Recollections of Forty Years in the House, Senate and Cabinet Part 114

I spoke on the 2nd of November in the Music Hall at Cleveland, and there again urged the election of Foraker. I give a short extract of the description of the speech as it appeared in the papers of that city:

"He ridiculed the third term scare of the Democracy and then paid a glowing tribute to the worth and integrity of Governor Foraker.

'Has any man said,' he asked, 'that Governor Foraker is a bad man; that he is not a good man? My countrymen, no one has said that.

He was a brave soldier. He is a self-made man; the son of good, plain people. He is self-educated. By integrity and toil he mounted, step by step, on the ladder of fame. Nearly every man who has arisen to prominence in our country has arisen from the ranks by toil. Such a man is Governor Foraker.'"

I spoke daily during the last two weeks of the canva.s.s and everywhere made the same appeal in behalf of Governor Foraker and the state ticket. The result of the election was that Campbell received a plurality of 10,872 votes and was elected. A majority of the legislature was Democratic, and subsequently elected Calvin S.

Brice United States Senator.

Elbert L. Lampson, the Republican candidate for lieutenant governor, was elected by a plurality of 22. The other candidates on the Republican state ticket were elected by an average plurality of about 3,000.

CHAPTER LVII.

HISTORY OF THE "SHERMAN SILVER LAW."

President Harrison's First Annual Message--His Recommendations Regarding the Coinage of Silver and Tariff Revisions--Bill Authorizing the Purchase of $4,500,000 Worth of Silver Bullion Each Month-- Senator Plumb's "Free Silver" Amendment to the House Bill--Subst.i.tute Finally Agreed Upon in Conference--Since Known as the "Sherman Silver Law"--How It Came to Be so Called--Chief Merit of the Law-- Steady Decline of Silver After the Pa.s.sage of the Act--Bill Against Trusts and Combinations--Amendments in Committee--The Bill as Pa.s.sed --Evils of Unlawful Combinations--Death of Representative Wm. D.

Kelley and Ex-Member S. S. c.o.x--Sketch of the Latter--My Views Regarding Immigration and Alien Contract Labor--McKinley Tariff Law--What a Tariff Is--Death of George H. Pendleton--Republican Success in Ohio--Second Session of the 51st Congress--Failure of Senator Stewart's "Free Coinage Bill."

The first session of the 51st Congress convened on the 2nd of December, 1889, both branches being Republican. President Harrison, in his message, reported a very favorable condition of the national finances. The aggregate receipts from all sources, for the fiscal year ending June 30, 1889, were $387,050,058. The total expenditures, including the sinking fund for that year, were $329,579,929. The excess of receipts over expenditures was $57,470,129. The estimated surplus for the current year was $43,678,883. This would justify, and the President recommended, a reduction of taxation to that amount. He called attention to the reduction of the circulation of national banks amounting to $114,109,729, and the large increase of gold and silver coin in circulation and of the issues of gold and silver certificates. The law then in force required the purchase of two million dollars worth of silver bullion each month, to be coined into silver dollars of 412 grains of standard silver nine- tenths fine. When this law was enacted, on the 28th of February, 1878, the price of silver in the market was $1.20 per ounce. Since that time to the date of his message the price had fallen to 70.6 cents an ounce. He expressed a fear of a further reduction of the value of silver, and that it would cause a difference in the value of the gold and silver dollars in commercial transactions. He called the attention of Congress to these three subjects of national importance--the reduction of taxation, the circulation of the national banks, and the further issue of silver coin and silver certificates, and invoked for them the considerate action of Congress.

He recommended the revision of the tariff law in such a way as not to impair the just and reasonable protection of our home industries, the free list to be extended to such domestic productions as our home industries did not supply. He referred approvingly to a plan for the increased use of silver, which would be presented by Secretary Windom.

The plan, submitted by Secretary Windom in his report, for increasing the use of silver in the circulation, provided that the treasury department should purchase silver bullion every month to a limited extent, paying therefor treasury notes receivable for government dues and payable on demand in gold, or in silver bullion at the current market rate at the time of payment, and that the purchase of silver bullion and the compulsory coinage of silver dollars under the act of 1878 should cease.

On the 28th of January, 1890, Senator Morrill introduced, by request, a bill which had been prepared by, and embodied the views of the Secretary of the Treasury. This bill was referred to the committee on finance, and was reported back by Senator Jones, of Nevada, February 25, with amendments. The first section of the amended bill authorized the Secretary of the Treasury to purchase $4,500,000 worth of silver bullion each month, and to issue in payment therefor treasury notes receivable for customs and all public dues, and when so received they might be reissued. They were also redeemable on demand in lawful money of the United States, and when so redeemed should be canceled. Such portion of the silver was to be coined as might be necessary to meet the redemptions authorized. Other sections provided for details by which the plan was to be effected.

To this bill I proposed an additional section authorizing the deposits of legal tender notes by national banks with the United States treasurer, to meet the redemption of the notes of such banks which had failed, gone into liquidation, or were reducing their circulation, to be covered into the treasury to the credit of an appropriation from which the money could be withdrawn as necessary to meet the payments of the notes for which the deposits had been made. The deposits of this character often exceeded $50,000,000, but under the plan proposed the money became immediately available in current disburs.e.m.e.nts, thus avoiding a h.o.a.rding of the notes in the treasury or the creating of a stringency in the circulation, and, at the same time, giving the government the use of the deposits until needed, by which the issue of bonds to a considerable extent would be avoided. This arrangement was accepted and eventually became section 6 of the law which is now in satisfactory operation.

In the progress of the debate on this bill every question connected with the financial operations of the government for twenty years was introduced and made the subject of debate, and especially the coinage act of 1873, and the dropping of the old silver dollar from coinage. Although this coin has been restored by the act of 1878, and hundreds of millions of such dollars had been coined, yet the Senators from the silver producing states, and especially Stewart, were continually harping on "the crime of 1873," as they called the coinage act of that year, a careful statement of which has already been made in these volumes.

The only new allegation made was that the amendment recommended by the Senate committee on finance, to strike out the franc dollar of 384 grains, provided for in the bill as it came from the House, and insert the trade dollar, was not agreed to in the Senate, but that the change was made in committee of conference, and pa.s.sed without the knowledge of the Senate. A conclusive answer was made to this statement by the production, from the files of the secretary's office, of the original bill as it stood after its pa.s.sage in the Senate and before it was sent to conference. As similar statements have been frequently made, I reproduce the portion of this original bill showing the section in question, with the printer's note accompanying the bill explaining the different type used in printing it. The word "AGREED" on the bill is in the handwriting of the journal clerk of the Senate, Mr. McDonald, who held that position many years until his death. It shows that the Senate adopted the recommendation of the committee on finance before the bill was sent to conference. This amendment was agreed to by the House conferees.

[Note in explanation of the bill (H. R. 2934).]

1. The body of the bill, printed in brevier, is as it came from the House.

2. Amendments to insert, reported by the Committee on Finance, are in _italics_.

3. Amendments to strike out, reported by the Committee on Finance, are in [brackets].

4. Amendments made by the Senate striking out words are in brevier, with brackets, and the words inserted in lieu thereof in the handwriting of the Clerk, are in SMALL CAPS.

IN THE SENATE OF THE UNITED STATES.

May 29, 1872.

Read twice and referred to the Committee on Finance.

December 16, 1872.

Reported by Mr. Sherman with amendments, viz.: Strike out the parts in [brackets] and insert the parts printed in _italics_.

January 7, 1873.

Mr. Sherman, from the Committee on Finance, reported additional amendments, which were ordered to be printed with the bill.

AN ACT Revising and amending the laws relative to the mints, a.s.say-offices, and coinage of the United States.

1 _Be it enacted by the Senate and House of Representatives of the 2 United States of America in Congress a.s.sembled_, 1 Sec. [16] 15. [That the silver coins of the United States shall be 2 a dollar, a half-dollar or fifty-cent piece, a quarter-dollar or twenty- 3 five-cent piece, and a dime or ten-cent piece; and the weight of the 4 dollar shall be three hundred and eighty-four grains; the half- dol 5 lar, quarter-dollar, and the dime shall be, respectively, one- half, 6 one-quarter, and one-tenth the weight of said dollar; which coins 7 shall be a legal tender, at their nominal value, for any amount not 8 exceeding five dollars in any one payment.] _That the silver coins 9 of the United States shall be a trade-dollar, a half-dollar or fifty- AGREED A DIME OR TEN-CENT PIECE 10 cent piece, a quarter-dollar or twenty-five-cent piece ^; and the 11 weight of the trade-dollar shall be four hundred and twenty grains 12 troy; the weight of the half-dollar shall be twelve grams and one- 13 half of a gram; the quarter-dollar and the dime shall be, respec- 14 tively, one-half and one-fifth of the weight of said half-dollar; 15 and said coins shall be a legal tender at their nominal value for 16 any amount not exceeding five dollars in any one payment_.

AGREED

On the 5th of June I made a speech covering not only the pending bill, and the cognate questions involved, but all the irrelative topics introduced by other Senators. I said:

"I approach the discussion of this bill, and the kindred bills and amendments pending in the two Houses, with unaffected diffidence.

No problem is submitted to us of equal importance and difficulty.

Our action will affect the value of all property of the people of the United States, and the wages of labor of every kind, and our trade and commerce with all the world. In the consideration of such a question we should not be controlled by previous opinions or bound by local interests, but, with the lights of experience and full knowledge of all the complicated facts involved, we should give to the subject the best judgment which imperfect human nature allows. With the wide diversity of opinion that prevails, each of us must make concessions in order to secure such a measure as will accomplish the objects sought for without impairing the public credit or the general interests of our people. This is no time for visionary theories of political economy. We must deal with facts as we find them and not as we wish them. We must aim at results based upon practical experience, for what has been probably will be. The best prophet of the future is the past.

"To know what measures ought to be adopted we should have a clear conception of what we wish to accomplish. I believe a majority of the Senate desire, first, to provide an increase of money to meet the increasing wants of our rapidly growing country and population, and to supply the reduction in our circulation caused by the retiring of national bank notes; second, to increase the market value of silver, not only in the United States, but in the world, in the belief that this is essential to the success of any measure proposed, and in the hope that our efforts will advance silver to its legal ratio with gold, and induce the great commercial nations to join with us in maintaining the legal parity of the two metals, or in agreeing with us in a new ratio of their relative value; and, third, to secure a genuine bimetallic standard, one that will not demonetize gold or cause it to be h.o.a.rded or exported, but that will establish both gold and silver as standards of value, not only in the United States, but among all the civilized nations of the world.

"Believing that these are the chief objects aimed at by us all, and that we differ only as to the best means to obtain them, I will discuss the pending propositions to test how far they tend, in my opinion, to promote or defeat these objects."

Those of us who were in favor of good money, whether of gold or silver, or whether issued by the government in the form of notes or currency by the national banks, all to be maintained at par with each other and of equal purchasing power, were constantly charged with reducing the volume of money. I showed that since the resumption of specie payments, January 1, 1879, there had been a constant annual increase in the total circulating medium of the country.

I furnished a table showing the steady increase of circulation during the period named, which I here insert:

THE AMOUNT AND KINDS OF MONEY IN ACTUAL CIRCULATION ON CERTAIN DATES FROM 1878 TO 1889.

Year. Date. Total circula- Gold coin. Standard sil- Subsidiary tion. ver dollars. silver.

1878. March 1. $805,793,807 $82,530,163 ........... $53,573,833 1879. October 1. 862,579,754 123,698,157 $11,074,230 54,088,747 1880. October 1. 1,022,033,685 261,320,920 22,914,075 48,368,543 1881. October 1. 1,147,892,435 328,118,146 32,230,038 47,859,327 1882. October 1. 1,188,752,363 358,351,956 33,801,231 47,153,750 1883. October 1. 1,236,650,032 346,077,784 39,783,527 48,170,263 1884. October 1. 1,261,569,924 341,485,840 40,322,042 45,344,717 1885. October 1. 1,286,630,871 348,268,740 45,275,710 51,328,206 1886. October 1. 1,264,889,561 364,894,599 60,170,793 48,176,838 1887. October 1. 1,353,485,690 391,090,890 60,614,524 50,414,706 1887. October 1. 1,384,340,280 377,329,865 57,959,356 52,020,975 1888. October 1. 1,405,018,000 375,947,715 57,554,100 52,931,352

Year. Date. Gold certifi- Silver cer- United States National cates. tificates. Notes.* bank notes.

1878. March 1. $44,364,100 ........... $311,436,971 $313,888,740 1879. October 1. 14,843,200 $ 1,176,720 327,747,762 362,950,938 1880. October 1. 7,480,100 12,203,191 329,417,403 340,329,453 1881. October 1. 5,239,320 52,590,180 327,655,884 354,199,540 1882. October 1. 4,907,440 63,204,780 325,272,858 356,060,348 1883. October 1. 55,014,940 78,921,961 321,356,596 347,324,961 1884. October 1. 87,389,660 96,491,251 325,786,143 324,750,271 1885. October 1. 118,137,790 93,656,716 318,736,684 311,227,025 1886. October 1. 84,691,807 95,387,112 310,161,935 301,406,477 1887. October 1. 97,984,683 154,354,826 329,070,804 269,955,257 1887. October 1. 134,838,190 218,561,601 306,052,053 237,578,240 1888. October 1. 116,675,349 276,619,715 325,510,758 199,779,011

*Includes outstanding clearing house certificates of the act of June 8, 1872.

Meanwhile, the House pa.s.sed a bill of like import to the one under consideration in the Senate, differing therefrom mainly in that it made the notes to be issued a full legal tender, and authorized the Secretary of the Treasury to redeem them in gold coin or silver bullion at current market rate. When this bill reached the Senate it was, by unanimous consent, accepted as a subst.i.tute for the Senate bill, and the discussion of the measure continued, occupying much of the time and attention of the Senate until June 17, 1890, when a vote was taken on an amendment proposed by Senator Plumb to strike out the first section authorizing the issue of notes and inserting the following:

"That from and after the date of the pa.s.sage of this act, the unit of value in the United States shall be the dollar, and the same may be coined of 412 grains of standard silver, or of 25.8 grains of standard gold, and the said coins shall be legal tender for all debts, public and private.

"That hereafter any owner of silver or gold bullion may deposit the same in any mint of the United States, to be formed into standard dollars, or bars, for his benefit, and without charge, but it shall be lawful to refuse any deposit of less value than $100, or any bullion so base as to be unsuitable for the operations of the mint."

This amendment was adopted by a vote of 43 to 24, the yeas being made up of Democrats and the Republicans from the silver producing states.

The adoption of this free silver amendment clearly indicated that a large majority of the Senate favored the free coinage of silver at the ratio of sixteen to one.

The other sections of the bill were then made to harmonize with this new provision, and the bill was pa.s.sed and returned to the House, where the amendments were nonconcurred in, and a conference asked for.

The Senate granted this request, and Senators Sherman, Jones, of Nevada, and Harris were appointed to meet Representatives Conger, Walker, and Bland, of the House, in conference, to adjust the wide disagreements. On July 7 a bill agreed upon in conference was reported to the Senate, Messrs. Harris and Bland not joining in the report. The bill agreed to became a law July 12, 1890, and was as follows:

"That the Secretary of the Treasury is hereby directed to purchase, from time to time, silver bullion to the aggregate amount of 4,500,000 ounces, or as much thereof as may be offered in each month, at the market price thereof, not exceeding one dollar for 371.25 grains of pure silver, and to issue, in payment for such purchases of silver bullion, treasury notes of the United States to be prepared by the Secretary of the Treasury, in such form and of such denominations, not less than one dollar nor more than $1,000, as he may prescribe, and a sum sufficient to carry into effect the provisions of this act is hereby appropriated out of any money in the treasury not otherwise appropriated.

"Sec. 2. That the treasury notes issued in accordance with the provisions of this act shall be redeemable on demand, in coin, at the treasury of the United States or at the office of any a.s.sistant treasurer of the United States, and when so redeemed may be reissued; but no greater or less amount of such notes shall be outstanding at any time than the cost of the silver bullion, and the standard silver dollars coined therefrom, then held in the treasury, purchased by such notes; and such treasury notes shall be a legal tender in payment of all debts, public and private, except where otherwise expressly stipulated in the contract, and shall be receivable for customs, taxes, and all public dues, and when so received may be reissued; and such notes, when held by any national banking a.s.sociation, may be counted as a part of its lawful reserve. That, upon demand of the holder of any of the treasury notes herein provided for, the Secretary of the Treasury shall, under such regulations as he may prescribe, redeem such notes in gold or silver coin, at his discretion, it being the established policy of the United States to maintain the two metals on a parity with each other upon the present legal ratio, or such ratio as may be provided by law.

"Sec. 3. That the Secretary of the Treasury shall each month coin 2,000,000 ounces of the silver bullion purchased under the provisions of this act into standard silver dollars until the 1st day of July, 1891, and after that time he shall coin of the silver bullion purchased under the provisions of this act as much as may be necessary to provide for the redemption of the treasury notes herein provided for, and any gain or seigniorage arising from such coinage shall be accounted for and paid into the treasury.

"Sec. 4. That the silver bullion purchased under the provisions of this act shall be subject to the requirements of existing law and the regulations of the mint service governing the methods of determining the amount of pure silver contained, and the amount of charges or deductions, if any, to be made.

"Sec. 5. That so much of the act of February 28, 1878, ent.i.tled 'An act to authorize the coinage of the standard silver dollar and to restore its legal tender character,' as requires the monthly purchase and coinage of the same into silver dollars of not less than $2,000,000 nor more than $4,000,000 worth of silver bullion, is hereby repealed.

"Sec. 6. That upon the pa.s.sage of this act the balances standing with the treasurer of the United States to the respective credits of national banks, for deposits made to redeem the circulating notes of such banks, and all deposits thereafter received for like purpose, shall be converted into the treasury as a miscellaneous receipt, and the treasurer of the United States shall redeem, from the general cash in the treasury, the circulating notes of said banks which may come into his possession subject to redemption; and upon the certificate of the comptroller of the currency that such notes have been received by him, and that they have been destroyed and that no new notes will be issued in their place, reimburs.e.m.e.nt of their amount shall be made to the treasurer, under such regulations as the Secretary of the Treasury may prescribe, from an appropriation hereby created, to be known as 'National bank notes: Redemption account,' but the provisions of this act shall not apply to the deposits received under section 3 of the act of June 20, 1874, requiring every national bank to keep in lawful money, with the treasurer of the United States, a sum equal to five per cent. of its circulation, to be held and used for the redemption of its circulating notes; and the balance remaining of the deposit so covered shall, at the close of each month, be reported on the monthly public debt statement as debt of the United States bearing no interest.

"Sec. 7. That this act shall take effect thirty days from and after its pa.s.sage."