Recollections of Forty Years in the House, Senate and Cabinet Part 24

"John Sherman.

"Mansfield, Ohio, September 28, 1861."

The matter thus rested until after the election on the 9th of October, when squads rapidly formed into companies, and within twenty days Camp Buckingham was opened near Mansfield.

In the performance of this self-imposed duty, I encountered but one difficulty, and at one time a very serious one, the selection of regimental officers, and especially of commanders of regiments.

I knew that military warfare was an art, a trade, an occupation, where education, experience and preparation are absolutely essential to effective service. The materials for soldiers abound everywhere, but without discipline, order, obedience, and severe drilling men are not soldiers. It was my desire to secure for the commanders of regiments two graduates of West Point. I made application direct to Washington for various details of officers of the regular army, so that the soldiers in Camp Buckingham might have experienced drill masters from the beginning. I failed to receive an answer, and went to Washington, earnestly impressed with the importance of my mission, and determined, if possible, that these men enlisted by me should not be placed in the front of the enemy until they had had all the benefit they could derive from military discipline and drilling. When I arrived I found that Secretary Cameron was indisposed to interfere with the purely military details of the army, while General Scott, a brave old soldier whom I always loved and admired, was firmly of the opinion that the favorable result of the war depended upon strengthening the regular army, maintaining its force and discipline, and especially retaining its valuable officers. The regular army, almost disbanded at the beginning of the war, was gradually filling up upon the basis of a new organization and long enlistments, but it was idle, it seemed to me, to expect that the young men of the country would enlist in the regular service. While ready to respond to the call of their country in its actual peril, they had no purpose to become regular soldiers for life. It appeared to me, therefore, that the manifest policy of the government should be to allow the regular army to be gradually absorbed into the volunteer service, where the young officers educated at the expense of the government might impart instruction to regiments and brigades, instead of to squads and companies. I spoke to General Scott about this, and the result of my interview was very unpleasant. I fear we both lost our temper, though I never ceased to respect the old general for the great service he had rendered his country; but his day was past.

After consulting Major Garesche, a.s.sistant Adjutant-General, as to the names of officers, I then applied to the President, explained to him fully the situation of affairs, my promise, the gathering of the soldiers in Camp Buckingham, their inexperience, and want of drill masters, their ardent patriotism, stated my interview with General Scott, and appealed to him to help me out of the dilemma.

I never shall forget the interview with Mr. Lincoln, for he did not hesitate, but sent for Major Garesche, and gave me the coveted order before I left him, directing the Secretary of War to detail two second lieutenants, James William Forsyth, of Ohio, and Charles Garrison Harker, of New Jersey, and Sergeants Bradley and Sweet, of the regular army, for service in the Ohio Volunteers, under my direction. This order was the key that unlocked the difficulty and gave to the force the elements of military discipline. At the same time the requisite orders were given for uniforms, arms of the best pattern, cannon, horses and various equipments.

I then procured the detail of Major Robert S. Granger, of the United States army, to command the camp and to organize the force. He had graduated as a cadet from Ohio, was one of the officers of the regular army surrendered by General Twiggs to the State of Texas before the beginning of the war, and had given his parole not to serve in the army until exchanged. Though this was not held to apply to the enlistment of volunteers he so construed his parole as to prevent him from serving in his regiment until duly exchanged.

When this was done he entered the service and was rapidly promoted to Major General of Volunteers.

Within sixty days 2,340 young men of Ohio were formed into the 64th and 65th regiments, the 6th battery of artillery, and McLaughlin's squadron of cavalry, armed with the best arms then in the service, uniformed, equipped and partly drilled as soldiers, ready to march, and actually marching, to the seat of war. No better material for soldiers, and no better soldiers in fact, ever enlisted in any cause or any service.

I insert a letter from General Garfield written when he was in command of this brigade:

"Headquarters, 20th Brigade, } "In the Field, 6 Miles from Corinth, Miss., May 17, 1862.} "Hon. John Sherman, Washington, D. C.

"Dear Sir:--I am now in command of the 20th Brigade, composed of the 64th and 65th Ohio (the regiments raised by yourself) and the 13th Michigan and 51st Indiana Regiments. I have sent forward to Washington the name of Lt. D. G. Swain (65th Ohio) of Salem, O., for appointment as A. A. Gen. on my staff. He is an excellent officer, and his nomination has been approved by Gen. Buell. I will be particularly obliged to you if you will aid in securing his appointment as soon as possible. The whole army advances toward Corinth this morning.

"Very respectfully yours, "J. A. Garfield, "Brig. Gen. Vols. U. S. A."

When General Sherman was in Louisville in October, 1861, he was called upon by Secretary Cameron, and they engaged in a general discussion of the military situation. General Sherman said that for aggressive movements, the United States would require 200,000 men. This was so far beyond the ideas of the time that he was regarded as crazy, and was soon after relieved from his command by General Buell. Secretary Cameron was blamed for this, but his letter to me, here inserted, shows that he was absent from Washington when the order was made:

"War Department, Nov. 14, 1861.

"Sir:--Your letter of the 10th inst. is received. General Sherman was recalled from the command in Kentucky during my absence at the north on official business. Since my return on the 11th, I have not had time to make any inquiries concerning the cause of the change, but I feel certain it was not from any want of confidence in the patriotism or capacity of your brother. He has been ordered to Missouri, under the immediate command of Major General Halleck, of the regular army, and the fact that he has been so a.s.signed is evidence of the confidence reposed in him.

"Very respectfully, your obedient servant, "Simon Cameron, Secretary of War."

CHAPTER XII.

Pa.s.sAGE OF THE LEGAL TENDER ACT IN 1862.

My Interview with Lincoln About Ohio Appointments--Governmental Expenses Now Aggregating Nearly $2,000,000 Daily--Secretary Chase's Annual Report to Congress in December, 1861--Treasury Notes a Legal Tender in Payment of Public and Private Debts--Beneficial Results from the Pa.s.sage of the Bill--The War Not a Question of Men, but of Money--Proposed Organization of National Banks--Bank Bills Not Taxed--Local Banks and Their Absorption by the Government--The 1862 Issue of $150,000,000 in "Greenbacks"--Legal Tender Act a Turning Point in Our Financial History--Compensation of Officers of the Government.

About this time I had an interview with Mr. Lincoln which may be of interest. In making the local appointments in Ohio he was naturally governed largely by his strong affinities for old Whig a.s.sociates in Congress, of one of whom, General Schenck, he was especially fond. I thought some of his appointments in Ohio were not judicious, and concluded I would go to him and make a general complaint of the distribution of these offices. I felt that he failed to consider the fact that the Republican party contained many men who had not belonged to the Whig party. I requested an interview with him which was promptly granted, and called at his office one evening. He was seated in an easy chair and seemed to be in excellent humor. I proceeded to complain of some of his appointments in Ohio and as I progressed the expression of his face gradually changed to one of extreme sadness. He did not say a word, but sank in his chair, placing his feet upon the table, and looking, as I thought, the picture of despair. I proceeded with my complaint until I began mentally to reproach myself for bothering the President of the United States with so unimportant a matter as the choice of persons to fill local offices in Ohio, when the country was in the throes of revolution. Finally I told him I felt ashamed to disturb him with such matters and would not bother him again with them. His face brightened, he sat up in his chair and his whole manner changed, until finally he almost embraced me. He then told me many interesting stories of his short service in Congress and of the men with whom he was brought in contact. The close of the interview was very pleasant and I kept my promise to him about his appointments.

When Congress convened on the 2nd of December, 1861, the financial condition of the government was more alarming than at any other period during the war.

The Secretary of the Treasury had ample and complete authority, given him by the act of July, 1861, to borrow money on the credit of the government, but he could not deal with the system of state banks then existing in the several states. He was forbidden, by the sub-treasury act of 1846, to receive notes of state banks and was required to receive into and pay from the treasury only the coin of the United States; but by the act of August 5, 1861, he was permitted to deposit to the credit of the Treasurer of the United States, in such solvent specie-paying banks, as he might select, any of the moneys obtained from loans, the moneys thus deposited to be withdrawn only for transfer to the regularly authorized depositaries, or for the payment of public dues, including certain notes payable on demand, as he might deem expedient. He had, however, no authority to receive from individuals or banks any money but coin.

The coin received from the Boston, New York, and Philadelphia banks, in payment of their subscriptions to the government loans, to the amount of nearly $150,000,000, had to be sent to every point in the United States to meet public obligations, and, when thus scattered, was not readily returned to the banks, thus exhausting their resources and their ability to loan again.

The demand notes, authorized by the act of July 17, 1861, were also paid out by the treasury; but from time to time were presented for redemption in coin or in payment of customs duties to the exclusion of coin, and thus both the banks and the government were greatly crippled, the banks suspending specie payments on the 30th day of December, 1861.

At this time an army of 500,000 Union soldiers was in the field, and a powerful navy, with vast stores of artillery and ammunition, had been created. In providing for their sustenance, comfort and equipment the government had been obliged to incur expenses far exceeding in magnitude any which had been hitherto known in its history, aggregating nearly $2,000,000 per day.

It was apparent that a radical change in existing laws relating to our currency must be made, or the government would practically be unable to make the current disburs.e.m.e.nts on account of the war, and the destruction of the Union would be unavoidable, notwithstanding the immense resources of the country which had then hardly been touched.

The annual report of Secretary Chase reached Congress on the 10th of December, having been delayed by the press of business. So much of it as related to the currency was the basis of the long debates that followed. The circulation of the banks of the United States on the 1st of January, 1861, was reported at $202,000,767. Of this $152,000,000, in round numbers, was in the loyal states, including West Virginia, and $50,000,000 in the rebel states, the whole const.i.tuting a loan without interest from the people to the banks, costing the latter only the expense of issue and redemption and the interest on the specie kept in hand for the latter purpose.

The secretary called especial attention to the organization and nature of these banks, and questioned whether a currency of banks issued by local inst.i.tutions under state laws was not in fact prohibited by the national const.i.tution. He said:

"Such emissions certainly fall within the spirit, if not within the letter, of the const.i.tutional prohibition of the emission of 'bills of credit' by the states, and of the making by them of anything except gold and silver coin a legal tender in payment of debts. However this may be, it is too clear to be reasonably disputed that Congress, under its const.i.tutional powers to lay taxes, to regulate commerce, and to regulate the value of coin, possesses ample authority to control the credit circulation which enters so largely into the transaction of commerce, and affects in so many ways the value of coin. In the judgment of the secretary, the time has arrived when Congress should exercise this authority."

He described with great force the weakness of the state banking system, and the repeated losses by the people of the United States on account of the failure of such banks. He recommended two plans by either of which he held that these banks might be absorbed, and a national currency be subst.i.tuted in the place of their issues.

One plan proposed the gradual withdrawal from circulation of the notes of private corporations, and the issue in their stead of United States notes, payable in coin on demand, in amounts sufficient for the useful ends of a representative currency. The other proposed a system of national banks authorized to issue notes for circulation under national direction, to be secured as to prompt convertibility into coin by the pledge of United States bonds and other needful regulations. He discussed these two plans at length, but concluded by recommending a system of national banks, the advantages of which would be uniformity in currency, uniformity in security, an effectual safeguard against depreciation, and protection from losses from discounts and exchanges. He expressed the opinion that such notes would give to the government the further advantage of a large demand for government securities, of increased facilities for obtaining the loans required for the war, a reduction of interest, and a partic.i.p.ation by the government in the profit of circulation without risking the perils of a great money monopoly. It will be noticed that the secretary nowhere suggested the suspension of coin payments, or making the notes a legal tender in payment of public and private debts, or the redemption in coin of the bank notes to be issued.

These recommendations were referred to the committee of ways and means of the House, and by it to a sub-committee, of which Elbridge G. Spaulding, of New York, was chairman. Undoubtedly we owe to him, more than to any other individual Member, the important and radical changes made in our currency system by the act reported by him to the House and amended in the Senate. Mr. Spaulding perceived the objection to the recommendations of Secretary Chase that they did not provide for any payments but in coin, or call for a suitable provision that the notes when issued should be a legal tender for public and private debts, or for their reissue in case of payment, nor did they provide for the absorption of the demand notes outstanding, which were, on their face, payable on demand, an obligation that could not be ignored without severely impairing the public credit. It was also apparent that the system of national banks proposed by the secretary could not be organized and put in effective force for a year or more, and that in the meantime the state banks would be in a condition of suspension, without coin or the possibility of obtaining it, and, with no effective money which the people were bound to receive, or which the government could receive, it would have been difficult to carry on the operations of the war.

The first bill introduced by Mr. Spaulding, on the 30th of December, met some of these difficulties. It provided for the issue of $50,000,000 treasury notes, payable on demand, the notes to be receivable for all debts and demands due to or by the United States, to be a legal tender in payment of all debts, public or private, within the United States, and exchangeable at their face value, the same as coin, at the treasury of the United States, and the offices of the a.s.sistant treasurers in New York, Boston, Philadelphia, St. Louis and Cincinnati, for any of the coupon or registered bonds which the secretary was authorized to issue. It also contained this provision: "Such treasury notes may be reissued from time to time as the exigencies of the public service may require," the first authority ever given for the reissue of treasury notes after redemption.

On the 7th of January, 1862, Mr. Spaulding reported the bill to the House with some important changes, and it soon became the subject of a long and interesting debate. On the 22nd of January, Secretary Chase returned Mr. Spaulding's bill to him and suggested some modifications, referring to the legal tender clause as follows, being his first reference to that clause:

"Regretting exceedingly that it is found necessary to resort to the measure of making fundable notes of the United States a legal tender, but heartily desiring to co-operate with the committee in all measures to meet existing necessities in the most useful and least hurtful to the general interest, I remain," etc.

In a letter to the committee of ways and means, on the 29th of January, the secretary said:

"The condition of the treasury certainly needs immediate action on the subject of affording provision for the expenditures of the government, both expedient and necessary. The general provisions of the bill submitted to me seem to me well adapted to the end proposed. There are, however, some points which may, perhaps, be usefully amended.

"The provision making United States notes a legal tender has doubtless been well considered by the committee, and their conclusion needs no support from any observation of mine. I think it my duty, however, to say, that in respect to this provision my reflections have conducted me to the same conclusion they have reached. It is not unknown to them that I have felt, nor do I wish to conceal that I now feel, a great aversion to making anything but coin a legal tender in payment of debts. I has been my anxious wish to avoid the necessity of such legislation. It is, however, at present impossible, in consequence of the large expenditures entailed by the war, and the suspension of the banks, to procure sufficient coin for disburs.e.m.e.nts; and it has, therefore, become indispensably necessary that we should resort to the issue of United States notes.

. . . Such discrimination should, if possible, be prevented; and the provision making the notes legal tender, in a great measure at least, prevents it, by putting all citizens, in this respect, on the same level, both of rights and duties."

On the 3rd of February the secretary wrote to Mr. Spaulding as follows:

"Mr. Seward said to me on yesterday that you observed to him that my hesitation in coming up to the legal tender proposition embarra.s.sed you, and I am very sorry to observe it, for my anxious wish is to support you in all respects.

"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, 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."

On the 5th of February the secretary became more urgent, and wrote to Mr. Spaulding the following brief note:

"My Dear Sir:--I make the above extract from a letter received from the collector of New York this morning. It is very important the bill should go through to-day, and through the Senate this week.

The public exigencies do not admit of delay.

"Yours truly, "S. P. Chase.

"Hon. E. G. Spaulding."

It will thus be perceived that, whatever may have been the const.i.tutional scruples of Secretary Chase in respect to the legal tender clause, he yielded to it under the pressure of necessity, and expressed no dissent from it until, as chief justice, his opinion was delivered in the case of Hepburn vs. Griswold, in the Supreme Court of the United States.

The bill, much modified from the original, pa.s.sed the House of Representatives by the decided vote of yeas 93, nays 59. As it pa.s.sed the House it contained authority to issue, on the credit of the United States, United States notes to the amount of $150,000,000, not bearing interest, payable to bearer at the treasury of the United States, at Washington or New York. It provided that $50,000,000 of said notes should be in lieu of the demand treasury notes authorized by the act of July 17, 1861, and that said demand notes should be taken up as rapidly as practicable. It provided that the treasury notes should be receivable in payment of all taxes, duties, imports, excise, debts and demands of all kinds due to the United States, and all debts and demands owing by the United States to individuals, corporations and a.s.sociations within the United States, and should be lawful money and a legal tender, in payment of all debts, public and private, within the United States.

This bill came to the Senate on the 7th of February. It was followed on the same day by a letter from Secretary Chase to Mr. Fessenden, as follows:

"Sir:--The condition of the treasury requires immediate legislative provision. What you said this morning leads me to think that the bill which pa.s.sed the House yesterday will hardly be acted upon by the Senate this week. Until that bill shall receive the final action of Congress, it seems advisable to extend the provisions of the former acts, so as to allow the issue of at least $10,000,000 in United States notes, in addition to the $50,000,000 heretofore authorized. I transmit a bill framed with that object, which will, I trust, meet your approval and that of Congress. Immediate action on it is exceedingly desirable."

The request for authority to issue $10,000,000 additional demand notes was immediately granted, and the bill was pa.s.sed without opposition.

The currency bill was considered in the committee on finance of the Senate, and four important and radical amendments were reported by that committee. These amendments were as follows: