Twenty Years of Congress, Volume 2 (of 2)

J >> James Gillespie Blaine >> Twenty Years of Congress, Volume 2 (of 2)

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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 412-1/2 grains.--General Butler of
Massachusetts 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 pass 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 passed 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 principal 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--passing 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 passed 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 principal 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 mass 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 asserted the
necessity of maintaining silver coin at full legal-tender, but upon
the basis of equality in intrinsic value with the gold dollar. This
class 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 class 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 hoarding 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 assistance, as was the constant reduction of the
principal, 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 principal 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 principal 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 competition
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 competition 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
illustrative 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 class 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 illustrated,
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 tithe 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 principal 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]

CHAPTER XXVII.

The question of the fisheries has been in dispute between Great Britain
and the United States for more than seventy years. During that period
it has been marked by constantly recurring, and sometimes heated,
controversy; and it will continue to be a source of irritation until
the two Government can reach a solution which shall prove satisfactory,
not only to the negotiators, but to the class of brave and
adventurous men who, under both flags, are engaged in the sea-fisheries.
For a long period each recurring season brought its series of
complaints, often threatening violence between the fishermen,
and tending to bring the two Governments into actual collision. An
adjustment was effected by the Reciprocity Treaty of 1854 and again by
the Treaty of Washington in 1871, but for so brief a time under each
agreement as only to postpone the difficulty and not to settle it.
There is a right and a wrong side to this questions, and either the
Government of the United States or the Government of England is to
blame for the chronic contention which marks it.

The American case can be briefly stated. When the independence of the
Colonies was recognized in the preliminary treaty of 1782 the
provisions agreed upon in regard to two subjects were held by both
Governments to be final and perpetual. One was the territory embraced
within the boundaries conceded to the United States: the other was the
right to the fisheries. The people of the Colonies, especially the
people of the New-England Colonies, had as British subjects used all
the British fisheries in what is now known as the Dominion of Canada
and the island of Newfoundland; and in the preliminary treaty to which
George III. gave his assent in 1782, as well as in the final and more
definite treaty of 1783, it was provided that the privilege should
continue to be enjoyed by citizens of the new Republic.(1) No doubt of
the intent and proper construction of this clause in both treaties had
ever been suggested, until the English and American negotiators were
engaged in framing the treaty of peace at Ghent in 1814, at the close
of the second war with Great Britain. The British negotiators claimed
that the war of 1812 had put an end to all existing treaties, and that,
the fishery clause in the treaty of 1782 being no longer in force, our
fishery rights had expired, and if revived at all must be revived under
new stipulations.

The direct purpose of this movement was obvious. By the treaty of
1782 it was declared that "the navigation of the Mississippi River
from its source to the ocean shall forever remain free and open to the
subjects of Great Britain and to the citizens of the United States."
It was at that time assumed that the boundary line between the
territory of British America and the United States, as set forth in the
treaty of peace, would at a certain point cross the Mississippi River,
and that the navigation of that river would thus be secured to the
subjects of his Britannic Majesty. But his was soon ascertained to
be an error, and to that end that the line might be determined with
precision the Jay treaty of 1794 provided for a joint survey. By the
time of the negotiation of the Treaty of Ghent, twenty years later, it
was definitely ascertained that the northern boundary of the United
States ran above the sources of the Mississippi, while the purchase
of Louisiana had given to our Government the control of the mouth of
the river. Hence the privilege of navigating the Mississippi (so
earnestly desired by the British Government) could not be insisted on,
since the river from its source to the sea was wholly within the
territory of the United States. If, therefore, our fishery rights were
void by the abrogation of the fishery clause of the treaty of 1792,
the restoration of those rights could be demanded only in exchange for
some equivalent; and the equivalent to be asked, as was well known,
would be the concession to Great Britain of the free navigation of the
Mississippi River.

The position thus taken by the British Government was plainly
untenable. The treaty of 1782 was only the formal declaration of
certain facts consequent upon the termination of the Revolutionary
war. That treaty recognized three conditions as fully established:
I. The independence of the thirteen Colonies. II. The territorial
limits of the United States. III. The rights and methods of the
common fisheries in Colonial waters which the citizens of the United
States had exercised as British subjects.--The history of the
negotiation and the explicit language of the treaty prove that the
clause touching the fisheries was the recognition of an _existing_
right and not the grant of a _new_ right. The British Government, in
1814, might with equal force and justice have claimed that under this
theory of the abrogation of the treaty of 1782 by war, the recognition
of our independence and the establishment of our boundaries had also
become void. It is a rather curious fact, apparently unknown or
unnoticed by the negotiators of 1814, that as late as 1768 the law
officers of the Crown under the last Ministry of Lord Chatham (to whom
was referred the treaty of 1686 with France, containing certain
stipulations in reference to the Newfoundland fisheries) gave as their
opinion that such clauses were permanent in their character, and that
so far the treaty was valid, notwithstanding subsequent war. The
American negotiators of course refused to admit the principle (that the
war of 1812 had put an end to any provision of the treaty of 1782) or
its application; and the result was that the Treaty of Ghent was signed
and ratified, without any provisions either as to the Fisheries or the
navigation of the Mississippi River,--a position which left the United
States in the full exercise of its rights under the treaty of 1782,
from which it could be excluded only by the exercise of force on the
part of the British Government. There was no danger of force being
applied. The war of 1812 had satisfied Great Britain that she could
gain nothing by going to war with the United States.