--Mr. Blaine submitted an argument "that gold and silver are the money of the Const.i.tution, the money in existence when the Const.i.tution was formed, and Congress had the right to regulate their relations." He favored the coinage of "such a silver dollar as will not only do justice among our citizens at home, but prove an absolute barricade against the gold monometallists." He did not believe that "412 grains of silver would make such a dollar."

--Mr. Davis of West Virginia favored the utilization of silver, "because it is one of our chief products, will make the money known to the Const.i.tution more abundant, will relive distress, and lead back to prosperity."

--Mr. McDonald of Indiana thought that "if no change had been made in our coinage laws, no proposition would be made to change them now.

The Act of 1873 demonetizing the silver dollar made the pending measure necessary."

--Mr. McPherson said that he was "charged by a large majority of the people of New Jersey to remonstrate against the measure, which they believe will r.e.t.a.r.d prosperity, and throw a blot upon our National integrity."

--Mr. Sargent of California, representing a mining State, opposed the bill, "as against good faith, and against the interests of the Government and of the people."

--Mr. Jones of Nevada supported the bill in a very elaborate speech.

He had an enthusiastic faith in silver as a circulating medium, and had given a great deal of study to the question.

--Mr. Ingalls of Kansas argued "that the public debt is payable in silver, and if the money unit should be established in the metal least subject to fluctuation that metal is silver. Gold is the money of monarchs, and was in open alliance with our enemies in the civil war."

--Mr. Lamar presented resolutions from the Legislature of his State, instructing the senators and representatives to vote for the pending measure. He explained that he could not comply with the instructions, and would give the reasons for his vote to his own people.

--Mr. Allison of Iowa closed the debate, drawing the distinction between free coinage as proposed in the House Bill, and limited coinage as proposed in the Senate amendment. He dwelt on the invitation for an International Monetary Conference. He recited the growing demand for gold in Europe, and explained that "France ceased coining silver because she already had in circulation as full legal-tender from $350,000,000 to $400,000,000 in that coin."

In the course of the discussion the history of the Demonetizing Act of 1873 was brought out, and the degree of attention, or rather inattention, which was given to its pa.s.sage,--On proceeding to vote the Senate rejected an amendment by Mr. Morrill, providing that for the first year only 25 per cent, and for the second year only 50 per cent, of the duties should be receivable in silver.--The amendment of Mr. Wilson "that $100,000,000 should be coined in silver dollars within three years, and then the coinage should cease if bullion should be more than three per cent below par," was also rejected.--The Senate refused to agree to an amendment offered by Mr. Edmunds, "that nothing in this section contained shall be construed to interfere with the coinage of gold and of the subsidiary silver now authorized by law."--The section providing for an International Conference was adopted,--_ayes_, 40; _noes_, 30.--Several forms of amendment relative to the legal-tender provision were suggested, but the phrase as it appears in the law was preferred.--Amendments offered by Mr. Eaton, Mr. Christiancy, Mr. Blaine, and Mr. Cameron of Wisconsin to increase the amount of silver in the coin, so as to approximate it to the value of the gold dollar, were severally rejected by large majorities.--After providing, on Mr. Chaffee's motion, for certificates of not less than $10 in exchange for silver coin deposited and redeemable in the same on demand, the Senate pa.s.sed the bill with its amendments, by _ayes_ 48, _noes_ 21.

On the return of the bill to the House of Representatives debate began on February 21st.--Mr. Phillips of Kansas advocated the double standard with the ratio of metal properly determined, and he thought this was done in the dollar of 412 grains.--General Butler of Ma.s.sachusetts was in favor of insisting on the House bill for free coinage, and was seconded by Mr. Atkins of Tennessee.--Mr. Bland was willing to accept the Senate amendments and then pa.s.s a supplementary measure for free coinage on an appropriation bill. He added: "If we cannot do that I am in favor of issuing paper money enough to stuff down the bondholders until they are sick."--Mr. Dwight of New York sought to limit the legal-tender quality of the silver dollar to $50, and for larger sums to make it receivable at its value in gold.--A motion by Mr. Hewitt of New York to lay the bill on the table was lost by _ayes_ 71, _noes_ 205. The several amendments of the Senate were then adopted; that limiting coinage by 203 _ayes_, to 72 _noes_, and that for an International Monetary Conference by _ayes_ 196, _noes_ 71.(2) The concurrence of the House in these amendments pa.s.sed the bill.

President Hayes returned the bill the House of Representatives with his objections, on the 28th of February. He based his veto on the proposition that "the silver dollar authorized is worth eight to ten per cent less than it purports to be worth, and is made a legal tender for debts contracted when the law did not recognize such coin as lawful money. The effect would be to put an end to the receipt of revenue in gold, and thus compel the payment of silver for both the princ.i.p.al and interest of the public debt." This he thought would be regarded as a grave breach of public faith: "It is my firm conviction that if the country is to be benefitted by a silver coinage, it can only be done by the issue of silver dollars of full value which will defraud no man. A currency worth less than it purports to be worth, will in the end defraud not only creditors, but all who are engaged in legitimate business, and none more surely than those who are dependent on their daily labor for their daily bread."

The House voted at once on the veto--pa.s.sing the bill against the objections of the President, by _ayes_ 196, to _noes_ 73. The vote was taken in the Senate on the same day, without debate, and the bill was pa.s.sed over the veto by _ayes_ 46, _noes_ 19. The senators not voting were paired. Had every senator been present and voted the result would have been _ayes_ 53, _noes_ 23. New England, New York and New Jersey supplied the princ.i.p.al part of the negative vote.

Mr. Bayard, Mr. Pinkney Whyte, Mr. Butler of South Carolina, and Mr. Lamar were the senators from the South who voted in the negative.

Pennsylvania, the South and the West sustained the bill. The Pacific coast was divided,--Mr. Booth supporting the bill and Mr. Sargent opposing it. The only vote for the bill in either House from New England was that of General Butler. The proportion and general location of the votes in the House were about the same as in the Senate.

The opinions of senators and representatives were of three distinct types. The majority believed, as the vote showed, in the policy of coining silver dollars of full legal-tender, regardless of their intrinsic equality of value with gold dollars,--thus creating two metallic currencies differing in value for all purposes of commercial interchange with the world, and keeping them at an equality of value at home by the force of law. The great ma.s.s of the Democratic party and a considerable number of Republicans joined in this view.

A small minority of both parties disbelieved in the use of silver as money, except for subsidiary coins, with its legal-tender value limited to small sums,--fifty dollars being the highest proposed, the majority apparently favoring ten dollars.

A majority of Republicans and a minority of Democrats a.s.serted the necessity of maintaining silver coin at full legal-tender, but upon the basis of equality in intrinsic value with the gold dollar. This cla.s.s feared the effect of an exclusively gold standard, while the supply of gold, compared with the commercial demands of the world, is relatively and rapidly growing less. They had seen the ratio of gold-supply far beyond that of silver for a series of years following 1850, and then for a series of years the ratio of silver-supply in excess of the supply of gold. The theory advanced by this cla.s.s rested upon the proposition that the dollar of commerce could not with safety be exclusively based either upon the scarcer or upon the more plentiful metal. An adjustment is required providing for the employment of both metals--maintaining between them such fair equalization as would not violently disturb the value of real property or of annual products, and most important of all would secure a steadiness to the wages of labor and a sound currency in which to recompense it. The supply of both metals for two periods of sixteen years each (1850-1865 both included and 1866-1881 both included) in the United States and in the world at large may suggest some useful lessons.(3)

From the Silver Bill the public interest turned to the approaching day of Specie Resumption, January 1, 1879. To the last month there had been many doubters, but when the day came it was found that the Treasury was fully prepared and the gold coin which had borne a premium for the seventeen years of specie suspension was not now demanded even by those who had been h.o.a.rding legal-tender notes for that express purpose.

The result has proved that legislators and financiers were wisest who had the largest faith in the resources of the nation. The legislation proved to be adequate to the end in view, and resumption was achieved with the least practicable disturbance of trade and the least practicable depression to industry. The process of funding the debt was of great a.s.sistance, as was the constant reduction of the princ.i.p.al, which all the while drew our bonds from Europe and thus reduced the amount due for foreign interest. The monthly charge for interest had been in 1865 as high as $12,581,474.--a part payable in paper. During the fiscal year ending with June, 1879, it was only $6,981,148. It is obvious that from this source alone the Treasury was greatly strengthened.

Generous credit was accorded to Secretary Sherman for the great achievement. It seldom happens that the promoter of a policy in Congress had the opportunity to carry it out in an Executive Department. But Mr. Sherman was the princ.i.p.al advocate of the Resumption Bill in the Senate, and during the two critical years preceding the day for coin payment he was at the head of the Treasury Department. He established a financial reputation not second to that of any man in our history.

During the period of the Crimean war (1854-6), the mercantile marine of the United States gained so rapidly that it approached equality with that of England, in tonnage. But even before the calamities of our civil war, a change was foreshadowed favorable to England, hostile to the United States. It was the change from sail to steam. The utilization of iron as a ship-building material, the cheapening of fuel, the superior speed, all betokened a radical change in transportation on the princ.i.p.al ocean routes of the world. From the close of 1856 to the outbreak of the rebellion the average loss to the Navigation interests of the United States was two per cent annually. This ratio of loss was immensely accelerated by the course of events during the civil war, involving the utter destruction of many American vessels or their change of flag. The natural result was that in the spring of 1865 we stood in the carrying trade relatively and absolutely far behind our position in 1855.

Practically, nothing has since been done to recover the lost ground.

Provision was made by Congress for the admission of certain ship-building materials free of duty. This somewhat improved the prospects and stimulated the construction of sailing vessels; but the compet.i.tion in the world's carrying-trade is in steam-vessels. Great Britain had for many years covered the ocean with subsidized steamers, paying heavily for mail service until the lines were self-supporting, and withdrawing her aid only when compet.i.tion could be safely defied.

Congress steadily refused to enter upon any system of the same kind.

Fitful aid was granted to special lines here and there, but no general system was devised, and the aid extended being temporary and accompanied sometimes by scandals in legislation was in the end rather hurtful than helpful.

Meanwhile the products we were exporting and importing enlarged so rapidly that we were giving more cargoes to ships than any other nation of the world,--furnishing in the year 1879 between thirteen and fourteen million tons of freight, and this altogether exclusive of our coasting trade. Some very extreme cases occurred, strikingly ill.u.s.trative of the reluctance of Congress to help the American carrying trade. It was shown by statistics that we were exporting to Brazil not over $7,000,000 of our own products, and taking from her over $40,000,000 of her products. We had no steam communication with Rio Janeiro, except by way of Europe. In 1876 the Emperor of Brazil, an able and enlightened monarch, visited the United States. As a result of his inquiries and examinations His Majesty expressed a sincere desire for closer commercial connections between the two countries, and eagerly spoke of his willingness to contribute by an annual bounty to the establishment of a line of steamers.

After the Emperor's return to his dominions John Roach (a native of Ireland, but long naturalized in the United States), an energetic and capable ship-builder, of unusual foresight, energy, and integrity of purpose, sent an agent to Rio Janeiro, and procured a contract from the Brazilian Government pledging $125,000 per annum, provided the Government of the United States would give the same amount, for the establishment of a steam line between the two countries. Not doubting the readiness of the American Government to respond, Mr.

Roach proceeded with full confidence, and built vessels for the line in his own shipyard. The enterprise promised the best commercial results; but to his chagrin and discomfiture, Mr. Roach found that no amount of argument or appeal by those who were willing to speak for him could induce Congress to contribute a single dollar for the encouragement of the line. Brazil cancelled her offer when the United States refused to join with her. Mr. Roach's ships were withdrawn, and the line was surrendered to an inferior cla.s.s of English steamers.

During the period of this futile experiment, as well as before and afterwards, Congress annually appropriated more than a million dollars for the maintenance of the South-American squadron of naval vessels, to protect a commerce that did not exist, and for the creation of which the United-States Government was unwilling to pay even ten per cent of the cost annually of maintaining the squadron. Every intelligent man knows that it is impossible to maintain a navy unless there be a commercial marine for the education of sailors. The American marine preceding 1861 was so large that it could furnish seventy-six thousand sailors to maintain a blockading squadron on the South Atlantic and Gulf coasts. The value of this school for seamen, as one of the arms for National defense, could not have been more strikingly ill.u.s.trated, or more completely proved. The lesson should have been heeded. It is a familiar adage requiring no enforcement of argument, that navies do not grow at the top. They grow from and out of a commercial marine that educates men for sea service. If the Government of the United States had, since the close of the war, expended annually upon the mercantile marine one-fifth of the amount that has been expended upon the Navy, our ships would have covered every sea, and the Navy would have grown of itself. Instead of that, we have been constructing the navy as an exotic, forcing it to grow without a favoring atmosphere, establishing it with officers and not with men, educating cadets on land, and not educating sailors on the ocean.

The Democratic party in Congress was hostile to every movement for the encouragement of our carrying trade, and the Republican party was fatally divided. The men who had earnestly attempted to do something were therefore constantly defeated and compelled to abandon the effort.

Following this came the demand for the ships, which meant simply that American capitalists might secure the registry of the United States for vessels built in English ship-yards and manned with English sailors. This is the last movement necessary to complete the dominion of Great Britain over the sea, to complete the humiliation of the United States as a commercial country. It would abolish the art of ship-building on this side of the Atlantic, would educate no American sailor, except in the coasting trade. As a result, our naval vessels, if a Navy should be maintained, would necessarily be constructed where the merchant vessels were constructed; and the last point of absurdity in this policy would be reached when, in case of possible conflict with a European Power, we should be dependent for naval vessels upon a foreign country from which we could be cut off by the superior strength of our opponent on the sea.

With a more extended frontage on the two great oceans of the world than any other nation; with a larger freightage than that of any other nation, it will be a reproach to the United States, more pointed and decisive every year, if it neglects to establish a policy which shall develop a mercantile marine, and as the outgrowth of the mercantile marine, a Navy adequate to all the wants of the Republic. If Congress, in the sixteen years following the war, had given a t.i.the of encouragement to the building and sailing of ships, that it has wisely given to manufactures, to the construction of railways, and to every industrial pursuit on land, our flag would before the close of that period have stood relatively on the ocean as strong and permanent as it stood before steam was applied to the carrying trade of the world.

In those sixteen years the Government expended more than three hundred millions on the Navy!(4) It expended scarcely three millions to aid in building up its mercantile marine, and expended much of that unwisely.

[(1) The Louisiana Commission was composed as follows:

General Joseph R. Hawley of Connecticut, Judge Charles B. Lawrence of Ohio, General John M. Harlan of Kentucky, Ex-Governor John C. Brown of Tennessee, Hon. Wayne McVeagh of Pennsylvania.]

[(2) The International Monetary Conference for which provision was made in the bill was held at Paris in the autumn of 1878. The American Commissioners were Reuben K. Fenton, William S. Groesbeck, and Francis A. Walker, with S. Dana Horton as Secretary. The princ.i.p.al European Nations were present with the exception of Germany. The Commissioners receive the impression that decided progress had been made towards the remonetization of silver in Europe, but subsequent event have not vindicated their judgment. Mr. Goschen, who was the head of the British delegation, declared that "it would be a misfortune for the world if a movement for a sole gold standard should succeed;" but he indicated no purpose on the part of his own government to change from the gold standard. The Conference came to no practical conclusion, simply agreeing that "it is necessary to maintain in the world the monetary functions of silver as well as those of gold;" but that "the selection for use of one or the other of the two metals, or both simultaneously, should be governed by the special position of each State or group of States." The proposition of the United States "that the delegations recommend to their respective governments the adjustment of a fixed relation between the two metals and the use of both in that relation as unlimited legal-tender money," was rejected.

The supporters of a bi-metallic standard, though disappointed in the immediate result of the Conference, received encouragement from the advance in International opinion in the years that had elapsed since the previous Conference (1867). At that time the Nations declared almost unanimously in favor of a single standard of gold. Many of them had found in the interval great difficulty in maintaining it and were withheld from declaring for the double standard simply by the influence and example of England.]

[(3) The following tables have been prepared with care by Hon. A. Loudon Snowden, the able superintendent for several years of the United States Mint at Philadelphia.

ANNUAL PRODUCTION OF GOLD AND SILVER IN THE UNITED STATES, FROM 1850 TO 1881, INCLUSIVE.

YEARS. GOLD. SILVER. YEARS. GOLD. SILVER.

1850 . . . $50,000,000 $50,000 1866 . . . $53,500,000 $10,000,000 1851 . . . 55,000,000 50,000 1867 . . . 51,725,000 13,500,000 1852 . . . 60,000,000 50,000 1868 . . . 48,000,000 12,000,000 1853 . . . 65,000,000 50,000 1869 . . . 49,500,000 12,000,000 1854 . . . 60,000,000 50,000 1870 . . . 50,000,000 16,000,000 1855 . . . 55,000,000 50,000 1871 . . . 43,500,000 23,000,000 1856 . . . 55,000,000 50,000 1872 . . . 36,000,000 28,750,000 1857 . . . 55,000,000 50,000 1873 . . . 36,000,000 35,750,000 1858 . . . 50,000,000 500,000 1874 . . . 33,500,000 37,300,000 1859 . . . 50,000,000 100,000 1875 . . . 33,500,000 31,700,000 1860 . . . 46,000,000 150,000 1876 . . . 39,930,000 38,780,000 1861 . . . 43,000,000 2,000,000 1877 . . . 46,900,000 39,800,000 1862 . . . 39,200,000 4,500,000 1878 . . . 51,200,000 45,281,000 1863 . . . 40,000,000 8,500,000 1879 . . . 38,900,000 40,800,000 1864 . . . 46,100,000 11,000,000 1880 . . . 36,000,000 39,200,000 1865 . . . 53,225,000 11,250,000 1881 . . . 30,650,000 43,150,000

Total. . $822,525,000 $38,400,000 Total. . $678,805,000 $467,011,000

Total Gold for thirty-two years, $1,501,330,000. Total Silver, $505,411,000

ANNUAL PRODUCTION OF GOLD AND SILVER IN THE WORLD, EXCLUSIVE OF THE UNITED STATES, FROM 1850 TO 1881, INCLUSIVE.

YEARS. GOLD. SILVER. YEARS. GOLD. SILVER.

1850 . . . $15,000,000 $39,500,000 1866 . . . $67,600,000 $40,750,000 1851 . . . 12,600,000 39,950,000 1867 . . . 52,300,000 40,725,000 1852 . . . 72,750,000 40,550,000 1868 . . . 61,725,000 38,225,000 1853 . . . 90,450,000 40,550,000 1869 . . . 56,725,000 35,500,000 1854 . . . 67,450,000 40,550,000 1870 . . . 56,850,000 35,575,000 1855 . . . 80,075,000 40,550,000 1871 . . . 63,500,000 38,050,000 1856 . . . 82,600,000 40,600,000 1872 . . . 63,600,000 36,500,000 1857 . . . 78,275,000 40,600,000 1873 . . . 60,200,000 53,500,000 1858 . . . 74,650,000 40,150,000 1874 . . . 57,250,000 34,200,000 1859 . . . 74,850,000 40,650,000 1875 . . . 64,000,000 48,800,000 1860 . . . 73,250,000 40,650,000 1876 . . . 63,770,000 48,820,000 1861 . . . 70,800,000 42,700,000 1877 . . . 67,100,000 41,200,000 1862 . . . 68,550,000 40,700,000 1878 . . . 67,800,000 49,519,000 1863 . . . 66,950,000 40,700,000 1879 . . . 69,800,000 55,200,000 1864 . . . 66,900,000 40,700,000 1880 . . . 70,400,000 57,500,000 1865 . . . 66,975,000 40,700,000 1881 . . . 65,800,000 62,800,000

Total $1,072,125,000 $649,800,000 Total $1,008,420,000 $716,864,000

Total Gold, $2,080,545,000. Total Silver, $1,366,664,000.

TOTAL FOR THE WHOLE WORLD.

GOLD. SILVER.

1850-1856 . . . . . . . . . . . . . . . $1,894,650,000 $ 688,200,000 1866-1881 . . . . . . . . . . . . . . . 1,687,225,000 1,183,875,000]

[(4) The Naval expenditures for the sixteen years following the war were as follows:--

Four years under President Johnson . . . . . $114,500,000 Eight years under President Grant . . . . . 154,500,000 Four years under President Hayes . . . . . . 57,000,000]