The earlier Presidents, filled with the spirit of the convention that formed the Const.i.tution, were extremely careful in the use of the veto-power. In eight years Washington used it but twice. Neither John Adams nor Thomas Jefferson used it even once. Madison resorted to it three times, Monroe only once, John Quincy Adams in not a single instance. Under the first six Presidents, the veto-power had been used but six times in all; unless there should be included some private bills sent back for correction and not in any sense furnishing matter of contest between parties. The country had thus been educated by the sages of the era of the Const.i.tution in the belief that only an extraordinary occasion justified a resort to what, in the popular dislike of its character, had received the name of "the one-man power."

President Jackson, therefore, surprised the country and shocked conservative citizens by his frequent employment of this great prerogative. During his term he thwarted the wish and the expressed resolve of Congress no less than eleven times on measures of great public consequence. Seven of these vetoes were of the kind which, during his Presidency, received the name of "pocket-vetoes."

In Madison's administration a bill which reached the President during the last ten days of the session failed by accident or inadvertence to receive the President's signature, and did not become a law. Mr.

Webster is authority for saying that there was not a single instance prior to the administration of General Jackson in which the President by design omitted to sign a bill and yet did not return it to Congress.

"The silent veto," said he, "is the executive adoption of the present administration." There had been instances in which, during a session of Congress, a President, unwilling to approve and yet not prepared to veto a measure, suffered it to become a law by the lapse of the Const.i.tutional period of ten days; but it was an entirely new device, to defeat a bill by permitting the period of less than ten days to expire at the close of the session--defeat it without action, without expression of opinion, without the responsibility which justly attaches to the Executive office. Commenting with great power, at the time, upon the new use of the veto-power in all its forms by President Jackson, Mr. Webster declared its tendency was "to disturb the harmony which ought always to exist between Congress and the Executive, and to turn that which the Const.i.tution intended only as an extraordinary remedy for extraordinary cases, into a common means of making Executive discretion paramount to the discretion of Congress in the enactment of laws." It was literally making the extreme medicine of the Const.i.tution its daily bread.

An example set by so strong a ruler as Jackson, especially in the establishment of a practice so congenial to man's natural love of power, was certain to be followed by other Presidents. It was followed so vigorously indeed that the forty years succeeding Jackson's advent to power presented a strong contrast with the forty years that preceded it. The one began with Washington, the other ended with Andrew Johnson. Mr. Van Buren, though in all respects a lineal heir to the principles of Jackson, did not imitate him in the frequent use of the veto-power. But Mr. Tyler on nine different occasions ran counter to the action of Congress by the interposition of his veto.

Mr. Polk resorted to it in three signal instances, but neither General Taylor nor Mr. Fillmore came in conflict with Congress on a single measure. President Pierce almost rivaled General Jackson in the ten vetoes with which he emphasized his own views as distinct from those of Congress. Mr. Buchanan used his arbitrary power on four occasions during his term. Mr. Lincoln permitted one bill to be defeated, as already noted in these pages, by expiration of Congress, and arrested the pa.s.sage of another by direct use of his veto. President Johnson, who in many features of his career has been suspected of an attempted imitation of Jackson, far surpa.s.sed his great prototype in the use of the veto-power, employing it directly in no less than twenty-one instances, besides pocketing at least two bills of public importance.

The aggregate number of vetoes, therefore, in the forty years that followed General Jackson's first election exceeded fifty, as against six for the forty years preceding it.

It will not escape observation that the most frequent resort to the veto has been by those Presidents who were chosen by the political organization which has always declared its hostility to Executive power. The Democratic party had its origin and its early growth in the cry against the overshadowing influence of the Presidential office --going so far in their denunciations as to declare that it was aping royalty in its manners and copying monarchy in its prerogatives.

The men who made this outcry defeated John Quincy Adams who never used the veto, and installed Jackson who resorted to it on all occasions when his judgment differed from the conclusion of a majority of Congress. Neither Taylor nor Fillmore--both reared in the Whig school --ever attempted to defeat the will of Congress, though each wielded Executive power at a time when questions even more exciting than those of Jackson's era engaged public attention. Mr. Lincoln presents a strong contrast with his predecessors,--Pierce and Buchanan,--ill.u.s.trating afresh the contradiction that the party declaiming most loudly against Executive power has constantly abused it. Mr. Tyler and Mr. Johnson were both chosen by the opponents of the Democracy, but they were both reared in that school, and both returned to it--exhibiting in their apostasy the readiness with which the Democratic mind turns to the tyranny of the veto.

The success of reconstruction in the South carried with it the ratification of the Fourteenth Amendment by the requisite number of States. The result was duly certified by Mr. Seward as Secretary of State, on the twenty-eighth day of July, 1868, and the Amendment was thenceforward a part of the organic law of the nation. It had been carried, from first to last, as a party measure--unanimously supported by the Republicans, unanimously opposed by the Democrats. Its grand and beneficent provisions failed to attract the vote of a single Democratic member in any State Legislature in the whole Union.

Wherever the Democrats were in majority the Legislature rejected it, and in every Legislature where the Republicans had control the Democrats in minority voted against it. Not only was this true, but the States of Ohio and New Jersey, which had ratified it in 1866-67 when their Legislatures were Republican, formally voted in 1868, when the Democrats had come into power, to recall their a.s.sent to the Amendment and to record their opposition to its adoption. It is very seldom in the history of political issues, even when partisan feeling is most deeply developed, that so absolute a division is found as was recorded upon the question of adopting the Fourteenth Amendment. It has not been easy in succeeding years to comprehend the deep-seated, all-pervading hostility of the Democratic party to this great measure.

Even on the Thirteenth Amendment, containing the far more radical proposition to abolish slavery, a few Democrats, moved by philanthropic motives, broke from the restraint of party and honored themselves by recording their votes on the side of humanity and justice; but on the Fourteenth Amendment the line of Democratic hostility in Nation and in State was absolutely unbroken.

It seems incredible that Democrats can be satisfied with the record made by their party on this most grave and important question. Every one of the many objects aimed at in the Fourteenth Amendment is founded upon a basis of justice, of liberty, of an enlarged and enlightened nationality. Its minor provisions might be regarded as temporary in their nature, but its leading provisions are permanent and are essential to the vitality of a true republic. Even those which may be held as temporary deeply affect more than one generation of American citizens, and are of themselves sufficiently important to justify a great struggle for their adoption.

It was certainly of inestimable concern to the honor of the country that those who had shed their blood and those who had given their treasure for its defense, should have their claims upon the national justice placed beyond the whim, or the caprice, or the malice of an accidental majority in Congress. Nor would it have been wise to leave open to those who in the conflict of arms had lost their slaves, the temptation to besiege Congress and the Legislatures of their States for compensation. Such an opportunity would have been a menace to the public credit, and would have proved a constant source of corruption.

The Republican therefore said, "We shall incorporate the right of the soldier to repayment, in the very Const.i.tution of the Republic; and shall in the same solemn manner decree that as slavery instigated the drawing of the sword against the life of the nation, and justly perished by the sword, its a.s.sumed value shall not be placed upon the free people of the United States as a mortgage whose payment may be exacted from their property and their toil." Against these just provisions, which in their nature are limited as to time, the Democrats in Congress and in every Legislature of the Union recorded an absolutely unanimous vote.

Another provision of the Fourteenth Amendment, temporary in its application, indeed necessarily limited to the existing generation, was demanded by the Republicans. The great ma.s.s of those engaged in the Rebellion were pardoned the moment their arms were laid down. But the leaders who, in official position before the war, had solemnly sworn to support the Const.i.tution, were held to be far more guilty than the mult.i.tude who followed them. They deliberately rebelled against a government to which, on their consciences and on their oaths, they had given their personal pledge of fidelity. The Republicans did not propose to visit even these chief offenders with pains and penalties; but they resolved to place in the Const.i.tution a prohibition upon their holding office under the National government until after two-thirds of both branches of Congress, satisfied of their good intentions, should remove their disabilities. The Democrats unanimously voted against even this mild discipline to those who precipitated the desperate war, thereby declaring their willingness, if not their desire, that the most guilty should fare as well as the innocent; that for example Mr. Toombs might resume his seat as a senator from Georgia, Mr. Breckinridge as a senator from Kentucky, Mr.

Benjamin as a senator from Louisiana, Mr. Jefferson Davis as a senator from Mississippi.

Still another provision of the Amendment which might prove temporary in its application, or might prove permanent, as the South should decide, was that relating to representation in Congress. On this point the Republicans held, as has been so often repeated, that the negro should not be included in the basis of representation until he was admitted to suffrage. There is such absolute justice and fair dealing in this proposition, that no reply which deserves to be called an argument has ever been made to it. The original provision in the Const.i.tution by which three-fifths of the slaves were enumerated in the basis of representation, agreed to originally as a compromise in connection with the subject of direct taxation, had lost its relevancy by reason of emanc.i.p.ation as decreed in the Thirteenth Amendment. The question now before Congress was therefore a new one. It affected the rights of States and the equality of citizens. To concede four and a half millions of negroes to the basis of Southern representation, and at the same time to confine the suffrage to the whites, was not merely a harsh injustice to the colored race, but it was an insulting discrimination against Northern white men. It gave, as was well said at the time, a far greater influence in National affairs to the vote of the Confederate solider in the South than to the vote of the Union soldier in the North. In Congressional districts where the colored race const.i.tuted one-half of the total population (and in many instances the proportion was even larger), the vote of one white man offset the vote of two in a Northern district where suffrage was impartial. This ratio of influence went into the Electoral College, and gave to the white men of South Carolina, Mississippi and Louisiana double the power of that enjoyed by white men in New York, Illinois and California. The loss of Representatives to the Northern States, or more properly speaking the gain to the Southern States on existing numbers, would be nearly one-eighth of the entire House, and fully one-quarter of those likely to occupy seats on the Democratic side of the chamber. In the Electoral College, the loss to the North and the gain to the South would be nearly in the same ratio. In the rapid increase of the negro race the offensive discrimination against the North would be continually enlarging in its proportions. The corrective provision in the Fourteenth Amendment was designed to prevent this grave injustice both to the negro and to the white man--but every Democrat in Congress and in the State Legislatures voted against it through all the stages of its enactment and its ratification, and thereby expressed a willingness to give an unfair advantage to the Southern white man, and to establish an unfair discrimination against the Northern white man.

Important and essential as are the provisions of the Fourteenth Amendment just cited, indispensable as they have proved in the system of Southern Reconstruction, they are relatively of small consequence when compared with that great provision which is for all time:--that provision which establishes American citizenship upon a permanent foundation, which gives to the humblest man in the Republic ample protection against any abridgment of his privileges and immunities by State law, which secures to him and his descendants the equal protection of the law in all that relates to his life, his liberty, and his property. The first section of the Const.i.tutional amendment which includes these invaluable provisions is in fact a new charter of liberty to the citizens of the United States; is the utter destruction of the pestilent heresy of State-rights, which constantly menaced the prosperity and even the existence of the Republic; and is the formal bestowment of Nationality upon the wise Federal system which was the outgrowth of our successful Revolution against Great Britain.

Before the adoption of this Amendment citizenship of the United States was inferred from citizenship of some one of the States, for there was nothing in the Const.i.tution defining or even implying National citizenship as distinct from its origination in or derivation from a State. It was declared in Article IV, Section 2, of the Federal Const.i.tution, that "Citizens of each State shall be ent.i.tled to all the privileges and immunities of citizens in the several States;" but nothing was better known than that this provision was a dead letter from its very origin. A colored man who was a citizen of a Northern State was certain to be placed under the surveillance of the police if he ventured south of the Potomac or the Ohio, destined probably to be sold into slavery under State law, or permitted as a special favor to return at once to his home. A foreign-born citizen, with his certificate of naturalization in his possession, had prior to the war no guarantee or protection against any form of discrimination or indignity, or even persecution, to which State law might subject him, as has been painfully demonstrated at least twice in our history. But this rank injustice and this hurtful inequality were removed by the Fourteenth Amendment. Its opening section settled all conflicts and contradiction on this question by a comprehensive declaration which defined National citizenship and gave to it precedence of the citizenship of a State. "_All persons born or naturalized in the United States and subject to the jurisdiction thereof are citizens of the United States and of the States wherein they reside_." These pregnant words distinctly reversed the origin and character of American citizenship. Instead of a man being a citizen of the United States because he was a citizen of one of the States, he was now made a citizen of any State in which he might choose to reside, because he was antecedently a citizen of the United States.

The consequences that flowed from this radical change in the basis of citizenship were numerous and weighty. Nor were those consequences left subject to construction or speculation. They were incorporated in the same section of the Amendment. The abuses which were formerly heaped on the citizens of one State by the legislative and judicial authority of another State were rendered thenceforth impossible. The language of the Fourteenth Amendment is authoritative and mandatory: "_No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws_." Under the force of these weighty inhibitions, the citizen of foreign birth cannot be persecuted by discriminating statutes, nor can the citizen of dark complexion be deprived of a single privilege or immunity which belong to the white man. Nor can the Catholic, or the Protestant, or the Jew be placed under ban or subjected to any deprivation of personal or religious right. The provision is comprehensive and absolute, and sweeps away at once every form of oppression and every denial of justice. It abolishes _caste_ and enlarges the scope of human freedom. It increases the power of the Republic to do equal and exact justice to all its citizens, and curtails the power of the States to shelter the wrong-doer or to authorize crime by a statute. To Congress is committed the authority to enforce every provision of the Fourteenth Amendment, and the humblest man who is denied the equal protection of the laws of a State can have his wrongs redressed before the Supreme Judiciary of the Nation.

It is perhaps not strange that the Democrats of the South were hostile to the great results wrought for freedom, for justice, and for popular rights by the Fourteenth Amendment. Their education, their prejudices, their personal interests had all been in the opposite direction, and it was doubtless too much to hope that all these would be overcome by a victory for the Union--a victory which carried to their minds a sense of personal humiliation and of remediless ruin. If their course was unwise it is not altogether unintelligible. But the action of the Northern Democrats cannot be accounted for and cannot be excused. They stood stubbornly, solidly, without reason, without justification, against a great enlargement of popular rights. It is a matter of wonder that a political organization which claims Jefferson for its founder and Jackson for its exemplar, should have surrendered to its rival the sole glory of an achievement which may well be compared with that increase of liberty attained by our ancestors, when the dependence of Colonies was exchanged for the independence of States.

Two eminent judges of the Supreme Court who died after the close of the war are ent.i.tled to the admiration and grat.i.tude of the loyal citizens of the United States. When Mr. Lincoln was inaugurated there were three judges on the Supreme Bench from the States which afterwards formed the Confederacy,--James M. Wayne of Georgia, John Catron of Tennessee, and John A. Campbell of Alabama. The last-named was placed upon the bench in 1853, and was undoubtedly the choice of Jefferson Davis, who as the leading Southern member of President Pierce's Cabinet exerted large influence, if not absolute control, over appointments from the slave-holding States. The personal and political a.s.sociations of Judge Campbell led him to resign his position on the Supreme Bench, and to give the weight of his name and his learning to the Confederate cause.

Judge Wayne was appointed by President Jackson in 1835, and Judge Catron by President Van Buren immediately after his inauguration in 1837, under a bill enlarging the Court, which had been approved by General Jackson. Judge Catron had long been a favorite of General Jackson in Tennessee, and it was understood that in appointing him to the Bench Mr. Van Buren was carrying out the expressed wishes of his predecessor. Both judges came from that earlier and better school of Southern Democracy which resisted the injurious heresies of State-rights and Nullification, sustained the Force Bill under President Jackson, and stood loyally by the Union of the States. They were allied to the South by birth, by education, and by the a.s.sociations of a lifetime. Their friends, their kindred, even members of their own families, joined in the Rebellion. But these patriotic men, one of whom was born during the Revolutionary war and the other during the first term of Washington's Presidency, maintained their judicial positions and were unshaken in their loyalty to the Union. Their example was followed by few officials from the states that seceded, but the steadfastness of their faith was a striking ill.u.s.tration of the difference between the South of Jefferson and Jackson and the South of Calhoun and Davis. They sat on the Bench throughout the entire civil struggle,--Judge Catron dying in May, 1865, in the eighty-seventh year of his age, and Judge Wayne in July, 1867, in his seventy-eighth year.

The conduct of these venerable judges is all the more to be praised because they did not personally sympathize in any degree with the Republican leaders. They did not believe in the creed or the policies of the party, and feared the result of its administration of the National Government. Their views in regard to the Const.i.tutional rights of the slave-holders were the same as those held by the Confederate chieftains. They had both concurred with Chief Justice Taney in the Dred Scott decision. But it was enough for them now to know that Mr. Lincoln had been Const.i.tutionally chosen President of the United States, and had been Const.i.tutionally installed in his great office. It was not for them as Justices of the Supreme Court to know any thing of his Executive acts, except as they might properly come for review before their high tribunal. They ill.u.s.trated the honorable line of duty for a Judge under the Government of the United States.

Off the Bench, his right to political opinions is no more to be questioned than that of any other citizen. On the Bench, he falls short of the full measure of his exalted duty if by any way or any expression he discloses his sympathy with one political party or his prejudice against another.

It is a tribute of honor to the Supreme Court that through all the mutations of its existence only a single Justice has proved unfaithful to the Union of the States; and prior to the war three-fifths of all the Justices were appointed from the South. Southern men in all other departments of the Public Service--those eminent in our Congressional annals, in the Army, in the Navy, in the field of Diplomacy, and even one who had occupied the Presidential chair--followed the lead of their States in rebellion against the Union; or rather it may with truth be said, they led their States into rebellion against the Union. Judge Campbell, in furnishing the sole exception to the record of judicial loyalty, did not yield without a struggle. He was surrounded with peculiar embarra.s.sments, and was not strong enough to overcome them.

He realized his position, and did what he could to avert war; but when war was inevitable, he upheld the Confederate cause and became one of its directing minds. In contrast with the fall from his high estate and over against all the evil influences which forced Judge Campbell to his fate, the names of Catron and Wayne will shine in history as examples of the just judge and the incorruptible patriot.

[(1) The President's personal hostility to some of the officers thus a.s.signed was well known, and surprise was expressed that he did not countermand or qualify the order of General Grant when first issued.

He was especially unfriendly to General Sheridan, and late in the summer of 1867 relieved him from his command. General Hanc.o.c.k was gazetted as Sheridan's successor, but he did not reach his post until late in November, the district meanwhile being under the command, first, of General Charles Griffin, and, second, of General Joseph A.

Mower. General Hanc.o.c.k's order a.s.suming command, issued on the 29th of November, had a certain political significance. He expressed gratification "that peace and quiet reign in the Department," and that in his purpose to preserve this condition of things, he regarded "the maintenance of the civil authorities in the faithful execution of the laws as the most efficient under existing circ.u.mstances." He said that when insurrectionary force had been overthrown and peace established, "the military power should cease to lead, and the civil administration resume its natural and rightful dominion." "Solemnly impressed with these views," the General announced that "the great principles of American liberty are still the lawful inheritance of the people and ever should be. The right of trial by jury, the _habeas corpus_, the liberty of the press, the freedom of speech, the natural rights of persons, and the rights of property, must be preserved."

General Sheridan had issued an order defining the qualifications of those who might sit on juries during the period of Reconstruction. One of the first acts of General Hanc.o.c.k was to annul this order. He declared "that the determination of who shall and who shall not be jurors appertains to the legislative power," and he indicated his intention of carrying out the existing law of Louisiana in regard to the selection of juries. General Sheridan had distributed certain memoranda of disqualification, together with questions to be proposed, for the registrars. Their effect in substance was to disqualify all persons who, having acted, prior to January 26, 1861, as _United-States senators and representatives, electors, officers of the Army and Navy, civil officers of the United States_, and State officers provided for by the Const.i.tution of the State, had afterwards engaged in the Rebellion; and also all those who in 1862 and 1864 claimed the protection of foreign powers. General Hanc.o.c.k set aside this action, declaring that he dissented from the construction given to the Reconstruction laws therein, and ordered the registrars to be guided by their own interpretation of the laws and of the Fourteenth Amendment. It was the popular understanding that General Hanc.o.c.k, in these successive steps, was acting in full sympathy with the wishes and designs of the Administration, in all of which he readily concurred as a Democrat.

The appointment of General Pope for the District of Georgia, Alabama, and Florida, had not been agreeable to the President. General Pope's political convictions were of a very positive character, and they were not at all in sympathy with the National Administration. He administered the Reconstruction laws, therefore, in their full spirit and with an entire belief in their justice and equity. He insisted on fair dealing, and suppressed all interference with voters by violence or threats of violence on the part of the late rebels. He would not permit the menace of military organizations, and expressly refused to allow any parading of armed men, except of United-States troops. It was General Pope's opinion that the South had seen quite enough of men in arms within the past four years, and he believed that safety and order would be best maintained by having no uniform worn except that of the Army of the United States, and no other flag shown than the flag of the Union. Holding these p.r.o.nounced views, aggressively loyal in every thought and action, General Pope was naturally in antagonism with the policy of the President. Towards the close of the year he was relieved of his command and General Meade ordered to take his place.

General Sickles, of the District of North Carolina and South Carolina, was relieved of his command early in September (1867), and General E. R. S. Canby appointed as his successor. General Sickles had been very energetic in the administration of affairs in his department, and had shown remarkable apt.i.tude and efficiency in the discharge of his peculiar duties,--exhibiting in his administration the very qualities most likely to prove offensive to the President. He had perhaps the most difficult command of any of the generals on duty in the South, as the State of South Carolina had from the beginning of the Rebellion presented certain phases of disobedience to Federal authority peculiar to her population and naturally arising from her antecedent history.

General Sickles had some trouble with Attorney-General Stanbery, and asked for a court of inquiry, that he might vindicate himself from the accusations of that official.

General Schofield and General Ord alone of the original commanders in the Southern military districts were left to carry through the work of Reconstruction. They both discharged their duties with intelligence and fidelity. Nor was the work of Reconstruction essentially hindered by the changed in other departments. It is the trained habit of the officers of the United-States Army to carry out their orders with implicit faith, and there is seldom a conflict as to the line of duty to be followed. If there was any exception, it was in regard to the course pursued by General Hanc.o.c.k. His conduct became a subject of controversy, and the popular division respecting its merits was on the political line. The National Administration and the Democratic party, both North and South, applauded every thing which General Hanc.o.c.k said and did in Louisiana. The Republican party throughout the country, and the General commanding the army, who was about to be nominated for the Presidency, united in strong disapproval of his course. But General Hanc.o.c.k's construction of the laws under which he was acting was the same as that held by the Attorney-General of the United States, and he thus felt abundantly justified and fortified in his position. He disobeyed no specific order of the General commanding the army, and, even if there had been a difference between them, General Hanc.o.c.k was sure of the sympathy and support of their common superior--the President of the United States.

It was however the subsequent opinion of General Grant that much of the disorder and bloodshed in the State of Louisiana during the national election of 1868 had resulted from the military government of General Hanc.o.c.k. It was not his belief that General Hanc.o.c.k had the slightest desire or design to produce such results, but that they were the outgrowth of the encouragement which the rebels of Louisiana received from the changes which General Hanc.o.c.k inaugurated in the manner of administering the Reconstruction Laws. Aside however from the conduct of General Hanc.o.c.k, the removal of General Sheridan from the Louisiana District was unqualifiedly offensive to General Grant in a personal sense, and contrary to his best judgment on ground of public policy and safety. His attachment to Sheridan was very strong, and a wrong against the latter was sooner or later sure to be resented by General Grant. His feelings of the question were promptly and significantly shown when he became President. Inaugurated on the 4th of March, he caused an army order to be issued on the morning of the 5th, restoring General Sheridan to his former command in Louisiana, and ordering General Hanc.o.c.k to the remote and peaceful Department of Dakota.]

CHAPTER XIII.

The financial experience of the Government of the United States in the years following the war is without precedent among nations. When Congress first met after the close of hostilities (December, 1865), it was as a ship sailing into dangerous and unknown seas without chart of possible channels. The Reconstruction problem before the country seemed at the time to be less difficult than the financial problem.

Other nations had incurred great expenditures for war purposes, but had always left them in chief part as a heritage for the future. Great Britain will probably never pay the total princ.i.p.al of her public debt.

France will be burdened perhaps as long as her nationality endures by the debts heaped upon her through the ambition of her sovereigns, and in her own struggles to enlarge the liberty of her people. But in this country the purpose was early formed, not simply to provide for the interest upon the debt incurred in the war for the Union, but to begin its payment at once, and to arrange for its rapid liquidation. In view of the magnitude of the sum involved this was a new undertaking in the administration of Government finances.

The difficulties of the situation were undoubtedly aggravated and complicated by the questions which arose from the condition of the Southern States. Could Congress expect at once that the populations in those States would begin to contribute to the revenue, would cease to require large expenditures for the maintenance of the National authority, would again add to the volume of our exports, to our commerce, and our general prosperity? Serious re-action had in other lands followed the financial expansion created by great wars, even without complications similar to those which the disturbed condition of the South seemed to render unavoidable. Ought Congress to accept such a re-action as the necessary condition of the restoration of our currency, of return to a normal situation, of adjustment of expenditure to revenue on a peace footing? Could the possibility be entertained of such a return and such an adjustment, without panic, without paralysis of industry, without temporary interruption and prostration of commerce? Grave apprehensions were felt as to the possible effect upon production and trade of the legislation required to maintain the National credit. These apprehensions derived force and peculiar seriousness from the growing conflict between President Johnson and Congress upon measures of Reconstruction and upon removals from office.

In spite however of all suggested fears and doubts, a feeling of confidence pervaded the country, and was fully shared by Congress, that the power which had saved the Union could re-establish its credit without panic and without dangerous and prolonged depression. Faith in the resources which had equipped and supported the National armies, now embraced the plainer and less exciting duties of funding and paying the debt and of protecting the notes of the United States. The loans had been placed, the money borrowed, under the excitement of war,--sometimes under the pressure of defeat, sometimes in the exaltation of victory. Without this pressure, without this exaltation, could money be secured at a rate adequate to build up a National credit worthy to be compared with that of the older and richer nations beyond the Atlantic?

The intrepidity with which Congress met its task will always compel the admiration of the student of American history. While the war lasted, the contributions by taxes and by loans had been on a munificent scale.

The measures adopted at the close of the Thirty-eighth Congress, after four years of desperate struggle and on the very eve on National victory, showed as great readiness to make sacrifices, as little disposition to count the cost of saving the Union, as had marked previous legislation. Less than six weeks before the surrender of Lee the internal taxes were increased, the duties on imports were adjusted to that increase, and a new Loan Bill was enacted. The bill provided for borrowing, in addition to the authority given by previous Acts, any sum not exceeding $600,000,000 in bonds, or treasury notes convertible into bonds, at six per cent interest in coin or seven and three-tenths per cent interest in currency. This provision was found to be so comprehensive that it not only provided a strong instrumentality for meeting the immense demands incident to the disbanding of the armies and the final settlement of claims connected with that momentous change in our affairs, but also laid the foundation for the policy of funding the debt at a reduced rate of interest.

These results testify to the magnificent proportions of the financial legislation during the period of hostilities.

When the Thirty-ninth Congress met in December, 1865, gold stood at 147-7/8 @ 148. A month later, on the 1st of January, 1866, the legal-tender notes and fractional currency amounted to $452,231,810; notes bearing 7-3/10 per cent interest, to $830,549,041; compound-interest notes payable three years from date (a considerable proportion of which time had elapsed), to $188,549,041; certificates of indebtedness, payable at various dates within the current year, to $50,667,000; and the temporary loan, practically payable on demand, had reached the large sum of $97,257,194. These might all be called floating and pressing obligations, and their grand aggregate was $1,618,705,045. At the same time the amount represented by bonds (6's of 1861, 5-20's, and 10-40's) was $1,120,786,700,--showing a total National debt on New-Year's Day, 1866, of $2,739,491,745. If the National credit was to be maintained these sixteen hundred millions of floating obligations must be promptly placed on a basis that would give time to the Government to provide means for their ultimate redemption. President Johnson, in his message at the opening of the session, spoke of the debt not as a public blessing, but as a heavy burden on the industry of the country, to be discharged without unnecessary delay. This was the popular sentiment in all sections of the country, although in financial circles arguments were frequently heard in favor of creating interminable obligations and of adjusting the debt on a basis of permanency, after the European fashion. The reduction had indeed already begun, since the maximum of debt had been attained in the preceding August.

The Secretary of the Treasury, Mr. Hugh McCulloch, estimated that for the fiscal year ending with June, 1867 (for which Congress was about to provide), the revenue would exceed the expenditures by $111,682,818, and that the whole of our vast debt could be liquidated by annual payments within thirty years. Mr. McCulloch's plans were to take from the compound-interest notes their legal-tender quality, from the date of their maturity, and to sell six per cent bonds, redeemable at the pleasure of the Government, for the purpose of retiring both the compound-interest notes and the plain legal-tenders. He believed that the entire debt might be funded at five per cent, while the average of the annual interest now stood at 6-62/100 per cent. He pointed to harmony between the different parts of the Union and to the settlement of the relations of labor in the Southern States, as essential conditions to the best management of the National obligations.

The leading feature of Mr. McCulloch's financial policy was the immediate and persistent contraction of the currency. His argument in support of the policy, as given in his annual report, was not accepted by the country or by Congress without serious reservation; but his belief in the theory was strong and determined, and so far as the laws permitted he went on reducing the volume of paper in circulation until on the 12th of April, 1866, the sum of legal-tenders was brought down to $421,907,103. Financiers of the Eastern cities favored the policy of contraction, although the logical plea was urged against them that the country would grow up to the volume of currency if not harried and disturbed by new legislation. Manufacturers and the holders of their products, and many who had incurred pecuniary obligations in the expanded currency, took alarm at the rapidity with which the Treasury notes were withdrawn. The argument was urged that the heavy taxes could not be met if the withdrawal were so rapid, and that industry and trade would in consequence be paralyzed by the enforced fall in prices.

These opinions and apprehensions were developed in the debate which led to the pa.s.sage of the Act of April 12, 1866. The subject was first introduced by Mr. Alley of Ma.s.sachusetts. On the 18th of December (1865) he offered a resolution concurring in the views of the Secretary of the Treasury, in relation to the necessity for a contraction of the currency, with a view to as early a resumption of specie payment as the business interests of the country would permit.

Under a suspension of the rules, without debate, 144 voted for the resolution, 6 against it, and 32 were not recorded. Two months later, on the 21st of February, 1866, Mr. Morrill, from the Committee on Ways and Means, reported a bill which, as he explained, would expand the authority provided by the Act of March 3, 1865, for funding interest-bearing obligations, so as to include non-interest-bearing obligations. The measure authorized the Secretary to exchange the bonds prescribed by the Act for notes or certificates, and power was given to negotiate them and make them payable either in the United States or elsewhere, but if beyond the sea at not over five per cent interest.

--Mr. Thaddeus Stevens declared that the bill put over _sixteen hundred millions_ of Government paper under the absolute and uncontrolled discretion of the Secretary of the Treasury. "This is a tremendous bill," said he. "It proposes to confer more power upon Mr. McCulloch than was ever before conferred upon any one man in a government claiming to have a const.i.tution."

--Mr. Hooper of Ma.s.sachusetts magnified the financial achievements of the Government, urged the policy embodied in the bill, and insisted on the importance of restoring the currency to a sound condition at the earliest practicable moment. He controverted the suggestion which had been made to increase United-States notes to $1,000,000,000, on the ground that the value of that dollar would be constantly fluctuating.

A minority of the commissioners appointed by the preceding Congress to inquire into the state of trade and commerce had presented a specious argument in favor of debasing the coinage, but Mr. Hooper dismissed the proposition summarily and argued strongly for a contraction of legal-tender notes.

--Mr. Hulburd of New York maintained that taxation could not be increased to meet the existing and maturing obligations of the Government. He held that under the Acts of June, 1864, and March, 1865, the Secretary had power to sell at home or abroad six per cent coin bonds in any amount to meet short obligations of the Government.

"Under the proposed measure," he said, "authority is specifically asked to withdraw the fractional currency and legal-tender notes, in whole or in part, and to subst.i.tute bonds for them. The like power was never asked for Neckar or for Pitt. As a principle the proposition is dangerous." He protested vigorously against making any part of the public debt payable in foreign countries.

--Mr. John Wentworth of Illinois argued in favor of contraction, maintaining that the purpose of the pending bill was to make the Secretary of the Treasury master of the situation. "If we expect him to compete successfully with the most desperate body of men in the world we must confer upon him the necessary powers. The real question is, Shall our Government pay its pensions and all its employees and creditors in depreciated paper, when by borrowing a little money at six per cent it can bring its paper to par?" He charged that an immense lobby against the bill had thronged the hall, and was surprised to find importers among them. "But the importers have found," said he, "that a bloated currency bloats the fashions." He earnestly indorsed Mr. McCulloch as a cautious man, who would not be precipitate, no matter what power might be conferred upon him: "If we adopt his policy we shall wake up some morning and find the paper of our country at par."

--Mr. Pike of Maine doubted the necessity of enforced contraction; but if contraction was necessary, he was for taxing the circulation of national banks out of existence, and afterwards retiring greenbacks.

"Once upon a specie basis," said he, "let the business of the country regulate itself." He proposed also to allow the States to tax the bonds of the United States.

--Mr. Price of Iowa asked: "Would any prudent and sensible business man who had given his note payable at his own option, without interest, be likely to give for it another note for the same amount payable at a certain time, with interest at six per cent semi-annually, in gold coin?"