a tariff for revenue upon foreign imports, and such equal taxation under the internal revenue laws as will afford incidental protection to domestic manufacturers, and as will, without impairing the revenue, impose the least burden upon, and best promote and encourage, the great industrial interests of the country.

In 1872 the "straight" Democrats, that is those who refused to support Greeley, were for a "judicious" revenue tariff; but in 1876 the party denounced the existing system as "a masterpiece of injustice, inequality and false pretence." Democratic state platforms were even less firm; in fact, the eastern states seemed committed to protection. In Congress, however, most of the opposition to the pa.s.sage of tariff acts was supplied by the Democrats.

The att.i.tude of the Republicans was more important, because theirs was the party in power. There was, as has been shown, a strong tariff-reform element, and in some of the conventions care seems to have been taken to avoid any definite statement of principles--doubtless on account of the well-known differences in the party--and for many years there was no clearly defined statement of the att.i.tude of the organization. Yet it must be emphasized that Republicans were usually protectionists in the practical business of voting in Congress. Skillful Republican leaders gave way a little in the face of opposition but regained the lost ground and a little more, after the opposition retreated. Since the war-tariffs had been pa.s.sed under Republican rule, it was easy to clothe them with the sanct.i.ty of party accomplishments.

Fully as technical as the tariff problem, and presenting a wider range for the legislative activities of Congress, was the financial situation in which the country found itself in 1865. The total expenditures from June 30, 1861 to June 30, 1865 had been somewhat more than three and one-third billions of dollars, an amount almost double the aggregate disburs.e.m.e.nts from 1789 to 1861. Officers accustomed to a modest budget and used to working with machinery and precedents which were adapted to the day of small things, had been suddenly called upon to work under revolutionized conditions. Prom the point of view of expense, merely, one year's operations during the war had been equivalent to thirty-six times the average outlay of the years. .h.i.therto. As has been shown, the major part of the income necessary for meeting the increased expenses had been obtained by means of the tariff and internal revenue taxes.

The tariff worked to the advantage of many people, and its retention was insistently demanded by them; the internal revenue taxes were disliked, and few things were more popular after the war than their reduction. In 1866 an act was pa.s.sed which lowered the internal revenue by an amount estimated at forty-five to sixty millions of dollars. In succeeding years further reductions were made, so that by 1870 the scale was low enough to withstand attacks until 1883.

The national debt was the source of more complicated questions. It was composed, on June 30, 1866, of a variety of loans carrying five different rates of interest and maturing in nineteen different periods of time. Parts of it had been borrowed in times of distress at high rates; but after the struggle was successfully ended, the credit of the government was good, and enough money could be obtained at low interest charges to cancel the old debt and establish a new one with the interest account correspondingly reduced. Hugh McCulloch and John Sherman as secretaries of the treasury were most influential in accomplishing this transition, and by 1879 the process was completed and a yearly saving of fourteen million dollars effected.

Differences of opinion concerning the kind of money with which the princ.i.p.al of the debt should be paid brought this matter into the field of politics. When the earliest loans had been contracted, no stipulation had been made in regard to the medium of payment. Later loans had been made redeemable in "coin," without specifying either gold or silver; while still later bonds had been sold under condition that the interest be paid in coin, although nothing had been said about the princ.i.p.al. There was considerable demand for redemption of the bonds in paper money, except where there was agreement to the contrary, although the previous custom of the government had been to pay in coin.

The proposal to repay the debt in paper currency, the "Ohio idea,"

gained considerable ground in the Middle West, as has already been explained. In the campaign of 1868 the Democratic platform advocated the Ohio plan. Some of the Republicans, like Thaddeus Stevens, agreed with this policy; some of the Democrats opposed it--Horatio Seymour, the presidential candidate, among them. Nevertheless the Democratic platform committed the party to payments in greenbacks unless express contract prevented, while the Republicans denounced this policy as "repudiation" and promised the payment of the debt in "good faith"

according to the "spirit" and "letter" of the laws. The credit of the government was highly benefited by the payment of the debt in gold, yet the bonds had been purchased during the war with depreciated paper, and gold redemption greatly enriched the purchasers at the expense of the remainder of the population. It is hardly surprising that the debtor cla.s.ses were not enthusiastic over this outcome. The Republicans on being successful in the election and coming into power, carried out their campaign promises and pledged the faith of the country to the payment of the debt in coin or its equivalent.

The income tax was a method of raising revenue which did not produce any considerable returns until after the war was over. Acts pa.s.sed during the war had levied a tax on all incomes over six hundred dollars and had introduced progressively increasing rates on higher amounts.

Incomes above $5,000, for example, were taxed ten per cent. The greatest number of people were reached and the largest returns obtained in 1866 when nearly half a million persons paid an aggregate of about seventy-three million dollars. The entire system was abolished in 1872.

Aside from the tariff, the "legal-tender" notes gave rise to the greatest number of political and const.i.tutional tangles. By acts of February 25, 1862 and later, Congress had provided for the issue of four hundred and fifty million dollars of United States paper notes, which were commonly known as greenbacks or legal-tenders. The latter name came from the fact that, under the law, the United States notes were legal tender for all debts, public or private, except customs duties and interest on the public debt. In other words, the law compelled creditors to receive the greenbacks in payment of all debts, with the two exceptions mentioned. Three main questions arose in connection with these issues of paper: whether Congress had power under the Const.i.tution to make them legal tender; whether their volume should be allowed to remain at war magnitude, be somewhat contracted or entirely done away with; and whether the government should resume specie payments--that is, exchange gold for paper on the demand of holders of the latter.

The first of these questions was twice decided in the Supreme Court. In 1870, in Hepburn _v._ Griswold, the point at issue was whether the greenbacks could lawfully be offered to satisfy a debt contracted before the legal-tender act had been pa.s.sed. As it happened, Salmon P.

Chase, who had been Secretary of the Treasury during the war, was now Chief Justice of the Supreme Court and delivered its opinion. By a vote of four to three it decided that the greenbacks were not legal tender for contracts made previous to the pa.s.sage of the law. At the time when the case was decided, however, there were two vacancies on the bench which were immediately filled, and shortly thereafter two new cases involving the legal-tender act were brought before the Court (Knox _v._ Lee, and Parker _v._ Davis). The decision, which was announced in 1871, over-ruled the judgment in Hepburn _v._ Griswold and held by a vote of five to four that the legal-tender act was const.i.tutional as applied to contracts made either before or after its pa.s.sage.

The second question relating to the greenbacks was that in regard to their volume. At first Congress adopted the policy of contraction and when greenbacks came into the treasury they were destroyed. As continued contraction tended to make the volume of currency smaller and to make money harder to get, and therefore, to raise its value, the debtor cla.s.ses began to object. As early as 1865 there was strong sentiment against contraction and in favor of paying the public debt in paper.

Economic distress in the West furthered the movement and some of the Republican leaders were doubtful of the wisdom of reducing the outstanding stock of paper. Contraction was stopped, therefore, in 1868, and only President Grant's veto in 1874 prevented an increase in the amount.

Eventually, in 1878, the amount then in circulation--$346,681,000--was fixed by a law forbidding further contraction.[1]

The western farmers, meanwhile, were feeling the pinch of falling prices. Believing that their ills were due to the scarcity of money, they opposed the policy of contraction and even launched the Greenback party to carry out their principles. In 1876 it polled 80,000 votes, and in 1878 at the time of the congressional elections over 1,000,000, but thereafter its strength rapidly declined. Neither the East nor the West understood the motives of the other in this controversy. Eastern congressmen considered western insistence upon a large volume of currency as a dishonest movement to reduce bond values by legislation.

Such an action, they a.s.serted, would do away with the national integrity. The people of the West thought of the eastern bondholders as "fat bullionists" who dined at costly restaurants on terrapin and Burgundy and paid for their luxuries with bonds whose values were raised by a contracted currency.

The third question relating to the greenbacks was that of the resumption of specie payments. At the close of the war practically all the money in circulation was paper, which pa.s.sed at a depreciated value because it was not redeemable in coin. The obvious thing was to resume the exchange of specie for paper and thus restore the latter to par value, but serious obstacles stood in the way. A money crisis in 1873 aroused a clamor for larger supplies of paper; gold was hard to procure, as France and Germany were both acc.u.mulating a redemption fund and specie was actually flowing out of the country. Outside of the treasury there was little gold in the United States, the amount being less than one hundred million dollars as late as 1877. The friends of resumption could not be sure of the feasibility of their project, and the opponents were aggressive and numerous.

In the elections of 1874 the Republicans were severely defeated, and it was seen that the Democrats would have a clear majority in the next House of Representatives. Hence the Republicans hurried through a resumption bill on January 14, 1875--a sort of deathbed act. It authorized the secretary of the treasury to raise gold for redemption purposes, and set January 1, 1879, as the date when resumption should take place. As in the case of the tariff, the political parties found difficulty in determining which side of the resumption question they desired to take. Although the Democratic platform of 1868 contained a greenback plank, yet some of its leaders opposed, and the state platforms of 1875 and 1876 demanded resumption. The national platform of the latter year both denounced the Republicans for not making progress toward resumption and demanded the repeal of the act of 1875, without disclosing whether the party was prepared to offer any improvements. In November, 1877, a bill practically repealing the resumption act pa.s.sed the House--the western and southern Democrats furnishing most of the affirmative votes, a.s.sisted by twenty-seven Republicans. A resolution declaring it to be the opinion of Congress that United States bonds were payable in silver was introduced and advocated by many Republicans. On the other hand, eastern state Democratic and Republican platforms were much alike. Apparently, therefore, differences of opinion in regard to the greenbacks and resumption were caused as much by sectional as by party considerations.

More lasting than finance as a political issue but less enduring than the tariff, was the reform of the civil service. In its widest sense, the term civil service included all non-military government officers from cabinet officials and supreme court judges to the humblest employee in the postal or naval service. The reform, however, was directed mainly toward the appointment and tenure of the lower officers. Before the Civil War the "spoils system" had been in full swing; appointments to positions had been frankly used as rewards for party activity; office-holders had been openly a.s.sessed a fraction of their salaries in order to fill the treasure chest at campaign times; rotation in office had been the rule. During the war, President Lincoln had found his ante-room filled with wrangling, importunate office-seekers who consumed time which he needed for the problems of the conflict. As he himself had expressed the situation, he was like a man who was letting offices in one end of his house while the other end was burning down. During the war, also, the patronage at the disposal of the government had vastly increased. Not only had the number of laborers, clerks and officials become greater, but numerous contracts had been let for the production of war materials, and manufacturers and merchants intrigued for a share of federal business. "Influence" and position had been more powerful than merit in procuring the favor of government officers.

After the war many abuses that had earlier been overlooked began to attract the attention of a few thoughtful men. It was estimated that not more than one-half to three-fourths of the legitimate internal revenue was collected during Johnson's presidency, so corrupt and inefficient were the revenue collectors. Endless Indian troubles and countless losses of money resulted from the corruption of the federal Indian agents. Conditions were even worse during the Grant regime. The President's appointments were wretched; he placed his relatives in official positions; revenue frauds amounting to $75,000,000 were discovered during his second administration. In certain departments, it was customary, when vacancies occurred, to allow the salaries to "lapse"--that is, acc.u.mulate--so as to provide a fund to satisfy patronage seekers. In one case, thirty-five persons were put on the "lapse fund" for eight days at the end of a fiscal year, in order to "sop up" a little surplus which was in danger of being saved and returned to the treasury. One customs collector at the port of New York removed employees at an average rate of one every three days; another, three every four days; and another, three every five days, in order to provide places for party workers. One secretary in an important department of the government had seventeen clerks for whom he had no employment. The party a.s.sessments on officeholders became little short of outrageous. Two or three per cent. of the salary of the lower officers was called for, while the more important officials were expected to contribute much larger sums. In New York--for the system held in the states and cities--candidates for the mayoralty were reputed to pay $25,000 to $30,000; judges, $10,000 to $15,000; and representatives in Congress, $10,000. While these conditions were by no means wholly due to the spoils system, the method of appointment in the civil service made a bad matter worse.

Conditions such as these could hardly fail to produce a reform movement. In fact, as far back as 1853 some elementary and ineffective legislation had attempted a partial remedy. The war gave added impetus to the movement and attention turned to the reform systems of Great Britain and other countries, where problems similar to ours had already been met and solved. The first American who really grasped civil service reform was Thomas A. Jenckes, a member of Congress from Rhode Island. He introduced reform bills in 1865 and later, based on studies of English practice and on correspondence with the leaders of reform there; but no legislation resulted. In brief, his plan provided for the appointment of employees in the public service on the basis of ability, determined by compet.i.tive examinations. After a time Jenckes and his a.s.sociates achieved considerable success and finally interested President Grant in their project. In 1871 they got a rider attached to an appropriation bill which authorized the chief executive to prescribe rules for the admission of persons into the civil service and allowed him to appoint a commission to put the act into effect. George William Curtis, a well-known reformer, was made chairman, and rules were formulated which were applied to the departments at Washington and to federal offices in New York. Grant, although favorable to the reform, was not enthusiastic about it, and soon made an appointment which was so offensive that Curtis resigned. Congress, nothing loath, refused to continue the necessary appropriations and the reform project continued in a state of suspended animation until the inauguration of President Hayes.

The human elements in the struggle for civil service reform, both during the decade after the war and for many years later, are necessary for an understanding of the course of the controversy and its outcome.

These elements included the advocates of the patronage system, the reformers and the president.

Sometimes the advocates of the patronage system viewed the reform with contempt. Roscoe Conkling, for example, expressed his sentiments in the remark, "When Dr. Johnson said that patriotism was the last refuge of the scoundrel he ignored the enormous possibilities of the word reform!" Sometimes they attempted to discredit the project by an exaggeration of its effects, as when John A. Logan declared that he saw in it a life-tenure and an aristocratic caste. "It will not be apparent how great is its enormity," he declared in Congress, "how vicious are its practices and how poisonous are its influences until we are too far encircled by its coils to shake them off." The strength of the exponents of the patronage system, however, lay not in their capacity for contempt and ridicule, but in a theory of government that was founded upon certain very definite human characteristics. The theory may be clearly seen in the _Autobiography_ of Thomas C. Platt, a colleague of Conkling in the Senate and for many years the boss of New York state. It may be expressed somewhat as follows.

In the field of actual politics, parties are a necessity and organization is essential. It is the duty of the citizen, therefore, to support the party that stands for right policies and to adhere closely to its official organization. Loyalty should be rewarded by appointment to positions within the gift of the party; and disloyalty should be looked upon as political treason. One who votes for anybody except the organization candidate feels himself superior to his party, is faithless to the great ideal and is only a little less despicable than he who, having been elected to an office through the energy and devotion of the party workers, is then so ungrateful as to refuse to appoint the workers to positions within his gift. Positions const.i.tute the cohesive force that holds the organization intact.

The second of the human elements, the reform group, was led by such men as George William Curtis, Dorman B. Eaton and Carl Schurz, with the support of periodicals like _Harper's Weekly_ and _The Nation_. The career and character of Curtis is typical at once of the strength and the weakness of the group. As a young man Curtis had intended to enter a business career, but finding it unsuited to his tastes he had abandoned his ambition, spent some years in European travel and then devoted himself to literary work, first on _Harper's Magazine_ and afterwards, for many years, as editor of _Harper's Weekly_. He had early interested himself in politics, had been in the convention which nominated Lincoln, had taken part in numerous state and national political conferences and conventions, was president of the Metropolitan Museum of Art in New York and chancellor of the University of the State of New York. For many years, during the period when civil service reform was making its fight for recognition, Curtis was the president and one of the moving spirits of the National Civil Service Reform League. In politics he was an independent Republican. Although of the intellectual cla.s.s, like the other prominent leaders of the reform movement, he was a man of practical political ability, not a mere observer of politics, so that he and his a.s.sociates made up in capacity and influence what they lacked in breadth of appeal. Some of the leaders were patient men who expected that results would come slowly and who were ready to accept half a loaf of reform rather than no loaf at all, but there were also such impatient critics as E.L.

G.o.dkin who put so much emphasis on the failures of the reformers as to overshadow their positive achievements. Moreover, there were the well-meaning but impracticable people who const.i.tuted what Theodore Roosevelt once called the "lunatic fringe" of reform movements.

The att.i.tude of the exponents of the patronage system toward the reformers was one of undisguised contempt. In a famous speech delivered at a New York state convention in Rochester in September, 1877, Conkling poured his scorn on the reform element in general and on Curtis in particular, as "man-milliners," "carpet-knights of politics,"

"gra.s.shoppers in the corner of a fence," and disciples of ladies'

magazines with their "rancid, canting self-righteousness."

The third personal element in the reform controversy was the chief executive. Beginning with Grant, if not with Lincoln, the presidents were favorable to the progress of reform, but they were surrounded by circ.u.mstances that made vigorous action a difficult matter. The task of distributing the patronage was a burden from which they would have been glad to be relieved, yet the demands of the party organization were insistent,--and to turn a constantly deaf ear to them would have been to court political disaster. The executive was always in the position of desiring to further an ideal and being obliged to face the hard facts of politics. The progress which he made, therefore, depended on how resolutely he could press forward his ideal in the face of continued opposition. A great difficulty lay in getting subordinates-in the cabinet, for example-who were in sympathy with progress, and sometimes even the vice-presidential nomination was given to the patronage element in the party in order to placate that faction, while the presidential nominee was disposed to reform.

Public opinion was slow in forming and was lacking in the means of definite expression. For many years after the war there was widespread fear that the installation of a Democratic president would result in the wholesale debauch of the offices, and sober northerners believed, or thought they believed, that "rebels" would again be in power if a Democrat were elected. Under such conditions and because the offices were already filled with Republicans, the Republican North was willing to leave things as they were.

The party p.r.o.nouncements on civil service reform were as evasive as they were on finance and the tariff. To be surer the Liberal Republicans in 1872 sincerely desired reform and made it the subject of a definite plank in their platform, but the wing of the Democratic party that refused to ally with them was silent on the civil service, and the "straight" Republicans advocated reform in doubtful and unconvincing terms. In 1876 both party platforms were even more vague, although Hayes himself was openly committed to the improvement of the service.

BIBLIOGRAPHICAL NOTE

The best work on the tariff is F.W. Taussig, _Tariff History of the United States_ (6th ed., 1914), a scholarly and non-partisan account, although giving slight attention to legislative history; Ida M.

Tarbell, _Tariff in Our Times_ (1911), emphasizes the personal and social sides of tariff history and is hostile to protection; Edward Stanwood, _American Tariff Controversies_ (2 vols., 1903), devotes considerable attention to the historical setting and legislative history of tariff acts, and is distinctly friendly to protection.

The most useful single volume on financial history is D.R. Dewey, _Financial History of the United States_ (5th ed., 1915), which is concise, accurate and equipped with full bibliographies; A.B. Hepburn, _History of Currency in the United States_ (1915), is by an expert; A.D. Noyes, _Forty Years of American Finance_ (1909), continues the same author's _Thirty Years_ and is reliable; T.B. Burton, _John Sherman_ (1906), is useful here. The legal-tender decisions are in J.W.

Wallace, _Cases argued and adjudged in the Supreme Court_, VIII, 603, and XII, 457.

The standard work on the civil service is C.R. Fish, _The Civil Service and the Patronage_ (1905); the reports of the Civil Service Commission, especially the Fourth Report, are essential; the articles by D.B. Eaton in J.J. Lalor, _Cyclopaedia of Political Science_ (3 vols., 1893), are justly well-known; G.W. Curtis, _Orations and Addresses_ (2 vols., 1894), and Edward Cary, _George William Curtis_ (1894), are excellent.

The politician's side may be found in A.R. Conkling, _Life and Letters of Roscoe Conkling_ (1889), and T.C. Platt, _Autobiography_ (1910).

[1] This is the amount still outstanding.

CHAPTER VI

THE ADMINISTRATION OF RUTHERFORD B. HAYES

The conditions which confronted President Hayes when the final decision of the Electoral Commission placed him in the executive chair did not make it probable that he could carry out a program of positive achievement. The withdrawal of troops from the South had been almost completed, but the process of reconstruction had been so dominated by suspicion, ignorance and vindictiveness that sectional hostility was still acute. As has been seen, the economic problems which faced the country were for the most part unsolved; on the subjects of tariff, finance and the civil service, neither party was prepared to present a united front; and the lack of foresight and statesmanlike leadership in the parties had given selfish interests an opportunity to seize control.

Nor did the circ.u.mstances surrounding the election of Hayes tend to simplify his task, for the disappointment of the Democrats was extreme, and they found a natural difficulty in adjusting themselves to the decision against Tilden. Democratic newspapers dubbed Hayes "His Fraudulency" and "The Boss Thief," printed his picture with "Fraud"

printed across his brow and referred to his election as the "steal" and a "political crime."

The man who was to essay leadership under such conditions had back of him a useful even if not brilliant career. He had been born in Ohio in 1822, had graduated from Kenyon College as valedictorian of his cla.s.s, attended Harvard Law School and served on the Union side during the war, retiring with the rank of a brevet Major General. He had been twice elected to Congress, but had resigned after his second election to become governor of his native state, a position which he had filled for three terms.

Hayes was a man of the substantial, conscientious and hard-working type.

He was not brilliant or magnetic, he originated no innovations, burst into no flights of imaginative oratory. His state papers were planned with painstaking care--first, frequently, jotted down in his diary and then elaborated, revised, recopied and revised again. The vivid imagination and high-strung emotions that made Clay and Blaine great campaigners were lacking in Hayes. He was gentle, dignified, simple, systematic, thoughtful, serene, correct. In making his judgments on public questions he was sensitive to moral forces. The emanc.i.p.ation of the slaves was not merely wise and just to him--it was "Providential."

He favored a single six-year term for the President because it would safeguard him from selfish scheming for another period of power. Partly because of the lack of dash and compelling force in Hayes, but more because of the low standards of political action which were common at the time, his scruples seemed puritanical and were held up to ridicule as the milk-and-water and "old-Woman" policies of "Granny Hayes." His public, as well as-his private life, was unimpeached in a time when lofty principles were not common and when scandal attached itself to public officers of every grade. To his probity and the "safe" character of his views, as well as to his record as governor of an important state, was due his elevation to the presidency.[1] In his habit of self-a.n.a.lysis, Hayes was reminiscent of John Quincy Adams. Like Adams he kept a diary from his early youth, the serious and mature entries in which cause the reader to wonder whether Hayes ever had a childhood.

When he had just pa.s.sed his twentieth birthday he confided to his diary that he found himself unsatisfied with his progress in Blackstone, that he must curb his "propensity" to read newspapers to the exclusion of more substantial matter, and in general that he was "greatly deficient in many particulars." Then and in later years he noted hostile criticisms of himself and combated them, recorded remarks that he had heard, propounded questions for future thought, expressed a modest ambition or admitted a curbed elation over success.

In the field of politics Hayes was looked upon as a reliable party man, a reputation which was justified by his rigid adherence to his party and by his att.i.tude toward the opposition. In both these respects he was the ordinary partisan. Nevertheless he thought out his views with unusual care, made them a matter of conscience and measured policies by ethical standards that were more exacting than the usual politician of the time was accustomed to exercise. The only remark of his that gained wide circulation reflects his type of partisanship: "he serves his party best who serves his country best." In these latter respects--his thoughtfulness, conscientiousness, exacting standards of conduct and less narrowly partisan spirit--he formed a contrast to the most influential leaders of his party organization. Altogether it seemed likely at the start that Hayes might have friction with the Republican chiefs.