I had already entered into the canvass when this resolution of Vallandigham was adopted. It was only necessary to read it to the people of Ohio to arouse resentment and opposition. The scattered opposition to Mr. Lincoln, much of it growing out of his conservatism, at once disappeared. The discontented Republicans who met in convention at Cleveland again became active in the Republican ranks. The two parties that grew out of factional politics in New York, the Blair party and its opponents in Missouri, and the army of disaffected office-seekers, waived their dissensions and griefs. Horace Greeley and the extreme opponents of slavery, represented by Wendell Phillips, not satisfied with the slow, but constitutional process of emancipation proposed by Lincoln, when compelled to choose between that plan of abolition and unconditional surrender to slavery, naturally voted for Lincoln. The great body of patriotic Democrats in all the states, who supported the war, but were still attached to their party, quietly voted for Lincoln. In Ohio, especially, where a year before they voted against Vallandigham for his disloyalty, they naturally voted against his resolution for surrender to the rebels.

During the campaign I accompanied Johnson to Indiana where he made patriotic speeches to great audiences. His arraignment of the autocracy of slaveholders in the south was very effective. The current of opinion was all in favor of Lincoln. The result of the election for Members of Congress in the states voting in October was a decisive indication of the result in November. All the central states elected a large majority of Republican Members of Congress. In Ohio the Union party had a majority of over 50,000 and elected 17 Republican and 2 Democratic Members of the House of Representatives. In 1862 Ohio elected 14 Democratic and 5 Republican Members. The presidential election that followed on the 8th of November, 1864, resulted in an overwhelming victory for Lincoln. He received 212 and McClellan 21 electoral votes, the latter from the States of New Jersey, Delaware and Kentucky. This political victory had a more decisive effect in defeating the rebellion than many battles. I returned to Washington soon after the election.

I was naturally deeply interested in the movements of General Sherman's march to the sea. Towards the close of November we had all sorts of rumors from the south, that General Sherman was surrounded by Confederate troops, that his supplies were cut off, that successful attacks had been made upon his scattered forces. I naturally became uneasy, and went to President Lincoln for consolation and such news as he could properly give me. He said: "Oh, no, we have no news from General Sherman. We know what hole he went in at, but we do not know what hole he will come out of," but he expressed his opinion that General Sherman was all right. Soon after, authentic information came that General Sherman had arrived at Savannah, that Fort McAllister was taken, and the army was in communication with the naval forces. The capture of Savannah and the northward march of General Sherman's army is part of the familiar military history of the country.

The second session of the 38th Congress convened on the 5th of December, 1864. It was a busy and active session confined mainly to appropriations, loan and currency bills. The necessary expenditures had been so greatly increased by the war that the aggregate amounts appropriated naturally created some opposition and alarm, but there was no help for it. As chairman of the committee on finance I did all I could to reduce the appropriations for civil expenses, but in respect to military expenditures there could scarcely be any limit, the amount necessary being dependent upon military success. The hopeful progress of the war gave encouragement that in a brief period the power of the Confederate States would be exhausted and peace would follow. We had, however, to legislate upon the basis of the continued prosecution of the war, and it therefore became necessary to increase the revenues in every possible way, and to provide for new loans. The act approved March 3, 1865, authorized the Secretary of the Treasury to borrow not exceeding $600,000,000, and to issue therefore bonds or treasury notes of the United States in such form as he might provide. This was the last great loan authorized during the war. An act to provide internal revenue to support the government was approved on the same day, which modified many of the provisions of the previous act, but added subjects of taxation not embraced in previous laws. It especially increased the taxes on tobacco in its various forms. The 6th section provided:

"That every national banking association, state bank, or state banking association, shall pay a tax of ten per centum on the amount of notes of any state bank or state banking association, paid out by them after the first day of July, eighteen hundred and sixty- six."

This tax on state bank circulation was a practical prohibition of all state bank paper, and before the time fixed for the commencement of the tax, this circulation entirely disappeared. Additional duties were placed upon certain foreign importations. Provisions were also made for the collection in the insurrectionary districts within the United States of the direct taxes levied under the act of 1862. During the entire season my labor was excessive, and when it closed my health and strength were greatly impaired.

CHAPTER XVI. ASSASSINATION OF ABRAHAM LINCOLN. Johnson's Maudlin Stump Speech in the Senate—Inauguration of Lincoln for the Second Term—My Trip to the South—Paying off a Church Debt—Meetings to Celebrate the Success of the Union Army— News of the Death of Lincoln—I Attend the Funeral Services—General Johnston's Surrender to General Sherman—Controversy with Secretary Stanton Over the Event—Review of 65,000 Troops in Washington—Care of the Old Soldiers—Annual Pension List of $150,000,000—I am Re- elected to the Senate—The Wade-Davis Bill—Johnson's Treatment of Public Men—His Veto of the Civil Rights Bill—Reorganization of the Rebel States and Their Final Restoration to the Union.

On the 4th of March, 1865, at the inauguration of the President and Vice President elect, a scene occurred in the Senate chamber, which made a serious impression, and was indicative of what was to occur in the future. About eleven o'clock of that day Andrew Johnson, Vice President, was shown into the room in the capitol assigned to the Vice President. He complained of feeling unwell and sent for either whisky or brandy, and must have drunk excessively of it. A few minutes before twelve o'clock he was ushered into the Senate to take the oath of office and to make the usual brief address. He was plainly intoxicated and delivered a stump speech unworthy of the occasion. Before him were assembled all the principal officers of the government and the diplomatic corps. He went on in a maudlin and rambling way for twenty minutes or more, until finally he was suppressed by the suggestion of the secretary that the time for the inauguration had arrived, and he must close.

The procession was formed for the inauguration at the east front of the capitol, where a great multitude was gathered. There Mr. Lincoln delivered his memorable inaugural address. Referring to the condition of the controversy at the time of his former inaugural, he said:

"Both parties deprecated war; but one of them would make war rather than let the Union survive; and the other would accept war rather than let it perish. And the war came."

He hopefully predicted the result of the war, but he said:

"Yet, if God wills that it continue until all the wealth piled by the bondsman's two hundred and fifty years of unrequited toil shall be sunk, and until every drop of blood drawn with the lash shall be paid by another drawn with the sword, as was said three thousand years ago, so still it must be said, 'The judgments of the Lord are true and righteous altogether.'"

His peroration will always be remembered for its impressive eloquence:

"With malice towards none, with charity for all, with firmness in the right, as God gives us to see the right, let us strive on to finish the work we are in; to bind up the nation's wounds; to care for him who shall have borne the battle, and for his widow, and his orphan; to do all which may achieve and cherish a just and lasting peace among ourselves and with all nations."

Soon after the adjournment I was invited by Secretary Stanton, with many other Senators and our families, to take a trip to the south in the steamer "Baltic." Among those on board were Senators Simon Cameron, Wade, Zach. Chandler, and Foster, of Connecticut, then president pro tempore of the Senate. The sea was exceedingly boisterous. Nearly all on board were sea sick, but none so badly as Wade and Chandler, both of whom, I fear, violated the third commandment, and nearly all the party were in hearty sympathy with them. I was a good sailor and about the only one who escaped the common fate. We visited the leading places of interest along the coast, but especially Charleston, Beaufort and Savannah. Charleston had but recently been evacuated. General Sherman was then on his march through North Carolina. In Charleston everything looked gloomy and sad. I rode on horseback alone through different parts of the city, and was warned by officers not to repeat the ride, as, if my name was known, I would be in danger of being shot.

We arrived in Beaufort on Sunday morning. The town was then full of contrabands. We remained there that day and received an invitation from a negro preacher to attend religious services at his new meeting-house. About fifteen or twenty of the party went to the "meeting-house," a new unfinished skeleton-frame house of considerable size without any plastering—a mere shell. We were shown to seats that had been reserved for us. The rest of the congregation were negroes in every kind of dress and of every shade of color. The scene was very interesting, but the sermon of the preacher was little better than gibberish. He was a quaint old man, wearing goggles and speaking a dialect we could hardly understand. At the close of his sermon he narrated how the meeting-house had been built; that John had hauled the logs, Tom, Dick and Harry, naming them, had contributed their labor, but they were in debt something over $200, and, with a significant glance at our little party, he thought this was a good time to take up a collection. No sooner was this said than Cameron, whispering to me, said: "Let's pay it; I'll give twenty dollars," and when the hat came around, instead of the usual dimes and quarters in ragged currency, it received greenbacks of good denominations. In the meantime the old preacher, highly elated, called upon the audience to sing "John Brown's Body." A feeble, piping voice from an old negro woman started the singing and the rest of the negroes, with loud melodious voices, joined in, and, before it was through, the rest of us joined in. The hat, when returned to the preacher, was found to contain more than fifty dollars in excess of the amount necessary to pay off the debt. Then, with many thanks to us by the preacher, the audience was requested to remain standing until their visitors left.

Our visit at Savannah was very interesting. We there found many leading citizens of the town who were social and kind, treating us in a friendly way by rides around the city.

In the latter part of March, I was invited by General Sherman, then on a visit to Grant near Petersburg, Virginia, to go with him to Goldsboro, North Carolina, where his army was then encamped. Secretary Stanton was my next door neighbor, and our families were intimately associated. I invited his eldest son, Edwin, then a young man studying law, to accompany me, an invitation which he gladly accepted. We joined General Sherman at Fortress Monroe and accompanied him on the steamer "Bat" to Newbern and thence by rail to Goldsboro. There was a sense of danger in traveling by rail through a country mostly unoccupied, but we reached the army at Goldsboro safely. There I had my first view of a great army in marching garb. Most of the troops had received their new uniforms and equipments, but outlying regiments were constantly coming in, ragged, with tattered hats, shoes and boots of every description, almost black from exposure and the smoke of the pine woods, and as hardy a looking set of men as one could conceive of. They had picked up all kinds of paraphernalia, "stove pipe" hats being the favorite, and had all sorts of wagons gathered in their march. Their appearance was rapidly changed by new uniforms. After a brief visit I returned to Washington, and thence to my home in Mansfield.

I was invited soon after, on the 14th of April, to attend a mass meeting at Columbus to celebrate the success of the Union army. I accepted the invitation and attended an immense meeting in the open air on the capitol grounds, and there Samuel Galloway and myself made addresses. Meetings were held, congratulations uttered in the evening of that day. The whole city was in holiday attire, ornamented with flags, and everywhere and with everybody, there was an expression of joy. I retired late at night to my room in the hotel, and after my fatigue slept soundly.

Early the next morning Rush Sloane, a personal friend, rapped at my door and announced to me the news of the assassination of Lincoln, and, as then reported, that of Seward. The change from joy to mourning that day in Columbus was marked and impressive. No event of my life created a more painful impression than this news following the rejoicings of the day before. I returned to Washington and attended the funeral services over the body of Mr. Lincoln, then about to be carried on the long journey to his old home in Springfield, Illinois.

On the 6th of May, in response to the invitation of my neighbors in Mansfield, I made an address upon the life and character of the dead President. It expressed the opinion and respect I then entertained for him, and now I could add nothing to it. As time moves on his name and fame become brighter, while most of his contemporaries are one by one forgotten.

Soon after the death of Mr. Lincoln, the terms of the surrender of General Johnston to General Sherman became the subject of a violent controversy. On the 21st of April, Secretary Stanton issued an order to General Grant to proceed immediately to the headquarters of General Sherman and direct operations against the enemy. He issued a bulletin in which he intimated that Davis and his partisans were on their way to escape to Mexico or Europe with a large amount of gold plundered from the Richmond banks and from other sources, and that they hoped to make terms with General Sherman by which they would be permitted with their effects, including their gold plunder, to go to Mexico or Europe. The most violent and insulting paragraphs were published in the newspapers, substantially arraigning General Sherman as a traitor and imputing to him corrupt motives. I felt myself bound at once, not to defend the terms of surrender, but to repel the innuendoes aimed at General Sherman. This led me into a controversy with Mr. Stanton, not worth while to recall.

I believed then and still believe that he was under the influence of perhaps a well-grounded fear that his life was in danger. The atmosphere of Washington seemed to be charged with terror, caused by the assassination of Lincoln, the wounding of Seward and the threats against all who were conspicuous in political or military life in the Union cause. Now, since we are fully informed of all the surrounding circumstances connected with the surrender, and the belief of General Sherman that he was strictly carrying out the policy of President Lincoln, it is plain that he acted in what he supposed was the line of duty. He did not comprehend that the fatal crime in Washington changed the whole aspect of affairs. His agreement with Johnston was on its face declared to be inoperative until approved by the authorities at Washington, and, while the political features of the surrender could not be approved, a simple notification of disapproval would have been cheerfully acted upon and the orders of the President would have been faithfully carried out.

General Sherman, when he received notice of the disapproval of his action, at once notified Johnston, and new terms were arranged in exact accordance with those conceded by General Grant to General Lee.

I remained in Washington until the arrival, on the 19th of May, of General Sherman's army, which encamped by the roadside about half way between Alexandria and the Long Bridge. I visited the general there and found that he was still smarting under what he called the disgrace put upon him by Stanton. I advised him to keep entirely quiet, said the feeling had passed away and that his position was perfectly well understood. I persuaded him to call on the President and such members of the cabinet as he knew, and accompanied him. He was dressed in full uniform, well worn, was bronzed and looked the picture of health and strength. As a matter of course he refused to call on Stanton and denounced him in unmeasured terms, declaring that he would insult him whenever the opportunity occurred. When he came in contact with his fellow officers and found that they sympathized with him his anger abated, and by the time the great review took place, he seemed to have recovered his usual manner.

The review of General Meade's army was to occur on Tuesday, May 23, and that of General Sherman's, as it was called, on the 24th. General Sherman, with his wife and her father, Hon. Thomas Ewing, and myself, were present on the reviewing stand on the first day of the review. He received on the stand the congratulations of hundreds of people and seemed to enjoy every moment of time. He was constantly pointing out to Mr. Ewing and myself the difference between the eastern and western armies, in which he evidently preferred the Army of the West. On the next day, prompt to the time stated, attended by a brilliant staff, he rode slowly up Pennsylvania avenue at the head of his column, and was followed by a magnificent army of 65,000 men, organized into four army corps, and marching with that precision only possible with experienced troops. His description of the scene in his "Memoirs" proves his deep interest in the appearance of his army and his evident pride in it. When he arrived at the grand stand, where the President reviewed the troops, he dismounted, left the line, came upon the stand and took his place by the side of the President. Everyone knew his relations to Stanton, and was curious to see the result of their meeting. I stood very near the general, and as he approached he shook hands with the President and the members of the cabinet, but when Stanton partially reached out his hand, General Sherman passed him without remark, but everyone within sight could perceive the intended insult, which satisfied his honor at the expense of his prudence. However, it is proper to say that these two men, both eminent in their way, became entirely reconciled before the death of Mr. Stanton. General Sherman always stopped with me when he was temporarily in Washington, and I know that in a brief period they met and conversed in a friendly way. When Mr. Stanton lay upon his death bed, General Sherman not only called upon him, but tendered his services, and exhibited every mark of respect for him.

The great body of the volunteer forces was disbanded, the officers and soldiers were returning to their homes. To most of them the war was a valuable lesson. It gave them a start in life and a knowledge and experience that opened to door to all employment, especially to official positions in state and nation. In all popular elections the soldier was generally preferred. This was a just recognition for his sacrifices and services. I hope and trust that while a single survivor of the War of the Rebellion is left among us, he will everywhere be received with honor and share all the respect which the boys of my generation were so eager to grant and extend to the heroes of the Revolutionary War. The service of one was as valuable as the other, rendered on a broader field, in greater numbers, with greater sacrifices, and with the same glorious results of securing the continuance of an experiment of free government, the most successful in the history of mankind and which is now, I profoundly trust, so well secured by the heroism and valor of our soldiers, that for generations and centuries yet to come no enemy will dare to aim a blow at the life of the republic. For the wounded and disabled soldiers and the widows and orphans of those who fell, a larger provision of pensions was freely granted than ever before by any nation in ancient or modern times. Provision was made by the general government, and by most of the loyal states, for hospitals and homes for the wounded. The bodies of those who died in the service have been carefully collected into cemeteries in all parts of the United States. If there has been any neglect or delay in granting pensions, it has been caused by the vast number of applications—more than a million—and the difficulty as time passes in securing the necessary proof. The pension list now, thirty years after the war, requires annually the sum of more than $150,000,000, or three times the amount of all the expenses of the national government before the war. No complaint is made of this, but Congress readily grants any increase demanded by the feebleness of age or the decay of strength. I trust, and believe, that this policy will be continued until the last surviving soldier of the war meets the common fate of all.

I participated in the canvass of 1865, when General Jacob D. Cox, the Republican candidate for governor of Ohio, and a Republican legislature were elected with but little opposition. The first duty of this legislature was to elect a Senator. There was a friendly contest between General Robert C. Schenck, Hon. John A. Bingham and myself, but I was nominated on the first ballot and duly elected.

I received many letters from Horace Greeley, in the following one of which he showed great interest in my re-election to the Senate:

"New York, February 7, 1865. "Hon. John Sherman:

"My Dear Sir:—Yours of the 5th inst. at hand. I can assure you that the combination to supplant you in the Senate is quite strong and confident of success. I did not mean to allude to the controversy, but was compelled to by the dispatch which got into our columns. I observe J. W. wrote 'locality' as he says, but the change to 'loyalty' was a very awkward one in these days; so I felt compelled to correct it.

"I fear more the raids of Thad. Stevens on the treasury than those of Mosby on our lines.

"Yours, "Horace Greeley."

When Congress met on the 4th of December, 1865, it had before it two important problems which demanded immediate attention. One was a measure for the reconstruction of the states lately in rebellion and the other was a plan for refunding and paying the public debt. It was unfortunate that no measure had been provided before the close of the war defining the condition of the states lately in rebellion, securing the freedmen in their new-born rights, and restoring these states to their place in the Union. Therefore, during the long vacation, from April to December, the whole matter was left to executive authority. If Lincoln had lived, his action would have been acquiesced in. It would have been liberal, based upon universal emancipation of negroes, and pardon to rebels. It was supposed that President Johnson would err, if at all, in imposing too harsh terms upon these states. His violent speeches in the canvass of 1864, and his fierce denunciation of the leaders in the Rebellion, led us all to suppose that he would insist upon a reconstruction by the loyal people of the south and that reasonable protection would be extended to the emancipated negroes. The necessity of legislation for the reconstruction of the Confederate states was foreseen and provision had been made by Congress, during the war, by what was known as the Wade-Davis bill, to provide for the reorganization of these states. During the 37th Congress, Henry Winter Davis, though not then a Member of the House of Representatives, prepared a bill to meet this exigency. It was a bill to guarantee to each state a republican form of government. It embodied a plan by which these states, then declared by Congress to be in a state of insurrection, might, when that insurrection was subdued or abandoned, come back freely and voluntarily into the Union. It provided for representation, for the election of a convention and a legislature, and of Senators and Members of Congress. It was a complete guarantee to the people of the insurrectionary states that upon certain conditions these states might resume their place in the Union when the insurrection had ceased. This bill he handed to me. I introduced it at his request. It was referred to the judiciary committee, but was not acted upon by it.

Afterwards Mr. Davis came into the 38th Congress as a Member of the House of Representatives. Among the first acts performed by him after taking his seat was the introduction of this same bill. On the 15th of December, 1863, it was debated in the House of Representatives and passed by a very decided vote, and was sent to the Senate. It was reported to the Senate favorably, but in place of it was substituted a proposition offered by B. Gratz Brown, of Missouri. This substitute provided a mode by which the eleven Confederate states might, when the Rebellion was suppressed within their limits, be restored to their old places in the Union. The bill was sent back to the House with the proposed substitute. A committee of conference was appointed, and the House preferring the original bill, the Senate receded from its amendment, and what was known as the Wade-Davis bill passed. It went to President Lincoln, who did not approve it, and it did not become a law, but on the 8th of July, 1864, after the close of the session, he issued the following proclamation:

"Whereas, at the late session Congress passed a bill to guaranty to certain states, whose governments have been usurped or overthrown, a republican form of government, a copy of which is hereunto annexed; and whereas the said bill was presented to the President of the United States for his approval less than one hour before the sine die adjournment of said session, and was not signed by him; and whereas the said bill contains, among other things, a plan for restoring the states in rebellion to their proper practical relation in the Union, which plan expresses the sense of Congress upon that subject, and which plan it is now thought fit to lay before the people for their consideration:

"Now, therefore, I, Abraham Lincoln, President of the United States, do proclaim, declare, and make known, that while I am (as I was in December last, when by proclamation I propounded a plan for restoration) unprepared, by a formal approval of this bill, to be inflexibly committed to any single plan of restoration; and while I am also unprepared to declare that the free state constitutions and governments already adopted and installed in Arkansas and Louisiana shall be set aside and held for naught, thereby repelling and discouraging the loyal citizens who have set up the same as to further effort, or to declare a constitutional competency in Congress to abolish slavery in states, I am at the same time sincerely hoping and expecting that a constitutional amendment abolishing slavery throughout the nation may be adopted."

He added his reasons for not approving the Wade-Davis bill. He did not entirely disapprove of it, but said it was one of numerous plans which might be adopted. Mr. Sumner stated, on the floor of the Senate, that he had had an interview with President Lincoln immediately after the publication of that proclamation, and it was the subject of very minute and protracted conversation, in the course of which, after discussing the details, Mr. Lincoln expressed his regret that he had not approved the bill. I have always thought that Mr. Lincoln made a serious mistake in defeating a measure, which, if adopted, would have averted many if not all the difficulties that subsequently arose in the reconstruction of the rebel states.

The next and closing session of that Congress neglected to provide for the reorganization of these states, and, thus, when Mr. Johnson became President, there was no provision of law to guide him in the necessary process of reconstruction. Thus, by the disagreement between Congress and President Lincoln, which commenced two years before the close of the war, there was no law upon the statute book to guide either the President or the people of the southern states in their effort to get back into the Union. It became imperative during the long period before the meeting of Congress that President Johnson should, in the absence of legislation, formulate some plan for the reconstruction of these states. He did adopt substantially the plan proposed and acted upon by Mr. Lincoln. After this long lapse of time I am convinced that Mr. Johnson's scheme of reconstruction was wise and judicious. It was unfortunate that it had not the sanction of Congress and that events soon brought the President and Congress into hostility. Who doubts that if there had been a law upon the statute book by which the people of the southern states could have been guided in their effort to come back into the Union, they would have cheerfully followed it, although the conditions had been hard? In the absence of law both Lincoln and Johnson did substantially right when they adopted a plan of their own and endeavored to carry it into execution. Johnson, before he was elected and while acting as military governor of Tennessee, executed the plan of Lincoln in that state and subsequently adopted the same plan for the reorganization of the rebel states. In all these plans the central idea was that the states in insurrection were still states, entitled to be treated as such. They were described as "The eleven states which have been declared to be in insurrection." There was an express provision that:

"No Senator or Representative shall be admitted into either branch of Congress from any of said states until Congress shall have declared such state entitled to such representation."

In all the plans proposed in Congress, as well as in the plan of Johnson, it was declared that states had no right while in insurrection to elect electors to the electoral college; they had no right to elect Senators and Representatives. In other words they could not resume the powers, rights and privileges conferred upon states by the Constitution of the United States, except by the consent of Congress. Having taken up arms against the United States, they by that act lost their constitutional powers within the United States to govern and control our councils. They could not engage in the election of a President, or of Senators or Members of Congress; but they were still states. The supreme power of Congress to change, alter or modify the acts of the President and to admit or reject these states and their Senators and Representatives at its will and pleasure, and the constitutional right of the respective Houses to judge of the election, returns and qualifications of its own Members were recognized. When Mr. Johnson came into power he found the Rebellion substantially subdued. His first act was to retain in his confidence, and in his councils, every member of the cabinet of Abraham Lincoln, and, so far as we know, every measure adopted by him had the approval and sanction of that cabinet. Every act passed by Congress, with or without his assent, upon every subject whatever, connected with reconstruction, was fairly and fully executed. He adopted all the main features of the Wade- Davis bill—the only one passed by Congress. In his proclamation of May 9, 1865, he provided:

"First, That all acts and proceedings of the political, military, and civil organizations which have been in a state of insurrection and rebellion within the State of Virginia against the authority and laws of the United States, and of which Jefferson Davis, John Letcher, and William Smith were late the respective chiefs, are declared null and void."

Thus, with a single stroke, he swept away the whole superstructure of the Rebellion. He extended the tax laws of the United States over the rebel territory. In his proclamation of May 29, he says:

"To the end, therefore, that the authority of the government of the United States may be restored, and that peace, order, and freedom may be established, I, Andrew Johnson, President of the United States, do proclaim and declare that I hereby grant to all persons who have directly or indirectly participated in the existing Rebellion, except as hereinafter excepted, amnesty and pardon, with restoration of all rights of property, except as to slaves, and except in cases where legal proceedings, under the laws of the United States providing for the confiscation of property of person engaged in rebellion, have been instituted, &c."

He enforced in every case full and ample protection to the freedmen of the southern states. No complaint from them was ever brought to his knowledge in which he did not do full and substantial justice. The principal objection to his policy was that he did not extend his proclamation to all the loyal men of the southern states, including the colored as well as the white people. It must be remembered in his justification that in every one of the eleven states before the Rebellion the negro was, by the laws, excluded from the right to vote. In Ohio, Pennsylvania and New York that right was limited. In a large majority of the states, including the most populous, negro suffrage was then prohibited. It would seem to be a great stretch of power on his part, by a simple mandatory proclamation or military order, to confer the franchise on a class of people, who were then prohibited from voting not only in the eleven southern states, but in a majority of the northern states. Such a provision, if it had been inserted, could not have been enforced, and, in the condition in which slavery left the negro race, it could hardly be defended. I cannot see any reason why, because a man is black, he should not vote, and yet, in making laws, as the President was then doing, for the government of the community, he had to regard the prejudices, not only of the people among whom the laws were to be executed, but also of the army and the people who were to execute those laws, and no man can doubt but what at that time there was a strong and powerful prejudice in the army and among all classes of citizens against extending the right of suffrage to negroes, especially down in the far south, where the great body of the slaves were in abject ignorance.

It must be also noted that in the Wade-Davis bill Congress did not and would not make negro suffrage a part of its plan. Even so radical an anti-slavery man as my colleague, Senator Wade, did not propose such a measure. The effort was made to give emancipated negroes the right to vote, and it was abandoned. By that bill the suffrage was conferred only upon white male loyal citizens. And in the plan of the President, he adopted in this respect the very same conditions for suffrage as those proposed by Congress. I believe that all the acts and proclamations of President Johnson before the meeting of Congress were wise and expedient, and that there would have been no difficulty between Congress and the President but for his personal conduct, and, especially, his treatment of Congress and leading Congressmen. The unfortunate occurrence, already narrated, at his inauguration, was followed by violent and disrespectful language, unbecoming the President, especially, his foolish speech made on the 22nd of February, 1866, in which he selected particular persons as the objects of denunciation. He said:

"I fought traitors and treason in the south. I opposed the Davises, the Toombses, the Slidells, and a long list of others, which you can readily fill without my repeating the names. Now, when I turn round, and at the other end of the line find men, I care not by what name you call them, who still stand opposed to the restoration of the Union of these states, I am free to say to you that I am still in the field."

And again he said:

"I am called upon to name three at the other end of the line; I am talking to my friends and fellow-citizens, who are interested with me in this government, and I presume I am free to mention to you the names of those whom I look upon as being opposed to the fundamental principles of this government, and who are laboring to pervert and destroy it."

Voices: "Name them!" "Who are they!"

He replied:

"You ask me who they are. I say Thaddeus Stevens, of Pennsylvania, is one; I say Mr. Sumner, of the Senate, is another; and Wendell Phillips is another."

The violence of language, so unlike that of Abraham Lincoln, added to the hostility to Mr. Johnson in Congress, and, I think, more than any other cause, led to his impeachment by the House of Representatives.

In the beginning of the controversy between Congress and the President, I tried to act as a peacemaker. I knew Mr. Johnson personally, his good and his bad qualities. I sat by his side in the Senate chamber during the first two years of the war. I was with him in his canvass in 1864. I sympathized with him in his struggles with the leaders of the Rebellion and admired his courage during the war, when, as Governor of Tennessee, he reorganized that state upon a loyal basis. The defect of his character was his unreasoning pugnacity. He early became involved in wordy warfare with Sumner, Wade, Stevens and others. In his high position he could have disregarded criticism, but this was not the habit of Johnson. When assailed he fought, and could be as violent and insulting in language and acts as anyone.

Under these circumstances I made a long and carefully considered speech in the Senate on the 26th of February, 1866, in which I stated the position of Congress on the reconstruction measures, and the policy adopted by Johnson from Lincoln. Either of these plans would have accomplished the provisional restoration of these states to the Union, while all agreed that, when admitted, they would be armed with all the powers of states, subject only to the constitution of the United States. I believed then, and believe now, that the quarrel with Johnson did much to weaken the Republican party. In consequence of it several Republican Senators and Members severed their connection with that party and joined the Democratic party. Johnson, irritated by this antagonism, drifted away from the measures he had himself advocated and soon after was in open opposition to the party that elected him. I here insert passages from my speech, which expressed my views at the time, and which I now feel were justified by the then existing opinions and conditions of political life:

"Sir, I can imagine no calamity more disgraceful than for us by our divisions to surrender, to men who to their country were enemies in war, any or all of the powers of this government. He, who contributes in any way to this result, deserves the execrations of his countrymen. This may be done by thrusting upon the President new issues on which the well-known principles of his life do not agree with the judgment of his political associates. It may be done by irritating controversies of a personal character. It may be done by the President turning his back upon those who trusted him with high power, and thus linking his name with one of the most disgraceful in American history, that of John Tyler. I feel an abiding confidence that Andrew Johnson will not and cannot do this; and, sir, who will deny that the overbearing and intolerant will of Henry Clay contributed very much to the defection of John Tyler? But the division of the Whig party was an event utterly insignificant in comparison with the evil results of a division in the Union party.

"Where will be the four million slaves whom by your policy you have emancipated? What would be their miserable fate if now surrendered to the custody of the rebels of the south? Will you, by your demand of universal suffrage, destroy the power of the Union party to protect them in their dearly purchased liberty? Will you, by new issues upon which you know you have not the voice of the people, jeopard these rights which you can by the aid of the Union party secure to these freedmen? We know that the President can not and will not unite with us upon the issues of universal suffrage and dead states, and he never agreed to. No such dogmas were contemplated, when, for his heroic services in the cause of the Union, we placed him, side by side, with Mr. Lincoln as our standard-bearer. Why, then, present these issues? Why decide upon them? Why not complete the work so gloriously done by our soldiers in securing union and liberty to all men without distinction of color, leaving to the states, as before, the question of suffrage.

"Sir, the curse of God, the maledictions of millions of our people, and the tears and blood of new-made freedmen will, in my judgment, rest upon those who now for any cause destroy the unity of the great party that has led us through the wilderness of war. We want now peace and repose. We must now look to our public credit. We have duties to perform to the business interests of the country, in which we need the assistance of the President. We have every motive for harmony with him and with each other, and for a generous and manly trust in his patriotism. If ever the time shall come when I can no longer confide in his devotion to the principles upon which he was elected, I will bid farewell to Andrew Johnson with unaffected sorrow. I will remember when he stood in this very spot, five years ago, repelling with unexampled courage the assaults of traitors. He left in their hands wife, children, property, and home, and staked them all on the result. I will remember that when a retreating general would have left Nashville to its fate, that again, with heroic courage, he maintained his post. I will remember the fierce conflicts and trials through which he and his fellow- compatriots in east Tennessee maintained our cause in the heart of the Confederacy. I will remember the struggles he had with the aristocratic element of Tennessee, never ashamed of his origin and never far from the hearts of the people.

"Sir, you must not sever the great Union party from this loyal element of the southern states. No new theories of possible utopian good can compensate for the loss of such patriotism and devotion. Time, as he tells you in his message, is a great element of reform, and time is on your side. I remember the homely and encouraging words of a pioneer in the anti-slavery cause, an expelled Methodist preacher from the south, who told those who were behind him in his strong anti-slavery opinions: 'Well, friends, I'll block up awhile; we must all travel together.' So I say to all who doubt Andrew Johnson, or who wish to move more rapidly than he can, to block up awhile, to consolidate their great victory with the certainty that reason and the Almighty will continue their work. All wisdom will not die with us. The highest human wisdom is to do all the good you can, but not to sacrifice a possible good to attempt the impracticable. God knows that I do not urge harmony and conciliation from any personal motive. The people of my native state have intrusted me with a position here extending four years beyond the termination of the President's term of office. He can grant me no favor.

"If I believed for a moment that he would seek an alliance with those who, by either arms or counsel or even apathy, were against their country in the recent war, and will turn over to them the high powers intrusted to him by the Union party, then, sir, he is dishonored, and will receive no assistance from me; but I will not force him into that attitude. If he shall prove false to the declaration made by him in his veto message, that his strongest desire was to secure to the freedmen the full enjoyment of their freedom and property, then I will not quarrel with him as to the means used. And while, as he tells us in this same message, he only asks for states to be represented which are presented in an attitude of loyalty and harmony and in the persons of representatives whose loyalty cannot be questioned under any constitutional or legal test, surely we ought not to separate from him until, at least, we prescribe a test of their loyalty, upon which we are willing to stand. We have not done it yet. I will not try him by new creeds. I will not denounce him for hasty words uttered in repelling personal affronts.

"I see him yet surrounded by the cabinet of Abraham Lincoln, pursuing Lincoln's policy. No word from me shall drive him into political fellowship with those who, when he was one of the moral heroes of this war, denounced, spit upon him, and despitefully used him. The association must be self-sought, and even then I will part with him in sorrow, but with the abiding hope that the same Almighty power that has guided us through the recent war will be with us still in our new difficulties until every state is restored to its full communion and fellowship, and until our nation, purified by war, will assume among the nations of the earth the grand position hoped for by Washington, Clay, Webster, Lincoln, and hundreds of thousands of unnamed heroes who gave up their lives for its glory."

I received many letters in commendation of this speech, among others the following from Thurlow Weed, who was in full sympathy with Secretary Seward:

"Albany, N. Y., February 28, 1866. "Dear Sherman:—You have spoken words of wisdom and patriotism— spoken them boldly at the right time. They will help save the Union—and they will save the Union particularly if fanatics and despots will allow it to be saved. Just such a speech at the moment it was made is worth more than all that has been said in Congress since the session commenced. I thank you gratefully for it.

"Yours truly, "Thurlow Weed."

I still hoped that the pending civil rights bill would be approved by the President, and that then the controversy would end. On the 17th of March, 1866, I made a speech at Bridgeport, Conn., in which I said:

"Now, I say, that upon all these various propositions, upon the necessity of a change in the basis of representation, upon the necessity for protecting the negroes, upon this question of suffrage —upon all these questions that have arisen in our politics of late, the differences between Andrew Johnson and Congress are not such as need excite the alarm of any patriotic citizen. No, my friends, we have a great duty to perform to our country. Every man in public life now has a heavy responsibility resting upon him, in the discharge of which he is bound to follow the dictates of his own conscience, given to him by Almighty God. There are, there must be, differences of opinion; God has so made us that we must differ; it is the established nature of the human mind to disagree. It is only by discussion and comparison of views that the highest human wisdom is elicited. Therefore, I say again, that no Union man need feel anxious or uneasy because of the differences between the President and Congress. Let me tell you, as the solemn conviction with which I address you to-night, that Andrew Johnson never will throw the power we have given him into the hands of the Copperhead party of the United States.

"I have many reasons for this faith. One is that no nomination has ever been sent by Andrew Johnson to the Senate of the United States of any man of that stripe of politics. No flattery, no cajolery can draw him from that line. He is a man who fights his own battles, and whether they are old friends or foes that assail him he fights them with equal freedom and boldness, and sometimes, perhaps indiscreetly; but that is a fault of his character, which need excite no uneasiness in the minds of the people.

"On Thursday, the day that I left Washington, we sent to him a bill which secures to all the colored population of the southern states equal rights before the law, the civil rights bill. It declares that no state shall exclude any man on account of his color from any of the natural rights which, by the Declaration of Independence, are declared to be inalienable; it provides that every man may sue and be sued, may plead and be impleaded, may acquire and hold property, may purchase, contract, sell and convey; all those rights are secured to the negro population. That bill is now in the hands of the President. If he sign it, it will be a solemn pledge of the law-making power of the nation that the negroes shall have secured to them all these natural and inalienable rights. I believe the President will sign it."

Unfortunately at the end of ten days the President sent to the Senate the civil rights bill, referred to, with his message vetoing it. It passed both Houses with the requisite two-thirds majority, and thus became a law. This veto was followed by other vetoes, and, practically, the President abandoned his party. From this time forth, I heartily joined with my political associates in the measures adopted to secure a loyal reorganization of the southern states. I was largely influenced by the harsh treatment of the freedmen in the south under acts adopted by the reconstructed legislatures. The outrages of the Ku-Klux-Klan seemed to me to be so atrocious and wicked that the men who committed them were not only unworthy to govern, but unfit to live. The weakness of the position of Congress in the controversy with Mr. Johnson, was, that it had furnished no plan of reconstruction and he was compelled to act upon the urgency of events. Many efforts were made to provide legislation to take the place of the proclamations and acts of the President, but a wide divergence of opinion in the Republican party manifested itself, and no substantial progress was made until near the close of the second session of the 39th Congress. Several bills were then pending in each House to provide governments for the insurrectionary states. On the 13th of February, 1867, during the short session, a bill with that title came from the House of Representatives. It was manifest unless this bill could be acted upon, that, in the then condition of Congress, all legislation would fail. It was kept before the Senate and thoroughly debated. On the 16th of February, after consultation with my political colleagues, I moved a substitute for the House bill. The fifth section of this substitute embodied a comprehensive plan for the organization of the rebel states with provision for elections in said states, and the conditions required for their administration and restoration to the Union and the exercise by them of all the powers of states, and provided for the election of Senators and Members of Congress. In presenting this substitute, I briefly stated my reasons for it, as follows:

"The principle of this bill is contained in the first two lines of the preamble. It is founded upon the proclamation of the President and Secretary of State made just after the assassination of President Lincoln, in which they declared specifically that the Rebellion had overthrown all civil governments in the insurrectionary states, and they proceeded by an executive mandate to create governments. They were provisional in their character, and dependent for their validity solely upon the action of Congress. These are propositions which it is not now necessary for me to demonstrate. These governments have never been sanctioned by Congress, nor by the people of the states where they exist. Taking that proclamation and the acknowledged fact that the people of the southern states, the loyal people, whites and blacks, are not protected in their rights, but that an unusual and extraordinary number of cases occur of violence, and murder, and wrong, I do think it is the duty of the United States to protect these people in the enjoyment of substantial rights.

"Now, the first four sections of this substitute contain nothing but what is the present law. There is not a single thing in the first four sections that does not now exist by law.

"The first section authorizes the division of the rebel states into military districts. That is being done daily.

"The second section acknowledges that the President is the commanding officer of the army, and it is made his duty to assign certain officers to those districts. That is clearly admitted to be right.

"The third section does no more than what the Supreme Court in their recent decision have decided could be done in a state in insurrection. The Supreme Court in their recent decisions, while denying that a military tribunal could be organized in Indiana because it never had been in a state of insurrection, expressly declared that these tribunals might have been, and might now be, organized in insurrectionary states. There is nothing in this third section, in my judgment, that is not now and has not been done every month within the last twelve months by the President of the United States. The orders of General Sickles, and many other orders I might quote, have gone further in punishment of crime than this section proposes.

"Now, in regard to the fourth section, that is a limitation upon the present law. Under the present law many executions of military tribunals are summarily carried out. This section requires all sentences of military tribunals which affect the liberty of the citizen to be sent to the commanding officer of the district. They must be approved by the commanding officer of the district; and so far as life is concerned the President may issue his order at any moment now, or after this bill passes, directing that the military commander of the district shall not enforce a sentence of death until it is submitted to him, because the military officer is a mere subordinate of the President, remaining there at the pleasure of the President.

"There is nothing, therefore, in these sections, that ought to alarm the nerves of my friend from Pennsylvania, or anybody else. I cannot think that these gentlemen are alarmed about the state of despotism that President Johnson is to establish in the southern states. I do not feel alarmed; nor do I see anything in these sections as they now stand that need endanger the rights of the most timid citizen of the United States. They are intended to protect a race of people who are now without protection.

"Now, in regard to the fifth section, which is the main and material feature of this bill, I think it is right that the Congress of the United States, before its adjournment, should designate some way by which the southern states may reorganize loyal state governments in harmony with the constitution and laws of the United States, and the sentiment of the people, and find their way back to these halls. My own judgment is that the fifth section will point out a clear, easy, and right way for these states to be restored to their full power in the government. All that it demands of the people of the southern states is to extend to all their male citizens, without distinction of race or color, the elective franchise. It is now too late in the day to be frightened by this simple proposition. Senators can make the most of it as a political proposition. Upon that we are prepared to meet them. But it does point out a way by which the twenty absent Senators, and the fifty absent Representatives can get back to these halls, and there is no other way by which they can justly do it.

"It seems to me that this is the whole substance of the bill. All there is material in the bill is in the first two lines of the preamble and the fifth section, in my judgment. The first two lines may lay the foundation adopting the proclamation issued first in North Carolina, that the Rebellion had swept away all the civil governments in the southern states; and the fifth section points out the mode by which the people of those states in their own manner, without any limitations or restrictions by Congress, may get back full representation in Congress. That is the view I take of this amended bill; and taking that view of it I see no reason in the world why we should not all vote for it."

The substitute was adopted on the same day and the bill, thus amended, was passed by a vote of yeas 29, nays 10. In the House it was agreed to with slight amendments, which were finally concurred in by the Senate, on February 20, 1867. It was sent to the President and was not approved by him, but was, on the 2nd of March, passed over his veto by a vote of two-thirds of both Houses.

Upon the law, long deferred, the several states mentioned in it were organized and restored to their place in the Union. The preamble and fifth and sixth sections of this law are as follows:

"An Act to Provide for the More Efficient Government of the Rebel States.

"Whereas, no legal state governments or adequate protection for life or property now exists in the rebel states of Virginia, North Carolina, South Carolina, Georgia, Mississippi, Alabama, Louisiana, Florida, Texas, and Arkansas; and whereas it is necessary that peace and good order should be enforced in said states until loyal and republican state governments can be legally established: Therefore,

"Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled: . . .

"Sec. 5. And be it further enacted, That when the people of any one of said rebel states shall have formed a constitution of government in conformity with the constitution of the United States in all respects, framed by a convention of delegates elected by the male citizens of said state, twenty-one years old and upward, of whatever race, color, or previous condition, who have been resident in said state for one year previous to the day of such election, except such as may be disfranchised for participation in the Rebellion, or for felony at common law, and when such constitution shall provide that the elective franchise shall be enjoyed by all such persons as have the qualifications herein stated for electors of delegates, and when such constitution shall be ratified by a majority of the persons voting on the question of ratification who are qualified as electors for delegates, and when such constitution shall have been submitted to Congress for examination and approval, and Congress shall have approved the same, and when said state, by a vote of its legislature, elected under such conditions, shall have adopted the amendment to the constitution of the United States, proposed by the 39th Congress, and known as article fourteen, and when said article shall have become a part of the constitution of the United States, said state shall be declared entitled to representation in Congress, and Senators and Representatives shall be admitted therefrom on their taking the oath prescribed by law, and then and thereafter the preceding sections of this act shall be inoperative in said state: Provided, That no person excluded from the privilege of holding office by said proposed amendment to the constitution of the United States shall be eligible to election as a member of the convention to frame a constitution for any of said rebel states, nor shall any such person vote for members of such convention.

"Sec. 6. And be it further enacted, That, until the people of said rebel states shall be by law admitted to representation in the Congress of the United States, any civil government which may exist therein shall be deemed provisional only, and in all respects subject to the paramount authority of the United States at any time to abolish, modify, control, or supersede the same; and in all elections to any office under such provisional governments all persons shall be entitled to vote, and none others, who are entitled to vote, under the provisions of the fifth section of this act; and no person shall be eligible to any office under any such provisional governments who would be disqualified from holding office under the provisions of the third article of said constitutional amendment."

At the same time, the financial question, embracing the currency, the public debt and the national revenue were of the highest importance and demanded immediate consideration. Hugh McCulloch, the Secretary of the Treasury, had been during most of his life a banker in the State of Indiana, of acknowledged ability as such, but with little or no experience as a financier dealing with public questions. He was the first comptroller of the currency under the banking act, and rendered valuable service in organizing the system of national banks, though he had not originally favored the system, but was, at the time of its adoption, a strong supporter of sound state banks. In his first report to Congress on the 4th of December, 1865, he, as Secretary of the Treasury, took strong ground against United States notes as a circulating medium and their being made a legal tender as money. He regarded the legal tender acts as war measures, and, while he did not recommend their repeal, he expressed his opinion that they ought not to remain in force one day longer than would be necessary to enable the people to prepare for a return to the constitutional currency. He denied the authority of Congress to issue these notes except in the nature of a loan, and affirmed that the statute making them a legal tender for all debts, public and private, was not within the scope of the duties or the constitutional powers of Congress; that their issue as lawful money was a measure necessary in a great emergency, but, as this emergency did not then exist, the government should, as speedily as possible, withdraw them, and he recommended that the work of retiring the notes should be commenced without delay and carefully and persistently continued until all were retired. He proposed to do this by the sale of bonds for United States notes outstanding and their withdrawal and cancellation. He recommended as a substitute the notes of national banks, but even these notes he thought redundant, and said:

"There is no fact more manifest that the plethora of paper money is not only undermining the morals of the people by encouraging waste and extravagance, but is striking at the root of our material prosperity by diminishing labor . . . and if not speedily checked, will, at no distant day, culminate in widespread disaster. The remedy, and the only remedy within the control of Congress, is, in the opinion of the secretary, to be found in the reduction of the currency."

The chief part of his report was devoted to the danger of inflation and the necessity of contraction. He said the longer contraction was delayed the greater must the fall eventually be, and the more serious its consequences.

In accordance with the recommendations of Secretary McCulloch, a bill was introduced in the House by Justin S. Morrill, which authorized the Secretary of the Treasury, at his discretion, to sell any of the description of bonds authorized by the act of March 3, 1865, the proceeds to be used only to retire treasury notes or other obligations issued under any act of Congress. This bill as reported would have placed in the power of the secretary the retirement of all United States notes at his discretion. An amendment was made in the House which provided:

"That of United States notes not more than ten millions of dollars may be retired and canceled within six months from the passage of this act, and thereafter not more than four millions of dollars in any one month."

The bill as it came to the Senate was as follows:

"An act to amend an act entitled 'An act to provide ways and means to support the government,' approved March third, eighteen hundred and sixty-five.

"Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the act entitled 'An act to provide ways and means to support the government,' approved March third, eighteen hundred and sixty-five, shall be extended and construed to authorize the Secretary of the Treasury, at his discretion, to receive any treasury notes or other obligations issued under any act of Congress, whether bearing interest or not, in exchange for any description of bonds authorized by the act to which this is an amendment; and also to dispose of any description of bonds authorized by said act, either in the United States or elsewhere, to such an amount, in such manner, and at such rates, as he may think advisable, for lawful money of the United States, or for any treasury notes, certificates of indebtedness, or certificates of deposit, or other representatives of value, which have been or which may be issued under any act of Congress, the proceeds thereof to be used only for retiring treasury notes or other obligations issued under any act of Congress; but nothing herein contained shall be construed to authorize any increase of the public debt: Provided, That of United States notes not more than ten millions of dollars may be retired and canceled within six months from the passage of this act, and thereafter not more than four millions of dollars in any one month: And provided further, That the act to which this is an amendment shall continue in full force in all its provisions, except as modified by this act.

"Sec. 2. And be it further enacted, That the Secretary of the Treasury shall report to Congress at the commencement of the next session the amount of exchanges made or money borrowed under this act, and of whom and on what terms; and also the amount and character of indebtedness retired under this act, and the act to which this is an amendment, with a detailed statement of the expense of making such loans and exchanges."

This bill, without change, became a law April 12, 1866. I believed then, and now know, that the passage of this law was a great misfortune. It enabled the Secretary of the Treasury to retire at a rapid rate United States notes and to largely increase the bonded indebtedness of the United States. It would no doubt have brought us abruptly to the specie standard and made us dependent for circulating notes upon the issues of national banks.

At this time there was a wide difference of opinion between Secretary McCulloch and myself as to the financial policy of the government in respect to the public debt and the currency. He was in favor of a rapid contraction of the currency by funding it into interest bearing bonds. I was in favor of maintaining in circulation the then existing volume of currency as an aid to the funding of all forms of interest-bearing securities into bonds redeemable within a brief period at the pleasure of the United States, and bearing as low a rate of interest as possible. Both of us were in favor of specie payments, he by contraction and I by the gradual advancement of the credit and value of our currency to the specie standard. With him specie payments was the primary object, with me it was a secondary object, to follow the advancing credit of the government. Each of us was in favor of the payment of the interest of bonds in coin, and the principal, when due, in coin. A large proportion of national securities were payable in lawful money, or United States notes. He, by contraction, would have made this payment more difficult, while I, by retaining the notes in existence, would induce the holders of currency certificates to convert them into coin obligations bearing a lower rate of interest.

CHAPTER XVII. INDEBTEDNESS OF THE UNITED STATES IN 1865. Organization of the Greenback Party—Total Debt on October 31st amounts to $2,805,549,437.55—Secretary McCulloch's Desire to Convert All United States Notes into Interest Bearing Bonds—My Discussion with Senator Fessenden Over the Finance Committee's Bill —Too Great Powers Conferred on the Secretary of the Treasury—His Desire to Retire $10,000,000 of United States Notes Each Month— Growth of the Greenback Party—The Secretary's Powers to Reduce the Currency by Retiring or Canceling United States Notes is Suspended—Bill to Reduce Taxes and Provide Internal Revenue—My Trip to Laramie and Other Western Forts with General Sherman— Beginning of the Department of Agriculture.

During this period a party sprang up composed of men of all parties called the Greenback party, who favored an increase of United States notes, and the payment of all United States bonds and securities in such notes. This difference of opinion continued until the resumption of specie payments, in January, 1879.

I propose to state here the measures adopted in respect to the national currency and debt during the rest of the administration of President Johnson.

The total debt of the United States on the 31st of October, 1865, was $2,808,549,437.55 in twenty-five different forms of indebtedness of which, $1,200,000,000 was payable at the option of the Secretary of the Treasury, or within a brief period. The amount of United States notes outstanding was then $428,160,569, and of fractional currency $26,057,469, in all $545,218,038. All of this money was in active circulation, in great favor among the people, worth in use as much as national bank notes, and rapidly rising in value compared with coin. It was the least burdensome form of indebtedness then existing. The treasury notes and compound interest notes were in express terms payable in this lawful money, and, therefore, bore a higher rate of interest than the bonds, which, by their express terms or necessary implication, were payable in coin only.

It was insisted that the amount of United States notes was in excess of what was needed for currency in time of peace and might safely be gradually reduced. This effort to contract the currency was firmly resisted by several Senators, myself among them. The Supreme Court decided that Congress had full power to make these notes a legal tender. They were far better than any form of currency previously existing in the United States. During the war, when the expenditures of the government reached nearly $1,000,000,000 a year they were indispensable. Those most opposed to irredeemable paper money acknowledged this necessity. The only objection to them was that they were not equivalent to coin in purchasing power. After the war was over, the general desire of all was to advance these notes nearer to par with coin, but not to withdraw them. The rising credit and financial strength of the United States would, it was believed, bring them to par without injustice to the debtor, but the rapid withdrawal of the notes would add to the burden of debts and cripple all forms of industry. It would convert the compound interest notes and treasury notes bearing seven and three tenths per cent. interest, amounting to over $1,000,000,000 expressly payable in United States notes, into coin liabilities. The bill prepared at the treasury department contemplated the conversion of all United States notes into bonds. In that form the bill was defeated in the House of Representatives, but it was reconsidered and an amendment was then made limiting the retirement of notes to $4,000,000 a month. This gained for the bill enough votes to secure its passage. Even the withdrawal of $48,000,000 a year was soon found to be oppressive and was subsequently repealed.

When this bill came before the committee on finance, I found myself alone in opposition to it. I could not impress my colleagues of the committee with the grave importance of the measure, and its wide-reaching influence upon our currency, debt and credit. They regarded it simply as a bill to change the form of our securities. I felt confident that without the use of United States notes we could not make this exchange. When the bill was brought before the Senate by Mr. Fessenden, chairman of the committee, he made no statement of its terms, but only said:

"I have merely to say that this bill is reported by the committee on finance without amendment as it came from the House of Representatives. The committee on finance, on careful examination of it, came to the conclusion that the bill was well enough as it stood, and did not deem it advisable to make any amendment. It has been before the Senate a considerable time, and I presume every Senator understands it. I ask, therefore, for the question."

I replied:

"I regret very much that I differ from the committee on finance in regard to this bill. This is the only bill on the subject of the public debt on which I have not been able to concur with that committee. . . .

"If Senators will read this bill they will find that it confers on the Secretary of the Treasury greater powers than have ever been conferred, since the foundation of this government, upon any Secretary of the Treasury. Our loan laws, heretofore, have generally been confined to the negotiation of a single loan, limited in amount. As the war progressed, the difficulties of the country became greater, and we were more in the habit of removing the limitations on the power of the Secretary of the Treasury; but generally the power conferred was confined to a particular loan then in the market. This bill, however, is more general in its terms. This bill authorizes the Secretary of the Treasury to sell any character of bonds without limit, except as to the rate of interest. The authority conferred does not limit him to any form of security. It may run for any period of time within forty years. He may sell the securities at less than par, without limitation as to rate. He may sell them in any form he chooses. He may put them in the form of treasury notes or bonds, the interest payable in gold or in paper money. He may undertake, under the provisions of this bill, to fund the whole debt of the United States. The only limit as to amount is the public debt, now $2,700,000,000. The power conferred on the Secretary of the Treasury is absolute. It is not only for this year, or during the current fiscal year, or for the next year, but it is for all time, until the act shall be repealed. It gives him absolute power to negotiate bonds of the United States to the amount of $2,700,000,000, without limiting the rate at which they shall be sold, and only limiting the rate of interest inferentially. The description of the bonds in the act of March 3, 1865, referred to here, would probably limit the rate of interest to six per cent. in coin, and seven and three- tenths per cent. in currency; but with this exception there is no limitation.

"It seems to me that in the present condition of our finances there is no necessity for conferring these large powers on the Secretary of the Treasury. The people are not generally aware of the favorable condition of our finances. The statement of the public debt laid on our tables the other day does not show fully the condition of the finances. It is accurate in amounts, but does not give dates of the maturity of our debts. But a small portion of the debt of the United States will be due prior to August, 1867, that will give the secretary any trouble. But little of the debt which he will be required to fund under the provisions of this bill matures before August, 1867. The temporary or call loan, now over one hundred millions, may readily be kept at this sum even at a reduced rate of interest. The certificates of indebtedness, amounting to sixty- two millions, may easily be paid from accruing receipts, or, if necessary, may be renewed or funded at the pleasure of the secretary. None of the compound interest notes or the seven-thirty notes mature until August, 1867. . . .

"There is, therefore, no immediate necessity for these vast powers. The question then naturally occurs, why grant them? I have carefully considered this question, and I do not think there is now any immediate necessity for granting these powers. No debt is maturing that is likely to give the government any trouble; and yet we are now about to confer upon the Secretary of the Treasury, powers that we cannot, in the nature of things, recall. It is true we may repeal this law next year, but we know very well that when these large powers are granted they are very seldom recalled; they are made the precedents of further grants of powers and are very rarely recalled. It seems to me that the whole object of the passage of this bill is to place it within the power of the Secretary of the Treasury to contract the currency of the country, and thus, as I think, to produce an unnecessary strain upon the people. This power I do not think ought to be given to him. The House of Representatives did not intend to give him this power. They debated the bill a long time, and it was defeated on the ground that they would not confer on the secretary this power to reduce the currency, and finally it was only passed with a proviso contained in the bill which I will now read:

'Provided, That of United States notes not more than $10,000,000 may be retired and canceled within six months from the passage of this act, and thereafter not more than $4,000,000 in any one month.'

"The purpose of the House of Representatives was, while giving the secretary power to fund the debt as it matured or even before maturity, giving him the most ample power over the debt of the United States, to limit his power over the currency, lest he might carry to an extreme the view presented by him in his annual report. If this proviso would accomplish the purpose designed by the House of Representatives, I would cease all opposition to this bill; but I know it will not, and for the very obvious reason, that there is no restraint upon the power of the Secretary of the Treasury to accumulate legal tender notes in the treasury. He may retire $200,000,000 of legal tender notes by retaining them in his possession without cancellation, and thus accomplish the very purpose the House of Representatives did not intend to allow him to accomplish. He may sell the bonds of the United States, at any rate he chooses, for legal tenders, and he may hold those legal tenders in his vaults, thus retiring them from the business of the country, and thus produce the very contraction which the House of Representatives meant to deny him power to do. Therefore, this proviso, which only limits the power of canceling securities or notes, does not limit his power over the currency, and he may, without violating this bill, in pursuance of the very terms of this bill, contract the currency according to his own good will and pleasure.

"My own impression is, that the Secretary of the Treasury, in carrying out his own policy, will do so. He says he will not contract it unreasonably or too rapidly, but I believe he will contract the currency in this way. He has now in the vaults of the treasury $60,000,000 in currency and $62,000,000 in gold—a larger balance, I believe, than was ever before kept in the treasury until within the last two or three months; a larger balance than was ever found in the treasury during the war. What is the object of accumulating these vast balances in the treasury? Simply to carry out his policy of contraction. With this power of retaining in the treasury the money that comes in, what does he care for the limitation put upon this bill by the House of Representatives? That says that he shall not retire and cancel more than $10,000,000 of United States notes within six months, and not more than $4,000,000 in any one month thereafter; but why need he retire and cancel them when he can retain them in the vaults of the treasury, and thus contract the currency? . . .

"I do not doubt in the least either the integrity or the capacity of the present incumbent of the treasury department. I have as much confidence in him as anyone; but this question of the currency is one that affects so intimately all the business relations of life, the property of every man in this country, his ability to pay taxes, his ability to earn food and acquire a living, that no man ought to have the power to vary the volume of currency. It ought to be regulated by law, and the law ought to be so fixed and so defined that every business man may transact his business with full knowledge of the amount of the currency, with all its limits and qualifications. I ask you, sir, how any prudent or judicious man can now engage in any important business, in which he is compelled to go into debt, with this large power hanging over him. It would be unsafe for him to do so. The amount of the currency ought to be fixed by law, whether much or little. There ought to be a limit, and no man ought to have the power at pleasure to enlarge or contract that limit. . . .

"Then there is the further power to reduce the currency, a power that has not heretofore been granted to any Secretary of the Treasury. The amount heretofore has been fixed and limited by law. By the first clause of this bill the secretary is authorized to receive treasury notes, or United States notes of any form or description, and there is no limitation to this power, except the clause which I have read to you. That limits his power to retire and cancel the United States notes, but not to accumulate the enormous balances on hand. My own impression has been, and when this bill was before the committee on finance I believed, it would be better for that committee to report to the Senate a financial project to fund the debt of the United States. I believe that now is the favorable time to do it. If a five per cent. bond, a long bond of proper description and proper guarantee, was now placed upon the market, with such ample powers to negotiate it as ought to be given to the Secretary of the Treasury, such a loan as was authorized two years ago, at a reduced rate of interest, to be exempt from taxation, I have no doubt whatever, the Secretary of the Treasury could fund every portion of the debt of the United States as it matured. . . .

"I do not like to embarrass a bill of this kind with amendments, because I know it is difficult to consider amendments of this sort, requiring an examination of figures and tables. I have prepared a bill very carefully, with a view to meet my idea, but I will not present it now in antagonism to this bill passed by the House of Representatives and the view taken by the finance committee, because I know, in the present condition of the Senate, it would not probably be fully considered. My only purpose now is to point out the fact that is perfectly clear to the mind of every sensible man who has examined this bill, that the bill as it stands does not carry out the manifest intention of the House of Representatives when they passed it, and that the proviso, limiting the power of the secretary over the legal tender currency, does not accomplish the purpose which they designed, and without which I know the bill never could have passed the House of Representatives."

Mr. Fessenden: "If the House of Representatives did not understand what they were doing when they passed this bill, it arises from the fact that they did not give the rein to their imagination, as the honorable Senator from Ohio seems to have done to his, and take it for granted that the Secretary of the Treasury had a purpose to accomplish, and that he would not hesitate to take any means in his power to accomplish it, improperly against the manifest will of Congress, against the interests of the country, and against his own interests as Secretary of the Treasury."

I replied:

"I appeal to the Senator whether that is a fair statement of my argument?"

Mr. Fessenden: "That is the way precisely that I understand it."

I said:

"That is precisely as no gentleman could have understood me. I never said that the secretary improperly would do so and so by any means. It is one of the honorable Senator's modes of stating propositions."

Mr. Fessenden: "I certainly did not mean to say that the honorable Senator supposed he designed to do so, but such seems to be the result of his argument—that the Secretary of the Treasury having the power, as he says, there is danger that he might abuse it in that precise way; else his argument amounts to nothing at all as against the bill. I certainly acquit my friend of any sort of desire or intention to throw any imputation on the Secretary of the Treasury. That he did not mean to do. . . ."

I said:

"I do not think it wise to confer on the Secretary of the Treasury the power to meet the indebtedness not accruing for a year, or two, or three years. I do not think it is necessary, in our present financial condition, to authorize him to go into market now and sell bonds at current market rates with a view to pay debts that do not mature for a year or two. I have no doubt before the five- twenty loans are due we shall retire every dollar of them at four or five per cent. interest. No one who heeds the rapid developments of new sources of wealth in this country, the enormous yield of gold now, the renewal of industry in the south, the enormous yield of cotton, the growing wealth of this country, and all the favorable prospects that are before us, doubts the ability of this government before this debt matures to reduce it to four or five per cent. interest. . . .

"The Secretary of the Treasury may sell bonds at any rate to meet debts as they accrue, but that is not the purpose of this bill."

Mr. Fessenden: "That is all the purpose there is in it."

I said:

"Then there is no necessity for it."

Mr. Fessenden: "Yes, there is. I differ from you."

I continued:

"We have here the tables before us. The honorable Senator and I know when this debt matures. . . .

"That is the power now given, and he will use the power. He may think it to his interest to retire the whole of the seven-thirties or the ten-forties; but is it wise for us to give him that power now, at the heel of the war and before things have settled down? I do not think it is.

"I repeat, I do not wish to call in question the integrity of the Secretary of the Treasury. The Senator interjects by saying we must look ahead. I have done so. The difference between us is that I anticipate that the future of this country will be hopeful, buoyant, joyous. We shall not have to beg money of foreign nations, or even of our own people, within two or three years. Our national debt will be eagerly sought for, I have no doubt. I take a hopeful view of the future. I do not wish now to cripple the industry of the country by adopting the policy of the Secretary of the Treasury, as he calls it, by reducing the currency, by crippling the operations of the government, when I think that under any probability of affairs in the future, all this debt will take care of itself. I believe that if the Secretary of the Treasury would do nothing in the world except simply sit in his chair, meet the accruing indebtedness, and issue his treasury warrants, this debt will take care of itself, and will fund itself at four or five per cent. before very long. All that I object to in this bill is the power it gives the Secretary of the Treasury over the currency, to affect the currency of the country now and to anticipate debts that are not yet due. . . .