Recollections of Forty Years in the House, Senate and Cabinet Part 82

My coming to Ohio naturally excited a good deal of comment and of opposition from Democratic speakers and papers. I was charged with nepotism in appointing my relatives to office, but upon examination it was found that I had appointed none, though several, mostly remote, were holding office under appointments of General Grant.

On the 25th of August I left Mansfield for Columbus and Cincinnati, and on the train met Charles Foster and others on their way to Mount Vernon. On their arrival they were met by flags and music, and in response to the calls I made a brief speech.

On the 27th of August I made my usual annual visit to Cincinnati and the Chamber of Commerce of that city. That body is composed in almost equal numbers of members of the two great parties, and therefore, in addressing it, I carefully refrain from discussing political topics. At that time there was a good deal of discussion of the order made by me on the 13th of August, addressed to the treasurer of the United States, directing him not to withdraw from bank depositaries the money deposited for the payment of called bonds, until it was required for that purpose. At the date of that order over $70,000,000 of called bonds were still outstanding, but only $52,000,000 remained on deposit with national bank depositaries to pay them, thus showing that $18,000,000 United States notes had been withdrawn from the depositaries into the treasury in advance of their need for such payment. These sums were fully secured by the deposit with the government of bonds to the amount of such deposits and a further sum of bonds to the amount of five per cent.

of the deposit.

I felt that the withdrawal of this great sum in advance of the presentation of the called bonds would necessarily create an injurious contraction of the currency. To meet this condition of affairs, upon the advice of the treasurer at Washington and the a.s.sistant treasurer at New York, and the pressing complaints of business men not interested in depositary banks, I issued this order:

"Treasury Department, August 13, 1879.

"Hon. James Gilfillan, Treasurer United States.

"Sir:--With a view to closing as soon as practicable the accounts of the department with depositary banks on loan account, without unnecessary disturbance of the money market or the withdrawal of legal tenders from current business, you will please receive from such depositaries in payment called bonds to be credited when pa.s.sed through the loan division. You will require from such depositaries sufficient money in addition to the called bonds, to insure the withdrawal of all deposits on loan account on or before the 1st of October next. The letter of the department of March 26 is modified accordingly.

"Very respectfully, "John Sherman, Secretary."

It was said that this was done to relieve the banks, and especially the First National and the National Bank of Commerce, of New York, which in closing out the refunding operations had, as already stated, made large subscriptions for themselves and others, and it was intimated that I was interested in these banks. This innuendo was without foundation or excuse, and was made merely to create a political sensation. This order was made, not at the request of the banks, for they were entirely prepared to pay the money, but at the urgent demand of business men, that the currency should not be withdrawn from the banks where it was employed in active business, and be deposited in the treasury where it would lay idle.

I thus explained the matter to the Chamber of Commerce, and to the public at large. I felt that it would not be advisable for me to drain the money market of legal tenders, and to h.o.a.rd them in the treasury to await the presentation of called bonds. If such a course had been adopted, the clamor would have been louder and more just. The order, no doubt, had a happy effect, as the running accounts were rapidly and quietly closed, by the payment of the called bonds, without any disturbance in the money market. The clamor made was beneficial because it induced the holders of the called bonds to send them in for payment, in which I greatly rejoiced.

In the evening of that day a reception was given to me at the Lincoln club. While it was going on a large crowd, headed by a band, approached the clubhouse, and loudly insisted that I should speak to them. As this was a political club, I felt at liberty, on being introduced by Warner M. Bateman, to make a political speech, mainly devoted to my early friend, General Ewing, and his peculiar notions of finance. This was reported in the papers at the time. If there was too much political feeling manifested in my speeches at this period, it may be partly excused by the extreme violence of denunciation of me by Democratic speakers and newspapers.

Later in the evening I visited Wielert's pavilion, on Vine Street, where the usual evening concert was being given. The visitors were mainly German citizens, and, as such, were known to be in favor of a sound currency based upon gold and silver. The orchestra at once stopped the piece they were playing, and played the "Star Spangled Banner," amid the cheering of the a.s.semblage. They insisted upon a speech, and I said:

"When I came here to-night I did not expect to make a speech, as I have made one already. I only came to see the people enjoy themselves, to drink a gla.s.s of that good old German beverage, beer, and to listen to the music. I am very happy to meet you, and shall carry away with me a kindly remembrance of your greeting.

All I want, and that is what we all want, is honest money. A dollar in paper is now worth a dollar in gold or silver anywhere in this country, and we want affairs so shaped that the paper money issued may be exchanged anywhere or under any circ.u.mstances for gold or silver. That is my idea of honest money. [Cries, 'That is so.'

'That is ours, too,' etc.] We may be a.s.sured that such shall be the character of the money in our country if the people will sustain the party which has equalized the values of the paper and metal moneys. Again I thank you for your kind reception."

I returned to Washington and remained there during the month of September, actively employed in the duties of the department.

During this month nearly all the outstanding called bonds were presented and paid, and all sums deposited with national banks during the operation of refunding were paid into the treasury and these accounts closed.

Fruitful crops in the United States, and a large demand for them in Europe, caused an acc.u.mulation of coin in this country. Much of it came through the customhouse in New York, but most of it was in payment for cotton and provisions. It was readily exchanged for United States notes and silver certificates. As all forms of money were of equal purchasing power and paper money was much more convenient to handle than coin, the exchange of coin, by the holders of it, for notes or certificates, was a substantial benefit to them and strengthened the treasury. I promoted these exchanges as far as the law allowed. I deemed it wise to distribute this coin among the several sub-treasuries of the United States, maintaining always the reserve for the redemption of United States notes in the sub- treasury in New York as the law required. For this purpose I issued the following order:

"Treasury Department, } "Washington, September 19, 1879.} "Gold coin beyond the needs of the government having acc.u.mulated in the treasury of the United States, by the deposit in the several public a.s.say offices of fine bars and foreign coin, for which the depositors have been paid, at their option, in United States notes, the treasurer of the United States, and the several a.s.sistant treasurers at Boston, New York, Philadelphia, Baltimore, Cincinnati, Chicago, St. Louis, New Orleans and San Francisco, are hereby authorized to pay out gold coin as well as silver coin and notes upon the current obligations of the government, and upon advances to disbursing officers, as may be convenient and practicable.

Transfers of coin for this purpose will be made to any a.s.sistant treasurer, when necessary, by the treasurer of the United States, upon application to him. The treasurer of the United States in this city, upon the receipt by him of a certificate of deposit issued by the United States a.s.sistant treasurer at New York, stating that there has been deposited with him legal tender notes in the sum of $100 or multiples thereof, will also cause to be shipped from the mint to the depositor, at his risk and expense, a like amount of gold coin. Standard silver dollars may also be obtained as heretofore.

"John Sherman, Secretary."

The result of this policy was beneficial, though the demand for coin rarely existed except for foreign exchange, and this was generally in New York, and largely depended upon the balance of trade. Our people had been so accustomed to the use of paper money that they received and paid United States notes in preference to coin, and this more readily since these notes were equal in purchasing power to coin.

Senator Thurman, my colleague and personal friend, was active in the canva.s.s in Ohio. His term expired on the 4th of March, 1881, and he was a candidate for re-election by the legislature about to be chosen. I heard of his speeches, especially those in respect to resumption. He commented upon the fact that United States notes were only redeemed in the city of New York, and claimed that we had not actually resumed, for gold was not in circulation. He appealed to his audiences to say whether they had any gold and whether they were not compelled to receive the same greenbacks then as they had since the period of the war, and said if they wanted gold they had to go to New York for it. I regarded this as a piece of demagogism, for he knew the difference between the greenbacks then and the greenbacks before resumption. Hearing that he was to speak in Bellaire shortly I arranged to have certain disburs.e.m.e.nts for wages in that neighborhood made in gold coin. When he made his speech in Bellaire, soon afterwards, he repeated the same statements that he had previously made, and appealed to the audience to know whether they had seen any of the gold coin they had heard so much about. Much to his surprise and embarra.s.sment quite a number of persons held up and shook gold coin. This put a stop to his inquiries. The people appreciated the advance in the purchasing power of their money, and neither demanded coin nor cared for it.

Early in October I yielded to the urgent request of Mr. Foster to help in the closing days of the canva.s.s, and, on the evening of the 8th, addressed a meeting at the west front of the capitol in Columbus, far exceeding in numbers any political gathering during the campaign. My opening will indicate the general trend of my remarks:

"It is not within my power to reach with my voice all who have a.s.sembled on this occasion, and besides, for some time I have not been much in the habit of speaking in the open air, and don't know how long my voice will hold out, but I think I will be able to say all that you will desire to hear from me, as I will be followed by a gentleman distinguished in war and able to supply any imperfections in my address.

"When I was here in August last it appeared that the great point in the political contest in which we were about to engage was whether the people of Ohio would stand fast to the resumption of specie payments, which the Republicans, by a steady and patient courage and unswerving conviction, had finally brought to a successful consummation on the 1st day of January last, or whether the people of Ohio would yield to the wild and fanciful ideas of inflation, and desert the great good that had been accomplished after so long a trial.

"The Democratic party, which had been holding the honored principles of that party, seemed to be willing to go after strange G.o.ds, and to form new alliances, to do anything to gain success, and that old party sought to form at least temporary alliances, so that the people would forget the great issue, and follow after these strange and delusive ideas of which I will speak. Therefore it was that my friend General Ewing was nominated for Governor of Ohio, with the expectation that as he had advanced some such ideas in times past, a coalition would be made between the parties naturally hostile, and that the State of Ohio would be thus gained for the Democratic ticket."

In the course of my remarks I read an extract from General Ewing's speech of the year before, in which he stated that if we were out of debt to foreign countries, and if our foreign commerce floated under our own flag, resumption in gold and silver would be impossible on the then volume of paper money; that if it were attempted the desperadoes of Wall street and the money kings of England would present greenbacks, and take the gold as fast as it could be paid over the counter of the treasury. I said in reply:

"Not a year rolled around until this resumption came, and these Wall street desperadoes and these money kings of Europe, instead of coming and demanding our gold in exchange for greenbacks, now bring their gold to us and want greenbacks for it.

"The money kings of Europe have brought us gold--$36,900,000 in gold coin from France--and the English have brought their gold and exchanged it for United States notes. And these Wall street desperadoes are as eager to get our greenbacks as you are. They don't want the gold at all and we cannot put it on them. Why, my countrymen, United States notes may now travel the circuit of the world with undiminished honor, and be everywhere redeemed at par in coin. They are made redeemable everywhere, and at this moment the greenback is worth a premium on the Pacific coast and in the Hawaiian Islands, and in China and j.a.pan it is worth par; and in every capital of Europe, in Berlin, in Paris, in London, an American traveling may go anywhere in the circuit of the civilized world, and take no money with him except United States notes.

"Well, now, General Ewing was mistaken. Well, why don't General Ewing come down and say 'I was mistaken?' [A voice, 'He will come down.'] Yes, after next Tuesday he will."

On the next day I spoke at Springfield to an audience nearly as large, following the general lines of my Columbus speech. On the following day I spoke at Lancaster from a stand in front of the town hall, in plain sight of the house in which General Ewing and I were born. I spoke of General Ewing in very complimentary terms, said we had been intimate friends from boyhood, that our fathers had been friends and neighbors, but that he and I then found ourselves on opposite sides of a very important question. I expressed my respect for the sincerity of General Ewing's motives, but believed that he was thoroughly and radically wrong. I said I wished to state frankly how he was wrong, and to what dangerous consequences the fruit of his errors would lead, and I wanted the people of Lancaster to judge between us.

On the Sat.u.r.day before the election I spoke in Ma.s.sillon. By some misunderstanding I was advertised to speak on that afternoon at both Ma.s.sillon and Mansfield, but, by an arrangement subsequently made, I spoke at Ma.s.sillon to one of the largest meetings of the campaign, and then was taken by special train to Mansfield in time to make my closing speech in the canva.s.s. It was late in the afternoon, but the crowd that met to hear me remained until my arrival, of which the following account was given by the local paper:

"But the grand ovation was reserved for our distinguished townsman, Secretary Sherman. There were acres of men, women, and children and vehicles at the depot to meet him, and as he stepped from the cars he was greeted with the booming of cannon, the music of half a dozen bands, and the loud and long acclaim that came from the throats of the immense concourse of friends. A thousand hands of old neighbors were stretched out to grasp his as he moved along with great difficulty, piloted by the reception committee, through the vast and surging crowd. Cheer after cheer went up on every imaginable pretext, and many times calls for 'Three cheers for John Sherman, our next President,' were honored with a power and enthusiasm that left no room for doubt as to the intensity of the devotion felt for him at his old home."

In this connection I wish to say once for all that I have been under the highest obligations to the people of Mansfield during my entire life, from boyhood to old age. I have, with rare exceptions, and without distinction of party, received every kindness and favor which anyone could receive from his fellow-citizens, and if I have not been demonstrative in exhibiting my appreciation and grat.i.tude, it has nevertheless been entertained, and I wish in this way to acknowledge it.

In opening my address in the evening I said:

"My fellow-townsmen, I regret your disappointment of to-day, that, by some misunderstanding as to the hour of your meeting, I felt it my duty, in obedience to the request of the state committee, to attend the great ma.s.s meeting as Ma.s.sillon this afternoon, and now come before you wearied and hoa.r.s.e, to speak of the political questions of the day.

"When I was in Ohio in August last, the chief question in the pending political canva.s.s was, whether the resumption of specie payments, so long and steadily struggled for, and happily accomplished by the Republican party, should be maintained, or whether it should give way to certain wild and erratic notions in favor of irredeemable paper money. Upon this issue General Ewing was nominated by the Democratic party, in the hope that he would gain support from a third party committed to inflation. Since then it would appear that the Democratic leaders seek to change the issue. The same old questions about the rights of states to nullify the laws of the United States--the same old policy to belittle and degrade our national government into a mere confederacy of states--are now thrust forward into prominence."

On the following Tuesday I voted, and immediately started for Washington. The news of the triumphant election of Foster and Hickenlooper, by over 30,000 majority, and a Republican majority of twenty-five in the legislature, reached me while on the train.

The management by Governor Foster of his canva.s.s, and his work in it, was as laborious and effective as any ever conducted in Ohio.

He visited every county in the state, often made four or five speeches in a day, and kept special railroad trains in motion all the while, carrying him from place to place. He is not, in the usual sense, an orator, but in his numerous campaigns he has always made clear and effective statements which the people could understand.

His manner is pleasing, without pretension or gush. He had been elected to Congress several times in a district strongly Democratic.

In the campaign of 1879 he adopted the same plan that had been so successful when he was a candidate for Congress. He was an experienced and efficient hand-shaker.

CHAPTER x.x.xIX.

LAST DAYS OF THE HAYES ADMINISTRATION.

Invitation From General Arthur to Speak in New York--Letter to Hon.

John Jay on the Subject--Mr. Evarts' Refined Specimen of Egotism-- An Anecdote of the Hayes Cabinet--Duty of the Government to Protect the Election of All Federal Officers--My Speech in Cooper Inst.i.tute --Offers of Support to Elect Me as a Successor of Senator Thurman --My Replies--Republican Victory in New York--President Hayes'

Message to Congress--My Report as Secretary of the Treasury-- Modification of My Financial Views Since that Time--Bank Notes as Currency--Necessity for Paper Money--Mr. Bayard's Resolution Concerning the Legal Tender Quality of United States Notes--Questions Asked Me by the Finance Committee of the Senate.

In the latter part of September I was invited by General Arthur, as chairman of the Republican state committee of New York, to speak to the Republicans of that state during the pending canva.s.s, in aid of election of Mr. Cornell as governor. The circ.u.mstances of the removal of Arthur and Cornell caused some doubt whether I should accept the invitation, as it seemed that the nomination of Cornell and the management of the canva.s.s by Arthur was an expression of triumph, and my acceptance would be regarded as a humiliation of the President. I did not think so and in this opinion the President concurred. I, therefore, accepted the invitation by the following letter:

"Treasury Department, } "Washington, September 29, 1879.} "Dear Sir:--I have to acknowledge the receipt of your letter of the 25th inst., inviting me to speak to the Republicans in New York some time during the pending campaign. It will give me great pleasure to do my utmost in aid of the election of Mr. Cornell and the Republican ticket at the coming election, and I wish I could accept your invitation without reserve; but in view of engagements made in Ohio, and the official duties inc.u.mbent upon me, I cannot make any more definite reply than to say that by the middle of October I hope to be able to set aside two or three days to be spent in your canva.s.s at such places as you may think I can render the most satisfactory service. I have also received an invitation from Mr. Johnson, secretary of your committee. Please consider this an answer.

"Very respectfully, "John Sherman.

"To General C. A. Arthur, "Chairman Republican State Committee, New York."

Shortly afterward I received a letter from Hon. John Jay, expressing regret at my acceptance, for the reasons I have stated. To this I replied as follows:

"October 4, 1879.

"My Dear Sir:--Your note of the 2nd is received.

"I feel as you do that the nomination of Mr. Cornell, and the appointment of Mr. Arthur to conduct the canva.s.s, has the look of a reproach to the President for their removal. If only their personal interests were involved, I should feel great indifference to their success, but it so happens that Republican success in New York is of such vital importance to the people of the United States, that their personal interest in the matter, and even the motive of the nomination and appointment, should be overlooked, with a view to secure the country against the return to power of the Democratic party.