
House refused to pass the bill, and demanded that
the constitution should again be submitted to the
people. A compromise was agreed upon, under
which a vote upon the acceptance of grants of land
from the federal government was to be had. If
the vote was favorable to acceptance, it was to be
regarded as an expression of a desire for admis-
sion under the Lecompton Constitution. If it was
adverse, the constitution was to be regarded as
rejected and admission decUned. On the 2d of
August, 1858, the proposition was rejected by a vote
of 11,300 out of a total of 13,088. With this deci-
sive vote the desperate efforts to make Kansas a

MEMBER OF CONGRESS 53

slave state ceased. Statehood was inevitable, and
that with a free constitution. Its consummation was,
however, postponed until after the election of Presi-
dent Lincoln, when the act of admission was passed.
At the first session of the Thirty-fifth Congress
Sherman continued to take a prominent part in the
debates on Kansas, his most important contribu-
tion being made in January, 1858. He presented a
resolution, unanimously passed by the legislature of
Ohio, requesting him to vote against the admission
of Kansas under the Lecompton Constitution or
any other constitution which had not been approved
by a vote of the people. He paid much attention to
frauds in the elections of October and December,
1857, for election of territorial delegates and rati-
fication of the Lecompton Constitution respectively,
pointing out that from a village of six houses 1628
votes were returned. The names of the alleged
voters had been copied in alphabetical order from
a Cincinnati directory, and included the name of
Salmon P. Chase, then Governor of Ohio. From
an Indian reservation, where there were fourteen
voters, 1200 votes were returned. He said that
impetuous violence might succeed for a time but
would leave nothing but bitterness, and closed by
saying: **Let us not war with each other; but with
the grasp of fellowship and friendship, regarding
to the full each other's rights, and kind to each
other's faults, let us go«hand in hand in securing to
every portion of our people their constitutional
rights."

54 JOHN SHERMAN

During this G>ngresS) Mr. Sherman was a mem^
ber of the Committee on Naval Affairs. Two ques-
tions were referred to this committee which gave
free scope to his abilities. The first was in relation
to the arrest of Greneral William Walker, by Com-
modore Hiram Paulding, in Nicaragua. Walker was
a persistent, adventurous filibuster. His violations
of the laws of neutrality were allowed to pass with
impunity, partly because the country admired his
reckless daring, but more because his efforts were
directed to an enlargement of territory for the ex*
ploitation of slavery. He had gained a foothold in
Nicaragua, and reestablished slavery, which had
been abolished thirty-two years before, but after*
wards he was driven out by a combination of the
Central American states. While he received sup-
port from some portions of the South it was alleged
that he was intriguing to gain the cooperation of
England. In 1857 he planned an expedition to
Nicaragua against which a letter of warning was
issued by Lewis Cass, Secretary of State. Com-
mander Chatard, a naval officer, was suspended
for failure to arrest Walker before landing. Later
Commodore Paulding, with a naval force, arrived
at San Juan, in Nicaragua, an^sted Walker, with
his followers, and brought them to the United States.

Notwithstanding the circular letter, and the sus-
pension of Commander Chatard, Paulding's course
was not approved by the administration. President
Buchanan, in a message, expressly stated: ** Com-
modore Paulding has, in my opinion, committed

MEMBER OF CONGRESS 65

a grave error.'* It was maintained that he had no
right to make an arrest on foreign soil. A majority
of the Committee on Naval Affairs joined in a re-
port to the same effect. This report called atten-
tion to the object of the statute under which the
arrest was made, viz.: "for the purpose of pre-
venting the carrying on of any such expedition or
enterprise," that is, filibustering enterprise, * • from
the territories or jurisdiction of the United States,
..." and alleged that this restricted the right of
arrest, or detention, to the high seas, saying the
phrase "carrying on any such expedition or enters
prise " carried with it the idea of motion or progres-
sion. They further said : " We shall not here take
the time to inquire into the merits of Walker. If he
had violated our laws in fitting out an expedition
against Nicaragua, as doubtless he had, opportuni-
ties had been afforded for holding him to account,
but those opportunities had been lost. ... He had
escaped the avenger and, so far as we were con-
cerned, had gotten into sanctuary."

These distinctions were commonly regarded as too
refined for practical application, and as prompted
by secret sympathy for Walker's expedition. Mr.
Sherman, in preparing the minority report, main-
tained that the duty to arrest applied after a land-
ing as well as before, and, at all events, that any
objection on the part of Nicaragua arising from the
landing on foreign soil was removed by the action
of that government in returning thanks to the United
States for the act of Commodore Paulding. No

56 JOHN SHERMAN

action was taken by either House upon the reports,
although divers resolutions were presented, vary-
ing from censure of O)mmodore Paulding to the
granting of a medal.

The other question considered by the naval
committee was in the session of the following win-
ter, when a res6lution was introduced by Mr. Sher-
man for the investigation of the conduct of certain
officials of the Navy Department, especially in the
Brooklyn Navy Yard. It was claimed that in the se-
lecting of purchasing agents and the awarding of
contracts the law had been violated, to the detri-
ment of the service, as well as for the purpose of
influencing pending elections; also that in the dis-
tribution of patronage, by allotting it to members
of Congress, discipline was destroyed and the pub-
lic service injured. A mass of testimony was taken
and men of all parties were compelled to admit that
glaring abuses existed, and subordinate officers
were inefficient; but the majority maintained that
nothing had been shown which should impugn the
integrity of the Secretary of the Navy, and pre-
sented resolutions, the first of which is character-
istic of the apologetic course pursued by political
parties when seeking to extenuate admitted abuses.
It is in the following language :

"Resolved, That the testimony taken in this investiga-
tion proves the existence of glaring abuses in the Brook-
lyn Navy Yard, and such as require the interposition of
legislative reform, but it is due to justice to declare that
these abuses have been slowly and gradually growing up

MEMBER OF CONGRESS 57

during a long course of years, and that no particular ad-
ministration should bear the entire blame therefor."

The minority report, prepared by Mr. Sherman,
recommended resolutions censuring the President
and the Secretary of the Navy, stating, among other
things, that the Secretary of the Navy had, with
the sanction of the President, abused his discre-
tionary power. It condemned the distribution of
patronage in the navy yard among members of
Congress, and the action of the President and the
Secretary of the Navy in considering the party re-
lations of bidders, and in having regard for the ef-
fect of a^^arding contracts upon pending elections.
Although no action was taken on these recommen-
dations of censure during the Thirty-fifth Congress,
yet in the succeeding Congress the resolutions of
the minority were adopted in the House by a vote
of nearly two to one, a large number of Democrats
voting for each, and resolutions calling for investi-
gation of the conduct of the President were also
adopted.

An interesting phase of this controversy was the
action of the President. He responded with a vig-
orous protest, in which he complained that the
resolutions for investigation deprived him of the
constitutional guards for his protection which he
possessed in common witli every other citizen of the
United States. Also, that his constitutional inde-
pendence as a coordinate branch of the government
was thereby assailed. He attacked those who had

58 JOHN SHERMAN

offered the resolutions, and in a message to the House
under date of June 22, 1860, he says : " The House,
on a recent occasion, have [has] attempted to de-
grade the President by adopting the resolution of
Mr. John Sherman." It must be admitted that
these resolutions were very unusual. It was also
very unusual for the President to send such an
answer. The mention by the President of members
of the House or Senate by name is almost without
precedent in communications from the Executive.
This investigation led to radical reforms in the
management of navy yards, and displays one of Mr.
Sherman's most striking qualifications throughout
his public career, namely, his keen insight for ad-
ministrative management of different departments
of the government.

, On the 27th day of May, 1858, Mr. Sherman
spoke on national expenditures, giving attention in
detail to the condition of the finances, and attack-
ing divers abuses which then existed. This was his
first elaborate treatment of subjects which were
destined in later years to absorb his time. He
pointed out cases wherein the departments assumed
the power to transfer appropriations, made for a
specific purpose, to objects differing from those for
which they had been made; also another abuse in
the making of contracts in advance of appropria-
tions. His argument was intensely partisan, and
based upon the idea that no reforms were possible
except with a House of Representatives in opposi-
tion to the administration. He asserted that four

MEMBER OF CONGRESS 59

years of modem Democratic administration cost
more than twenty-six years in the earlier and purer
days of the Republic. He gave warning of the dan-
ger of misceUaneous items, and showed that thirty-
ei^t pages of the estimates for the session were
devoted to items of this nature, amounting .to
$18,946,189, and said: ''In this vast mausoleum
are buried your secret contracts, your jobs, your cus-
tom-houses, your marine hospitals, your post-office
deficiency and post-offices, your coast-survey, your
court-houses, — and a vast catalogue of jobs to
partisan favorites." He pleaded for a return to the
old principle of the House originating and control-
ling supply bills, and thus holding the Executive
and Senate in check, and added that control over
the public purse was "the pearl beyond price with-
out which constitutional liberty in England would
long since have fallen under the despotism of the
Crown."

The abuses of which he complained were only
partially corrected at the time. Indeed, with the
lavish expenditures during and after the Civil War,
they were greatly aggravated. In May, 1870, in the
Senate, Sherman said the Admiral of the Navy had
embarked upon a plan for building a navy in reli-
ance upon the unexpended balances accumulating
from appropriations under various heads during
and since the war. This plan was found to be for-
bidden by a brief provision in an appropriation bill
of February 12, 1868, restricting appropriations
solely to the objects for which they were made. In

60 JOHN SHERMAN

1870 a further act was passed, restricting the ex-
penditure of annual appropriations to the payment
of expenses, or the fulfillment of contracts properly
incurred or made during the year for which they
were intended. In 1874 another statute was passed
making the law stiU more stringent. Under this
legislation, unexpended balances on appropria-
tions, amounting to $174,000,000, were retained in
the Treasury; $36,000,000 belonging to a single
bureau.

This speech attracted wide attention, and not only
received respectful consideration from political
opponents as well as friends, but was published in
full in many of the journals of the day.

But for the all-absorbing slavery contest, it is
probable that Mr. Sherman would have given his
most earnest attention to problems of administra-
tion and finance. On several occasions he apolo-
gizes for a continuance of the discussion upon
Kansas, by stating that he had hoped the time of
the House could be given to the financial manage-
ment of the country, but he felt compelled, by the
conditions existing, to speak upon the contest there.

THE THIBTY-SIXTH CONGRESS

On the Sth of December, 1859, the Thirty-sixth
Congress met with 109 Republicans, 101 Democrats,
and 27 Americans. A speakership contest similar
to that of 1855-56 was anticipated. In the former
instance, a choice was made by the adoption of the
plurality rule, but at this time party feeling was
much more bitter, and it was not believed that a
majority would agree upon such a settlement. Mr.
Sherman and Mr. Galusha A. Grow were the Re-
publican candidates for the speakership. It was
agreed that no caucus should be held, but that the
one receiving the larger number of votes on the first
ballot should have the united support of the Re-
pubUcan party. On the first ballot Mr. Sherman
received the larger number. The vote as between
Mr. Sherman and Mr. Grow, when viewed from
the standpoint of Mr. Sherman's future affiliations
with his fellow members, presented several anom-
alies. Mr. Morrill of Vermont, with whom he
was more closely associated than with any one else
in his legislative career; Mr. Schuyler 0)lfax, who
was then, and later, a close personal friend; Mr.
William Windom of Minnesota, who was strongly
urged by Sherman for Secretary of the Treasury in

02 JOHN SHERMAN

President Harrison's cabinet in 1889, — all pre-
ferred Mr. Grow, and cast their votes for him, while
Roscoe Conkling, with whom Sherman was to have
serious collisions, voted for him. Of the eleven mem-
bers from Massachusetts, ten, including Charles
Francis Adams, Henry L. Dawes, and Anson Bur-
lingame, voted for Sherman. Francis E. Spinner,
of the well-known signature, and Reuben E. Fen-
ton, afterwards Governor of New York, E. B.
Washbume, and Owen Lovejoy, of Illinois, voted
for Grow. Mr. Sherman's name was placed in
nomination by Thomas Corwin. Immediately after
the first vote, Mr. Clark of Missouri introduced a
resolution which created a most bitter controversy.
It was to the effect that no member of the House
who had indorsed the work of Hinton R. Helper,
entitled "TThe Impending Crisis of the South; How
to Meet It, " was fit to be Speaker of the House. It
appeared that both Mr. Sherman and Mr. Grow
had signed a paper indorsing this book, though
both seem to have signed without any examination
of its contents, or any comprehension of the storm
which would be raised by it.

The failure of Mr. Sherman to obtain the speak-
ership has been commonly ascribed to this indorse-
ment. This remarkable volume was written by
Helper in North Carolina, when only twenty-seven
years of age, and was first published in the year
1857. It was a protest against slavery from the
standpoint of a white man, who attacked it, — not
because of sympathy for the slave, but from a con-

THE THIRTY-SIXTH CONGRESS 68

viction that the institution was demoralizing, and
closed the gates of opportunity to the non-slave-
owning whites of the South. In the preface he states,
with a well-understood reference to Mrs. Stowe's
"Uncle Tom's Cabin," that women might paint in
fiction the evils of slavery, but it remained for men
to give the facts. It included numerous tables in
which comparisons were made between the North-
em and the Southern States. The author points
out that while the average value of lands in New
York was $36.97 per acre, the average value in
North Carolina was only $3.06, and maintained
that it would be far better for the slaveholders them-
selves to lose the value of their slaves, and thereby
obtain an enormous increase in the value of their
lands. His generalizations were very bold, and his
inferences from figures would not all of them bear
analysis. He not only made comparisons based
upon the greater wealth of the North, but made
unfavorable contrasts of the mental standing of the
inhabitants of the two sections, asserting that the
South had no literary or scientific men to compare
with those of the North.

The book cteated a profound sensation. It was
proscribed in the South, but was found in every
bookstall in the North. To the reader of to-day it
would seem that its author was a bitter partisan of
the Republican party, although he disclaimed any
partisanship. In speaking of Buchanan and Fre-
mont, he refers to the former as "the timid Sage
of Wheatland," and to the latter as "the dauntless

64 JOHN SHERMAN

Finder of Empire." The slaveholders were termed
the "" lords of the lash,*' and no effort was spared to
cause them to be regarded as an offensive and pro-
scribed class. To them, this production was even
more execrable than "Uncle Tom's Cabin."

Ineffectual balloting for Speaker continued for
eight weeks, during which time it was plainly appar-
ent that the plurality rule, which had been adopted
four years earlier, would not be agreed upon by the
House. The time was largely occupied by debates
of the most bitter nature, in which the Southern
members took the leading part. Mr. L. Q. C.
Lamar, and others, uttered threats of secession, of
a bolder and more emphatic nature than had been
heard before. In referring to the selection of a
Speaker, one member expressed the hope that the
House would be saved from " the burning, withering,
blistering curse and shame which would result from
the putting in that chair the gentleman from Ohio.**
On the 1st of February, 1860, after the withdrawal
of Sherman from the contest, William Pennington,
ex-Governor of the State of New Jersey, a man
who had not previously served in the House, was
elected Speaker. Mr. Sherman used to relate with
satisfaction, the surprise which was manifested
because Mr. Pennington filed a list of his commit-
tees, in which excellent selections were made, only
a few days after the election, and explained it in this
manner: Pennington came to him and asked his
assistance, stating that he was new in his acquaint-
ance with the House, and could not judge of the

THE THIRTY-SIXTH CONGRESS 65

capabilities of the members. Sheiman responded
by showing him a proposed assignment of members
on conmiittees which he had prepared while the
balloting was in progress, anticipating that he might
be elected. Mr. Pennington immediately adopted
it with very slight changes, placing Mr. Sherman at
the head of the Committee on Ways and Means.
The business of the session had been very much
retarded by the long struggle over the speakership,
but after that was settled it was conducted in a
manner which strikingly contrasted with the boister-
ous and violent discussions of the first two months.
Mr. Sherman's attention was given, for the most
part, to the appropriation bills. Mr. Morrill, his
colleague on the Committee on Ways and Means,
prepared the tariff bill which afterwards bore the
name of its author, and which passed the House
May 10, 1860, but did not pass the Senate until the
following winter.

The Republican party, although in the minority
in both Houses, secured the adoption of two meas-
ures in the session of 1860-61 which were entirely
in accordance with Republican policies. The one
was that for the admission of Kansas, the other the
Morrill Tariff Act. But for the withdrawal of
the senators of the seceding states, these measures
probably could not have been passed. The Morrill
Tariff Act deserves especial attention, because it
was the first legislation upon tariff which was placed
upon the statute-book by the Republican party.
It was by no means so distinctively a protective

66 JOHN SHERMAN

measure as later tariff acts. It contained but few
of the essential features which were afterwards
adopted as part of the Republican policy of pro-
tection.

There was no uniform tendency in the tariff leg-
islation of the country prior to the Morrill Tariff
Act, either in the rate of duties or the object for
which they were imposed. While several tariff bills
had been drawn professedly for revenue only, at
no time had the policy of fostering domestic manu-
tures been entirely disregarded. The preamble to
the first tariff act, passed July 4, 1789, reads:
** Whereas, It is necessary for the support of gov-
ernment, for the discharge of the debts of the United
States, and the encouragement and protection of
manufactures, that duties be laid on goods, wares,
and merchandise imported." In the debate upon
it, Mr. Hartley of Pennsylvania said: "I think it
both politic and just that the fostering hand of
the general government should extend to all those
manufactures that will tend to national utility."
Under it specific duties were levied on certain
articles, and ad valorem duties, varying from five to
fifteen per cent., on others.

During the next twenty years there was a con-
siderable increase in rates, and a more minute
classification, such as would naturally arise from
a more perfect knowledge of the articles imported,
and their different qualities. The increase in rates
seems rather to have been caused by the need of
additional revenue than from any desire to aid

THE THIRTY-SIXTH CONGRESS 67

domestic industry. The Embargo Proclamation of
President JeflFerson in 1807, followed by the Non-
Intercourse Act of 1809, paralyzed foreign trade
and necessitated a domestic supply for many arti-
cles which theretofore had been imported. The
War of 1812 increased this necessity, and, as a re-
sult, domestic manufactures largely increased. On
the other hand, after the Peace of 1815, importa-
tions of manufactured articles were greatly multi-
plied, especially from Great Britain. TTiis was
succeeded by industrial and commercial depression
of a veiy serious nature. All these circumstances
strengthened the movement for protective duties,
and each succeeding tariff act, until and including
that of 1828, made substantial increases in rates.
This Act marks the maximum of average duties
prior to the Civil War. It was styled by its enemies
**The Tariff of Abominations.'^

In 1833, after a threat of nullification in South
Carolina, another bill was passed as a compromise,
the aim of which was a gradual reduction of ad
valorem duties — which at that time averaged
thirty-three and eight tenths per cent. — to twenty
per cent, by July 1, 1842. The final reduction was
in force only two months, from July 1 to Septem-
ber 1, 1842, when another bill raising duties went
into effect, which, like the Act of 1828, was distinct-
ively a protective measure. From the Act of 1842
until the Morrill Tariff Act all legislation tended
toward a material decrease in duties. The Act of
1846 levied ad valorem duties exclusively, and made

68 JOHN SHERMAN

veiy material reductions. The Act of 1857 still fur-
ther reduced duties.

The principal argument for the Morrill TariflF
Act was the need not of protection, but of revenue.
Mr. Sherman, after he became Chairman of the
Committee on Ways and Means, pointed out the
rapidly growing deficit in public revenues, and
advocated a tariff bill which should be sufficient
to pay the deficit accruing since the passage of the
Tariff Act of March 3, 1857, and supply a sufficient
revenue for the future. In some remarks made on
May 7, 1860, he said : ** This deficit is not merely
temporary, but it is permanent. . . . We must
either diminish the expenses, increase the public
debt, or increase the revenue." He showed that
under the operation of the tariff of 1857 the deficit
in three years had amounted to over $52,000,000.
He said that the public lands could not be relied
on as a source of revenue, and advocated a sys-
tem of preemption laws, or a homestead biU. He
advocated the imposition of specific duties in
place of ad valorem so far as practicable, and stated
that this change was in accordance with the views
and wishes of the President, though not favored
by the Secretary of the Treasury, Mr. Cobb. In his
remarks on the subject he seems by no means to
have overlooked the policy of fostering home manu-
factures. He says : " There is another reason why
I desire to have this bill pass, and that is because
it is framed upon the idea that it is the duty of the
government, in imposing taxes, to do as little injury

THE THIRTY-SIXTH CONGRESS 6§

to the industry of the country as possible; that they
are to be levied so as to extend a reasonable protec-
tion to all branches of American industry."

That protection was not considered to be the ob-
ject of the measure is shown by the remarks of Mr.
Morrill. In presenting the Bill he said : " The prin-
ciples upon which the present tariff bill are [is]
founded do not necessarily raise the question of
protection per se. Our manufacturers have made
such advance that a revenue tariff with proper dis-
criminations will be found, in most instances, aU
that may be required for a fair share of prosperity."
And at another time he said: "The highest duties
in the biU are proposed for the purpose of revenue.
The manufacturers might get along with lower
duties, but we require the revenue."

Mr. Sherman stated in a discussion with his col-
league, Mr. Stanton, " When Mr. Stanton says that
the manufacturers are urging and pressing this bill,
he says what he must certainly know is not correct.
. . . The manufacturers have asked over and over
again that they should be let alone. The tariff of
1857 is the manufacturers' bill, but the present bill
is more beneficial to the agricultural interest than
the tariff of 1857." He then points out how much
more favorable it is to the domestic growers of wool.

The average rates in the Morrill Tariff Bill were
materially less than in several of the tariff acts which
had preceded it, and, upon a majority of items, less
than in the Bill of 1842. The general range of ad
valorem duties was from ten to thirty per cent.

70 JOHN SHERMAN

An especial feature of the Bill, and one in line
with later Republican policies, was the adoption of
specific duties so far as possible. The duties in the
two preceding tariff acts had been exclusively ad
valorem. In acts prior to 1846, specific and ad va-
lorem duties alike appear in each measure. Occa-
sionally it was provided, in the case of ad valorem
duties, that the value of the imported articles should
not be regarded as less than a certain sum. Duties
so imposed were styled minimum duties. In other
cases it was provided that a specific duty should
not be less than a certain per cent, ad valorem. Some-
what later, compound duties, or those which com-
bined the specific and ad valorem, were brought
into use, but these were employed only to a limited
extent in the Morrill Tariff Act, and were made ap-
plicable to the most expensive brands of cigars, iron
and steel wire, woolen goods, and ready-made cloth-
ing. The avowed object in the case of woolens was
to furnish a compensatory duty for the benefit of
the manufactured domestic product, so as to make
allowance for the duty on raw wool.

As a revenue-producing measure this Act proved
a failure, largely because of the troubled condition
of affairs incident upon secession. As a part of the
fiscal history of the country it is of minor importance,
because it remained in effect unchanged only from
April 1 to August 5, 1861, the date of the passage
of the first revenue act of the war period. There
is no indication that in the framing of this measure
the possibilities of war were taken into account, in

THE THIRTY-SIXTH CONGRESS 71

the kast degree. Several omtioning influences le-
quiiedTeiy material increases in the later acts, chief
among which were the necessity for greater reirenue
created by the existence of civil war, and the es-
tablishment of the internal revenue system, which
greatly added to the cost of many domestic articles
and made compensatory duties necessaiy. On the
final passage of the BiU in the House, May 10, 18G0,
Mr. Sherman took chaige. Several objectionable
amendments had been adopted, but by his skiUful
pariiamentaiy management it was restored to a
form practically identical with that in which it was
introduced by Mr. Morrill. In later years Mr. Sher-
man said of this measure: **I have participated in
framing many tariff bills, but have never succeeded
in securing one that I entirely approved. The Mor-
rill Tariff Bill came nearer than any other to meet-
ing the double requirement of providing ample
revenue for th^ support of the government, and of
rendering the proper protection to home indus-
tries." Had peace continued it would no doubt have
satisfied existing conditions.

His views with reference to tariff at that time and
later were well defined. He regarded an ideal sys-
tem as requiring that discussions upon the subject
be removed from partisan politics, and favored the
appointment of a representative non-partisan com-
mission upon whose recommendations Congress
should act. He realized the impossibility of fram-
ing a perfect tariff law when the representatives
of so many sections and interests have a voice in

72 JOHN SHERMAN

enacting it, and thus the decision whether an ar-
ticle shall be subject to duty is. determined, or at
any rate vitally influenced, by comproniise rather
than by an unbiased judgment. He opposed dis-
criminating duties, and gave only reluctant support
to propositions for reciprocity. He favored the mul-
tiplication of ports of entry, both on the borders
and at the more important points in the interior,
maintaining that the convenience of the importer
should be subserved, and that he should be enabled
to receive an imported article at no great distance
from his home. In his judgment the object to be
gained thereby outweighed the disadvantages of
increased expense of collection and the danger of
fraud and inequality in appraisement.

He became a stalwart protectionist, though not
an extremist in this regard, favoring specific rather
than ad valorem duties. It is especially to be noted
that he was at all times strongly opposed to the
admission of competing raw materials free of duty,
and regarded the continuance of protection for this
class of imports as absolutely essential. Every leg-
islator must be more or less influenced by his en-
vironment and by his constituency. In the first Con-
gress of which Sherman was a member, he took a
stand for tariff on wool, which was a leading product
of his state. In all his subsequent service in Con-
gress he was urged by the advocates of duties on
wool to maintain the same position. It is evident
that if this species of raw material is to be protected,
other varieties must logically receive the same con-

THE TfflRTY-SIXTH CONGRESS 7S

sideration.^ He favored a classification of imports
into schedules, so that rates of duty on items of one
or more schedules could be advanced or lowered,
to meet changing requirements of the revenue, with-
out disturbing the general scheme of taxation.

Events which threatened the overthrow of the
slave power followed each other in quick succession
in the spring and summer of 1860. The nomination
of Abraham Lincoln for the presidency was received
with great enthusiasm. The Democratic National
Convention was unable to agree upon a candidate,
and the result was a disruption fatal to success at
the election. The existence of a third organization
known as the Constitutional Union party, which
sought in its platform to ignore the question of
slavery, was sure to draw a larger vote from
Democrats than from Republicans. Under these
circumstances the Republicans entered the cam-
paign of 1860 with confidence.

The leading political events which had strength-
ened the anti-slavery movement were the Fugitive
Slave Law of 1850, the Kansas-Nebraska Act of
1854, and the violent e£Forts after this Act to make
of Kansas a slave state. In addition, public opinion
was kept aroused by a variety of minor events, each
of which for a brief time caused an excitement equal
to, or even greater than, that occasioned by the pas-
sage of laws or by public policies which displayed
the evils of slavery. Among these may be counted
Mrs. H. B. Stowe's work entitled "Uncle Tom's
^ See pages 346, 347, infra.

74 JOHN SHERMAN

Cabin." Mr. Khodes, the historian, says that of
the literary forces which aided in bringing about the
immense revolution in public sentiment between
1852 and 1860, we may affirm with confidence that
by far the most weighty was the influence spread
abroad by this book. It was first published as a se-
rial in the " National Era," an anti-slavery publica-
tion at Washington, and appeared in book form in
March, 1852. Three hundred thousand copies were
sold within a year. With this work of fiction may
be counted Helper's book, already referred to, which
was destined to increase the indignation against
slaveiy. Another influence in this direction was the
series of debates between Lincoln and Douglas, in
the summer and autumn of 1858. Mrs. Stowe's
novel appealed powerfully to the emotional and
moral nature. The debates between Lincoln and
Douglas contained the clearest expositions of the
essential principles of the two parties which, up to
that time, had been made.

The growing feeling, which was increasing in
tension, was greatly intensified in the following year
by a futile attempt on the part of John Brown to
excite an insurrection of negroes in Virginia. Brown
was a fanatic, intensely religious, fit to live only. in
a time when the sword is the implement which
moves men and shapes the destiny of nations. Bred
in an atmosphere of conflict, he was not fitted for
an orderly, modem community. At the same time
his sincerity and courage were admitted, and his
resolution upon the scaffold awakened a degree

THE THIRTY-SIXTH CONGRESS 75

of admiration even among those who abhorred
his actions. Politicians of the time engaged in per-
plexing conjectures as to which party would be most
injured by his actions. Excitement and bitterness
on both sides were certainly increased by this law-
less raid, while at the same time the people of the
country were brought face to face with the serious-
ness of the problems which were demanding solu-
tion. Those who loved law and order were appalled
by such an audacious and criminal outbreak. Those
most bitterly opposed to slavery looked upon the
attempt as a new illustration of the horrors of the
system at which it was directed.

Mr. Sherman took a more prominent part in this
campaign of 1860 than in any preceding one. Fart
of his time was spent in the doubtful States of Penn-
sylvania, Indiana, New Jersey, and Delaware. In
order to gain the sup{X)rt of Douglas Democrats,
he argued that the choice of candidates lay between
Lincoln and Breckinridge, and that the real issues
were the questions of union or disunion, free or
slave institutions. In a speech delivered at Phil-
adelphia, which was widely circulated, he empha-
sized the fact that Lincoln was the only candidate
who could secure a majority in the Electoral Col-
lege, and, if he failed of election, the choice must
be made by the House of Representatives, in which
case the vote of the smallest state would have equal
weight with that of the largest.

His work during the session of 1860-61, after the
election of Lincoln; was divided between the ap-

76 JOHN SHERMAN

propriation bills of which he took charge as Chair-
man of the Committee on Ways and Means, and
ineflfectual efforts to promote a compromise which
should prevent disunion. He was more unyielding
than many of his associates in the matter of conces-
sions to the South. He had come to recognize that
the conflict was an irrepressible one, and felt sure
that no amicable adjustment could be reached. He
especially favored measures which would detach the
Border States from those of the far South, believing
that in this manner secession could be nipped in
the bud or rendered futile. Nevertheless he voted
for a constitutional amendment, offered as a com-
promise, which apparently abandoned the cause
for which the more radical anti-slavery advocates
had been contending for many years. This amend-
ment provided: *'No amendment shall be made
to the constitution which will authorize or give to
Congress the power to abolish, or interfere, within
any state, with the domestic institutions thereof,
including that of persons held to labor or service by
the laws of said state." It was recommended by a
committee of thirty-three members from the House,
and passed there by a vote of one hundred and
thirty-three to sixty-five, and in the Senate by ex-
actly two thirds, or twenty-four to twelve. Efforts
for compromise were made by a committee of thir-
teen from the Senate, and by a peace congress
made up of commissioners assembled under ap-
pointment by the governors of twenty-one states,
but all failed, and state after -state seceded, until.

THE TmRTY-SIXTH CONGRESS 77

when President Lincoln was inaugurated, on March
4, 1861, seven states denied the authority of the
federal government, and others sympathized with
them in the stand they had taken. President Buch-
anan had disclaimed, in his message, the right of
the central government to coerce a state, and then
in a hesitating manner sought to maintain national
authority. The North was waiting for the admin-
istration of the newly elected President with the
thought that when he should take the reins, some-
thing decisive, or at least definite, would occur.

Mr. Chase, who had been elected to the Senate
from Ohio for the six years beginning March 4,
1861, was selected by President Lincoln as Secre-
tary of the Treasury. Consequently he resigned his
senatorship and after indecisive balloting for a
couple of weeks in the Ohio legislature, Mr. Sher-
man was elected in his place. At first Sherman did
not exert himself in the senatorial contest. It was
his thought that he had reasonable assurance of ob-
taining the position of Speaker of the House, which
in view of the unusual circumstances of. his failure
to be chosen in the preceding Congress would be
regarded as a most gratifying triumph. Neverthe-
less his correspondence of that time shows that his
preference was to enter the Senate. Mr. Sherman's
service of six years in the House of Representatives
terminated with his election to the Senate.

The advancement of a member of a legislative
body must depend upon a variety of qualities, and,
in a measure, upon circumstances beyond his con-

78 JOHN SHERMAN

trol. Some at the very beginning win prominence
and speedily gain a leading position: others, attract-
ing the same attention at first, do not acquire in-
creased reputation, because their gifts are super-
ficial or their judgment is faulty. This is especially
true of those who rely upon oratorical talent merely.
With others still, qualities of leadership are slow
to develop, and it is only after years that the
beginner, who at first was lost in the complicated
shuffle, is accorded the respect which his abilities
deserve. Influence in such a body must depend
largely upon the confidence which is given to the
member in question. This confidence can only be
gained by thorough acquaintance with him, by
knowledge that his powers are symmetrically de-
veloped and that his vision is not clouded by pre-
judice or passion. Time is required to tell of the
reliability of his judgment, because the future must
verify the prognostications he has made, and, in a
great degree, his efficiency as a legislator is ascer-
tained by his capacity correctly to foresee the future
bearing and result of the measures which he ad-
vocates. In a time of partisan excitement, when
calmness is not the demand of the hour, an undue
prominence is often given to those who are most
radical. Fierce denunciation is accepted as a sub-
stitute for ability and good judgment.

Mr. Sherman not only gained prominence at the
very outset, but increased in reputation as his quali-
ties became known. In the very first month of his
membership in Congress, when a motion to adjourn

THE TfflRTY-SIXTH CONGRESS 79

for the holidays was made, he suggested that it was
the first duty of the House to select a Speaker, and
opposed the adjournment. His view was accepted
and the House continued balloting. In the next
session his answer to the message of President
Kerce, already referred to, was regarded as one
of the ablest presentations of BepubUcan principles.
Within four years after taking his first oath as a
member he was the candidate of his party for
Speaker. His speeches in the House, for fire and elo-
quence, compare favorably with those which he later
delivered in the Senate. His native disposition was
conservative, but his course was characterized by
strenuous partisanship and readiness to sustain such
radical views as belonged to a stormy time. His
progress wds steady, though at no time character-
ized by meteoric flights. He certainly gained a po-
sition which could only be occupied by one pos-
sessed of striking ability and solid judgment.

MEMBER OP THE SENATE. — THE CIVIL WAR AND
ITS PROBLEMS

The administration of President Lincoln was con-
fronted with problems as serious as any ever en-
countered by a nation in time of trial. They were
political, military, and financial. A vital feature of
the political situation was the advent to power of a
party organization made up of incongruous ele-
ments, whose success resulted from a combination
of those opposed to existing policies and methods.
The Republican party, though representing one of
the most vigorous of political uprisings, had gained
its strength with the people and its success at the
polls largely by the support of those who were actu-
ated by ethical principles. When intrusted with
the administration of .affairs its leaders realized the
difficulty of maintaining an affirmative policy which
would, at the same time, deserve the approval of
those who had identified themselves with it on high
moral grounds, and command the united support
of the people.

Among the most earnest supporters of President
Lincoln had been the opponents of the Fugitive
Slave Law, yet at the beginning of his inaugural ad-
dress, he referred to the clause in the Constitution

MEMBER OF THE SENATE 81

relating to the restoration of fugitives, and said that
all members of Congress had sworn to support the
whole Constitution. Mr. Trumbull of Illinois had
said, in a discussion with Jefferson Davis, that the
Fugitive Slave Law would probably be enforced
with greater certainty under the administration of
Mr. Lincoln than under the administration of either
Buchanan or Pierce. Mr. Seward, while advocating
a modification of that portion of the law which
obliged private persons to assist in its execution,
nevertheless maintained the validity and propriety
of its general provisions. Mr. Lincoln had declared
that the country could not endure half slave and
half free, and that the agitation on the subject of
slavery would not cease until the people could rest
in the belief that it was in course of ultimate ex-
tinction, but he quoted, in his inaugural, from one of
his speeches in which he had said : " I have no pur-
pose, directly or indirectly, to interfere with the insti-
tution of slavery in the states where it exists. I be-
lieve I have no lawful right to do so, and I have no
inclination to do so." One of the fundamental ideas
of the Republican party had been that slavery must
be excluded from the territories by national legis-
lation, but, after the election of President Lincoln,
Colorado, Nevada, and Dakota were granted tem-
porary governments, by the aid of Republican votes,
with no provision for exclusion. Among the mem-
bers of political organizations at the North, there
were many who sustained President Lincoln be-
cause they loved the Union, but who would not for

82 JOHN SHERMAN

a moment have advocated the use of force with the
thought that it was intended to destroy slavery.

In the management of the diflScuIt problems of
the time, President Lincoln displayed transcendent
qualifications in adapting measures to existing con-
ditions, giving the utmost consideration to public
opinion, yet leading the people with such dexterity
as to avoid disastrous opposition, while at the same
time securing the adoption of the policies in which
he believed.

It may be regarded as a fact of history that, but
for the firing on Sumter in April, 1861, the states
which remained true to the Union would not have
been aroused to use coercion. Except for the dis-
graceful defeat at Bull Run, in July of the same year,
the magnitude of .the undertaking would not have
been realized, and adequate preparation for prose-
cuting the war would not have been sustained.
Still further, the disastrous Peninsular campaign of
1862 paved the way for the Emancipation Pro-
clamation, promulgated in September of that year,
and the further steps for the abolition of slavery.

Military problems were no less difficult and found
few or none competent to solve them. Within four
years after the firing upon Sumter, two million men
were enlisted; a computation has. been made that
this number constituted a larger proportion of the
male population of the loyal states than enUsted in
the Revolutionary War. The great lesson to be
derived from the conflict between the South and the
federal government is the impossibility of prose-

MEMBER OF THE SENATE 8S

cuting war in the most effective manner by a nation
of civilians. There was no considerable number of
regular soldiers, and the volunteers and militia,
though imbued with a patriotism and an individual
courage never surpassed by any soldiers in the field,
proved that time and training are required to secure
a thoroughly effective army. Sanitary arrangements
which are so important in war were crude and
entirely insufficient to make provision for so large
a force. In addition, those who were enlisted for the
service desired to keep in touch with home. Fur-
loughs were frequent, and at all times the percent-
age of absentees was very large. In the recruiting
of troops, and the execution of the draft, it was
constantly necessary to take into account political
considerations. Governors of states and prominent
politicians frequently sent word to President Lin-
coln that unless the draft should be postponed or
modified, important elections would be lost. The
severe punishments for desertion and other mib'tary
offenses, which are so necessary in maintaining
discipline, were looked upon with great disfavor
by the public, and were reluctantly approved by
President Lincoln.

There was a great demand for the appointment
of men as generals who had not received military
training. At the same time it must be said that by
no means all of the men educated for war, who were
selected to lead the armies, showed themselves mas-
ters of the situation. The two great successes of
the year 1862 were the capture of Forts Henry and

84 JOHN SHERMAN

Donelson and the expedition to the mouth of the
Mississippi, which resulted in the capture of New
Orleans. But permission to Grant to attack Fort
Henry, in February, had been refused by Halleck
in the preceding month. He advised postponing
an advance in that direction until April, and sought
to make it a condition of offensive operations that
before Grant advanced he should receive heavy re-
inforcements from the Army of the Potomac. After
the capture of Fort Henry, Grant was ordered to
devote himself to fortifying that place rather than
to a march on Donelson. Fortunately the order was
not received until after Donelson was captured.
McClellan did all in his power to prevent the expe-
dition to New Orleans. The popular ideal as to the
merits of generals was often misleading. It was re-
quired that they be affable, confidential with news-
gatherers, and ready to conform themselves to all
the standards of civil life. The bombastic addresses
of McClellan to his troops, based upon trivial
achievements, gave him undeserved standing as a
military commander.

The part of Senator Sherman in the political
and military phases of the contest was an active and
important one, though much less prominent than
his connection with the financial management. In
political policy he was conservative, and not among
the first to advocate the abolition of slavery. To
use his own language, in 1863 : " I opposed arbitrary
arrests, general confiscation, the destruction of state
lines, and other extreme measures." In the conduct

MEMBER OF THE SENATE 85

of the war he criticised President Uncohi quite
severely for lack of vigor and for seeming irresolu-
tion. He early realized the gravity of the contest.
On the day of the falling of Sumter he wrote to his
brother: "I look for preliminary defeats, for the
^bels have arms, organization, unity, — but this
advantage will not last long. . . . For me, I am
for a war that will either establish or overthrow the
government, and will purify the atmosphere of po-
litical life. We need such a war and we have it now."
On the 1st of May, 1861, he wrote from Philadel-
phia to his wife : '" I assure you this is to be no holi-
day war. Many battles will be fought and many
lives lost, but I am satisfied our countiy will pass
through the ordeal with increased strength and
Vigor.

His opinions upon military problems were very
much influenced, though not controlled, by his
brother, who also was one of the first to recognize
the seriousness of the situation. General Sherman's
letters and utterances at the time are full of fault-
finding and unduly pessimistic. In every case he
felt sure that military operations would fail, and
this gloomy forecast of results continued until after
the capture of Vicksburg in July, 1863, when he
began to be more hopeful.

Recruiting stopped in April, 1862, because san-
guine hopes were entertained of the speedy close
of the war by the use of the forces already in the
field. It was necessary to resume soon after, how-
ever, first by a caU for three hundred thousand men.

86 JOHN SHERMAN

and then by a call for three hundred thousand more.
Sherman advocated universal conscription if neces-
sary. He opposed the payment of large bounties,
and frequently used the term "the physical power
of the government, " which he said he would bring
to bear with all its force, meaning thereby all avails
able men who could bear arms. His brother, as well
as General Grant, called attention to the doubtful
policy of consolidating depleted regiments, and im-
passionedly wrote Senator Sherman to know if the
provision in the Bill of March, 1863, authorizing
that method, could not be repealed. He also op-
posed the grant of numerous furloughs, and was
especially displeased by the presence of newspaper
men at the front, who, in their anxiety to convey
news, published much that was of value to the
enemy.

An examination of the debates in the Senate
makes it appear very clearly that Sherman yielded
gracefully to the administration, often abandoning
his own judgment on executive recommendations
because of his appreciation of the dreadful emer-
gency, and his reluctance to do anything which
might in any way embarrass the prosecution of the
war by those in control. He wrote to his brother:
"I cannot respect some of the constituted authori-
ties, yet I will cordially support and aid them wliile
they are authorized to administer the government."

The activities of Mr. Sherman at the beginning
of the war did not differ from those of other public
men. All took an absorbing interest in the conflict,

MEMBER OF THE SENATE 87

such as they had never t)efore taken in the country's
welfare. Some made stirring speeches for the Union,
advocating enlistment as soldiers. Others went to
the front, sometimes carrying, as did General Lo-
gan, a musket like a private soldier. The methods
employed may have been directed by impulses which
were crude, but all were actuated by the same con-
suming spirit of patriotism. In company with the
first two Ohio regiments which were enlisted, Sher-
man proceeded to the front, and served as a volun-
teer aide to General Patterson, remaining with him
until it was necessary to go to Washington to attend
the special session of G>ngress beginning on the
4th of July, 1861. So absorbing was his interest
in military operations that at this time he seriously
contemplated resigning his seat in the Senate to
accept a commission in the army. After the ad-
journment of the special session he undertook the
enlistment of a body of soldiers known as the " Sher-
man Brigade," consisting of two regiments of in-
fantry, with a battery of artillery and a squadron
of cavalry. To the organization of this brigade at
Mansfield, he gave most of his time during the
autumn of 1861, spending much of it in and about
camp with the men. By strenuous eflFort he secured
as field officers of the two regiments, Regular Army
officers, two of whom were graduates of West Point.
The brigade performed most honorable service.

The third problem of the administration was
to make financial provision to carry on the great
struggle. A certain degree of glamour attaches to

88 JOHN SHERIVIAN

the enlistment of armies for the field; there were
political leaders of experience and ability; but the
provision of ways and means to sustain all the va-
ried expenses of the war afforded the greatest diffi-
culty. The financial policy of Congress and of the
Treasury Department has been very much criti-
cised. It is asserted that the war might have been
prosecuted to a successful termination without the
suspension of specie payments. No doubt blunders
were made in the conclusions reached relating to
currency and taxation. This was inevitable when
untried men were grappling with unheard-of diffi-
culties. The military administration seemed like a
succession of experiments. One general succeeded
another in the field, and it was not until the war had
been in progress for two years that commanders
were selected who rendered satisfactory service
when placed in control. The same was true with the
financial management, but we must judge of the
wisdom or unwisdom of the time, not alone from
retrospect, but by placing ourselves as much as
possible in touch with conditions as they then ex-
isted.

Until 1861 the fiscal operations of the federal
government had been very much limited. The
controversy over the relation between the central
government and the states not only pertained to
the separate rights of the states, but affected as well
the expenditures of the central government atid
the scope of its activities. The almost uniform
tendency was toward restriction. Expenditures for

MEMBER OF THE SENATE 89

the army and the navy had been largely determined
by the political views of the party in power. The
amounts expended for the navy were considerable
under John Adams, but were very much dimin-
ished under Jefferson, and though increased dur-
ing the War of 1812, the total expenditures for this
branch of the service did not in any one year equal
$10,000,000 until 1853.* Expenditures upon the
army were very considerably larger, because of the
necessary provision for armies in the field. These
expenditures, however, except those growing out
of the War of 1812, the Indian wars from 1836 to
1838, and the Mexican War, at no time, before
1851, equaled $10,000,000, reaching a war maxi-
mum in 1847 of less than $36,000,000. The prior
annual expenditures of the United States attained
the highest figures in 1858, when they amounted
to $74,185,270.39.' In 1860 these expenditures had
fallen to a sum slightly in excess of $63,000,000.
In the year 1861, when some expenditures were
made on account of the Civil War, they amounted
only to $66,546,644.89. Even these small annual
expenditures were more than the revenues, which,
in 1858, fell short by $27,000,000, and in 1860 by
$7,000,000, while in 1861, during which year busi-

* Here and elsewhere in this book, when expenditures or
revenue for any year are mentioned, the fiscal year is intended,
which after 1842 ended June 30. In all other cases the refer-
ence is to calendar years.

' These figures are accepted from the Anmud Circular of the
Division of Bookkeeping and Warrants of the Treasury Depart-
ment. They include interest and premiums on loans.

90 JOHN SHERMAN

ness experienced the shock caused by the with-
drawal of certain of the Southern States and the dis-
turbed conditions incident thereto, the revenue fell
short of the expenditures by $25,000,000. We have
thus a comparatively small annual expenditure,
which, nevertheless, was in excess of the country's
income. A season of war succeeded in which the
total expenditure in the very first fiscal year, that of
1862, was more than seven times as great as in either
of the two preceding wars, exceeding $474,000,000.
The staggering effect of so great a multiplication
of demands upon the Treasury, requiring provision
for more than $400,000,000 in excess of the usual
expenditures, is almost beyond comprehension.

This made it necessary to raise a very large sum
either by increased taxation or by borrowing. Small
amounts had with difficulty been borrowed in De-
cember, 1860, at 12 per cent, interest, and, at the
beginning of the following year, 6 per cent, bonds
were sold at the rate of 89.1.

It would be difficult to find a civilized nation
which in a single year was confronted by financial
difficulties so overwhelming. As against the seven-
fold increase in the expenditures of the United
States in a single year, 1862, the total expenditure .
of Great Britain during the war with France, which
began in 1793, gradually increased by 1797 to
nearly 3^ times as much as in 1792. The increase
in the first year of that war was less than one sixth,
and not more than might have occurred on a peace
footing. After 1797 there was a gradual decrease,

MEMBER OF THE SENATE 91

caused then, as later, by intervals of peace, and the
figures of that year were not again reached until
1802, and then again not until 1806, from which
time there was a progressive increase until 1815,
when, in the twenty-third year after the beginning
of the contest, the total expenditure was about 6^
times as much as in 1792.^ Yet in 1865, after four
years of war, the expenditures in the United States
were more than twenty times as great as in 1860.

The problem was how to provide for these enor-
mous disbursements. The Morrill Tariff Bill proved
disappointing. No measure for taxation could
be framed which within the short space of a year
could supply more than a fraction of the increased
demands. Our fiscal system was absolutely lacking
in flexibility. There was no such measure as the
income tax, the rates of which can be raised or
lowered in accordance with the needs of the time.
In fact no emergency had existed which required
anything of the kind. Resort must be made to loans.
President Lincoln, in his message to the special
session of Congress, July 4, 1861, recommended that
at least $400,000,000 be placed in the control of the
government.

Mr. Chase, in his very comprehensive report at
the beginning of this special session, estimated that
$320,000,000 would be required for the expenses
of the ensuing year, and advised that $80,000,000,
the amount of expenses other than for war, be raised

* See ParltamentaTy Accounts and Papers, PMic Income and
Expendttures (1868-69), vol. xxxv, pp. 433, 441.

92 JOHN SHERMAN

by taxation, and the balance by loans. In the same
report he expressed a belief that the great body of
the citizens of the states then involved in the calami-
ties of insurrection, as he tenned it, would ere long
become satisfied and return; but later, in his report
of 1863, he regrets this inadequate conception of
the severity of the conflict. Of the $80,000,000
he estimated that $60,000,000 would be raised
from customs duties and other existing sources of
revenue, and recommended the collection of the
remainder by a direct tax, to be divided among the
several states in proportion to their population, or
by internal revenue tax<es. He dwelt upon the dif-
ferent modes of raising revenue such as duties on
imports, direct taxes, and internal duties or excises
and suggested numerous sources of taxation in one
or another of the above categories, which might be
adopted. This report, more than any other docu-
ment, furnished the baisis for fiscal legislation
throughout the war; but Mr. Chase's estimates,
and his hopeful forecast of an early termination of
the war, were accepted by the leaders in Congress
as a reason for bringing forward no considerable
revenue legislation at that time. Mr. Stevens, at
the special session in 1861, announced that the Com-
mittee on Ways and Means, after full and mature
deliberation, had determined not to enter upon a
revision of the tariflF. Some new duties were, how-
ever, created, and others raised. Mr. Chase's recom-
mendation for raising $20,000,000 by a direct tax
was adopted and an act for an income tax was

MEMBER OF THE SENATE 93

passed, but the latter was not made payable until
June 30, 1862, and even in 1863 less than $3,000,-
000 was realized from it. With the next meeting of
Congress the seriousness of the situation was more
thoroughly realized, and on the 21st of January,
1862, upon the recommendation of the Conmiittee
on Ways and Means, the House directed the
preparation of a bill adequate to produce a reve-
nue of $150,000,000 per year.

Nothing is more evident than that at this time
there was no adequate conception of the magnitude
of the struggle which had begun. The lack of ap-
preciation of the condition of affairs was manifest
in all kinds of legislation, and is, to one who famil-
iarizes himself with the prevalent opinions of the
time, the most striking feature of the situation.
President Lincoln in his special session message
said: "It is now recommended that you give the
legal means for making this contest a short and
a decisive one."

The total increase of the taxes collected in the
year 1862, as compared with the preceding year,
barely exceeded $10,000,000, and the total amount
of revenue for the year did not reach $52,000,000.
Authority was granted July 17, 1861, to borrow
$250,000,000 in bonds and Treasury notes. The
banks of New York, Boston, and Philadelphia
arranged to lend $150,000,000 to the Treasury
upon the purchase of bonds. In making these loans
they were influenced in a large degree by patriotic
motives, as the credit of the government at this

94 JOHN SHERMAN

time was very poor. At first these loans were more
readily made because of the stagnation in business,
which made deposits large and curtailed the ordi-
nary lines of business in discounting, or otherwise,
in which they were usually engaged. It was the
remark of one banker that they had been doing
business with the commercial community, and were
now transacting business with the government.

The advances to the Treasury upon the bonds,
amounting to $150,000,000, were, in the first in-
stance, promptly made. Although there began to
be a decrease in the deposits and specie held by the
banks, they readily complied with their promises,
and in one instance even desired to anticipate the
time within which payments were to be made. An
unfavorable ruling, however, was made by Secre-
tary Chase which diminished their ability to make
pajmients. Under the Subtreasury Law the Secre-
tary of the Treasury was forbidden to receive the
bills of state banks, or to deposit elsewhere than
in the subtreasuries. A statute was passed at the
special session, which was intended to give the
Secretary authority to draw checks upon the banks
which had made subscriptions, in payment of ob-
ligations to contractors and others. Secretary Chase
declined to do this. Had he done so, all the various
machinery of clearing-houses, under which payments
from debtor to creditor can be settled by transfers
of deposits in banks, would have come into play
and very much relieved the demand upon the cur-
rency of the country.

MEMBER OF THE SENATE 95

The career of Mr. Chase as Secretary of the
Treasury has been justly commended for the high
standard of honor which he always maintained, and
for his stalwart patriotism. Such was the respect
for his character and ability that he was able to
make negotiations and accomplish results in which
a man less trusted would have failed. It may,
however, be questioned whether he had sufficient
familiarity with the practical details of finance to
give him the highest qualifications for the manage-
ment of the Treasury. He was prone to demand
observance of certain general principles and rules,
and to dismiss at once, without consideration, modi-
fications such as would have been suited to the
emergencies of the time. Before accepting the po-
sition he had expressed great hesitancy about his
fitness for it; his previous experience, though quali-
fying him to solve great problems of statesmanship
and administration, had given no training for the
position to which he was called.

Nothing could more forcibly display the dis-
couraging situation, when the legal-tender proposi-
tion was presented at the session of 1861-62, than
a comparison of Secretary Chase's reports of July
4, 1861, at the beginning of the special session, and
December 9, 1861, at the regular session. In July
he estimated the revenue from existing sources for
the ensuing year at $60,000,000; in December he
was compelled to diminish this by $25,000,000, or
to $35,000,000. In July his estimate of the expend-
itures for the fiscal year 1862, including interest and

96 JOHN SHERMAN

payments on maturing Treasury notes, was $818,-
000,000; but in December it was $543,000,000, an
increase of $225,000,000, which, coupled with the
error of $25,000,000 in his forecast of the revenue,
showed a difference in his estimates, in the short
space of a little more than five months, of $250,-
000,000. Secretary Chase had also, under authority
granted at the special session, issued demand Treas-
ury notes which, to a limited extent, had taken the
place of currency, but had greatly added to the
embarrassment of the banks, which were reluctant
to receive these notes as deposits, because they were
not legal tender, and thus not immediately available
for the payment of obligations, and yet desired to
receive them so as not to embarrass the government.
To all these disadvantages was added the tension
with Great Britain, arising out of the seizure of the
two Southern envoys from the steamer Trent and
the ultimatum that the two envoys should be re-
turned within seven days or the British Minister
would withdraw, — a demand which threatened
immediate war.

The combination of all these circumstances
created a panic. Money did not readily flow to
the banks for deposit, and lenders, especially the
customers of the banks, were reluctant to invest
in government bonds. There were other cogent rea-
sons which added to the argument for legal tender.
On the 30th of December, 1861, the banks of New
York suspended specie pajmients on their notes.
This action was quickly followed by a similar sus-

MEMBER OF THE SENATE 97

pension by the banks of Boston and Philadelphia.
The total amount of paper currency in the Northern
States, issued by solvent hanks, was estimated at
$150,000,000. The loans made by the Treasury
Department between July 1 and December 9, 1861,
were $197,000,000, or more than the aggregate
of paper currency, and an additional issue of
$75,000,000 of bonds was in contemplation.

It was under these circumstances that the ques-
tion arose of issuing government notes, not redeem-
able in coin, but with legal tender quality. The bill
for this purpose was introduced in the House of
Representatives by Mr. E. G. Spaulding, a member
of the Committee on Ways and Means, on the 30th
of December, 186 1 . This bill authorized the issuance
of $50,000,000 of Treasury notes, on the faith of the
United States, payable on demand, without specify-
ing any place of payment. They were to be in de-
nominations of not less than five dollars each, and
were to be receivable for all debts and demands due
to the United States, and for all salaries, dues, debts
and demands owing by the United States, and were
also to be a legal tender in payment of all debts,
public and private, within the United States, etc.
As finally passed, the bill contained a provision
authorizing holders of the notes to deposit them as
a loan to the government not to exceed $25,000,000.
Deposits were to draw interest at five per cent, if
retained not less than thirty days. These deposits
assumed importance because of their influence in
determining the volume of greenbacks issued.

94 JOHN SHERMAN

time was very poor. At first these loans ^^^.^^^^^
readily made because of the stagnation > ^^ ^^.
which made deposits large and curtai ^^^^jg^,
nary Unes of business in discounting, o ^^ ^^ ^^
in which they were usually engaged. ^^.^

remark of one banker that they had D ^^^^^^
business with the commercial ^^"^"'"""J^njent.
now transacting business with the gove ^^^^^3,
The advances to the Treasury "P°° ^^t in-
amounting to $150,000,000, were, in ^ ^^
stance, promptly made. Al^^^J^V* j^ held by the
be a decrease in the deposits and ^f~ . ^^ises,

bankM, they readily complied with tn^^.^»:^^ ^^6
and in one instance even ilesireil '^^^ ^^^^ ^^
time within which payments were o^^ ^^^ ^^^
unfavorable ruling, however, was ^„v

tarv Chase which dirainished tmi ^^^^ gec

tary Chase which dimmi.hed their ^^^ g^^^e-

p^ynients. Under the Subtteasu^ ^^^ ^^^,^e ^.e
^ ^ - ^ ^Pg^ forbidden i" ^ t\,an

tary of the Treas

bills of state

in the subtre

special aes

Secreta

w^hich

ligiiiio]

decline
machine
from deb
of deposit

tiiblte

MEMBER OF THE SENATE 09

mending its adoption. The Secretary then strongly
advised the issuance of national bank notes. This
plan was embodied in a lengthy bill prepared for
presentation to Congress, but it was immediately
manifest that the opposition was so formidable that
no such measure could be adopted for months to
come. So far as meeting present needs was con-
cerned, the plan was impracticable because even if
this new system should be established, a long in-
terval would ensue before the banks could oigan-
ize and aid the government in the manner contem-
plated by the Secretary.

The bill for the issuance of legal tenders, which
had been introduced by Mr. Spaulding on Decem-
ber 30, 1861, was reported by him on the 7th of
January, 1862. The amount of currency to be
issued was increased from $50,000,000, as specified
in the original bill as introduced, to $100,000,000.
There was a wide difference of opinion in regard to
it. It has often been stated that the discussion in
Congress showed great ignorance of the problems
of banking and currency; but an examination of
the debates at that time disproves these statements.
It is true that some arguments were made which
were fanciful, and others were ingenious rather than
sound, but the dangers arising from the issuance
of paper money by the government were clearly
pointed out. Many warning voices were raised
against the proposed form of currency. Mr. Pendle-
ton and others argued against the measure on con-
stitutional grounds. Mr. Morrill opposed the bill,

100 JOHN SHERMAN

but especially insisted that the amount of the issue
should be limited. He said: ''I would as soon pio-
vide Chinese wooden guns for the anny as paper
money alone for the army." When the biD was
urged as a necessity he was over-sanguine about
the early termination of the war and said: "The
ice that chokes the Mississippi is not more sure
to melt and disappear with the approaching vernal
season than are the rebellious armies upon its banks,
when our western army shall break from its moor-
ings and rush with the current to the gulf." He
termed the bill ** a measure not blessed by one sound
precedent and damned by all."

Mr. Alley of Massachusetts supported the bill, but
said : ** Beneficent as this measure is as one of relief,
nothing could induce me to give it sanction but
uncontrollable necessity." And further: ** If you do
not adopt this measure, you will see the country
flooded with irredeemable bank currency, a great
deal of which will be found, as after the War of
1812, utterly worthless."

Mr. Horton of Ohio opposed the bill and pro-
phesied : '' If this bill passes, as I hope and pray it
will not, this will be a point from which we shall
date a new financial system in the United States."

Mr. Roscoe Conkling said: "The Treasury will
control and decide the war, not the war the Treas-
ury. . . . Armies and navies may perish, and a
public credit well preserved can replace them; but
if the public credit perishes, the army and navy can
only increase the disaster and deepen the dishonor."

MEMBER OF THE SENATE 101

He opposed the proposition to make paper a legal
tender on the ground that the Constitution author-
ized no proceeding of the kind. He argued also
against what he termed the " moral imperfections "
of the bill. ** It will proclaim," he said, ** throughout
the country a saturnalia for fraud; a carnival for
rogues. . . . Every debtor of a fiduciary character,
who has received from others money, hard money
worth a hundred cents on the dollar, will forever
release himself from liability by buying up for that
knavish purpose, at its depreciated value, the
spurious currency which we shall have put afloat.
Everybody will do it except those who are more
honest than the American Congress advises them
to be." Several spoke in opposition to the legal-
tender phase of the bill, to which there seemed to be
much more objection than to the other provisions
of the measure. Mr. Thaddeus Stevens said:
"This bill is a measure of necessity, not of choice."
It must be borne in mind in considering condi-
tions at the time that the banks and financial inter-
ests of the country were not accustomed to respond
to great demands for loans. The financing of great
enterprises, which has become so familiar in later
days, was entirely unknown. Such undertakings
as were then conducted were, in comparison, on a
very limited scale. Reference has frequently been
made to the great wealth of the country, which, in
1860, was estimated at over sixteen billions; but
means to make this vast aggregate of property avail-
able for the preservation of the country were woe-

102 JOHN SHERMAN

fully lacking. Mr. Sumner said in the Senate:
*' Whatever may be the national resources^ they
are not now within reach except by summary pro-
cess." There was a notable absence of that ** dis-
posable capital" which Mr. Bagehot terms the
characteristic feature of the London money market.
On previous occasions when large amounts were
required, resort was had to the money-lenders of
Europe. At this stage of the Civil War, however,
this resource was almost entirely wanting. The
bonds of the Confederate States were in some
quarters thought to be a better investment than
those of the Union. The London " Economist *' in
August, 1861, in speaking of the funds required
by the Northern States, said: ''Europe won't lend
them : America cannot." The motive at home for
loaning to the government was largely one of patri-
otism, and bonds were taken with a feeling of un-
certainty as to whether they would ever be paid.

While the Legal Tender Act was pending it was
much discussed in financial circles. Delegations
came to Washington from New York and other
cities to oppose it. Several alternatives were pro-
posed. The one most prominently advocated was
the sale of bonds, which would necessarily be dis-
posed of at a discount whether paid for in gold or in
the depreciated bank currency which was in circula-
tion. The borrowing capacity of the nation under
the existing currency system had already been
strained to the utmost by the issuance of nearly
$200,000,000 of bonds and Treasuiy notes during

MEMBER OF THE SENATE 103

the five months prior to the Secretary's report in the
preceding December. The requirements of the
succeeding twelve months were sure to be at least
$500,000,000 in excess of revenue.

As regards the proceeds of bonds, after only
$200,000,000 of United States securities had been
issued, those drawing six per cent, were selling
for 87i in January, 1862, and five per cents at 78,
a discount greater on the former than that upon the
greenback until July, 1862, and greater on the latter
than upon greenbacks until the end of September,
when $300,000,000 had been authorized, and the
disastrous Peninsular campaign had exerted its full
effect upon the finances of the country. Previous
experience did not afford encouragement to those
who in 1862 contemplated relying upon the issuance
of bonds alone. Mr. McDuffie, in a report from the
Committee on Ways and Means of the House of
Representatives, April 13, 1830, states, that during
the War of 1812 the government borrowed $80,000-
000 for which $68,000,000 was received in the cur-
rency of the time, which was worth in coin only
$34,000,000, or 42 J per cent, on the par value of the
loans. Yet the disproportion in that period between
expenses and income, and between the cost during
war and that in the preceding years of peace, was
far less than in 1862.

The plan of the associated banks and members of
boards of trade contained six propositions, involving
the issuance of two-year Treasury notes and twenty-
year bonds, with no limitation upon the price at

104 JOHN SHERMAN

which they were to be sold ; also a suspension of the
Subtreasury Act so as to allow the deposit of moneys
in the banks. The first proposition was to the effect
that $1^5,000,000 should be raised by taxation other
than from customs. This method of raising revenue
was- no doubt to be commended, but the likelihood
of its success may be judged from the fact that in
1864, two years later, after all the intervening rev-
enue legislation, only $110,000,000 was raised by in-
ternal revenue and direct taxes, and in the combined
years, 1862 and 1863, the revenue was less than
$50,000,000 from sources other than customs. The
last of the six propositions authorized the Secretary
of the Treasury to make temporary loans upon the
security of funded stock, or long-time bonds, with
power to hypothecate such stock, and if such loans
were not paid at maturity, the lender could sell the
stock for the best price that could be obtained.
This last proposition met with almost universal dis-
approval, and justly so. In time of stress it would have
placed the government at the mercy of the wealthy
money-lenders of the country. Bonds hypothecated
would have been exposed to the danger of sale at
a ruinous sacrifice, and national credit would have
rested upon a most unstable foundation. The
bankers who made these propositions were dis-
trusted. Many believed that the plan to loan upon
bonds which the lender might sell out as collateral
indicated that they desired a method which would
give hopeful promise of profitable transactions in
which they might bear an important part. A sus-

MEMBER OF THE SENATE 105

pidon rested upon them that, such was their view-
point of the relation between the interests of the
public and their own, although they were no doubt
endowed with wisdom and actuated by patriot-
ism, they nevertheless, unconsciously to them-
selves perhaps, had formulated a scheme which,
while intended to help the government, incidentally
would help themselves also. A revulsion followed,
favorable to the Legal Tender Act. It was thought
that if this was the best plan the bankers had to
offer, it was better to pass the bill. The Chambers
of Commerce of New York, Philadelphia, and
Boston passed resolutions advocating its passage,
and their opinion was concurred in by many, if not
a majority, of the leading bankers of the country.
It had been reported that Secretary Chase opposed
making the notes legal tender, and no doubt he
contemplated so radical a step with great reluc-
tance, but he gave his acquiescence. In a letter,
January 29, 1862, to the Committee on Ways and
Means, he said: "It is, however, at present im-
possible, in consequence of the large expenditures
entailed by the war, and the suspension of the
banks, to procure sufficient coin for disbursements,
and it has therefore become indispensably neces-
sary that we should resort to the issue of United
States notes." In the same letter he approves the
legal-tender clause. In a letter of the 3d of Febru-
ary, 1862, he wrote: "It is true that I came with
reluctance to the conclusion that the legal-tender
clause is a necessity, but I came to it decidedly

106 JOHN SHERMAN

and I support it earnestly. I do not hesitate when
I have made up my mind, however much regret
I may feel over the necessity of the conclusion to
which I come." In the same letter he said: ''Im-
mediate action is of great importance. The Treas-
ury is nearly empty. . . . You will see the neces-
sity of urging the bill through without more delay."
February 5, he wrote a brief note, stating: **It
is very important the bill should go through to-
day, and through the Senate this week. The pub-
lic exigencies do not admit of delay."

Several important additions were made to the
bill before it passed the House. There was an
authorization for five hundred millions of twenty-
year six per cent, gold bonds, redeemable after
five years, familiarly known as the "five-twenties."
The amount of legal-tender notes was increased
from one hundred to one hundred and fifty milr
lions of dollars, with the provision, however, that
fifty millions should take the place of demand
Treasury notes issued by the Act of July 17, 1861,
which latter were to be retired as rapidly as prac-
ticable.

The measure was taken up in the Senate on the
12th day of February, 1862. The greatest differ-
ence of opinion there, as in the House, was upon
the question of making the notes legal tender.

Mr. Sherman made the leading speech in favor
of this bill, on the 13th of February. Although he
was with one exception the youngest member of
the Senate, his record as Chairman of the G>m-

MEMBER OF THE SENATE 107

mittee on Ways and Means of the House of Re-
presentatives, in the previous G>ngress, gave him
such standing that he had been selected as the third
member of the important G>mmittee on Finance
of the Senate, of which Senator Fessenden was
chairman. It is to be noted that he based the
argument for its passage upon the pressing necessi-
ties of the time. That he was unmindful of the
dangers which lurked in the measure cannot be
asserted by any one who reads his remarks. He
pointed out that $100,000,000 was then due and
payable, and especially that there were arrears
in the obligations to the soldiers, contractors, and
officials; that the aggregate capital of the banks
of the three principal cities of the United States
was but $105,000,000, and they had already taken
more than their capital in the bonds of the United
States; that the needed sum which was to be
raised by taxation could not be obtained for six
months at least; that over $300,000,000 had to be
paid out before the following July, with but small
revenue; that the reason why the bonds could not
be sold, even at sixty cents on the dollar, was
not because financiers did not consider them good,
but because there was no money with which to
buy them.

The very strongest argument for the issuance of
the greenbacks was the lack of a reliable and uni-
form circulating medium. Gold was at a pre-
mium and had disappeared from circulation. All
the inconveniences attaching to the state bank

108 JOHN SHERMAN

circulation were emphasized by the existing con-
ditions. The banks had suspended specie pay-
ments, and their bills were utterly unsuited to meet
the emergency. Their solvency and methods were
of such a varying quality, and it was so difficult
to ascertain their exact standing, that the people
distrusted them.

To the argument that the Subtreasury Law
should be repealed, and paper money received by
the government, he answered that a worse evil
would arise from that course because the banks
would have every inducement to inflate; even at
that time they did not pretend to pay specie, and
it would not be long before there would be all the
evils of an irredeemable currency of the worst
character, and in the most dangerous form. In
supporting the pending measure, he said: "I dis-
like to vote for it. I prefer gold to* paper money.
But there is no other resort. We must have money
or a fractured government." He called attention to
the precedent created by the issuance of bills to
be used as currency during the wars of 1812 and
with Mexico, and at the recent session of Congress.

In analyzing the argument of Senator CoUamer
— who maintained that notes might be issued,
but that they should not be made legal tender —
he said: "Our creditor must take them, but we
must not make his creditor take them, — the loss
must fall entirely upon our creditor. . . . But I
ask, is not his proposition manifestly unjust?
He will compel our immediate creditor to take the

MEMBER OF THE SENATE 100

note or get nothing. . . . Shall we inflict a loss
only on those who trust and labor for the govern-
ment, and relieve the selfish, avaricious, idle, un-
patriotic citizen who will neither fight for, lend to,
nor aid the government ? '* Toward the end of his
remarks he said: ^ After all, Mr. President, this
is a mere temporary expedient. It is manifest that
we must rely upon some other source of obtain-
ing money. We dare not repeat this experiment
a second time. If we do, we enter on the same
course that was followed in the French Revolu-
tion, and also by our American ancestors.'* In
the same line with his opinions expressed at other
times upon the vigorous prosecution of the war,
he alleged that the only true way was first to as-
certain how much money we could afford to ex-
pend in the prosecution of the war, and then col-
lect one half by taxation and the other half by loans,
anticipating the taxation by an issue of demand
notes. He does not seem to have been altogether
confident of the constitutionality of the issue, for
he said: ''Our arguments must be submitted
finally to the arbitration of the courts of the United
States."

Two important changes were made by the Senate
in which the House at a later time concurred. One
compelled the payment in coin of customs duties,
which was to be applied in payment of interest
upon bonds and notes, and in part to the reduc-
tion of the public debt; the other authorized the
Secretary of the Treasury to dispose of bonds at

110 JOHN SHERMAN

market value for coin or Treasuiy notes. The
bill became a law February 25, 1862.

At no time during the Civil War was it more
difficult to meet the obligations of the government.
Not only was the Treasury nearly empty, but there
was no adequate circulating medium, and military
operations were impeded by a lack of money. This
Act, under which legal-tender notes were issued
in the following month, created, however, a de-
cided change in conditions. It is manifest that the
legal-tender measure would not have been passed
except for the almost bankrupt condition of the
Treasury and the exigencies of the time. The most
severe criticism which can be made upon the fiscal
management of the first year of the war is that
earlier steps were not taken to provide increased
revenue by taxation.

Much stress has been laid upon the argument
that the absence of activity in business, which
would have resulted from compelling all payments
to be made in gold, would have added greatly to
the political difficulties of the administration. It
has also been alleged that the exactions of the war
became so severe, and the burdens of taxation
weighed so heavily upon the country, that but for
the circulation of the legal-tender notes the strug*
gle might have been hopeless. There can be no
doubt that the more buoyant business conditions,
caused by the issuance of legal-tender notes, aided
in the prosecution of the war. The measure, how-
ever, does not rest for its justification upon any

MEMBER OF THE SENATE 111

such foundation as this, but rather upon the sub-
stantial basis of necessity.

It would have been fortunate if the resort to
paper money could have ceased with this first pro-
vision for $150,000,000; but in a very short time
the desire was manifest for further issues. In this
disposition to continue a perilous experiment lies
one of the chief evils of irredeemable paper cur-
rency. While the first Legal-Tender Act was under
discussion, Mr. Morrill had prophesied that, within
sixty days, at least twice the amount of notes at
first proposed would be required. His prophecy
was not literally fulfilled, but as this method of
meeting obligations seemed so satisfactory, resort
was again made to it to meet the increasing de-
mands upon the national credit. The receipts
from increased taxation were altogether disap-
pointing, and at the same time the expenditures
of the government were increasing beyond all es-
timates. On the 7th of June, 1862, Mr. Chase
requested a further issue of $150,000,000 of legal-
tender notes, of which, it was suggested, a part
should be of denominations of less than five dollars.
This latter recommendation was based upon the
demand for currency of small denominations which
in normal conditions had been supplied by sub-
sidiary silver. It was also recommended that $50,-
000,000 of this issue be reserved to meet payments
upon notes deposited at the Treasury as a loan,
the limit of which was increased to $100,000,000.
A considerable amount of currency had been lent

112 JOHN SHERMAN

to the government under this provision. The sec-
ond issue was received in a manner very different
from the first. By many it was thought that as the
undesirable step had already been taken a further
issue would not aggravate the evil. Some who had
voted against taking the first step acquiesced in
the second. It is a notable fact, however, that sev-
eral, among whom was Senator Sherman, who
voted reluctantly for the first measure, because
of the unusual exigency, opposed the second. But
the bill passed and became a law on July 11, 1862.
Later provisions for greenbacks were made by
a joint resolution of January 17, 1863, authorizing
$100,000,000 more, and by the Act of March 3,
1863, authorizing an additional $50,000,000, or
$150,000,000 including the $100,000,000 described
in the resolution. On the passage of the resolu-
tion of January 17, 1863, President Lincoln,
while giving his approval, added a minute in which
he said: "I thiiJc it my duty to express my sin-
cere regret that it has been found necessary to
authorize so large an additional issue of United
States notes when this circulation, and that of the
suspended banks together, have become already
so redundant as to increase prices beyond real values,
thereby augmenting the cost of living to the in-
jury of labor, and the cost of supplies to the injury
of the whole country." He also recommended "a
reasonable taxation of bank circulation" to pre-
vent deterioration of the currency, and advised the
formation of national banking associations, to be

MEMBER OF THE SENATE US

organized under a general Act of Congress as sug-
gested in his message at the beginning of the ses-
sion.

Prior to the resolution of January 17, 1863, there
had been grave complaint that soldiers in the field
did not receive their pay, and at the time of the
Act of March 3, numerous claims against the gov-
ernment were in arrear.

The aggregate amount of greenbacks author-
ized by the three acts and the resolution men-
tioned was $450,000,000, of which the sum of
$50,000,000 was to be held in reserve to meet the
deposits to which reference has been made. The
Revenue Act of June 30, 1864, forbade addi-
tional issues. The maximum amount outstand-
ing at any time was $449,338,902, on the 3d of
January, 1864. Additional provisions were made
to supply the absence of subsidiary silver on the
17th of July, 1862. Postage stamps were made a
legal tender for dues to the United States of less
than five dollars, and on the same date with the
granting of authority for the last issue of legal
tenders, — March 3, 1863, — a fractional currency
in denominations of fifty cents or less was pro-
vided, the amount of which, including postage and
revenue stamps employed as currency, should not
exceed ^50,000,000. The desire for further issues
of irredeemable paper was diminished by a not-
able increase of revenue which became manifest
in the autumn of 1863, and by the readier sale of
bonds.

114 JOHN SHERMAN

The total expenditures of the government from
the beginning, in 1789, until June 30, 1861, had
been slightly less than $1,800,000,000. In the four
succeeding years of civil war this total of seventy-
two years was almost doubled, the aggregate ex-
penditure from June 30, 1861, to June 30, 1865,
reaching the enormous total of $3,350,090,808.
According to an official statement prepared when
Mr. Sherman was Secretary of the Treasury and
published in 1880, the total expenses during the
Civil War, and resulting therefrom, that is, in the
years from 1861 to 1879, aggregated $6,189,929,908.
In this vast sum must be included very nearly
$1,750,000,000 for interest on the public debt, the
largest item; slightly in excess of $1,000,000,000
for the pay of the soldiers; $400,000,000 for pen-
sions, and nearly an equal amount for the subsist-
ence of the army; $345,000,000 for clothing, and
$336,000,000 for transportation. The expenses in
the four years reached their maximum in 1865,
rapidly increasing until that year. Singularly
enough, the year ending June 30, 1861, did not
show any marked increase in the demands on the
Treasury. As regards disbursements it is rather to
be ranked with the preceding years of peace than
the four succeeding years of war.

The influence of Mr. Sherman was at all times
on the side of economy, though his efforts were ren-
dered almost powerless in the overwhelming press
of the time. At an early date he proposed a com-
mission to investigate the salaries of the employees

MEMBER OF THE SENATE 115

of the diflFerent departments. Work upon this,
however, was practically abandoned because the
increased cost of living made it evident that no
substantial reduction could be made.

TAXATION AND LOANS. — NATIONAL BANKING
SYSTEM

The colossal expenditures of the Civil War period
were met by taxation, and by loans. With loans
should be included the irredeemable paper money
which was issued, and with taxation, certain minor
and incidental sources of revenue, such as the pro-
ceeds of confiscated property, and the sale of pub-
lic lands.

Revenue was mostly derived from customs du-
ties and internal revenue. In the beginning it was
stated that the people were prajdng to be taxed.
Before the close of the contest it might have been
said with equal accuracy that rewards were offered
for the suggestion of anything to be taxed which
had not already been discovered and tried. Until
July 1, 1862, the receipts from customs furnished
practically all the revenue of the government, less
than 6 per cent, being collected from all other sources
in the years 1861 and 1862. In 1863, however, a
radical change commenced, approximately one third
being derived from internal taxes. In 1864 more
was derived from internal taxes than from customs;
and in 1865, 1866, and 1867, these taxes furnished
considerably more than half the total revenue.

TAXATION AND LOANS 117

The proportion of revenue to expenses gradu-
ally increased also. In 1862 the amount realized
from all forms of taxation was less than one ninth
of the total expenses of the year, but in 1865, al-
though expenditures had increased by more than
$800,000,000 over 1862, the revenue was more
than one fourth. By this time the capacity of the
people to endure taxation had been tried, and, as
a result, the income of the government, as counted
in the depreciated currency of the time, in three
years had increased more than sixfold; in the
following year of 1866 it had increased to more
than tenfold, — which, even after taking into ac-
count the premium on gold, was a gain unpre-
cedented in the fiscal history of nations, and a proof
alike of the unlimited resources of the country and
of the patriotism of the people, who were willing
to submit to such a multiplication of their bur-
dens.

The course of tariff legislation during the con-
flict is marked by several well-defined, though not
harmonious, tendencies: first, an effort to derive
the greatest possible revenue from duties in order
to meet the increased demands upon the Treasury;
second, a desire to do away with imports in the
greatest possible degree, because they caused large
exportations of gold, which were thought to threaten
the financial strength, and even the very life, of
the government, so that some even avowed a de-
sire to fix the rates so as to exclude importations
entirely; third, the adjustment of tariff schedules

118 JOHN SHERMAN

so as to benefit domestic industry. It does not ap*
pear that in the first year or two of the Civil War
those whose business interests would be favorably
affected by increasing duties made especial effort
for higher tariff schedules; but at a later time they
became active and endeavored to shape legisla-
tion so as to add to their profits. Still another
object of tariff legislation was to offset the specific
and ad valorem internal revenue taxes which were
levied upon a number of articles, and necessarily
increased their cost.

In the confusing mass of tariff legislation which
was adopted during the Civil War, two or three
measures stand out prominently. The first legis-
lation became effective August 5, 1861. It in-
creased the duty on sugar, salt, spices, drugs, and
other articles, and established duties on tea and
coffee. Further duties on tea, coffee, and sugar
were levied early in the following session by the
Act of December 24, 1861. The first great Tariff
Act of the Civil War became a law July 14, 186£.
Its object, as stated by those who presented it
in the House, was primarily to increase duties to
such an extent as might be necessary to offset the
internal taxes adopted during the same month.
This measure carried a substantial increase in
duties. In most cases in which the alleged reason
was to meet internal revenue taxes, the additions
were more than ample. No further important
increase was made until April 29, 1864, when by
a joint resolution, expressed in a few brief lines, all

TAXATION AND LOANS 119

duties except those on printing-paper for books
and newspapers, were increased by fifty per cent.
This resolution, which at first was to be enforced
for only sixty days, was afterwards extended to
July 1, 1864. On the day preceding the expira-
tion of the extension, the Tariff Act of June 30,
1864, a comprehensive measure, became a law.
The Act of 1862 was entitled ** An Act increasing
temporarily the duties on imports, etc." The Act
of 1864 contained no such limitation, although
Mr. Morrill, in presenting it, said: "This is in-
tended as a war measure, a temporary measure."
It was framed with a view to afford ample pro-
tection to domestic industries. It was prohibitive
in many of its schedules, and carried other rates,
imposed for the purpose of revenue, to the high-
est possible figures. Under the Act of 1862 the
average rate on dutiable commodities had been
87.2 %; under the Act of 1864 it became 47.06 %.
The latter Act assumes especial importance be-
cause, as regards foreign products which compete
with domestic, it continued, though with consid-
erable alterations both in the raising and lower-
ing of duties, as the basic tariff law of the United
States for nearly twenty years. If any tendency
is to be detected in the various subsequent acts
within that period it is in the direction of increase.
It would be impossible in a brief compass to
give all the various kinds of internal revenue taxes
imposed during the Civil War period; or to set
forth any well-defined principles which prevailed

120 JOHN SHERMAN

in their adoption. The first measure levying these
taxes was coupled with the Tariff Act of August
5, 1861. It imposed a direct tax of $20,000,000
upon the states of the Union including those then
in insurrection, also an income tax of 3 % on in-
comes in excess of $800. Internal or excise duties
had been strongly advocated by Hamilton, and
notwithstanding turbulent opposition, and a large
percentage of cost for collection, they were re-
sorted to with fairly favorable results for a period
of ten years prior to Mr. Jefferson's administra-
tion. But on the advent of Mr. Jefferson and his
party in 1801, all these taxes were repealed. The
committee having the bill of repeal in charge re-
ferred to the system as an iniquitous one. Internal
taxes were again imposed, for about four years,
during and after the War of 1812, but were re^-
pealed when the immediate pressure of additional
expenses was removed. Even under the overwhelm-
ing pressure for increased revenue during the war,
the Union leaders in Congress hesitated to restore
this method of taxation because they feared that
the visit of a new tax-gatherer would render it ob-
noxious, and that the collection would be attended
by serious embarrassment because of popular
opposition and difficulties in administration.

Two theories with reference to these taxes were
advanced, one, that they should be levied on the
greatest number of articles, so as, it was argued, to
diffuse the burden among the people; the other,
that only a very small number of articles should be

TAXATION AND LOANS 121

taxed. The former view was maintained by Mr.
Morrill in the House. The other plan was favored
by Mr. Sherman in the Senate. On presenting the
first general bill in the House in March, 1862, Mr.
Morrill said:

"... We have all the world before us where to choose.
In doing this we have to be just. If it would not do to
quarter the immense Army of the Potomac on the District
of Columbia alone, no more would it do to press any
single interest with the entire burden that now weighs
down upon the Treasury. The weight must be distributed
equally, ... in a just proportion to the means and fa-
cility of payment. ... A heavy duty upon some articles
would banish them from use, while upon others it would
merely stimulate greater activity and industry to obtain
them. A tax dependent upon the habits or vices of men
is the most reliable of all taxes, as it takes centuries to
change or eradicate one or the other. The orbit of the •
United States and the States must be different and not
conflicting. . . . Seeking to avoid all extremes, the com-
mittee have thought best to propose duties upon a large
number of objects, rather than confine them to a narrow
field; ... to set out on a moderate scale, . . . rather
than attempt to make any one product the victim from
which to torture magnificent bounties."

When the bill had passed the House and was
pending in the Senate, Mr. Sherman argued that a
great many classes in the different license schedules
ought to be stricken out, and said : "" This bill, if it
was reduced to a few simple propositions, would be
an excellent tax bill." For illustration, he called
attention to the provision for taxing employments,
which he thought had been extended further than it

122 JOHN SHERMAN

ought to be, and added: '^You tax almost eveiy
kind of employment from a juggler up to a lawyer,
if there is any graduation between them; some
people think there is not. I think it is an invidious
kind of tax, and I am opposed to the great body of
it." In his general contention it is now very gen-
erally agreed that he was right. The tendency of the
most progressive nations after a trial of the system
of internal taxes has been to diminish to a minimum
the number of objects on which these charges are
levied.

At one time Sherman took a very radical stand
on this point and also advocated a great increase
in taxation. While conceding that the House mea-
sure, which it was estimated would yield $250,000,-
000 per annum, must be followed, he said: "I
believe that an income tax of ten per cent, on all
incomes above the mere product of a man's daily
toil; a tax of twenty-five or even fifty per cent, on
manufactures fairly collected; a large tax on those
articles of luxury consumed by the rich; and then
a tax on common carriers, who are but the freight
agents of this country, would yield more than twice
as much, with far less trouble and expense in collec-
tion. We could then dispense with all the insignifi-
cant and trifling taxes with which the bill abounds."
He added that he felt more alarm at the condition
of the currency than at the system of taxation, and
suggested that the greatest benefit which could be
gained was by reducing the currency to a stable
basis, so that every note would be the representative.

TAXATION AND LOANS 12S

or nearly the representative, of gold and silver. He
pointed out that, in the struggle with Napoleon,
England for years collected sixty per cent, of her
war expenditures by taxation, raising the income
tax to fifteen per cent.

In this legislation Sherman yielded his own
preferences. The action of the Senate, especially
in the later years of the war, was dominated by the
prevalent rush to provide immediate means for the
prosecution of the war. As an illustration it may
be said that the important Tariff Act of 1864 passed
the House after three days' discussion, and in the
Senate was passed on the day following that on
which it was taken up. Mr. Sherman also frequently
took the stand that the House had the framing of
revenue legislation, and that unless some excep-
tional objection existed, its judgment should pre-
vail.

The first comprehensive Internal Revenue Act
became a law July 1, 1862, after three months' delay
in committee room and in the House and Senate.
It included a tax upon malt and distilled liquors,
license taxes upon various professions or occupa-
tions, taxes upon manufactures and specific pro-
ducts of use or luxury, also upon the gross receipts
of divers corporations, including transportation
companies, and upon the dividends of banks and
other financial institutions. The exemption in the
income tax was reduced from eight hundred to six
hundred dollars, and numerous stamp duties were
created.

124 JOHN SHERMAN

The greatest diflBculty did not arise from tlie
discontent of the people, — which had been very
much feared, — but from faulty administration
and from frauds. It was necessary to build up the
system anew without any precedent except those
which were very remote. The first year's revenue
was extremely disappointing. As against an esti-
mate of $100,000,000 by Congress, and $85,000,000
by Mr. Chase, the actual amount realized was only
$37,000,000. But in the following year, under
more perfect administration, the receipts began
to equal the expectation of those who had recom-
mended the law. The rates were very greatly
increased, and new items included by later statutes,
notably those of June 30, 1864, and March 3,
1865. By the close of the war the system of internal
taxes included a greater variety of objects, and
brought a larger number of people into immediate
contact with the national system of taxation than
under any previous plan for raising revenue. In
speaking of its effect, an Austrian writer (von Hock)
has said:

"The citizen of the Union paid a tax every hour of the
day, either directly or indirectly, for each act of his life;
for his movable and immovable property; for his income
as well as his expenditure; for his business as well as his
pleasure. Stamps were affixed to the smallest agreement,
and the most insignificant bill of exchange bore a tax
ranging in amount from that on a small receipt to one of
twenty dollars." *

1 Quoted by Frederic C. Howe, Taxation in the United States
VKider the Internal Revenue System, p. 65.

TAXATION AND LOANS 125

Repairs on buildings were taxed. The householder
could not improve his dwelling without paying a
fine for the privilege of doing so. Every successive
process of manufacture was taxed, as well as al-
most every operation of business or conmierce.
The simplest transfer of title to property could
not occur except the state laid its hands upon the
transaction and levied a fee.

Notwithstanding the adoption, in the beginning,
of principles of taxation which were manifestly
erroneous, and in spite of many deficiencies in
administration, the system of internal revenue tax-
ation deserves to rank, with the establishment of
the national banks, as one of the two great fiscal
measures of the Civil War which were destined
to endure. From the great mass of articles a few
were selected as proper objects for the imposition
of permanent taxation. Experience taught the
best methods of organizing and managing the
machinery of assessment and collection. The pro-
portion of cost to collection is now materially less
for internal taxes than for duties on imports, and
it is probable that the share of government rev-
enue to be derived from this source in the future
will increase.

Of the more than $3,000,000,000, required for
the expenses of the four years from 1861 to 1865,
a portion in excess of three fourths, or to speak
exactly, 77.£4 %, was supplied by loans. As already
stated, the prospect for borrowing at the end of
President Buchanan's administration was most

126 JOHN SHERMAN ,

unfavorable.* In fact there had been difficulty in j

disposing of bonds at all.

Under Secretary Chase, an attempt was made
to observe several well-defined rules in securing ;

loans. He was especially insistent in seeking to I

make them redeemable after a short period because,
as he stated, with the increasing supply of gold, it
was almost inevitable that rates of interest would
fall, hence it was desirable that a way be left open
to substitute, at an early date, bonds drawing a
lower rate of interest for pending loans. He termed
this '* controllability." In his report, in 1863, the
following were stated as the objects steadily kept
in view: first, moderate interest; second, general
distribution; third, future controllability, — the
feature above described; fourth, incidental utility.
The average rate of interest on the whole debt,
including non-interest-bearing notes, had declined
from 4.36 % on the 1st day of July, 186£, to
3.95 % on the 1st day of October, 1863. With the
increase in the issue of bonds this average rate
became higher. The second object was the dis-
tribution of the debt among the greatest number
of holders. Every effort was made to this end.
The first plan for distribution involved the em-
ployment of a large number of agents in many
places, all of whom were to act under the direct
control of the Treasury Department. This ar-
rangement was found to be inadequate, and the
Secretary employed as a general agent. Jay Cooke,
^ See page 90.

TAXATION AND LOANS 127

who organized agencies in all portions of the coun-
try, and through sub-agents disposed in a com-
paratively short time of nearly four hundred mil-
lions of five-twenty bonds. The Secretary in com-
menting says: **The history of the world may be
searched in vain for a parallel case of popular
financial support to a national government." 'The
fourth object, incidental utiUty, was sought to be
derived from the acceptance of deposits at an in-
terest not exceeding 5 %. The amount of these de-
posits, as already mentioned, was at first limited to
$25,000,000, afterwards to $50,000,000 and then to
$100,000,000. To secure their payment a reserve of
$50,000,000 of United States notes was maintained.
The loans or obligations incurred by the gov-
ernment during the Civil War may be roughly di-
vided into three classes: first, long-period loans,
including the twenty-year bonds drawing 6 %,
issued under legislation of July and August, 1861 ;
the five-twenties, payable in twenty years, but re-
deemable after five years; the ten-forties, provided
for by legislation enacted March 3, 1863, and June
30, 1864, payable in forty years, and redeemable
in ten years. Second, short-time loans ; some of
these were issued at a high rate of interest, espe-
cially in the early years of the war when the credit
of the government was poor; among these may
be included the seven-thirties, payable in not to
exceed three years, the rate of interest on which
was fixed at 7.3% because, at this rate, one penny a
day accrued on a fifty-dollar bond; Treasury notes

128 JOHN SHERMAN

running a minimum of sixty days and a maximum
of three years ; temporary loans at 4, 5, or 6 per cent. ,
redeemable after ten days' notice; certificates of
indebtedness to creditors who elected to receive
them, payable on or before a year after date; notes
running one and two years at 5 %. Third, notes
which bore no interest, available for use as cur-
rency, some not having legal-tender qualities, and
others, like the greenbacks, endowed with that
capacity. Demand notes, authorized early in the
war, were not legal tender, but were receivable
for customs as well as for all other public dues.
Some were in circulation until March, 1864, and
by reason of their availability for the payment of
duties, they commanded a premium nearly as high
as that upon gold.

Not only were the bonds and securities hetero-
geneous in character, but it was a feature of many
of the short-time bonds that they might be ex-
changed for those running a longer period. At the
close of the war there were thirty-two varieties of
outstanding obligations.

The bonds issued after gold had disappeared
from circulation did not, prior to the ten-forties of
March 3, 1863, contain a promise that the principal
should be paid in coin, although it was expressly
agreed that the interest on the five-twenties should
be so paid.

The national debt, on the 1st of July, 1861, was

$90,580,873.72.^ It did not reach its maximum

^ Figures giving the amount of the public debt are taken from
the Treasury Finance Report of 1897.

TAXATION AND LOANS 129

at the date of the virtual close of the war, in April,
1865, but, by reason of the liquidation and pay-
ment of numerous outstanding claims, it was
greatest on August SI, 1865, when it amounted
to $2,844,649,626. Between the time of Lee's
surrender, in April, 1865, and the date of this maxi-
mum amount, the debt increased at the rate of
nearly $3,000,000 a day.

The Secretary of the Treasury had shown sur-
prising timidity in recommending increased taxa-
tion. In his report, in December, 1861 , he said : ** It
will be seen at a glance that the amount to be de-
rived from taxation forms but a small portion of
the sums required for the expenses of the war. For
the rest, the reliance must be placed on loans."
In his report of December, 1862, he repeated: "But
the chief reliance, and the safest, must be upon
loans." He explained these recommendations in
his report of 1863, in these words: "Hitherto the
expenses of the war have been defrayed by loans
to an extent which nothing but the expectation
of its speedy termination could fully warrant."
In this respect the views of Mr. Sherman were
exactly the opposite. He favored the largest pos-
sible revenue from taxation. The two consulted
frequently, and in many instances Mr. Chase de-
pended upon Mr. Sherman to secure in the Senate
the passage of measures which he desired to have
adopted; but, as regards methods of providing
means to prosecute the contest to a successful ter-
mination, they were widely at variance.

180 JOHN SHERMAN

Throughout the war it was possible for the
Secretary to exercise very potent influence on finan-
cial conditions by his selection of means to meet
current demands. If he relied upon long-time bonds
for funds, the tendency was for gold to fall. If he
issued greenbacks, gold rose in price, because with
every additional issue of irredeemable paper cur-
rency, or its greater use in payments from the
Treasury, paper money was depreciated in value.
The Secretary has been very much criticised for
his attempt to float a five per cent, bond under the
Act of March 3, 1864. A desire to lower the rate
of interest was certainly praiseworthy, but it is
charged that when these bonds did not readily sell,
the Secretary sought to force their acceptance by
glutting the money market. The sale of five-twen-
ties at six per cent, had been ample to satisfy the
demands on the Treasury, but bonds at a lower
rate were disposed of with diflSculty. When Secre-
tary Fessenden took charge of the Department, July
1, 1864, he reversed the policy of his predecessor,
and returned to the sale of six per cent, bonds.

The premium on gold varied under the influ-
ence of a multitude of circumstances, chief among
which was the success or failure of the govern-
ment in its military operations. With the defeat
or victory of armies in the field, gold rose or fell.
In the same category may be classed the indorse-
ment or defeat of the administration at elections;
also our foreign relations, which caused distrust
when there were threats of intervention, or com-

NATIONAL BANKING SYSTEM ISl

plications such as arose after the seizure of the
Trent. Other very important factors were the
amount of legal-tender notes, as determined by
legislation, and the policy of the Treasury De-
partment in the meeting of obligations. The is-
sues of state banks, which increased very con-
siderably during a portion of the Civil War, added
to the paper-money inflation, and exercised a veiy
considerable influence upon the premium on gold.
Another potent influence lay in the operations of
the gold market. It is probable there has never
been an instance in which the opportunities for
profit by mere speculative manipulation have been
so great as in the case of the purchase and sale
of gold during the Civil War. A maximum price
was reached in Wall Street, July 1, 1864, just after
the resignation of Secretary Chase, an event which
was seized upon as an excuse to advance the pre-
mium to a figure far in excess of that for which
any substantial reason existed. This was followed
in the same month, when Early was threatening
Washington, by a still higher price, 285, the highest
quoted. In view of the very considerable decrease
of the premium during the successful military
operations in the autumn of 1864 and the winter
of 1864-65, it was anticipated by many that it
would entirely disappear with the close of the war.
The legislation establishing the national bank-
ing system was one of the most important events
during the Civil War. Unlike the legal-tender acts
it was anticipated at the time that the laws estab-

182 JOHN SHERMAN

lishing the national banks would be permanent
Notwithstanding the absorbing attention required
for affairs purely military, Congress and the Ex-
ecutive Department gave heed to a subject which
ordinarily would only be considered in a time of
peace. Such a measure would have been impos-
sible in the preceding years. The opposition to
centralization had been so strong that a system
under which the banks of the country, or the lead-
ing banks, were to obtain federal charters and be
placed under the supervision of federal officials
located at Washington, would have been defeated.
This is particularly true when we consider that
the leaders of the Democratic party retained a
vivid recollection of the strenuous contest be-
tween Jackson and the United States Bank. While
there was a very marked distinction between one
central banking institution, such as Jackson op-
posed, and a multitude of banks scattered over
the different states, under regulations by which
five persons or more could associate themselves,
and, on complying with certain conditions, obtain
a charter, yet in the popular mind the very con-
siderable difference between the two would not
have been recognized.

A number of conditions favored the establish-
ment of national banks, chief among which were
the objections to the note circulation of existing
banking corporations. The bitter experiences of
the people, in frequent losses from failure of local
corporations, had created a strong impression. It

NATIONAL BANKING SYSTEM 13S

was estimated that five per cent, of the bills in cir-
culation proved worthless each year. In addition
to this there were manifold difficulties arising
from the necessity of exchanging bills of banks
which were widely separated. A very serious diffi-
culty also arose from the frequent counterfeits^
rendering it necessary that an expert should pass
upon a package of bills, and in many instances
even the most practiced cashier could not be sure
whether a note was genuine. In some remarks
made by Senator Sherman he gave the number
of banks issuing notes in 1862 as fifteen hundred^
while the number whose notes were not counter-
feited was only two hundred and fifty-three. Of
the various kinds of imitations, alterations, and
counterfeits there were more than six thousand.
The inefficiency of the old system was universally
recognized. Under a Democratic administration.
Secretary Guthrie, in 1855, had said that if the
states continued the chartering of banks, with
authority to issue and circulate notes as money,
and failed to apply any adequate remedy. Con-
gress might be justified in the exercise of the power
to levy an excise upon the notes and thus render
the authority to issue and circulate them value-
less. Secretary Chase in his report of July 4, 1861,
recommended a tax upon state bank circulation,
and in his report of December, 1861, he fully com-
mitted himself to the establishment of national
banks. The measure prepared in pursuance of
his recommendation was at first treated as too

134 JOHN SHERMAN

important for early consideration, and afterward
received with pronounced disfavor. Mr. Stevens
filed an unfavorable report. It is not difficult to
realize the opposition of existing banks to such a
revolutionary measure. Such opposition under
ordinary circumstances could not have been over-
come.

Mr. Sherman became convinced, as he says,
long before he entered Congress, that the whole
system of state banks, however carefully guarded,
was both unconstitutional and inexpedient, and
ought to be overthrown. He especially distinguished
between the ordinary powers of banking and the
issue of bills, and dwelt upon the number of great
banking institutions which did not issue them.
In the discussion of the Revenue Act of July, 1862,
he had proposed an amendment imposing a tax
of two per cent, on the annual circulation of state
banks. He said the right of the banks to issue
bills was worth $9,000,000 per annum, and was
about the only franchise or property right not taxed.
The amendment was defeated by a vote of twenty-
seven to ten. In July, 1862, a second bill for a na-
tional banking system was framed and introduced.
It was prepared by Secretary Chase with the aid
of Messrs. Spaulding and Hooper of the House
and of Mr. Sherman, but the opposition seemed
to grow stronger. In December, 1862, Secretary
Chase renewed his recommendation and appealed
to Mr. Sherman to remodel the bill and take charge
of it in the Senate. In a letter to his wife, after

NATIONAL BANKING SYSTEM 135

the debate on the bill in the Senate, Shennan
writes:

"Chase appealed to me throu^ Cooke to remodel the
bill to satisfy my views and take charge of it in the Senate.
The appeal was of such a character that I could not
resist, although I foresaw the difficulties and danger of
defeat. When I made the speech on taxation of state
bank bills, I had not determined what to do, but carefully
avoided any reference to the National Bank Bill. That
speech brought me into correspondence with bankers and
others, and while giving me some reputation, compelled
me to study the preference between government and bank
currency and led me to the conviction that it was a public
duty to risk a defeat on the Bank Bill. I thoroughly con-
vinced myself, if I could not convince others, that it was
indispensable to create a demand for our bonds, and the
best way was to make them the basis of a banking system.
When you reflect upon the magnitude of interests in-
volved you will be impressed what a task this was. Not
a step could be taken without a contest with local banks
of great power and extensive ramifications. However, I
carefully examined Chase's bill, made several important
alterations and restrictions and introduced it. . . . Dur-
ing the struggle I was very anxious, and scarcely slept, and
now feel all the lassitude consequent on a long mental
effort."

It is to be noted that after several failures in
the House, the Bill which became a law was first
introduced and passed in the Senate. It was not
presented for consideration until it was reported by
Mr. Sherman on the 2d of February, 1863. In his
argument sustaining the measure he stated briefly,
yet comprehensively, the principal Arguments for
the new system. He said : " We are about to choose

1S6 JOHN SHERMAN

between a pennanent system designed to estab*
lish a uniform currency . . . and a system of
paper money without limit as to amount except
for the growing necessities of war." He enumer-
ated the benefits which the United States would
obtain from the system; namely, that there would
be a market furnished for the bonds; that it would
furnish a medium by which the state bank paper
might be gradually absorbed — not by any harsh
measures; that it would furnish a convenient
agency for the collection of taxes; that it would
make a community of interest between the stock-
holders and the banks, the people and the gov-
ernment. He continued: "At present there is a
great diversity of interests. The local banks have
one interest, and the government has another. . . .
The similarity of notes all over the United States
will give them a wider circulation; . . . banks
would be guarded against all frauds and altera-
tions [that is, in their notes]; . . . they are made,
by this law, depositories of the public money; . . .
These notes are to be receivable for taxes due to
the United States." It was evident from the discus-
sion at the time that in adopting the national bank
system it was understood that a means would be
established by which the sole paper currency of
the country should be provided in the future. . In-
deed, Mr. Sherman says, in the speech just quoted,
that at the close of the war the legal tenders would
be banished.

In his remarks on February 10th he ascribed

NATIONAL BANKING SYSTEM 137

supreme urgency to the measure, saying: "The
establishment of a national currency, and of this
system as the best that has yet been devised, ap-
pears to me all important. It is more important
than the winning of a battle. . . . Sir, we cannot
maintain our nationality unless we establish a
sound and stable financial system, and, as the basis
of it, we must have a uniform national currency."

Minute provisions were made for safeguards,
both for the protection of the government and of
depositors. The noteholders were to be secured
by a deposit of bonds, which should be in excess
of the issues of the bank in the proportion of 100
to 90, and deposited with the National Treasury
at Washington. Two objects assumed greatest
prominence, — to provide a market for government
bonds and to secure a uniform and stable currency.
It is difficult to state which of the two secured for
the measure the greatest support.

The Act became a law on the 25th of February,
1863. As originally passed it consisted of sixty-
five sections. The early results did not equal ex-
pectations. The amount of bonds taken by banks
as late as November 25, 1864, was only $81,961,000.
It had been expected that numerous state banks
would change their organization and take out
national charters, and that a considerable num-
ber of new national banks would be organized.
In the first seven months, to October 1, 1863, only
sixty-six banks were organized, a considerable
share of which were in the states of the middle west.

138 JOHN SHERMAN

Ohio, Indiana, and Illinois. In the older states
there was already a sufficient note circulation of
banks already organized. Hie Act was» in form,
repealed, and its provisions greatly modified by
another measure passed June 3, 1864. This made
divers changes, most of which were in the direc-
tion of giving greater stability. A more prompt
payment of subscriptions by shareholders was re-
quired, and the amount of the initial payment was
increased. The Act of 1863 made no provision
for redemption of circulation except at the bank-
ing offices of the issuing banks; the supplemental or
repealing Act compelled redemption at some bank
in one of the principal cities. Coupon bonds were
sufficient as security for circulation, under the Act
of 1863, but registered bonds were required by the
Act of 1864. The Act of February 25, 1863, provided
a tax by the government on circulation only. An-
other Act, passed six days later, changed the basis
of assessment, granting exemptions which were espe-
cially helpful to banks of smaller capital. This pro-
vided a substantially lower tax on circulation. The
second Act also imposed taxation on the average
amount of deposits in excess of average circulation.
The Act of 1864 decreased the rate of taxation upon
circulation, doubled that upon deposits, but again
materially changed the basis of assessment and im-
posed a tax upon the average capital stock beyond
the amount invested in United States bonds, at the
same time authorizing the states to levy taxes upon
bank shares and their real estate.

NATIONAL BANKING SYSTEM 189

The opposition of the state banks, which had
been very pronounced at the beginning, gradu-
ally diminished. The objections which were sug-
gested at furst to a change from state to national
charteis were found to be mostly groundless.
These were summarized by Mr. McCulloch, then
Comptroller of the Currency, as follows: (1) The
apprehension that the national system might prove
to be a repetition of the free bank system of
the West, which had been a disreputable failure;
(i) the opinion that, in becoming national banks,
and issuing notes secured by government bonds, their
interests would be so identified with the interests
of the government, their credit so dependent upon,
so interwoven with, the public credit, that they
would be ruined if the integrity of the Union should
not be preserved; (3) the danger of hostile legis-
lation by Congress, or the annoyance to which they
might be exposed by congressional interference
with their business, for partisan purposes; (4) the
requirement that in order to become national banks
they must relinquish the names to which they had
become attached, And be known by numerals.
This requirement was modified so that the desig-
nation by numerals was unnecessary.

At the time when the National Banking Act
was passed, nearly $170,000,000 of notes of state
banks were in circulation in the loyal states. The
securities pledged for the notes and available for
their payment were alleged to be of a value prob-
ably not more than one fourth the par value of

140 JOHN SHERMAN

outstanding bills. So long as this large circulation
was outstanding, inflation could not be prevented,
nor could the public be protected from frequent
losses by the failure of banking institutions to pay
their notes. The growth of the national banks
was slow so long as state banks retained the privi-
lege of note-issue. The Revenue Act of March 3,
1865, imposed a tax of ten per cent, per annum
on state bank notes, after July 1, 1866. Under this
tax their circulation soon disappeared.

After recovery from the shock of the battles of
the Wilderness and Cold Harbor, and from the
environment of the National Capital by General
Early, in July, 1864, the tide began to turn. Gen-
eral Sherman captured Atlanta and commenced
his famous march to the sea. From this time an
assurance that the result of the war would be suc-
cessful was cherished by the people. The false
hopes which had been entertained after earlier
victories made the growth of confidence slow, but,
in the autumn and early winter, the end seemed to
be plainly in view. A main cause of the defeat of
the South was the exhaustion .of her material re-
sources, which were not sufficient in quantity or
quality for the maintenance of so gigantic a strug-
gle. The blockade, which was maintained with
increasing efficiency, destroyed hope of outside
supplies, and, however eflfective her army might be
as an army, it could not keep the field in the face
of the disadvantages resulting from scarcity of
food and the equipment for war. In the North,

NATIONAL BANKING SYSTEM 141

Chase had said that the danger-line was approach-
ing with the increase of the public debt. He doubted
whether the contest could be continued after
$8,000,000,000 of obligations had been incurred.
There was, however, an abundance available of
all that the armies required, and a disposition
which, although somewhat changeable in its mani-
festations, was determined to restore the Union at
any cost. The surrender of Lee and the assassi-
nation of Lincoln followed closely, in April, 1865.
The one indicated the fall of the rebellion, the
other was the crowning tragedy of the great con-
flict.

THE RECONSTRUCTION PERIOD

It was unfortunate that the bloody years of the
Civil War should be followed by the stormy period
of reconstruction. This period does not present
a picture pleasant to contemplate. It was char-
acterized by angry clashes between the executive
and legislative departments, which rendered a
dispassionate and just solution of the pending
problems impossible. In this contest Senator Sher-
man probably found more that was distasteful
than in any portion of his political career. He was
by nature conservative, but was also a very strong
party man, and above all things reluctant to break
from those who had been his associates in the po-
litical and financial measures of the great strug-
gle. It was impossible, after the bitter contest in
which success had been achieved with so much
difficulty, to take a moderate view of the situa-
tion. The returning soldiers in each of the two
sections dominated public opinion. Neither could
so soon forget.

Questions relating to reconstruction had already
arisen during the administration of President Lin-
coln, and, but for his overshadowing influence, would
have caused a serious split at that time. They

THE RECONSTRUCTION PERIOD 14S

were sure to arise again as soon as the immediate
problems of the war no longer occupied exclusive
attention. In order to act harmoniously with Con-
gress it was necessary that the Executive should
be possessed of consummate tact. This quality
Mr. Johnson altogether lacked. Few Presidents
have left a more pronounced impression upon the
course of political events than President Johnson.
He will be remembered, however, not, as most of
the rest, for the policies which were adopted as
the result of presidential leadership, but because
of the opposition and irritation awakened by his
peculiar personality.

He was a most remarkable man. Of lowly an-
cestry and very limited educational opportunities,
by force of pluck and ability he had become a
Representative in Congress, twice Grovemor of
Tennessee, and a Senator of the United States.
From the very first he was conspicuous for his ob-
stinate adherence to the opinions which he enter-
tained. So early as the administration of President
Polk, a public man was asked whether Andrew
Johnson was the same as Cave Johnson, Postmaster
General. The reply was, " Oh no! there is no cave
in him." He was subject to decided limitations.
His career in Tennessee had been a stormy one, in
which joint discussions, bitter personal encounters,
and close victories had been his lot. The applause
of the populace was as the breath of his nostrils, and
his chief delight was in political or personal contro-
versy. A person who had risen from such surround-

144 JOHN SHERMAN

ings could hardly be expected to occupy the presi-
dential chair without undue elation, nor to be able
to maintain tolerance toward his opponents. No
one can deny his patriotism, nor his devotion to
the Union, a devotion which had continued in the
midst of the greatest obstacles and amid surround-
ings which made his situation almost intolerable
in the dangers and conflicts which it aroused. He
transmitted to Q)ngpess some of the ablest state
papers which are to be found among the messages
and papers of the Presidents. While in the pre-
paration of many of these he no doubt called upon
others, in and out of the cabinet, for aid, he was
at least judicious in his selections.^ On the other
hand, his public utterances were characterized
by a bitterness and an absolute lack of dignity
altogether below the standard observed by any
other person who had occupied the presidential
office.

Mr. Johnson was repellent because of his un-
attractive personal traits and his colossal ego-
tism. Barely three hours after President Lincoln
had breathed his last, the oath was administered
to him in the presence of a considerable number
of distinguished men. Notwithstanding the ap-
palling calamity, the thought of which filled all
minds, he did not mention President Lincoln's
name or achievements, but spoke at some length

^ It appears that his first message, transmitted to Congress
in December, 1865, was written by George Bancroft, the historian.
The original is in the Library of Congress.

THE RECONSTRUCTION PERIOD 145

of his own past record, indicating the probable
course which he would pursue, and giving assur^
ance that he might be trusted in the presidential
office. It was maintained by President Johnson
and his supporters that his plan of reconstruction
was identical with that of Resident Lincoln, and
derived from it. If the people had been convinced
of this, it would no doubt have brought to him
a large popular support, but he always termed his
plan " My Policy," and made no reference to Presi-
dent Lincoln as its author.

The hostility of those who had been ardent sup-
porters of the Union would not have been so fiercely
aroused had it not been that Johnson was so open
to the accusation of glaring inconsistency, if not
of insincerity. He had been the most vociferous
of all in his denunciation of rebels, and had used
the most drastic language in describing the pun-
ishment which should be visited upon them. These
expressions were not merely employed in the heat
of election campaigns, but were continued after
he became vice-president, and even after he as-
sumed the presidential office. The prevalent feel-
ing was one of apprehension that he would be too
severe. After his repeated denunciations he began
most unexpectedly and without any warning to
take measures which showed an absolute aban-
donment of his former position. Only twelve days
before he became President he had said: "When
you ask me what I would do " (i. e., to those en-
gaged in the rebellion), "my reply is, I would arrest

M9 JOHN SHERMAN

them, I would try them, I would convict them,
and I would hang them." His opinion then was
that ''treason must be made odious, and traitors
must be punished and impoverished, their social
power broken." Even so late as April 25, 1865,
with presidential responsibilities upon him, he de-
clared, in response to an inquiry about Jefferson
Davis: ''The time has come when traitors must
be taught they are criminals. The country has
clearly made up its mind on that point, and it
can find no more earnest agent of its will than
myself."

In strange contrast with these vehement senti-
ments are the utterances of President Johnson
made only a few months later. In an address to
delegates from nine Southern States, September
11, 1865, he makes no mention of "treason" or
"traitors," and assures these representatives of the
South that " there is no disposition on the part of
the government to deal harshly with the Southern
people." At a banquet in his honor, in New York,
August 29, 1866, the same people of whom, six-
teen months before, he had said that they "must
be punished and impoverished, their social power
broken," he would not now have "come back into
this Union a degraded and debased people," but,
rather, he wished them "to come back with all
their manhood," and said that ''then they would
be fit, and not otherwise, to be a part of these
United States."

It is impossible to tell just what influence caused

THE RECONSTRUCTION PERIOD 147

him to change his mind. Mr. Blaine, who reviews
the subject with very considerable care, and from
the standpoint of a contemporaiy, regards the in-
fluence of Mr. Seward as the determining factor.
He states that when Seward arose from what was
expected to be his death-bed, he advocated pacific
measures toward the South, and President John-
son was convinced by his ailments, though his
personal relations with him had not been of the
most friendly nature. This view, while plausible,
has not been generally accepted. It seems more
probable that a sense of the gravity of the prob-
lem and of the unparalleled responsibility of his
position caused him to reconsider the opinions
which he had expressed upon the hustings.

The change in the policies which he advocated
was undoubtedly very much more readily made
by reason of his earlier views and affiliations.
Though none had been more pronounced in his
declarations of allegiance to the Union, he had
little else in common with the party which elected
him. He had been a Democrat of the strictest
school; he had opposed tariff as robbery; he had
resisted every movement for internal improve-
ments; he had little sympathy with the movement
for the abolition of slaverjs except as a punish-
ment to rebels in arms. It was but natural that
when the conflict was over there should be a re-
turn to many of his own old ideas, and with each
successive development of opposition to his course,
his obstinacy a^d contentious disposition caused

148 JOHN SHERMAN

him to become more and more radical in his de-
parture from his former opinions.

Three general theories were propounded upon
the subject of reconstruction. One may be called
that of the indestructible states, under which it
was maintained that no state could be out of the
Union. Thus, if there had been rebellion within
its borders, even though it was promoted and led
by the Governor and all its officers, it was a re-
bellion against that state quite as much as against
the federal Union; and as a result, when the
federal authority should be restored the state re-
turned to its position in the Union. A second and
opposing theory was, that by rebellion the so-called
states entirely lost their rights as such, and were in
the same relation to the loyal portion of the coun-
try as territories, or even as newly acquired pro-
vinces. Under this view, it was not necessary, on
their readmission to the Union, to follow state lines
or pay any respect to the former organizations
which had existed. A third was to the effect that
by rebellion the states were disorganized, losing
their former status, and that it remained for Con-
gress, and for Congress alone, to determine their
position, to prescribe temporary governments for
them, and to reinstate them in the Union at such
time as seemed best. As expressed in a congres^
sional report, the Constitution does not act upon
states, as such, but upon the people.

Upon a decision as to which was the correct
opinion depended the vital question whether the

THE RECONSTRUCTION PERIOD 149

lestoration of the states was for the executive
or for the legislative branch of the government.
President Johnson advocated the first, and Con-
gress, after much delay and discussion, in which
the second theory had strenuous and able advo-
cates, substantially adopted the third. All opin-
ions were still further complicated by the problem
of what to do with the freedmen.

No extra session was called, and the work of
organizing state governments in the South re-
mained entirely with the Executive until the meet-
ing of Congress in December, 1865. President
Johnson, on the 29th of May, issued a proclama-
tion of amnesty and pardon to those who had been
engaged in the rebellion, referring to two procla-
mations of similar tenor by President Lincoln
and requiring a prescribed oath to support the
Constitution and the Union. There were numer-
ous exclusions from its provisions for amnesty, in
which were embraced civil, diplomatic, or military
oflScers of the "pretended Confederate Govern-
ment," above the rank of colonel in the army or
lieutenant in the navy, as well as officers of any
grade who had been educated at West Point or
the Naval Academy; all those who had held the
pretended office of governor of any state in insur-
rection; those who had left seats in Congress, or
judicial stations under the United States, to aid
in the rebellion; those who had resigned or ten-
dered resignations in the army or na^7 to evade
duty in resisting it; those who had engaged in any

150 JOHN SHERMAN

way in treating persons found in the United States
service otherwise than lawfully as prisoners of
war; those who had been engaged in destroying
commerce of the United States upon the high seas
or the lakes and rivers between the United States
and Canada, or in making raids from Canada into
the United States; those who had been absent
from the United States for the purpose of aiding
the rebellion, or who had left their homes within
its jurisdiction and passed beyond the federal
military lines into the pretended Confederate States
for the same purpose; those who at the time of
seeking the benefits of the proclamation were
prisoners of war, or were under civil or militaiy
arrest; those who had voluntarily participated in
any way in the rebellion and who were the owners
of taxable property to the value of more than twenty
thousand dollars; ^ and, finally, those who had
taken the oath of amnesty under President Lin-
coln's proclamation, or an oath of allegiance, and
had not kept and maintained the same inviolate.
It will be noted that these exceptions, constitut-
ing fourteen classes, excluded from restoration to
citizenship nearly all the men who had taken a
prominent part in the rebellion; but there was a
provision in the proclamation which allowed spe-
cial application to be made to the President for
pardon by any person belonging to the excepted
classes. Thus the leading men of the South could

^ This class was not excluded from amnesty by President
Lincoln, in his proclamation.

THE RECONSTRUCTION PERIOD 151

be pardoned by an act of executive clemency,
whik the rank and file were amnestied in a body.
The records of the State Department show that
nearly fourteen thousand were pardoned by the
Executive in nine months. The method of apply-
ing to take the oath, and of administering it, was
prescribed by the Secretary of State and was very
simple. Any commissioned officer, civil, military,
or naval, of the United States, and any officer, civil
or military, of a loyal state or territory, was de-
clared competent to administer this oath, a copy
of which should be given to the person taking it,
and another copy sent to the State Department
at Washington.

Another proclamation was issued on the same
day, appointing a provisional governor for North
Carolina. This governor was authorized and
directed to have an election held for choosing dele-
gates to a constitutional convention, to be held
with a view to the reconstruction of the state and
its restoration to its constitutional relations with
the United States. All citizens were qualified to
vote who could vote under the constitution and
laws in force immediately before May 20, 1861,
the date when North Carolina passed an ordinance
of secession, and who had taken the oath prescribed
in the proclamation of amnesty. This proclama-
tion diflFered from those issued by Mr. Lincoln on
the 8th of December, 1863, and March 26, 1864,
in one important particular. Mr. Lincoln had
specified ten per cent, of the old electorate as a

15« JOHN SHERMAN

sufficient number to form a state goverament:
Mr. Johnson laid clown no rule as to the numer-
ical proportion which the modified electorate should
bear to the old, but he left to the convention of the
State of North Carolina, which was to be assem-
bled, or to the legislature which might follow, the
power to prescribe the qualifications of electors and
the eligibility of persons to hold office; adding,
significantly, **a power the people of the several
states composing the federal Union have rightfully
exercised from the origin of the government to the
present time."

After the proclamation pertaining to North
Carolina, similar proclamations were issued by
the President relating to Mississippi, Georgia,
Texas, Alabama, South Carolina, and Florida, for
each of which states provisional governors were
appointed. The existing state government in Vir-
ginia was recognized. Mr. Johnson also recog-
nized Louisiana, Arkansas, and Tennessee as re-
constructed states under acts and proclamations
of Mr. Lincoln. The other seven states, except
Texas, took prompt action under Mr. Johnson's
proclamations, and held conventions. In tliat state
the war was considered to be still in existence, and
the final conclusion of the contest there was not
declared until August 20, 1866. Proclamations
were also issued commanding the raising of the
blockade and the restoration of commerce with
the states which had been in rebellion. The state
governments thus created, with the exception of

THE RECONSTRUCTION PERIOD 15S

Mississippi, which rejected it, ratified the Thirteenth
Amendment, abolishing slaveiy, though the ratifi-
cation in Florida was not accomplished until
December 28, 1865.

It does not seem that before the meeting of Con-
gress any general opposition had been aroused
against the plan proposed by President Johnson
for the reconstruction of the Southern States.
Popular attention was laigely occupied with the
results obtained by the war, such as the permanency
of the Union, and the final and absolute libera-
tion of the slaves.

With the meeting of Congress in December,
1865, Senators and Representatives from the
Southern States in process of reconstruction pre-
sented themselves for admission. Admission was
peremptorily denied, and a joint Committee on
Reconstruction consisting of fifteen members, nine
from the House and six from the Senate, was pro-
vided for at the very beginning of Congress. This
committee was to inquire into the condition of the
states, and to report, by bill or otherwise, whether
they were entitled to representation. It was also
provided that no member should be received until
this committee should report. The House denied
the privilege of the floor to the members who pre-
sented themselves.

A great deal of distrust had been created by the
passage of so-called Vagrancy Acts in the Southern
States, which were considered to be aimed at the
freedmen, and, it was claimed, made possible the

154 JOHN SHERMAN

continuance of slavery in a modified form. In one
state the court was to apprentice minors whose
parents did not have the means of support, and if
said minor were the child of a freedman, the former
owner of said minor should have the preference.
In other states it was provided that every adult
freedman should furnish himself or herself with
a comfortable home and visible means of support
within twenty days, and failing to do so was to be
immediately arrested and hired out by public ad-
vertisement to the highest bidder for the remainder
of the year. In one state the failure to pay a poll-
tax of three dollars was to be followed by a similar
procedure, thus virtually resulting in the sale of a
human being for taxes. There could be no ques-
tion as to the intent of these provisions. They
pointed to a continuance of former conditions in
an even more objectionable form. These facts
caused those who had advocated the abolition of
slavery to think that the South would not accept
the Emancipation Proclamation and the Thir-
teenth Amendment in good faith.

The joint committee of fifteen appointed by
Congress, of which Senator Fessenden was chair-
man, made a report in which especial attention
was given to the bitterness of the antagonism
which survived in the South. It said : " The Southern
press, with few exceptions, abounds with weekly
and daily abuse of the institutions and people
of the loyal states; defends the men who led, and
the principles which incited, the rebellion; de-

THE RECONSTRUCTION PERIOD 155

nounces and reviles Southern men who adhered to
the Union; and strives constantly and unscrupu-
lously, by every means in its power, to keep alive
the fire and hate and discord between the sections."

It was shown that Confederate officers had ap-
peared in the different conventions wearing the
uniform which they had worn in the field. There
can be no doubt that the President's course
emboldened many who had resisted the national
authority to maintain an irreconcilable attitude,
not accepting the results of the war.

Mr. Sherman was on friendly terms with Presi-
dent Johnson. For two years they sat side by side
in the Senate, and in the presidential contest of
1864 they were in company in the campaign in
Indiana and other states. For a time it was hoped
that he might bring about a reconciliation between
President Johnson and the more radical Repub-
lican leaders in Congress. His first prominent
utterance in regard to the policy of President John-
son was made in February, 1866. In this he called
attention to the similarity of the reconstruction
policy of President Johnson to that of President
Lincoln. He mentioned that all the members of
Lincoln's Cabinet had acquiesced in the measures
which Johnson had adopted. In answer to the
argument that the Southern States had not pro-
vided for suffrage for the freedmen, he said that,
as regards the Northern States, in some the right
of suffrage had not been given at all, while in
others it had only been given occasionally. When

156 JOHN SHERMAN

Senator Guthrie said that he had great confidence
in the President, Senator Sherman added, "So
have I." There was evidently at this time no
irreparable breach with the President, and leading
Republicans had not abandoned hope that he might
still act in harmony with the Republican majority
in Congress- On the 22d of February, 1866,
however, the President made one of his turbulent
harangues, in which he said: "I have opposed the
Davises, the Toombses, the Slidells, and a long
list of others. Now when I turn around, and at
^e other end of the line find men, I care not by
what names you call them, who still stand opposed
to the restoration to the Union of these states, I am
free to say that I am still in the field." When
called upon to name who they were, he said : " You
ask me who they are. I say Thaddeus Stevens of
Pennsylvania is one; I say Mr. Sumner of the
Senate is another; and Wendell Phillips is another."
These remarks operated as a firebrand. The Pre-
sident not only embittered the radical leaders men-
tioned, and their friends and supporters, but caused
the more conservative elements to distrust him.

From this time on, a policy of moderation to-
wards the South was considered out of the ques-
tion. The most radical measures received the most
enthusiastic support. The presidential veto, which
in ordinary times would have been received with
respect, and its arguments weighed, was absolutely
ignored. It was a source of gratification to pass
a bill against the President's objections. Some of

THE RECONSTRUCTION PERIOD 157

his messages, refusing assent to measures passed
by Congress, were able documents, couched in tem-
perate language, and clearly setting forth consti-
tutional objections, and probable ill results which
would follow from the legislation proposed; but
the feeling against him was so strong that he no
longer commanded respect.

The first session of the Thirty-ninth Congress did
not result in the final enactment of any important
legislation relating to reconstruction, though divers
declaratory resolutions were passed, outlim'ng clearly
the policy which Congress favored. Also, the
Fourteenth Amendment was submitted, June 16,
1866. The Committee on Reconstruction made
majority and minority reports.

The opinion of the majority with reference to
the status of the seceding states was expressed in
the following language :

"It is more than idle, it is a mockery, to contend that
a people who have thrown off their allegiance, destroyed
the local government which bound their states to the
Union as members thereof, defied its authority, refused
to execute its laws, and abrogated every provision which
gave them political rights withia the Union, still retain,
through all, the perfect and entire right to resume, at their
own will and pleasure, all the privileges within the Union,
and especially to participate in its government, and to
control the conduct of its affairs. To admit such a prin-
ciple for one moment would be to declare that treason
is always master and loyalty a blunder. Such a principle
is void by its very nature and essence, because incon-
sistent with the theory of government, and fatal to its very
existence."

158 JOHN SHERMAN

Mr. Sherman gradually aligned himself —
though not with the more radical element in his
party — with those who strenuously opposed the
President. On the 17th of March, 1866, he had
expressed the hope that President Johnson would
approve the Civil Rights Bill, the aim of which
was to protect the colored population of the South-
em States in their civil rights. This statute in the
first section declared all persons bom in the United
States, and not subject to any foreign power (ex-
cluding Indians not taxed), to be citizens of the
United States; and gave to all the same right to
make and enforce contracts, and the same rights
in regard to property; also to all persons the full
and equal benefit of all laws and proceedings for
the security of person and property. The statutes
passed by some of the Southern States in the
preceding year had created palpable discrimination
in the rights of the two races. Crimes of violence
against persons were declared to be offenses when
committed against whites, but no provision for
punishment was made when the same offense was
committed against blacks. President Johnson,
however, objected because the first section, desig-
nating who should be regarded as citizens, com-
prehended Chinese as well as those of African
blood. In an enumeration of rights in the same
section he thought he saw a prohibition of state
statutes against intermarriage between the two
races. He gave at great length, though with less
of ability than in most of his veto messages, his

THE RECONSTRUCTION PERIOD 159

objections to the law. Mr. Sherman joined with
others in passing it over his veto.

When the course of the President in the dispensa-
tion of patronage was criticised, and legislation was
proposed to curtail his powers, Sherman took
radical ground against him. In some remarks on
the Tenure of Office Bill, on the 10th of January,
1867, he desired an amendment in the form of a
penalty clause, and mentioned several cases in
which the President had utterly disregarded the
law in keeping rejected appointees in office. A little
later he criticised the President's method of making
selections, and said that he had no unkind feelings
toward him, but that the latter had no right to turn
men out of office because of political divisions aris-
ing during the course of his administration. On the
18th of February, 1867, he said that the whole
revenue service had been upturned to reward par-
tisans and betray a party.

At other times, however, Sherman's native con-
servatism asserted itself. On the Idth of February,
1867, he said he was willing to enfranchise the
negroes, but would not disfranchise the whites. .
Replying to Senator Sumner he said:

"If we exclude from voting the rebels of the South, who
compose nearly all the former voting population, what
becomes of the republican doctrine that all governments
must be founded on the consent of the governed ? I invoke
constitutional liberty against such a proposition. Beware,
sir, lest in guarding against rebels you destroy the founda-
tion of republican institutions. I like rebels no better

160 JOHN SHERMAN

than the Senator from Massachusetts; but, sir, I will not
supersede one form of oligarchy in which the blacks were
slaves, by another in which the whites are disfranchised
outcasts. Let us introduce no such horrid deformity into
the American Union. Our path has been toward enfran-
chisement and liberty. Let us not turn backward in our
course, but after providing all necessary safeguards for
white and black, let us reconstruct society in the rebel
states upon the broad basis of universal suffrage."

On March 11, 1867, he said that the proposition
then was to reconstruct that civil government w^hich
had been overthrown by rebellion on the basis of
universal suflFrage, and added : " A year ago I was
not in favor of extending enforced negro suffrage
upon the Southern States." In May of the following
year, in speaking of the Fourteenth Amendment, he
said: "I have always thought that was the best,
safest, and surest basis of reconstruction, and had
it not been for the evil genius of Andrew Johnson,
I think this question would have been settled long
ago on the basis of the Fourteenth Amendment to
the Constitution."

In the session beginning December 3, 1866,
Congress took up the whole subject of reconstruc-
tion and passed a variety of measures. The first
was one repealing the authority granted to the
President to pardon those who had participated in
the rebellion. Another, relating to the territories,
was significant in regard to negro suffrage. It pro-
vided that there should be no denial of the elective
franchise there, on account of race, color, or previous
condition of servitude. A proposition was made for

THE RECONSTRUCTION PERIOD 161

the impeachment of the President, which was not
finally acted upon.

At the close of the session, March 2, 1867, the
Act which embodied the congressional theory of
reconstruction was passed over the veto of the
President. By its terms, the ten states which had
been in rebellion, and had not regained their posi-
tion in the Union,^ were divided into five military
districts, in which the military power was to be
supreme, although no sentence aflFecting the life or
liberty of any person was to be executed unless
approved by the officer in command of the district,
and no sentence of death without the approval of
the President. Provision was made for the forma-
tion of a constitution in each of the ten states, by
a convention of delegates, to be elected by the male
citizens of each state, twenty-one years of age and
upward, of whatever race, color, or previous con-
dition. The admission of each state under such
constitution as might be adopted was conditioned
upon the insertion of a provision therein that the
elective franchise should be enjoyed by all persons
who were qualified to vote for delegates. This was
intended to include the negro. Another condition
was that each state should agree to the amendment
to the Constitution proposed by the Thirty-ninth
Congress, known as Article or Amendment 14. A
final section declared all governments to be provi-
sional until the readmission of the respective states
under the provisions of the Act.
* Tennessee was recognized as fully restored to the Union.

162 JOHN SHERMAN

This Act, in substantially the form in which it
became a law, was prepared by Mr. Sherman and
introduced by him as an amendment to a House
Bill, framed by Mr. Thaddeus Stevens. It was
milder in several particulars than the Stevens Bill.
The President, instead of General Grant, General
of the Army, was to appoint the commanders of
the five military districts, and had to approve any
military sentence imposing the death penalty. In
explaining it, Mr. Sherman said that it was founded
upon the proclamation of the President made after
the assassination of President Lincoln, in which
he declared that the rebellion had overthrown all
civil governments in the insurrectionary states, and
had sought by executive mandate to create govern-
ments therein. In analyzing the bill he contended
that existing laws authorized most of the regula-
tions provided in the act. Military districts could
already be formed, and it was the duty of the Prcr
sident to assign military officers to such districts.
The third section authorized a military tribunal in
a state which had been in insurrection. He main-
tained that this was in accordance with authority
which the Supreme Court had recently recognized.
The fourth section required all sentences of military
tribunals to be sent for review to the commanding
officer. A proviso was added to the substitute as
prepared by Sherman, to the eflFect that a sentence
of death should not be enforced until it was sub-
mitted to, and approved by, the President. This
proviso he regarded as unnecessary. The fifth sec-

THE RECONSTRUCTION PERIOD 163

tion demanded, he said, that the Southern States
extend to all their male citizens, without distinc-
tion of race or color, the elective franchise, and
provided a way in which they might reorganize
loyal state gcfvemments.

In this instance, as in others during the ensuing
quarter of a century, Mr. Sherman showed his
singular ability in framing a measure upon which
discordant elements of his party could agree. Not
all of the laws which bear his name met wiih his
own hearty approval. He supported the Resump-
tion Act of 1875 as the best obtainable. The
Silver Purchase Act of 1890 was presented by him
very reluctantly. A supplemental Act was passed
providing the machinery for the registration of
voters, and for the manner of holding elections, as
well as the procedure in the framing and adoption
of the proposed constitutions. This Act provided
for military control of elections. It did not become
a law until the special session of the Fortieth Con-
gress, begun in March, 1867. The Reconstruction
Acts were executed in the five military districts.
There was as much leniency as was consistent with
the letter of the law, but opposition was awakened
at every turn. If there had been reactionary and
unjust measures by the conventions held under the
proclamations of President Johnson, those held
under the Reconstruction Acts were also criticised
for incompetency and extravagances of the gravest
nature. The supplemental Act had provided that
a convention should be held only when a majority

164 JOHN SHERMAN

of the registered electors voted on the question, and
the majority of those voting voted in the affirmative.
In five of the ten states in which reconstruction was
attempted the colored voters had a majority. So
strong was the feeling in Congress that when the
legislation already adopted failed to meet the case,
supplemental acts were passed. It was intended to
secure the supremacy of the Republican party in
the states which had been in insurrection, and then
their admission at the eariiest practicable date.

A Tenure of Office Act had been passed March 2,
1867, the object of which was to prevent the Presi-
dent from using the power of his office to sustain
himself or the policies recommended by him. An
alleged violation of this Act by the President in the
removal of Secretary of War Stanton, and the desig-
nation of Greneral Ix)renzo Thomas in his place, led
to articles of impeachment in the early part of the
year 1868. It was on the ground of the designation
of Greneral Thomas especially that Mr. Sherman
voted for impeachment. He filed a memorandum
at the time of the trial, setting forth his views quite
completely, in which he argues at considerable
length that the Act referred to prohibited temporary
appointments, and that the President had violated
the law. In this memorandum he makes the follow-
ing reference to the general attitude of the President:

"The great offense of the President consists in his
opposition, and thus far successful opposition, to the
constitutional amendment proposed by the Thirty-ninth
Congress, which, approved by nearly all the loyal states,

THE RECONSTRUCTION PERIOD 165

would, if adopted, have restored the rebel states, and thus
have strengthened and restored the Union convulsed by
civil war. Using the sca£Poldings of civil governments
formed by him in those states without authority of law,
he has defeated this amendment; has prolonged civil
strife; postponed reconstruction and reunion; and
aroused again the spirit of rebellion overcome and sub-
dued by war. He alone, of all the citizens of the United
States, by the wise provisions of the Constitution, is not
to have a voice in adopting amendments to the Constitu-
tion; and yet he, by the exercise of a baleful influence and
unauthorized power, has defeated an amendment de-
manded by the result of the war. He has obstructed, as
far as he could, all the efforts of Congress to restore law
and civil government to the rebel states. He has aban-
doned the party which trusted him with power, and the
principles so often avowed by him which induced their
trust."

A trial was had, but on May 16, 1868, the requisite
two thirtis was lacking by the close vote of thirty-
five to nineteen. The Fourteenth Amendment
was, however, ratified by a sufficient number of
states, and the proclamation, or final certificate,
of its adoption was issued by Mr. Seward, Secre-
retary of State, on the 20th of July, 1868. A con-
current resolution was passed by Congress on the
following day, declaring it to be a part of the Con-
stitution of the United States. It is difficult to
summarize in small compass the provisions of this
important amendment. The primary object sought
was to protect the freedman in the enjoyment of
his rights, thus making permanent one of the prin-
cipal results of the war. The Thirteenth Amend-

166 JOHN SHERMAN

ment abolished slavery. The Fifteenth enfran-
chised the negro. The Fourteenth was, in a de-
gree, an intermediate step between the two, though
affecting other vital questions besides the status
of the colored race.

The Fifteenth Amendment was a measure de-
cided upon, not so much because of a desire for
the political equality of the colored race, although
that was a potent factor in influencing the opin-
ions of many, as to insure their protection and with
a view to preventing the supremacy of the element
which had been in rebellion, and securing, and mak-
ing permanent. Republican control in the states of
the South. The final vote upon its submission was
had in the Senate on the 26th of February, 1869,
on which day the conference report between the
two Houses, which had been concurred in by the
House on the preceding day, was adopted. The
proclamation of President Grant, with the certi-
ficate of Mr. Fish, Secretary of State, declaring
its adoption, was made on the 30th of March, 1870.

At the date of the presidential election, in No-
vember, 1868, seven Southern States out of ten had
so far complied with the reconstruction measures
that Acts had been passed for their restoration to
the Union, though the vote of Georgia for the
presidency was virtually Tejected, and representa-
tion in Congress was denied her, first in the
Senate and then in the House.

By March 30, 1870, Acts were passed admit-
ting the other three states to representation in Con-

THE RECONSTRUCTION PERIOD W

gress, Virginia, Mississippi, and Texas. In each
of these Acts it was recited in the preamble that
the legislature had ratified the Fourteenth and
Fifteenth Amendments. Two forms of oath were
prescribed to be taken by the members of the
legislature or state officers. The first was for
those outside of the classes excepted in the several
presidential proclamations. The second was based
upon the claim that an Act of Congress had re-
moved the disabilities of the others. In this man-
ner especial care was taken to ignore a general
proclamation of amnesty, issued by President John-
son, on Christmas Day of 1868.

On May 31, 1870, an Act was passed for the en-
forcement of the Fourteenth and Fifteenth Amend-
ments. It provided not only penalties against state
officers for the violation of these amendments, but
severe penalties against any one within the states
who should undertake by unlawful means to deprive
any other person of his right to qualify to vote
at any election. This was called the Enforcement
Act.

On the 20th of April, 1871, the Ku-Klux Act was
passed, which sought to legislate for the preserva-
tion of civil and political rights within the states,
and for punishment of the infraction of the same
by individuals. At divers times after the establish-
ment of the state government to succeed military
control, soldiers were sent into the reconstructed
states at the request of the governors or other
officials.

168 JOHN SHERMAN

The civil regime which followed military rule
in six of the states, in 1868, and in the remaining
four in 1870, w^as much more demoralizing than
the military rule which had preceded, although
in form it was more in accordance with the prin-
ciples of republican government. The rankest
corruption was rife in the reconstructed govern-
ments. Greorgia promptly broke away from the
so-called "carpet-bag" rule at the election in De-
cember, 1870. In the years from 1874 to 1876
others of the reconstructed states succeeded in
overthrowing the existing regime, and by 1877 the
Solid South was under white Democratic govern-
ment.

Thirty years after the close of the Civil War,
when asperities were softened, and he had re-
flected upon the events of the reconstruction era,
Mr. Sherman said in his " Recollections":

"It became imperative, during the long period before
the meeting of Congress, that President Johnson should,
in the absence of legislation, formulate some plan for the
reconstruction of these states. He did adopt substan-
tially the plan proposed and' acted upon by Mr. Lin-
coln. After this long lapse of time I am convinced
that Mr. Johnson's scheme of reorganization was wise and
judicious. It was unfortunate that it had not the sanction
of Congress, and that events soon brought the President
and Congress into hostility. ... In the absence of law
both Lincoln and Johnson did substantially right when
they adopted a plan of their own, and endeavored to
carry it into execution. ... I believe that all the acts
and proclamations of President Johnson before the meet-
ing of Congress were wise and expedient, and that there

THE RECONSTRUCTION PERIOD 169

would have been no difficulty between Congress and the
President but for his personal conduct, and especially
his treatment of Congress and leading Congressmen.*'

As explaining the time when he l)egan to act
with the radical members of his party, he says, in
speaking of the vote gn the Civil Rights Bill : " From
this time forth I heartily joined with my political
associates in the measures adopted to secure a
loyal reorganization of the Southern States. I was
largely influenced by the harsh treatment of the
freedmen in the South, under acts adopted by the
reconstructed legislatures. The outrages of the
Ku-Klux Klans seemed to me to be so atrocious
and wicked that the men who committed them
were not only unworthy to govern, but unfit to
Uve."

In some remarks in the Senate, upon the Blair
Bill for government aid to education, on the 13th
of March, 1890, he expressed himself even more
definitely, especially upon the enfranchisement of
the colored race and the disposition of citizens of
the Northern States toward the South at the close
of the wair.

These remarks were elicited by attacks upon
the Republican party and the accusation of North-
ern unfriendliness to the South. He said:

"When the Civil War closed there was a feeling uni-
versal in the Northern States that the best way to solve the
difficulty was to restore to the people of the Southern
States their state governments with all the original powers
attached thereto, with only such limitations and qualifica«

170 JOHN SHERMAN

tions as would enable the people of the United States to
secure the results of the w^r. . . . There was at that
time no feeling of hostility against the people of the
South. ... At that time it was not contemplated to arm
the negro with suffrage. . . . You may go back to the
records and you will see . . . that the laws passed by the
various Southern States, when they first assumed to act,
after the dose of hostilities, were so cruel, so wrong in our
view of the rights of the colored people of the South, so
unjust in our view of the rights of the white Republicans
of the South, . . . that those laws burned like coals of
fire in the Northern heart. . . . The belief grew stronger
and stronger that the people who had waged war to break
up the Union intended to overthrow the results of the war,
and to deprive those who were made free by the policy
of that war of all the rights of citizenship. That was the
feeling. It was a feeling in which I participated. ... It
was not until the people of the North felt that there was
no way whatever left to protect the acknowledged rights
of the colored men of the South except to arm them with
suffrage, that we approached the question, and we did
so with great difficulty and with much delay. . . . But,
Sir, when the time came that we saw there was no other
protection for the people of the Southern States, and
especially for those who had been emancipated, ... we
reluctantly, slowly, deliberately adopted that remedy, and
the only remedy fit for the case. There was no feehng of
passion about it. There was no feeling of hatred about it.
... It was adopted in the form of a constitutional
amendment, and voted for by such men as I have named,
— Fessenden and Trumbull, and Doolittle and Mr. Cox.
... It was adopted by them as the last resort. . . . Mr.
President, this is all that I need to say. If there is any-
thing wrong in the situation of the Southern affairs, in
every case they have brought it upon themelves. When
the Senator from Mississippi yesterday spoke of the feel-
ing of hate that exists in the Northern States he described

THE RECONSTRUCTION PERIOD 171

what is only to be seen in his own imagination. ... If
there are any ills in the South they have been brought
upon them by themselves. ... If they complain of the
Fifteenth Amendment . . . they compelled us to pass it,
in the judgment of the most conservative men of the
Northern States, not of the extreme men; not of Mr.
Sumner, or a few others who might be picked out, but
the conservative classes of the Northern States including
as I believe a great mass ci the Democrats of the North
who felt that there was no other way. ... It is true it
has not turned out as we expected, because no man then
dreamed that such measures would be resorted to as have
been resorted to, in order to deprive the negro of his rights.
No man then dreamed of Ku-Klux Klans and of the savage
machinery by which this exclusion has been perfected."

When asked by Senator Butler of South Carolina
whether in his judgment as a statesman and as a
citizen, he did not think that the conduct of Andrew
Johnson, when he was President of the United
States, had as much to do with the condition of
things in the South as the conduct of the Southern
people themselves, he said:

"I say that Andrew Johnson is more responsible for
the evils that have been brought upon this country by the
treatment of the negroes than anybody else. He was
elected by the Republicans as a part of the generous
treatment they have always extended to the people of the
South. They took Johnson, in 1864, and put him on the
ticket. They took him as a Southern Democrat, and when
he came into power he deserved the Republican party;
he turned his back upon that party, and joined the
Democrats of the South in this system of measures that
I have complained of, and our fight was against Johnson
as well as against the extreme men of the South."

vra

FINANCIAL CONDinONB AFTEB THE CIVIL WAR —
THE CUBRENCY — PUBUC DEBT

The distinctive features of the financial and com-
mercial situation at the close of the war were the
inflation of prices and the existence of an era of
speculation in which money was plentiful and
profits were large. Industry and enterprise had
received a great stimulus from the herculean efforts
made to subdue the rebellion, and there had fol-
lowed an unprecedented degree of energy in the
development of the country. There was every indi-
cation that this development would continue, and
become a permanent feature.

Numerous plans were advocated for the resump-
tion of specie payments. On the 17th of May, 1866,
Chief Justice Chase had written to Horace Greeley:
"The way to resumption is to resume." This
catchy phrase was taken up by Mr. Greeley and
others, who advocated an immediate return to specie
payments without any change in the volume of
outstanding notes or accumulation of a gold reserve;
indeed, without any legislative action, relying en-
tirely upon the action of the Executive Department
of the government with the ordinary means at
hand.

CURRENCY AND PUBLIC DEBT 173

Some believed in the absolute retirement of the
greenbacks. They advised destroying them when-
ever received at the Treasury, and, if they did not
come in with sufficient rapidity, exchanging bonds
for them.

Secretary McCuUoch, who had been placed at
the head of the Treasury Department on the second
inauguration of Lincoln, believed in their gradual
withdrawal, regarding them as an emergency cir-
culation. It had been the general impression that
the greenbacks would be retired soon after the close
of hostilities, but in what way, or exactly how soon,
had been considered only vaguely. Others favored
the accumulation of a gold reserve, which at that
time, with the balance of trade against us, and the
gold supply almost exhausted, was a task of no
little difficulty, although it is to be observed that
this was an essential feature of the plan finally
adopted.

Another class, among whom may be included
Senator Sherman, did not favor immediate inter-
ference with the greenbacks. They thought a policy
of "let alone" to be best; that the problem of re-
sumption was primarily a commercial one and need
not depend upon legislation, at least not until later.
They believed that with the growth of the country
and the increasing demands for currency, outstand-
ing issues of greenbacks would be required as part
of the necessary volume of money. In the South
there was no money in circulation. This void must
be filled. The fall in the gold premium from the

174 JOHN SHERMAN

maximum of July, 1864, until the successful termi-
nation of the contest had been so rapid that it seemed
reasonable to expect the premium would entirely
disappear.

The insistent arguments against contraction did
not begin to be advanced until a considerable time
after the close of the war. It is evident that if early
resumption was to be accomplished, this was the
occasion. The prices of gold had been subjected to
extreme fluctuations; the business community had
become accustomed to the conduct of enterprises
when the gold market showed violent changes in
values from day to day. Then, too, with an abun-
dance of circulating medium, and with an unusual
share of the production of the country required for
supplies for the prosecution of the war, payments
had been prompt and a smaller share of business
than usual had been conducted upon credit, so that
no great mass of debts had been contracted by
individuals, though the obligations of the govern-
ment were very laige.

Secretary McCuUoch took strong ground in favor
of the retirement of the legal tenders. In an address
at his home in Fort Wayne, in the month of October,
1865, he said: "If Congress shall early in the ap-
proaching session authorize the funding of the legal
tenders, and the work of reduction is commenced
and carried on resolutely, but carefully and pru-
dently, we shall reach it " (i. e. the solid ground of
specie payments), " probably without serious embar-
rassment to legitimate business; if not, we shall have

CURRENCY AND PUBLIC DEBT 175

a brief period of hollow and seductive prosperity
resulting in widespread bankruptcy and disaster."

Mr. Sherman's plan of resumption was altogether
a diflferent one. The object to which he attached the
greatest importance was the funding of the im-
mense national debt at lower rates of interest. To
accomplish this he regarded it as essential that an
abundant supply of legal tenders should be con-
tinued in circulation, and be made by law readily
exchangeable for bonds drawing a low rate of inter-
est, of which, in order to make them more accept-
able, principal and interest should be made payable
in gold. With such a currency he was sure the bonds
and short-time obligations would be rapidly con-
verted. At the same time he was reaching a conclu-
sion to which he later adhered, that it was best to
retain the greenbacks as a leading part of the per-
manent monetary supply.

He came to believe that the people of the United
States should have* the benefit of these notes as a
loan without interest. Another argument with him
was the desirability of having some form of paper
currency legal tender, a quality which could not be
given to national bank notes. He was no doubt
very much influenced by the business prosperity
which existed after the issuance of the greenbacks.
In his letters during the war, beginning in 1862, he
had frequently shown his gratification at the sur-
prising degree of commercial activity.

In commenting upon Mr. McCuUoch's opinions
he says:

17« JOHN SHERMAN

"At this time there was a wide difference of opinion
between Secretary McCuUoch and myself as to the finan-
cial policy of the government in respect to the public debt
and the currency. He was in favor of a rapid contraction
of the currency by funding it into interest-bearing bonds.
I was in favor of maintaining in circulation the then
existing volume of currency as an aid to the funding of all
forms di interest-bearing securities into bonds redeemable
within a brief period, at the pleasure of the United States,
and bearing as low a rate of interest as possible. Both of
us were in favor of specie payments, he by contraction,
and I by the gradual cidvancement of the credit and value
of our currency to the specie standard. With him specie
payment was the primary object. With me it was a
secondary object, to follow the advancing credit of the
government. Each of us was in favor of Uie payment of
tiie interest of bonds in coin. ... A large proportion
of national securities were payable in lawful money or
United States notes. He, by contraction, would have
made this payment more difficulty while I, by retaining
the notes in existence, would induce the holders of cur-
rency certificates to convert them into coin obligations
bearing a lower rate of interest." .

The rapidly maturing claims against the gov-
ernment were taken up for the most part by the
issue of "seven-thirty" bonds, $830,000,000 of
which were outstanding October 1, 1865, a volume
exceeding that of any prior bond issue. The pub-
lic debt statement on June 30, 1865, showed the
usual variety of outstanding securities; the de-
mand Treasury notes and temporary loans were,
however, rapidly diminishing in amount. After
the public debt reached its maximum, on the 31st
of August, 1865, radical changes occurred. Bonds

CURRENCY AND PUBLIC DEBT 177

were issued, not to meet expenses, but to fund out-
standing obligations. Expenses no longer exceeded
receipts, but receipts were greatly in excess of ex-
penditures. The problem of the time was how to
meet these changed conditions, to provide a proper
currency, and to adopt a policy with reference to the
public debt which should, at the same time, secure
the best results to the government and relieve the
people of burdens of taxation unduly severe.

Secretary McCulloch's report, in December, 1865,
in line with remarks already quoted, strongly
favored the withdrawal of the greenbacks, main-
taining that the existing Legal-Tender Acts were war
measures. He took up the different objections to
reduction of the currency — that it would operate
injuriously by reducing prices; that it would re-
duce the public revenue; and that it would en-
danger the public credit by preventing funding.

He said :

"The people are now comparatively free from debt.
. . . So far as individual indebtedness is regarded, it may
be remarked that the people of the United States, if not as
free from debt as they were six months ago, are much less
in debt than they have been in previous years, and alto-
gether less than they will be when the inevitable day of
payment comes around, if the volume of paper money is
not curtailed. . . . Business is not in a healthy condition;
it is speculative, feverish, uncertain. Every day that con-
traction is deferred increases the difficulty of preventing
a financial collapse. Prices and credits will not remain as
they are. The tide will either recede or advance, and it
will not recede without the exercise of the controlling
power of Congress."

178 JOHN SHERMAN

He recommended that the compound-inteiest
notes should cease to be a legal tender from the
day of their maturity, and that he be authorized
to sell bonds bearing interest at a rate not ex-
ceeding six per cent., for the purpose of retiring
these as well as United States notes. He esti-
mated that it would not be necessaiy to retire
more than a hundred millions, or, at most, two
hundred millions, of the legal-tender notes, besides
the compound-interest notes, before the desired
result, parity of notes with specie, would be ob-
tained. He also recommended that two hundred
million dollars be applied annually towards the
principal and interest of the public debt.

The recommendations of Secretary McCulfoch
were received with great favor in the House, where
a resolution concurring in his views passed, almost
unanimously, December 18, 1865. A bill was in-
troduced authorizing him to sell any of the bonds
authorized by the Act of March 3, 1865, for the
purpose of retiring Treasury notes, as well as other
obligations of the government. This was, how-
ever, materially amended so as to provide that ten
millions might be retired within six months, and
thereafter not more than four millions in any one
month.

Mr. Sherman's objections to this measure were
those already mentioned, and, besides, that it gave
to an executive officer a power which should be
exercised by Congress, viz.: to determine the ex-
tent to which the volume of currency should be

CURRENCY AND PUBLIC DEBT 179

reduced; also, that it enabled him to retire United
States notes at a rapid rate, and increased the
bonded indebtedness of the country; further, that,
by converting into coin liabilities the compound-
interest notes and Treasury notes bearing seven
and three tenths per cent, interest, and expressly
payable in currency, it would greatly add to the
burden of the debt. The amount of these liabiUties
was then one billion.

This Bill, however, became a law on the 12th
day of April, 1866, as an amendment to the Act of
March 3, 1865.

On the 30th of June, 1865, the quantity of paper
currency in circulation was greater than at any
date during the war, and more than three times
as great as in 1860. Under the tax which had been
imposed upon state bank notes to take effect July
1, 1866, they were rapidly disappearing. The vac-
uum caused by their withdrawal, however, was
destined to be more than filled by the issuance
of national bank notes. Before as well as after
the passage of the Act of April 12, 1866, there
was a decrease in outstanding greenbacks, so that
by July 1, 1867, the quantity had been reduced to
$319,000,000. Notwithstanding this reduction in
the circulation of the greenbacks and a reduction
in ensuing years until 1868, the premium on gold
in May, 1865, showed a lower average for that
month than the average for any one of the four
years succeeding June 30, 1865.

It is evident that the triumphant ending of

180 JOHN SHERMAN

the war exerted an influence in diminishing the
premium on gold which could hardly be perma-
nent. In the month of May, 1865, the average value
of a greenback dollar was 73.7. So late as the month
of September, 1869, it was less valuable. Whether
this premium would have disappeared, if contrac-
tion had been continued, it is impossible to state,
but it is difficult to overrate the derangement of
business conditions caused by a departure from
gold and silver as the standards of value. During
these four years also the balance of trade was against
us, especially in 1869, and the exports of gold ex-
ceeded the whole product of our own mines. It
was even true that in the years 1866 and 1868 the
net exports of gold, as determined by the differ-
ence between exports and imports, exceeded the
domestic product. Unfavorable crops, and ex-
penses in excess of estimates, in 1867, also exerted
an unfavorable influence.

The Secretary renewed his recommendations for
contraction of the currency, in December, 1866,
and again later, but in the mean time popular sen-
timent was crystallizing in opposition to further
reduction.

A study of conditions during the Civil War, and
after its close, goes far to explain why the senti-
ment against contraction was so strong. Discus-
sions relating to currency and legal tender were
of course influenced by the financial conditions
of the time. Prices were high in 1865; great in-
vestments were made in numerous enterprises at

CURRENCY AND PUBLIC DEBT 181

the existing high prices; agricultural areas of the
West were rapidly developed, and the production
of cereals vastly increased. With the returning
soldiers of the disbanding armies, and increased
immigration from abroad, new fields were settled.
The change of so great a multitude of soldiers
from consumers to producers, changed the re-
lation between demand and supply in many classes
of products. Railways were buUt, so that in eight
years, iProm 1865 to 1873, the total mileage in the
country was doubled. Just as military operations
had been conducted on a tremendous scale, and
with a boldness never before thought of in this
country, so, now, industrial and commercial under-
takings were promoted with the same boldness
and energy. The crucial fact was that many of
these enterprises were undertaken on long-time
credits, a thing almost unknown during the war.
As a result the great body of those who were
interested in the new era of development were
greatly disturbed by any fall in prices, and traced
its cause to a diminished premium on gold and
the consequent increased value of the circulating
medium in which debts must be paid.

Another set of facts made its impression. Not
only was there a tendency towards lower values in
the prevalent currency, with every decrease of the
premium on gold, but after 1866 the general trend
of prices, as expressed in gold, was decidedly
downward; and this was true not alone in the
United States but throughout the world. That

182 JOHN SHERMAN

year marked the end of a brief cycle of rising prices,
which was succeeded by a period of falling prices
reaching a minimum in 1869. The unfavorable
effect of this decrease in prices was nowhere more
keenly felt than among the farmers of the United
States. Not only was the relation of demand and
supply very much influenced by increased areas
of cultivation here, but competing fields were ap-
pearing in other parts of the world. The valley
of the Danube was developed, and navigation was
made possible at its mouth; Roumania and India
increased their export of wheat for the European
market; and, in the new world, Canada began to
send grains to Europe on a large scale.

Considerations of political expediency began to
exert a potent influence. After the war and the
flurry occasioned by reconstruction had passed,
the strongest factor in the success or failure of a
political party on election day was the business con-
dition of the country, or the apparent condition.
The moral and sentimental issues which on the
questions of slavery and Union swayed the popular
heart were lacking. A more commercial era gave
greater weight to commercial considerations. When
prices were favorable and business active the
party in control could expect a further lease of
power, but if a crisis should occur and business
depression rest upon the land, the party out of
power found, in these facts, its strongest and most
successful claim for obtaining control.

In the later years of the war business was pros-

CURRENCY AND PUBLIC DEBT 188

perous. After its close there was no longer the
feverish activity which had prevailed while mil-
lions were expended every week for military sup-
plies, and when every one seemed to be enjoying
unheard-of prosperity. But it was desired that the
opportunities for profit should continue, and any
step which placed a check upon the existing order
was opposed.

In every case of great development of wealth,
when large fortunes are made, there is at the same
time an army of speculators made up of men who
seek fortunes from a rise in prices. In times of
activity they succeed. Among them are many of
the most acute minds, men who realize that legis-
lation is a powerful auxiliary in helping them on.
They exert an influence out of proportion to their
numbers. Such men opposed contraction because
it meant lower prices. Again there was a multitude
of producers accustomed to high prices who joined
in opposing the withdrawal of the greenbacks. Also,
the people generally had come to like this form
of currency. They were so superior to the bills
issued by state banks before the war that they
were reluctant to part with them.

An Act was introduced, late in 1867, suspending
the authority to retire greenbacks. It passed the
House by the decisive vote of 127 yeas to 32 nays.
It was strongly supported by Mr. Sherman in the
Senate. The reasons which he gave in its favor were :

"First, it will satisfy the public mind that no further
contraction will be made when industry is in a measure

184. JOHN SHERMAN

paralyzed. We hear the complaint from all parts of the
country, from all branches of industry, from every state
in the Union that industry for some reason is paralyzed
and that trade and enterprise are not so well rewarded as
they were. . . . One hundred and forty million dollars
have been withdrawn out of seven hundred and thirty-
seven million dollars in less than two years. There is no
example, that I know of, of such rapid contraction. . . .
Second, this Bill will restore to the legislature their power
over the currency, a power too important to be delegated
to any single officer of the government. . . . Third, this
will strongly impress upon Congress the imperative duty
of acting wisely upon financial measures, for the respon-
sibility will then rest entirely upon Congress, and will not
be shared with them by the Secretary of the Treasury.
Fourth, it will encourage business men to continue old
and embark in new enterprises, when they are assured
that no change will be made in the measure of value
without the open and deliberate consent of their repre-
sentatives."

In his computation of the amount of contraction
he evidently \neluded interest-bearing Treasury
notes, which, to an extent, circulated as money or
were used as a reserve by banks. Senator Sumner,
in advocating the Bill, placed the contraction at
$160,000,000. Mr. Sherman said that the question
was only preliminary to others of far greater im-
portance which involved, " first, the existence of the
banking system of the United States; second, the
time and manner of resuming specie payments;
third, the mode of redeeming the debt of the United
States, and the kind of money in which it may be
redeemed; and, in this connection, the taxes, if any.

CURRENCY AND PUBLIC DEBT 185

that may be levied upon the public creditors;
fourth, such a reduction of our expenditures and
taxes as will relieve our constituents, as far as prac-
ticable, from the burdens resulting from the recent
war." After a lengthy debate the Bill passed the
Senate by a vote of 33 to 4, becoming a law Febru-
ary 4, 1868.

Next came the famous "Act to Strengthen the
Public Credit," passed March 18, 1869, which in
unequivocal language pledged the faith of the
United States to the payment in coin, or its equi-
valent, of all obligations of the United States, ex-
cept where otherwise expressly provided. This was
a declaration of triumph over the result of the elec-
tions of 1868, in which the two parties had taken
diametrically opposite grounds — the Democratic
party favoring the payment of bonds in paper
money, and the Republican party insisting upon
ultimate payment in gold. There was no further
legislation relating to currency until the Act of
July 12, 1870, which authorized an addition of
$54,000,000 of national bank notes to the $300,-
000,000 already authorized.

Legislation was attempted by the passage of a bill,
in April, 1874, for the permanent increase of the
greenback currency to $400,000,000. An important
question had arisen relating to the authority of the
Secretary of the Treasury to reissue notes which had
been redeemed and lodged in the Treasury. At the
date of the passage of the Act of 1868, forbidding
further reduction, the amount outstanding was

186 JOHN SHERMAN

$356,000,000; but there was an additional $44,000,-
000 redeemed and in the Treasury, which made the
total $400,000,000, the limit placed by the Act of
1864. It is to be noted that while the nominal limit
in the Act of 1864 was $450,000,000, the actual
limit was $400,000,000, $50,000,000 being issued
for redemption of currency deposits. In times of
stress Secretaries of the Treasury issued a part of this
$44,000,000 to relieve the situation. This was done
twice while Secretary Boutwell was in charge of the
Treasury. Secretary Richardson, after the crisis of
1873, made further issues from the legal tenders,
so that the total amount of reissues aggregated
$26,000,000. This Bill of April, 1874, would have
ratified Secretary Richardson's action, and author-
ized a still further issue of $18,000,000. President
Grant vetoed it. In the following June, however,
an Act was passed relating to the amount of na-
tional bank notes, in which a section was inserted,
as a compromise, providing that the amount of
United States notes should not exceed the sum of
$382,000,000, which was to be counted as a part of
the public debt, and no part should be held or used
as a reserve. This section, by necessary implication,
fixed the amount at $382,000,000, the amount then
outstanding, which included the $26,000,000 issued
by Secretary Richardson. In the following January,
1875, the Act was passed for the resumption of
specie payments. This repealed all limitations upon
the aggregate amount of national bank notes to be
issued, and provided that whenever circulating

CUKRENCY AND PUBLIC DEBT 187

notes were issued by them. United States notes were
to be diminished by four fifths of the amount of
national bank notes issued until the aggregate was
reduced to $300,000,000. It was thus a feature of
the plan for resumption to increase national bank
notes and diminish greenbacks. This Act provided
for the resumption of specie payments, January 1,
1879. The legislation relating to resumption will be
considered in a chapter upon that subject.

While these successive changes with reference to
the greenbacks were in progress, conditions were
very much modified by the issuance of other forms
of currency and by the premium on .gold. Com-
pound-interest notes were virtually out of circulation
by 1869. National bank notes, except in the years
1869 and 1870, in which there was a slight decrease,
steadily increased until 1875, at which time the
total in circulation was $340,000,000. Fractional
currency in circulation also increased from the date
of its first issue in 1863, when it amounted to
$15,800,000, until 1874, when it was $38,000,000.
The tendency of the total circulation was irregular.
In 1866, 1867, and 1869 there was a decrease partly
due in the first two years to the policy of contraction
inaugurated by Secretary McCulloch; from 1869
up to 1875 there was an annual increase.

The question of the validity or the constitution-
ality of the Acts authorizing the issue of legal-tender
notes was under consideration by the courts in the
later sixties. During the war it had been held by
state courts, with substantial unanimity, that the

188 JOHN SHERMAN

Acts were valid. Several significant decisions, how-
ever, were rendered by the Supreme Court of the
United States, which pointed in the opposite direc-
tion, one to the effect that the notes were not legal
tender for state taxes; another that they were
exempt from taxation because they were obligations
or securities of the government; also, as was very
clear, that they were not legal tender in payment of
contracts specifically calling for payment in specie.
It was at last decided, in February, 1870, in the case
of Hepburn vs. Griswold, that, in the case of a debt
incurred and maturing before the passage of the
Act, greenbacks did not constitute a valid payment.
The decision was given by a divided court, four to
three, and the opinion was rendered by Chief Jus-
tice Chase, who had been Secretary of the Treasury
when the Legal-Tender Acts were passed. A second
case was taken to the Supreme Court, then differ-
ently constituted, and a decision rendered thereon, in
May, 1871. The prior holding was reversed, and it
was decided that the legal-tender notes constituted
a valid payment, not only for debts incurred after
the passage of the Legal-Tender Act or Acts, but for
those incurred before. Both in the argument and in
the decision, the exigency of the occasion when they
were issued received prominent attention.

A statute, passed on the 31st of May, 1878, forbade
the Secretary of the Treasury, or other officer under
him, to cancel or retire any more of tlie United States
legal-tender notes; it also provided that when any of
the notes might be redeemed, or be received into the

CURRENCY AND PUBLIC DEBT 189

Treasury under any law, from any source whatever,
they should be "reissued and paid out again and
kept in circulation." This statute was clearly in-
tended to give the right to pay out notes redeemed
by the Treasury. It was an assertion of the power
to issue legal-tender notes in time of peace, when
theretofore the Acts which had been passed had
been explained as an exercise of the war power.
Thus the question was clearly raised whether the
right of Congress to authorize .legal-tender notes was
limited in its exercise to the emergencies of war.
On this subject the Supreme Court decided, with
only one dissenting voice, that such power existed.
Justice Gray, in rendering the decision upon this
point in the case of Juilliard vs. Greenman, on
the 3d of March, 1884, placed great reliance upon
the principles enunciated in the decision of Chief
Justice Marshall in McCulloch vs. Maryland. In
stating the matter in controversy, he said: **The
single question, therefore, to be considered ... is
whether notes of the United States, issued in time
of war, under Acts of Congress declaring them to be
a legal tender in payment of private debts, and
afterwards, in time of peace, redeemed and paid in
gold coin at the Treasury, and then reissued under
the Act of 1878, can, under the Constitution of the
United States, be a legal tender in payment of such
debts."

Justice Gray gives a broad scope to the powers of
the government. After quoting the powers enumer-
ated by Chief Justice Marshall, he says: "A Con-

190 JOHN SHERMAN

stitution establishing a frame of government, de-
claring fundamental principles and creating a
national sovereignty, and intended to endure for
ages, and to be adapted to the various crises of
human affairs, is not to be interpreted with the
strictness of a private contract."

He relied on the section giving Congress power
''to make all laws which shall be necessary and
proper for carrying into execution the foregoing
powers," and says: "The words 'necessary and
proper' are not limited to such measures as are
absolutely and indispensably necessary, . . . but
they include all appropriate means which are con-
ducive or adapted to the end to be accomplished."

With this decision the controversy upon the
legality of the greenbacks was set at rest, and the
total amount then in existence, $346,681,016, has
continued from 1878 to the present time as the
quantity outstanding.

REDUCTION OF TAXATION. — TARIFF. — INTERNAL
REVENUE

At the close of the war confijicting opinions were
advanced with reference to pajdng the debt incurred.
Some favored the continuance of the scale of tax-
ation which had been adopted during the contest
until the whole indebtedness should be paid off.
A more conservative view prevailed, however, be-
cause it was realized that a continuance of war-
time taxation would hamper the development of
the country, and impose too heavy a burden on the
people. Early steps were taken to reduce taxes.
The measures for their discontinuance were char-
acterized by something of the same haste and lack
of system as marked those which imposed them.

In legislation relating to the tariff, for years
succeeding the war, the protectionist sentiment pre-
vailed. Although ostensibly changes had been made
in the schedules, to make tariff rates conform to
internal revenue taxes, this principle was usually
applied in such manner as to increase the protec-
tion afforded by duties. Absorbing attention was
at first given to questions of reconstruction, and
the truth was illustrated that the wisest and most
judicious attention is given to great problems of

192 JOHN SHERMAN

legislation only when they are regarded as of para-
mount importance.

Tlie first Tariff Act passed after the war, that of
May 16, 1866, imposing a duty of twenty per cent.
ad valorem on live animals, — horses, mules, cattle,
etc-, was a concession to the agricultural interests.
The next Act, that of July 28, 1866, showed pro-
tectionist leanings, in that, in computations of the
dutiable value of merchandise subject to ad valorem
duties, it was enacted there should be added the cost
of .transportation from the place of export to tlie
United States.

The next measure, that of March 2, 1867, caused
a considerable increase in the duties upon wool,
with compensating duties on woolen goods. In
adjusting the rates as between the two it was com-
puted that one pound of woolen goods should re-
present four pounds of raw wool. This Act changed
the classification and very considerably increased
the rates. Prior tariffs had levied a duty according
to the value per pound, without subdivision or refer-
ence to the purpose to which it was to be applied.
The Act of March 2, 1867, made a division into
clothing, combing, and carpet wools, respectively,
and subdivided the different varieties; the first two
into those worth more or less than thirty-two cents
per pound, and the last into those worth more or
less than twelve cents per pound.

While the wool duties in the Act of 1867 were
established at a rate very materially in advance of
those which had existed under the Act of 1864,

REDUCTION OF TAXATION IftS

several reasons for this action were given which
appealed very strongly to Congress. The demand
for woolen goods had been very much diminished
by the disbandment of the anny, and it is said that
a still further diminution had resulted from the sale
by the government of great quantities of garments
which had been purchased, but were not required
because of the termination of the war. The wool-
growers and the wool manufacturers held several
conferences and agreed upon recommendations
which were in substance accepted by Congress.
A commission of three members, which had been
appointed under the Act of March 3, 1865, and
of which Mr. David A. Wells was chairman, con-
sidered these recommendations. Notwithstanding
that at this time Mr. Wells was advocating sweeping
reductions in tariff schedules, he united with the
other two members in favoring these rates upon
wool and woolens.

A sentiment for tariff reduction gained consider-
able strength about the year 1870, and resulted in
the lowering of some protective duties and the re-
moval of a considerable number of revenue duties.
Again, in 1872, considerable additions were made
to the free list, and a horizontal reduction of ten
per cent, was made on a variety of articles. In 1870
the duties on tea and coffee, and kindred non-
competing products, were materially reduced, and
two years later, in 1872, those on tea and coffee
were entirely removed.

In the discussions which led to tlie reductions

IM JOHN SHERMAN

in protective duties a division by geographical lines
began to manifest itself. There was a strong senti-
ment for revision in the agricultural regions of the
Western States, where the only interest which
strongly asserted itself for tariff was that of the
wool-growers. Mr. William B. Allison, afterwards
a Senator of the United States, took an active part
in advocating a decrease of duties, and referred to
the declarations made by the leading supporters of
tariff bills passed during and since the war, that
they were designed only as temporary measures.
He said : ** But I may be asked how this reduction
shall be made. I think it should be made upon all ,
leading articles, or nearly all. ... I shall move
that the pending bill be recommitted to the Com-
mittee on Ways and Means, with instructions to
report a reduction upon existing rates of duty
equivalent to twenty per cent. . . ."

Mr. Sherman, in the Senate, favored the reduc-
tion, and said, in speaking of the manufacturers:
** I believe it is for their interest to have this re-
duction of ten per cent, made because their interest
is so connected with the general interest of the sub-
ject-matter, with the maintenance of the protective
system, that I believe it would be a misfortune to
them if this concession to the consumers of the
country should now be refused. ... I say again,
. . . that in my deliberate judgment, it is better
for the protected industries in this country that this
slight modification of duties should be made rather
than to invite a contest which will endanger the
whole system."

REDUCTION OF TAXATION 195

There were further manifestations of a sentiment
for reduction during the campaign of 1872, but
after the election the conviction prevailed that this
sentiment was on the wane. The increase of importa-
tions caused increased exportations of gold, and,
as in war time, this fact created an argument for
higher duties. The lessened revenue which resulted
from the crisis of 1873, and the general depression
of industry, also afforded arguments for a restora-
tion of the duties lowered in 1872. As a result, a bill
was introduced which became a law on the 3d of
March, 1875, repealing the ten per cent, reduction.

Prom this time until March 3, 1883, there was
no material change in tariff schedules. In 1876
an act was passed to carry into effect a conven-
tion made with the Hawaiian Islands, providing
that sugar and other products of those islands
should be entered free of duty, and in 1879, quinine
was placed on the free list.

Internal revenue taxation reached its maximum
in the year 1866, when the total amount collected
amounted to $309,000,000, the largest amount
realized in a single year until that time from any
one general source of taxation in this or any coun-
try. It was generally realized that such heavy taxes
were inconsistent with the commercial growth and
prosperity of the country, and the disposition to
make a rapid reduction of the public debt yielded
to a desire to lighten the burdens of the people.
It was also realized that the system was incongru-
ous and unnecessarily complex and burdensome.

196 JOHN SHERMAN

The Revenue Commission appointed mider the
Act of March 3, 1865, reported in Januaiy, 1866,
criticising the system then in vogue for its diffuse-
ness and for the burdens which it imposed upon
industry. It recommended the speedy reduction
or abolition of taxes which in the judgment of the
commission tended to check development, and the
retention of those which in their ojMnion feO chiefly
on realized wealth, such as the income and inherit-
ance taxes. It advised the concentration of the
taxes on a few commodities; and favored the reor-
ganization of the system which, if properly organ-
ized and administered, would, in their judgment,
on the basis of existing rates, yield $500,000,000
per annum. These recommendations relating to
administration and to reductions, though not imme-
diately accepted, were, for the most part, adopted
in the three succeeding years.

The law of July 13, 1866, repealed the taxes on
coal and pig-iron, and lowered the rates on manu-
factures as well as on the gross receipts of corpora-
tions. In the following year, on the 2d of March,
the rate of taxation on cotton was lowered, while
the taxes on a considerable number of manufac-
tured products were repealed. There was another
change in the income tax, in that incomes up to
$1000 were declared exempt. A year later, on the
3d of February, 1868, the tax on cotton was removed,*
and on the 31st of March of the same year a sweep-
ing repeal was made of taxes upon goods, wares and
manufactures. Those, however, on gas, illuminating

REDUCTION OF TAXATION 197

oils, tobacco, liquors, and banks, as well as those col-
lected by stamps, were retained. There was a third
act in the same year, which changed the duty on
distilled spirits from two dollars a gallon to fifty
cents. A striking illustration of the danger from
fraud and dishonesty in collecting a tax which is
placed at a high figure, was afforded by the result of
this reduction. TTie income realized in 1868 under
the tax of two dollars a gallon was only $18,655,000,
while in the following year the amount under the
lower tax of fifty cents was $45,000,000, and in
1870 it attained the figure of $55,000,000.

The machinery of assessment and collection
was so improved that there was far less evasion
and fraud. In one tax, however, this improve-
ment was not manifest. This was the income tax,
which, in the later years in which it was in force,
did not by any means afford the amount of revenue
which was anticipated, a result due in a measure
to the frequent changes in the minimum amount
and in the rates, but probably more to systematic
evasion.

The amount of revenue from internal revenue
taxation was determined by three factors: the rate
of tax, the' prosperity of the country, and the de-
gree of thoroughness in the administration of the
laws. Generally speaking, the increase resulting
from prosperity, or the business activity of the
country, surpassed expectations. For example, it
was anticipated that the repeals and reductions
of the Act of 1866 would cause a reduction of

198 JOHN SHERMAN

(65,000,000, but the actual reduction was only about
$43,000,000. This influence of business prosper-
ity continued until the year 1873, and was espe-
cially marked in the four years beginning in 1869.

In 1870 another sweeping reduction was made,
leaving a revenue system, the principal items of
which continued until 1883. The income tax,
though repealed by this Act, was to continue in
force until 1872. The tax on spirits was raised
from fifty to seventy cents on the 6th day of June,
1872, to ninety cents on the 3d of March, 1875, and
to $1.10 on the 28th of August, 1894.

The income derived from internal revenue, from
1870 to 1883, corresponded closely to business con-
ditions, falling to a minimum of $102,000,000 in
1874, and rising to $146,000,000 in 1882. The
revenue from this source, save in the most un-
prosperous years, almost invariably exceeded the
estimate.

In almost every year Senator Sherman, who had
become Chairman of the Committee on Finance
of the Senate in 1867, made elaborate statements
upon the financial condition of the country. The
material given in these speeches affords a financial
history of the period. He kept in dose touch with
all questions relating to revenue, expenditures,
and the public debt. There were some opinions
which he reiterated on numerous occasions. One
was that it was desirable to pay off the public
debt in about thirty years. He was in favor of such
a policy as would diminish foreign importations.

REDUCTION OF TAXATION 199

and stated, April 9, 1866: ''I hope that the duties
received from imported goods will be diminished by
a diminution of importations." He was never over-
sanguine in his estimates of revenue. He estimated
the amount for the year 1866 at $500,000,000
and that for 1867 at $400,000,000. The former
estimate was surpassed by $58,000,000 and the
latter by $90,000,000. So great a variety of cir-
cumstances influenced the amount of collections
that all prognostications during this period were
notably incorrect. On one form of taxation he
took a pronounced stand, the income tax, which
he heartily favored at that time. In some remarks,
on May ^, 1870, he sustained this method of
taxation and reviewed at great length the experience
of Great Britain in the imposition of such taxes,
in 1797, and their repeal in 1816 and 1817; he
quoted extensively from Mr. Pitt, and from Sir
Robert Peel on the occasion when the tax was re-
stored in 1842; also from the remarks of Mr.
Gladstone, in 1853. He read at a very consider-
able length from different writers on political
economy who had sustained the tax, such as Mill,
Walker, and Perry. He opposed increasing the
exemption from $1000 to $1500. It was stated that
at that time two hundred and seventy thousand
people paid the tax, and the proposed exemption
would relieve one hundred thousand from payment.
In speeches made in January, 1871, he set forth
his views again quite elaborately. In a discus-
sion of this subject, he said: ^The income tax

SOO JOHI^ SHERMAN

is now only levied upon those whose good fortune
it is to enjoy large property, or whose salaries or
profits lift them far above the pressing wants that
rest upon the great mass of our people." At that
time the tax was two and one half per cent, on
gross incomes over $2000. He said: "It is the
only tax levied by the United States that falls
upon property, or office, or on brains that yield
property, and in this respect is distinguished from
other taxes levied by the United States, all of which
are upon consumption — the consumption of the
rich and the poor, the old and the young." He
added: "If I consulted my own interest ... I
would yield to the impulsive feeling of the Senator
from Massachusetts (Mr. Sumner) who, when the
subject was mentioned, on Friday, demanded that
the income tax be repealed that night before we
went home. I would no longer contend with per-
sonal friends who regard this tax as odious and
oppressive; but my own conviction is so clear that
its repeal now is wrong, both in policy and jus-
tice, that it becomes my imperative duty to state
the facts and reasons fully and clearly upon which
this opinion is founded." In comparing it with
other taxes, he said : " There is no aigument of
injustice or hardship that can be mentioned against
the income tax to be compared to the tax upon
tea, coffee, and sugar." He alleged that the in-
come tax, while it applied to only about sixty thou-
sand people, rested upon those who did not pay
their proper share of other taxes.

REDUCTION OF TAXATION 201

Regarding the constitutionality of the Act, he
maintained that the tax had been levied by the
United States since 1863, and that no court, so far
as he knew, had pronounced the law unconstitu-
tional, $150,000,000 having already been collected
under it.

NATIONAL DEBT. — REFUNDING OF BONDS

From the date of the maximum public debt, August
31, 1865, there was a succession of years in which
a substantial reduction was made. Receipts laigely
exceeded expenditures until the year 1874, at which
time the full force of diminished taxation made
itself felt, and the industrial depression added to
the diflSculty. The total amount of reduction ac-
complished by June 30, 1872, was $600,000,000.
yfhile the public debt reached its maximum in
1865, the greatest expenditure for interest was in
the year 1867. In that year it amounted to over
$143,000,000, a sum equal to more than twice the
total expenditures of the government in the year
1861. Equally striking is a comparison of the
amount of interest paid out with other expenses
of the government in this time of laige expendi-
tures and heavy debt. After deducting the cost
of the military establishment, which continued at
a very considerable figure until 1870, expenses for
interest comprised more than one half of all the
other expenses of the government, from 1866 to
1870, inclusive. Only a comparatively small frac-
tion of the debt at this time ran for any consider-
able number of years.

NATIONAL DEBT 20S

At an early date, a variety of funding measures
were proposed. The first was introduced by Mr.
Sherman in the Senate, in April, 1866, proposing
a five per cent, bond redeemable after ten years, to
be issued in exchange for any of the outstanding
obligations of the United States. He advocated
this measure but it failed of passage, and 6 % bonds
were for the most part employed for refunding.

Under statutes previously enacted, giving most
ample powers to the Secretary of the Treasury,
changes in the form of indebtedness were rapidly
made by Secretary McCuUoch. The first of these
was the substitution of permanent loans for short-
time Treasury notes and bonds. The funding into
securities having not less than five years to run
was practically complete by 1869, and by far the
larger share drew interest at 6 % in gold.

A second funding bill was introduced in De-
cember, 1867, which provided for a domestic loan
at 5 %, and a foreign loan at 4J%. This was
passed near the end of the session, but, not being
approved by President Johnson, failed to become
a law, for, although on political questions a two-
thirds vote could readily be mustered against the
President, the same was not true of financial ques-
tions. Nothing further was seriously attempted
while Johnson was President.

The important Act of this period was that of
July 14, 1870. As introduced by Mr. Sherman
in the Senate, it made provision for three classes
of bonds, each amounting to $400,000,000. The

«04 JOHN SHERMAN

first was to be redeemable in ten years, with inter-
est at 5%; the second in fifteen years, at 4 J % ;
and the third in twenty years, at 4 %. In present-
ing the bill Mr. Sherman reviewed the financial
legislation of the Civil War and defended the Legal-
Tender Act of February 25, 1862. He also ex-
pressed gratification because of the adoption, under
the Senate amendments, of the pro^Tsion in that
Act for the payment of interest in coin, and all
duties on imports in the same manner. He said:
"We provided for gold interest and gold revenue
to avoid the extreme inflations of an irredeemable
currency. We wished to rest our paper fabric on
A coin basis and to keep constantly in view ultimate
specie payments. I believe that but for that por-
vision in the Loan Act of February 25, 1862, in
1864 our financial system would have been utterly
overthrown. There was nothing to anchor it to
the earth except the collection of duties in coin,
and the payment of the interest on our bonds in
coin.'' In this speech, as on numerous other occa-
sions, he expresses the desirability of retiring the
legal tenders. In defending the legal-tender measure
he said: "But it must be remembered that this
clause (that is, the legal-tender clause) was justi-
fied only by the exigencies of war. It was not in-
tended as a measure of peace. The legal tenders
were only the instruments of battle; they were
musketry and cannon; and when peace came they
should have been rapidly retired."
Some funding measure was urgent, because.

NATIONAL DEBT 205

during the current year, over $1,100,000,000 of
the public debt became redeemable, and it was
desired, if possible, to substitute for outstanding
securities bonds drawing a lower rate of interest.

In advocating twenty years as a maximum time
within which the bonds should be redeemable,
and forty years as the maximum period in which
they should become payable, Mr. Sherman main-
tained that, unlike the policy of Great Britain,
this had been the plan pursued in the United States,
beginning with the financial projects of Hamilton.
The policy adopted here looked always to the pay-
ment of the principal of the debt within the life
of the generation that created it. He said : ** This
is the established policy of our country, and I trust
it will never be departed from." He clearly fore-
saw that if a long-time bond should be issued it
would be necessary, in redeeming it, to pay a pre-
mium, and cited the loans of 1842, 1847, 1848,
and 1850, the latter called the Texas Indemnity
Bonds. On these securities premiums ranging
from fourteen and one half to twenty per cent,
had been paid, although many of the bonds were
sold originally at a figure below par. "We have
always paid our debts, " he said, " before we agreed
to pay them. ... It is important to us to reserve
the right to redeem these bonds within a limited
period of time, so that we may not in the future
be compelled to pay high rates of premium."

As a part of the plan national banks were to
be compelled to surrender their .holdings of bonds

206 JOHN SHERMAN

and accept, in exchange, bonds provided by the
Bill, not more than one third of which should be
of the 5 % or 4J % varieties. This provision was
very strongly opposed by the national banks. In
this connection Sherman said : " I do not see how
we can go before the people of the United States
and ask them to lend us gold at par for our bonds
when we refuse to require agencies of our own
creation to take them.** He abandoned this pro-
vision very reluctantly, and only because, as he
said: "In order to secure a funding bill, we have
been compelled to abandon all provisions in re-
gard to the national banks."

In the further consideration of the bill in the
House a failure to realize the prospective fall in
rates of interest proved expensive to the Treas-
ury. The decided opinion in that body was to the
eflFect tliat money could not be borrowed by the
government at so low a rate of interest as 4 %,
unless for a long period. The House, after consid-
erable delay, passed a bill authorizing the issuance
of $1,000,000,000 of bonds redeemable after thirty
years at 4 % interest. An apparently hopeless dead-
lock arose between the two Houses. After the fail-
ure of many attempts at agreement a compromise
was made under which $200,000,000 of bonds at
5 % were authorized, redeemable after ten years;
$300,000,000 4 J % bonds, after fifteen years; and
$1,000,000,000 4 % bonds, after thirty years.

This resulted in a decided change in the policy
of borrowing. Theretofore, no bonds had been

NATIONAL DEBT 207

issued for meeting the expenses of the Civil War
which could not be paid in ten years, or less. In
the following winter a change was made by which
the quantity of 5 per cent, ten-year bonds which were
authorized, was increased from $200,000,000 to
$500,000,000, but with the provision that the total
amount to be issued should not exceed that in the
original bill — $1,500,000,000.

In view of the high rates of interest which pre-
vailed during the season of great business activ-
ity in succeeding years, the bonds drawing the
lower rate of interest were not sold. The whole
authorized issue of $500,000,000 was disposed of
prior to August 24, 1876; after which time 4 J %
bonds were sold until June, 1877, by which time
$200,000,000 had been disposed of. At that time
Mr. Sherman had become Secretary of the Treas-
ury, and revoked the negotiations for the sale of
4^ % bonds, and began to dispose of those draw-
mg only 4 %.

This legislation was extremely unfortunate for
the government. In the years from 1887 to 1891
there was abundant revenue available for reduc-
tion of the public debt, but no obligations of the
government were available for redemption. It
became necessary to purchase those bonds which
were not payable until the expiration of thirty
years. In all, more than $50,000,000 of premiums
were paid, the rate of premium in some instances
reaching as high a figure as 29 %.

A controversy arose during this period about

208 JOHN SHERMAN

the manner of payment of bonds of the United
States — whether it was obligatory that they should
be paid in coin, or whether full compliance with
the contract w^s had when they were paid in cur-
rency. The Legal-Tender Decisions had not yet
been rendered, but all calculations were made
upon the assumption that the Legal-Tender Act
would be declared valid. Prom the standpoint of
the letter of the contract the preponderance of the
argument would seem to have been in favor of
the right to pay the principal of the bonds in green-
backs.

The fundamental Act was that of February 25,
1862, in which provision was made for the issuance
of legal tenders, and in which it was said: "Such
notes . . .shall be receivable in payment of all
taxes, internal duties, excises, debts and demands
of every kind due to the United States, except
duties on imports, and of all claims and demands
against the United States of every kind whatso-
ever, except for interest upon bonds and notes,
which shall be paid in coin . . ."

The Act of July 11, 1862, contains the same
phraseology as that of February 25, except that
in place of the words " bonds and notes," in refer-
ring to interest, there appear the words '* bonds,
notes, and certificates of debt or deposit." It is im-
portant to note that the holders of these notes might
exchange them for bonds, a privilege which at first
was not limited in time, though later limited until
July 1, 1863; also that this privilege was made a

NATIONAL DEBT «09

part in each of the earlier acts of the section au-
thorizing the issuance of legal tenders. It was further
provided that such United States notes should " be
received the same as coin, at their par value, in
payment for any loans that may be hereafter sold
or negotiated by the Secretary of the Treasury."
Similar language was adopted in the Act of March
3, 1863, the last of the Acts authorizing the original
issuance of legal tender notes.

Other statutes relating to bonds were passed on
March 3, 1863, in another section of the Act last
referred to, and on March 3, 1864, providing for
the issue of the so-called ten-forty bonds and their
payment in coin. This last fact does not seem,
however, to aflford an argument in favor of the
payment of bonds in coin, but rather the contrary,
except so far as these particular bonds were con-
cerned.

The facts alleged in favor of payment in gold
were the issuance of circulars by the agents hav-
ing the sale of bonds in charge, stating that the
principal would be paid in gold; and statements
made in the discussion in Congress at the time
that such was the intention of the government.
On this subject Greneral Garfield had said, at the
close of the war, that according to his recollection
every one took it for granted during the discussion
that payment would be made in gold; and Secre-
tary Chase maintained in statements made while
he was Secretary of the Treasury that such was
the intention. Mr. Thaddeus Stevens had said.

«10 JOHN SHERMAN

while the bonds were under discussion : " Widows
and orphans are interested, and in tears lest their
estates should be badly invested. I pity no one
who has money invested in United States bonds,
payable in gold in twenty years, with interest semi-
annually."

In strict construction, these facts would not
control the plain letter of the contract, which was
outlined in legislation on the subject, but other
considerations sufficient to outweigh any form of
technical argument should enter into the decision
of so important a matter. In the first place, no
government of advanced position could afford to
allow the permanent debasement of its monetary
standard, or suffer it to fall below that of other com-
mercial nations of the same rank. Credit is a quality
of a nation as well as of an individual, and even
from the most selfish standpoint it would not be
desirable to tolerate other than the highest standard.
Then, too, it was all the while anticipated that the
abandonment of the gold basis was but a temporary
aberration from a normal currency. It was ex-
pected that in a short time specie payments would
be resumed.

So far as precedents derived from the action of
the Treasury are concerned there is but one incident
which affords any light. Certain bonds were issued
in the year 1842, amounting to nearly $3,000,000.
These fell due on the 1st of January, 1863. The
question arose whether they should be paid in cur-
rency or in coin, there being no specification in the

NATIONAL DEBT 211

contract. An opposition member of Congress pre-
sented a resolution adopted December 16, 1862,
asking the Secretary to report how he proposed to
pay. January 5, 1863, an answer was given, stating
that he had already paid in coin. The answer gives
a list of the names of all the holders of the bonds,
and the Secretary says:

"My judgment was determined in favor of pa3mient
in coin not merely by the weighty considerations growing
out of its beneficial influences on public credit, but by the
circumstance that I found myself able to obtain the needed
specie at a cost so small that payment in coin was, in fact,
a less inconvenience to the Treasury, and a less inter-
ference with pa3mients to and for the army and navy
thau pa3mient in notes would have been. The whole
amount of coin required was advanced by moneyed insti-
tutions, most of which, it is believed, had no interest in
the loan, nor any interest in the transaction except what
arises from the general support of the public credit."

He subjoined a letter signed by twenty presidents
and vice-presidents of financial institutions in New
York, stating that it would be injurious to the credit
of the United States if the bonds were not promptly
paid in coin, and that the failure to do so would
deteriorate the value of all government stocks to an
extent far exceeding the whole sum in question.
They also stated that it was the only loan maturing
for nearly two years to come.

Mr. Sherman has been very much criticised* for
his utterances upon this question. Some apologists
have sought to explain his attitude by showing that
he maintained the right to pay five-twenty bonds

212 JOHN SHERMAN

in legal tenders only under certain conditions. He
himself would not have made such a defense, and
his position on the subject was entirely clear. His
object can be very readily gathered from the de-
bates which occurred in the five years succeeding
the war. He was all the while seeking to reduce the
rate of interest on public securities, and to allow a
ready interchange of legal tenders for bonds. In
this way he anticipated that rates of interest would
be lowered and that the greenbacks would approach
equality with coin. What he actually said on the
subject is found in a report to the Senate, and in
speeches there, made respectively on December 17,
1867, and February 27, 1868. In the report he
reviewed the arguments for and against the obliga-
tion to pay in coin, and cited the legislation above
referred to, and added: "The law does not ex-
pressly provide that the principal is payable in
coin, but does provide that the 'interest shall be
paid in coin,' thus raising the implication that the
principal may not be. To meet this implication it is
shown that by the established policy of the govern-
ment the principal of the public debt has always
been paid in coin, without any stipulation to that
effect." He quotes from a letter of Secretary Chase,
written in May, 1864, in which he said, of the five-
twenties and the twenty-year sixes : " These bonds,
therefore, according to the usage of the government,
are payable in coin."

He opposed the passage of a resolution declaring
that the bonds should be redeemable in gold, saying

NATIONAL DEBT 21S

that instead of settling the question it would surely
create divisions and parties and that the resolution
when passed would be subject to agitation and re-
peal. He took the lead in the committee in proposing
the substitution of new bonds which by their terms
were clearly made payable in gold. Still further in-
sisting upon the right to pay in legal tenders he said :
"To give more than is stipulated to the public
creditor is to do injustice to the taxpayer; to give
less is to violate the public faith."

He called attention to the gold value of the money
in which the bonds were purchased, and showed
that in 1863 they were sold at an average price of
seventy-four cents in gold. At the same time, as
a matter of justice to the bondholders, he distinctly
opposed the further issuance of legal-tender notes
beyond the amount then authorized by law; at
least, until . they were convertible into gold and
silver. He said: " Our duty is to elevate the green-
back, the standard of national credit, to the stand-
ard of gold, the money of the world."

At this time it would seem that he still adhered
to the opinion that the greenback should be with-
drawn, for he said: "Your committee are of the
opinion that the time is not distant when it will
become the duty of Congress to repeal so much
of existing laws as makes the United States notes
a legal tender in payment of debts either public or
private."

On the 27th of February, 1868, he again discussed
the subject of the obligations of the government,

214 JOHN SHERMAN

and maintained the right to pay the principal in
paper money where an express provision to the con-
trary was lacking. The committee proposed giving
to the holders of the five-twenty bonds the option,
until the following 1st of November, of making an
exchange by which the holders of the public securi-
ties could receive a bond at a lower rate of interest.
It was conceded that they would continue to draw
six per cent, interest in gold if the exchange was not
made, leaving the question with reference to the
principal to be decided at a later time. After refer-
ence to the course adopted in England, in 1822, and
to the action of Alexander Hamilton, in modifying
the terms of loans issued by our government, Sher-
man referred to this oflfer to substitute otlier bonds,
and said in distinct language : " If the offer is re-
jected I will not hesitate to vote to redeem maturing
bonds in the currency in existence when they were
issued, and with which they were purchased, care-
fully complying, however, with all the provisions of
law as to the mode of pa3anent, and as to the amount
of currency outstanding."

It will be noticed that his expressions on this sub-
ject were conditional, but his utterances furnished
a basis for many arguments of the Greenback party
in succeeding years.

In the following year, near the close of President
Johnson's administration, he said : " I declare now
to you that my construction of the law under which
these five-twenties, and under which the greenbacks
were issued, still remains unchanged; but I do assert^

NATIONAL DEBT 215

as a question of public policy, that it is wise now for
us to declare, in the language of this bill, that the
bonds and greenbacks alike shall be paid in gold as
rapidly as we can do so."

In his "Recollections" he frankly expresses his
change of opinion on this subject. He says: *' I do
not approve all I said in that speech of February 27,
1868. ... It has been frequently quoted as being
inconsistent with my opinions and action at a later
period. It is more important to be right than to
be consistent. I then proposed to use the doubt
expressed by many people, as to the right of the
government to redeem the five-twenty bonds in the
legal-tender money in circulation when the bonds
were sold, as an inducement to the holders of bonds
to convert them into securities bearing a less rate
of interest, but specifically payable in coin. Upon
this policy I changed my opinion. I became con-
vinced that it was neither right nor expedient to pay
these bonds in money less valuable than coin, that
the government ought not to take advantage of its
neglect to resume specie payments, after the war was
over, by refusing the payment of the bonds with
coin. I acted on this conviction when, years after-
wards, the Resumption Act was adopted, and the
beneficial results from this action fully justified my
change of opinion."

Another question arose at this time which awak-
ened much discussion, — that relating to the taxa-
tion of government bonds. As a business proposi-
tion it would seem plain that whatever amount is

216 JOHN SHERMAN

paid by the holder of bonds for taxes would inevita-
bly be added to the rate of interest. As levies for
local taxation were very different in different por-
tions of the country, in some places the payment
made by the taxpayer on bonds, if taxed, would pro-
hibit him from purchasing them, while the foreigner,
or the resident of a locality less taxed, would realize
a much larger income from them. Mr. Sherman
opposed propositions for allowing the states to tax
the bonds. True, at one time he joined with the
rest of the Finance Committee of the Senate in
recommending the reservation of a specific portion
as the equivalent of taxation on the entire debt ne-
gotiated, with a view to distributing it among the
states according to their population. This proposi-
tion does not seem to have been carefully matured,
and it was abandoned.

In 1868 the question again arose. The popular
prejudice against bondholders was so strong that
any proposal for a tax on their holdings was re-
ceived with a great deal of favor. On this occasion
Sherman said : " No government that I have been
able to find ever allowed its bonds or securities to be
taxed. The United States never did. In the ab-
sence of stipulations to the contrary the courts have
always held that no state or subordinate authority
could tax the national securities. . . . The effect
in time of war would be disastrous."

He opposed taxation on the bonds by the general
government as being a direct tax and in violation
of the Constitution, unless apportioned among the

NATIONAL DEBT 217

states according to population, while conceding
that the interest on them was subject to the income
tax. On another occasion he said: "The exemp-
tion of public securities is not the result of any Act
of Congress. It grows out of the provision of the
Constitution of the United States which secures to
Congress the power to borrow money, and out of the
supreme nature of that power which cannot be
affected or limited by the act of any state or local
government. ... If a state may tax a security
of the United States, it may entirely defeat a power
essential to the existence of the government."

President Johnson, in his last annual message
(filed contemporaneously with the report of Secre-
tary McCuUoch, in which the latter strongly advo-
cated the payment of bonds in gold, and laid great
stress upon the importance of public credit), while
judiciously advising against extravagance, made
a most remarkable recommendation to Congress.
He called attention to the great increase in public
expenditures, alleging that while the population be-
tween 1791 and 1869 had increased 868%, expend-
itures had increased 8618%, and that the increase
between the census years 1860 and 1869 showed an
even larger disproportion, or only 21% as against
489 %. He added: "These startling facts clearly
illustrate the necessity of retrenchment in all
branches of the public service. Abuses which were
tolerated during the war for the preservation of the
nation will not be endured by the people now that
profound peace prevails."

218 JOHN SHERMAN

He then made a bald recommendation for re-
pudiation. The Secretary of the Treasury had
recommended five per cent, as the rate of interest
upon which refunding bonds should be issued,
while some had regarded three per cent, as suffi-
cient. President Johnson came to the conclusion
that by compulsory action interest might, in effect,
be abolished. He said: "The general impressioii
as to the exorbitancy of the existing rate of interest
has led to an inquiry in the public mind respecting
the consideration which the government has actually
received for its bonds, and the conclusion is becom-
ing prevalent that the amount which it obtained
was in real money 300 or 400% less than the obliga-
tions which it issued in return." In making this
statement he made a palpable error not only in re-
gard to the obligations of a contract, but also in
mathematics. 100% would equal the total par
value of the securities, and a reduction to that extent
would cancel them. But President Johnson, in his
extraordinary statement, went further and said that
the amount paid for the bonds was 300 or 400 %
less than their par value. He then added a recom-
mendation that as the securities drew 6 % in gold,
equal to 9 % in currency, the 6 % paid by the gov-
ernment should be applied to the reduction of the
principal in semi-annual installments, which, he
said, in sixteen years and eight months would
liquidate the entire interest-bearing national debt.

This portion of his message was not taken seri-
ously. Indeed, the majority in Congress had ceased

NATIONAL DEBT 219

to pay any attention to the President's recommenda-
tions, and it may even be a question whether his
action did not strengthen the disposition to pay the
principal of the bonds in gold.

Both Senate and House promptly condenmed
President Johnson's utterances. The Senate
passed this resolution : ** That the Senate, properly
cherishing and upholding the good faith and honor
of the nation, do hereby utterly disapprove of and
condemn the sentiments and proposition contained
in so much of the late annual message of the Presi-
dent of the United States as reads as follows."
Then follows his recommendation for repudiation
above given. This passed by a vote of 43 to 6, and
a similar resolution in the House by 155 to 6. In
fact, the Fourteenth Amendment contained a
clause which settled all controversy on the subject.
It included the following distinct declaration:
"The validity of the public debt of the United
States, authorized by law, including debts incurred
for payment of pensions and bounties for services
in suppressing insurrection or rebellion, shall not be
questioned."

Party lines had not been drawn upon the ques-
tion. A resolution was introduced by Mr. Samuel
J. Randall of Pennsylvania, a Democrat, and
passed on the 5th of December, 1865, with but one
dissenting vote. It declared that the public debt
created during the late rebellion was contracted
on the faith and honor of the nation; that it was
sacred and inviolate and must and ought to be paid,
principal and interest; that any attempt to repudi-

220 JOHN SHERMAN

ate or in any manner to impair or scale the said debt
should be universally discountenanced and promptly
rejected by Congress if proposed.

Not all the time of Congress, in the years imme-
diately succeeding the war, was given to reconstruc-
tion, nor yet to fiscal questions, such as currency,
repeal of internal revenue taxes, or refunding of
bonds. A bankruptcy law was passed in 1867, the
third since the formation of the government. A bill
supplemental to the Homestead Act of 1862, was
passed in 1866. It restricted each entry to eighty
acres, and gave the right to enter upon government
lands in the states of Alabama, Mississippi, Louisi-
ana, Arkansas, and Florida, with the express pro-
vision that the exercise of this right should be with-
out distinction of race or color. The first of the
general acts limiting hours of labor was passed in
1868. ^ It enacted that eight hours should constitute
a day's work for all laborers, workmen, or mechan-
ics, then or thereafter employed, by or on behalf
of the United States. Mr. Sherman moved to add
as a proviso: *' Unless otherwise provided by law,
the rate of wages paid by the United States shall
be the current rate for the same labor, for the same
time, at the place of employment." This proviso
failed of adoption.

Numerous statutes granting lands to railways and

^ On the 31st of March, 1840, President Van Buren, with the
avowed object of establishing a uniform rule, issued an Execu-
tive Order prescribing ten hours for laborers or mechanics in
the employ of the government.

NATIONAL DEBT «21

to states for internal improvements were passed.
A Department of Education was established. An
appropriation of $100,000 for the erection of a
building for the Commissioner of Agriculture was
strongly supported by Mr. Sherman, and became
a law, although Senator Fessenden opposed it, and
said the appropriation was a committal to large
undertakings and the beginning of a very con-
siderable expense to the government.

It is instructive to note the tendency during this
period to increase the civil expenses of the gov-
ernment, a tendency apparent not only during and
after the gigantic Civil War, but in minor conflicts,
such as the War of 1812, and the contest with Spain.
The increase begins during the war, and gathers
even greater volume after. It would seem that the
necessity for larger expenditures for military pur-
poses would create quite the opposite tendency
in civil affairs, as the need of economy is empha-
sized by the great demands for the maintenance
of the army and navy. As a rule, quite the con-
trary is the case. The reasons for such increase
are not difficult to explain. It is impossible to
maintain a large scale of expenditure in any one
department, however essential to the nation's life,
without demands for lavish expenditures in others,
whether pertaining to the military or the civil side
of the government. The cost of living, and of
the different branches of the public service, is in-
creased by the war. The cost of supplies, the
amounts paid on contracts and salaries, all in-

222 JOHN SHERMAN

crease. In addition to this the larger taxation
and consequent revenue, and the placing of loans,
reveal the resources from which greater disburse-
ments can be made. Claims, which for a long time
have been postponed, are brought to the front.
Improvements and recommendations, disregarded
prior to the war, are pressed upon the attention
of G)ngress, and, as a result, extravagance is
created all along the line. This was strikingly
manifest after the Civil War. Expenses of the
civil and miscellaneous list, which had reached
$23,797,000 in 1859, attained to $56,474,000 in
1869. The amount expended for the support of
the Indians, which had been $3,490,000 in 1859,
reached $7,042,000 in 1869.

In the presidential campaign of 1868 Mr. Sher-
man favored the nomination of Chase by the Re-
publicans. He, as well as his brother, doubted
whether Grant would add to his reputation by
assuming the office of President, although con-
ceding the nomination was his if he desired it.
His relations with Grant, although friendly, were
at no time, while he was President, of the closest
character. When Grant was severely criticised
after the battle of Shiloh, Sherman vigorously de-
fended him in the Senate. A man of large experi-
ence in the legislative or executive department is
prone to regard a candidate for the presidency,
whose main qualification is military service, with
a degree of distrust or even of dislike. President
Grant brought to the office less experience in civil

NATIONAL DEBT 225

life than any of his predecessors, with the possi-
ble exception of President Taylor, of whom as a
candidate for the presidency Webster had spoken
in terms of unkindness, if not of disrespect.

President Grant was at first inclined to side with
that element of the Republican party which was
most liberal to the South, and urged Congress to
take measures for the restoration of Virginia and
other states to the Union; but toward the con-
clusion of his first term, he became thoroughly
identified with the radicals. He associated less
with prominent senators and representatives than
was expected, and apparently relied for advice
upon a small number, among whom were Conk-
ling, Logan, and a few others, the influence of
Conkling being especially potent with him. Dur-
ing his first administration he alienated quite a
number of the leading men of his party, partly from
personal considerations. Senator Sherman gave
him cordial support for his second election in 1872.

Sherman's relations with other Presidents after
President Grant, with the exception of Hayes, were
not of the most cordial nature, though with Gar-
field, and at first with McKinley, they were very
friendly. As regards Arthur, there was a pro-
nounced repulsion, due to the fact that, at his
instance, Arthur had been removed from the posi-
tion of collector of the port at New York. There
was little between them during that administra-
tion beyond the compulsory formalities of social
and official life.

224 JOHN SHERMAN

Several distinctive characteristics are manifest
in Sherman's legislative career during this period.
He was wont to regard a policy once adopted by
Congress as a settled fact, not to be interfered
with, somewhat akin to the decision of a court.
As an illustration, he was absolutely opposed to
the Funding Act of 1870, because of the long-time
period, thirty years, provided for most of the bonds.
Yet during nearly seven years' service in the Sen-
ate, before he became Secretary of the Treasury
in President Hayes' cabinet, he did not attempt
to change this provision, nor yet by any recom-
mendation while Secretary of the Treasury. When
it was evident that the action of the House would
not be in accordance with that taken by the Senate,
he in some instances showed a similar disposition
by reluctantly giving his support to measures
adopted, stating frankly to the Senate that he did
not approve the action of the other body on sche-
dules of tariff or internal revenue, but that the
constitutional right belonged to the House in the
first instance, to determine these questions, virtu-
ally taking the stand that it was useless to seek to
modify its action.

In his desire for the prompt disposal of fiscal
measures presented by him as Chairman of the
Senate Finance Committee, he often insisted upon
postponement of other legislation, and sometimes
incurred the obloquy of his colleagues by opposing
policies to which, except for his assertion of the
prerogatives of his committee, he would not have

NATIONAL DEBT 225

objected. In his anxiety to obtain early action on
bills presented by him he sometimes argued against
other propositions with impatience and even with
irritation.

He desired to have all legislation of practical
value, and his opposition to any mere theoretical
declaration was repeatedly shown. When a con-
current resolution to prohibit the admission of
senators and representatives from states lately
in rebellion was brought forward by Mr. Fessen-
den» he opposed its consideration, stating that each
House must pass upon the qualification of its
members, and there was no practical benefit to
be gained from passing such a resolution. In re-
ferring to Senator Fessenden's remarks he said:
"The Senator says that no question can be so im-
portant as this. Sir, in my judgment no question
can be very important which can lead to no prac-
tical results. The true test of the importance of
every measure is, wnat good will result from it."
It was also a fixed idea in his political creed that
it was useless to stand in the way of an overwhelm-
ing public opinion or try to pass or enforce a meas-
ure which public sentiment did not sustain.

FINAL ACCOMPLISHMENT OF LEGISLATION FOR
RESUMPTION

After the Act of 1868, suspending further con-
traction of legal tenders, it was useless to attempt
to secure resumption by that method. Any pro-
position looking to a diminished volume of green-
backs would have been promptly defeated by
Congress, and even more emphatically rejected
by the people. For some years after 1866 a popu-
lar vote would not have sustained either the with-
drawal of the greenbacks or the issuance of bonds
to provide gold for the purpose of resuming specie
payments. The desire for a large amount of
paper currency was so deeply seated that the final
successful outcome was only* gained when the
leaders of the Republican party realized, not only
the propriety, but also the absolute necessity for
resumption.

So late as the 24th of January, 1870, Mr. Sher-
man, in speaking of a proposition to withdraw
United States notes, said: "This proposition, even
if it should receive the assent of the Senate, would
probably not receive that of the House. The green-
backs are a great favorite of the people. They
were the agency and means by which our coun-
try was carried through the war. They are a con-

LEGISLATION FOR RESUMPTION 227

venient form of currency. . . . Even if our rea-
son should convince us that it is wiser and better
to withdraw them in order to give place to national
bank notes, and gold and silver coin, the opin-
ions of our constituents would prevent us from
doing it. This feeling is the great obstacle to
specie payments." Nevertheless, in the same
speech he expressed what was doubtless his own
opinion at that time, as follows :

"Other nations as well as our own have often tried the
experiment of maintaining a circulating note issued by the
government, and they have uniformly found it to fail.
It is impossible to give a currency issued by a government
the flexibility necessary to meet the movement of the ex-
changes; and therefore experience has shown that a note
issued by a government, and maintained upon the guar-
antee of the government alone, does not form a good
circulating medium, except during a suspension of specie
payments. It must have a flexibility which will enable it to
be increased in certain periods of the year, and to flow
back again into the vaults of the banks at others. I am
convinced, although it is unnecessary to discuss that point
here, that in time it will be wise to retire our United States
notes, and all forms of government circulation, and de-
pend upon notes issued by private corporations, amply
secured beyond perad venture, so that in no case can the
noteholder lose, and to subject the banks to regulations
applicable to all parts of the country, making them free,
so that the business of banking will be like the business
of manufacturing, blacksmithing, or any other ordinary
occupation or business of life, governed only by general
law."

President Johnson, in his message of 1867, ex-
pressed the predominant opinion that resump-

2^ JOHN SHERMAN

tion was desirable, but that it was not worth while
to make sacrifices to secure it, by saying that it
was the duty of the government, as early as might
be consistrtit with the principles of sound political
economy, to make the greenbacks and the bills
of national banks equivalent to specie. But, he
added: "A reduction of our paper circulating
medium need not necessarily follow."

The hardship which would fall upon the debtor
was forcibly expressed, in some remarks made by
Mr. Sherman, in the Senate, in January, 1869. He
said:

"But the distress caused by an appreciation of the cur-
rency falls mainly on the debtor. ... It [specie pay-
ment] means the payment of $135 where he has agreed
to pay $100, or, which is the same thing, the payment
of $100 where he has agreed to pay $74. Where he
has purchased property and paid for one fourth of it, it
means the loss of the amount paid; it means the addition
of one fourth to all currency debts in the United States.
A measure to require a debtor now to pay his debt in gold,
or currency equivalent to gold, requires him to pay one
hundred and thirty-five bushels of wheat when he agreed
to pay one hundred; and if this appreciation is extended
through a period of three years, it requires him to pay
an interest of 12 % in addition to the rate he has agreed
to pay. When we consider the enormous indebtedness of
a new country like ours, where capital is scarce and where
credit has been substituted for capital, it presents a diffi-
culty that may well cause us to pause. We may see that
the chasm must be crossed, but it will make us wary of
our footsteps. Good faith and public policy demand that
we appreciate our currency to gold; but in the process
we must be careful that bankruptcy, distress, and want

LEGISLATION FOR RESUMPTION 229

do not result. The debtors of this country include the
active, enterprising, energetic men in all the various em-
ployments of life. It is a serious proposition to change
their contracts so as in effect to require them to pay one
third more than they agreed to pay. They have not
paused in their business to study questions of political
economy. They have based their operations upon this
money which has been declared to be lawful money.
Its relative value may be changed, but a reasonable
opportunity should be given them to change their con-
tracts so as to adapt them to the new standards of value. "

Funding the debt was still with him the object of
supreme importance. Until the very date of the Re-
sumption Act, in January, 1875, he favored resump-
tion by making the legal-tender notes exchangeable
for bonds, and even in his remarks presenting that
measure he said that his personal judgment was in
favor of such a course.

In a discussion in March, 1870, some opposition
developed to allowing the greenbacks to be ex-
changed for four per cent, bonds. On this subject
he said:

"It is idle to talk about specie payments either now or
in the future, when you refuse to give for the greenbacks
an obh'gation of the government bearing 4% interest in
gold. Sir, this measure, as far as this point is concerned,
is a weak one. The noteholder ought to have more privi-
leges than are conferred by this bill; but the fear of con-
traction, of a disturbance of the business relations of the
country, as an effect of a sudden return to specie pay-
ments, must be guarded against, as we have endeavored
to do. . . . The vote of the Senate on this question will
have far more effect upon the resumption of specie pay-

230 JOHN SHERMAN

ments than any vote that has been taken at the present
session. If we now again dissever the connection between
the note and the bond we allow the note to float on the
market, a mere toy for speculators, to be raised or lowered
at their pleasure. But if we now tie it to our public credit,
tie it to the market value of the bonds, we shall have
anchored it to a sure foundation, where it may rest in the
hands of the people, to be floated into the Treasury in
payment of bonds until all that are left — and nearly all
will be left — will be paid in gold and silver coin when
we resume specie payments."

For a time he did not favor the plan of fixing a
specific day for resumption. When such a proposi-
tion was made by Senator Morton, in January,
1869, he argued: "Would not the effect of his
measure be that the government would hoard the
gold and the people the greenbacks, and thus make
the contraction he fears? What more profitable
investment could any man make than to take this
dollar, now having a purchasing power of seventy-
four cents in gold, and lock it in his safe with a cer-
tainty that in two years it must be worth one dollar
in gold, an annual advance of seventeen and a half
per cent. ... All the historical precedents show
that fixing the day for resumption inevitably leads
to a contraction of the currency by the banks, so
that when the day comes the scarcity of currency
shall prevent a demand for coin." This objection
to the accumulation of a redemption fund was very
generally made, and the plan was rejected as im-
practicable by many of the most steadfast and intel-
ligent opponents of paper money.

LEGISLATION FOR RESUMPTION 231

With the election of General Grant, in Novem-
ber, 1868, on a platform denouncing repudiation,
followed by the passage of the Public Credit Act
of March 18, 1869, the prospects of resumption
revived a little. President Grant, in his inaugural
address, in March, 1869, and in his message of the
following December, strongly advocated it. In his
inaugural he said in referring to the debt: "The
payment of this, principal and interest, as well
as the return to a specie basis as soon as it can be
accomplished without material detriment to the
debtor class, or to the country at lai^, must be
provided for." In his message he said : "Among the
evils growing out of the rebellion, and not yet re-
ferred to, is that of an irredeemable currency. It is
an evil which I hope will receive your most earnest
attention." He added, however: "Immediate
resumption, if practicable, would not be desirable.
It would compel the debtor class to pay, beyond
their contracts, the premium on gold at the date of
their purchase, and would bring bankruptcy and
ruin to thousands."

On February 21, 1870, the House passed a re-
solution that the business interests of the country
required an increase in the volume of circulating
currency, and advocated an increase of at least
$50,000,000. The Senate three days later passed a
resolution that "to add to the present irredeemable
paper currency of the country would be to render
more difficult and remote the resumption of specie
payments; to encourage and foster a spirit of

232 JOHN SHERMAN

speculation; to aggravate the evils produced by
frequent and sudden fluctuations of values; to de-
preciate the credit of the nation, and to check the
healthful tendency of legitimate business to settle
down upon a safe and permanent basis; and there-
fore, in the opinion of the Senate, the existing
volume of such currency ought not to be increased."

It must be said that while Mr. Sherman had not
supported any project which would cause a rapid
withdrawal of the greenbacks, he, at all times,
stood equally firm against any further debasement
of the currency by an additional issue, and against
any plan which did not contemplate their final
equality with gold; but it was not until the month
of January, 1873, that he took a decisive stand for
resumption and insisted upon immediate practical
steps for its accomplishment.

In a report made on the 14th of January, 1873,
he expressed the views of the Committee on Finance
of the Senate, and his own, upon the subject of the
reissue of greenbacks. Mr. Richardson, Assistant
Secretary of the Treasury, in the absence, but with
the later approval, of Secretary Boutwell, had
reissued some $5,000,000 of legal tenders over and
above the amount outstanding when the Act of
February 4, 1868, became a law. In addition, there
had been issued a million and a half to replace the
amount burned at the time of the Chicago fire.
This issue, however, was based upon the destruc-
tion of the notes, while that of the $5,000,000 was
in view of a supposed public emergency. With

LEGISLATION FOR RESUMPTION 233

substantial unanimity the committee condemned
this course, and denied the right of the Secretary
of the Treasury to exercise such a power. In his
report, Mr. Sherman says: "A power over the
currency so wide-reaching as the power to issue
$44,000,000 of new legal-tender notes (the differ-
ence between the amount fixed in the Act of 1868
and the amount originally authorized) is one that
ought not to rest upon implication."

Two days later, on the 16th of January, 1873,
he made the first of a series of speeches in which he
emphasized the supreme importance of a return to
specie payments. From this time on he became the
most influential and foremost champion of resump-
tion. Whatever hesitancy there may have been in
his utterances theretofore, there was no uncertainty
in his remarks on this occasion, nor at any time
thereafter, until resumption was triumphantly ac-
complished. He asserted that the restoration of our
currency to a specie standard was an object of
primary importance. He argued for it on the
ground of public faith. "Every United States
note," he said, "is a dishonored obligation, a
promise to pay, but with no pa3rment or provision
for payment. . . . Tested by the rules of law be-
tween individuals it would be enforced by sale on
execution, and by process of compulsory bank-
ruptcy. Yet it is the promise of the United States.
Surely the dishonor of this broken promise can
have no longer an excuse in the necessity of war.
... It is now four years since we solemnly pledged

eS4 JOHN SHERMAN

the natioiial faitb to redeem tliem in coin at the
earliest practicabk period. . . . To delay longer
is to tamper with the public honor and familiarize
our people with an open, palpable, long<<x>ntinaed
breach of the public faith/' He added: "But
specie payment is not only required by public faith;
it is now demanded by public policy; — or, to use
a narrower phrase, it is wise political economy.
Experience has established that every nation using
a depreciated currency loses in exchanges with a
nation having a better currency. . . . Again, it is
impossible to give to a depreciated currency the
quHlity of flexibility. ... All the existing laws
authorizing United States notes and bank notes are
based upon the theory of specie pa}rments. . . .
If, then, public faith, public policy, and the spirit of
our laws demand that our currency be restored to
the specie standard, it would seem that the only
remaining inquiry should be, what is the best way
to resume ? "

In meeting the objections that specie pa}rments
would add largely to the burden of debt he said:
"The effect of any measure upon the interests of
active business men should be carefully studied,
but individual hardship is not sufficient reason
for a violation of public faith or a disregard of the
general interests or policy of the whole country."

He maintained that the eflFect of a specie stand-
ard in producing a contraction of the currency was
greatly exaggerated, and said: "A contraction of
the currency is not necessarily a result of specie

LEGISLATION FOR RESUMPTION «S5

pajonents, though it would undoubtedly produce
them. It is the most direct road to specie pay-
ments, and, if the paper money in circulation is in
excess of the wants of the community, it is the only
road."

As on previous occasions, the two different meth-
ods of securing and sustaining resumption were
referred to, — the maintenance in the Treasury
of a large reserve in coin, and the authority of the
Secretary of the Treasury to sell bonds for coin.
To these he added a third, which he favored : i. e.,
to authorize an alternative redemption either in coin
or bonds. He reconmiended a measure to the effect
that on the 1st of January, 1874, the United States
would redeem its notes either in coin or with bonds
of convenient denominations, bearing 5 % inter-
est in coin. It was expected that in case the Sec-
retary of the Treasury was not able to pay out
coin for the redemption of the notes, the attrac-
tion of a bond, payable in gold, would cause such
a contraction of the currency that resumption
would result from the diminished amount in cir-
culation. No action was taken upon this recom-
mendation. The House of Representatives was
unfriendly and the Senate not altogether cordial
in its support. It, however, indicated progress on
the road towards resumption.

In the following September occurred the crisis
of 1873, to be followed by a season of severe dis-
tress, continuing, with greater or less intensity, for
nearly six years. This disturbance in financial

2S6 JOHN SHERMAN •

conditions was, in many respects, the most severe,
and, in nearly aU respects, the most thoroughly
characteristic, of the recurring periods of panic
and depression which must occur in any progress-
ive community. The starting-point of the difficulty
was the great progress made in the increase of
equipment for production. This resulted in over-
action and speculation, and in the multiplication
of improvident and unwise investments. A serious
crash resulted. Of course prices and wages fell,
and the hopes of the speculator were rudely shat-
tered. If it was difficult to secure resumption
before this decided check in the onward march
of prosperity, it was fourfold more difficult there-
after.

Business interests had come to rely upon the
Treasury and upon Congress for the creation of
conditions which would make their investments
profitable, and thus, in great degree, had neglected
the more safe and certain way of individual wis-
dom and economy in the adjustment of expenses
and the making of investments. Whenever there
was a stringency it had become the custom to rely
upon the purchase of outstanding bonds, or, in-
deed, upon the issuance of greenbacks which, ac-
cording to the opinion of the Senate Committee,
there was no right to issue. The demand for aid
from the Treasury was almost overwhelming in
the autumn of 1873. The Secretary purchased
$13,000,000 of bonds, and also issued greenbacks
which had been withdrawn, so that by Januaiy,

LEGISLATION FOR RESUMPTION «37

1874, $26,000,000 of the $44,000,000 which had
been retired during the incumbency of Secretary
McCuUoch were again in circulation.

The apparent obstacles in the way of resump-
tion were never greater. Under the stimulus of
extensive railway building, and other enterprises
looking to the development of the coui^try, very
large purchases had been made abroad, especially
during the preceding five years. The average
excess of imports over exports during this period,
including shipments of specie, had been more
than $40,000,000 per year. In addition to this very
considerable drain upon our resources, merely to
pay balances in trade, very large amounts were
paid for the annually increasing interest charges
upon indebtedness, public and private, held abroad,
the principal of which by this time was estimated
at $1,500,000,000. There is still further to be taken
into account the large amount paid to foreigners
for the carrying trade.

One result of the unfavorable balance of ex-
change was the continued premium on gold, which,
even after the Resumption Act of 1875, rose in value.
For the six years from 1871 to 1876, inclusive,
the price continued stubbornly at almost the same
figure, the average annual valuation for the period
not varying more than 2.8 per cent. ; the lowest
average, that for 1872, being 111.8, and the highest,
that for 1873, being 114.6. It is not difficult to
ascertain the cause of this. Other nations were
seeking to increase their gold supply, some as the

288 JOHN SHERMAN

result of the adoption of a gold standard where
a silver or bimetallic standard had existed before.
There was a falling-off in the world's product as
compared with the two decades ending in 1860 and
1870, and in the scramble to increase gold reserves
a country having an unfavorable balance of trade,
and a currency made up of irredeemable paper,
was subjected to inevitable disadvantages. Yet the
popular sentiment, which had already crystallized
in opposition to contraction, was strengthened by
the untoward trend of events. On the meeting of
Congress many propositions were embodied in bills
and resolutions, nearly all of which looked toward
a further inflation of the currency.

But for the courage of Senator Sherman, and
other men who saw that the difliculty did not arise
from scarcity of the currency, and that the indus-
trial depression had been caused rather by the
redundancy than by the scarcity of our monetary
supply, serious blunders would have been made,
and the unfortunate financial and commercial
situation would have been very seriously aggra-
vated. Notwithstanding the great number of bills
which were pending, looking toward increase of
the currency, a majority of the Senate Finance
Committee, through Mr. Sherman, presented a re-
solution, in the month of December, 1873, in these
words: "Resolved, that it is the duty of Congress
during its present session, to adopt definite measures
to redeem the pledge made in the Act, approved
March 18, 1869, entitled *An Act to strengthen

LEGISLATION FOR RESUMPTION 289

the Public Credit/ . . . and the Committee on
Finance is directed to report to the Senate, at
as early a day as practicable, such measures as
will not only redeem this pledge of the public
faith, but will also furnish a currency of uniform
value, always redeemable in gold or its equivalent,
etc." A member of the committee oflFered a minor-
ity report recommending a substitute, directing the
committee to report to the Senate "such meas-
ures as will restore commercial confidence and
give stability and elasticity to the circulating me-
dium ... by providing for an increase of cur-
rency of $100,000,000, including the $44,000,000
reserved, etc."

After these reports Mr. Sherman made a speech,
on the 16th of January, 1874, which was one of his
greatest eflForts. Its tone was one of fault-finding
with the Senate because of its omission to com-
ply with the pledge of 1869. He never before had
so assumed to be the mentor of his fellow sena-
tors. He complained of the reissue of greenbacks
by the Treasury Department, and said that when
the Act of March 18, 1869, was passed no one
dreamed that there existed a power to reissue the
$44,000,000 in the Treasury. He combated the
argument for waiting until more prosperous times,
and in the strongest language called attention to the
delinquency of the Senate in failing to take action
looking towards resumption. He said, with irony :
"We are all for specie payments sometime, maybe.
We are not in favor of it in times of plenty. We are

940 JOHN SHERMAN

not in favor of it in times of great prosperity.
We are not in favor of it in view of the panic. When
shall we be in favor of it ? That is the question
that senators ought to be prepared to answer
to the business men of this country." He again
repeated his views expressed during preceding
Congresses, asserting that we should have made
the greenbacks exchangeable for bonds, and the
Refunding Bill should have been passed. '' If,*'
he said, "in the first session of Congress during
Andrew Johnson's administration we liad passed
a Funding Bill authorizing any holder of any form
of government security to convert it into a five per
cent, bond, all the evils that have flowed out of
our disordered currency would have passed away;
the questions that afterward were raised to endan-
ger the public credit never would have arisen ; all
this long agony of endeavoring to do what we have
promised to do, and never performing it, would
have been avoided."

His remarks were in much the same line as on
the same day, January 16, of the previous year.
He expressed even less hopefulness of success ex-
cept by his favorite plan, of making the legal tenders
exchangeable for bonds, and, even more clearly,
the difficulty of acting counter to public opinion.
In referring to the plan for the retirement of United
States notes, he said: "In the first place, this plan,
while it operates, does so with such severity as,
in a popular government like ours, to cause its
suspension and repeal. Undoubtedly the most

LEGISLATION FOR RESUMPTION 241

certain way to reach specie payments is by retiring
the notes that are dishonored, paying them oS and
taking them out of circulation. But the trouble
is, the process of contraction is itself so severe
upon the ordinary current business of the country
that the people will not stand it; and in this coun-
try the people rule." On the same subject he said:
"Mr. President, there are some objections, of a
popular character, made to specie payments which
I think I ought to answer. In a popular govern-
ment like ours even an unfounded fear ought not
to go unheeded. Warnings are uttered; a great
alarm is raised about every measure that tends to-
ward specie payments."

In answering the ai^ument that more money was
needed he replied: "They say: *We want more
money.' Well, in the sense in which money means
capital, I think we all want more money. In the
sense in which money is used as a mere medium of
exchange, to measure value, to pass from hand to
hand, to facilitate commercial transactions, the only
test and measure of the amount necessary is the
amount which can be maintained at the specie
standard; no other." Speaking of the public faith
he said:

"Senators, we have now arrived at a stage of our his-
tory, where, if we will obey the law and keep the public
faith, we shall surely come to that safety and prosperity
which rest upon the universal standard of value, — when
industry will be rewarded, and not cheated by the de-
preciation of paper money. If, on the other hand, you

242 JOHN SHERMAN

will enter again into a depreciation of your paper money,
adopting the cry of expansion, 'more money/ you will
siuely travel a road that many nations have traveled be-
fore, and which leads to bankruptcy and repudiation.
. . . But there is one other reason why all these schemes
for more paper money ought not even to be debated here.
An increase of paper money beyond $400,000,000 would
be a clear and palpable violation of the public faith.
... I again appeal to the Senate to now firmly take its
stand against any inflation of paper money, under any
circumstances, under any provocation, or on any plea.
. . . Sir, I have been many years here and in the other
House, through long and troublesome controversies, dur-
ing peace and war, and I for one desire to see the work of
our generation crowned by the greatest of civic triumphs,
the fulfillment of every promise, and to behold the nation
free from all dishonor, its promises good, its credit un-
tarnished, its wealth and power increasing and expand-
ing. ••
mg.

The history of the resolution referred to, offered
in December, 1873, shows how extremely difiicult
it was to enact judicious financial legislation at that
time. It was introduced as a direction to report a
bill which would hasten specie payments. A measure
passed both Houses in a form to postpone them
indefinitely. The Finance Committee of the Senate
waited until March 23, 1874, before reporting,
and then presented a measure which legalized the
reissue of $26,000,000 of greenbacks, with a view to
making the total amount $382,000,000. In the dis-
cussion which followed, radical amendments were
offered, and some were passed, among which was
one enlarging the maximum amount by $18,000,-

LEGISLATION FOR RESUMPTION 24S

000 to $400,000,000. In its final shape it also
authorized additional national bank notes to the
amount of $46,000,000. It was clearly an inflation
measure. When it came to a final vote, Mr. Sher-
man voted in the negative. It was taken up soon
after in the House of Representatives, and, after
a brief debate, was passed. It was evident that
the prevalent ^sentiment there was for additional
currency, to which object all other features of the
existing fiscal system were made subordinate.
Fortunately, President Grant vetoed this measure,
on the 22d of April, 1874. He called attention to
previous utterances in his annual message of De-
cember, 1869, and to Acts of Congress, which were
inconsistent with such a policy as that embodied in
the bill.

Another bill, originating in the House, provided
for free banking. Mr. Sherman's committee in the
Senate amended this, obligating the Treasury to
redeem legal tenders in gold, or five per cent, bonds,
on and after January 1, 1877. On discussion in
the Senate, however, all provisions for the redemp-
tion of United States notes were stricken out. On
its final passage, the bill contained no reference to
redemption; but fixed the aggregate of United
States notes at $382,000,000, and provision was
made for free banking.

The severe depression of business continued in
December, 1874, when Congress met. But an un-
expected event had occurred which impressed upon
the Republican leaders the imperative necessity of

244 JOHN SHERMAN

giving attention to specie payments, — namely, the
election, in the preceding autunm, of a Democratic
majority in the House of Representatives. On the
foUowing 4th of March, the Republicans, for the
first time in fourteen years, would be in the minority
in the lower branch of Congress. After much vacil-
lation and great difference of opinion, the mouth-
pieces of business interests of the country had
reached the conviction that the only proper method
by which to restore and maintain wholesome condi-
tions was the restoration of specie payments. As
formerly, the Senate took the initiative and a com-
mittee was appointed to formulate a Resumption
BiU, with Mr. Sherman as chairman, with whom
were associated Messrs. Allison, BoutweU, Conk-
ling, Edmunds, Ferry, Frelinghuysen, Howe, Lo-
gan, Morton, and Sargent. In this committee an
apparently hopeless difference of opinion developed
at the very outset. Every plan for resumption was
represented. There were those who favored the
absolute withdrawal of the greenbacks. Some be-
lieved in a policy of drifting. On the other hand,
others were advocates of inflation. There was, how-
ever, a disposition on the part of all to agree upon
something, with the realization that after the follow-
ing 4th of March no measure put forward by the
Republican party could have any prospect of suc-
cess. An agreement was also aided by the fact that
some of the senators who had favored inflation had
done so out of deference to their constituents, while
really believing that resumption was highly desirable.

LEGISLATION FOR RESUMPTION 245

It was the short session, and the committee of
Republican senators, realizing that time was press-
ing, acted with a degree of promptness very strik-
ingly in contrast with their previous policy of delay.
No two adhered to the same plan of procedure, but
never did the ability to gain results by concession
— a qualification which Mr. Sherman preeminently
possessed — appear more prominently than at this
time. A measure was at last agreed on, although
there was a distinct understanding that in one most
vital particular, viz., the reissue of the retired green-
backs, the bill should not be regarded as a com-
mittal. By the first section, silver coins were sub-
stituted for the outstanding fractional currency.
To this there was no objection, because every one
was disgusted with the " shinplasters," as the frac-
tional currency was called, and the change to bright
coins was an agreeable one. The second section, as
a concession to the gold-mining states, repealed the
mint-charge of one fifth of one per cent, for con-
verting gold bullion into coin, and made its coinage
free. All restrictions upon the circulation of national
banking associations were repealed. The limit, first
placed at $300,000,000, and afterwards at $354,-
000,000, was removed; also the limit of $1,000,000
for one bank. It was provided that the amount
of greenbacks, then $382,000,000, should be ulti-
mately reduced to $300,000,000, the reduction keep-
ing pace with the increase of national bank notes.
For every $100 of national bank notes issued, $80
of greenbacks should be redeemed, until the amount

246 JOHN SHERMAN

should be reduced to $300,000,000. The reason for
fixing the figure at $80 was that the statutes relating
to the banks required the maintenance in reserve
of at least 25 per cent, in certain large cities, and
15 per cent, elsewhere, of the amount of its cir-
culating notes. As an average of 20 per cent, would
thus be required for reserves by the banks in
their vaults, $80,000,000 of greenbacks would have
an efficiency as a circulating medium equal to
$100,000,000 of national bank notes.

The date for resumption was fixed for January 1,
1879, approximately four years. No option to the
Treasury to pay in United States bonds, as in previ-
ous bills, was included in this measure. Coin, not
gold, was the term used for the money of redemp-
tion, and in order to provide for the execution of the
law, the Secretary of the Treasury was authorized
to use any surplus revenues in the Treasury, not
otherwise appropriated, and to sell at not less than
par, in coin, either of the descriptions of bonds pro-
vided for in the Funding Act of July 14, 1870, viz. :
5% bonds running ten years, 4J% bonds running
fifteen years, and 4% bonds running thirty years.
It was held, in the future administration of the law,
that the authority granted by the Resumption Act
to issue these bonds was entirely without restriction
as to the amount which might be issued, and in this
respect it diflFered from the Funding Act referred
to.

The Bill was reported to the Senate by Mr.
Sherman on the 21st of December, 1874, and con-

LEGISLATION FOR RESUMPTION 247

sidered on the following day. Mr. Sherman only
briefly explained its provisions at first, but later
occupied a considerable time in answering questions
and objections. On the subject of the reissue of
greenbacks paid into the Treasury he said :

"At any rate the question is not material until the
whole amount of $82,000,000 is reduced. ... I say
frankly that we do not propose to decide that question in
this bill. . . . The process (i. e., of reduction) must go
on pari passu until the amount of legal-tender notes is
reduced to $300,000,000. Before that time will probably
arrive, in the course of human affairs, at least one or two
Congresses will have met and disappeared, and we may
leave to the future these questions that tend to divide us
and distract us, rather than imdertake to thrust them
into this bill, and thus divide us and prevent us from
doing something in the direction at which we aim. . . .
In supporting a bill of this kind I do not meet all possible
questions that may arise in its construction, and no
human mind could do it. I know this, and upon this rock
I stand : that this bill has provisions in it which tend to
accomplish the purpose which I have so diligently sought,
and I will not seek to obstruct its passage or defeat it by
thrusting into it doubtful questions of law or public
policy which may tend to defeat it. I take this bill, not as
the bill that I should propose myself, a bill which itself
surrenders many of my convictions as to the means to be
ei&ployed to accomplish the particular purpose designed,
but I take it because I see that every provision in it tends
to the object sought."

Senator Schurz, one of the strongest friends of
resumption, declared his intention to vote for it,
because it contained a' pledge to bind all its sup-
porters as to their future action, but not because

248 JOHN SHERMAN

he believed that with its present machineiy it
would assure the desired resulL

The vote in the Senate was practically on parly
lines. After some amendments had been voted
down, the Bill was passed by 32 to 14, no Demo-
crat voting for it, and two Republicans, Spiague
and Tipton, voting against it.

So absorbingly interested was Senator Sherman
in this measure, and so anxious to have the Bill
absolutely effective and its phraseology such as
to require no further amendment, that he after-
wards said, in speaking of it: "We were careful
to select phraseology so comprehensive that aU
the resources and credit of the government were
pledged to redeem the notes of the United States,
as fully and completely as our Revolutionary
fathers pledged to each other their lives, their for-
tunes, and their sacred honor in support of the
Declaration of American Independence."

The measure passed the House, practically with-
out debate, on the 7th of January, 1875, by a vote
of 136 to 98, and received the approval of Presi-
dent Grant, January 14. It would be difficult to
find a more striking illustration of party unanimity
and strength than the passage of this measilre.
For years Congress had been considering the sub-
ject. Irreconcilable differences of opinion had de-
veloped, and either no effective legislation had been
enacted, or legislation which might better have
been omitted. Now, after the sting of defeat in
the preceding election, in an unprecedentedly short

LEGISLATION FOR RESUMPTION 249

time, a bill was placed on the statute-books which
at last declared for specie payment at a specified
time, and under a definite plan.

Popular government in the United States has
been characterized by a number of compromises
which have settled troublesome questions or averted
inunediate difficulties. But it is no exaggeration to
say that among all compromises, whether political
or financial, none embodied so many discordant
opinions or gave heed to so many conflicting
interests as the Resumption Act. In response to
a demand for a contraction of legal tenders a pro-
vision was made for their reduction, while those
who desired an increase of currency were gratified
by the removal of limitations upon the circula-
tion of the national banks. As regards a reserve
to redeem the notes, the Secretary of the Treas-
ury was authorized to use surplus revenues from
time to time, and to sell bonds; but, on the other
hand, no provision was made for a permanent
specie reserve, an essential requirement, action upon
which was not taken for a quarter of a cen-
tury. A specific date was fixed for resumption,
but those who had believed that the problem was
a commercial one and would adjust itself in time,
as well as those who demanded that the approach
to specie payment should be gradual, in order
that the debtor might not suffer, were gratified by
the fixing of a date four years hence. Those who
opposed resumption could hope for repeal dur-
ing this interval. The measure was not less signi-

250 JOHN SHERMAN

ficant in regard to subjects upon which it was silent
than in relation to those which were definitely
treated. The future controversy over the greater
use of silver could already be anticipated by care-
ful observers, but coin only, not gold, was speci-
fied in the law. The much-debated question of
the right to reissue greenbacks lodged in the
Treasury received no answer in the Bill, and it
was the agreement of those who had framed it that
no unnecessary reference should be made to this
very important feature in any plan of resumption.

It should be borne in mind that the provisions
of the law had to be enforced without further aid
from Congress. At no time between January 7,
1875, and January 1, 1879, the date for the resump-
tion of specie payments, was there a majority friendly
to the Act in both Houses of Congress.- On one
occasion, as will be pointed out, a Bill for its re-
peal passed the House. An unfriendly sentiment
very soon developed against it, proceeding not
merely from inflationists, but from some hard-
money men. The criticisms made upon the meas-
ure by.the friends of resumption were that the date
fixed was too remote, that the Bill was a political
trick, passed with a full realization that before
the 1st of January, 1879, another Congress could
repeal or nullify it in some way. Another objection
was that the means provided in the way of bor-
rowing and accumulation of the revenue would
prove inadequate, that more gold would be re-
quired than could possibly be secured. Others

LEGISLATION FOR RESUMPTION 251

complained that the authorization of an increase
in the circulation of the national banks was grant-
ing to those institutions control of the currency
and an undue degree of favor. Some of the strong-
est advocates of resumption maintained that the
bill was essentially defective because there was no
provision for the cancellation of legal tenders,
when redeemed.

• In response to all these arguments, it is suffi-
cient to answer that the purpose of the Bill was re-
sumption, and that the means adopted were the best
which could be obtained from a Congress, which,
if not hostile, was absolutely lacking in cordiality
for the measure. A majority of the members were
more friendly to legislation which would make
some form of money more plentiful than they were
to that which involved those sacrifices essential
to secure specie payment. Then, too, the result
justified the means employed, for it proved a mag-
nificent success.

XII

SECRETARY OF THE TREASURY. — REFUNDING. —
SILVER LEGISLATION. — RESUMPTION

The contest for resumption was by no tineai^
ended. The first prominent echo of the contro-
versy was in the Ohio campaign of 1875, where
the issues were clearly defined between resump-
tion and payment of bonds in gold on the one side,
and the indefinite continuance of the greenback
and its unlimited use for the payment of debts, on
the other. For a state campaign, it attracted al-
most unequaled attention. The Democratic plat-
form declared that the policy adopted had already
brought disaster to the business of the country
and threatened general bankruptcy. It demanded
that this policy be abandoned and attacked the
national banks as a dangerous monopoly. There
was an unprecedented vote, more than sixty thou-
sand greater than at the preceding presidential
election. Governor Hayes, the Republican can-
didate, was elected by a plurality barely in excess
of five thousand.

Mr. Sherman took a very active part in this
canvass, and both he and Governor Hayes main-
tained a bold stand for sound money. He con-
tinued his advocacy of a specie standard in the

SECRETARY OF THE TREASURY 25S

Senate, especially on the occasion of the presenta-
tion of the resolutions of the New York Cham
ber of Commerce in favor of resumption, on the
6th of March, 1876.

The triumph of Mr. Hayes in the gubernatorial
contest in Ohio caused him to be prominently
named for the presidency in 1876, though in the
National Republican Convention of that year his
support at the beginning was not large outside of
his own state. The feeling against Mr. Blaine, —
who was far in the lead in the convention, — on
the part of Mr. Conkling and others, together with
the importance of the electoral vote of Ohio and
the close vote in the state at the preceding election,
furnished potent reasons, however, for the nomina-
tion of Mr. Hayes, and on the seventh ballot he
was chosen. In the ensuing contest for election
Mr. Sherman again took part with more activity
than ever before, partly because of his friendliness
for Mr. Hayes, whom he had supported in the
convention, and partly because the issues of the
campaign had to do with questions in which he
had taken a leading part.

The Democratic National Convention declared
against the Resumption Act. The platform said:
"We denounce the financial imbecility and im-
morality of that party which, during eleven years
of peace, has made no advance towards resump-
tion, no preparation for resumption, but, instead,
has obstructed resumption by wasting our resources
and exhausting all our surplus income; and, while

254 JOHN SHERMAN

annually professing to intend a speedy return to
specie payments, has annually enacted fresh hin-
drances thereto. As such hindrance we denounce
the Resumption Clause of the Act of 1875, and
we here demand its repeal."

Mr. Sherman took a very strong partisan stand
in this campaign, even more pronounced than in
the days of reconstruction. In a speech at Marietta,
Ohio, on the 12th of August, 1876, he said :

"The real question is, shall the Democratic party he
restored to power again, not with new principles and
leaders, but the Democratic party composed of the same
elements as before the war? Sixteen years have passed
away, and yet that party in soul, purpose, and policy is
the same as when at the close of Buchanan's term it left
the coimtry crumbling into anarchy. . . . What will be
the result of the restoration of the Democratic party to
power? The first result will be a severe check to the
growth of the Union sentiment — love of the Union. . . .
If they succeed they will have accomplished by a restora-
tion what they sought to accomplish by a revolution.
How will it read in history if it is recorded that the Ameri-
can people took up arms and overcame the Democratic
party in order to save their Union, and, when it was saved,
restored the same party and the same men to power
again?"

Such a restoration he compared to that of Charles
the Second. He laid much stress upon the pres-
entation of claims against the government by those
who had been engaged in the late rebellion, and
cited two bills, introduced in the House of Re-
presentatives, as showing the danger which would
result if Tilden should be elected and the Demo-

SECRETARY OF THE TREASURY ^5

crats come into power. He called attention to the
danger to the colored race in the South; to the
election frauds in New York; the barbarities of
the Ku-Klux and the White League; and the in-
consistency of the Democratic party as to the Re-
sumption Act.

In speaking of the administration of General
Grant he said:

"Conscious that their only hope lay in blackening the
character and conduct of General Grant and his ap-
pointees, the Democratic majority organized the whole
House into committees of investigation. They have ex-
plored every department, bureau, and office of the govern-
ment. They have called as witnesses penitentiary con-
victs and the insane from the hospital. They have seized
telegrams by the wholesale, and examined private books
and papers. They have sought to disclose Cabinet secrets,
which have alwa}^ been held inviolable. They have em-
ployed detectives to watch accused persons. They have
examined, in secret, witnesses without number to sustain
certain secret accusations, and have given the accused no
benefit of cross-examination, no opportunity to face their
accusers, no specification of the charges against them,
and what is the result of it all ? . . . They denounced the
Credit Mobilier and found that their candidate for Presi-
dent was its confidential lawyer."

The result of the election was in doubt four
months and caused great excitement in the country
and a practical suspension of all public and private
enterprise. President Grant, in view of the accusa-
tions of fraud, requested a committee of Repub-
licans to go to New Orleans to witness the canvass-
ing of the vote of Louisiana. Mr. Sherman was

256 JOHN SHERMAN

asked to be one of the committee. He promptly
complied with the request, in November, 1876, and
spent a considerable amount of time in the state.
A similar delegation went at the invitation of the
National Democratic Committee. On the request
of the Board of Retuming-officers of Louisiana,
ten gentlemen, five from each party, were chosen
to witness the count. Mr. Sherman was one of this
committee of ten. He was at all times confident that
such an amount of fraud had been perpetrated that
the vote of numerous parishes should be thrown out,
and believed that the action of the Board of Retum-
ing-officers, in giving certificates of election to the
Republican electors, was fair and honest.

It was evident that there would be trouble in the
counting of the electoral vote. Mr. Hayes and
others maintained that the Vice-President alone
had the authority to decide what votes should be
counted. In order to obtain a prompt settlement of
disputed questions, of a nature to command the
confidence of the people, a bill creating an Electoral
Commission of fifteen membere was introduced
in the Senate by Mr. Edmunds of Vermont. Very
prominent Republicans opposed it, among whom
were Mr. Morton and Mr. Blaine, the latter point-
ing out the danger of leaving to one person, the non-
partisan member of the commission, the right to
determine how the vote of a state should be counted,
and thus decide who should be President. Mr.
Sherman thought it was extra-constitutional, as did
many others, and did not vote for it. The bill be-

SECRETARY OF THE TREASURY 257

came a law. The result is so generally known that
it is not necessary to detail it here.

In Februaiy, 1877, after the decision of the
Electoral Commission, President Hayes strongly
urged Mr. Sherman to become Secretary of the
Treasury. Mr. Sherman, after he became assured
that the legislature at Columbus would elect a
Republican in his place in the Senate, accepted
the proffered position.

The two great tasks before him, as Secretary of
the Treasury, were resumption and the refunding
of the public debt. For the administrative manage-
ment of the Treasury he possessed exceptional
qualifications; also, he found the Treasury, as a
department, in excellent working order. Most of
the subordinates who had served under preceding
administrations were retained. They were men
<rf large experience, who labored together har-
moniously and eflSciently. During the first few
months of his service as Secretary of the Treasury
three important steps were taken, — the beginning
of practical preparation for resumption; the re-
funding of bonds at lower rates of interest; and
the inauguration of measures for the sale of bonds
directly to the people, with a view to avoiding the
usual method of dealing with syndicates.

When he became Secretary of the Treasury, in
March, 1877, a contract was in force, made on the
S4th of August preceding, providing for the sale of
$300,000,000 of four and one half per cent, bonds
payable after fifteen years. Secretary Lot M.

258 JOHN SHERMAN

Morrill had made this contract with a syndicate of
bankers representing American and foreign inter-
ests. It was anticipated that the larger share of the
bonds to be sold mider the contract would be taken
in Europe. There was an absolute agreement to
dispose of $40,000,000 merely, but with an option
to take the remaining $260,000,000. The com-
mission to be paid was one half of one per cent.
Five-twenty bonds as well as coin might be received
in payment of subscriptions for these bonds. It was
contemplated that all the proceeds should be applied
in payment of outstanding indebtedness, and no part
for the accumulation of a fund for resumption.
Barely a month after the beginning of the Hayes
administration, on the 6th of April, 1877, Mr.
Sherman notified a representative of the syndicate
that he desired to dispose of four per cent, bonds
rather than those drawing four and one half per
cent. Accordingly several changes were made and
a new contract entered into on the 0th of the follow-
ing June. First : the total sale of the four and one
half per cent, bonds was reduced from $300,000,000
to $200,000,000. The object in withholding $100,-
000,000 from sale was to be ready for all contin-
gencies. In case there should be difficulty in accom-
plishing resumption, a balance of $100,000,000 of
bonds drawing four and one half per cent., the
higher rate of interest, would be available for sale
to secure a sufficient quantity of gold for resump-
tion. Second: agreement was made for the sale
of $25,000,000 of four per cents, with the option

SECRETARY OF THE TREASURY 259

to the syndicate to take the unissued balance of the
four per cents at the same rate of commission, one
half of one per cent. Of this $25,000,000, not to
exceed $5,000,000 should be sold for resumption
purposes. Third : the syndicate agreed for a period
of thirty days to offer the four per cent, bonds to
the people of the United States. The object in
compelling the syndicate to offer bonds to the public
was twofold: first, to widen the market for the
bonds; and, second, to educate the people to pur-
chase them more directly from the government, so
that bonds could be sold without the intervention
of a syndicate.

The syndicate, on the 14th of June, gave notice
of the proposed sale to the people, by general adver-
tisement, and as a result, within thirty days $67,-
600,000 of the four per cent, bonds were taken in
the United States, as against $10,200,000 in Europe.
Since the 1st of March there had also been a sale
of $135,000,000 of the four and one half per cents.
By appl}dng the proceeds to the redemption of six
per cent, bonds the aggregate annual reduction of
interest by these sales, between March 1 and July
16, 1877, was $3,581,000. The sale of bonds for
refunding did not amount to any considerable sum
in the latter portion of the year 1877. The con-
tinuance of the silver agitation, the presentation of
bills to repeal the Resumption Act, — one of which
passed the House, — and especially the railway
riots, in July and August, which assumed a serious-
ness never before equaled in labor disturbances

960 JOHN SHERMAN

in the country, — all tended to cause distrust at
home and abroad, and after September sales were
practically suspended.

Mr. Shennan was asked, in June, 1877, for assur-
ance that the bonds would be paid in gold, since
payment in silver was feared. The members of the
syndicate urged Mr. Sherman to make a public
declaration to that effect. He, at first, in a letter
addressed to Mr. Belmont on the 16th of June,
declined to do this, stating that "'nothing would so
tend to disturb this result " — that is, the rightful
settlement of the question — "as unauthorized
'theses,' or dogma, by an executive officer upon
a question purely legislative or judicial." In the
same letter, however, he expressed his opinion that
the bonds would be paid, principal and interest,
in gold coin, and, in a letter three days later, ad-
dressed to Mr. Francis O. French of New York,
he wrote:

"Under laws now in force there is no coin issued or
issuable in which the principal of the four per cent, bonds
is redeemable, or the interest payable, except the gold
coins of the United States of the standard value fixed by
laws in force on the 14th of July, 1870, when the bonds
were authorized. The government exacts , in exchange for
these bonds, payment at par in such gold coin, and it is not
to be anticipated that any future legislation ci Congress,
or any action of any department of the government, would
sanction or tolerate the redemption of the principal of
these bonds, or the payment of the interest thereon, in
coin of less value than the coin authorized by law at
the time of the issue of the bonds. . . . The essential
element of good faith in preserving the equality in value

SECRETARY OF THE TREASURY 261

between the coinage in which the government receives,
and that in whidi it pays these bonds, will be sacredly
observed by the government and the people of the United
States, whatever may be the system of coinage which the
general policy of the nation may at any time adopt."

When Congress met on October 15, 1877, —
having been called together because of the failure
to make appropriations for the support of the army
at the preceding regular session, — it was evident
that most of the members were much more inter-
ested in the money question than in the mainten-
ance of the army, and that a considerable majority
in both Houses were opposed to the financial policy
of the administration. Four bills were introduced
in the Senate and fourteen in the House for the
lepeal of the Resumption Act.

On the 5th of November a bill, introduced in
the House by Mr. Bland of Missouri, providing
for the free coinage of silver dollars of 412^ grains,
— that is, at a ratio to gold of 16 to 1, — and re-
storing their legal-tender character, was taken up,
on a motion to suspend the rules, and was passed
by the overwhelming vote of 163 to 34. TTie infla-
tion movement at this time was very strong. The
silver agitation was largely a manifestation of the
demand for more money, reinforced by the potent
silver-mining interests of the country, and furnished
with arguments by the prior use of silver concur-
rently with gold and the uniform use of the word
" coin " in laws relating to the obligations of the gov-
ernment. Also the passage of the Demonetization

262 JOHN SHERMAN

Act of 1873, without any considerable discussion,
was made a basis for the accusation that it was
surreptitiously passed.

Among members of prominence who voted for the
Bland Bill were numbered such men as John G.
Carlisle and Hilary A. Herbert, afterwards members
of President Cleveland's Cabinet; J. G. Cannon,
later Speaker of the House of Representatives;
J. D. Cox, who had been Secretary of the Interior
in Grant's Cabinet; S. S. Cox, a stalwart opponent
of paper money inflation, in 1862; and William
McKinley, afterwards President of the United
States. Among those voting in the negative were
Messrs. Beed and Frye of Maine, Blair of New
Hampshire, Republicans; and Alexander H. Ste-
phens of Georgia, A. S. Hewitt and Fernando Wood
of New York, Democrats. General Garfield, after-
wards President, and Eugene Hale of Maine were
absent when the vote was taken, but were opposed
to the proposed legislation.

An examination of contemporaneous facts often
proves that opinions entertained in past years,
which, when viewed in the light of subsequent
events, or upon more careful consideration, are
regarded as delusions, were not entirely baseless.
An argument for the more extended use of silver
was found at that time in its employment by France
for three quarters of a century, on a ratio to gold of
15j to 1, and its use with gold in many of the more
advanced nations. There was also a strong ail-
ment based upon conditions relating to the pro-

SECRETARY OF THE TREASURY «68

duction of gold and silver. After the year 1870
the world's annual production of gold very mater-
ially declined, and did not reach that of 1870 and
prior years until 1891. In the United States the
average figures for twenty years, until and including
1870, were not again reached until 1896. Leading
geologists urged that the gold-fields in which placer
mining had been in vogue were becoming exhausted,
and that in the future the annual accretion to the
existing supply would be greatly diminished. This
view seems to have been accepted by many intelli-
gent students of the subject during the period of
diminished production after 1870.

In the great advance of conunerce and industry
in the first half of the nineteenth century, the pro-
duction of precious metals did not keep pace
with the increasing demands for metallic money.
Later the discovery of gold in California in 1847,
and in Australia in 1851, exercised a marked in-
fluence upon prices and caused the more extensive
use of that metal as money. It was maintained that
since 1870 the scarcity of gold had created a con-
dition similar to that prior to 1851, when, as it was
alleged, the scant supply of both metals had in-
juriously affected prices and hampered industry.
The rehabilitation of silver, it was argued, would
remedy this.

Whatever the argument for bimetallism might be,
however, the arguments against it were gaining
ground and seemed sure of ultimate acceptance.
These were that bimetallism, as a principle, was

S64 JOHN SHERMAN

impracticable, because under modem commercial
conditions, with readier means of transportation
and with markets in which variations in the relative
value of the two metals would be emphasized upon
the slightest difference in quotations, the metal
overvalued in coinage would be used for money, to
the exclusion of the other. Thus it was impossible
to join the two metals tc^ther and give to each
absolutely free coinage. Then, too, conmierce had
come to demand in aU its transactions the simplest
and most convenient instruments; and in a com-
parison of the relative merits of gold and silver, gold,
by reason of its superior lightness, was sure to be
preferred. Moreover, substitutes for metallic or
other forms of money were annually assuming a
prominence unknown in previous years.

The downward tendency of prices did not cease
until 1879, and so strong was the sentiment for silver
coinage that President Hayes, in his message of
1877, had recommended '"the renewal of the silver
dollar as an element in our specie currency, endowed
by legislation with the quality of legal tender to
a greater or less extent." At the same time he
insisted upon payment of the public debt in gold,
and said : '" It is lar better to pay these b(Hids in that
coin [gold] than to seem to take advantage of the
unforeseen fall in silver bullion to pay in a new issue
of silver coin thus made so much less valuable."

In his first annual report in December, 1877,
Secretary Sherman discussed the silver question
at some length, and advocated the use oi silver as

SECRETARY OF THE TREASURY «65

convenient and desirable, but only in case that it
should be kept on a par with gold. He said : "' With
such legislative provision as will maintain its cur-
rent value at par with gold its issue is respectfully
recommended." He reviewed the changes in legis-
lation relating to the ratio <rf silver to gold, — first
15 to 1; then, in 1837, 16 to 1; then, in 1853, the
coinage of fractional silver at the mint at a ratio of
14.8 to 1.

The average intrinsic value of the gold and
alver in a dollar in the year 1877 was in the pro-
portion of 100 to 92, and silver was worth less at
the close of the year. It was the favorite aigument
of those who advocated the remonetization of silver
that unlimited free coinage would speedily obliter-
ate the difference in the market value of the metal
in the two dollars. Sherman expressed himself
strongly against this prevalent opinion of the so-
called bimetallists, and said : "' £F the slight error
in the ratio of 1792 prevented gold from entering
into circulation for forty-five years, and the slight
error in 1837 brought gold into circulation and
banished silver until 1853, how much more cer-
tainly win an error now of 9 % cause gold to be
exported, and silver to become the sole standard
<rf value ? Is it worth while to travel again the round
of errors, when experience has demonstrated that
both metals can only be maintained in circulation
together by adhering to the policy of 1853?" He
took up and answered the current arguments in
favor of free silver, and gave, in substance, all the

266 JOHN SHERMAN

reasons employed in succeeding years in the debates J

upon the subject. He referred to the provision of the |

Act of February, 1862, by which customs duties were
pledged in payment of the public debt, and to the
uniform custom of collecting these in gold coin.
Free coinage of silver would violate this pledge.
In regard to an international convention he said: i

" Even such a convention, while it might check the |

fall of silver, could not prevent the operation of that '

higher law which places the market value of silver
above human control." He concluded by saying:
"Issued upon the conditions here stated, the Sec-
retary is of the opinion that the silver dollar will
be a great public advantage, but that if issued with-
out limit, upon the demand of the owners of silver
bullion, it will be a great public injury." He referred
to his letters in June, assuring the payment of bonds
in gold, and said : " The Secretary earnestly urges
Congress to give its sanction to this assurance."
The passage of the Bland-Allison Silver Bill, and
the Matthews Resolution were the response.

The passage of the Bland Bill in the House gave
concrete basis for fears which had been entertained
during preceding months of the year, and the sales
of bonds either for refunding or resumption were
brought to a rude stop. Outstanding four per cent,
bonds dropped to 99, and even lower.

Secretary Sherman used all possible influence
with his late associates in the Senate to prevent this
measure from passing that body. He at first ex-
pressed absolute confidence that it would not pass

SECRETARY OF THE TREASURY 267

there; then the hope that at least the coinage
would be limited, and express provision be made
that the public debt should be paid in gold, and that
customs duties and interest on the public debt
should be paid in that metal. The Senate, on con-
sideration, very materially changed the bill. Senator
Allison introduced the amendments and the meas-
ure has since been known as the Bland-Allison Bill.
These amendments took away the unlimited free
coinage feature, which would have allowed the
owner of bullion to bring his silver to the mint, and
restricted coinage to bullion purchased by the
govemmept, the quantity of which should be not
less than $2,000,000 worth nor more than $4,000,000
worth per month. The measure retained the ob-
jectionable feature of the House Bill, in that silver
was made legal tender for all debts and dues, public
and private. All propositions to increase the quan-
tity of silver in a dollar, so as to make it more nearly
conform, in intrinsic value, to the gold dollar, were
promptly voted down. There was the usual chimer-
ical provision for an international conference to
agree upon the ratio between gold and silver; also
a provision for the issuance of certificates, in de-
nominations of not less than ten dollars, to circulate
as paper currency, upon a deposit of silver dollars
in the Treasur}%

Senator Stanley Matthews, Mr. Sherman's suc-
cessor in the Senate, on the 6th of December, three
days after the presentation of Sherman's report
containing the request for legislative assurance that

«68 JOHN SHERMAN

bonds would be paid in gold, introduced a resolution
declaring that, under the Act of 1869, to Strengthen
the Public Credit, silver, as well as gold, was in-
cluded under the term ""coin," and that, at the
option of the government, silver dollars containing
412^ grains each, might be used as a legal tender
in payment of the principal and interest of bonds,
and that such payment was not in violation of the
public faith, nor in derogation of the rights of the
public creditor. Much surprise was expressed that
Mr. Afatthews, who was supposed to be especially
close to the President, and to the Secretary of the
Treasury, should have introduced such a resolution;
but he called attention to the passage by Uie legis-
lature of the State of Ohio, at its previous session,
of a resolution that "common honesty to the tax-
payers, the letter and the spirit of the contract under
which the great body of its indebtedness was
assumed by the United States, and true financial
wisdom, each and all demand the restoration of the
silver dollar to its former rank as lawful money."
This resolution had received but three negative '
votes in the Ohio House of Representatives, and but
one in the Senate.

Against the Matthews resolution it was contended
that not more than eight million silver dollars had
been coined, from the very foundation of the govern-
ment; that most of the existing generation had
never seen a silver dollar; that all obligations, pay-
able in coin, had been met by payment in gold;
also, that at the time when the resolution was pend-

SECRETARY OF THE TREASURY 269

ing, there was no law providing for the coinage of
silver dollars having legal*tender quality.^ Never-
theless, cm the ^th of January, 1878, this concur-
rent resolution passed the Senate by a vote of nearly
two to one, and three days later passed the House
by a vote of 189 to 79.

The passage ot the Bland-Allison Silver Act of
February 28, 1878, exercised a surprisingly insig-
nificant effect upon financial conditions. The
amount of silver coinage was limited. The profit
from the difference between the bullion value of
silver and the par value of the coinage accrued to
the government. The enforcement of the law was
in the hands of an administration which, it was
confidently believed, would coin only the minimum
amount prescribed by the Act. Then, too, the tide
had turned, and imports of gold exceeded exports.
The financial condition of the country was in many
ways improving. There were at least hopeful in-
dications of revival. The premium on gold was not
appreciably affected; it did not rise one eiglith of
one per cent, with the news of the passage of the
bill over the presidential veto, and declined during
the month succeeding. Resumption was too well
under way, and the confidence of the people in
Secretary Sherman and the administration too well
established, to allow this bill to disturb their cal-
culations. The Secretary himself did not fear the

' The legal-tender quality of the trade dollars — for sums
not in excess of five dollars — was taken away by the resolution
of July 22, 1876.

870 JOHN SHERMAN

measure, and hardly agreed with the President
in his veto message. One reason was that in his
efforts in the Senate to obtain a modification of the
Bland Bill, he had recognized the force of the silver
sentiment and had been willing to make certain
concessions.

For some years other factors, which diminished
the volume of other kinds of currency, prevented
derangement from the execution of the Silver Coin-
age Act. After the Resumption Act directing the
retirement of United States notes to the extent of
80 % of tlie national bank currency issued, there
had been a considerable contraction of the currency.
The high price of bonds caused many of the banks
to withdraw the whole or a part of their circulation.
When that Act was passed in January, 1875,
$352,000,000 of national bank notes were in cir-
culation. Three years later, in 1878, $74,000,000
had been withdrawn and $43,000,000 of new notes
had been issued, a net decrease of $31,000,000.
Against these $43,000,000 of national bank notes
issued, over $35,000,000 of greenbacks had been
withdrawn under the Resumption Act. As a result
there was a decrease of both these kinds of currency
and a net contraction of considerably over $60,-
000,000. This fact afforded a reason for fixing the
amount of greenbacks at a higher figure than was
contemplated by the Resumption Act. This was
done by the Act of May 31, 1878, already men-
tioned, which increased the limit of issues from
$300,000,000, the amount to which reduction was

SECRETARY OF THE TREASXHIY 271

to be made under the Resumption Act, to $346,-
681,016.

While the controversy over silver was pending,
one of the bills to repeal the Resumption Act passed
the House, November 23, 1877, by a vote of 133 to
120. It was taken up in the Senate where a substi-
tute was adopted, by the close vote of 30 to 29, pro-
viding that after the passage of the pending bill
United States notes should be received the same
as coin in payment for four per cent, bonds, and on
and after October 1, 1878, they should be receivable
for duties on imports. This Bill was involved in
a hopeless parliamentary tangle on its return to the
House. After several ineffectual attempts it was
finally brought up for consideration in February,
1879, after resumption had become an established
fact. The sound money sentiment was stronger
then, and a motion by Mr. Garfield that the bill with
the amendment be laid on the table was adopted by
a vote of 141 to 110.

In 1878 bonds were again disposed of on a large
scale. Secretary Sherman had given notice to the
S3mdicate that he would terminate its contract, from
and after the 26th day of January, 1878, continuing
such of its provisions merely as related to the sale of
bonds in European markets. A notice to the public
was then issued directly from the Treasury De-
partment requesting subscriptions for the four per
cent, bonds, redeemable July, 1907, and offering
a commission of one quarter of one per cent, on
subscriptions of $1000 and over.

272 JOHN SHERMAN

Especial attention was given to the accumulation
of a stock of gold for resumption, and, to negotiate
a sale of bonds for that purpose, Mr. Sherman went
to New York in April, 1878. His first desire was to
sell $50,000,000 of four per cents, but it became
apparent they could not readily be disposed of.
He then offered to die foreign sjmdicate four and
one half percent, bcmds at 103. This they declined.
After some bargaining the syndicate agreed to take
these bonds at 101^, they to receive one half of one
per cent, commission. The local banks offered to
give par, but said that in their opinion an offer of
101 ought to be accepted. All installments in pay*
ment on these bonds were to be paid prior to the
date for resumption, and were to be for resumption
purposes only. In the following autumn, influenced
partly by a favorable balance at trade, the subscrip-
tion for the four per cent, bonds appreciably in-
creased. The admission of the Assistant Treasurer
of the United States as a member of the Clearing*
House, so that only the actual balance of debits
would have to be paid over, very materially assisted
in resumption. This arrangement diminished
greatly the strain upon the currency supply, and
thus lessened the demand for gold.

By the date of Mr. Sherman's repwt of Decem-
ber, 1878, the quantity of bonds sold to accumulate
gold for reserve was $95,500,000, of which $65,-
000,000 were four and one half per cent, bonds, and
$30,500,000 four per cent, bonds. The amount of
coin available in tlie Treasury on the preceding 23d

SECRETARY OF THE TREASURY 273

day of November w&s $141,888,100. At the date
of this report slightly more than $100,000,000 of
four per cent, bonds had been disposed of.

It was the one absorbing desire of Mr. Sherman
that resumption might be accomplished. To this
end he had bent the best energies of his life. He
wrote to an acquaintance in Ohio, who had ex-
pressed alarm over the feelings of the people with
reference to the financial situation : ** The question
of resumption is higher than any party obligation."
His efforts to this end aroused the most violent
opposition, which was visited with especial virulence
upon him, personally. The bitter feeling was illus-
trated by his reception at Toledo, in his own state,
in the autumn of 1878. He was announced to speak
there and found the hall packed by an unfriendly
audience. It is hardly to be wondered at that he
was a partisan when such attacks could be made.
The leading Democratic journal of the state, in de-
scribing the meeting, used the following headlines:
" Howled Down. John Sherman's Welcome Home.
Turbulent and Riotous Demonstration at His Meet-
ing in Toledo. Men Made Beggars by Him Refuse
to listen to His Defence of the Process, and the
Architect of National Ruin Receives a Slight Fore-
taste of the Hereafter." Mr. Sherman had written
out a carefully prepared speech, but, in view of the
undue demonstrativeness of the crowd which was
confronting him, he changed his plans entirely,
indulging in the interlocutory method laigely,
allowing those who were present to interrupt. The

274 JOHN SHERMAN

party committee were so pleased with this address
that they chose to adopt it, rather than the written
speech, and circulated it widely as a campaign
document.

Nor was the opposition manifested in a mere
occasional outbreak. The strength of the sentiment
for irredeemable paper currency was proved by the
rise of the Greenback party, a political oiganiza-
tion which relegated to the rear the accepted issues
which were regarded as most important by the
existing political parties, and ascribed supreme
importance to the question of currency. This organ-
ization had become prominent in the year 1876,
at which time a national convention was held, a
platform was framed, and candidates nominated
for President and Vice-President, under the official
designation of the Independent National party. Its
platform alleged that the industries of the people
were prostrated, and labor was deprived of its just
reward by a ruinous policy which both parties re-
fused to change. The convention demanded the
immediate and unconditional repeal of the Resump-
tion Act, and that a currency consisting entirely of
United States notes should be issued directly by the
government. These notes were to be convertible
on demand into obligations bearing a rate of interest
not exceeding 3.65%, which obligations on demand
could in turn be exchanged for notes. They adopted
as the party slogan a quotation from Jefferson that
** bank paper must be suppressed and the circulation
lestored to the nation to whom it belonged.'' Both

SECRETARY OF THE TREASURY 275

they and many of the later advocates of free silver
ridiculed the use of the term "intrinsic value,*' as
applied to gold and silver money, and maintained
that the sole ground for the acceptance and circula-
tion of metallic or paper money alike was the stamp
of the government.

In the year 1876 this party cast 81,740 votes,
having especial strength in the states of Illinois,
Indiana, Iowa, Michigan, and Kansas. The name
popularly given to it was at first the Greenback
party, though later, under a combination with other
elements maintaining its essential views, it was
known as the Greenback Labor party. Its dis-
tinctive principles were afterwards adopted, and its
general ideas survived under the name of the Popu-
list, or People's party. The maximum vote of the
so-called Greenback party was obtained in the year
1878, when, at the congressional elections, the
organization obtained the support of more than a
million voters and elected fourteen congressmen.
With resumption its strength declined, and at a
later time those who had been most active in its
support identified themselves with the silver move-
ment. Its fundamental ideas still retained a con-
siderable hold upon the people.

In 1892 the Populist party declaimed against the
money power, dwelling upon the demonetization
of silver as a vast conspiracy against mankind on
the two continents, and added to the principles of
the Greenback party government ownership and
operation of railways, the telegraph, and the tele-*

me JOHN SHERMAN

phone. It also opposed the so-called monopoliza*
tion of land, and commended to thoughtful con-
sideration the legislative system known as the
"'initiative and referendum." In that year, for the
first time since 1800, a third party assumed such
prominence as to cany a state in the presidential
contest. Mr. Weaver, their nominee, cairied the
states of G>loTado, Idaho, Kansas, and Nevada,
and received an electoral vote in each of the states
of North Dakota and Oregon. In 1896 the prin-
ciples of the Populist party were regarded as so
nearly accepted by the Democratic organization
that its vote was cast largely with the latter party,
although the Populists held a separate convention,
indorsing the nomination of the Democrats for the
presidency, but making a separate nomination for
Vice-President, Thomas E. Watson of Geoigia, who
received twenty-seven electoral votes.

It must be conceded that the accomplishment
of resumption was aided by trade conditions and
other circumstances of the weightiest importance.
For a long time prior to 1876 there had been an
unfavorable balance against the United States in
exports and imports of merchandise, and in gold as
well. Only three years showed a preponderance of
exports of merchandise, and that of a comparatively
small amount. In 1876, however, there was a change.
The enforced economy which resulted from the
commercial depression following the crisis of 1873,
and, not less important, the increased equipment
for production which was the result of the great

SECRETARY OF THE TREASURY 277

progressive movement prior to that year, made
greater exportations necessary, from the standpoint
of the consumer, and easier from the standpoint of
the producer. The settlement of the ad verse balance
had been made partly by loans, and partly by ex-
ports of gold, which had been very large since 1861.
The unfavorable balance in the movement of gold
continued until the year 1878, when a change
occurred and the product of our mines was retained
at home, together with a small balance imported
from abroad. The favorable trade balance in mei^
chandise, which had reached nearly $80,000,000
in 1876, exceeded $150,000,000 in 1877, $250,000-
000 in 1878, and $260,000,000 in 1879, the first half
of the last-named year, or until December 31, 1878,
the day before that fixed for resumption, surpassing
all previous favorable records. There were abound-
ing crops at home and a failure over large areas
abroad.

All these circumstances were at work when, at the
end of December, 1878, there was a readiness for
resumption. The premium on gold had steadily
declined during the year 1878, and, for some days
prior to the end of the year, currency and gold were
used together interchangeably. It would, however,
be an error to ascribe the prosperity of this time
entirely to favorable crops and natural conditions.
The recuperative powers of the country were very
much stimulated by the prospect of resumption,
which gave a more wholesome direction to trade and
industry.

278 JOHN SHERMAN

Resumption day, which, by reason of the first day
of the New Year being Sunday, was the 2d of Janu-
ary, 1879, was viewed with a great deal of appre-
hension. Over against confident hope there was a
lingering fear that unforeseen obstacles might arise.
It had been reported, and not denied, that a pro-
minent bank president had said he would give
$50,000 for the privilege of standing first in the line
at the Subtreasuiy to present greenbacks. Rumors
were current of a combination to exhaust the gold
supply. There were disturbing visions of a long line
in Wall Street ready to present their greenbacks
in exchange for gold when the doors of the Sub-
treasury should open with the promise of redemp-
tion. When the day came, however. Wall Street and
the financial district were adorned with bunting as
if a great holiday were being celebrated, or some
notable event had given ground for rejoicing.
Occasional dispatches were received at the Treas-
ury Department during the day to the effect that all
was quiet in New York. These, while they gave
some assurance, were not accepted as absolutely
conclusive. But at the close of business hours the
following dispatch was received: "$135,000 of
notes presented forcoin : $400,000 of gold fornotes.'*
This brief message brought to the national capital
the glad news that resumption was a triumphant
success, for on the decisive day, instead of notes being
presented for gold, a greater quantity of gold, or
rather of gold certificates, had been presented for
notes.

SECRETARY OF THE TREASURY 279

Immediately after resumption a change occurred,
not only in the condition of the Treasury but in the
financial condition of the country, with which no
other single event in our financial history can be
compared. It was well described by the Secretary
himself, in his report of December, 1879: **The
specie standard thus happUy secured has given an
impetus to all kinds of business. Many industries,
greatly depressed since the panic of 1873, have re-
vived, while increased activity has been shown in
all branches of production, trade, and commerce.
Every preparation for resumption was accompanied
with increased business and confidence, and its
consummation has been followed by a revival of
productive industry unexampled in our previous
history."

A most gratifying incident, as a sequel to the
resumption of specie payments, was the action of
the Chamber of Conmierce of New York. Early
in 1879 this institution, which had been founded
before the Revolution, requested that Mr. Sherman
sit for a portrait to be placed on the walls of its
chamber. This very complimentary invitation was
accepted, and the portrait was placed beside that
of Alexander Hamilton, conferring an honor which
has been bestowed upon no other of the financiers
of the United States. The portrait was painted by
Daniel Huntington, president of the Academy of
Fine Arts.

In presenting the letter requesting leave to hang
the portrait in the chamber. Honorable William

260 JOHN SHERMAN

E. Dodge, in addressing Mr. Sherman, said : " You
will henceforward be known as Secretary of the
Treasury of the United States in the second great
epoch of the nation's financial histoiy, as one of the
founders of the National Banking Law, as 'restorer
of the public credit,' and the successful funder of
the national debt. It Ls the wish of the Chamber of
Commerce of the State of New York, as whose re-
presentative I appear before you, that your portrait
shall be placed side by side with that of Alexander
Hamilton, and be conmiemorative to succeeding
generations of the momentous events in which you
have taken so conspicuous a part. The earlier and
the later period will thus be brought home to the eye
and the mind of every beholder."

In nothing were the changed conditions, after
resumption, more manifest than in the placing of
loans. Almost immediately a circular was issued
by the Department offering a four per cent, loan,
with a commission of from one eighth to one fourth
of one percent., graded according to the amount
subscribed. $60,000,000 were subscribed for in two
weeks. Demands for bonds came from all portions
of the country and from Europe. Congress was
asked to repeal the requirement for ninety days'
notice in calling bonds, but neglected to act. It was
extremely inconvenient to wait for the prescribed
limit of calls and keep money idle while interest was
accruing, both on the old and the new bonds, or else
depend upon future subscriptions. If the whole
amount subscribed for new bonds had been de-

SECRETARY OF THE TREASURY 281

posited in the Treasury, to await disbursement
when the notices matured, there would have been
a most disastrous stringency in the money market.
This was guarded against by keeping the payments
with depositaries until required for redemption of
the called bonds.

The rapidity of the calls was so unprecedented
that complaints from the London bondholders
reached the ear of our consul-general at London,
and to his mind assumed such importance that he
made a report to the Secretary of State, Mr. Evarts.
The dissatisfaction there was coupled with a threat
that they would demand payment of called bonds
'm coin. The movement of merchandise was so
strongly in favor of this country that such a demand
would have caused little trouble. Then, too, four per
cents, were sold in London in such quantity as to
prevent embarrassment. Before all five-twenty bonds '
had been called in, a notice was given that when the
balance, amounting to about $88,000,000, should be
called for, the terms of sale of four per cent, bonds
would be less favorable to the purchaser. The
circular issued on March 4, 1879, concluded : " This
notice is given so that all parties wishing to subscribe
for consols, upon the terms stated in the circular and
contract, may have an opportunity to do so until
the five-twenty bonds are caDed." This, as it were,
added fuel to the flames, and there was a still more
rapid increase in subscriptions. $473,000,000 were
sold by March 31. Terminable options to the
Rothschilds and foreign bankers were closed. By

282 JOHN SHERMAN

the 4th of April all of the five-twenties had been
called. On the last day of the subscription, under
the notice of March 4, telegrams came in such
number that it was necessary to make an apportion-
ment among those who desired to purchase.

But even this remarkable achievement was
eclipsed after a notice had been given out that bonds
would not be sold except at a premium. On the 16th
of April an offer was made to dispose of $150,000,-
000 of four per cents at one half of one per cent,
above par. This was followed by a steady stream
of telegrams from New York, on the following day,
all desiring to share in the distribution. The final
surprise came with a dispatch from the First Na-
tional Bank of New York, requesting $190,000,000;
$150,000,000 of four per cent, bonds, and $40,-
000,000 of refunding certificates, which, in denom-
inations of ten dollars, had been authorized at foiu:
per cent. This amount as transmitted was so vast
that it was at first thought to be an error in figures.
Secretary Sherman, departing from the convention-
alities of official correspondence, immediately sent
the following telegram to the bank: "Your tele-
gram covering one hundred and ninety million con-
sols staggers me. . . . What is the matter? Are
you all crazy ? " It was impossible to apportion to
this or to other banks the total amount requested.

When the news of this great rush of subscrip-
tions reached London, Mr. Sherman's agent, IVfr.
Conant, sent word that the day the buUetin was
posted on the stbck exchange people were astounded

SECRETARY OF THE TREASURY «8S

at the operation. United States bonds rapidly ad-
vanced in value.

On the 18th of April a call was made for $160,-
000,000 of ten-forty five per cent, bonds, being all
of such bonds outstanding except such amount as
would be covered by the proceeds of the ten dollar
refunding certificates. Three days later the final
call was made for outstanding redeemable bonds.
The total amount refunded during the first two
years and five months of Sherman's incumbency
as Secretary of the Treasury was $845,343,950. The
annual interest saved was $14,290,416.50.

With the restoration of the gold standard applica-
tions for bonds came from all parts of the civilized
world. Nothing could more emphatically prove
the importance of sound money. It would be hard
to find a single event in finance which caused a
greater difference in the credit and financial stand-
ing of a country than the resumption of specie pay-
ments in the United States in 1879.

Notwithstanding the magnificent success of
funding operations under Secretary Sherman later
developments, which none could have foreseen,
give some element of alloy to the satisfaction
aroused by it, though nothing can detract from the
magnitude of the achievement. The credit of the
United States improved to such a degree that later it
was an easy matter for the government to borrow
at rapidly diminishing rates of interest, 3f , 3, 2^,
and finally even at 2 per cent. This reduction was
due to a multitude of causes. The availability of

2B4 JOHN SHERMAN

bonds as security for national bank notes will
always create a lai^ demand for them. The general
tendency, too, was towards lower interest rates on
governmental obligations everywhere. Notwith-
standing legislation on the 'silver question, and
repeated agitation for legislation still more objec-
tionable, the bonds of the United States were more
eagerly taken than those of any other country. Our
record in funding a staggering load of obligations,
in reducing the aggregate of indebtedness with un-
paralleled rapidity, and in restoring gold as the
standard of value, made a most favorable impres-
sion. The general condition of the country was
prosperous, and marked by constant growth in the
utilization of abounding resources. As a result
obligations drawing five and six per cent., and
maturing after the close of President Hayes' admin-
istration, were continued by the holders, first at 3^
per cent., and later at 3 per cent.

There was an abundant surplus applicable for
pajring off these bonds. For eleven years, from 1879
to 1890, there was an excess of revenue over expend-
itures, unprecedented in the history of any nation.
Presidents and Secretaries of the Treasury recom-
mended a reduction of the revenue, but nothing ef-
fective or far-reaching was done, and there remained
each year a large amount applicable for the extinc-
tion of the public debt. For seven years, or until
1886, these bonds which had been extended, and
were redeemable at the pleasure of the government,
were sufficient to exhaust the amount available for

SECRETARY OF THE TREASURY 285

reduction of the debt, but thereafter the earliest
securities which would be redeemable were bonds
drawing 4^ per cent., maturing in 1891, and those
drawing 4 percent., maturing in 1907. By this time
both these varieties of bonds were valued at a very
considerable premium, those drawing 4j per cent,
reaching the figure of 114, and those drawing 4 per
cent., 129, in the year 1886. In the four years begin-
ning with 1888 over $50,000,000 was paid in premi-
ums by the government in the purchase of these
bonds. If there had been recourse to the shorter
term bonds, running ten years, and drawing 5 per
cent., they could have been purchased on much
more favorable terms. No one, however, could fore-
see that such a stupendous advance would occur
in the credit of the United States. Until resumption
was an assured fact it was a task of very consider-
able difficulty to sell four per cent, bonds. In a few
years after resumption the oldest and wealthiest
nations of Europe were unable to borrow money at
so cheap a rate as this country.

In accomplishing resumption the machinery
devised had looked to securing equality between
paper money and gold. The maintenance of this
equality had been much less regarded, and, after
the Silver Bill of 1878, Congress was unwilling to
discontinue silver coinage. In his report of 1877
Secretary Sherman had advised a reserve of $100,-
000,000 in coin to be used only for the redemption
of legal-tender notes. In case of depletion of this
reserve notes redeemed were not to be reissued until

286 JOHN SHERMAN

it was restored. He had also advised fixing the
maxiinum of legal-tender notes at $300,000,000.
In his report of 1878, after the amount of green-
backs had been fixed at $346,681,016, he again
called attention to the necessity of a reserve, and
stated that it had become necessary to increase
the amount of coin in the Treasury to 40% of the
outstanding legal tenders, or approximately $188,-
000,000. In this report he asserted the right to sell
bonds for maintenance of the parity between gold
and paper, after, as well as before, resumption.
This meth6d,as outlined by him, was resorted to in
the second administration of President Cleveland.
Sherman strongly recommended a limitation of
$50,000,000 in the amount of silver dollars to be
issued, unless their coinage ratio to gold should be
changed.

In his report of 1879 a recommendation was
again made by the Secretary to reduce the maximum
of greenbacks to $800,000,000, and he also raised
the question whether the legal-tender quality ought
not to be taken from them. He called attention to
their convenient use ; their prompt redemption when
presented; and their general employment in busi-
ness transactions, because of their receipt in pay-
ment of customs and other obligations due to the
government, and added :

"While these conditions are maintained, the legal-
tender clause gives no additional credit or sanction to the
notes, but tends to impair confidence and to create fears
of over-issue. It would seem, therefore, that now and

SECRETARY OF THE TREASURY 287

during the maintenanoe of resumption, it is a useless and
objectionable assertion of power which Congress might
now repeal, on the ground of expediency alone. When it is
considered that its constitutionality is seriously contested,
and that from its nature it is subject to grave abuse, it
would now appear to be wise to withdraw the exercise of
such a power, leaving it in reserve to be again resorted to
in such a period of war or grave emergency as existed in
1862."

In making this recommendation he did not favor
their withdrawal from circulation, but seems to
have considered that the removal of the legal-tender
quality would tend to prevent derangement of the
currency in case over-issue should be advocated or
provided for by Act of Congress.

In this report he again recommended a reserve
fund, saying: "To avoid all uncertainty it is re-
spectfully recommended that by law the resumption
fund be specifically defined and set apart for the re-
demption of United States notes, and that the notes
redeemed shall only be issued in exchange for, or
purchase of, coin or bullion." His fear was that the
gold in the Treasury might be used in the payment
of current expenditures, and the ability promptly to
redeem legal tenders might thereby be threatened,
— a fear which was afterwards realized. By the
date of his report, in December, 1880, gold coin was
in general circulation, and he could say, in speaking
of gold and United States notes: "A marked pre-
ference is shown for notes, owing to their superior
convenience in counting and carrying." There was
at this time a balance of $141,000,000 in the Treas-

288 JOHN SHERMAN

ury which he regarded as available for redemption.
Congress passed no act, at this time, providing for
a separate gold reserve, though, strangely enough,
in the year 1882, in an act for the extension of the
corporate existence of national banking associations,
a section was inserted relating to gold certificates, in
which express language was used suspending their
issue ** whenever the amount of gold coin and gold
bullion in the Treasury, reserved for the redemption
of United States notes, falls below $100,000,000."
By implication this both recognized such a reserve
and fixed its amount at $100,000,000.

The quantity of gold in the Treasury continued
to be ample, at one time exceeding $300,000,000,
and no question could be raised as to its sufficiency
until the winter of 1892-3. The difficulties of gold
redemption at that time will be mentioned later,
but in tracing the history of legislation it is well to
state that, by the Currency Act of March 14, 1900,
a division is made between the funds in the Treasury
available for current expenses, and those for re-
demption of Treasury notes. This reserve consists
of $150,000,000 in gold, and must be restored to
that amount by the sale of one year three per cent,
bonds whenever it falls below $100,000,000. •

In the management of the Treasury, as a de-
partmental organization. Secretary Sherman showed
a skill and ability not surpassed by any one who has
ever held the office. He had characteristic methods.
Whenever a plurality of questions was presented he
gave concentrated attention to the one which was

SECRETARY OF THE TREASURY 289

most important, disposing of that entirely before
taking up any other subject, not allowing himself
to be distracted. He gave his own immediate atten-
tion only to as many questions as he could thoroughly
consider and solve, leaving the rest to subordinates,
whose capabilities he carefully measured, assigning
to them exclusively the great mass of questions
where matters of detail only were involverf. As
in every well-regulated executive department, the
necessity of prompt action upon pending problems
was strenuously insisted upon. A notable feature
of his management of tlie Treasury was the adop-
tion more nearly of ordinary business methods in
dealing with outside parties. Under the Bland-
Allison Silver Act of February 28, 1878, it was antici-
pated that the silver dollars would be coined at the
San Francisco Mint, as that was near to the silver-
mines, from which very large quantities of bullion
were annually shipped to Europe to find a market.
The holders of silver bullion combined, and refused
to sell silver for a less price than the current quota-
tions in London, plus the freight from London to
San Francisco, which would mean a very consider-
able sum. The Secretary immediately took steps
to provide for the coinage of silver at the Philadel-
phia Mint, where the freight from London would
constitute a much smaller item of expense. This
prompt action caused the owners of silver to recede
from their position, and sell it at the London rate,
with a very great saving to the government.

In selling bonds negotiations were entered into

890 JOHN SHERMAN

with syndicates tf foreign and domestic bankers^ as
well as national banks, with a view to obtaining the
most favorable terms for the United States. Every
effort was made to afford the government the benefit
oS competition among capitalists and investors.
Then, when the immediate exigency, provisi(»i for
resumption, was pasted, with the double object of
securing the best rates and diffusing the loans
popular subscriptions were invited. The result of
this comprehensive effort to secure subscriptions
from all sources was veiy favorable to the Treasury.
It effected a reduction of the commission paid on
most of the bonds from one half to one fourth of
one per cent., and gieatly increased the number
of investors.

At the very beginning of die Hayes administra-
tion the management of the custom-houses of the
country was called in question. That in New York
City was the most severely criticised. There was
a prevalent impression that the office had been
managed too much along political lines, and with
too little regard for the collection of revenue. The
leading officials at that port were Chester A. Arthur,
collector, afterwards President of the United States;
A. B. Cornell, naval officer, later Governor of the
State of New York; and George H. Sharpe, sur-
veyor.

It was a matter of commoti notoriety that, bepn-
ning with Jackson's administration, this ofBce had
been a source pf great political influence. Senator
ConkUng, when a political opponent was about to

SECRETARY OF THE TREASURY «91

be appointed collector, said that he could not look
on with indiflFerence and see an unfriendly choice
made, because that official had it in his power to
defeat his election.

On April 23, 1877, a commission was appointed
by Mr. Sherman to examine and report. Its first
report related to the degree in which appointments
were made upon political considerations without
due regard to efficiency. This led to President
Hayes' famous letter of May 26, 1877, in which he
said:

"It is my wish that the collection of the revenues should
be free from partisan control, and organized on a strictly
business basis, with the same guarantees for efficiency
and fidelity in the selection of the chief and subordinate
officers that would be required by a prudent merchant.
Party leaders should have no more influence in appoint-
ments than other equally respectable citizens. No assess-
ments for political purposes on officers or subordinates
should be allowed. No useless officer or employee shoul i
be retained. No officer should be required or permitted
to take part in the management of political organizations,
caucuses, conventions, or election campaigns. Their right
to vote and to express their view on public questions,
either orally or through the press, is not denied, provided
it does not interfere with the discharge of their official
duties."

Secfetary Shemutn directed that further examin-
ation be made. In a second report, dated July 4,
1877, specific charges were made against persons
employed in the custom-house. The conclusion
was reached that the three officers at the head had
couae to assume that, as appointments were made

202 JOHN SHERMAN

upon personal and partisan recommendations, they
were in a degree relieved from responsibility for the
exercise of the appointive power, and even for the
management of the office. Collector Arthur re-
ferred to ten thousand applications which had been
made for positions, and asserted that the persons
reconmiending them should bear their share of the
responsibility for the character of the whole force.
The surveyor referred to a person holding a high
official position who had recommended the ap-
pointment of an officer, who, as- he knew, had been
dropped three times for cause, and who, as was
admitted, had been engaged in defrauding the
government. The collector, in a statement before
the commission, in enumerating complaints against
subordinates, said: "Some are for inefficiency,
some are for neglect of duty, some for inebriety,
. . . some for want of integrity, and some for accept-
ing bribes."

In the first and later reports, the commission re-
commended a reduction of twenty per cent, in the
number of persons employed, and various measures
of reform. In detailing the results of their investiga-
tion they said :

"It was estimated by chiefs of departments that men
were sent to them without brains enough to do the work,
and that some of those appointed to perform the delicate
duties of the appraiser's office, requiring the special qual-
ities of an expert, were better fitted to hoe and to plow.
Some employees were incapacitated by age, some by igno-
rance, some by carelessness and indifference ; and parties
thus unfitted have been appointed, not to perform routine

SECRETARY OF THE TREASURY 2»3

duties distinctly marked, but to exercise a discretion in
questions demanding intelligence and integrity, and in-
volving a large amount of revenue."

The reports showed that there was ignorance
and incapacity, a degree and extent of carelessness
which should not be permitted to continue. Copies
of the reports were sent to Collector Arthur, and in
very guarded and friendly language Mr. Sherman
directed him to act upon them. There was for
a time no apparent objection to carrying out the
recommendations on the part of the collector, or any
of those associated with him. Finally a report was
filed, on examining which the President announced
his desire to make a change in the three leading
offices of the New York custom-house. In reaching
a decision in this historic controversy he does not
seem to have been influenced by a disposition to fill
the offices with his friends, or to favor any faction
in his party. He regarded it as necessary that radical
reforms should be made in the management of
the custom-house, and did not believe the present
officers would make them. He, as well as Secretary
Sherman, was convinced that a question of the
greatest importance was involved, relating to the
extent to which public officers should be made
agents for political purposes. The proposed action
of the President was submitted to the cabinet and
cordially approved by all the members.

Mr. Sherman concluded it was better that
Cornell, Arthur, and Sharpe should all give way
to new men, stating that no personal attack upoa

294 JOHN SHERMAN

General Arthur was intended, and that he hoped
he would be recognized in a most complimentaiy
way. It seems that he was, in fact, oflfered the
position of consul-general to Paris. In a letter
to Assistant Secretary McCormick, of the Treasury
Department, who was a friend of Arthur, as well as
of Sherman, and was selected as an intermediary
between them, Mr. Sherman wrote, in September,
1877: ''I want to see Arthur, and have requested
him to come here. You can say to him that, with the
kindest feelings, and, as he will understand when he
sees me, with a proper appreciation of his conduct
during the examination by the commission, there
should be no feeling about this in New York. At all
events, what has been done is beyond recall."

His opim'on of the merits of the case was very
clearly set forth in an open letter to General Arthur,
which was given to the press in February, 1879:

"If to secure the removal of an officer it is necessary to
establish the actual commission of a crime by proems de-
manded in a court of justice, then it is clear that the case
against Mr. Arthur is not made out, especially if his
answer is held to be conclusive without reference to the
proofs on the public records, and tendered to the com-
mittee of the Senate. But if it is to be held that to procure
the removal of Mr. Arthur it is sufficient to reasonably
establish that gross abuses of administration have con-
tinued and increased during his incumbency; that many
persons have been regularly paid on his roll who rendered
little or no service; that the expenses of his office have
increased while collections have been diminishing; that
bribes, or gratuities in the nature of bribes, have been
leceived by his subordinates in several branches of the

SECRETARY OF THE TREASURY 305

custom-house; that efforts to correct these abuses ha^e
not met his support, and that he has not given to the
duties of the office the requisite diligence and attention;
then it is submitted that the case is made out."

Mr. Sharpe» the surveyor, withdrew his applica-
tion for leappQintmeaty and on the d4th of October,
1877, the Resident sent to the Senate, at the special
session, the nouiinations of successors to all three
of the leading o£Bcials of the custom-house. Each
of these nominations was rejected five days later.
December 6« at the regular session, the nominations
were repeated. Those for collector and naval
ofBcer were again rejected; while Edwin A. Merritt
was confirmed as surveyor, on the 16th ct December.
It was the opinion of Mr. Sherman, and the friends
of President Hayes, that the resistance to confirma-
tion came from Mr. Conkling, and was prompted by
regard for his personal prerogatives as Senator, and
his opposition to the prindples of civil service. The
objection on his part seems to have been even greater
than that of the oflicials removed.

Mr. Arthur remained in office until the 11th day
of July, 1878, when commissions were given to
Edwin A. Merritt as collector, and Silas W. Burt
as naval officer. Mr. Sherman had definitely made
up his mind that he would resign if these nomina-
tions were not confirmed. When the Senate met,
in the following December, he brought to bear upon
senators the full force of his personal infiuence for
confirmation, using arguments of political expedi-
ency, as well Its the efficiency of the service, and

296 JOHN SHERMAN

seeking to show that if the restoration of Arthur
should be insisted upon, the whole liberal element
would turn against the Republican party. After
a heated debate of more than seven hours, in which
Conkling is said to have used the expression '^this
man Hayes," as applied to the President, the nomi-
nations were confirmed.

Mr. Sherman has naturally been very much
criticised for accepting an invitation in the follow-
ing autumn from General Arthur, as chairman of
the Republican State Committee, to take part in
the New York campaign and advocate the election
of Mr. Cornell, one of the officials removed, as
governor. It was certainly an indication of his
strong partisanship and of the intensity of political
contests during that period. When his course was
questioned he wrote : " We must carry New York
next year (that is, 1880), or see all the results of
the war overthrown, and the constitutional amend-
ments absolutely nullified. We cannot do this if our
friends defeat a Republican candidate for gov-
ernor, fairly nominated, and against whom there
are no substantial charges affecting his integrity."

His personal opinion of Arthur does not seem
to have been a favorable one. When he was nomi-
nated for Vice-President, in 1880, Sherman wrote to
a personal friend : " The nomination of Arthur is a
ridiculous burlesque, and I am afraid was inspired
by a desire to defeat the ticket. He never held an
office except the one he was removed from. His
nomination attaches to the ticket all the odium of

SECRETARY OF THE TREASURY 297

machine politics, and will greatly endanger the
success of Garfield. I cannot but wonder why a
convention, even in the heat and hurry of closing
scenes, could make such a blunder."

RETURN TO THE SENATE. —THREE TIMES A CANDI-
DATE FOR THE PRESIDENCY

The administration of President Hayes, with which
Mr. Sherman was more closely identified than with
any other administration, and in which he was most
influential, brought no popularity to the incum-
bent, but was well adapted to bring success to his
party. Hayes had entered upon the duties of the
office under a serious handicap, because his title had
been called in question. At the outset he alienated
miany men who were extremely influential in his
party, and who under the presidency of General
Grant had exercised an almost controlling influence.
The Stalwart element of the party was offended be-
cause it was alleged he had made an abject surren-
der of the state governments in the South, and yet
the Southern question had been settled in a manner
which, while unsatisfactory to many, was recognized
as the only way. Compulsion by the national ad-
ministration in the affairs of states could not be
exerted indefinitely over part of the country.

Financial questions of the greatest difficulty arose.
Labor riots of the most serious nature marked the
first year of his administration. But resumption
had been acccomplished. There was universal

RETURN TO THE SENATE 299

prosperity, and the numerous and influential con-
servative element preferred a continuance in power
of the party in control. A stem rebuke had been
given to corrupt practices, and the misuse of patron-
age for political advantage. It was conceded that
great advancement had been made in the standard
of eflSciency in the public service. Withal, there
was a potent influence to decrease the bitterness of
party feeling which had been so manifest for many
years preceding, and to give to his administration
the respect and support of a united country. In
his inaugural address he had furnished the key-note
of his policy in saying : " Let me assure my country-
men of the Southern States that it is my earnest
desire to regard and promote their truest interests,
— the interests of the white and of the colored
people, both and equally, — and to put forth my
best efforts in behalf of a civil policy which will
forever wipe out in our civil affairs the color-line
and the distinction between North and South, to the
end that we may have, not merely a united North
or a united South, but a united country."

President Hayes had announced, in the cam-
paign of 1876, that he would not be a candidate for
a second term. President Garfield was elected in
1880 by a safe majority. For the first time since
187S a Republican majority was chosen in the
House of Representatives. The Senate had an equal
number of Republicans and Democrats, with one
so-called Independent, David Davis of Illinois, and
one Readjuster, William Mahone of Virginia.

SOO JOHN SHERMAN

Mr. Shennan was frequently named for contin-
uance in the position of Secretary of the Treasury,
and at one time it was anticipated that he would be
invited to remain in President Garfield's Cabinet.
This retention did not seem entirely agreeable to
Mr. Blaine, who was to be Secreti^ry of State. It
was urged as a substantial objection to Sherman's
appointment that the continuance of but one mem-
ber of the Cabinet of Mr. Hayes in that of his suc-
cessor would be interpreted as a slight upon the rest,
and would give offense, particularly since Sherman
and Garfield were from the same state. Mr. Sher-
man himself recognized the force of this objection.
His correspondence at the time reveals that he pre-
ferred the Senate in any event. Early in January,
1881, he was unanimously renominated for that
position by the caucus of Republican members
of the Ohio Legislature, and his election followed
a few days later.

It must be admitted that his election to the Senate
on this occasion was an indication of great good
fortune. In 1877 he had resigned his position in
that body to assume the duties of Secretary of the
Treasury. The Legislature of Ohio which would
have chosen his successor, had he continued in the
Senate, was elected that same year and was more
strongly Democratic than any legislature elected
in that state since the formation of the Republican
party. George H. Pendleton, a Democrat, was
chosen Senator. Another Senator would be chosen
by the legislature elected in 1879. By this time a

RETURN TO THE SENATE SOI

very strong sentiment had crystallized in favor of
Mr. Garfield for the position. It was demanded
as a fitting tribute to his ability and public service,
and as a recognition of the Western Reserve which
had been giving large Republican majorities for
many years. There was a Republican legislature,
and Mr. Garfield was chosen senator in January,
1880, for the term of six years beginning March
4, 1881. But in the presidential convention at
Chicago, in June, 1880, he was nominated for the
presidency and elected in the following November.
In the mean time a strong movement had been
initiated in the state to send Governor Foster, or
some Republican other than Mr. Sherman, to the
Senate. His commanding position, however, and
his great service to the state and to the country
received such recognition that, after considerable
discussion, all other persons whose names were
mentioned for the senatorship were compelled to
step aside, and he was elected with the cordial
cooperation of all the other candidates.

Mr. Sherman resigned his position as Secretary
of the Treasury on the 3d of March, 1881, and
assumed his duties in the Senate on the following
day. This was the beginning of another period of
service in the Senate of equal duration with that
preceding his assumption of the position of Secre-
tary of the Treasury, each continuing for sixteen
years.

The name of Mr. Sherman was presented to the
Republican National Convention as a candidate

8M JOHN SHERMAN

for the presidency in each of the years 1880, 1884,
and 1888. For a time his chances of success seemed
very favorable in the j'ear 1880. There was a bitter
contest between the supporters of Mr. Blaine and
those of ex-President Grant. It was Mr. Sherman's
opinion at first that Grant would be nominated.
But as the time drew near he became convinced
that such a nomination would be disastrous to the
party, and, though personally friendly, he earnestly
opposed his selecticm. The strength of his own
chances lay in a probable deadlock between the
supporters of Grant and Blaine. Those who favored
Grant were in control of the National Committee,
and thus of the preliminary organizati<m, but the
claims of c<Mitesting delegates were so carefully
weighed •and so well supported by friends of the
opposing candidates that no advantage seems to
have been derived from that fact.

A contest arose over the so-caUed "\Jnit Rule."
The friends of Grant, actuated in a measure by the
situation in New York, where a minority of the
delegates favored Blaine, desired a rule compelling
each state to vote as a unit in accordance with the
wish of the majority. This rule Mr. Sherman had
strenuously opposed, and continued to oppose, until
the time of the convention, even though it might
cost him the nomination. The friends of Mr. Blaine
also arrayed themselves against it. A report on the
subject was presented by Mr. Garfield, opposing
the unit rule. The latter's remarks on presenting
this report gave him a very prominent position

RETURN TO THE SENATE 808

before the convention, as did also his further ap-
pearance in opposition to a iiescdution of Senator
Conkling's, proposing to exclude three del^ates
for voting against a resolution expressing the sense
of the convention that every member of it was bound
in honor to support its nominee. Garfield's speech,
nominating Sherman for the presidency, added
greatly to the favorable impression which he had
already made. On the first baUot Grant received
804 votes, Blaine 284, and Sherman was third with
93. A contest of unprecedented length ensued, in
which many efforts were made to break the dead-
lock. At one time Mr. Sherman's vote reached 120.
On the sixth day, after thirty-five ineifectual ballots,
Mr. Garfield was nominated, receiving nearly all
the votes theretofore cast for Mr, Sherman and Mr.
Blaine, as well as those for two or three minor
candidates.

Ten of the forty-four delegates from his own
state, from the first, steadily refused to join with the
rest in supporting Mr. Sherman. Their stubborn-
ness, in his opinion, not only made his nomination
impossible, but also prevented the remaining
thirty-four delegates from voting for Mr. Blaine,
whom Sherman and his friends very much pre-
ferred to Grant as the nominee. Had these thirty-
four turned to Blaine, his nomination would have
been probable. This convention undoubtedly
caused a great deal of disappointment and heart-
burning on the part of Mr. Sherman. He often
declared that he would have fared better had he

804 JOHN SHERMAN

made no effort for the nomination, and regretted
that he did not maintain a waiting attitude. At
first he had absolutely declined to be a candidate,
stating, in response to letters of numerous friends,
in 1878 and 1879, that a sufficient demand for him
as a presidential candidate had not developed to
justify his entering the contest. A suspicion was
entertained by many that Mr. Garfield, who at-
tended the convention under instructions to vote
for Mr. Sherman and was himself nominated for
President, and Grovemor Charles Foster of Ohio,
who was also a leading Sherman supporter, did not
give him cordial support. Sherman, after careful
examination, clearly absolved Garfield. He was
more doubtful in regard to Foster, with whom his
relations had been extremely friendly. Whatever
distrust, however, he may have entertained with
reference to him was entirely removed and for
many years they continued to be close friends.

In 1884 his support was comparatively small, at
no time reaching the full vote from his own state.
Just as in 1880 he had been strongly opposed to
Grant, so in 1884 he was equally opposed to Arthur.

Four years later, in 1888, his candidacy assumed
larger proportions than ever before, and for a time
previous to the meeting of the convention at Chi-
cago, it seemed as if he would be nominated. In the
balloting he received twice as many votes as any
of his competitors, on the first two ballots, and the
largest vote for six ballots. An unusual number of
favorite sons appeared in this contest, and scattered

RETURN TO THE SENATE 305

a vote of which otherwise he would no doubt have
received a considerable share, although there was
a disposition inimical to him in several large dele-
gations, notably that of the State of New York.
At this convention the delegation from Ohio was,
for the first time, unanimous for him. There were,
however, rumors of lack of cordiality on the part of
some leading members of the delegation which did
much to diminish support from other states. The
nomination of Harrison was entirely satisfactory
to him. On this occasion he was strongly opposed
to the nomination of Mr. Blaine, to whose selection
he had been reconciled in 1884.

The quality of Sherman's support was much to
his credit in each of the conventions named. Theo-
dore Roosevelt, then a young man, for the first
time a delegate to a National Convention, wrote
him from New York, July 12, 1884: "I have only
to regret that my efforts to transfer the various
* d^rk horse ' and * favorite son ' votes to yourself
were not successful; you would have received the
most cordial and hearty support from all Republi-
cans, and I should have been proud indeed could
I have assisted in bringing about your nomination.'*

After the convention of 1888, in response to a
letter of congratulation sent by Sherman to Mr.
Harrison, the latter wrote that he had been saying
to those who had asked him whether he had heard
from Sherman:

''Have no concern about him. His congratulations
and assurances of support will not be withheld, and they

906 JOHN SHERMAN

will not be leas siiioere than the earlier and more demon-
strative expressions from other friends." . . .

He added:

" You will recaU our last conversation at Pittsbui^, in
which I very sincerely assured you that, except for the
situation in our state, my name would not be presented
at Chicago in competition with yours. I have always said
to all friends that your equipment for the presidency was
so ample, and your services to the party so great, that I
felt there was a sort of inappropriateness in passing you
by for any of us. I absolutely forbade my friends making
any attempts upon the Ohio delegation, and sent word
to an old army comrade in the delegation that I hoped
that he would stand by you to the end. I shall very much
need your advice and assistance, for I am an inexperi-
enced politician, as well as statesman."

On reviewing, however, his own record and the
political conditions of the time, it does not seem
strange that Sherman did not obtain the nomina-
tion on either occasion. His claims in 1880 were
very strong because his name was more prpmi-
nently associated than that of any other with the
notable prosperity of that year; but his career, then
and later, was not of that type which appeals most
strongly to popular enthusiasm. He suffered es-
peciaUy from the disadvantage of having taken a
pronounced stand upon numerous questions about
which the electorate were divided in their opinions.
This disadvantage has proved fatal to the presiden-
tial aspirations of several leading An^ricans. In
addition to this handicap there was no great issue,
suited to awaken general acclaim, in which he had

RETURN TO THE SENATE 807

borne the leading part. He had been engaged in
managing the government finances. He had taken
a prominent part in keeping down appropriations.
While strong friends had been made by his achieve-
ments in these directions enemies equally bitter had
arisen. The issues which sway the multitude are
those of a sentimental nature. Many of those most
strongly allied to him were men who did not take
any active part in politics. Those who met at presi*
dential conventions, and discussed the question of
availability, with a supreme desire for party success,
conceded his fitness and his service to the party and
the country, but thought him not sufilciently mag-
netic to attract the masses.

Ever since the Civil War the Republican party
has shown a partiality for soldier candidates, for
every one of its nominees for the presidency, with
the exception of Mr. Blaine, had a military record.
First there was Grant, the most commanding mili-
tary figure of the Civil War. Next, Hayes was nom-
inated, a brave and successful soldier, the colonel
of a regiment which has the unexampled record
of having furnished two Presidents of the United
States as well as one Justice of the Supreme Court.
Then there was Garfield. His military service,
showing bravery in action and great readiness in
acquiring the details of military science, was of the
best, and would be much more commented upon
had not his civil career eclipsed his military record.
Then came Harrison, who had risen at a compara-
tively early age to the position of brigadier-general.

308 JOHN SHERMAN

Last of the Army of the Union was McKinley, in
whom recognition was given to a class who entered
into the struggle when mere boys, and showed that
youth was no barrier to the development of sol-
dierly qualities. Still later the well-known service
of Roosevelt in the Spanish-American War gave to
him an added element of strength as a candidate,
because the people recognized in him a proof that
the martial spirit was not yet dead and that prowess
in war meant courage and aggressiveness in peace.
It has been frequently said that Mr. Sherman
was an adroit politician, a word which, as com-
monly used, is difficult to define. It is considered
that one characteristic of the skillful politician is the
ability to forecast the future by shrewdly interpret-
ing the tendency of pending events, and to judge
of the probable bearing upon public opinion of
measures which are suggested. In this regard Mr.
Sherman was certainly a very able politician. He
had unusual astuteness in determining the reception
which would be given to policies adopted. He was
in no danger of pitfalls because of a failure to
recognize the bearing of events of to-day upon the
opinions of to-morrow. There is more than this,
however, in the equipment of the most successful
politician. He must be familiar with the machinery
of party organization and the methods by which a
guiding influence is impressed upon public opinion.
He must be in touch with the men who are instru-
ments, if not in controlling, at least in expressing,
the wishes of the people. In this particular Sherman

RETURN TO THE SENATE 309

was entirely without aptitude. His thought was of
principles and policies, rather than of men ; of the
aggregate, made up of all the people, rather than of
individuals. To him men who were intrusted with
the administration of affairs were merely the agents
of the people in great public movements. His lack
of the faculty for remembering names and faces was
also in a practical way a serious drawback. People
thought him unappreciative and cold. The modem
hustler so-called may be more drawn to a public
man by one moment's personal recognition than
by the history of a lifetime of statesmanlike achieve-
ment; to him the substance of political action is the
noise and hurrah of a campaign, and he cannot
appreciate a man of grave mien, who busies himself
with seemingly useless abstractions and studies of
a kind to prevent him from displaying affability.

The second period of sixteen years of Mr. Sher-
man's service in the Senate was strongly in contrast
with the first. It was an era of quietness and peace,
as compared with the bustle and conflict of his
earlier years. The bitter controversies of recon-
struction were passed. Financial questions assumed
a predominance. There was no lack of bitter party
controversy, or even of sectional differences, but the
tariff and other economic questions were coming
to the forefront. During these sixteen years, in four
only did one political party control the executive
department as well as a majority in both Houses
of Congress; from 1889 to 1891 the Republicans
controlled the executive as well as the legislative

310 JOHN SHERMAN

branch, and from 1893 to 1895 the Democrats like-
wise. Partisan legislation was for this reason, dur-
ing most of the time, impossible, and even during
these four years the party majorities were so narrow
that no extreme measures could be adopted. The
country was prosperous in the main until 1893,
although for two or three years after 1882 unfavor-
able conditions caused a decrease of general pros-
perity, and alternations of activity and dullness were
so frequent as to cause sharp distress. Whatever
may have been true in regard to individual pros-
perity for the first eight years and more after
1881, the fiscal history of the government was a mar'
vel. Instead of the question, how to raise revenue,
the difficult problem was how to dispose of it.

Mr. Sherman's position in the Senate was also
a different one. During his incumbency in the
Treasury he lost his priority on the Conmiittee
on Finance. Mr. Morrill became chairman, with
Sherman as the second member. This imposed
upon him much less responsibility in the labor of
framing and presenting measures. There was no
decline, however, in his standing among his col-
leagues. In the 49th Congress, from 1885 to 1887,
he was chosen as president pro tempore of the
Senate. He was now regarded with a most unusual
degree of deference because of his knowledge and
experience, and was considered as speaking with an
authority on financial and many other questions
such as had rarely belonged to any one in the history
of the Senate. The untimely death of Garfield, in

RETURN TO THE SENATE 311

September, 1881, brought to the presidential chair
a man with whom his relations were not friendly ;
but some of his ablest efforts were in support of
Arthur's administration. During these first eight
years of his second period of service in the Senate
it must be acknowledged that he did not accom-
plish as much in constructive statesmanship as in
other years of his career, although he was active,
and in the prime of his intellectual ability.

There was little currency legislation in the eight
years from 1881 to 1889.

^the charters of the national banks would have
commenced to expire in 1882. A bill was introduced
in the winter of 1881-2 providing for an extension
of twenty years. This measure afforded opportunity
to all opponents of the system to offer amendments
restricting its powers or changing the form of organ-
ization. The changes made, however, were not
important, nor was the opposition so formidable
as had been anticipated.

It was provided that not more than $3,000,000
worth of circulation could be withdrawn in any
one month. At first this amount seemed to all
a liberal margin, but after a few years nearly the
maximum amount was withdrawn each month.
The banks were to take as the security for their
circulation three per cent, bonds in exchange for
those bearing three and one half per cent. Silver
certificates were made available for reserves, and
national banks were forbidden to belong to a clear-
ing-house where silver certificates were not taken

312 JOHN SHERMAN

in payment of balances. With these amendments the
bill became a law in July, 1882. A few years later
Senator Sherman advocated authorizing the banks
to increase their issues of notes to one hundred per
cent, of bonds held by them, instead of ninety per
cent., but this change in the law was not accom-
plished until March 14, 1900.

With the increasing price of bonds the circulation
of the national banks became unprofitable, and after
reaching its maximum amount of $356,953,345 at
the end of November, 1881, constantly, though
irregularly, fell oflf until 1891, when it was less
than half that amount, the bonds securing the
notes having been sold. The decrease was especially
laige after 1886. There was general acquiescence
in the continuance of greenbacks, at the amount
fixed by the Act of 1878.

The agitation for the larger use of silver con-
tinued, notwithstanding repeated adverse recom-
mendations by Secretaries of the Treasury of both
political parties, and requests that the coinage be
suspended. Under the Bland-Allison Act, pro-
viding for the coinage of not less than $2,000,000
worth per month, the silver dollars accumulated
much more rapidly than the withdrawal of na-
tional bank notes, so that the increase in the amount
of silver money in circulation, as represented by
silver dollars and certificates, from March, 1881,
when Secretary Sherman left the Treasury, to July,
1890, when the Silver Purchase Iaw was passed, was
close to $300,000,000. Much the larger portion was

RETURN TO THE SENATE 31S

lepresented by certificates. The increase in the cir-
culation of gold, including gold certificates, in the
same time was over $220,000,000. The net increase
in all forms of money was nearly $360,000,000.
This would seem to have been ample to provide
for the growing demands of business, especially
when it is taken into account that substitutes for
money were more and more coming into use.

The diflBculty in obtaining a circulation for
silver was sought to be remedied by legislation in
two ways, — first by the provision of 1882, and
again in 1886 and later years, providing an appro-
priation for the transportation of silver coin, and
authorizing the Secretary of the Treasury to trans-
port it free of charge when requested to do so, pro-
vided an equal amount of coin or currency should
be deposited by the applicant. Despite this effort,
by the year 1890 the total amount of silver dollars
in circulation among the people was less than
$60,000,000. A second effort was made under the
Act passed in 1886, providing for the issuance of
silver certificates in denominations of one, two, and
five dollars. Ten dollars had been the minimum
denomination. In accordance with the policy pro-
moted by this Act, the smaller legal-tender notes
were retained in tne Treasury with a view to forcing
silver, or silver certificates, into circulation. The
great demand for smaller denominations of bills
made this attempt notably successful. In the with-
drawal of national bank notes from circulation,
many bills of smaller denominations were included.

814 JOHN SHERMAN

Mr. Sherman, in his last reports as Secretary of
the Treasuiy, had pointed out the serious danger
from further coinage of silver dollars. The evib
which he portrayed did not occur until later, by
reason of the exceptional conditions refeired to,
which at the time he could not have foreseen. It was
also true that, in the great prosperity which f dlowed
resumption, there was a much greater demand fo^
currency. This was especially true in the year
1880.

From 1881 to 188d the reduction of the national
debt proceeded with great rapidity. Only one law
of special importance relating to loans was passed,
and that was part of the National Banking Act of
July, 1882, authorizing the issue of 3 % bonds in
place of the bonds extended at 8j %, for which
Secretary Windom had made provision without
legislative authority. As an inducement to take
these the Act provided that they should not be
called for redemption so long as any bonds drawing
a higher rate of interest were redeemable. This
would retain them in the hands of investors until
all the Si % bonds were called. It was not antici-
pated at this time that the surplus revenue would
be so large, or that these bonds would be called
so rapidly. Mr. Sherman had introduced a bill pro-
viding for $200,000,000 of 8 % bonds, redeemable
after five years, with the thought of paying oflF the
balance of those drawing 3j %. He said: **If we
sell our three per cent, bonds at par, we do better
than any country in the world has done." His

RETURN TO THE SENATE 815

remarks show how little the excellent credit of the
country was realized. With no definite tertQi 8 %
bonds to the amount of $280,000,000 were issued in
place of three and one half per cents in less than ^ix
months. Between 1881 and 1889 there was a reduc-
tion in the public debt considerably in excess of
$400,000,000. Bonds extended at 8^ % were all
paid off. The three per cents were also paid, and
the question had arisen of the policy of buying four
per cents at the prevailing premium, which was
25 % or more*

The revenue during this period, so far as legisla-
tion is concerned, was only affected by the Act of
1883. In both sessions of the Forty-seventh Con-
gress the questions of tariff and revenue aroused
veiy considerable discussion. In the first session,
beginning in December, 1881, Mr. Sherman urged
a reduction of taxes, and a revision of tariff to meet
changed conditions. He argued that an industrial
revolution had occurred in the preceding twenty
years, and, while many duties could be lowe];pd,
that prices were low, and in some cases duties should
be increased. He advocated the selection of a com-
mission to report, and urged that the revision should
be such as would reduce taxation. His course with
reference to the pending bill. was consistent with
his record at all times. He said :

"The only pertinent question involved in this bill is
whether it is best to organize a commission of experts,
not members of Congress, to examine the whole subject
and to report such facts and information to Congress as

S16 JOHN SHERMAN

the commission can gather, or whether the propoi^ re-
vision should be made directly, without the delay of a
commission, by the aid of committees of Congress and the
officers of the government familiar with the workings of
the customs laws. It does seem to me that to decide this
question, we need no long arguments about protection or
free trade, watch-words of opposing schools of political
economy, nor does it seem to me that the political bear-
ings of the tariff question are involved when we all agree
that the tariff ought to be revised, and are now only find-
ing out the best way to get at it. . . . The only mitigation
of my desire for a prompt revision of the tariff is the con-
fidence I have that delay and discussion will make the
sectional revolution more thorough and universal, and
leave the tariff question a purely business, and not a polit-
ical or sectional issue."

The legislation which was enacted during this
Congress was the result of a great deal of confusion,
and of questionable parliamentary procedure. The
first measure discussed in the Senate was one for
the creation of a tariff commission. The first
measure introduced in the House was one for
the^ reduction of internal revenue taxation. This
passed the House at the first session, but was not
debated in the Senate, although it was reported
with provisions for changes in the tariff duties on
sugar, and an increase of the duties on certain
forms of iron. In the mean time the bill for a tariff
commission passed both Houses, and a commission
of nine members had been appointed, the members
of which were ordered to report, with printed
copies of the testimony, not later than the first day
of the following, or short session. The report of the

RETURN TO THE SENATE 317

commission favored lower duties, advising a reduc-
tion averaging 25 %.

Early in the second session, beginning in Decem-
ber, 1882, the Senate took up the Internal Revenue
Bill passed by the House in the preceding session,
and concluded to add amendments revising the
tariff. The Bill was discussed there at great length.
A great contrariety of opinion appeared, there being
few consistent advocates of a general policy of
either high or low duties. At last a bill was passed
which showed a tendency toward lower duties,
some of those fixed in the bill being at a lower rate
than those suggested by the commission. The
protectionist sentiment in the House, where there
had been much discussion on the subject, but no
action had been taken, was much stronger than in
the Senate. Acting upon the theory that the House
must initiate revenue legislation, it had been the
expectation that before any final measure should be
adopted it should first be passed by the House, and
then considered by the Senate, but the session was
nearing its close, and, with a desire to pass some
measure reducing taxation, every effort was made
to accomplish something. It was arranged that the
Senate Bill should be brought up in the House, and,
without discussion, disagreed to, so that it might be
considered in conference. This virtually left the
framing of a revenue measure to a conference com-
mittee, which reported an agreement only trv^o days
before the close of the session. In the House the
strongest protectionists voted against the measure

818 JOHN SHERMAN

a3 reported by the conference committee, among
them Mr. McKinley of Ohio. This raised the duties
on a number of articles above those ot the Senate
Bill, and in some instances even above rates which
the House had shown a willingness to accept. The
duties on the more expensive grades of woolen
goods were raised, though on the more common
grades they were lowered. It must be said, how-
ever, that the former were more largely imported.
The duty on raw wool was slightly lowered. In this
respect the wish of the woolen manufacturers was
more favorably regarded than that of the wool-
growers. The same general course was adopted
with reference to cotton cloths. The ai^ument was
made, in the case of both kinds of cloth, that the
general consumer, the man of limited means, would
obtain advantage from the Bill. The duty on iron
ore was raised, while on pig-iron, steel rails, copper,
nickel, and marble it was lowered.

The Bill, as passed, abolished internal revenue
taxes on many articles, and greatly reduced those on
others, especially upon some forms of tobacco. Tariff
duties were materially changed. Reductions were
made on a larger number of items, but upon those
of which the values of importations were largest the
rates were retained or raised, so that as a result
the average percentage collected on dutiable im-
ports was, after a short interval, slightly increased.
As a measure for the reduction of taxation or of the
surplus, it was not successful. The income from
customs and internal revenue, after touching a low-

RETUBN TO THE SENATE 319

water mark in 1885, increased rapidly, resulting in
a veiy laige surplus and creating further embar-
rassment.

The Tariff Act of 1883 exhibited to an exceptional
extent the lack of any logical principle or uniform
rules. Senator Sherman was wont to say afterwards
that he regretted he had not defeated it. A change
of his vote in the Senate would have prevented its
passage, as it prevailed by a majority of only one;
but he was of the opinion that if it had been defeated
the questions involved would not have been settled
for many years. It is evident that he voted for this
Bill with great reluctance, and only because he re-
garded the necessity for reducing taxes as urgent.
In his judgment this Act laid the foundation for
serious tariff complications. On the other hand
divers forms of internal revenue taxation were abol-
ished and the law was made to conform to the idea
which he had upheld for many years, limiting these
taxes practically to spirits and tobacco. The tax
of one per cent, per annum on bank circulation was
retained, while that on capital and deposits was
repealed. The growth of the country, however,
was such that even with the diminished number of
objects of taxation receipts from internal revenue
increased after a brief interval of two years.

In this decade there was a notable increase in
the consideration of the tariff as compared with
purely financial questions. In the succeeding
Congress, the second during Arthur's administra-
tion, as well as in the two 0)ngresses under Cleve-

320 JOHN SHERMAN

land's administration, there were repeated discus-
sions on the subject. Bills were introduced, but
failed of passage in either House until, in 1888,
the so-called Mills Bill, making extensive reductions
in the tariff, passed the House, but failed in the
Senate. Party lines, in the mean time, were drawn
more strictly, and in 1888 the question of tariff
was beyond doubt the paramount issue in the
presidential campaign.

O^ngress enacted many important laws between
1881 and 1889 on subjects both political and non-
political. Senator Sherman made a record on nearly
all of these great questions, some of which are still
burning issues before the people. While some of his
utterances did not show mature consideration, he
brought to bear upon all a high grade of statesman-
ship and a wise forecast of the probable results of
the measures which were pending.

His colleague, Mr. Pendleton, in the winter of
1882-3, presented a Civil Service Bill. Mr. Sherman
took strong ground in favor of selections for minor
offices by general laws, and by some mode of exam-
ination. He opposed the customary interference
by members of Congress, saying that it was " not
only demoralizing, but humiliating," and referred
to his record in voting, years before, for a law for-
bidding, under severe penalties, any member of
Congress applying to any department of the gov-
ernment for an appointment. This Bill had been
introduced by Mr. Trumbull, then a Senator from
Illinois. During the discussion Mr. Sherman said:

RETURN TO THE SENATE 821

** I believe that members of Congress when they are
compelled by public sentiment, or by the common
custom of the country, or by the expectation of their
constituents, to apply to the departments for minor
offices, abandon the duties which are imposed upon
them, and interfere with duties which are expressly
imposed by the Constitution upon the heads of
departments and the courts of law." While calling
attention to the fact that senators were made by the
Constitution a part of the appointing power, he
added : " The evil of the civil service occurs in the
filling of subordinate offices." He advocated guard-
ing the power of removal, the abuse of which he said
was that which ought to be most guarded against.
He favored some limitation of the term of office, and
tests of efficiency. He nevertheless opposed a law
imposing a penalty on any clerk or employee of the
government who made a voluntary contribution for
political purposes, although favoring severe pen-
alties for coercion. In speaking on this Bill Mr.
Sherman took a strong stand in favor of an amend-
ment introduced by Senator Blair of New Hamp-
shire, providing that no person should be appointed
who habitually used intoxicating liquors.

The Civil Service Law passed by a decisive vote,
only five voting against it in the Senate as against
thirty-eight in its favor. It became a law on the
16th of January, 1883. By this Act the Civil Service
Commission was constituted. Specified classes of
employees were to be designated for selection accord-
ing to the law, and authority was given to each of

Sn JOHN SHERMAN

the heads of departments, at the direction of the
President, to revise or extend the classification.
A period of probation was prescribed before any
absolute appointment. Appointments were appor-
tioned among the several states, examinations pro-
vided, contributions for political purposes dis-
countenanced, and their solicitation in any room
or building occupied in the discharge of official
duties, or their payment to any official in the service
of the United States, or to any senator or congress-
man, was prohibited. The recommendation of a
senator or representative could not be considered
except as to the character or residence of the appli-
cant.

During the pendency of the Blair Educational
Bill, proposing appropriations by the federal govern-
ment for the aid of common schools, the amounts
to be apportioned among the states according to
the number of inhabitants of the age of ten years or
over who could not write, Sherman at first violently
opposed the proposition. In 1871, in a discussion on a
bill adding to the number of clerks in the Bureau of
Education, he had expressed himself against educa-
tion at the expense of the national government, and
had said : ** If the states are good for anything at all,
if they are to have any powers whatever, they must
have the charge and custody of the children, and the
charge of the domestic relations of life." In changing
his views upon the Blair Bill he was perhaps influ-
enced by the development of illiteracy in the Southern
States and the condition of the newly enfranchised

RETURN TO THE SENATE 823

colored voters. He gave his support to the measure,
but insisted that illiteracy, which was to be made the
basis in the distribution of the proposed appropria-
tions, should be determined according to those of
school age, and that the federal government should
retain a general supervision over the expenditure,
so as to see that the money was properly expended ;
also that the appropriations should be for common
schools only which were non-sectarian in character.
This measure, which would have imposed so great
a burden and so much responsibility upon the
central government, passed the Senate by a vote of
33 to 11, but was not even considered in the House.
In April, 1882, he expressed his intention to vote
for the repeal of section 1218 of the Revised Statutes
which excluded persons who had been engaged in
the rebellion from senang in the army. He also
said that he would vote to repeal all provisions
of law in regard to the Test Oath, and be liberal in
the interpretation of the third clause of the Four-
teenth Amendment. Nevertheless he said that he
did this with the firm conviction that these acts when
passed were all wise measures. He gave as the his-
tory of the Test Oath that it was adopted in the midst
of war with the intention of guarding the House and
Senate from the admission of persons who would
take the oath of office and then violate it, — which
one man had done, on the Fourth of July, 1861, and
then, within a month, engaged in armed rebellion.
He said he saw no occasion for keeping the law on
the statute-book, when it had served its purpose;

824 JOHN SHERMAN

and the same was true with regard to the law ex-
cluding from the Army of the United States those
who had participated in the rebellion.

The most bitter political controversy in which he
took part was that arising in Januaiy, 1884, when
he proposed an investigation of election methods
in the States of Virginia and Mississippi. His
resolution for the investigation was adopted and he
took a prominent part in the examination of wit-
nesses. In the discussion of the subject he expressed
decided views upon the right and obligation of the
national government to interfere. He said: "The
war emancipated and made citizens of five million
people who had been slaves. This was a national
act, and, whether wisely or imprudently done, it
must be respected by the people of all the states."
He contended that the fact that the elections were
not national had no bearing upon the case, and that
if the essential rights of citizenship were denied by
any state the national government must exhaust
every means in its power to safeguard those rights.
He added: ** Protection at home in the secure
enjoyment of the rights of person and property is
the foundation of all human government, without
which its forms are a mockery, and with which
mere forms of government become a matter of
indiflFerence. Protection goes with allegiance, and
allegiance ceases to be a duty when protection is
denied."

Another political controversy arose in the Senate,
two years later, in regard to the election of his col-

RETURN TO THE SENATE 325

league, Henry B. Payne, as United States Senator
from Ohio. A demand had been made that the
Senate inquire into charges that Mr. Payne's elec-
tion was fraudulent and was accomplished by
bribery and corruption. Senator Sherman strongly
favored an investigation, on the ground that it was
demanded by the people of the state, Republicans
as well as Democrats, and stated that such action
had been taken by the Senate on the charge of a
single newspaper, while in this case at least forty
newspapers of the party to which Mr. Payne be-
longed had insisted that the Senate consider the
question of his election, and bring to bear its su-
perior powers in obtaining testimony and conduct-
ing a thorough examination. An animated dis-
cussion occurred on this subject, but the Senate
refused to act.

XIV

FOREIGN AFFAIRS. — LEGISLATION PERTAINING TO

INTERSTATE COMMERCE. — FURTHER TARIFF

DISCUSSION

On two important subjects relating to foreign
affairs Sherman at first expressed opinions which
he afterwards entirely changed. In one case the
change was in response to the trend of public sen-
timent as manifested in his lifetime; in the other
it was in opposition to it.

Early in 1882 Senator Miller of California re-
ported a bill providing for the exclusion of Chinese
laborers for twenty years, with severe provisions for
enforcement of the law, including an elaborate
system requiring personal registration and pass-
ports. The demand for this legislation arose from
the injurious competition created by the presence
of laborers of the Mongolian race on the Pacific
coast and elsewhere. The Burlingame Treaty,
framed in 1868, contemplated free intercourse
between China and the United States, and the un-
trammeled movement of Chinese citizens hither.
In one article it was provided : " The United States
of America and the Emperor of China cordially
recognize the inherent and inalienable right of man
to change his home and allegiance, and also the
mutual advantage of the free migration and emigra-

FOREIGN AFFAIRS S27

tion of their citizens and subjects, respectively, from
the one country to the other, for purposes of curi-
osity, of trade, or as permanent residents." In
another article appeared this provision : " Chinese
subjects, visiting or residing in the United States,
shall enjoy the same privileges, inmiunities, and ex-
emptions in respect to travel or residence, as may
there be enjoyed by the citizens or subjects of the
most favored nation." It was, however, agreed that
naturalization should not necessarily result, by the
following paragraph: "But nothing herein con-
tained shall be held to confer naturalization upon
citizens of the United States in China, nor upon
the subjects of China in the United States." On
the other hand, it was provided that Chinese sub-
jects should enjoy all the privileges of the public
educational institutions under the control of the
United States which were enjoyed by the citizens
or subjects of the most favored nation. This treaty
came to be regarded as an unfavorable one because
of the unexpected influx of Chinese and the
alleged unfavorable effect of their contact and
competition.

Twelve years later, in 1880, another treaty with
• China was concluded which provided for the ex-
clusion of Chinese laborers, and contained a clause
agreeing that the government of the United States,
because the coming of Chinese laborers affected or
threatened to affect the interests of that country,
might regulate, limit, or suspend such coming or
residence, but might not absolutely prohibit it.

328 JOHN SHERMAN

It was added: '"The limitation or suspension shall
be reasonable, and shall apply only to Chinese who
may go to the United States as laborers, other
classes not being included in the limitations.
Legislation taken in regard to Chinese laborers
will be of such a character only as is necessary to
enforce the regulation, limitation, or suspension of
immigration, and immigrants shall not be subject
to personal maltreatment or abuse." There were
special articles exempting from the provisions of
the treaty Chinese teachers, students, and merchants,
with their household and body servants, and
Chinese laborers then in the United States.

Mr. Sherman opposed this Treaty of 1880 as well
as the bill introduced by Senator Miller in 188£.
He averred that the measure was a reversal of our
traditional policy of welcome to all people, and of
dependence for growth, in a large degree at least,
upon foreign immigration; that its provisions were
too severe and sweeping. He advocated the exercise
of discrimination between different grades of labor
and Chinese of different employments. He was
opposed to so long a term of exclusion as twenty
years, the time fixed in the bill, and stated that in
the mean time the sentiment of the people might
change, giving as an illustration the change of
sentiment in California with reference to the ratifi-
cation of the Hawaiian Treaty, which at first had
been strongly favored there, but at that time was
opposed. He expressed his willingness to vote for
exclusion for a term of five years.

FOREIGN AFFAIRS 329

President Arthur vetoed this bill, calling attention
to the Burlingame Treaty, and the later treaty,
drawn in 1880, and eflFective the following year.
In his veto message he gave the history of the con-
sultations between the representatives of the two
countries when the latter treaty was made, and
called attention to the serious consequences of
repudiating treaty obligations, and the great advan-
tages, present and prospective, which would accrue
from trade with China, especially to San Francisco
and the Pacific coast. He transmitted a memoran-
dum of objections by the Chinese Minister, in which
it was urged that the bill was not only in violation
of the letter and spirit of the treaties, but was
expressly contrary to the explanatory statements
made by the American conmiissioners at the time
the treaty was formed. Mr. Sherman voted to sus-
tain the veto of President Arthur, and the bill did
not receive the requisite two thirds.

At the same session, another bill was framed,
excluding Chinese laborers for ten years, and con-
taining further provisions that no Chinese should
be permitted to enter the United States without
producing to the proper officer a prescribed certifi-
cate. It forbade citizenship to the Chinese, and
contained provisions for the execution of the law,
which, though drastic, were surpassed by further
legislation in 1884, 1888, and later years. Sherman
voted against this bill also. It was passed, however,
and approved by the President.

In February, 1885, while taking strong ground

S30 JOHN SHERMAN

in favor of the Alien Contract Labor Law, forbid-
ding the entry of aliens under contract, Sherman
discussed the Chinese Exclusion Acts, declaring they
were not passed on the ground of race or color, but
because the Chinese came here as mere serfs under
a contract, to compete with our free laborers. The
Alien Contract Labor Law, forbidding the importa-
tion of men who came under a contract to labor
in the United States, was, he said, similar in its
purposes. It did not exclude people because of
their race, but because they were under contract.
Any class of people who were so low and so lacking
in manhood as to barter away their freedom should
not be permitted to be brought Jnto this country, to
compete with our laborers who were struggling to
elevate themselves in the arts of manhood. It was
not a case of prohibiting the immigration of for-
eigners, but the importation of "bought" men.
In 1886 there was a demand for another law, and a
supplementary act was reported by him, the object
of which was to make the entry of Chinese still
more difficult, and to punish fraud. This passed
the Senate, without division, June 1, 1886, but was
not reported in the House. In the discussion Mr.
Sherman stated that he had not voted for the treaty
of 1880, or the bill of 1882 upon the subject, but
that he regarded the pending measure as merely
supplementary to prior acts and necessary for their
proper execution. He expressed an opinion, how-
ever, in sympathy with legislation of this character,
because Chinese citizenship was uncongenial and

FOREIGN AFFAIRS SSI

dangerous. He insisted that the citizens of any
country had the right to exclude any people of any
country whom they considered obnoxious to them
or to their institutions.

Another subject upon which he changed his
views was in reference to the relations of the United
States with Canada. At one time he favored political
and commercial union. On further consideration
he thought the acquisition of Canada not desirable,
and, it may be added, he did not think it best to
enlarge the borders of the United States in any
direction. This later opinion was adopted and
formulated by him some years before the so-called
Anti-imperialistic movement of 1899, and he
strenuously maintained it during the Spanish-
American War and after.

Mr. Sherman became a member of the Com-
mittee on Foreign Relations of the Senate in De-
cember, 1883, and its chairman in April, 1886.
The work of this committee was never altogether
in accordance with his tastes, and he accepted the
chairmanship with some hesitancy. During the
time when he was chairman, many important
diplomatic questions arose in which he took a pro-
minent part.

A treaty with Great Britain was negotiated by
the Executive Department, and sent to the Senate
for ratification in February, 1888. It was intended
to define the rights of American fishermen plying
their vocation in Canadian waters, a question which
had caused a great deal of irritation. This was

S92 JOHN SHERMAN

rejected, August 21. 1888. The President at a later
time sent to Congress a message asking for fuUer
power to undertake retaliation in case severe
measures should become necessary. A bill giving
the President such power was introduced in the
House, and passed, but the Senate took no action
upon it, the majority there expressing the opinion
that a retaliatory law passed in the preceding year,
ci which the President had not taken advantage,
gave him ample power in the premises.

Mr. Sherman submitted a resolution for the in-
vestigation of the relations of the United States
and Canada with a view to establishing closer re-
lations. On the 18th of September, 1888, in some
remarks upon this resolution, he referred to the re-
lations between the United States on the one hand,
and Great Britain and Canada on the other, in
a speech of very considerable length. He reviewed
the various treaties in regard to fisheries, beginning
with that framed in 1818. The first fault which
Mr. Sherman found with President Qeveland's
message was that while the rejected treaty referred
only to the rights asserted on the northeastern
coast of Canada, this message referred to subjects
extending across the continent, affecting commer-
cial relations with every state and territory on the
northern boundary. He said the difficulties arising
from existing differences would be much easier to
solve if we could treat alone with Canada as an
independent power, instead of through the sover-
eign power, Great Britain. He made a very com-

FOREIGN AFFAIRS 8SS

plete leA^iew of the whole controversy, and ended
by dwelling on the desirability of the union of
Canada with the United States. Towards the
close he said that retaliation in the manner pro-
posed by the President would be "neither
manly, dignified, nor just;" that the only way
to avoid future friction would be a commercial
and political union between Canada and the United
States. "True statesmanship," he said, "consists
in an earnest effort by honest means to promote
the public good. No greater good can be accom-
plished than by a wise and peaceful policy to unite
Canada and the United States under one common
government, but carefully preserving to each state
its local authority and autonomy. This controUing
principle of blending local and national authority —
many in one — was the discovery of our fathers, and
has guided the American people thus far in safety
and honor, and I believe can be, and ought to be,
extended to the people of Canada. With a firm con-
viction that this consummation, most devoutly to
be wished, is within the womb of destiny, and be-
lieving that it is our duty to hasten its coming, I am
not willing, for one, to vote for any measure, not
demanded by national honor, that will tend to
postpone the good time coming when the American
flag will be the signal and sign of the union of all
the English-speaking people of the continent, from
the Rio Grande to the Arctic Ocean."

He expressed similar opinions in regard to uniting
the two countries, in the Senate, March 12, 1889,

3S4 JOHN SHERMAN

saying that the word *' annex " was not very pleasant
to either the United States or Canada, ""but," he
said, "'the union of Canada and the United States,
in my judgment, is just as sure to come, whatever
committees you may have, and whoever may be
senators here, as any future event that can happen."
He added: "I certainly would not propose any
measure that would either threaten, or coax, or beg,
or ask, even, the people of Canada to join their for-
tunes with ours. The time wiD come when by the
growth of popular sentiment on both sides of the
line it will be felt that it is necessary, for the safety of
each and all, to prevent internal wars, and, if you
please, continued discord; that it will be for the
benefit of the people of these countries, speaking
the same language, with like institutions, — as
much alike as those of our several states, — to
gradually melt into allegiance to one government,
under the same common flag, and, I trust, with the
hearty good will of the mother country of both."

In the next decade, on further reflection, he re-
garded it the best policy that Canada should con-
stitute an independent republic, founded upon the
model of the United States, with one central govern-
ment, and provinces converted into states. The
reason for this conclusion was that the United
States already embraced so vast a country that any
addition to the number of its states would tend to
weaken the system, and the conversion of the pro-
vinces in Canada into states of our Union would
introduce a new element of discord. He thought

FOREIGN AFFAIRS 8S5

that the condition of Canada constantly invited
a breach of peace between the United States and
Great Britain, but that with Canada governed by
a Parliament, and by local assemblies of her own,
no embarrassing differences would arise.

In January, 1889, he spoke on matters relating to
the Samoan Islands, and gave an extended history
of the conflicts and disturbances which had oc-
curred there. The discussion on this subject, and
his participation in it, are espedaDy interesting
because of its relations to future policies of the
United States in regard to the islands of the Pacific
Ocean, and as disclosing his views respecting the
attitude of our own country toward weaker coun-
tries in which opportunities exist for advancing our
interests by intervention. He insisted on the right
to have a harbor and a coaling-station at Pago Pago,
and that it was universally recognized that the people
of Samoa were unable to sustain a regular form of
government. No thought of contest with Great
Britain and Germany, which countries also had
rights there, was to be tolerated for a minute. It
would be a shame and disgrace for three Christian
nations if they could not agree on some form of
control for the islands and their respective rights
in them. The right to a coaling-station was based
on a treaty in the year 1878, and our occupation
six years previous thereto. While insisting on our
right to a harbor, it will be noticed that at no time
did he advocate the permanent annexation of the
islands, and the conference of 1889, at Berlin, recog-

8M JOHN SHERMAN

nized them as neutral territoiy, with an independent
government. This arrangement continued until
1898, when disturbances arose, and the islands were
divided between the United States and Germany.

As regards Mexico, he favored the most intimate
commercial relations between that country and the
United States, though at the same time expressing
his opposition to discrimination in the rates of duty
in favor of any nation.

The agitation for railway rate regulation, under
the constitutional power of Congress to control
interstate commerce, was contemporaneous with
the development of the West after the Civil War.
The great increase in the production of grain and
other agricultural products awakened attention to
the rates of freight to be paid in reaching markets,
and led to the so-called '' granger *" legislation. Laws
were passed by state legislatures regulating railway
rates and seeking to diminish charges.

The first recognition in federal legislation of the
right to control interstate commerce is found in an
Act, introduced by Mr. Garfield, and passed June
15, 1866, containing this preamble: "Whereas,
the Constitution of the United States confers upon
Congress in express terms the power to regulate
commerce among the several states, etc." This Act
provides that every railroad company is authorized
to carry upon and over its road passengers, troops,
government supplies, mails, freight, and property
on their way from any state to another state, and to
receive compensation therefor, and to connect with

INTERSTATE COMMERCE 3S7

roads of other states so as to form continuous lines
for the transportation of the same to the place of
destination. It contains a proviso that no new road
or connection can be built without authority from
the state in which the railroad or connection is pro-
jected. On June 9, 1868, a Committee of the House
of Representatives which had been directed to report
whether Congress had the right to regulate railway
rates, and, if such right existed, to present a bill,
reported that the right existed but that the members
had not the necessary information upon which to
act.

Before any legislation was enacted by Congress,
two Senate Committees made reports upon the sub-
ject, reaching widely different conclusions. The
first was appointed in December, 1872, in compli-
ance with a recommendation of President Grant,
in his message. Senator William Windom of Minne-
sota was chairman, and Mr. Sherman was a member,
of this committee. In April, 1874, the committee
made a report in which different methods of regula-
tion were considered and some of them pronounced
impracticable. This report advised such indirect
regulation and reduction of charges as would result
from the establishment of one or more railway lines,
to be owned or controlled by the government, and
said: **This proposition proceeds upon the theory
that, by reascm of stock inflation, extravagance, and
dishonesty in construction and management, and
combinations among existing companies, the present
railroad service of the country imposes unnecessary

888 JOHN SHERMAN

burdens upon its commerce, and that one or more
railroads, economically constructed and operated
or controlled by the government, in the interest of
the public, would regulate all the others on fair,
business principles, remedy the abuses that now
exist, check combinations, and thereby reduce the
cost of transportation to reasonable rates." Much
of the attention of the committee was given to numer-
ous water-routes, the development of a majority of
which, whether natural or artificial, has since come
to be considered of doubtful utiUty, because of the
disproportion between cost and the probable benefit
to be derived from them. It will be noted that this
report proceeded upon the theory that rates were
unreasonable.

A later report made by a Senate Committee, of
which Senator CuUom was chairman, on the 18th of
January, 1886, after "railroad rates had been very
much diminished by reason of the natural outcome
of competition, — a result made possible by the
superior construction and increased business of the
roads, — came to radically different conclusions;
maintaining that the great evil to be corrected was
unjust discrimination between persons, places,
commodities, or particular descriptions of traflSc.

The Committee made this statement in its re-
port:

"The policy which has been pursued has given us the
most efficient railway service and the lowest rates known
in the worid; but its recognized benefits have been at-
tained at the cost of the most unwarranted discrimina-

INTERSTATE COMMERCE 339

tions; and its effect has been to build up the strong at the
expense of the weak; to give the large dealer an advan-
tage over the small trader; to make capital count for
more than individual credit and enterprise; to concen-
trate business at great commercial centres; to necessitate
combinations and aggregations of capital; to foster
monopoly; to encourage the growth and extend the in-
fluence of corporate power; and to throw the control of
the commerce of the country more and more into the
hands of the few."

In the mean time numerous propositions for
xegulation or for a report upon the powers of Con-
gress had l)een presented in both Houses, but nearly
all of them died in the committee room. It is sur-
prising to observe how large a share of the resolu-
tions introduced were mere directions for a report
upon the constitutional right of Congress to regulate
interstate railway traffic. This right was asserted
in an act which became a law March 3, 1873, to
prevent cruelty to animals in transit. The first
general measure to pass either body was a bill intro-
duced in the House by Mr. Greorge W. McCrary of
Iowa, in 1874, to regulate commerce by railroad
among the states, providing for a board of railroad
commissioners of nine members, one from each of
the judicial districts of the United States. This
measure passed the House March 26, 1874, by
the close vote of 121 to 115. It foreshadowed the
bill creating the Interstate Commerce Commission,
but did not receive attention in the Senate. In
December, 1878, a bill framed by Mr. Reagan, of
Texas, passed the House by a vote of 139 to 104.

340 JOHN SHERMAN

This contained no provision for any commission,
but forbade discrimination between individuals,
and required the posting of schedules showing
classifications of freight, places to which commod-
ities could be carried, and rates. No action was
taken upon this in the Senate. In February, 1880,
and December, 1881, other bills were introduced
by Mr. Reagan, but failed of passage.

In January, 1885, Mr. Reagan called up a bill,
introduced by him, which forbade discrimination
between individuals in freight rates charged by
railroads or pipe-lines engaged in interstate traffic;
demanded that the charges be reasonable; fixed
three cents per mile as a maximum passenger rate;
forbade discrimination in facilities afforded; re-
quired equal promptness in handling for all
shippers; prohibited rebates; absolutely forbade
the charging or receiving greater compensation for
a shorter haul than for a longer haul which included
the shorter; required the posting of schedules, etc.,
and contained a section against pooling. An amend-
ment providing for a body to be known as the
Interstate Commerce Commission, and defining
its powers, was voted down. The Bill passed the
House January 8, 1885.

The Reagan Bill in effect compelled a pro rata
graduation of freight rates on railways engaged
in interstate traffic in accordance with mileage,
prescribing, for example, for a distance of one
hundred miles one tenth the rate for one thousand
miles, though making allowances for charges for

INTERSTATE COMMERCE 841

loading and unloading. It also gave to the state
courts jurisdiction in all questions relating to the
enforcement of the law. When the Bill reached the
Senate, Mr. Sherman, though favoring the general
purpose of the measure, very strongly opposed
these particular provisions. He also doubted the
right of Congress to establish maximum and mini-
mum freight rates, though inclined to believe that
the general power of regulation existed. He espe-
cially opposed the pro rata rule as applied to freight
rates, and the allowing of state courts to enforce
the law. He ridiculed this latter provision by asking
if a Texas justice of the peace might pass on the
construction of the law. A substitute bill, proposed
by Senator Cullom, passed the Senate February 4,
1885, but a disagreement between the two Houses
prevented the adoption of the measure.

In 1886, when the discussion was continued in
the next Congress upon a Bill for the Regulation
of Interstate Commerce, introduced by Senator
Cullom, Mr. Sherman called attention to the intri-
cate questions arising upon routes of transportation
where there was competition between land and
water, and explained the general details of the Bill.
The discussion continued in April, 1886, when he
pointed out the relation of the Bill to foreign com-
merce, maintaining that lower freight rates should
be fixed on commodities intended for export. The
paramount desire was for legislation forbidding
discrimination, although a lowering of rates in
specific localities was still insisted upon. The dis-

342 JOHN SHERMAN

cussion upon the Bill, particularly in the Senate,
makes it apparent that a decrease in the a^regate
leceipts of the railroads of the country was not
anticipated. Readjustment, to prevent discrimina-
tion between persons or localities, was expected,
rather than reduction.

A vital diflFerence developed between the Senate
and the House, they discussing distinct measures.
The House favored a broad general provision that
a higher rate should not be charged for a short haul
than for a longer haul, on the same line, and includ-
ing the short haul. It was argued in the Senate
that the rates from terminal points, where water
competition existed, might, by this provision, be
rendered so high that railways could not compete
with waterways, except by diminishing local rates
to a figure which would be confiscatory. As a result
the provision insisted upon by the Senate was that
the charge for the shorter haul should not be greater
than for the longer, '"under substantially similar
circumstances and conditions," but gave the Com-
mission the right to determine the different con-
ditions under which exception could be made. The
Senate Bill provided for a Commission of five mem-
bers, and defined their powers.

During the discussion of this subject Sherman
opposed the section in the House Bill forbidding
pooling, which finally was included in the Act.
He argued that just as individuals have an un-
deniable right to form partnerships on such bases
as they may see fit, the right of railroads to join

INTERSTATE COMMERCE 343

together should be allowed to them. He said there
was no reason in refusing to permit them to make
contracts with each other, in any form they might
see fit, unless it involved a breach of public policy.
All pools were not wrong. Great advantage in
steadiness of business, and, upon the whole, in
reduction of rates, had resulted from them. The
Conunission should be given the power to discrim-
inate between pools which were beneficial to the
public and those which were detrimental. He
opposed a provision making the maximum passen-
ger charge three cents per mile, and pointed out
the instances in which this would interfere with
charters already granted by states. He declared
for a court of nine judges, which would have the
supervision of all questions relating to interstate
traffic. The two measures were submitted to a
conference in which, at that session, no agreement
was reached.

By the following winter of 1886-87 a decision
of the Supreme Court had been rendered which
emphasized the idea that state legislatures could
not control traffic except that which was entirely
inside a state. This made it the more important
that national regulation should be established,
and the conference committee, which had failed
to agree at the previous session, agreed upon a Bill
in substantially the form in which the measure
had passed the Senate. Both Houses then adopted
the conference report, and the BiU was approved
by the President on the 4th of February, 1887.

944 JOHN SHERMAN

In December, 1887, President Cleveland sent
to Congress his annual message, in which he de-
parted from traditional forms and dwelt only upon
the necessity of reducing the revenue. On the 4th
of January, 1888, in a criticism of the President's
message, Sherman made the most elaborate of his
speeches on the tariflF. He criticised the Democratic
House for its failure to propose any measure re-
ducing taxes, and attacked the President because
he did not apply the surplus revenue to the reduc-
tion of the public debt. In July, 1886, he himself
had already clearly set forth the danger of the
accruing surplus revenue, and had promised
that a majority of the Senate were ready to adopt
any reasonable measure for the reduction of taxes.
He attacked the House for . omitting beneficial
appropriations, such as those for the return of the
Civil War direct tax to such of the states as had paid
it; for deficiencies which were admittedly due;
for coast defense, and the upbuilding of the navy.
He contended that had these appropriations been
made, and had the Secretary of the Treasury em-
ployed the residue for payment of the public debt,
as was legal and proper, this condition, which the
President thought so exceedingly alarming, would
not exist. The public debt would have been greatly
reduced, and there would be under way vast works
for the public weal.

One of his main criticisms of the President was
that the real substance of his message was an
attack on the protective system, rather than an

TARIFF DISCUSSION S45

attempt to relieve the burdens of the people by
diminished taxation. He said that the existing
conditions might not be the result of intention on
the part of the executive oflScers, but their neglect
of public duty was the fountain of their woes, and
if evil came from this condition to the Republic
the fault would be at their door. No artificial scare
could be made to cover the faults and defects of
the administration. If the danger was as great
or as imminent as the President would have the
people believe, why, to meet such an extraordinary
danger, did he not exercise his constitutional right
and convene Congress? But now that Congress
had met in regular order, it could not be stampeded,
by mere shoutings of danger, to reverse its entire
policy of the last thirty years of protecting domestic
industries against foreign competition. He further
asserted that if the President merely desired to
avoid surplus revenue there were three ways in
which that could be done; reduce internal revenue
taxation; put upon the free list such articles as
could not be produced at home to advantage, or
raise protective duties to the point of prohibition
so as to cut down importations.

On the effect of the tariff in certain lines of manu-
facture he said that, under the beneficent influence
of this protection, we had made marvelous strides
and had brought within range of the most of the
people, porcelains, table ware, ornaments, rich
clothing, enamel work, beautiful furniture, and a
thousand articles of taste and luxury, all the work

846 JOHN SHERMAN

of our own countrymen. To talk of reducing
duties on these articles of luxuiy, made abroad, was
to propose a shifting of the burdens of taxation
from the shoulders of those able and willing to
bear it to the masses of the people. If reduction of
revenue was required, he was willing to cut the
tariff tax on sugar in two, or he was willing that in-
ternal revenue taxes on tobacco should be abolished.
He clearly set forth his usual views in regard to
the protection of so-called raw material, saying:

"The principle of protection applies to all American
labor alike. . . . No reason can be given why wool
should be made free and woolen goods be protected.
If we must have cheap wool, we must have cheap woolens,
and if the labor of the farmer in producing the wool is not
protected against undue competition with Australia or
Buenos Ayres, then he who makes cloth of wool should
not be protected against competition with the looms of
Manchester or Leeds. If we have low duties on iron ore,
we must have low duties on iron and steel in all its forms.
The farmer in producing his crops performs as valuable
labor as the artisan in the workshop, and the rights of
every producer should have equal and just consideration
without fear or favor."

He asserted that fairness not only between the
laborer and the employer, but also between the
producer of raw material and of the finished pro-
duct, required a duty on the former as well as on the
latter, and expressed the opinion that in order to
develop prosperous manufactures, it was necessary
to have a large and permanently available stock
of the basic products, to which he referred as

TARIFF DISCUSSION 847

**mi3called raw materials." Thus, he aigued, the
pig-iron industry could not have been developed
except for the duty on iron ore, and by the same
rule the woolen industry could not have been estab-
lished without the duty on wools. He especially
attacked the President for advocating the removal
of the wool tariff, and said the argument used by
him that many farmers had no sheep, and so
derived no benefit from the wool duty, was "the
outgrowth of the narrowest sectionalism which
sees no advantage in great objects of national
desire." Under this principle, he added, the Central
States would oppose coast defenses; the New
England States, the improvement of the Mississippi ;
the Quakers, all forms of military strength; and
the childless, the public school system.

On two later occasions he criticised the Mills
Bill, and again set forth his views on the subject
of tariff. He said the Bill represented the general
sentiment of the Democratic party, and looked
to tariff for revenue only, while the Senate Bill,
which was framed as an amendment, provided for
both revenue and protection. He called attention
especially to the benefits derived by the South
from the protective system, and said: '*The South
is a part of our country, and will be forever, no
doubt. Whatever else we may differ about, there
is no doubt about the unity, power, and greatness
of our country; and therefore I take as much pride
in the prosperity of the South as I do in that of
New England or Ohio, or the Northwest, with its

848 JOHN SHERMAN

marvelous prosperity/' He said he. would extend
the protective policy, which had made the North,
to the South; that the time was not far distant
when different ideas would prevail there, and it
would become rich in manufactures as well as in
agriculture; that a diversification of industries was
the hope of the South.

He favored a duty on tin {date, and said that if
such a duty had been imposed five years before
it would already be an established industry. On
the 29th of September, 1890, he expressed himself
as follows upon the necessity of frequent alterations
in tariff schedules: *'From the nature of a tariff
law it is necessary that constant changes should
be made, because, however perfect may be the
form of a tariff law this year, in five years the change
of production and manufacture, of consumption,
the change of markets, demands a change of the
tariff. Therefore it is that in most countries, even
in those that are free, while the popular voice is
heard in legislaticm, the necessary changes in tariff
laws are made by executive authority."

During this period Mr. Sherman was associated
with several projects of a patriotic nature having
to do with commemorating, by memorials at Wash-
ington, the work of men who had an important
part in the upbuilding of the nation. This was
especially true of the Washington Monument.
The building of this structure was at first under-
taken by a private association, known as the Wash-
ington Monument Society, which proposed to

THE WASfflNGTON MONUMENT 849

raise the necessaiy funds by voluntaiy subscrip-
tions. In 1854, about one third of the Monu-
ment had been constructed, when work was sus-
pended, for want of means. On the one hundredth
anniversary of the Declaration of Independence,
July 4, 1876, Mr. Sherman wrote out a i^solu-
tion recounting the obligations of the countiy to
Washington, and proposing that Congress as-
sume and direct the completion of the Monument
and instruct the Conuiiittees on Appropriations
to carry out this intention. This resolution was
offered by him on the morning of July 5, 1876»
and agreed to in the Senate unanimously. On the
following day it was unanimously adopted in the
House. The Monument was completed, and dedi-
cated with impressive military and civic ceremonies,
on the 22d of February, 1885. He was selected
as chairman of the commission to arrange for the
dedicatory services, and presided over the exercises
at the base of the Monument. He also presided
on the occasion of the ceremonies at the dedication
of the statue of Chief Justice Marshall, on the birth-
day of Mr. Sherman, in 1884. In December of the
same year he proposed, as an amendment to an
appropriation bill, the erection of a statue to the
memoiy of General .Lafayette. This amendment,
which was the initial step in securing the statue
now located in Lafayette Square, was adopted.

The political campaigns for eight years, from the
inauguration of President Garfield to that of Presi-
dent Harrison, were years of great political activity

S50 JOHN SHERMAN

on the part of Sherman, especially in the State of
Ohio. Each year he took a leading part in the
contests in his native state, and was expected to
make the key-note speech, — at least so far as
national affairs were concerned. There was an
active campaign in every year, except 1881, when
the death of President Garfield, which occurred
on September 19, practically precluded political
discussion. It was thought, by men of both parties,
that the bitter controversies which usually prevail
in political contests would not harmonize with a
proper respect for his memory. Democratic vic-
tories occurred in Ohio, in 1882 and 1883. Local
issues, especially the regulation and taxation of the
liquor traffic, were very prominent in the years
from 1881 to 1885. Sherman was very much criti-
cised because the Tariff Bill of 1883 was regarded
as diminishing the protection afforded to wool, a
product in which Ohio then led all other states.
In 1883, as on several preceding occasions, he was
strongly urged to become a candidate for Governor
of Ohio. So much had been done for him by the
state that if the party convention had insisted upon
naming him as a candidate he would have felt com-
pelled to accede to its wishes, and it required the
utmost effort on his part to prevent the nomination.
The legislature which chose Mr. Sherman senator
for the fifth time was elected in 1885. The contest
at the polls resulted in an easy victory for the Re-
publicans, and in his own party there was practi-
cally no opposition to his return.

CAMPAIGN SPEECHES S51

In 1884 he took a prominent part in the national
campaign in Massachusetts and New York, closing,
in company with Mr. Blaine, at Brooklyn, a few
days preceding the election. In 1885, after the
election in Ohio, he spent some time in the Virginia
campaign. In March, 1887, on his return from a
visit to Florida and Alabama, he made an address
in the hall of the house of representatives at Nash-
ville, Tennessee, which attracted wide attention at
the time. He was received there in a very friendly
manner, and spoke especially of the interests of
Tennessee in the policies advocated by the Re-
publican party, because of their bearing on the
material development of the state. This speech
was said to be the first address on national politics
ever made by a Republican of national reputation
to a Southern audience. He laid special stress upon
the former Whig tendencies of Kentucky and
Tennessee, and their old leaders, Henry Clay and
John Bell, and maintained that the Republican
party was continuing the policies which had been
advocated by them, both as regards protection and
sound money, and that in those policies lay the
future hope of the state.

Beginning in 1887, his attention was taken up
with his proposed presidential candidacy of the
following year. At no time, however, does he seem
to have given that all-absorbing attention to his
candidacy which is usually characteristic of candi-
dates supremely anxious for success. In all his
aspirations he was guided by a feeling that all

852 JOHN SHERMAN

events were determined by currents of public
opinion, which could not be controlled. This did
not amount to an idea of fatalism, but he recognized
that no man could be chosen except in response to
the will of the peoj^.

IN THE SENATE. — ADMINISTRATION OF PRESIDENT
HARRISON, 1889 TO 1893

DcjRiNG the administration of President Harrison
the activities of Senator Sherman were associated
with three very important legislative measures, —
the Anti-Trust Law, the Silver-Purchase Law, and
the McKinley TariflF Bill. The first two have been
designated by his name, though, as regards the
Silver-Purchase Law, it should be said that he
always disclaimed responsibility for the measure,
as it was merely a compromise which he prepared
with a view to harmonizing the discordant views
of members of his party.

Anti-trust legislation was first enacted in 1890, by
the Fifty-first Congress. Prior to that year several
of the states had passed laws relating to trusts,
but the evils sought to be corrected were found to
be of such magnitude that national legislation
was thought to be required. The problem did not
receive any considerable attention in Congress until
the Fiftieth Congress, from 1887 to 1889. During
these two years a score of bills and resolutions
were introduced to suppress, regulate, or investi-
gate trusts. In pursuance of a House Resolution,
a lengthy investigation was conducted by a com-

854 JOHN SHERMAN

mittee of that body, but no legislation was formu-
lated or recommended, and, in a report after the
election of 1888, the conmiittee said that the number
of combinations and trusts formed and forming
was very laige; but, owibg to differences of opinion
between the members of the committee, they limited
their report to submitting to the careful considera-
tion of subsequent Congresses the facts shown by
the testimony taken before the committee.

The first bill in the Senate was introduced in
May, 1888. It merely prohibited combinations for
the control of patented articles. The next, intro-
duced August 14, 1888, defined trusts, and pro-
vided a severe punishment for persons connected
with them. A trust was defined as a combination
of capital or skill, by two or more persons: (1) to
create or cany out restrictions on trade; (i) to
limit, to reduce, or to increase the production or
prices of merchandise or commodities; (3) to pre-
vent competition in the manufacture, making, sale,
or purchase of merchandise or commodities; (4) to
create a monopoly.

Mr. Sherman, on the 14th of August, 1888, intro-
duced a brief measure, declaring all agreements,
etc., between persons or corporations, with a view,
or which tended, to prevent full and free competi-
tion, or to advance the cost to the consumer, to be
«piinst public policy, unlawful, and void; also
penalties were provided, one of which was aimed
at corporations, and prescribed a forfeiture of
corporate franchises as a punishment. This Bill

HARRISON'S ADMINISTRATION 855

was reported in the following month by Mr. Sher-
man, with two additional sections making penal-
ties more specific. The first gave a civil remedy
to the injured party. The second prescribed a
criminal penalty, to the eflFect that persons entering
into any such agreement should be guilty of a high
misdemeanor, and, on conviction, should be subject
to a fine or imprisonment, or both. This was further
amended, and brought up for discussion in January,

1889, when a lengthy debate occurred. An elab-
orate speech was made by Mr. George of Missis-
sippi, in February, 1889, maintaining that the Bill
was unconstitutional. None of these bills passed
either House during that Congress.

On the 4th of December, 1889, Mr. Sherman
introduced in the Senate, as the very first measure
of that Congress, Bill No. 1, entitled "A Bill to
declare unlawful, trusts and combinations in re-
straint of trade and production." In its original
form the first section was a declaration that all
contracts made with a view, or which tended, to
prevent full and free competition in commercial
transactions, whether having to do with articles
imported into the country or with those of domestic
growth or production, were against public policy,
unlawful, and void. The phraseology was identical
with that of the amended bill reported in September,
1888. The original bill was reported by Mr. Sher-
man, from the Committee on Finance, January 14,

1890, with amendments substituting the words,
"with the intention" for "with a view or which

S56 JOHN SHERMAN

tend, ** in describing the purpose or results of the
acts forbidden, and granting a penalty to the in-
jured party of twice the amount of the damages
sustained. The words **for sale" were added in .
describing articles transported from one state to
another. In a substitute presented by Mr. Sherman
in March, 1890, the word "intention" was stricken
out and the former phraseology restored. The
evident purpose of this was to avoid the difficulty
of proving an intention on the part of a corporation.
In this substitute draft, also, the arrangements,
etc., declared unlawful were restricted to those
** between two or more citizens, or corporations,
or both, of different states, or ... of the United
States and foreign states."

It is to be noted that up to this time neither in
Congress nor in the countiy at large had the opinion
gained any appreciable support that these aggrega-
tions of capital, familiarly known as trusts, were
the result of a process of evolution. They were
universally condemned as grasping monopolies,
formed for the sole purpose of benefiting their
projectors at the expense of the general public.
Nor was any especial attention given to the ques-
tion whether the common law, without the aid of
statutes, afforded adequate remedies. It was gener-
ally conceded to be desirable that a statute should
be passed, if sanctioned by the Constitution. In
the consideration of this measure, as well as of the
Interstate Commerce Act, and other measures,
such as a law requiring the introduction of auto-

HARRISON'S ADMINISTRATION S57

matic couplers upon railways, there was a degree
of opposition proceeding from believers in states'
rights. This was usually joined with declarations
that the legislation in itself was salutary, but that
it did not come within the scope of federal juris-
diction. With each successive measure, this opposi-
tion became less vigorous and more perfunctory.

Mr. George, as in the previous Congress, made
an argument attacking the Bill on the ground of
unconstitutionality, stating that he did not believe
he differed from Mr. Sherman himself, who had
said, on August 14, 1888: "Whether such legis-
lation can be ingrafted in our peculiar system by
the national authority, there is some doubt. If it
can be done at all, it must be done upon a tariff bill
or revenue bill. I do not see in what other way it
can be done." Mr. George continued: "The
truth is, sir, the committee, by its methods, under-
took to accomplish the impossible. They have
undertaken to compound from reserved and
granted powers a valid bill, and the result is the
incongruities I have pointed out, that curious
commingling of inconsistent and inefficient pro-
visions which has produced this abortion. There
is one power in the Constitution which would have
been efficient if it had been resorted to. It is the
power to levy taxes, duties, imposts, etc." He
asserted that, as a practical fact, the difficulties in
bringing suits for reparation of injuries suffered
would be such that no suits would ever be insti-
tuted; not one would ever be successful. He

S58 JOHN SHERMAN

strongly reprobated, however, the evil at which the
Bill was aimed. In support of the position that
the Bill was unconstitutional, he averred that any
statute passed must be the exercise of a power to
regulate foreign or interstate commeree,and nothing
else. "The Bill proceeds," he said "on the idea
that as to inteistate commerce the jurisdiction of
Congress extends to the regulation of the production
and manufacture of articles taking place in a state,
if only it be intended that, after such manufacture
or production shall be complete, all, or a portion,
of the articles shall become subjects of inteistate
commerce, and shall, in fact, be transported as
such." This he maintained was clearly not in ac-
cordance with the law; that the only jurisdiction
possessed by Congress was over actual commercial
transactions between persons located in different
states or engaged in trade with foreign countries.

On the 21st of March, 1890, Mr. Sherman spoke
at length on the Bill. The general substance of his
argument was that similar legislation existed in
the states of the Union, that each state could and
did prevent and control combinations within its
limits, but that the states were unable to deal with
the larger combinations which created a greater
evil and not only affected our commerce with
foreign nations, but trade and transportation
among the several states. The measure was not
aimed at corporations. It did not seek to cripple
combinations of capital and labor, the formation
of partnerships or of corporations, but only to

HARRISONS ADMINISTRATION 859

prevent and control such as were formed with
a view to prevent competition, or for the restraint
of trade, or to increase the profits of the producer
at the cost of the consumer. He said :

"But associated enterprise and capital are not satisfied
with partnerships and corporations competing with each
other, and have invented a new form of combination,
commonly called trusts, that seeks to avoid competition
by combining the controlling corporations, partnerships,
and individuals engaged in the same business, and placing
the power and property of the combination under the
government of a few individuab, and often under the
control of a single man called a trustee, a chairman, or a
president. The sole object of such a combination is to
make competition impossible. It can control the market,
raise or lower prices, as will best promote its selfish inter-
ests, reduce prices in a particular locality, and break down
competition, and advance prices at will where competi-
tion does not exist. Its governing motive is to increase the
profits of the parties composing it. The law of selfishness,
uncontrolled competition, compels it to disregard the
interest of the consumer. It dictates terms to transporta-
tion companies, it commands the price of labor without
fear of strikes, for in its field it allows no competitors.
Such a combination is far more dangerous than any here-
tofore invented. ... If the concentred powers of this
combination are intrusted to a single man, it is a kingly
prerogative inconsistent with our form of government,
and should be subject to the strong resistance of the state
and national authorities. If an3rthing is wrong, this is
wrong. If we will not endure a king as a political power
we should not endure a king over the production, trans-
portation, and sale of any of the necessaries of h'fe. If we
would not submit to an emperor, we should not submit to
an autocrat of trade, with power to prevent competition,
and to fix the price of any commodity."

Seo JOHN SHERMAN

He attacked the theory that such combinatioiis
reduced prices to the consumer by better methods
of production. All experience showed, he said,
that this saving of cost went to the pockets of the
producer. He believed that the Bill was authorized
by the Constitution, partly on the ground of the
jurisdiction given to federal courts in suits at law
and in equity between citizens of different states, or
in which the United States should be a party, but
more upon the ground that the subject-matter of the
measure was included in the jurisdiction granted
by the Constitution to regulate commerce with
foreign nations and between the states.

The Bill was attacked by Senator Vest on the
ground of unconstitutionality, and the charge was
also emphatically made that the evils sought to be
remedied were traceable to the tariff. He said:
** One year ago the Senator from Ohio struck the
key-note as to all these trusts and combinations in
the United States. It was in the expression made
in this chamber that whenever he was satisfied
that any trust or combination was protected by
a high tariff duty he would be in favor of reducing
that duty." A considerable amount of political
argument was thereafter interjected into the dis-
cussion. Mr. Vest presented a list of some twenty
combinations with the duties on the articles manu-
factured or sold by each of them, all of which he
alleged were creatures of the tariff.

Senator Beagan, who had introduced another
bill on the subject, said: '^I think the countiy is

HARRISONS ADMINISTRATION 361

debtor to that distinguished senator (Mr. Sherman)
for his efforts to furnish a remedy for a great and
dangerous evil."

Some views which would not now be accepted
were expressed: — that transportation was not
commerce at aU ; it was only a means of conducting
commerce; that the states were the most compe-
tent to control trusts, and to control them efficiently.
Several senators thought all legislation useless on
such a subject, and called attention to a statute
passed in England in 1844, entitled ''An Act for
abolishing the offenses of forestalling, regrating»
and engrossing, and for repealing certain statutes
passed in restraint of trade." It was alleged that
this was the result of centuries of effort to control
the natural courses of trade, and showed the use-
lessness of such endeavors.

A great variety of remedies were suggested at
this and later times. Among them were proposi-
tions declaring that a person or corporation violat-
ing the provisions could not enforce a contract in
an action at law; denying the use of the mails;
imposing internal revenue taxes in addition to all
other taxes then imposed; prohibiting trusts from
engaging in interstate or foreign commerce; de-
claring patents to be null and void when used or
operated by a trust. The suspension of duties by
order of the President, when satisfied that a trust
had been formed, and that in consequence thereof
there had been an enhancement in the price of that
particular article, was one favorite remedy proposed

362 JOHN SHERMAN

during the discussion of this Bill, and repeatedly
suggested thereafter.

A motion was made that the Bill be referred to
the Judiciary G>mmittee. This motion at first was
lost. Numerous amendments were then adopted,
excepting from the provisions of the Bill combina-
tions between laborers made with a view to lessen-
ing the number of hours of their labor or to increas-
ing their wages; also combinations of persons en-
gaged in horticulture or agriculture with a view to
enhancing the price of their products. An amend-
ment forbidding dealing in options and futures was
inserted. By this time, the 27th of March, 1890,
so many amendments had been placed upon the Bill
as to render it incongruous and probably invalid.
The motion was renewed that it be referred to the
Committee on the Judiciary with the direction that
they report within twenty days. Mr. Sherman him-
self thought some of the amendments which had
been adopted seriously injured the measure.

The Bill was again reported to the Senate by
Senator Edmunds of the Judiciary Committee, on
the 2d of April, very much modified in form, and
the title changed so as to read: ""A Bill to protect
trade and commerce against unlawful restraints
and monopolies." The first section declared illegal
every contract in restraint of interstate or foreign
commerce. The second prohibited every act in
the way of monopolizing or attempting to mono-
polize. The third related to the territories of the
United States and the District of Columbia, and

HARRISON'S ADMINISTRATION 36S

placed them on the same footing as states, in all
cases. As regards these, there was no question of
the power of Congress to act. A penalty was pro-
vided of a fine not exceeding five thousand dollars,
or imprisonment not exceeding one year, or both
said punishments, in the discretion of the courts.
Jurisdiction was given to the circuit courts of the
United States. Property owned under any contract,
or by any combination, or pursuant to any con-
spiracy prohibited by the first section, when in the
course of transportation, was to be forfeited to the
United States; and persons injured by the acts
forbidden could bring suit and recover threefold
damages.

Mr. Sherman, soon after the presentation of the
substitute, announced his intention to vote for the
Bill, "not as being precisely what I want, but
as the best under all the circumstances." It passed
the Senate on the 8th of April, with only one nega-
tive vote.

The objects of the Bill, as stated in a favorable
report by the Committee on the Judiciary of the
House, on the 25th of April, 1890, were said to be
to protect trade and commerce among the several
states, or with foreign nations, against unlawful
restraints and monopolies; also to afford like
protection in the territories and the District of
Columbia. The Committee added : ** It is proposed
to accomplish the first object of the Bill by declaring
every contract, combination in the form of trust
or otherwise, or conspiracy in restraint of trade

S64 JOHN SHERMAN

or commerce among the several states, or with for-
eign nations, illegal, and by declaring every person
who shall monopolize, or attempt to monopolize, or
who combines or conspires with any other person
or persons to monopolize, any part of the trade or
commerce among the several states, or with foreign
nations, guilty of a misdemeanor."

There was no extended discussion in the House.
The provisions of the Bill were explained, and it was
discussed and passed in a single day. Objections
to the measure were based mostly upon the tariff
question, or rather upon the theory that the only
method to pursue was to reduce or abolish the
tariff; yet all expressions were favorable to the gen-
eral purpose involved. The House added amend-
ments, modifications of which were proposed in the
Senate, but after some delay both Houses agreed
upon the Bill in the form in which it passed the
Senate, and it became a law, July 2, 1890.

An effort has not infrequently been made to
belittle the part which Senator Sherman took in
the passage of the Anti-Trust Law. The ground for
this is that in the final form in which the Bill
appeared and was enacted int9 law, it was drawn
by others. But over against this stands the fact
that he introduced the Bill and took the initiative
in pressing legislation of this character upon the
attention of Congress; that he formulated the
general ideas and policies to be embodied into law,
and that by his insistence, amounting to antago-
nism of other measures, he secured the favorable

HARRISON'S ADMINISTRATION S65

attention of the Senate and the passage of the Bill.
Whatever criticism nmy be visited upon this legis-
lation, the Act is one of the most important results
of his legislative career, and to him especially
should be ascribed the praise or blame for its place
on the statute-books of the United States.

No subject in the twenty years from 1877 to 1897
was more earnestly debated than the use to be
made of silver as money. There were repeated
demands by some for the unlimited coinage of the
silver dollar. Others, less radical, were constantly
saying: **We must do something for silver." In
the whole history of legislation in the United States,
no single industry or interest can be found for
the benefit of which so much has been done, or
for which such constant efforts have been made,
as for that of silver-mining. The time had passed
when this metal possessed the rank as money
which it formerly held among the nations. At the
time President Harrison was inaugurated it had
been diminishing in value, with rare exceptions,
for thirty years. Within twenty years not fewer
than a dozen nations had taken steps looking to
the adoption of a mono-metallic standard. Neither
the Demonetization Act of 1873 nor the Bland-
Allison Act of 1878 had exercised any considerable
effect upon the price of silver. Three hundred and
twenty million silver dollars had been coined by
March 1, 1889, an amount closely approaching
the outstanding amount of greenbacks. Less than
sixty millions of these dollars were in circulation.

866 JOHN SHERMAN

The demand for further legislation was active
at the beginning of the administration of President
Harrison. In his report of December 2, 1889, Sec-
retary Windom dwelt exhaustively on the subject
of silver coinage. He reviewed and dismissed as ob-
jectionable or impracticable several propositions,
such as an international agreement; the continu-
ance of the present policy of coining two million
dollars worth of silver per month; an increase of
the coinage to four million dollars per month; also
free coinage; and recommended a plan to repeal
the compulsory features of the Coinage Act then in
force and to "issue Treasury notes against deposits
of silver bullion at the market price of silver when
deposited, payable on demand in such quantities of
silver bullion as will equal in value, at the date of
presentation, the number of dollars expressed on the
face of the notes at the market price of silver, or in
gold, at the option of the government; or in silver
dollars at the option of the holder." This would
accomplish three objects, suspend the coinage of the
silver dollar, supersede it by a currency in which
there would be equality between the quantity of silver
purchased and the face value of the note issued, —
at least at the time of purchase, — and provide an
additional supply of money. On every one of these
propositions there was a pronounced difference
of opinion. The abandonment of the silver dollar
was strenuously opposed, and without material
concessions no such step could be taken. If the
Bland-Allison Act of 1878 was to be suspended,

HARRISON'S ADMINISTRATION 367

it would be necessaiy to substitute some other use
of the metal in its place. On the question whether
the adoption of Secretaiy Windom's recommenda-
tion would raise the price of silver, there was also
difference of opinion. He was sure that it would.
Past experience did not furnish ground for san-
guine expectation, but it was maintained that the
absorption by purchase in the manner suggested
of an amount equal to the annual production of
the United States would affect the price in a greater
degree than any measure which had been tried.
As regards the need of more money, there was
nothing exceptional in the situation; in certain
seasons of the year there was too much, and, in
other seasons, there was confessedly not enough.
The essential defect of our currency system, a lack
of elasticity, though recognized in a degree, was
partiaUy overlooked.

The intrinsic value of the silver dollar had sur-
passed that of the gold dollar in 1873. In the year
1878, when the Bland-Allison Silver Act went into
effect, it had fallen to 89.1. There was a consider-
able fall the following year, but slight recoveries in
1880 and 1884. The general tendency, though not
absolutely invariable, was downward. In 1889 the
value of a silver dollar, measured in gold, had fallen
to 72.3. It was manifestly impossible, unless some
heroic measure should be adopted, to maintain for
any very considerable time the silver dollar along
with gold, when the variance in their values was so
considerable.

868 JOHN SHERMAN

There had been a decrease in certain forms of
currency and this aioused the ciy for more money,
which was stimulated by the fact that there was a
slight decrease in the per capita circulation as com-
pared with the preceding year. As against this fact
Secretary Windom showed in his report that there
had been a net increase in the circulation of money
between March 1, 1878, and October 1, 1889, of
nearly six hundred millions of dollars, a little over
74 % in total quantity, and almost 32 % per capita.
The very large surplus of revenue over expenditure
and the reluctance of the administration to purchase
bonds had caused unusual quantities of currency
to accumulate in the Treasury. Again, the high
price of bonds was causing the national bank notes
to be withdrawn. That species of circulation had de-
creased in the preceding year more than any other.

The support of silver in Congress had been
increased by the admission of four new states by
the preceding Congress. In the Senate any propo-
sition for its increased coinage was sure of a ma-
jority. Of the eighty-four senators, the thirty-eight
Democrats were nearly unanimous for the free and
unlimited coinage of silver, and they were sup-
ported by seventeen of the forty-six Republicans,
some of whom were not especially friendly to tariff
legislation, and insisted upon concessions to silver
as an equivalent for their support of any measure
of the former class.

At the end of January, 1890, Senator Morrill
introduced in the Senate, at the request of the Secre-

HARRISON'S ADMINISTRATION 369

tary of the Treasury, a Bill embodying the latter's
plan, though with some modifications. It was soon
afterwards reported from the Finance Committee
in a form satisfactory to the advocates of silver in
the Senate, who, although they desired free coinage,
thought this the most favorable measure which
could be obtained. The first section authorized
the Secretary of the Treasury to purchase silver
bullion of a value of $4,500,000 each month, and
to issue in payment therefor Treasury notes receiv-
able for customs and public dues. When so received
they might be reissued. They were also to be
redeemed, on demand, in lawful money of the
United States. When redeemed they should be
canceled, but enough silver was to be coined from
the bullion purchased under the Act to equal the
quantity of notes canceled. It is to be noted that
this measure diflFered from Mr. Windom's plan in
omitting the option of the Treasury to redeem in
silver bullion, at the market price at the time of
presentation. The Bland-Allison Act of 1878 was
to be repealed or superseded by this measure.

Mr. Sherman proposed an additional section,
which was adopted, authorizing the transfer to the
general funds of the Treasury, of greenbacks or
legal-tender notes deposited for the redemption of
the notes of national banks. The greenbacks, or
legal tenders, deposited, were not, as formerly, to be
retained as special deposits, but were to be placed
with other moneys of the government in the Treas-
ury. As a result a large amount of money was

870 JOHN SHERMAN

jdaced in circulation because, under the law as it
had formerly existed, it was necessary to allow the
money for redemption of national bank notes to
remain in the Treasury as a special deposit, until,
in the rather slow course of events, the notes were
presented.

A long and desultory discussion occurred on the
general subject of silver, in which the so-called
" Crime of '73 " was much referred to. Following
the usual course, the members of the Senate who
favored silver, though at first satisfied with the
pending measure, introduced one for free and
unlimited coinage at the ratio of 16 to 1. In the
whole period when this subject was under discus-
sion, the advocates of silver in the Senate used
every means known to parliamentary procedure
to load down legislation, whatever its nature and
whether acceptable to them or not, with free coin-
age amendments. Propositions for the issuance of
bonds, for salutary changes in the national bank-
ing laws, for increased revenue, for tariff changes,
were all amended by the addition of free silver
propositions.

Meanwhile, during the pendency of this measure
in the Senate, the House, on June 7, 1890, passed a
bill of the same general tenor, but differing in sev-
eral essential particulars. The amount of silver to
be purchased was the same, but the notes to be
issued were full legal tender instead of being merely
receivable for customs and public dues; and the
Secretary of the Treasury was authorized to redeem

HARRISON'S ADMINISTRATION 871

them in coin or silver bullion at the current market
rate. During the discussion on the House Bill,
which after its passage was taken up by the Senate
and considered instead of the measure pending
there, a motion was made in the Senate, and carried
by a vote of 43 to 24, for the substitution of the
unlimited free coinage of silver for the proposed
purchase of bullion. Other sections of the Bill
were made to harmonize with the new provision,
and the Bill was passed and returned to the House,
which refused to concur, and a conference was
ordered.

On conference the so-called ''Sherman Silver
Law" was agreed upon by the Republican con-
ferees. Of this law Mr. Sherman said, in after
years, "I took but little part in framing the legis-
lation until the Bill got into conference. The situa-
tion at that time was critical. A tai^ 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 apprehen-
sion 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 abso-
lute free coinage." In a conversation with several
of the Republican conferees on the Bill, when the

37« JOHN SHERMAN

proposed law had been substantially agreed upon,
he said: *'I ought not to be compelled to bring in
such a Bill. My judgment is against it." There
were several vital differences in the measure as
framed by Mr. Sherman, when compared with the
House Bill. The amount of silver bullion to be
purchased was changed from $4,500,000 worth per
month to 4,500,000 ounces. In view of the fall in
the price of silver this greatly reduced the quantity
to be purchased. The provision of the House Bill
for the redemption of notes in bullion, especially
favored by Secretary Windom, was stricken out, and
in its place there was substituted a declaration that
it was the purpose of the government to maintain
the parity of the two metals.

The amount to be purchased under the law
would practically exhaust the total current produc-
tion of the United States, and it was confidently
maintained by its advocates that it would prevent
depreciation, and even advance the market value
of silver. It was even said that the law would cause
such a rise in value that a lai^ profit would be
obtained by the government, while, at the same
time, silver would be recognized, the currency
supply would be increased, and benefits would
flow from every direction.

The reasons given for consenting to this law
by those who, with Senator Sherman, reluctantly
favored it were: (1) that irreparable injury would
soon result from the continuance of coinage under
the Bland-Allison Silver Law; that something must

HARRISON'S ADMINISTRATION 87S

be done to stop this coinage; and that the plan pro-
posed would take into account the actual commer-
cial value of silver, and would, in this respect, be
a great improvement on the prior law; (2) that a
Free Coinage Bill might pass both Houses, and, if it
passed, the President might sign it, or, if not, at any
rate it would be fatal to party success to compel
him to veto it. Some who opposed the use of silver
were reconciled to this measure because, they said,
a trial of it would disclose the absurdity of further
attempts to use silver as money and would make
its abandonment possible.

In the accounts of this legislation it appears to
have been overlooked that on one occasion votes
were taken in the House which seemed to show
a majority for a Free Silver Law. On the 18th of
June, 1890, the Silver Bill had been returned from
the Senate with an amendment providing for free
coinage, and, in accordance with the rules, as
interpreted by Speaker Reed, it was to be referred,
without mention or notice in the open House, to the
Committee on Coinage, Weights, and Measures.
To this action exception was taken by the advo-
cates of free silver, and a resolution introduced,
June 19, to the effect that the order of reference
was incorrect, and without authority under the
rules of the House, and directing that the reference
be canceled. This contention, which was com-
monly regarded as a test question upon free coin-
age, was sustained, on numerous motions during
two exciting days, by majorities of from one to

874 JOHN SHERMAN

seven. This would have left the Bill before the
House, the decision of the Speaker having been
overruled and the reference annulled. The situa-
tion seemed serious on these two days, but on the
following day several Democrats who* opposed the
free coinage of silver, including Mr. Fitch of New
York, and Mr. Buckalew of Pennsylvania, joined
with the Republicans in voting to refer the Bill in
accordance with the ruling of Speaker Reed. This
episode, however, increased the apprehension that
at some time, or under some circumstances, a
Free Coinage Bill might pass the House as well
as the Senate.

In the final vote on the adoption of the conference
report exact party lines were drawn in both Houses,
not a single Republican voting against adopting the
report, and not a single Democrat in its favor.
There was again displayed, among men of widely
differing ideas upon the question of coinage, the
effect of party discipline, as in the passage of the
Resumption Act of 1875. The measure, as finally
agreed upon, became a law, July 14, 1890. The
coinage into silver dollars of two million ounces a
month from the four million, five hundred thousand
ounces to be purchased, was to be continued until
the 1st of July, 1891.

While the reasons for the passage of this Act can
be readily understood, it would be difiBcult to find»
among measures relating to finance or currency, one
which compares with this. It selected an article
and issued notes upon it to serve as currency, which.

HARRISON'S ADMINISTRATION 875

except for minor coinage, had been rekgated to the
position of merchandise by the most advanced na-
tions of the earth, indeed by nearly all of those with
which our exchanges and transactions were largest.
It was not to be wondered at that in the succeeding
autunm organizations were formed in several states
which promised to create the nucleus of a political
party, whose aim was to have the government
establish a warehouse system in which farmers
might deposit their 'grain, or other products, and
receive in lieu thereof bills which were to answer as
currency.

For a brief time the price of silver increased,
more from the buoyancy of the speculative market,
and the hope of those who expected favorable
results from the law, than from any actual rise in
value, although the increased purchase created a
very large new demand. But in a few months
prices again began to decline, showing that the
prophecies of the advocates of the larger use of
silver were ill-founded.

Almost immediately after the passage of the
Silver Purchase Law there was a discussion which
proved that no permanent settlement had been
reached. In the second session <rf the Fifty-first
Congress the disposition of the advocates of silver in
the Senate to prevent any financial legislation was
continued. An attempt was made to combine in
one bill several financial propositions, and a report
was made by Mr. Sherman recommending the
passage of such as were regarded most desirable.

876 JOHN SHERMAN

especiaDy one to provide against contraction of the
currency. The usual course was pursued. A Free
Silver Amendment was placed upon this Bill, and
thus any financial legislation during this session was
prevented.

In the debate upon this measure, on the 13th of
January, 1891, Mr. Sherman made the first of three
lengthy speeches which stand out prominently
among his utterances on the subject. The second
was delivered on June 30, 1892, and the third
on August 30, 1893. His utterances prior to the
special session called by President Cleveland, in
the summer of 1893, would fill several volumes. He
avowed himself a bimetallist, but never to the
point of advocating any measure which would cause
the country to depart from a gold standard. Ses-
sion by session he began to recognize and declare
impracticable plans for the use of silver which had
been recommended. He took a leading part in cur-
rency discussion, not as a pronounced mono-
metallist, but with the most steadfast regard for
the country's credit and financial honor. With him,
not bimetallism but a sound and stable currency
was the chief object of desire.

The McKinley Tariff Bill became a law on the
1st of October, 1890. This famous measure, while
radically protective in its provisions, was a logical
and symmetrical embodiment of the policy of pro-
tection to all American industries and products.
The incongruities and inequalities which were in
existence before its passage were in a large degree

HARRISON'S ADMINISTRATION 377

traceable to the fragmentary treatment of schedules
and to the undue attention theretofore given to
specific lines of industry. Mr. McKinley, in intro-
ducing the measure, said that he interpreted the
victory in the presidential election of 1888, and the
Bepublican majority in the House and Senate, to
mean that the votes of the people not only demanded
a revision of the tariflF, but that such revision should
be in line with, and in full recognition of, the prin-
ciples and purposes of protection. After calling
attention to a decrease of some ten millions of dol-
lars of internal revenue taxes, resulting from the
abolition or reduction of the tax on different forms
of tobacco, he said: "The tariff part of the Bill
contemplates and proposes a complete revision. It
not only changes the rates of duty, but modifies
the general provisions of the law relating to the
collection of duties."

This Bill was the first to contain a complete
schedule of protective duties upon competing agri-
cultural products, though omitting hides, an item
made dutiable in the Dingley Bill which was to fol-
low in 1897. The particular article on which duties
were raised to a point suflBcent to create a new local
industry was tin plate. This duty was bitterly
opposed, and a proviso was added that it should
be abrogated entirely unless a certain amount of
domestic manufacture should result from the trial.
The duty on sugar was abolished, thereby doing
away with the source of a very large share of the
revenue, but a bounty was to be paid upon the

378 JOHN SHERMAN

domestic product, for safeguarding home inteiests.
Over $50,000,000 had been paid on sugar duties
during the year 1889. By the removal of this duty
an appeal was made to those who desired to lessen
the burdens of taxation and to diminish the surplus
revenue.

The leading part in the management of the Bill
in the Senate was taken by Senator Aldrich of
Rhode Island, who, by his familiarity with mercan-
tile and industrial topics, had assumed great pro-
minence in tariff legislation. By this time he was
conceded the most prominent position in this field
by his colleagues.

The measure was materially changed in the
Senate, not only in numerous schedules, but by
the addition of a provision for reciprocity, or recip-
rocal trade, as it was termed. The third section, as
passed by the Senate, was intended to secure recip-
rocal trade with countries producing certain pro-
ducts, especially those which were tropical or
semi-tropical, by admitting them free. But it pro-
vided that duties should be levied on such pro-
ducts when imported from countries which imposed
duties, or other exactions, upon the agricultural or
other products of the United States which the
President deemed reciprocally unequal and unrea-
sonable. In that case the President would have the
power, and it was made his duty, to suspend, by
proclamation, the free introduction of specified
imports from such countries.

This measure was accompanied by a Customs

HARRISON'S ADMINISTRATION 379

Administrative Law, prepared in pursuance of sug-
gestions made by the Treasury Department, and
presented by Mr. McKinley. It became a law in
June, 1890, and, although the second succeeding
Congress made radical changes in the tariflF law,
this measure was allowed to remain practically
undisturbed.

It was a frequent remark of Mr. McKinley that
the real objection of those importers who had
attacked him most bitterly for his part in tariff
legislation was not because of the Tariff Bill which
received his name, for they could adapt their prices
to changing conditions created by increased duties,
but because they were disjJeased at the Customs
Administrative L#aw, which rendered impossible
methods of importation under which an experi-
enced importer was able to evade the intention of
the law, and to manage his importations so as to
bring in goods without subjecting himself to the full
payment of duties prescribed.

The general objects of the law were to secure the
prompt decision of disputed questions, to correct
ambiguities in the law, and to prevent fraud. At
this time more than five thousand suits for return of
duties paid were pencfing in the courts of the United
States, involving claims for over $25,000,000.
A board of appraisers was selected who should
pass promptly upon valuations. Consular verifica-
tion of invoices was required with the oath of the
importer. Very material changes were made in
regard to the exemption of coverings, for it was

S80 JOHN SHERMAN

found that in some cases the coverings, which came
in free of duty, wei^ more valuable than the package.
Severe penalties were prescribed for under-valua-
tion. In case of dissatisfaction with the decision
of the collector as to the rate and amount of duty,
notice must be given within ten days, when the
matter would be taken up by the board of general
appraisers, and from their decision an appeal must
be taken within thirty days to the circuit court of
the United States. Secretary Windom had pointed
out the defects in the existing law, which were, like
the defects in schedules demanding revision, largely
the result of conflicting provisions and ambiguities.
He stated that no adequate means were afforded
by the laws for the punishment of fraud in the entry
of merchandise.

Senator Sherman took an active part in the dis-
cussion of the McKinley Tariff Bill. He did not alto-
gether favor the entire abolition of duties on sugar.
He sustained the Bill as a whole very vigorously,
and taunted the Democrats for dilatory methods
which only postponed its inevitable passage. He
did not, as a general policy, favor discriminations
between different countries in the rates of duty,
though conceding that in view of our nearness to
Canada reciprocal trade with that country was
profitable, and this was especially true when it
appeared that our exports to that country far
exceeded our imports. He favored mutual laws,
as he termed them, to be adopted by both coun-
tries, father than treaties with the South American

HARRISON'S ADMINISTRATION 381

states. He especially opposed the duty on coal,
when imported from Canada, and recommended
a commission to report the best method of securing
reciprocal relations with that country. He said he
had never voted for a reciprocity treaty, because
he believed that the power to originate every bill
in regard to tariflF duties lay in the House. As on
all previous occasions, he favored a duty on raw
materials. He expressed his willingness to see
duties removed from all articles manufactured by
trusts, and attacked the Sugar Trust. He said the
refiners were not in good odor, and it would be
well to have free trade in sugar of all grades in
common use. He said that the Tariff of 1883 had
many imperfections, and that the great error in it
was in not making the report of the Tariff Commis-
sion the basis of the Bill. He said there were three
principles in the McKinley Bill, — protection to
home products, free trade in things not produced
here, and taxation of articles of luxury.

As Chairman of the Senate Committee on Foreign
Relations, Sherman had an important part in the
consideration of propositions for the construction
of an Isthmian Canal. On the 10th of January,
1891, a report was made by him, as Chairman of
* the Committee, upon the Clayton-Bulwer Treaty of
1850, and other questions relating to the enterprise.
That portion relating to negotiations with Great
Britain was prepared by Senator Edmunds; that
upon the engineering phases of the project, the
condition of the work, and its probable importance

38« JOHN SHERMAN

from a commercial and military standpoint, by
Senator Morgan ( while that in regard to the finan-
cial aspect of the subject, its cost and the aid that
should be given by the United States, was prepared
by Mr. Sherman. The report was unanimously
made by a very able Committee, consisting of
Messrs. Sherman, Edmunds, Frye, Evarts, Dolph,
Morgan, Brown, Payne, and Eustis.

Mr. Sherman had favored a treaty with Nicara-
gua, submitted by President Arthur in 1884, which
was afterwards withdrawn by President Cleveland,
who alleged that the treaty created an entangling
alliance, because the United States engaged to
defend the territorial integrity of the states through
which the canal would pass. Subsequently a private
company had been organized known as the INIari-
time Canal Company of Nicaragua, which proved
unable to accomplish a work of so great magnitude.
Mr. Sherman had foreseen from the start that such
an undertaking could not be executed without the
support and aid of the government. It was pro-
posed in the Bill which was reported first by him,
and later by Senator Morgan, that the United States
should aid the canal company, although he pre-
ferred the absolute purchase of its concessions and
the execution of the work under the supervision of
the Engineer Corps of the United States Army, in
the same manner that river and harbor improve-
ments are made in this country. The plan for
construction by the government was afterwards
adopted in 1902.

HARRISON'S ADMINISTRATION S8S

The question of the choice of the route seems
never to have been considered by him with any
especial care. While he was a member of the
Senate it was taken for granted that the Nicara-
guan route would be chosen because the sentiment
of the people favored a canal constructed and oper-
ated by American citizens, or absolutely owned by
the government. At that time the possibilities of
such control and ownership did not exist in Panama.

In the month of February, 1891, General William
Tecumseh Sherman died at New York. It would
be difficult, if not impossible, to find in the whole
range of history two brothers of such equal and
similar prominence, the one in civil, the other in
military life. The affection between the two was
always of the very strongest nature. Each profited
by the assistance and counsel of the other. The
letters passing between them throw a varied light
upon the events of nearly forty years.

Each was possessed of intellectual powers of the
very highest order, endowed with an unusual
ability to judge of men and events, facile in speech
and with the pen. Each was exceptionally loyal
to any cause to which he had given his adherence,
and had the power of so shaping his actions and
efforts as to accom^dish his ends.

In personal traits, however, there was a wide
variance between them. The Senator was impass-
ive, viewing all events from the most practical and
realistic standpoint. The General was emotional,
sometimes impulsive, even to the point of rashness*

584 JOHN SHERMAN

The General was fond of meeting friends, and
loved society and association with those who were
possessed of jollity and good humor. The Senator,
while not disliking such associations, was much
more at home in the intellectual laboratoiy in which
his work was performed. In the business affairs of
life the Senator was careful, thrifty, and exceedingly
successful. The General was profuse in his expense
account, and though he enjoyed a brief training as
a banker, with fair success, he was not a good
financier. Though pursuing widely different paths,
they were united in their aims and opinions, to an
unusual degree. Although divided by a period of
nine years in their deaths, their lives are always to
be associated with the great epoch which is known
as the last half of the nineteenth century.

In 1881 and 1886 the position of Senator from
Ohio had come to Mr. Sherman by the universal
acquiescence of members of his own party in the
state, but in January, 1892, there was a vigorous
contest with ex-Governor Foraker, who had four
times been the Republican candidate for governor,
and who had filled that ofiBce for two terms. On
the last day of December, 1891, Mr. Sherman went
to Columbus to give personal attention to the con-
test. He had, however, friends of prominence who
directed the canvass. On the 6th of January, 1892,
he was nominated for his sixth term in the Senate,
by the Republican members of the legislature, by
a vote of fifty-three to thirty-eight, and was elected
soon after.

HARRISON'S ADMINISTRATION 585

The campaign of 1892 resulted in the election of
Mr. Cleveland to the presidency, over Mr. Harri-
son. It was Mr. Sherman's conviction that Harri-
son could not be elected, and for this reason he
advised the nomination of another man, preferably
McKinley. He, however, gave Harrison hearty sup-
port, speaking at Philadelphia, New York, Chicago,
and Milwaukee, as well as frequently in his own
state.

XVI

SENATOR DURING CLEVELAND'S SECOND ADMIN-
ISTRAllON, 188S-1897.

The immediate question which presented itself,
after the inauguration of President Cleveland, was
the condition of the currency as aflFected by the pur-
chase of silver bullion. On the 14th of July, 189£,
Mr. Sherman had introduced in Congress a Bill
for the repeal of the section requiring the purchase
of 4,500,000 ounces each month. It was not pressed
at that or the following session, because it was evi-
dent that the Senate favored the largest possible
use of silver, and he feared that the House might
maintain the same position. When attacked for
his failure to bring this Bill to a vote he said that
if the Democrats would furnish a contingent of ten
senators in support of the repeal, it would pass the
Senate within ten days.

The principal subject of controversy between the
two parties at the election of 1892 was that of the
tariff. The Republican platform did not mention
the Silver Purchase Law, either with approval or
disapproval. It demanded the use of both gold and
silver as standard money, but under conditions
such that the dollars, whether of silver, gold, or
paper, should at all times be equal. The Demo-

SENATOR, 1893-1897 387

cratic platform denounced the law as a cowardly
makeshift which should make all of its supporters,
as well as its author, anxious for its speedy repeal.

In the mean time the silver bullion certificates,
issued under the Law of 1890, began to drive other
forms of currency out of circulation, and gold out
of the country. The apprehension of a silver
standard caused each mail boat to bring laige
quantities of bonds from Europe to the United
States, to be sold here. As a result there was in
the year 1892-93 an excess of nearly $90,000,000
of exports of gold over imports. Exports of agri-
cultural products fell oflF very largely from the
preceding year. Expenditures of the government
in two years reached an aggregate of $728,000,000,
and were crowding very close upon the total
revenue. Public confidence, always somewhat
disturbed by a change of administration, was
especially apprehensive of the tariflF changes which
would certainly occur in case the platform of the
successful party should be carried into eflFect.
It was under these circumstances that a financial
crisis occurred, which in its severity and in its para-
lyzing influence upon financial institutions has
rarely been surpassed. The gold reserve neared
the vanishing-point.

In view of the situation. President Cleveland,
June 30, 1893, issued a proclamation convening
Congress in extraordinary session. This call made
it evident that he desired the repeal of the so-called
Sherman Silver Law, and his message to Congress

888 JOHN SHERMAN

of the 8th of August confirmed that opinion. He
leferred to this Act of July 14, 1800, as **a truce
after a long struggle between the advocates of free
silver coinage and those intending to be more
conservative."

Mr. Sherman took an active part in favor of
sustaining the recommendation of the President.
He spoke, first, on the very day when the message
was received, August 8, and on several other days
of the month. Also, after the protracted debate in
the Senate, he again took a leading part in Septem-
ber and October. His speeches during this period
were a forecast of the famous campaign of 1806,
the final and decisive contest in which was settled
the question whether gold or silver should be the
monetary standard of the United States.

His most stirring speech was on the 17th of
October. The Bill had passed the House, after less
than three weeks' discussion, by more than two to
one. Then followed a succession of filibustering
tactics in the Senate which threatened absolutely
to prevent any action unless some disastrous con-
cession should be made to the silver interests. It
was at all times conceded that a majority favored a
repeal, but the question could not be brought to a
vote. On this occasion Mr. Sherman again assumed
the position of Mentor of the Senate, speaking to
Democrats in much the same manner as he had
to Republicans twenty years before, when he was
laboring for resumption. There was no longer the
same physical vigor, but there was more of impress-

SENATOR, 189^1897 389

iveness and that authority which belongs to years
of notable service. The scene was dramatic.

There is a vivid account of his speech in the
" Washington Post ** of the following day, written by
Mr. 'H. S. Canfield, a brilliant newspaper writer,
since deceased, which thus describes the event:
''The climax of the remarkable day was now at
hand. There is no man in the Senate for whom a
deeper feeling of esteem is felt than John Sherman.
He saw the Republican party bom, he has been its
soldier as well as its sage, he has sat at the council
table of Presidents. His hair is white and his
muscles have no longer the elasticity of youth,
but age has not dimmed the clearness of his intel-
lectual vision, while it has added to the wisdom of
his counsels. Upon Mr. Sherman, therefore, as he
arose, every eye was turned. Personalities were
forgotten, the bitterness of strife was laid aside.
In a picture which must live in the memory of him
who saw it, the spare and bowed form of Mr.
Sherman was the central figure. There was not
the slightest trace of feebleness in his impassioned
tones. Except once or twice, as he hesitated a
moment or two for a word to express his thought,
there was not a reminder that the brain at seventy
may be inert or the fire be dampened in the veins.

" Mr. Sherman spoke, as he himself said, neither
in reproach nor anger- It was the appealing tones
that gave his speech its power — its convincing
earnestness, its lack of rancor, its sober truth, that
gave it weight. Suffice it to say that he predicted

390 JOHN SHERMAN

that the rules would have to be changed since they
had been made the instrument of a revolutionary
minority. Never before had he seen such obstruc-
tion in the Senate, never before the Force Bill had
he known of a measure which failed, after due de-
liberation, to come to a vote. The Republicans had
remained steadfast to the President, although under
no obligation to him, and now the time had come
when the Democrats must take the responsibility.

" * They say they cannot agree. They must agree,*
thundered Mr. Sherman, drawing himself to his
full height, and pointing his quivering finger to the
Democratic side, *or else surrender their political
power!'

" Then Mr. Sherman pointed out the important
legislation that was so sadly needed, not the least
being some provision for the deficit of the govern-
ment, which, he quoted Secretary Carlisle as saying,
would be $50,000,000 this year. 'These things
cannot be evaded,' he said, while the Senate lin-
gered on his words. *We must decide this silver
question one way or the other. If you,' he added,
looking the Democrats in the face, * cannot do it,
then retire from the Senate Chamber, and we will
fix it on this side, and do the best we can with our
silver friends who belong to us, who are blood of our
blood and bone of our bone. But yours is the proper
duty, and, therefore, I beg of you, not in reproach
or anger, to perform it. You have the supreme
honor of being able to settle this question now, and
you ought to do it.'

SENATOR, 189S-1897 891

** Mr. Sherman ceased, but the thraU of his words
remained long after his venerable form had dis-
appeared. No Democrat answered him."

Finally a vote was taken in the Senate on the 80th
of October, and the Bill passed, by 43 to 32. The
Senate had made slight changes but left the Bill
in substantially its original form. It discontinued
the purchase of silver bullion, though declaring
it to be the policy of the United States to continue
the use of both gold and silver as standard money;
and also that the efforts of the government should
be directed to the establishment of such a safe
system of bimetallism as would maintain, at all
times, the equal power of every dollar coined or
issued by the United States. The Senate Amend-
ments were concurred in by the House, and the
Bill was approved by the President, November 1,
1893.

In the efforts of the President and Secretary
Carlisle to maintain the reserve for specie payments
during the trying times of 1893-94-95, Mr. Sherman
cordially cooperated to such an extent that each
was accused by members of both parties of being
too much under the influence of the other. He
emphatically maintained that the Secretary of the
Treasury had the power under the law to sell
bonds to maintain the reserve, and that Secretary
Carlisle did right in paying gold instead of silver
for United States notes when presented.

When the Wilson Tariff Bill was transmitted
from the House to the Senate Sherman attacked

99i JQHN SHERMAN

it most vigorously. When it was presented to the
Senate, with numerous amendments, he ridiculed
the changes which had been made, stating that
as it came iFrom the House it was an orderly and
symmetrical Bill, embodying the principles of the
Democratic platform of 1892, while the Senate
Bill was a material departure from those principles.
The House Bill paid especial regard to revenue
and made raw material free. The Senate Bill,
which was adopted, was strongly protective as
regards certain industries, but without any ap-
parent controlling principle. The House Bill
abolished duties upon agricultural products. The
Senate Bill restored them except upon wool. He
criticised the measure as grossly sectional, and
claimed that the minority of the Conmiittee on
Finance was not given an opportunity to present any
suggestions until a final decision had been reached
by the majority. He again prophesied that the
people of the South would change their views on
the tariff, saying that slavery had been absolutely
inconsistent with the development of manufactures,
so that it was inevitable that the protective policy
should, during the existence of that institution,
be opposed in that section. Its manufactures had
nearly quadrupled in thirty years. This develop-
ment would result in a change in their tariff views.
He was very much exercised over the abolition of
the tariff on wool, and was willing to be satisfied
with the ad valorem duty of thirty per cent, imposed
by the Walker Tariff Act of 1846. Until and after

SENATOR, 1893-1897 S9S

the Bill became a law, Sherman continued his
criticisms and prophesied its early repeal.

At this time he opposed the Income Tax, though
he did say that it was a fair and just method of
raising revenue, that he had supported it in 1871,
and would support it again if there were a necessity
for it. He contended that this was a source of
revenue which should be left to the states. He
especially opposed fixing four thousand dollars
as the minimum income which should be taxed,
saying that was a form of socialism, and that one
thousand dollars would be much more fair.

At the same session in which the Wilson-Gorman
TariflF Bill was passed, the question of the Hawaiian
Islands was before Congress. Popular s}nnpathy
was with those inhabitants who desired to dethrone
the ruling Queen and become annexed to the United
States. It was apparent that but for the action of
President Cleveland annexation would have been
accomplished. Mr. Sherman attacked the Presi-
dent upon the ground that he had assumed powers
which belonged only to Congress, and that he should
have communicated his action to the legislative
branch more fully. He even accused the President
of lack of frankness, for his action in withholding
information from Congress which should have
been given. He denied the President's right to use
military force to restore the Queen to power.

He advocated the annexation of the islands,
largely because of American interests there, and
favored making them a part of the State of Cali-

894 JOHN SHERBIAN

fomia, clearly outlining the views which he after-
wards maintained. He said: —

"But when the government d the United States under-
takes to acquire property and govern it as a territory,
it does what is not consistent with the ordinary machinery
of the Constitution of the United States. The Constitution
was not framed for dependencies; it was framed for
states.^ I trust the time is not far distant when every
portion of the territory of our country will be within the
limits of a state. I should be very glad indeed to see Utah
attached to Nevada, if the people of Nevada would con-
sent. I should be glad to see New Mexico and Arizona
united together. The Alaskan Territory ought to be
attached either to Washington or Oregon, because in that
way we could give to those people a local government,
a county government; and a county is often as independ-
ent of the state as the state is of the nation."

In the election of 1894 the trend of popular
favor towards the Republican party was very
noticeable. An overwhelming Republican majority
was elected to the House of Representatives, and
a plurality in the Senate, though a Democrat still
remained at the head of the Committee on Foreign
Relations.

The Congressional Session of 1894-95 was
singularly lacking in action upon any important
questions. The election of the preceding autumn
had shown pronounced disapproval of the party
in power. Then, too, the hopeless split in the
Democratic party upon the money question, which
first became evident during the pendency of the
< See also quotation on page 415.

SENATOR, 1893-1897 395

Act for the repeal of the SUver Purchase Law, in
1893, became more and more manifest with each
session, and led to a partial re-alignment of parties
in 1896. There was much desultory discussion but
little affirmative action upon any subject. On the
meeting of the Fifty-fourth Congress in the years
1895-96, there was much of the same disposition to
inaction, and, besides, little could be done, because,
although there was an overwhelming Republican
majority in the House of Representatives, there
was only a plurality of that party in the Senate,
with a laige preponderance of Free Silver Senators.
All parties were playing a waiting game and looking
forward to a decisive contest in the presidential
election of 1896.

The dispute between Great Britain and Venezu-
ela over the boundary-line between British Guiana
and the latter country, as well as the growing
disturbance and anarchy in Cuba, caused very
considerable excitement, and, in a measure, diverted
attention from domestic affairs. President Cleve-
land sent a message to Congress, in December, 1895,
in which he gravely contemplated the possibility
of war with Great Britain. Mr. Sherman did not
oppose the President, or criticise his message, but
he favored deliberation and the reference of a
pending Bill to the Committee on Foreign Relations
before any action should be taken. The Bill pro-
posed an appropriation for the expenses of a com-
mission to investigate and report on the true divi-
sional-line between Venezuela and British Guiana.

$90 JOHN SHERMAN

Sherman said: ''There is no huny about this mat-
ter. The controversy between Venezuela and Great
Britain will not be settled in a day, or in months.
In my judgment it will be settled peaceably by
the action of those two powers." He set forth the
Monroe Doctrine in the following language : ** The
assertion of our right to prevent European powers
from seizing any part of the American continent,
from treating America as an Africa, to be conquered
and divided among the various nations of Europe,
cannot be questioned." He did not seem to en-
tertain advanced opinions upon the Doctrine, and
appeared to regard our action toward Mexico as a
violation of it. On the following day he said : **The
Doctrine, though often stated since the time of Mr.
Monroe, has never been applied specially in any
particular case. We did not regard the Doctrine
when we invaded Mexico. After Texas had been
ceded to us we occupied great portions of Mexican
territory, including California. We ought to have
thought of it then. But still we have insisted upon
our right to protect the American nations from
European encroachment, and I believe in it as
heartily as any."

In the latter part of February, 1896, he spoke
upon a resolution which, after quoting from the
President's message a determination honestly to
fulfill eveiy international obligation, declared that
the good oflSces of the United States were recom-
mended to the favorable consideration of the Span-
ish government for the recognition of the independ-

SENATOR, 189S-18d7 3S7

ence of Cuba. He favored this resolution, and
stated that he desired to share the responsibility
for the consequences that might come from its
adoption. He said: **My convictions are strong,
made stronger eveiy day, that the condition of
affairs in Cuba is such that the intervention of the
United States must sooner or later be given, to put
an end to crimes that are almost beyond descrip-
tion." He called attention to his having intro-
duced, in 1870, a resolution to the effect that the
United States recognized the existence of a state of
war between Spain and Cuba, and that the United
States would observe strict neutrality between the
belligerent parties. He stated that President Grant
favored intervention, but was held back by the
advice of his Secretary of State, Hamilton Fish. He
made a very severe attack on Governor-General
Weyler, and ended with the declaration: "Sir,
whatever may be the result of the adoption of this
measure, I desire to take my share of responsibility
in connection with it, and with a confidence in the
judgment of the Almighty Ruler of the universe, I
believe it will be wise if we can assist, and all the
other nations of America concur, in securing to the
people of Cuba the same liberties we now enjoy."
At the same time he made this distinct declaration
against annexation: "Mark it, Mr. President, I
am not in favor of the annexation of Cuba to the
United States."

Although no financial legislation of any im-
portance was enacted during President Cleveland's

398 JOHN SHERMAN

second administFation after the Repeal Act of 1893,
financial discussions continued without end. Sher-
man stated the Republican position in some remarks,
January 3, 1896, criticising the President and the
Secretary of the Treasury. He attacked the admin-
istration on the ground that the sole cause of the dif-
ficulty was the lack of revenue, saying: **The only
difficulty in the way of an easy maintenance of our
noteis at par with coin is the fact that, during this
administration, the revenues have not been suffi-
cient to meet the expenditures authorized by Con-
gress." He again insisted on the propriety of setting
apart a specific gold reserve, for the maintenance of
specie payments, or segregating this reserve fund
from the general balance, and called attention to
his recommendation* of such action while Secretary
of the Treasury, on the 6th of December, 1980.

Two bills had passed the House of Representa-
tives, one providing for a horizontal increase in
duties, the other for the issuance of a three per cent,
gold bond to be disposed of instead of the much
more unfavorable issues which could be sold for
maintenance of the gold reserve. The pendency of
measures intended to relieve the Tl^asury Depart-
ment from serious embarrassment was taken advan-
tage of by the advocates of free silver. They did not,
in this case, merely amend the bills by an addition,
or by striking out something, but, in the one provid-
ing for an increase of duties, struck out all after the
enacting clause, and substituted a provision f6r the
unlimited free coinage of silver at the ratio of sixteen

SENATOR, 18dS-1897 899

to one. In the discussion of this measure, on Febru-
ary 25, Sherman strongly supported the President,
and declined to discuss the silver question, tri-
umphantly calling attention to the immense major-
ities which the opponents of silver had received at
the preceding election, in the autumn of 1894.

A startling proposition was discussed in the
Senate in May, 1896, the purpose of which was to
forbid the issuance of bonds for the maintenance of
the reserve for specie payments. This would operate
as a practical repeal of the Resumption Law. He
spoke in the strongest terms against this measure,
saying its passage would be a crime, but expressing
his gratification that the House of Representatives
would still stand on the right side, and the President
would aid the House. He said: "'I denounce it as
a repudiation. It is as bad as if we should pass
an act that we will not pay the public debt. . . .
It was supposed that this Senate would be the con-
servative check upon a numerous and tempestuous
body of Representatives, and prevent unwise and
hasty legislation; and yet we here, the part of the
government of the United States which it was
thought could be most safely relied upon, violate
the most sacred contracts made by the people of the
United States."

At the end of the year 1895 his book, in two large
volumes, was published, entitled ** John Sherman's
Recollections of Forty Years in the House, Senate,
and Cabinet." In that year he spent the major
part of the congressional vacation, between March 4

400 JOHN SHERMAN

and the session ttt the beginning of December, in
the preparation of this work. It had been his first
intention to publish a compilation of his speeches;
later he thought of preparing a financial histoiy of
the United States during the period of his public
life, but afterwards he concluded to write a com-
prehensive account of his life and times. The vol-
umes were prepared with a degree of haste so great
as to make it surprising that they are so free from
inaccuracies as they are. They give a very clear
portrayal of his life, his views upon public ques-
tions, his associations, his triumphs, and his disap-
pointments. He gives the frankest expression to his
thoughts in regard to the men and events of his day,
and, while guarded in speaking of those with whom
he had come in collision, he, in occasional instances,
visits unsparing censure upon some of his contempo-
raries.

For some time prior to the National Republican
Convention of 1896 he was eagerly interested in the
nomination of Mr. McKinley for the presidency,
and displayed his old-time political skill in promot-
ing his chances. The campaign of 1896 was one of
the most hotly contested, and yet one of the most
satisfactory, in the histoiy of American politics.
It was, in a preeminent sense, a campaign of educa-
tion, and manifested the disposition of the voters
in an election campaign to become absorbingly
interested in one clearly defined issue, to which they
attach supreme importance. At such a time the
probabilities of a wise decision at the polls are

SENATOR, 1898-1897 401

greatly increased. After the elections of 1894, and
indeed after those of 1893, it had been confidently
expected that a Republican President would be
chosen in 1896. Commercial and industrial condi-
tions were veiy unfavorable. Agricultural interests
also suffered very severely. All these facts gave
popular force to the demand for a change. Gov-
ernor McKinley was nominated in June, 1896,
and Mr. Bryan in July. Up to this time it had
been expected that the tariff and other questions,
upon which party lines were drawn in 1892, would
be the contested issues in the campaign, but the
Democratic Convention, held at Chicago, dispelled
this expectation. The convention repudiated Mr.
Cleveland and his administration by refusing to
pass a resolution of indorsement, and in its plat-
form, and by the utterances of its candidate, pro-
claimed free and unlimited coinage of silver at six-
teen to one as the leading issue. This unexpected
change of front greatly increased at first the chances
of Democratic success. While the change was
accepted by many as a virtual confession that the
political policies which had dominated the Demo-
cratic party for years preceding were of doubtful
expediency, yet others believed that in the unlim-
ited use of silver a remedy would be found for the
low prices, lack of employment, and business stag-
nation which existed. It was a frequent remark that
anything would be better than the existing hard
times, and we had best try free silver. Thus, the
line of division between the two parties was very

402 JOHN SHERMAN

materially changed. If a vote had been taken in Au-
gust or September of 1896, it is probable that Mr.
Bryan would have been elected by a considerable
majority, as his pleasing personality and aggressive
methods of campaigning gave him great strength
as a candidate; but in time the question of silver
was more thoroughly understood. An unusual
amount of financial literature, of a superficial but
taking quality, had been in circulation for years,
which gave the advocates of free coinage an advan-
tage in the early part of the campaign, but the
electorate pondered upon the question as never
before on a financial subject. The hoax of the
" Crime of '73 '* was exploded. The very novel cam-
paign of Mr. Bryan lost a measure of its attractive-
ness. In addition, there was some faint glimmering
of improvement in industrial and commercial con-
ditions, although the activity of business com-
munities was largely suspended, and an eager
interest in politics was taken by thousands of men
who had given only passing notice to previous
election campaigns.

Governor McKinley showed remarkable poise,
and, by his many utterances from the porch of his
home at Canton, he contributed to the success of
the campaign. His words were always calm and
patriotic, but showed qualities of leadership and
a dispassionate consideration of pending issues
which greatly increased the confidence of the people.
The fear that his absorbing interest in tariff had
left him no time for profound consideration of other

SENATOR, 189S-1897 408

topics was dispelled by the clearness and courage
of his utterances upon public questions. No candi-
date with a long record of speeches upon policies
in dispute had awakened less animosity by his
views. The exemplary record of his domestic life
and his attractive personal qualities drew many
to him. The result was the election of Mr.
McKinley, who received in the Northern States,
east of Ohio, unprecedented Republican majorities.
Senator Sherman took a less active part in this
campaign than usual, rather by reason of the
limitations of age than for lack of interest, he
now being seventy-three years old. He spoke at
the formal opening of the Ohio campaign, at Colum-
bus, on the 15th of August, 1896. On this occasion
he pursued the course of reading from manuscript,
setting forth his views on silver at very considerable
length, as well as touching upon the tariff and all
great pending questions. There was little that
was new in this address, although it showed all
the forcefulness of statement which had character-
ized his preceding years. Occasional failure of
memory became apparent for the first time during
this campaign. There was an absence of that
accuracy in the marshaling of facts and figures
which had characterized him in previous years.
At the same time his mental grasp had not seriously
slackened, and it is probable that if Mr. Sherman
had remained in the Senate, where he was accus-
tomed to the methods employed in the transaction
of business, and where a certain consideration

404 JOHN SHERMAN

would have been shown for any infirmity due to
advanced years, there would have been no serious
handicap upon his usefulness until the end.

It was the earnest desire of Mr. McKinley and
of Mr. Hanna, the latter of whom had been
among Mr. Sherman's strongest friends in all his
political aspirations, and had been his manager
at the Republican National Convention in 1888,
that he should take the position of Secretary of
State in the new Cabinet. He was extremely re-
luctant to leave the Senate, but in accepting a posi-
tion in the Cabinet he was influienced both by his
desire to meet the wishes of his closest friends, and
by a feeling that the preference 6f the President-elect
should be respected. On the 15th of January, 1897,
Mr. Sherman conferred with Mr. McKinley at
Canton, and it was agreed that he should assume
the position.

His participation in legislation during the last
session of the Fifty-fourth Congress was materially
lessened by his contemplated membership in the
Cabinet, which not only occupied his time, but
imposed an especial responsibility and hampered
his freedom. After the public announcement of
his selection as Secretary of State, he avoided
as far as possible participating in the debates
in the Senate upon questions involving foreign
relations. Ineffectual discussions occurred upon
questions of revenue and of currency, but there
was a disposition to postpone everything until
the following administration. Two questions were

SENATOR, 1893-1897 405

discussed, however, of very considerable .import-
ance, on which it was necessary for him to express
an opinion. One was upon a proposed arbitra-
tion treaty with Great Britain; the other upon
the construction of the Nicaraguan Canal.

The arbitration treaty had been the subject of
correspondence in the spring of 1895, and was again
considered at the time of the Venezuelan boundary
dispute. Lord Salisbury, the English Prime Minis-
ter, was not altogether friendly to a general arbi-
tration treaty. He proposed excluding from the
scope of propased arbitration disputes which in-
volved national honor and integrity, suggesting
practically the exceptions which have since been
reserved in several arbitration treaties recently
negotiated between different nations of Europe.
By the terms of the treaty, which was signed and
transmitted to the Senate on the 11th of January,
1897, provision was made that pecuniary claims
were to be decided by tribunals composed of three
or five arbitrators, the number depending upon
the amount of the claim; an equal number of
arbitrators were to be jurists of repute, to be chosen
by each of the contracting parties; the third or
fifth was to be chosen by those so selected. The
claims were to be decided by a majority. But con-
troversies involving the determination of territorial
claims were to be submitted to six persons holding
judicial positions, three to be selected by each of
the contending parties, and their decisions were
not to be binding unless five of the six arbitrators

406 JOHN SHERMAN

should concur in the award, though there was to be
no recourse to hostile measures until the mediation
of one or more friendly powers had been invited.

Some senators denied the validity of such a
treaty on the ground that it would eliminate the
action of the Senate in the ratification of agreements
with foreign nations. Among several amendments
proposed was one limiting the questions to be
decided by arbitration to those submitted by a
vote of the Senate. Objection was made to the
appointment of judges as arbitrators, because they
might have expressed judicial opinions on questions
propounded to them. Another amendment was
adopted in the Senate that any differences which,
in the judgment of either party, materially affected
its honor, or its domestic or foreign policy, should
not be referred to arbitration. This left so wide
a range of subjects outside the proposed submission
that, in a time of great excitement such as might
arise from a collision of interests, the good effects
of any treaty would be practically nullified. In its
original form the treaty had provided for the sub-
mission of all controversies, but with a vital differ-
ence in regard to the decision by the judges. In
one case a majority might decide, and in the other
it must be five to one. The vote for ratification was
43 to 26, less than the requisite two thirds.

A Bill was brought forward by Senator Morgan
favoring a guarantee of bonds of the Maritime
Canal Company of Nicaragua. Mr. Sherman took
part in the discussion, saying: "I have always

SENATOR, 1893-1897 407

believed, and still believe, that the only way by
which the Nicaraguan Canal could be built was
by the action and credit and power of the govern-
ment of the United States." He vigorously opposed
the pending proposition, again referring to the
treaty prepared during President Arthur's ad-
ministration, twelve years before, and saying that
if, instead of having been withdrawn by Cleveland,
it had been ratified, the canal might already have
been completed. It was stated during the discus-
sion that about $4,500,000 had been expended by
the company and that it was unable to borrow any
more money. He expressed the opinion that the
canal could never be built by a corporation, how-
ever strong and powerful it might be, and called
attention to the Suez, which was constructed by
the contributions of the people of several nations,
among them France and Great Britain.

A closely related question, that of the binding
effect of the Clayton-Bulwer Treaty, was discussed
in the month of February, 1897. This treaty had
usually been considered as an obstacle to under-
taking the construction of the canal, without the
consent or cooperation of Great Britain. A joint
resolution was introduced by Senator Morgan,
declaring this treaty, which was concluded on the
19th of April, 1850, to be abrogated. Mr. Sherman
objected to the consideration of this resolution and
it was decided to take up the question in the privacy
of an executive session, where, after debate, it was
referred to the Conunittee on Foreign Relations.

408 JOHN SHERMAN

It is known, however, that Mr. Sherman opposed
the declaration of abrogation.

His very last utterance in the Senate, February
26, 1897, was called out by a discussion in regard to
one Julio Sanguily, a naturalized American citizen,
who had been seized by the Spanish authorities at
Havana and imprisoned. A resolution was offered
demanding his immediate release, and suitable
compensation. Such was the temper of the time
that this was an extremely popular proposition, but
it was within less than a week of the closing of the
Fifty-fourth Congress, and it was earnestly desired
that appropriation bills should be disposed of.
Under these circumstances the accusation was
made against Mr. Sherman that, in favoring the
adoption of the resolution, he was obstructing the
passage of appropriation bills. This he disclaimed,
and in reply made the last utterance of his legis-
lative career, saying: "I am opposed to wrong
and violence and tyranny, wherever it is exercised,
and, when it is inflicted upon a citizen of the United
States, I will stand by him, if I am alone."

xvn

SECRETARY OF STATE. — HIS LAST DATS

The period of Mr. Sherman's service as Secretary
of State, from March 5, 1897, to April 27, 1898,
was an extremely important one in our diplomatic
relations.

An important negotiation was that for the annex-
ation of the Hawaiian Islands. In January, 1893,
the monarchical government in these islands had
been overthrown, and a provisional government
established which sought annexation to the United
States. President Cleveland, however, who was
inaugurated on the 4th of March, thought there had
been a violation of neutrality. He believed that
the marines and sailors of the U. S. S. Boston had
landed, not merely for the protection of American
property and the prevention of incendiarism, but
with a view to a change in the government. A
treaty had been framed at Washington and sent
to the Senate for ratification before the close of
President Harrison's term. President Cleveland
withdrew the treaty and made overtures for the
restoration of the monarchy, but these were re-
jected, and the provisional government remained
in power. It was his declaration that the Queen sur-
rendered, not to the provisional government, but to

410 JOHN SHERMAN

the United States; not absolutely and permanently,
but temporarily and conditionally, until such time as
the facts could be considered in the United States.

In February, 1894, the House of Representatives
approved the action of the President, declaring
that annexation was uncalled for and inexpedient
and <;ondemning the action of the Minister to
Hawaii in directing the employment of United
States naval forces. Contrary action was taken in
the Senate, however, where a resolution against
the policy of annexation was indefinitely postponed,
and a resolution recognizing the right of the island-
ers to establish their own form of government, and
against allowing interference on the part of foreign
countries, was adopted.

A Republic with d form of government similar
to ours was proclaimed on the fourth of July, 1894.
This Republic was recognized by foreign powers.
It steadfastly adhered to the policy of seeking
annexation to the United States, although an oppo-
sition party developed. In February, 1897, the
attorney-general for the islands came to Washing-
ton to open negotiations for a new treaty of annexa-
tion, and on June 16, after the inauguration of
President McKinley, Secretary Sherman signed
such a treaty on behalf of the United States. Less
than two thirds of the members of the Senate
favored this treaty, and thus it was not ratified,
but the islands were finally annexed to the United
States by a joint resolution approved by the Presi-
dent on July 7, 1898.

SECRETARY OF STATE 411

There was the ever-present ground for contro-
versy with Spain over conditions in Cuba. What-
ever he may have said in the Senate, Mr. Sherman
labored with earnestness, from the very beginning
of his incumbency in the State Department, to
establish conditions in Cuba which would secure
the people of the island in their rights, and be satis-
factory to the United States, without a collision
with Spain. In this he cooperated witii President
McKinley, and after he left the Cabinet he fre-
quently expressed the opinion that if he could have
continued those negotiations, war might have been
averted.

While sympathy for Cuba had aroused in the
United States the most bitter animosity against
the Spanish government, it must be conceded that
the situation of Spain was a most delicate one.
That country had discovered the new world, and,
as a result, had laid claim to a whole hemisphere,
more than half of which it had possessed for three
centuries; but now, of this vast colonial empire
only two islands in the West Indies remained. The
Ministry which would abandon these without a
struggle would be hurled from power in disgrace.
It was preeminently a case in which a stronger
nation might well be considerate of a weaker.
Yet every narrative of Spanish misrule or outrage
in Cuba added fuel to the flame of indignation,
and, besides, important interests of the United
States were grievously injured by the intolerable
conditions there. No subject was more discussed

412 JOHN SHERMAN

in G>ngress, nor was there greater interest In any
topic among the public at large. Resolutions for
recognition of belligerency were frequently intro-
duced, also resolutions for intervention. In Sep-
tember cS 1897 Minister Woodford notified the
Spanish government that rec(^nition of Cuban
belligerency was demanded in the United States.
A measure of local government was given to Cuba
by Spain, but the unrest and turmoil still continued.
The concentration of inhabitants of the island in
towns where they were unable to obtain suitable
habitations, or the means of support, and were even
in a starving condition, did much to arouse popular
feeling in the United States.

It is nevertheless possible that peace might have
been obtained had it not been for the blowing-up
of the United States Battleship Maine, in the
harbor of Havana, on the 15th of Februaiy, 1898.
On a subsequent investigation a report was made
by naval officers of the United States that the ship
was destroyed by a submarine mine which caused
the partial explosion of two or more of the maga-
zines. Though no evidence was obtained fixing
the responsibility, and it is altogether improbable
that any Spanish official of prominence directed
the destruction of the ship, nevertheless, it was
believed that the mine must have been located and
fired by Spaniards, and that the act was prompted
by ill will towards the government and people of the
United States.

In surveying the long months of tension arising

SECRETARY OF STATE 41S

from the feeling against Spain* it is easy to realiae
how difficult it was, after this tragic denouement,
to avoid war. Soon after, Congress voted $50,000,-
000, to be used by the President under his abso-
lute discretion for the national defense, but evi-
dently with a view to preparing for war and waging
it. On the 11th of April, 1898, the President noti-
fied Congress that all his efforts to obtain satisfaction
from Spain had failed. Congress passed, and the
President on the 20th of April, 1898, approved,
resolutions of intervention, declaring that Cuba
should be independent, and directing the use of
the military and naval forces of the United States
to carry the resolutions into e£Pect. A formal de-
claration of war soon followed, and, on the 23d
of April, a call for one hundred and twenty-five
thousand men.

By this time the position of Secretary Sherman
in the Cabinet had become unbearable. Mr.
William R. Day, an intimate personal friend of
President McKinley, since appointed to the Su-
preme Court of the United States, had been chosen
as Assistant Secretary of State, in May, 1897, and
it soon became apparent that President McEIinley
relied upon him for the management of affairs in
the State Department. The unusual course was
adopted of inviting an Assistant Secretary to attend
the meetings of the Cabinet for the purpose of
discussing the question which at that time was of
the most absorbing interest to the whole nation.
Mr. Sherman was not slow to observe this, and.

414 JOHN SHERMAN

in a measure, resented it. On the 25th of April,
two days after the call for troops, he resigned his
position as Secretary of State, and, on the 27th,
vacated the office.

His abandonment of the office was inevitable,
on two grounds. In the first place his health had
so failed that it was impossible for him to manage
this great department, in this tiying emei^ncy,
with sufficient vigor. He had become foi^tful,
and in many important matters of detail his lack
of memoiy threatened complications in relations
with the ambassadors of other nations. So com-
plete was his failure of memory that he sometimes
failed to recognize old acquaintances. On one
occasion two Senators, who had been his colleagues
in the Senate, called upon him, presenting a citizen
of their state for a diplomatic position. Secretary
Sherman was very considerably interested, but in
a brief time it appeared that he was addressing one
of the two Senators who had been his colleagues
as the applicant, showing an entire forgetfulness of
a man with whom he had associated for two years
in the Senate.

A second reason was a difference of opinion as
to the proper policy to adopt. Whatever he may
have said in earlier years in the Senate, he was now
unalterably of the opinion that it was not a desirable
policy for the United States to annex outlying
territory. In his " Recollections," written in 1895, he
had said at the very close of the book : " The events
pf the future are beyond the vision of mankind.

fflS LAST DAYS 415

but I hope that our people will be Content with
internal growth, and avoid the complications of
foreign acquisitions. Our family of states is al-
ready large enough to create embarrassment in
the Senate, and a republic should not hold de-
pendent provinces or possessions. Every new
acquisition will create embarrassments. Canada
and Mexico, as independent republics, will be more
valuable to the United States than if carved into
additional states. The Union already embraces
discordant elements enough without adding others.
If my life is prolonged I will do all I can to add
to the strength and prosperity of the United States,
but nothing to extend its limits or to add new
dangers by acquisition of foreign territory." In
view of this declaration, naturally his every eflFort
was exerted to avoid war with Spain, especially
since such a war was at that time considered as
a prelude to the annexation of Cuba. It cannot be
denied, however, that he left the Cabinet with
a degree of bitterness toward President McKinley,
more by reason of his practical supersession than
for any other reason; but also with a belief that
he had been transferred to the Cabinet to make
room for another in the Senate.

The remaining years of his life were years of
sadness. It is not diflScult to realize that a man
who, for forty-three years, had been absorbingly
occupied in public affairs, and had come to regard
himself as identified with the government of the
country, should feel entirely lost when outside of

416 JOHN SHERMAN

oflfonal gtation. HI health and weakness were
creeping upon him, but his chief misfortune was
his absence from the pursuits which had been his
very life. It was believed that he cherished a bitter
feeling because of his withdrawal from the Cabinet,
and numerous interviews and utterances of his
appeared, some of which were no doubt genuine,
in which he attacked the policy of the administra-
tion. At the request of the Anti-Imperialist League
he furnished a clear and aigumentative statement
against the annexation of the Philippines, which
showed that, however lacking his faculties might
be in some directions, he still retained remarkable
vigor of thought and expression. The sadness of
his situation was very much aggravated by the
failure of his wife's health. She was stricken with
paralysis in the autumn of the year 1898, not long
after the fiftieth anniversary of their marriage, but
lingered until the 5th of June, 1900.

Mr. Sherman alternated between Mansfield and
Washington. To place a quietus upon one of the
rumors of his opposition to the Republican party,
and numerous reports that he would take a part
in Ohio politics against the President, he sent a
letter, in which he strongly supported the Repub-
lican candidate. Judge Nash, for governor, in the
year 1899.

In March of that year he took a trip to the West
Indies, during which he was taken seriously iU at
San Juan, Porto Rico, and later suffered a relapse.
An untrue report of his death was sent to the United

HIS LAST DAYS 417

States. A government steamer was assigned for his
use, which landed him at Fortress Monroe not long
after.

Several months after the death of Mrs. Sherman
he returned to Washington, very much shattered,
both in mind and body. In taking his last glimpse
of Mansfield he seemed bewildered about the place
to which he was going, and even asked : ** Where
are they going to take me ? "

Soon after his return it was evident that his life
was fast ebbing away. He was confined to his bed,
and was, for most of the time, unconscious. When
some of his near relatives and friends had gathered
in his house, in the last hours, he raised his head,
and, seizing the hand of his adopted daughter, Mrs.
McCallum, said: "There are some friends in the
house, are there not ? " She responded in the affirm-
ative. He then said: "You must show them
hospitality." These were his last words, and on the
following morning, Tuesday, October 22, 1900, he
passed away.

President McKinley issued a proclamation
eulogizing his character and his * distinguished
public services, and directing that the flags upon
the public buildings at the capital be placed at
half-mast, and that in like manner tribute be paid
to his memory, for ten days, by the representatives
of the United States in foreign countries. Com-
memorative services were held at his residence in
Washington, after which there were funeral serv-
ices at Mansfield, at which place he was buried.

XVIII

8X7MMABY AND CONCLI7BION

The political and financial hirtoiy of the United
States, from 1855 to 1898, the period of Mr. Slier-
man's active participation in public life, is charac-
terized by a record of events which in importance
is not surpassed by that of any equal period in the
lustoiy of any nation. In neariy all of these events
he had part; in veiy many he was prominent, and
in a considerable number he was the central figure.
So closely was he associated with the stirring
scenes and the remarkably progressive movements
of this time that his biography is virtually a hist(»y
of his country during these forty-three years.

No man was more closely associated vrith the
great material growth which was a leading feature
of the last half -century. He was at the very fore-
front in the financial and industrial achievements
of his day. He reveled in trade and census statis-
tics which showed the increasing prosperity of the
country and promised for it an unchallenged
supremacy. In his earlier years he had visited
prairies and plains which were as unoccupied as
mere desert wastes. It gave him supreme satis-
faction to see them in later years, and to view the

SUMMARY AND CONCLUSION 419

prosperous cities which had arisen under the magic
touch of American enterprise.

His part in public affairs commenced with the
anti-slavery agitation. This was followed by the
great excitement and strain of the Civil War, in
which the public men of the United States were com-
pelled to face problems rarely imposed upon states-
men of any nation, and their capabilities tried to
the utmost. Then followed the difficult period of
political reconstruction and material reparation.
Later still, came the financial and commercial
revolution which was a distinguishing feature of
the last thirty years of the nineteenth centuiy.

Sherman was naturally conservative in his views
upon public questions. At the very outset of his
political career he was criticised by the radical
anti-slaveiy advocates. He was not among the
eariier advocates of emancipation during the Civil
War. He was at first opposed to granting the right
of suffrage to the colored race. Yet he became an
intense partisan, and adhered to the measures and
policies of his party with unswerving tenacity.
He could not well have been anything else. Our
judgment of men must be determined, not by any
ideal standard, but by the epoch in which they
live, and by their environment.

He was first elected at a time when the moral
sentiment of the country was intensely aroused.
The very first session of his legislative career saw
him in the midst of a reign of terror in Kansas,
where an effort was made by brute force and by

420 JOHN SHERMAN

devious means to defeat the will of the citizens of
a territory which was soon to become a great state.
He was threatened with personal assault and vio-
lence on the floor of the House, and had been com-
pelled at one time to carry a weapon, in order that
he might feel safe from the attack of a fellow mem-
ber whose animosity against him was aroused
solely by his political principles. He was defeated
for Speaker when he felt himself most justly entitled
to the position, and that by a species of opposition
which left with him a legacy of bitterness, not
merely political but personal as well. In the years
following the Civil War it was believed for a long
time that the restoration of the opposing party
would mean the annulment of the results of the
conflict. Contests were close. His prominence
subjected him to accusations of official dishonesty.
Political opponents thought there was no surer
way to overthrow a contending candidate than by
accusations of this kind. It is not probable that
similar methods for securing political advantage
will ever be entirely done away with in the Re-
public, but it is to our credit that there has been
great improvement, especially within the past
decade.

The charge of inconsistency has been frequently
made against him, a charge which is undoubtedly
sustained by his numerous changes of opinion.
His views upon the tariff are the most satisfactory
to one who in a survey of his life is anxious to find
a public man consistent in his ideas. On many

SUMMARY AND CONCLUSION 421

other subjects he on various occasions advocated
policies widely different. In taxation he favored
an income tax, in the earlier seventies, and opposed
it in 1894. As regards the greenbacks,he regarded
them as a temporary measure when he first voted
for them in 1862; later he said they would disappear
with the end of the war; but at a subsequent time
he came to believe in them as a permanent por-
tion of our currency, and retained that belief until
the end of his life. It is evident that he thought
lightly of consistency, regarding it as a jewel pre-
cious because of its rarity rather than for its intrinsic
worth or its importance as a rule of conduct.

His changes of attitude were not in all instances
free from apparent regard for political expediency.
At the same time they were too numerous, too
frankly avowed, and so often divorced from con-
siderations of personal advantage that no adequate
explanation can be given except that they were due
to a habit of his mind. He did not always change
his tack with changes of the tide. He was constantly
giving heed to the despotic power of public opinion,
but his advocacy of policies was often most persist-
ent, and, indeed, obstinate, in cases in which he
incurred strong opposition and obloquy, by reason
of the alteration of his views; or in which he was
thoroughly aware that he was going counter to the
opinions of a majority of his countrymen. His
courage and his patriotism appear in the strongest
light in numerous instances in which he was willing
to appeal to the future and disregard the clamor

4Sti JOHN SHERMAN

of the passing moment. After his own state had
voted by more than fifty thousand nm jority against
negro suffrage, he courageously advocated the
Fifteenth Amendment, although he had been loath
to favor it at an earlier time. His arguments for
sound money and for financial honor and credit
were strongest and most earnest when the senti-
ment in his state and in the country was manifest-
ing itself most forcibly for inflation, or depreciation
of the monetary standard.

In many instances his changes of opinion would
seem to be the result of inadvertence or foigetful-
•ness. In a long career covering forty-three years,
most of which was in a legislative body, where his
utterances would fill a great many volumes, and
during which his views were expressed on a greater
variety of subjects than by almost any of our
public men, it is not improbable that some expres-
sions were hastily given, without reflection, or as
soon forgotten as spoken. In 1888 he spoke in
favor of erecting a public building in every town
of four or five thousand inhabitants, and in 1892
he said that it was not best to construct any such
building in a town of less than ten thousand inhab-
itants, because, in the smaller towns, it would be
more profitable to rent than to build. There are
very many instances, however, in which the differ-
ence in his utterances cannot be ascribed to for-
getfulness. When he was straining every effort to
aid in the funding of the national indebtedness at a
lowei rate of interest, he demanded that the national.

SUMMARY AND CONCLUSION 423

banks should take, as a basis for their circulation,
large amounts of bonds at the minimum rate of
interest provided in a proposed issue, and that a
law should be passed to that effect. Some years
after, although fully aware of the line of argument
which he had adopted at an eaiiier time, and con-
fronted with his former words, he strenuously
opposed the imposition of a similar requirement,
saying that it was unjust to the banks, and a re-
proach upon the credit of the government.

At times his views were changed only when he
became convinced that an overwhelming majority
of his constituents had come to think differently
from him. His life was contemporaneous with a
transition period in the relation between the people
and public men. The situation in which party
followers waited for the views of their leaders, as
in the days of Jackson, Clay, Calhoun, and Webster,
gave place to one in which the individual citizen
asserted himself more prominently. The initiative
in great public movements, in a much greater
degree, began with the people themselves. He at
first opposed larger pensions for soldiers, but later
yielded to the popular demand for them. Like
many other public men who had gone through the
stirring scenes of the war, he was unwilling to oppose
the most generous provision for the volunteer
soldiers who had answered the call to arms.

His first impulses on almost every question were
actuated in great degree by a desire for economy
in the management of the public purse. This atti*

434 JOHN SHERMAN

tude he was unwilling to yield until he became
convinced that general opinion was permanently
fixed in favor of more generous expenditure. In
some instances, such as in his occasional expressions
of willingness to see the bonds, issued during the
Civil War, paid in greenbacks, he was clearly
actuated by a desire to obtain the most favorable
bargain for the government possible, a disposition
which was as constant with him as his desire to
obtain favorable bargains in his private business
transactions. He was exceedingly anxious to relieve
the country as far as possible from the almost
overwhelming load of debt which had been incurred
in the Civil War.

It has been said that Mr. Sherman was a cold
man. This accusation is always made against those
who do not love greetings in the market-place, or
whose habits are those of men constantly and
intensely devoted to their work. He was a model
man in his family; an affectionate husband; kind
and forbearing in all the relations of life. He was
not only thoughtful, but affectionate, and at times
jovial. When he went outside the circle of his
immediate friends, however, he was in a degree
reserved; not given at any time to enthusiastic
praise; absolutely lacking in anything like gush
or sudden impulse; but always dignified, appre-
ciative of his friends, and, though remembering
his foes, not vindictive.

His public utterances have certain well-defined
characteristics. They abound in facts and figures.

SUMMARY AND CONCLUSION 485

He never aimed to be ornate. In his eariy career.
Chase, on one occasion, had advised him to add
something in the way of a peroration, but he con-
cluded not to do so. Occasionally, however, as at
the dedication of the Washington Monument, and
at the later meeting of the Sons of the American
Revolution, at the base of the Monument, on the
Fourth of July, 1894, he expressed himself in flowery
language, and with the usual elation over the
triumphs of American institutions. He was master
of a concise style. His sentences were at the same
time readily understood — comparatively short,
and especially striking in that they were compre-
hensive and covered all the different phases of the
subject in very brief compass.

He had the power of intense concentration.
When engaged in reading or writing he was ob-
livious to his surroundings and hardly noticed the
presence of any one. In preparing an elaborate
address he usually drew first an outline in his own
handwriting; then dictated something to be written
out in a manner which would leave ample space
for interlineation. To this first draft he added
much, and then made material changes in the
second draft before speaking. In a majority of
cases, however, in which he addressed the Senate,
his remarks were extemporaneous. He always
understood where to find material in the way of
information and statistics for his speeches, and
rarely called upon others for references or any
form of assistance.

4M JOHN SHERMAN

He was not without literaiy tasle. In the mass
of his correspondencey there may be found a letter
expresmig regret because of his inability to attend
the centennial celebration of the birthday of Thomas
Moore. Of Moore and of the Irish peojde he wrote:

''Death has made for him, as it often does for men of
genius, a second fame more splendid than the renown of
his lifetime. His various literary productions, the bright
satire, the poetry on Oriental tli^mes, exquisite prose,
romance like the 'Epicurean,' witty epistle, neat epigram,
biography like that of Byron, the copious annals of his
country — they all hold, and will continue to hold their
honorable place in literature; but these are secondary to
his matchless Irish melodies, interwoven by the poet witb
the beautiful airs of his country. These songs can never
be heard without enthusiasm. They have an ever-varying
chaim, and, whether mournful or gay, they breathe the
wild sweetness of the Irish harp, and all the hope and
grief of Irish national life. The legend and landscape, the
picturesque history, the poetic national traits, ibe ro-
mance of the past, the courage, the chivalrous homage to
beauty, the frolic levity, conviviality, joy, anguish, love
of country, fiery sorrow under subjugation, the passion for
national independence without which there is no great-
ness in a poetry or a people — all that is most Irish is
contained in these melodies.

We are French when we read Victor Hugo; Walter
Scott makes Scotchmen of us all, and we are made Irish-
men by the magic of Moore's melodies. These songs have
naturalized us. They have made the poetic vision of
Ireland to fill every heart with sympathy and respect.
Emmet has his wish, — in another, perhaps a better,
sense than he meant, — his country takes her place high
and abiding among the nations of the earth in the genius
of her sons, among whom Thomas Moore wiU always
hold a supreme place."

SUMMARY AND CONCLUSION 4«7

There can be no more fitting eulogy upon him
than that expressed by President Garfield, in 1880»
in his speech at Chicago nominating Mr. Sherman
for the presidency:

" You ask for his monument. I point you to twenty-five
years of national statutes. Not one great, beneficent law
has been placed on our statute-books without his intelli-
gent and powerful aid. He aided in fonnulating the laws
to raise the great armies and navies which carried us
through the war. His hand was seen in the workmanship
of those statutes that restored and brou^t back ' the
unity and married calm of the states.' His hand was in
all that great legislation that created the war currency,
and in the still greater work that redeemed the promises
of the govenunent and made the currency equal to gold.
When at last he passed from the halls of legislation into
a high executive office, he displayed that experience,
intelligence, fimmess, and poise of character which have
carried us through a stormy period of three years, with
one half the public press crying ' Crucify him,' and a
hostile Congress seeking to prevent success. In all this
he remained unmoved until victoiy crowned him. The
great fiscal affairs of the nation, and the vast business
interests of the country, he guarded and preserved while
executing the law of resumption, and effected its object
without a jar, and against the false prophecies of one
half of the press and of all the Democratic party. He
has shown himself able to meet with calmness the
great emergencies of the government. For twenty-five
years he has trodden the perilous heights of public
duty, and against all the shafts of malice has borne his
breast unharmed. He has stood in the blaze of
' that fierce light that beats against the throne ;' but its
fiercest ray has found no flaw in his armor, no stain
upon his ^eld."

428 JOHN SHERMAN

One of the most discriminating tributes to his
memory was that of his colleague, Senator Hoar:

"It is rarely more than onoe or twice in a generation
that a great figure passes from the earth who seems the
very embodiment of the character and temper of his
time. Such men are not always those who have held the
highest places or been famous for great genius or even
enjoyed great popularity. They rather are men who
represent the limitations as well as the accomplishments
of the people around them. They know what the people
will bear. They utter the best thought which their countiy-
men in their time are able to reach. They are by no means
mere thermometers. They do not rise and fall with the
temperature about them. But they are powerful and
prevailing forces, with a sound judgment and practical
common sense that understands just how high the people
can be lifted, and where the man who is looking, not
chiefly at the future, but largely to see what is the best
thing that can be done in the present, should desist from
unavailing effort. Such a man was John Sherman. . . .

" He filled always the highest places. He sat at the seat
of power. His countrymen always listened for his voice,
and frequently listened for his voice more eagerly than
for that of any other man. . . . The contest [i. e., for
Speaker] left him the single preeminent figure in the
House of Representatives — a preeminence which he
maintained in his long service in the Senate, in the
Treasury, and down to within a few years of his death.

" He was a man of inflexible honesty, inflexible courage,
inflexible love of country. He was never a man of great
eloquence, or greatly marked by that indefinable quality
called genius. But in him sound judgment and common
sense, better than genius, better than eloquence, always
prevailed, and sometimes seemed to rise to sublimity>
which genius never attains. . . .

*'Mr. Sherman's great fame, and the title to hiscoun-

SUMMARY AND CONCLUSION 409

trymen's remembrance which will most distinguish him
from other men of his time, will rest upon his service as a
financier. He bowed a little to the popular storm in the
time of fiat money. Perhaps if he had not bowed a little
he would have been uprooted and the party which would
have paid our national debt in fiat money would have
succeeded. But ever since that time he has been an oak
and not a willow. The resumption of specie payments
and the establishment of the gold standard, the two great
financial achievements of our time, are largely due to his
powerful, persistent, and most effective advocacy."

The fame of any great man is in a measure
ephemeral. It is true that there was much that was
prosaic in the life of Sherman, and that his best
efforts were not connected with that glamour which
gains the loudest applause; but in substantial
influence upon those characteristic features which
have made this country what it is, and in the un-
recognized but permanent results of eflScient and
patriotic service for its best interests, there are
few for whom a more beneficial record can be
claimed. He will stand in history as a character-
istic American; as a man of untiring industry and
absorbing ambition for the public good; and as
the country shall more and more assume a leading
position in all the elements which tend to give
primacy in modem progress, his work will deserve
and obtain increased appreciation.

INDEX

Abolitionism, Southern indiaerim-
inate application of term, 23.

Adams. C. F.. and J. S. (1860). 62.

Agricultural products, protection,
192,377. See aUo Wool

Agriculture, Department of, J. 8.
and Fessenden on, 221.

Aldrich. N. W., and HcKinley
Tari£F Bill, 378.

Alien Contract Labor Law, J. S. on,
330.

Alley, J. B., on legal tender, 100.

Allison. W. B., tarifif reform, 194;
Senate committee on resump-
tion, 244; amendments to Bland
Silver BiU, 267.

American Resolution, bans. 11.

Amnesty, Johnson's proclamation,
149; exceptions, 149; individual
pardons, 160; administration,
151; right taken from Johnson,
160; J. S. on (1882). 323.

Anti-slavery. See Slavery.

Anti-Trust Law. See Trusts.

Arbitration, British general treaty
in Senate, 405, 406.

Army, Appropriation Bill contest
(1856). 43; expenditures before
the war, 89; J. S. on repeal of
ineligibility of ex-Oonfederates,
323. See also Civil War.

Arthur, C. A., and J. S.. 223, 311;
collector at New York, charges
against, 290-293; Hayes' letter
on conduct of oflSoe, 291; re-
moval, 293. 295; offered post
of consul-geneial, 294; J. S. on
removal, 294; Senate and re-
moval, 295; J. 8. and New York
campaign (1879). 296; J. S.'s
personal ojHnion, 296; J. S.
opposes renomination, 304; veto
of Cihinese Exclusion Bill, 329;
Nicaragua Canal Treaty, 382.

Bancroft, George, and Johnson's
message* 144.

Bankruptcy, Act of 1867. 220.

Banks. N. P., elected Speaker, 36.

Banks, state, and first war bonds,
93, 94; suspension of qiecie
payments, 96; and Legal-Tender
Act, 103-105; tax on circula-
tion proposed, 112, 133, 134;
notes unequal to war emergency,
108, 132; counterfeit of notes,
133; and national banks, 139;
circulation (1863), 139; tax on
notes, 140. See aleo National
Banks.

Bimetallism, J. S. on gold pay-*
ment of bonds (1877), 260, 266;
Bland's Free Silver Coinage Bill,
261; members who voted for it,
262; arguments for. 262. 263;
arguments against, 263; Hayes'
attitude (1877). 264; J. S.'s re-
port on (1877), 264-266; fal-
lacy of fixed ratio, 265; policy
of intomational convention,
260, 260; Bland Bill and bond
sales, 266; J. S. works against
Bland Bill. 266; its modifica-
tion in Senate, 267; silver certi-
ficates under Bland-Allison Law,
267, 312. 313; Matthews' reso-
lution on payment of bonds in
silver. 267-269; effect of Bland-
Allison Law. 269. 365; influence
of diminished volume of paper
money, 270, 314; and Popcdist
party, 275; J. S. advises lim-
itation in amount of silver dol-
lars. 286; J. S and price of silver
bullion. 289; silver certificates as
bank reserve. 311; increase in
silver coinage (1881-90), 312,
365; i^ans to encourage circula-
tion of nlver, 313; period of de-
bate, 365; fail in price of silver,
365. 367; Windom's report and
recommendations (1889). 366;
opposition to them, 366; and
demand for more money, 368;

432

INDEX

oomplexion of OoncresB (1889),
368; Morrill's Purohaae Bill,
309; diwuasion in Senate, 370;
efforts for unlimited coinage, 370,
371.375.398: House Purchase
Bill, 370; J. S. and conference
bill, 371; bill as alternative to
freeooinase, 371, 373; provisions
of conference bill, 372; bill and
further depreciation, 372, 375;
conservatives* reasons for voting
for bill, 372; passage of biU.
374; continuation of coinage of
dollars, 374; abnormality of
Purchase Act. 374; J. S. on, 376;
J. S.*B bill to stop purchase of
silver, 386; as issue in 1802. 386;
results of Silver Purchase Act,
387; extra session and message
on repeal of act, 387; House re>
peal bill, 388; filibustering in
Senate. 388; J. S. on repeal.
38^301; provisions of repeal
biU, 391; repeal enacted, 391;
as issue in 1806, 401.

Blaine, J. G., and presidential
nomination, 253, 302, 303; and
Electoral Commission, 256; and
suggested retention of J. S. in
cabinet. 300.

Blair, H. W., and Bland Silver
Bill, 262; on civil service and
inebriety, 321 ; Educational
Bill, 322.

Bland, R. P., Silver Bill, 261-267;
its effect, 266. 269, 365.

Blockade, and defeat of the South.
140; raised, 152.

Bonds, national, issue of 1861, 93,
94; exchange of greenbacks for,
08, 100, 175. 212, 229,240; lack
of disposable capital, 101-103,
107; European distrust. 102;
early discount, 103; sole reliance
on, not advised, 103; plans as
alternative of greenbacks. 103-
105; pajrment of interest in
coin pledged, 100, 204; Chase's
policy, 126; system of floating,
126; classes of war, 127; coin
payments. 128, 185, 209. 211;
Chase's Ave per cent, bond, 130:
and national banks, 136, 137;
refunding versus contraction of
greenbacks, 175. 176, 178, 179;

Public Credit Act, 185: J. S.*8
funding measure (1868). 203;
McCulloch's funding operations,
203; veto of Funding Bill (1868),
203; J. S.'s Refunding BiU (1870).
203; his arguments. 204. 206; J.
S. on length of time. 205; plan
to compel national banks to
refund bonds held. 205. 422;
House changes in bill, 206; a
compromise bill passes, 206; later
change in Refunding Act, 207;
effect of Act, 207; sale of refund-
ing bonds, 207; effect of long-
time bonds, 207; argument for
payment in greenbacks, 207-
209; arguments against, 209,
210; precedent for coin pay-
ment, 210, 211; attitude of
J. S. on payment in green-
backs. 211-215; state taxation,
215; federal taxation. 216;
Johnson recommends repudia-
tion. 217-219; Congress con-
demns it. 219; government
purchases at time of panic. 236;
J. S.'s policy as Secretary, 257;
previous method of sale of re-
funding, 257; his changes in
it, 258. 271, 289; policy of popu-
lar subscription, 259, 271;
J. S. on pasrment in gold, 260.
266; sales and Bland BiU, 266;
Matthews' resolution on pay-
ment in silver, 267-260; sale
for specie reserve, 272, 398;
demand for refunding, after
resumption, 280-283; effect of
ninety days' notice in calling.
280; Tx)ndon and rapidity of
calls, 281; final call of five-
twenties, 282; sale of four per
cents at a premium, 282; re-
funding certificates, 282; call
of ten-forties, 283; redeemable
bonds aU refunded (1879), 283;
amount refunded by J. S., 283;
mistake in refunding policy,
283-285; rapid reduction of
interest rate, 283; redemption
(1879-90), 284; government pur-
chase at premium, 285; power
to sell to maintain specie re-
serve, 286. 391; sale of. to main-
tain reserve, authorised, 288;

INDEX

438

iasueof three per cent., 314; pay-
ment of three sod a half and
three per cent., 315; J. S. on
plan to forbid sale of, to main-

I tain specie resenre (1806), 390.
See aieo Debt.

Boutwell. G. B.. inflation of green-
backs, 186; Senate committee
on resumption, 244.

Brooklyn Navy Yard, congres-
sional investigation (1858), 56.

Brown, John, in Kansas, 45; char-
acter, 74; effect of Harper's
Ferry raid, 76.

Bryan, W. J., campaign of 1806,
401.

Buchanan, James, elected Presi-
dent, 44; preparation for the
office, 45; prelection Kansas
jyromises, 46; inaugural and
slavery, 48; and Lecompton
Constitution, 52; and Paulding-
Walker affair, 54; Sherman's
resolution censuring, 57; pro-
test against it, 57; and seces-
sion, 77.

Buckalew, C. R., and Free Silver
Bill. 374.

Burlingame, Anson, and J. S.
(1859), 62.

Burlingame Treaty on Chinese
immigration, 326.

Burt, S. W., naval officer at New
York, 295.

Business, post-war prosperity,
172; and reasons for contraction
of greenbacks, 175, 177; un-
favorable balance of trade, 180,
273; prices and opposition to
contraction, 180-184; panic of
1873, 235; reliance on (Congress
for aid, 236; continued de-
pression, 243; revival. 269. 276;
favorable balance of trade. 277;
andreeumption.277, 279; Silver
Purchase Act and panic of 1893,
387. See aUo Interstate Com-
, Trusts.

Campbell, L. D., speakership

contest (1855), 35.
Canada, draft treaty on fisheries

question (1888), 331; Cleveland's

message on retaliation, 332; J.

S.'s comment on it, 332; his ad-

vocacy of annexation, 333; later
reversal of opinion, 334; on re-
ciprocity with, 380.

Canfield, H. S., on J. S.'s speech
on repeal of Silver Purchase Act,
389-391.

Cannon, J. O., and Bland Silver
BiU, 262.

Carlisle, J. O., and Bland Silver
Bill, 262; efforts to maintain
specie reserve (1893-95), 391.

Cass, Lewis, and Walker's filibus-
tering, 64.

Certificates of indebtedness, 128.

Chamber of (])ommerce of New
York, portrait of J. S.. 279.

CSiase. S. P., and J. S., 33; finan-
cial recommendations (July,
1861). 91; refusal to apply
clearing-house methods, 94; as
financial secretary, 95; report
(Dec., 1861), 95; issue of de-
nuuid notes, 96; and Legal-
Tender Act, 98, 105; and na-
tional banks, 99. 133-135; and
further issues of greenbacks,
111; rules in securing loans. 126;
reluctance to advocate taxa-
tion, 129; reliance on loans, 129;
influence on financial condi-
tions, 130; his five per cent,
bond, 130; suggests tax on state
bank notes, 133; on danger-
line of debt. 141; coin payment
of bonds. 209. 211.

Chatard, Frederck, and William
Walker, suspended, 54.

Chinese exclusion. Bill of 1882, .326;
Burlingame Treaty on immigra-
tion, 326; Treaty of 1880 on
exclusion, 327; J. S. on, 328-
331; veto of bill, 329; second
bill passed. 329.

Ciitizensbip, characteristics of early
American, 10; and Chinese, 327, »
330.

Civil Rights Act, provisions. 168;
Johnson's objections, 158; passed
over veto, 159.

Civil service, abuse in Navy De-
partment (1858), 56, 67; J. S.
on Johnson's system, 159; re-
moval of New York custom-
house officials, 290-296; Hayes*
letter on appointments, 291;

INDEX

J. 8. and nConn. 320; Pondletoii
RHorm Law. 321.

Civil War, politieal problems. 8(K
82; lioooln's ■daptetion of
iiHiawiifiH 111 iniMlMiniii ff?; mil-
ttary problems. 82-M; inad-
•quata prepaimtion. 82; interfei^
coee of poUtics. 83; ehamcter
of ganenUs. 83. 88; J. 8. and
politiosl and militaiy problems.
84^86; his aistiva military inter-
est. 86; Northern success as-
sured. 140; cAuse of Southern
defeat. 140. See aim Finances.

Gbrk. J. B.. on J. 8. (1860). 82.

Caay. Henry, and finality of Com-
promise of 1850. 21.

dayton-Bulwer Treaty, proposed
abrogation. 407.

Cleveland, Qrover. J. 8. on Cana-
dian fisheries message. 332;
tariff messsge. 344; J. 8. on it
344-347; and Nicaragua Canal
Treaty. 382; and repeal of Silver
Purchase Act, 387; efforts to
maintain specie payments, 301;
and Hawau. 303. 400; and Vene-
suela^uiana boundary. 305;
and Cuba, 306.

Coffee, tariff duties. 103.

Colfax. Schuyler, in speakership
contest (1865). 36; and J. S.
(1860), 61.

Collamsr. Jacob, on legal tender,
108.

Commerce. See Business, Finances.
Interstate, Tariff.

Compromise of 1860, finality. 21,
27; Southern disbelief in North-
em sincerity, 23; J. S.'b support,
31.

Congrees, ThirtV'foufih: complex-
ion of House, 34; speakership
contest, 36-37; partiaan legisla-
tion impossible, 37; J. S. and
slavery. 37; Kansas investiga-
tion, 30-41; majority report,
41; Kansas delegate, 42; Army
Appropriation Bill, 43; Pierce's
partisan message (1866). 47; J.
8.'b speech on it. 47, 48.

ThiHu-Hith: liccompton Con-
stitution, 62; English Ck>mpro-
mise, 62; Paulding-WaUcer af-
fair. 54-66; investigation of

Navy DepaHmeni, 56. 87; J. 8.
<m abuse of national expendi-
turas. 58-60.

Tkiriy-mxai: House eensnro
of Buchanan. 57; Buchanan's
IKOtest. 57; complexion, 61;
speakership contest. 61-64; Pen-
nington's committee appoint-
ments, 64; Morrill Tariff Act,
65. 68-71; comfKomise efforts,
76; proposed amendment guar-
anteeing state slavery. 76.

Thirty-eevenOi, Thifiy-eitfhih:
qpecial session. Chase's rqwrt,
02; financial legislation at spe-
cial session. 02; revenue meas-
ure of 1862. 03; bond issoe of
1861. 03; second session. Chase's
report. 05; Legal-Tender Act.
07-111; further issues of green-
backs. 111-113; tariff. 118; in-
ternal revenue. 110, 123; nation-
al banks. 133-138.

Thirty^nirUh: Southern oon-
gressmen refused admission, 153;
joint committee on reconstruc-
tion. 163: first report, 154; ef-
fect of Johnson's February 22
speech. 166; Fourteenth Amend-
ment, 157; joint committee on
status of seeeding states, 167;
CHvil Rights Act. 168; Tenure of
Office Act. 160. 164; negro suf-
frage in territories. 160; Recon-
struction Act. 161-163; Mo-
CuUoch's report on contraction.
177. 178; contraction author-
ised. 178. 170; Wool Act. 102;
internal revenue, 106; funding.
203; Homestead Act, 220; in-
terstate commerce, 336.

Fortieth: impeachment of
Johnson. 164, 165; suspension
of contraction, 183-186; inter-
nal revenue, 106; funding, 203;
condemnation of repudiation,
210; Eight-Hour Law. 220; re-
port on regulation of railway
rates. 337.

Forty-iiret, Forty-eeeond: Pub-
lic Oedit Act, 185; tariff. 103.
104; internal revenue, 108; Re-
funding Act, 203-207; attempt-
ed inflation, 231; J. 8. on re-
sumption, 233-236.

INDEX

435

Forty4hird: inflatioii bill ve-
toed. 186. 242; oompromiae in-
flation. 186. 243; resumption,
186, 238, 243-249; tariff. 195;
report and bill on interstate
commerce, 337, 339.

Forty-fifth: reissue of green-
backs required, 188; attempt to
repeal Resumption Act, 261,
271; Bland-Allison Silver Bill,
261-267; Matthews' resolution
on payment of bonds in silver,
267-269; Reagan's bill on inter-
state conmieroe, 339.

Forty-aeverUh: complexion,
299; recharter of national banks,
311; three per oent. bonds, 314;
tariff and internal revenue, 315-
319; civil service reform. 320-
322; Blair Educational Bill. 322;
Chinese exclusion, 326-329.

Forty-eighfh, Forty-^inth: in-
vestigation of Southern elections,
324; Senate report on railway
rates, 338; Reagan's bill on rail-
ways, 340; Interstate Ck>mmerce
Act, 341-343.

Fiftieth: Canadian fisheries,
331, 332; tariff message, 344;
J. S. on it, 344-347; Mills Tariff
Bill, 347; anti-trust bills and in-
vestigation, 353-355.

Fvfty-fir§t, FifttMeeond: Anti-
Trust Act, 355-365; Silver Puiv
chase Act, 366-375; McKinley
Tariff Act, 376-381; Isthmian
Canal. 381-383.

Fifty-third: repeal of Silver
Purchase Act. 387-391; Wilson-
Gorman Tariff Bill. 391-393; Har-
waii. 393. 394, 410; inaction of
second session, 394.

Fifty-fourth: inaction, 395;
Venesuela boundary, 395; Cuba.
396, 408; British Arbitration
Treaty, 403, 406; Isthmian
Canal, 406; Clayton-Bulwer
Treaty, 407.
Conkling. Roscoe. and J. S. (1859).
62; on legal tender. 100; and
Grant, 223; Senate committee
on resumption, 244; and Blaine,
253; and removal of New York
custom-houae officers, 290, 295,
296.

Cooke, Jay, and war finaDees,
126.

Cornell, A. B., naval officer at New
York, 290; charges against, 291-
293; removal, 293; Senate and
appointment of suooesaor. 295;
J. S. assists in campaign of 1879,
296.

Corwin, Thomas, and J. S. (1859),
62.

Cox, J. D., and Bland Silver Bill,
262.

Cox, S. S.. and Bland Silver Bill,
262.

Cuba, J. S. on intervention (1896),
396; and against annexation,
397; case of Sanguily in Senate,
408; administration's desire for
peaceful settlement, 411; Spain's
delicate position, 411; movement
for recognition of belligerency,
412; local autonomy. 412; con-
centration of inhabitants, 412;
blowing up of Mmne^ 412;^ ap-
propriation for national defense,
403; resolutions of intervention
and war, 413.

Cullom, S. M.. report on railroad
discrimination, 338; Interstate
Commerce Bill, 341.

Chirrency. See Money, Paper
Money.

Curtis, B. R.. dissent in Dred Scott
decision, 49.

Davis. David, position in Senate
(1881). 299.

Davis. Jefferson, and territorial
slavery, 26; and Kansas-Ne-
braska Act. 27.

Dawes, H. L., and J. S. (1859),
62.

Day, W. R., practically super-
siedes J. S. in cabinet, 413.

Debt, national, proportion of war
expenses paid by loans. 125;
Chase's rules in securing loans,
126; decline in average interest
rate. 126; classes of war. 127
128; in 1861. 128; maximum;
129; or taxation. Chase and J. 8.
on. 129; Chase on danger-line,
141; Public Credit Act. 185; re-
duction before 1872. 202; maxi-
mum interest charge, 202; on

486

INDEX

pasnneot by generation ineur-
ring, 205; Fourteenth Amend-
ment on, 219; reduction (1881-
89), 315. 5m aUo Bonds, Paper
Money.

Democratie party, split (1894),

. 994. <See otei Elections.

Depew, C. M., Sherman ancestry, 2.

Direct tax, recommended, 92; im-
poeed, 92, 120; tax on federal
bonds as, 216; J. S. advocates
return. 344.

Dodge, W. E., on J. S. and achieve-
ment of resumption, 280.

Douglas, 8. A., on sacredness of
Missouri OcMnpromise, 22; Kan-
sas-Nebraska Act, 27; action a
mystery, 30; and Lecompton
Ck>nstitution, 51; lAncoln de-
bates as anti-slavery force, 74.

Dred Scott decision, 49; effect on
slavery agitation, M.

Edmunds, Q. F.. Senate committee
on resumption, 244; Electoral
Commission, 256; Anti-Trust
Bill, 362; report on Isthmian
Ganal (1891), 381.

Education, of J. S.. 5-7; early
American attitude, 11; in Ohio,
15; Blair Bill, 322.

Elections, of 1856, 44-46; of 1860,
73, 75; of 1868, 222; Ohio, of
1875, 252; of 1876, nomination
of Hayes, 253; financial issue.
253; "bloody-shirt," 254; and
Grant's administration, 255; con-
test in Louisiana, 255; Electoral
Oommission, 256; of 1880-88,
J. S. and Republican nomina-
tion, 301-306; of 1892, 385; is-
sues. 386; Republican success in
1894, 394; of 1896. campaign of
education, 4O0, 402; issues, 401;
Brytai as candidate, 402; Mc-
Kinley as candidate, 402.

Electoral O>mmi88ion of 1877, 256.

English Gorapromise, 52.

Excise duties. See Internal reve-
nue.

Expenditures, J. S. on abuse of
national (1858). 58; belated re-
form, 59; amount and condi-
tions of ante-war, 88; ratio be-
fore and during the war, 90;

Chase's estimate for 1882, 95;

total war, items, 114; decrease

in proportion to revenue, 117;

proportion of war, paid by

loans, 125; extravagance in civil.

as result of war, 221.
Evarts, W. M., Sherman ancestry,

2.
Ewing, Thomas, adopts W. T.

Shennan, 5.

Farragut, D. G., plan for irregular
expenditures, 59.

Ferry, T. W., Senate committee
on resumption, 244.

Fessenden, W. P., and issue of
bonds, 131; chairman joint com-
mittee on reconstruction, first
report, 154; and Department of
Agriculture. 221.

Fifteenth Amendment, main pur-
pose, 166; ratified, 166; rati-
fication essential to reconstruc-
tion, 167; l^slation to enforce,
167; J. S. on necessity, 170, 422;
J. S. on violation (1884). 324.

Finances, charges against war, con-
sidered, 88; previous limited
operations of federal, 88; sud-
denness and greatness of war
problem, 90; inflexible system,
91; Lincoln's recommendation
(1861), 91; (Phase's report and
plan (July, 1861), 91; inadequate
conception of tadc.92,93; Chase
and checks on subscribing banks,
94; Chase as Secretary, 95;
Chase's report (Dec., 1861), 95;
and Trent affair, 96; panic, sus-
pension of specie pasrments, 96;
lack of floating capital, 101; Eu-
ropean distrust, 102; hasty en-
actments, 123; popular support.
127; influence of Secretary's
action, 130; post-war prosper-
ity, 172; post-war problem, 177.
184; panic of 1873. 235; panic
of 1893. 387; services of J. S..
427, 429. See aleo Banks, Bi-
metallism, Bonds, Debt, Ex-
penditures, Gold, Internal Re-
venue, Money, National Banks.
Paper Money, Revenue, Re-
sumption, Taxation, Tariff.

Fisheries, controversy (1888), 331.

INDEX

4S7

Fitoh, A. P.. and Free Silver Bill.
374.

"Fix his fences," orisin, 18.

Foraker, J. B., contest with J. S.
for aenatorship, 384.

Foreign relations, J. S. and, 331;
his opposition to expansion, 335,
394, 397, 414-416. See aleo Isth-
mian, and countries by name.

Foster, Charles, candidacy for Sen-
ate. 301; and loyalty to J. 8..
304.

Fourteenth Amendment, passes
Congress, 157; Johnson and,
160, 165; ratification essential
to reconstruction, 161; ratified,
165; purpose, 165; I^slation to
enforce, 167; on federal debt,291.

Fractional currency, paper, au-
thorised, 113; amount (1874),
187; redemption, 245.

Freedmen. See Negroes.

Frelinghuysen, F. T.. Senate com-
mittee on resumption, 244.

Fremont, J. C, campaign of 1856,
44-46.

French, F. O., J. S.'s letter to, on
payment of bonds in gold, 260.

Frye, W. P.. and Bland Silver Bill.
262.

Fugitive Slave I-aw. Northern
acquiescence, 21, 27; and anti-
davery movement, 73; divergent
attitudes in the Republican par-
ty, 80.

Garfield, J. A., and coin pasrment
of bonds, 209; and J. S., 223;
and Bland Silver Bill, 262; and
attempt to repeal Resumption
Act, 271; elected President, 299;
election to Senate, 301; and
unit rule, 302; nominates J. S.,
303; nomination, 303; and loy-
alty to J. S., 304; as soldier can-
didate, 307; Interstate Com-
merce Act (1866), 336; on J. S.'s
career, 427.

Geary, J. W., as Governor of Kan-
sas, 45.

George, J. Z., on anti-trust legisla-
tion, 365, 357.

Georgia, reconstruction denied to,
166; redeemed from carpet-bag
rule, 168.

Gold, war premium, 130; premium
and contraction of greenbacks,
1 79 ; export and policy of resump-
tion, 237; cause of continued pre-
mium, 237; premium and Bland
Iaw, 269; decline of premium.
277; increase in circulation
(1881-90), 313; export (1893),
387. See aUo Bimetallism.

Granger movement, 336.

Grant, U. 8., veto of inflation bill,
186, 243; and J. 8., 222, 223. 302;
civil inexperience, 222; Southern
poUcy, 223; congressional asso-
ciates, 223 ; on resumption, 231;
candidacy in 1880, 302, 303; as
soldier candidate, 307.

Gray, Horace, on power to issue
legal-tender notes, 189. 190.

Great Britain, growth of expend-
itures during Napoleonic Wars,
90; Venezuela-Guiana boundary,
395; draft treaty on general ar-
bitration, 405; proposed abrogar-
tion of Clayton-Bulwer Treaty,
407. See aleo Canada.

Greenback party, principles, 274;
strength, 275; successor, 275.

Grow, G. A., speakership contest
(1859), 61.

Guthrie. James, on state bank
notes, 133; and Johnson, 156.

Hale, Eugene, and Bland Silver
Bill, 262.

Halleck, W. H., and first move-
ments in the West, 84.

Hanna. M. A., and J. S., 404, 415.

Harper'^ Fen'y, John Brown's
raid. 74.

Harrison, Benjamin, J. S. and
nomination, 305; on J. S.'s can-
didacy. 305, 306; as soldier can-
didate. 307; and free silver, 371 ,
373; J. 8. and renomination, 385.

Hartley, Thomas, on protection,
66.

Hawaii, reciprocity convention,
195; J. 8. on annexation, 393,
394; Cleveland withdraws An-
nexation Treaty, 409; action of
Congress, 410; new treaty of
annexation signed, 410; not
ratified, 410; annexation by
joint resolution, 410.

4S8

INDEX

Hayw, R. B., and J. 8., 223; gu-
bernatorial oontest (1875), 252;
nomination for President, 253;
campaign, 253-255; oontested
election, 255; on right to count
electoral votes, 256; offers J. S.
Treasury portfolio, 257; and
bimetallism, 264; and New
York custom-bouse officOTs, 291-
296; letter on civil sonrioe, 291 ;
character of administration, 298;
as soldier candidate, 307.

Helper, H. R., Impending CrtM
and speakership contest (1859),
62; character of book, 62; its
effect, 63, 74.

Hepburn va. Griswold, 188.

Herbert, H. A., and Bland Silver
Bill. 262.

Hereditary influence in American
statesmanship, 2.

Hewitt. A. S.. and Bland Silver
Bill, 262.

Hoar, E. R., Sherman ancestry, 2.

Hoar, G. F., Sherman ancestry, 2;
eulogy on J. S., 428.

Hock, Baron von, on American
internal revenue tax, 124.

Homestead, Supplemental Bill
(1866), 220.

Horton, V. B., on legal tender. 100.

Howard, W. A., Kansas investiga-
tion, 39.

Howe. T. O., Senate committee on
resumption, 244.

Impeachment. See Johnson.

Impending Crists. See Helper.

Imperialism, opposition of J. S.,
335, 394, 397, 414-416.

Income tax. imposed, 92, 120, 123;
war revenue from, 93; changes
in, 196; terminated, 198; J. S.
on, 199-201, 393.

Indians and Ohio, 14.

Internal improvements, period in
Ohio, 8.

Internal revenue taxation, recom-
mended, 92; first war. 120;
earlier measures, 120; theories
of imposition. 120; J. S.'s ad-
vocacy of heavy tax on few
articles, 121, 122; his theory
upheld, 122; Act of 1862, 123;
returns during war, 124; devd-

opment of administration. 124,
197; range of war imposition*
124, 125; as a permanent sys-
tem, 125; maximum, 195; policy
of reduction, 195; report of Rev-
enue Oommission, 196; adoption
of its recommendations, 196;
various acts reducing, 196-198;
reduction in tax on spirits, effect,
197; factors in revenue from, 197,
198; increase in tax on spirits,
198; J. S. on income tax, 199-
201. 393; revision (1883). 317-
319.

Interstate commerce, beginning of
agitation for regulation, 336;
"Granger movement," 338; Act
of 1866. 336; House committee
on rate regulation (1868), 337;
Senate report on r^ulation
(1874), government lines recom-
mended to reduce charges, 337;
second report on regulation
(1886), discrimination and re-
sults, 338; right to r^:ulate. as-
serted. 339; McCrary's bill for
commissioners (1874), 339; Rea-
gan's first bill (1878), 339;
Reagan Bill of 1885. 340; pro-
vision for commission, 340, 342;
long and short haul rates, 341,
342; state j urisdiction, 341 , 343;
Cullom Bill, 341; paramount
desire to preventdiscriminations,
341; pooling, 342; maximum
passenger .charge, 343; court
proposed. 343; passage of bill,
343; and anti-trust legislation,
358. 360.

Isthmian Canal, Senate report
(1891). 381; draft treaty with
Nicaragua. 382; J. S. on owner-
ship, 382. 406; and route, 383;
attempted abrogation of Clay-
ton-Bulwer Treaty, 407.

Johnson. Andrew, influence on re-
construction contest, 143; char-
acto", 143; state papers. 144;
public utterances, 144; egotism,
144; and Lincoln's reconstruc-
tion policy, 145; first attitude
on conquered South, 145; sud-
den change of policy, 146; fac-
tors influencing change, 146-148;

INDEX

439

reconstruction theory, 149; am-
nesty proolamatioD, 140; ex-
ceptions to it, 149; individual
pardons, 150; provisional gov-
ernment for North Carolina, 151;
other acts of reconstruction,
152; policy not opposed at
first, 153; influence of policy
on Southern attitude, 155; rela-
tions with J. S., 155. 158, 159;
February 22 speech, 156; ig-
nored by Congress, 156; and
Fourteenth Amendment, 160,
165; deprived of amnesty power,
160; impeachment proposed,
161; impeachment, 164, 165;
J. S.'s final commendation of
policy, 168; J. S. on responsibil-
ity for reconstruction evils, 171 ;
funding veto, 203; recommends
repudiation of fedo^ bonds,
217-219; on resumption, 227.
Juilliard va. Greenman, 189.

Kansas, first territorial elections,
38, 40; war, 39; congressional
investigation committee, 39;
Free-State elections, 40, 41; con-
gressional report, 41; no dele-
gate seated, 42; army appropri-
ation amendment (1856), 43;
better conditions, 45; Geary as
Governor, 45; Buchanan's in«-
election attitude, 46; ultimate
Free-State success evident, 46;
effect of Dred Scott decision on,
50; Lecompton Constitution, 51;
action of Congress, English Com-
promise, 52; Compromise re-
jected by Kansas, 52; admitted,
53, 65; election frauds (1857),
53; war and anti-slavery move-
ment, 73.

Kansas-Nebraska Act, 27; effect
on North, 28-30.

Ku-Klux Act. 167.

Labor, federal Eight-Hour Law
(1868). 220; J. S. on AUen Con-
tract Law, 330.

Lafayette, J. S. and statue of,
349.

Lamar, L. Q. C, disunion threats
(1859), 64.

Lancaster, Ohio, Shermans in, 4.

Lane, J. H., in Kansas, 45.

Lecompton Constitution, 51; ac-
tion of Congress, 62; rciieoted,
52.

Legal tender. See Paper Money.

liegal-Tender Cases, 188.

Lincoln, Abraham, nomination,
73; Douglas debates as anti-
slavery force, 74; and Fugitive
Slave Law, 80; and state slav-
ery, 81; consummate leadership,
82; J. S.'s attitude toward, 85;
financial recommendation (1861),
91. 93; and greenbacks, 112;
and tax on bank circulation, 112;
and reconstruction, 142, 151,
152; amnesty proclamation,
150.

Loans. See Bonds, Debt, Paper
Money.

Logan, J. A., enlistment, 87; and
Grant as President, 223; Senate
committee on resumption, 244.

Louisiana, election of 1876, 255.

Lovejoy. Owen, and J. S. (1859),
62.

McClellan, G. B.. as a general, 84.

McCormick, R. C, and removal of
Arthur, 294.

McCrary, G. W., bill for railroad
commissioners (1874), 339.

McCulloch, Hugh, on state bank
objections to national banks,
139; on contraction of green-
backs, 174, 177, 178; J. S.'s
comment on policy of contrac-
tion, 175, 176; funding opera-
tions, 203.

McKinley, William, and J. S., 223;
and Bland Silver Bill, 262; as
soldier candidate, 308; and Tariff
of 1883, 318; Tariff Bill, 376; on
opposition to it, 379; candidacy
(1892). 385; J. S. and nomina-
tion, 400; campaign, 402; of-
fers State portfolio to J. S.. 404;
and annexation of Hawaii, 410;
and peaceful solution in Cuba,
411; ignores J. S. as Secretary,
413; J. S.'s resignation and feel-
ing against, 414, 415; proclama-
tion on death of J. S., 417.

Mahone, William, position in Sen-

. ate (1881), 299.

440

INDEX

Mansfield, Ohio, J. S.'s home in,
16. 19.

Manhall, John, J. S. and statue of,
349.

Maine, blowing up of. and war,
412.

Matthews, Stanley, resolution on
paying bonds in siiver, 267-269.

Merritt, E. A., surveyor at New
York, 295; coUector. 295.

Mexico. J. S. on relations. 336; on
war with, and Monroe Doctrine,
396.

Miller. J. F., Chinese Exclusion
Bill, 326-329.

Missouri Compromise, sacredness,
22; Douglas on this, 22; and
national balance on slavery, 25;
nullified, 27; declared uncon-
stitutional. 49.

Money, suspension of specie pay-
ments. 96; increase in circula-
tion, 313. 368; lack of elasticity
neglected. 367. See aUio Bimet-
allism, Gold, Paper Money. Re-
sumption.

Monroe Doctrine, J. 8. on, 396.

Moore. Thomas, J. S. on, 426.

Morgan. J. T., report on Isthmian
Canal. 382; bills on aid for Nica-
ragua Canal Company, 382. 406;
and abrogation of Clayton-
Bulwer Treaty, 407.

Morrill, J. S., and J. S. (1859), 61;
Tariff Bill, 65-71; on legal ten-
der, 99, 111; policy of internal
revenue impositions, 121; Sil-
ver Purchase Bill, 369.

Morrill, L. M., Secretary of the
Treasury, sale of refunding
bonds, 258.

Morton, O. P., and resumption,
230, 244; and Electoral Com-
mission, 256.

Muskingum Aiver Improvement,
7.

Nash, G. K., J. S. supports can-
didacy, 416.

Nashville, J. S.'s speech in, 351.

National banks. Chase favors, 99,
133; previous opposition, 132;
conditions favoring establish-
ment, 132; Stevens's unfavor-
able report, 134; second bill

fails, 134; J. S. takes charge of
bill, 134; his arguments, 135-
137; uigency. 137; safeguards,
137; objects to be obtained by,
137; bill enacted, 137; early
results, 137; modifications in
1864. 138; taxation on. 138;
opposition of state banks, 139;
increase in notes authorised,
185; unlimited circulation au-
thorised, 186; amount of circu-
lation (1875), 187; low-interest
bonds as security for circulation,
205, 422; decrease in circula-
tion, 270. 312. 366; Recharter
Act, changes, 31 1 ; ratio of notes
to security, 312; transfer of
greenback reserve, 369.

Navy, expenditures before the war,
89.

Navy Department, congressional
investigation (1858), 56; J. S.'s
minority report, 57; censure of
Buchanan and Secretary, 57;
Buchanan's protest, 57; re-
forms, 58.

Negroes, Southern legislation on
freedmen. 153-155. 169. 170;
Fourteenth Amendment. 157,
160. 161, 165; Civil Rights Act,
158; J. S. on suffrage, 159;
Johnson's responsibility for suf-
frage, 160; suffrage in territories,
160; suffrage under Reconstruc-
tion Acts. 161; Fifteenth Amend-
ment, 166. 170; J. S. on depri-
vation of suffrage (1884), 324.

New York City, removal of custom
house officials, 290-296.

North Carolina. Johnson's recon-
struction, 151.

Northwest Odinance, value to
Ohio, 13, 14.

Ohio, internal improvements. 7. 8;
prominence in national affairs,
9; cosmopolitan quality of cit-
isenship, 11; eclectic institu-
tions, 12; value of Northwest Or-
dinance to, 13, 14; and Indians,
14; type of pioneers, 15; educa-
tion, 15; quality of population,
15; political balance. 16; cam-
paign of 1875, 252; legislature
on pasring bonds in silver, 268;

INDEX

441

J. S. and political campaigns
(1881-1889), 340; and tariff on
wool, 350.
Oliver, Mordecai, Kansas investi-
gation, 39.

Panic, of 1873. 235; effect on policy
of resumption, 236, 237; of
1893, 387.

Paper money. Treasury notes au-
thorised (1861). 93; issue of de-
mand notes, 96, 128; Legal-
Tender Bill introduced, provi-
sions, 97; deposit as loan, 97.
111. 127; departures in bill, 98;
exchange for bonds, 98. 100,
175, 212. 229, 240; Chase's at-
titude, 98, 105; House debate
on bill. 99-101; need of floating
capital, 101, 107; opposition of
bankers, 102; bankers' alternate
propositions, 103-105; revul-
sion in favor of legal tender, 105;
changes in House Bill, 10)6; J.
S.'s argument, 106-109; argu-
ment of necessity, 107, 110; in-
adequacy of bank notes, 107,
108; necessity of legal tender,
108; as a temporary expedient,
109, 136. 204, 421; constitution-
ality, 109, 187; Senate changes
in bill, 109; bill enacted. 110; ef-
fect. 110; further issues of green-
backs. Ill, 112; total issue. 113;
fractional currency. 113; ob-
jections to state bank notes,
132; counterfeiting of them.
133; J. S. on national bank
notes. 136; amount of state
bank notes (1863), 139; tax on
state bank notes, 140; pian to
retire greenbacks, 173; McChil-
loch's plan of contraction. 174.
177, 178; J. S.'s objections to it,
175, 176, 178; contraction au-
thorised, 178; funding of Treas-
ury notes, 178; amount of con-
traction, 179, 184; causes of op-
position to further contraction,
effect on prices, 180-183; popu-
larity of greenbacks, 183, 226;
contraction suspended, 183-185;
power over currency, 184; in-
crease of national bank notes
authorized, 185; inflation of

greenbacks by Treamiry. 185,
232, 236; inflation bill vetoed,
186, 242; compromise inflation
bill. 186. 243; Resumption Act
on greenbacks and national
bank notes. 186; amount of na-
tional bank notes (1875). 187;
of fractional currency (1874),
187; general increase in circuliU
tion, 187; reissue of greenbacks
ord^ed, 188, 270; constitution-
ality of peace issues of green-
backs, 189, 190; present amount
of greenbacks, 190; argument
for paying bonds in greenbacks,
208; argument against it, 209,
210; precedent against it, 210,
211; J. S.'s attitude on this,
211-215; J. S. on inflation,
213, 232. 233, 241; resumption
through contraction of, not
possible, 226; House advocat«s
inflation (1870), 231; Senate
opposes, 231; redemption of
fractional, 245; issue in Ohio
campaign of 1875, 252; silver
certificates under Bland-Allison
Law, 267, 313; decrease in na-
tional bank circulation, 270, 312,
368; J. S. advises reduction of
greenbacks and repeal of l^^al
tender (1879>, 286; preferred to
specie, 287; silver certificates as
bank reserve, 311; circulation of
silver certificates, 365; Wind-
om's plan for silver certificates
(1889), 366; in Morrill's Silver
Purchase Bill, 369; transfer of
greenback reserve, 369; in the
House Silver Purchase Bill, 370;
plan to base, on agricultural pro-
ducts, 375; silver certificates
tend to monopolize circulation,
387. See also Resumption.

Patterson, Robert, J. S. as aide to,
87.

Paulding, Hiram, arrests William
Walker, 54; Buchanan censures,
54; action of Congress, 55.

Payne. H. B., charges against elec-
tion to Senate. 325.

Pendleton, G. H., and legal tender,
99; elected to Senate, 300; Civil
Service Bill, 320-322.

Pennington, William, elected

44ft

INDEX

speaker. 04; J. 8. and oommit-
tee appmntments 04.

Pennono, J. 8. and, 423.

Philippines, J. 8. oppoees annexa-
tion. 416.

Phillipe. Wendell, Johnaon'e de-
nunciation. 160.

Pieree. Franklin, eleetion and fin-
ality of Compromise of 1850. 21;
and slavocracy. 26; opposition
House, 35; and Kansas. 40; and
Army Appropriation Bill (1850).
43; last annual message, 47;
denunciation by J. 8.. 47, 48.

Politics, hereditary influence on
statesmanship. 2; partisan bal-
ance in Ohio. 16; " fix his fences,*'
18; national slavery balance, 24;
basis of party vicissitudes. 28;
conditions governing advance-
ment of statesman, 77; develop-
ment of popular initiative, 423.
See aUo Elections, and parties
by name.

Popular sovereignty. ^See 8qaatter
8overeignty.

Populist party, principles, 275;
career, 276.

Public Credit Act. 185; Matthews'
resolution on payments in silver,
267-269.

Public lands, entfy by negroes,
220; grants to railways and
states. 220.

Railroads. See Interstate Com-
merce.

Randall, 8. J., resolution on sacred-
ness of federal debt, 210.

Reagan, J. H., first bill against
railroad discrimination (1878),
339; Bill of 1885, 340; onJ.S.'s
Anti-Trust Bill, 330.

Reciprocity, J. S.'s attitude, 72,
380; with Hawaii, 195; in Mo-
Kinley Act, 378.

Reconstruction, character of con-
test, 142; Lincoln's beginnings,
142; influence of Johnson's char-
acter, 143-145; his original at-
titude. 145; and sudden change.
146; factors influencing John-
son, 146-148; theories, 148;
proclamation of amnesty, 149;
exceptions, 149, 150; individ-

ual pBfdons. 150; method of
administering amnesty, 151;
executive, in North Oartdlna,
151; and elsewhere, 152; eon-
ventions, 152; ratification of
Thirteenth Amendment, 153;
reconstructed oongreesmen re-
fused seats. 153; joint commit-
tee. 153; 8outhem legislation
on freedmen. 153, 169, 170; re-
port of joint committee, 154;
effect of Johnson's policy on
Southern attitude. 155; J. 8. and
Johnson's policy. 155. 158, 168;
Johnson's February 22 speech,
156; it makes moderate policy
impossible, 156; Johnson ig-
nored. 156; joint committee on
status of seceding states. 157;
Civil Rights Act, 158; J. 8. on
Southern suffrage, 159; Johnson
and Fourteenth Amendment,
160; President deprived of right
to pardon, 160; Reconstruction
Act. 161-163; Supplementary
Act. 163; character of conven-
tions under acts, 163; supple-
mental acts to secure Republi-
can supremacy. 164; completion,
166; oath of reconstructed offi-
cials, 167; Enforcement Act,
167; Ku-Klux Act, 167; con-
tinued presence of troops, 167;
character of reconstructed gov-
ernments, 168; restoration of
home rule. 168; J. 8. on responsi-
bility for congressional policy,
169-171; Grant's attitude, 223;
Hayes and the South, 298. 299.

Reed. T. B., and Bland Silver Bill,
262; and attempt to force pas-
sage of Free Silver Bill, 373.

Reeder, A. H.. as Governor of Kan-
sas, 40; removed, 40; contest-
ing delegate from Kansas, 41;
not seated, 43.

Refunding. See Bonds.

Republican party, and Abolition'
ists, 23; and territorial slavery,
25; strength in campaign of
1856, 46; incongruous elements
on slavery questions, 80-82;
Linoc^n's management, 82; sol-
dier candidates, 307. See also
Elections.

INDEX

44S

Resumption , automatic plan. 172;
plan to retire all greenbacks,
173; gold reserve plan, 173, 235;
as a commercial problem, 173;
conditions favoring early, 174;
McGulloeh's plan, 174; J. S.'s
plan (1866), 175, 176. 229; by ex-
changing greenbacks for bonds,
175, 212, 22Q, 240; by contrac-
tion no longer possible, 226; J. S.
on necessity of, 227; Johnson
on, 227; J. S. on effect on debtor
class, 228. 234; J. S. on danger
of fixing a day for, 230; Grant
on, 231; J. S. champions, 233-
235; and public faith, 233; and
wise political economy, 234;
and contraction, 234; plan to
sell bonds for coin, 235; com-
bined plan, 235; effect of panic,
236, 237; effect of export of
specie, 237; J. S.'s resolution
and speech (1874), 238-242; un-
popular, 241, 273; further futile
attempt, 243; effect of defeat
of Republicans (1874), 243, 248;
Senate committee, 244; provis-
ions of bill, 245; reissue of green-
backs, 247. 250; Schurz on, 247;
passage, 248; comprehensive
phraseology of bill , 248; as a com-
promise measure, 249; no specie
reserve, 249; not on gold basis,
250; opposition to the act, 250;
act as an achievement, 251, 283;
as issue in Ohio campaign of 1875,
252; in national election of
1876, 253; sale of bonds, for re-
serve, 259, 266, 272; attempts
to repeal law, 261, 271; and
Treasiury's membership in Clear-
ing House, 272; coin available for,
272; and Greenback party, 274;
interaction of financial revival,
277, 279; accomplished, 278;
credit to J. S., 279; J. S. on ne-
cessity of specie reserve, 285,
287, 398; right to sell bonds for
reserve, 286, 391; implied recog-
nition of reserve, 288; final l%i»-
lative provision for reserve. 288;
efforts to maintain (1893-95),
378,391; J. S. on plan to forbid
sale of bonds to maintain (1896),
399.

Revenue, deficit (1868HI1), 89;
total (1862), 93; Chase's esti-
mate (Dec. , 1861) , 95; total from
internal (1862-64), 104; sources
of war, 116; increase in propor-
tion to expenses, 117; excess
and payment of debt, 284; Cleve-
land's message on need of reduc-
ing, 344; J. S. on proper use of
surplus, 344; deficit (1894-96),
398. See aUo Debt, Taxation.

Revenue (])ommission, report on in-
ternal revenue, 196.

Richardson, W. A., of Illinois,
speakership contest (1855), 35.

Richardson, W. A., of Massachu-
setts, inflation of greenbacks, 186,
232, 336.

Roosevelt, Theodore, on J. S.'s
candidacy (1884), 305; as sol-
dier candidate, 308.

Salisbury, Lord, and Arbitration
Treaty, 405.

Samoan Islands, J. S. on affairs
(1889), 335; tripartite agree-
ment, 335; division, 336.

Sanguily, Julio, case in Senate,
408.

Sargent, A. A., Senate committee
on resumption, 244.

Schurz, Carl, and Resumption Bill,
247.

Secession, movement and attempt-
ed compromise, 76; Buchanan
on, 77.

Seward, W. H., and enforcement
of Fugitive Slave Law, 81; and
Johnson's reconstruction policy,
147; and amnesty, 151.

Shannon, Wilson, as Governor of
Kansas, 45.

Sharpe, G. H., surveyor at New
York, 290; charges against, 291-
293; removed, 293, 295.

Sherman, C. R., father of J. S., as
office-holder, 4, 5; migration to
Ohio, 4, 15; death, 5; family, 5.

Sherman, Mrs. C. R., mother of
J. S., character, 5, 18.

Sherman, Daniel, as office-holder,
4.

Sherman, John, immigrant, de-
scendants, 2.

Sherman, John, birth and death, 1,

444

INDEX

417; length of public career,
1; ancestry. 1, 2; oflSce-holding
aoceetry, 3; father. 4; educa-
tion. 5-7; first employment, 7;
origin of partisanship, 8; studies
law, 8, 16; first business ven-
ture. 0; in Mansfield, 16. 19;
property, 17, 18; marriage, 18;
and father-in-law. 19; adopted
daughter. 19; Washington home,
19; plan to practice law in Cleve-
land, 20; nominated for Con-
gress (1854), 30; influences
favoring political start, 30; pre-
vious political interests, 31; con-
sidered conservative on slavery,
31; canvass, 32; elected, 32; and
Chase, 33.

Congmtman: slavery attitude
(1855). 37; Kansas investiga-
tion. 39; report, 40; and Kan-
sas delegate. 42; amendment to
Army Appropriation Bill (1856),
43; early prominence, 44; de-
nunciation of Pierce, 47, 48; and
Dred Scott decision, 50; on Kan-
sas election frauds (1857), 53;
Committee on Naval Affairs, 54;
minority report on Paulding-
Walker affair, 55; investigation
of Navy Department, 56; minor-
ity report censuring Buchanan,
57; Buchanan's protest against
report, 57; resulting reforms,
58; on abuse of national ex-
penditures, 58-60; speakership
contest (1850), 61-64; and Pen-
nington's committee appoint-
ments, 64; head of Committee
on Ways and Means. 65; and
Morrill Tariff Bill, 68. 69, 71;
general tariff views, 71-73, 420;
in campaign of 1860, 75; and
compromise measures, 76; and
proposed amendment guaran-
teeing state slavery, 76; elected
senator. 77; advance. 78.

Senator, firat period: and poli-
tical problems of Civil War, 84;
and Lincoln, 85, 86; realises
gravity of contest, 85; ^nd mili-
tary problems, 85; military
activity, 86; on Legal-Tender
Act, 106-109; Committee on
Finance, 107; and second issue

of greenbacks, 112; and economy
in war expenditures, 114; on
imposition of internal revenue
taxes, 121, 122;i>refer8 taxation
to loans. 129; on state bank
notes, 133, 134; drafts National
Bank Bill, 134; takes charge of
Bill, 134, 135; argument for it,
135-137; and reconstruction
contest, 142; first relations with
Johnson, 15i5; becomes radical
on reconstruction, 158, 159. 169;
on Johnson and civil service,
159; opposes disfranchisement of
Southern whites, 159; on John-
son and Fourteenth Amendment,
160, 165; and Reconstruction
Act, 162. 163; and impeachment
of Johnson, 164; final commen-
dation of Johnson's policy, 168;
on conditions causing congres-
sional reconstruction policy and
Fifteenth Amendment, 169-171;
on Johnson's responsibility, 171;
plan of resumption (1866), ob-
jection to contraction, 175. 176.
178; on exchange of greenbacks
for bonds. 175, 212. 229, 240;
on suspending contraction, 183;
on control over currency, 184;
and reduction in tariff (1872),
194; financial statements, 198;
on diminishing imports, 198;
conservative estimations of re-
venue, 199; on income tax. 199,
393; funding scheme (1866),
203; on Refunding Bill of 1870,
204-206; on pajrment of inter-
est in coin, 204; on permanency
of greenbacks, 204. 213. 217.
421; on short-time bonds. 205; on
low-interest bonds for national
bank note security, 206. 422;
and payment of bonds in green-
backs, 211-215; and inflation,
213. 232, 233, 241-243; and
state taxation of federal bonds,
216; and pay of laborers (1868),
220; and Department of Ag-
riculture, 221; relations with
Grant, 222, 223; and with sub-
sequent Presidents, 223, 311; on
popularity of greenbacks, 226;
on necessity of resumption. 227;
on its effect on debtor class, 228,

INDEX

445

234; on fixed day for reflomption.
230; first stand for resumption,
232: advocacy of it (1873), 233-
235; (1874), 238-242; commit-
tee on resumption, 244r-246; re-
ports the bill, 246; on reissue of
greenbacks under the bill, 247;
on phraseology of bill, 248; in
Ohio campaign of 1875, 252;
partisanship in campaign of
1876, 254; on Democrats and
Grant's administration, 255;
"visiting statesman," 255; and
return of Louisiana Board, 256;
and Electoral Gommission, 256;
report on railway rates (1874),
337.

/Secretory of (he TrtOBury: ten-
der of portfolio, 257; tasks. 257;
qualifications, 257; and sale of
refunding bonds, policy of popu-
lar subscriptions, 257-260, 271,
289; on payment of bonds in
gold, 260, 266; on silver ques-
tion (1877), 264-266; and Bland
Silver Bill, 266, 269; prepara-
tion for resumption, 272; popu-
lar opposition to resumption
policy, 273; Toledo speech
(1878), 273; accomplishment of
resumption, 278-280; on its
effect on business, 279; portrait
for New York Chamber of Com-
merce, 279; and refunding after
resumption, 280-283; on neces-
sity of specie reserve, 285, 287;
on right to sell bonds to main-
tain resove, 286, 391; advises
limitation of amount of silver
dollars and of greenbacks, 286;
advises repeal of legal tender,
286; management of Depart-
ment, 290; and price of silver
bullion, 289; and removal of New
York custom-house officials, 290-
296; in New York campaign of
1879, 296; personal opinion of
Arthur, 296; suggested retention
of office under Garfield. 300: and
Grant's third-term aspirations,
302; candidacy for President
(1880), 301-304; (1884), 304;
(1888), 304-306; opposes Ar-
thur's nomination, 304; and
nominations of Harrison, 305,

385; not proper preridential tim-
ber, 306-309.

Senaior, mooni period: deo-
tion, 3(X). 301; good fortune in
securing election, 300; length
of second period, 301; character
of it, 309; position, 310; Com-
mittee on Finance, 310; presi-
dent pro-4Bm., 310; tidvocates na-
tional bank notes to full amount
of security. 312; and authorisa-
tion of three per cent, bonds,
314; and revision of tariff (1882),
315; and Tariff Bill of 1883, 319;
and civil service reform. 320:
and Blair Educational Bill, 322;
on repeal of military ineligibility
of ex-Oonfederates and test oath,
323; investigation of Southern
elections (1884), 324; on investi-
gating Payne's election, 325;
and Chinese exclusion, 328-331;
on relations with Canada, 331'
335.380; Committee on Foreign
Relations, 331; on Samoan Is-
lands, 335; anti-imperialist,
335. 394, 397, 414-416; on re-
lations with Mexico, 336; on
regulation of interstate com-
merce, long and short hauls, 341;
stat« jurisdiction, 341; pooling,
342; maximum passenger rate,
343; advocates a court, 343; on
CHeveland's tariff message, 344-
347; on proper use of surplus,
344; on advantages of protec-
tion, 345; on duties on raw ma-
terials. 346; and tariff on wool,
347, 350, 392; on Mills Bill, 347;
on South and protection, 347,
392; on protection for tin plate,
348; on necessity of frequent
tariff changes, 348; and Washing-
ton Monument, 349; and Mar-
shall statue, 349; and Lafayette
statue, 349; in Ohio campaigns
(1881-89), 349; urged to run for
Governor, 350; reelected Sena-
tor, 350, 384; in campaign of
1884, 351; in the South. 351;
speech at Nashville, 361; and
Silver Purchase Act, 353, 371-
373; first anti-trust proposal.
354; introduces Sherman Anti-
Trust Bill, 355; changes in 'its

446

INDEX.

ph m wotogy, 8g6; sisiimcDt f or
it. 358^360; on ito constitution-
ality. 360; on the renvideled
biU. 363; oradit for the bill. 364;
and transfer of reserve green-
backs, 360; on bimetallism. 376;
on MoKinley Bill. 380; on Isth-
mian Gbnal. 381-383. 406-408;
in campaign of 1802. 385; bill
to repeal purchase of silver, 386;
speech on repeal, 388-301; and
elforU to maintain specie reserve
(1803-06). 301; on Wilson-Gor-
man Tariff Bill. 301-303; opposes
income tax, 303; advocates an-
nexation of Hawaii (1804). 303.
304; on VenesuelarQuiana bound-
ary controversy, 306; on Monroe
Doctrine, 306; on intervention
in Chiba, 306, 408; on financial
oonditions (1806), 308; and ef-
forts for free silver. 300; on plan
to forbid sale of bonds to main-
tain specie reserve, 300; Reeol-
lectioru, 300; and campaign of
1806. 4(X). 403; reluctant accept-
ance of State portfolio, 404; last
session of Senate, 404; on Brit-
ish Qeneral Arbitration Treaty,
405.

Latt yean: term as Secretary
of State, 400; signs Hawaiian
Annexation Treaty, 410; and
Chiba, 411; practical superses-
sion as Secretary. 413; resigns,
414; reasons for resignation,
414-416; personal bitterness.
41 5; effect of relegation to private
life. 415; and death of wife, 416;
continues a Republican, 416;
illness in West Indies. 416; last
days, 417; President's procla-
mation on death, 417; burial,
417: importance of career, 418;
association with national mate-
rial growth. 418; great questions
of career, 410; Garfield on career.
427; Hoar's eulogy, 428; as em-
bodiment of character of his
time. 428; fame. 428. 420.

Traita: character in youth, 6;
scientific bent, 6; practicality,
8, 225; self-restraint, 16; as a
lawyer, 16; versatility and force-
tiilneaa, 17; married life. 10, 424;

graq>, 44; admtniatimtiTB man-
agement, 58; conservatism, 142,
410; development of partisan-
riiip, 142. 410; adverse to over-
turning Uigislation , 224; assertion
of pratigative, 224; and public
opinion, 225, 423; pronounced
stand on controversial questions.
306; not associated with stirring
issues, 306; as a practical poli-
tician, 308; without magnetism,
300; never absorbed by politics.
351; and General Sherman, 383;
impassive, 383; reserve, 384.
424; private and public thrift,
384. 423; failure of memory, 403,
414; personal bitterness, 420;
charges against, 420; inconsist-
ency. 420-423; and political ex-
pediency . 421 ; fofgetf ulness. 422;
style, 425, 428; concentration,
425; preparation of speeches,
425; literary taste, 426.

Sherman. Margaret C. (Stewart),
wife of J. S., 18; character, 10;
death. 416.

Sherman, Roger, ancestry, 2.

Sherman. Samuel, inmiigrant an-
cestor of J. S., 1.

Sherman, Taylor, grandfather of
J. S.. as office-holder, 4.

Sherman, Mrs. Taylor, lives with
J. S., 18.

Sherman, W. T., adopted by Sw-
ing, 5; character in youth, 6;
war pessimism, 85; on consoli-
dating depleted regiments. 80;
death, 383; character and J. S.,
383.

Sherman Brigade, 87.

Silver. See Bimetallism.

Silver Purchase Act. iSes Bimetal-
lism.

Slavery, value of exclusion to Ohio,
14: senith of power, 20; posi-
tive good. 20; finality of Com-
promise of 1850. 21: sacredness
of Missouri (Compromise, 22;
Southern disbelief in Northern
good faith in compromise, 23;
apprehension of loss of political
balance, 24; extension neces-
sary to preservation. 25; views
of right in territories. 25. 26;
Pierce's pliancy, 26; confidence

INDEX

447

of iMders (1854). 27. 29; re-
flponstbility for renewal of agi-
tation. 27, 47; Kansas^Nebraska
Act, 27; effect of it on North,
28-30; Dred Scott decision, 49;
effect of it on agitation, 50; and
Walker's filibustering, 54; con-
test absorbs public interest, 60;
events strengthening move-
ment against, 73; effect of John
Brown's raid, 74; proposed
amendment guaranteeing state,
76; and elements of Republican
party, 80-82; Thirteenth Amend-
ment ratified by South, 153. See
aUo Negroes.

South, J. S. on, and protection,
347, 392; J. S. in. 351. See
alao Civil War, Negroes, Recon-
struction, Slavery.

Spain. See Cuba.

Spaulding, E. G., Legal-Tender
Bill, 97. 99.

Speakership contests (1855), 35-
37; (1859), 61-64.

Specie reserve. See Resumption.

Spinner, F. E.. and J. S. (1859). 62.

Sprague, William, opposes Re-
sumption Bill, 248.

Squatter sovereignty, and terri-
torial slavery, 25; Stephens on.
25; in Kansas-Nebraska Act, 27;
nullified in Kansas, 38; nulli-
fied by Dred Scott decision, 49.

States' rights and interstate com-
merce and trust legislation, 357.

Stephens, A. H., on squatter sov-
ereignty, 25; and Bland Silver
Bill, 262.

Stevens, Thaddeus, and war fi-
nances, 92; on l^al tender, 101 ;
and National Bank Bill. 134;
Johnson's denunciation. 1 56;
and coin payment of bonds, 209.

Stewart. Judge, father-in-law of
J. S., 18; correspondence with
J. S., 19.

Stewart. Margaret C. iSee Sherman
(Margaret).

Stowe, Harriet B., Uncle Tom' a
Cabin as anti-slavery force, 73.

Subtreasury Act. plan to modify.
104. 108.

Suffrage, undo' Johnson's recon-
struction policy, 151; J. S. on

Southern reoo nstr uotioo, 150;
Johnson reqmnsibility for n^ro,
160; under Reconstruction Act.
161; Fifteenth Amendment,
166; J. S. on the Amendment,
170; J. S. on nullification of
negro (1884). 324.

Sugar, free trade and bounty under
McKinley Tariff Act, 377, 381.

Sumner, Charles, on lack of dis-
posable capital, 102; Johnson's
denunciation, 156.

Supreme Court, Dred Scott case,
49; legal-tender decisions, 188-
190; on state control of inter-
state commerce. 343.

Taney. R. B.. Dred Scott decision,
49.

Tariff, J. S.'s early advocacy of
protection, 31; importance of
Morrill Act. 65; review of earlier
legislation. 66-68; Morrill Act a
revenue measure rather than
protective, 68. 69; average rates
of Morrill Act, 69; specific and
ad valorem duties. 70 ; minimum
duties, 70; failure of Morrill Act
as revenue measure, 70; passage
of it, 71 ; J. S. on Morrill Act, 71 ;
general views of J. S., 71-73,420;
on raw material, 72; estimate
of receipts (July, 1861), 92; in-
crease (1861), 92; coin pasonent
of duties. 109; tendencies of war
legislation, 1 17; growth of desire
for protection. 118; war acts.
118; Act of 1864 as basic law.
119; development of protection,
191. 192; Wool Act of 1867. 192;
concession to agricultural inter-
ests, 192; addition of transpor-
tation charge in ad valorem com-
putations, 192; Wool Act of
1867, 192; reform sentiment,
reductions of 1870 and 1872,
193; sectional differences, 194;
J. S. and reduction (1872). 194;
reform sentiment wanes. 195;
increase (1875), 195; reciprocity
with Hawaii, 195; J. S. and
movement for revision (1881),
315; commission. 316; report of
oommitssion, 317; Senate Bill,
317; Bill in House and confer-

448

INDEX

eno0, 317; pnmaions of Act of
1883, 318; failure as a revenue
reducer, 318; J. 8. and the Act.
319; increased interest in, 319;
various bills, 320; Cleveland's
message, 344; J. 8. on it, 344-
347; on results of protection,
345; on duties on raw materials,
346; on Mills Bill, 347; on South
and protection, 347, 392; on
protection for tin plate, 348; on
need of frequent alterations,
348: and truaU, 360, 361, 364;
MoKinley Bill as logical meas-
ure, 376; avowedly protective,
377; special features of Bill, 377;
in Senate, 378; and reciprocity,
378; Customs Administration
Law. 378-380; J. S. and McKin-
ley BUI, 380; as issue in 1892,
386; J. 8. on Wilson-Gorman
Bill. 391-393; attempted hori-
lontal increase (1896). 398.

Taxation, Chase's plan (July.
1861), 92; direct and income,
imposed. 92; revenue from
(1862), 93; plan as alternative
of greenbacks, 104; reluctance
to impose, 110. 129; growth of
revenue from. 116, 117; of na-
tional banks. 138; policy of re-
duction. 191. 196; of federal
bonds. 216-217. Sw alao In-
ternal Revenue, Tariff.

Tea. tariff duties. 193.

Tenure of Office Act, J. S. on rea-
son for, 169; and impeachment,
164.

Territories, views on slavery in, 25,
26; Dred Scott decision on
slavery, 49; negro suffrage, 160.

Test oath. J. S. on repeal. 323.

Texas and national slavery bal-
ance. 24.

Thirteenth Amendment. Southern
ratification. 153.

Thomas. Ix>ren20, appointmentand
impeachment of Johnson. 164.

Tin plate, J. S. on protection. 348;
protection under McKinley Bill.
377.

Tipton. T. W.. opposes Resump-
tion Bill. 248.

Toucey, Isaac, Secretary of Navy.
congressional investigation, 56;

friiitewaahing naolution, 66;
J. S.'8 resolution of censure.
57.

Transportation as commerce, 361.
See aleo Interstate Commerce.

Treasury notes. See Paper Money.

TrerU affair and finances, 96.

Trumbull, layman, on enforce-
ment of Fugitive Slave Law, 81;
civil service reform. 320.

Trusts, state laws against, 353;
first congressional interest, 353;
House investigation (1888), 353;
firet Senate Bill. 354; defined.
354; J. S.'s firet bill (1888), 359;
constitutionality of legislation,
355, 357. 360; Sherman Anti-
Trust Bill introduced, 356; orig-
inal form, 355; amended phrase-
ology on intention, 355; inter-
state commerce aspect. 356, 358,
360, 362; evolutionary origin of
trusts not understood. 356; leg-
islation and states' rights, 356;
J. S.'s argument, 358-360; and
competition. 359; and reduc-
tion in prices. 360; and tariff,
360. 361. 364; Reagan on. 360;
obsolete views. 361; variety
of remedies. 361; amendments
to bill. 362; bill as remodeled by
Judiciary Clommittee. 362; passes
Senate. 363; objects of remod-
eled bill and means to accom-
plish them. 363; bill in House.
364; final passage, 364; credit
to J. S.. 364.

Uncle Tom'e Cabin. See Stowe.

Van Buren. Martin, order on hours

of labor. 220.
Venesuela-Guiana boundary que»-

tion. 395.
Vest. G. G.. on trusts and tariff,

360.

Walker. R. J., apd Lecompton
Constitution. 51.

Walker. William, filibustering ex-
peditions. 54; congressional re-
port on arrest by Paulding. 54-
56.

Washbume.E. B.. and J. S. (1859),
62.

INDEX

449

Waahington Monument, beginning ,
348; J. S. and completion,
349.

Wells. D. A., and Wool Act of
1807. 193.

Whigs, new aflKliations of formo',
34.

Whitfield. J. W.. election as dele-
gate from Kansas, 40, 41; un-
seated. 42.

Wilson-Gorman Tariff Bill. 391-
393.

Windom, William, and J. 8.

(1850), 61; istae of three per
cent, bonds, 314; report on rail-
way rates (1874). 337; report
on silver coinage, 366.

Wood. Fernando, and Bland Sil-
ver Bill. 262

Woodford. S. L.. and Cuban bel-
ligovncy, 412.

Wool, J. 8. on tariff on, 72, 347;
Tariff Act of 1867. 192; duties
in Act of 1883, 318; interest of
Ohio in. 350: free trade under
Wilson Act. 392.

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