"Again, sir, an irredeemable and fluctuating currency always raises the rate of interest on money, while a stable currency or an improving currency always reduces the rate of interest. This is easily shown by statistics, but the reason is so obvious that proof is not needed. If a man lends his money he wants it back again with its increase; but if the money, when it is to be paid back, is like to be worth less than when he thinks of loaning it, he will not loan it except at such rates as will cover the risk of depreciation. He will prefer to buy land or something of stable value. If money is at the gold standard, or is advancing toward that standard, he will loan it readily at a moderate interest, for he knows he will receive back money of at least equal value to that he loaned. Again, sir, with a depreciated currency great domestic productions are cut off from the foreign market; for it is impossible that with such a currency we can compete on equal terms with rival nations, whose industry rests upon a specie standard. As we approach such a standard, we are now able, as to a few articles, to compete with foreign industry; but it is only as to articles in the manufacture of which we have peculiar advantages. Let us rest our industries on that standard, and soon we could compete in the markets of the world in all the articles produced from iron, wood, leather, and cotton, the raw basis of which are our national productions. And it must be remembered that all the countries with which we compete are specie-paying countries.

"A country that does not rest her industry upon specie is necessarily excluded from the great manufacturing industries of modern civilization, and is self-condemned to produce only the raw basis for advanced industry. Cheap food, climate, soil, or natural advantages, such as cheap land, vast plains for pasture, or rich mines, may give to a country wealth and prosperity in spite of the evils of depreciated paper money; but when we come in competition with the world in the advanced grades of production which give employment to the skilled mechanic, we must rest such industry upon the gold basis, or we enter the lists like a knight with his armor unbound.

"Again, sir, a depreciated and fluctuating currency is a premium and bounty to the broker and money changer. Under his manipulation our paper standard of value goes up and down, and he gambles and speculates, with all the advantages in his favor. Good people look on and think that it is gold that is going up and down; that their money is a dollar still, and trade and traffic in that belief. But the shrewd speculator calculates daily the depreciation of our note, the shortening of the yard stick, the shrinkage of the acre, the lessening of the ton, and thus it is that he daily adds to his gains from the indifference or delusion of our people.

"Sir, it is an old story, often repeated in our day, and most eloquently epitomized by Daniel Webster in the often-quoted passage of his speech, in which he said:

'A disordered currency is one of the greatest of political evils. It undermines the virtues necessary for the support of the social system and encourages propensities destructive of its happiness. It wars against industry, frugality, and economy; and it fosters the evil spirit of extravagance and speculation. Of all contrivances for cheating the laboring classes of mankind, none has been more effectual than that which deluded them with paper money. Ordinary tyranny, oppression, excessive taxation, these bear lightly upon the happiness of the mass of the community, compared with the fraudulent currencies and the robberies committed by depreciated paper. Our own history has recorded for our instruction enough, and more than enough, of the demoralizing tendency, the injustice, and the intolerable oppression of the virtuous and well-disposed, of a degraded paper currency authorized by law or in any way countenanced by government.'

"Sir, we must meet this question of specie payments, not only because the public honor is pledged to do so, but also for the lesser reason that it is our interest to do so. The only questions we should permit ourselves to discuss are the means and measures of doing so.

"And now, sir, let us examine the reasons that have been given for the repeal of the resumption act by those who, though favoring resumption, yet think the act should be repealed for one or other of the following reasons:

"First. That it is not advisable to fix a day for resumption. "Second. Or at least until the balance of trade is in our favor. "Third. That it produces a contraction of the currency. "Fourth. That it injuriously adds to the burden of existing debts.

"Let us glance at these objections.

"First. As to fixing a day for resumption.

"If it was possible to agree upon measures that would secure resumption without fixing a time, I agree it would not be indispensable, though not unadvisable, to fix a time; but such agreement is utterly impossible. Of the multitude of schemes that have been presented to me by intelligent men trying to solve this problem, many could have been selected that in my opinion would be practicable; but of all of them not one ever has or is likely to secure the assent of a majority of a body so numerous as Congress. One difficulty we have encountered is that the Democratic party, though in the minority, has never presented in any form, through any leading member, a plan for resumption, but with widely differing opinions has joined in opposing any and every measure from the other side. I understand from the papers that our Democratic friends, through a caucus, and through a caucus committee of which my colleague is chairman, have been laboring to agree upon a plan for specie payments. After his frequent speeches to us about secret conclaves, about shams and deceptions, and such like polite and friendly comments upon the work of the Republican party, I might greet my colleague with such happy phrases about his caucus; but I will not, but, on the contrary, I commend his labors, and sincerely hope that he and his political friends may agree upon some plan to reach a specie standard, and not one to avoid to, to prevent it, to defer it. Under color of intending to prepare for it, I hope they will not make their measure the pretext for repealing the law as it stands, which fixes a day for resumption and will secure the end we both aim at.

"I frankly state for the Republican party that, while we could agree to fixing the time for specie payments and upon conferring the ample and sufficient powers upon the Secretary of the Treasury contained in the law, we could not agree in prescribing the precise mode in which the process should be executed. Nor, in my opinion, was it at all essential that we should. Much must be left to the discretion of the officer charged with the execution of such a law. The powers conferred, as I shall show hereafter, are ample; and the discretion given will be executed under the eye of Congress.

"And, sir, there is a strong force in the fact that in every example we have of the successful resumption of specie payments, in this and other countries, a fixed day has been named by legislative authority, and the details and power of execution have been left to executive authority. Thus, in Great Britain, the act of parliament of July 2, 1819, fixed the time for full resumption at the 1st day of May, 1823, and for a graduated resumption in gold at intermediate dates; and for fractional sums under forty shillings to be paid in silver coin; and the governor and directors of the Bank of England were charged with its execution, and authorized at their discretion to resume payment in full on the 1st day of May, 1822. France is now successfully passing through the same process of resumption, the time being fixed (two years ago) for January 1, 1878, and now practically attained.

"In our own country many of the states have presented similar laws in case of suspended bank payments, and in some cases the suspended banks have, by associated action, fixed a time for general resumption, and each bank adopted its own expedient for it. Sir, the light of experience is the lamp of wisdom. I can recall no case of successful resumption where a fixed future time has not been presented beforehand, either by law or agreement; while the historical examples of repudiation of currency have come by the drifting process, by a gradual decline of value, by increased issues, and a refusal to provide measures of redemption, until the whole mass disappeared, dishonored and repudiated.

"This concurrence in the mode of resumption by so many governments was the strongest possible instruction to Congress when fixing a plan of resumption for the United States, and should satisfy reasonable men of its wisdom.

"Besides, it would seem to be but fair that everyone should have plain notice of so important a fact. If the measures only were presented and no time fixed it would be a matter of speculation, and the discretionary powers of the Secretary of the Treasury could be exercised with a view to hasten or postpone the time to the injury of individuals.

"As to the date selected, I can only repeat it was placed as remote as any one suggested; far more so than is necessary to secure the object, and so that the fluctuations of value will scarcely exceed in four years what they have frequently been in a single year. It allows ample time to arrange all the relations of debtor and creditor, and to enable Congress to provide any additional measure in aid of redemption, or, if events make it expedient, to postpone the time."

CHAPTER XXVII. MY CONFIDENCE IN THE SUCCESS OF RESUMPTION. Tendency of Democratic Members of Both Houses to Exaggerate the Evil Times—Debate Over the Bill to Provide for Issuing Silver Coin in Place of Fractional Currency—The Coinage Laws of the United States and Other Countries—Joint Resolution for the Issue of Silver Coins—The "Trade Dollar" Declared Not to Be a Legal Tender—My Views on the Free Coinage of Silver—Bill to Provide for the Completion of the Washington Monument—Resolution Written by Me on the 100th Anniversary of the Declaration of Independence—Unanimously Passed in a Day by Both Houses—Completion of the Structure Under the Act.

It seemed to be the policy of a majority of the Democratic Members of both the Senate and the House to exaggerate the evils and discouragements of the times, while in fact the people were rapidly recovering from the results of the panic of 1873, and all branches of industry were, to a greater or less extent, starting into life anew, and to prevent the resumption of specie payments, and, if possible, to repeal the act providing for such resumption. This policy undoubtedly checked the process of refunding the public debt, which progressed slowly, and was confined to an exchange of bonds bearing five per cent. interest for those bearing six per cent.

I took a much more hopeful view of the situation, and in the many speeches I made in that Congress, I stated my confidence, not only in the process of resumption and refunding, but in the rapid improvement of all branches of industry as we progressed towards specie payments. In a speech I made in the Senate on the 6th of January, 1876, on a bill "to further provide for the redemption of legal tender United States notes in accordance with existing law," I said:

"Sir, we ought to take a hopeful view of things in this centennial year of our country. Look at the aggregate results. A century ago we were three million people; now forty million; then we had a little border on the Atlantic; we are now extended to the Pacific. See what has been accomplished in a hundred years. During that time there have been periods of darkness and doubt. Every seven or ten or twelve years, periodically, there have been times of financial distress. We have lived through them all. I believe, and I trust in God, that this very year is the beginning of another period of prosperity, and that all these dark clouds, which gentlemen are trying to raise up from the memory of the past two or three years and from their own clouded imaginations, will entirely disappear. I believe that even now we are in the sunshine of increasing prosperity, and that every day and every hour will add to our wealth and relieve us from our distress.

"Sir, things are not so unhopeful as Senators seem to think. We have made a promise to be executed three years hence, and every step of our legislation, if any is had, should look in that direction. We may not adopt any measure or may not deem that any is necessary; but, if any be adopted, it ought to look to the execution of that promise, and we ought to enter on the performance of this duty with hopeful trust in the continued prosperity of our country. All this gloom and doubt, all this arraignment of official statements, this doubt of our sufficient revenues, this doubt of our ability to meet and advance our destiny, always falls upon my ear with painful surprise. Senators, the task we have before us may be a difficult one, as it has always proved to be difficult to resume the specie standard whenever, for any reason, a nation has fallen from it, but it is a duty that must be executed, and it ought to be executed without the spirit of party warfare, without these appeals, directly or indirectly, to party tactics. The pledges made one year ago, although not voted for by the Democratic party, are pledges binding upon their honor and their faith as they are upon mine, and I trust in God that we shall join together in all the proper steps to carry out those pledges."

This bill was referred to the committee on finance, but no action was taken upon it, as the committee preferred to await the action of the House.

The resumption act provided for the payment and destruction of the fractional currency then in circulation, to the amount of $40,000,000, and the substitution of silver coins in all respects, such as were defined by the coinage act of 1853. This was to be the first step in preparation for the general resumption of coin payments in January, 1879. It became necessary to provide for the coinage of fractional silver coins, and a bill for this purpose, entitled "A bill to provide for a deficiency in the Printing and Engraving Bureau, and for the issue of the silver coin of the United States, in place of the fractional currency," was reported by Mr. Randall, on the 2nd of March, 1876, from the committee on appropriations of the House. It was subsequently considered, amended and passed by the House, after a long debate, participated in by many of the leading Members. Much to my surprise, Mr. Hewitt and Mr. Ward, prominent Members from New York, opposed the measure, denounced the resumption act, and prophesied its failure. Mr. Hewitt, in support of his position, quoted passages from the reports of Mr. Bristow, then Secretary of the Treasury, and predicted the utter failure of resumption, unless the United States notes were entirely withdrawn. He insisted that if silver coin was issued to replace fractional currency, the coin would disappear from circulation, leaving the people without any currency for the smaller necessities of life. In the progress of the debate, it became manifest that the larger portion of the Democratic Members would vote against every measure proposed to aid in the execution of the resumption act.

The bill passed the House on the 31st of March by the vote of 123 yeas and 100 nays. In the Senate it was referred to the committee on finance, and reported back with amendments. The third section of the bill, as it came from the House, provided for the coinage of the silver dollar, of the weight of 412.8 grains troy, standard silver, and made that dollar a legal tender at its nominal value, to an amount not exceeding twenty dollars in any one payment, except for customs duties and interest on the public debt, and that the "trade dollar" should not, thereafter, be a legal coin. This section was stricken out.

In the remarks made by me, upon this bill, on the 10th day of April, 1876 , I gave, in detail, the history of each of the coinage laws of Great Britain, France, Belgium, Germany, Switzerland and Italy. I had taken great pains to collect this information and to procure translations of the laws of the several countries named. The then recent changes, made by Germany, and their effect upon the coinage of other nations, were carefully stated. The general conclusion which I drew from a reference to these statutes of various countries, were:

"First. It is impossible, in the nature of things, to fix the precise value of silver and gold. We have tried it three times and failed.

"Second. Whenever either coin is worth more in the market than the rate fixed by the law, it flees from the country. That we have twice proved. That is the admitted economic law. It is the Gresham law; a law of currency named from the name of its discoverer. He wrote a book to show that always the poorer currency would drive out of circulation a superior currency; and his book gave name to the theory that is called the law of Gresham. It is the universal law of political economy that, whenever two metals or two moneys are in circulation, the least valuable will drive out the most valuable; the latter will be exported.

"The third proposition is that the example of several great European nations, as well as of the United States, proves that to prevent the depreciation of silver the tendency of modern nations is to issue it as a token coinage somewhat less in intrinsic value than gold, and maintain its value by issuing it only as needed, at par with the prevailing currency, and to make it a limited legal tender. I may say that has been acted upon by every great Christian nation. Russia and Austria have not yet gold coinage at all, but still they have their values based upon gold.

"Fourth. That the demonetization of silver tends to add to the value of gold, and that though the relative value ebbs and flows it is more stable compared to gold than any other metal, grain, or production. Its limit of variation for a century is between fifteen to seventeen for one in gold.

"Fifth. That both coins are indispensable, one for small and the other for large transactions.

"Sixth. That the causes of the decline of silver are temporary. It is still used by a great majority of mankind as the standard of value. Its use in France and the United States will, on resumption, more than counteract its decline in Germany.

"Seventh. The general monetizing of silver now, when it is unnaturally depreciated, would be to invite to our country, in exchange for gold or bonds, all the silver of Europe, and at last it would leave us with a depreciated currency.

"Eighth. The decline of silver enables us now to exchange silver coin of the old standard for fractional currency, leaving the exchange optional with the holder, until we have the courage, as we now have the ability, to redeem it in gold.

"Ninth. More silver can be maintained at par than we have now of fractional currency.

"Tenth. The redemption of a part of our currency would advance its purchasing power, while the silver in circulation will counteract the contraction of the currency."

This bill became a law on the 17th of April, 1876. The second section provided:

"That the Secretary of the Treasury is hereby directed to issue silver coins of the United States of the denomination of ten, twenty, twenty-five and fifty cents of standard value, in redemption of an equal amount of fractional currency, whether the same be now in the treasury awaiting redemption, or whenever it may be presented for redemption; and the Secretary of the Treasury may, under regulations of the treasury department, provide for such redemption and issue by substitution, at the regular sub-treasuries and public depositaries of the United States, until the whole amount of fractional currency outstanding shall be redeemed. And the fractional currency redeemed under this act shall be held to be a part of the sinking fund provided for by existing law, the interest to be computed thereon as in the case of bonds redeemed under the act relating to the sinking fund."

A joint resolution for the issue of silver coin was introduced in the House by Mr. Frost, of Massachusetts, on the 1st of May, 1876. The object of this resolution was to expedite the issue of minor coin and the retirement of fractional currency. It was referred to the committee on finance, reported favorably and passed with amendments June 21. The House disagreed to the amendments of the Senate, and a committee of conference was appointed composed of John Sherman, George S. Boutwell, and Louis V. Bogy, managers on the part of the Senate, and H. B. Payne, and Samuel J. Randall, managers on the part of the House. The report of the conferees was agreed to, and the bill having passed both Houses it was approved by the President on the 22nd of July. It provided:

"That the Secretary of the Treasury, under such limits and regulations as will best secure a just and fair distribution of the same through the country, may issue the silver coin at any time in the treasury to an amount not exceeding ten million dollars, in exchange for an equal amount of legal tender notes; and the notes so received in exchange shall be kept as a special fund, separate and apart from all other money in the treasury, and be reissued only upon the retirement and destruction of a like sum of fractional currency received at the treasury in payment of dues to the United States; and said fractional currency, when so substituted, shall be destroyed and held as part of the sinking fund, as provided in the act approved April seventeen, eighteen hundred and seventy-six."

It also provided: "That the trade dollar shall not hereafter be a legal tender, and the Secretary of the Treasury is hereby authorized to limit, from time to time, the coinage thereof to such an amount as he may deem sufficient to meet the export demand for the same."

It also provided that the amount of subsidiary silver coin authorized should not exceed $50,000,000. The silver bullion was to be purchased from time to time at market price by the Secretary of the Treasury from any money in the treasury not otherwise appropriated, and any gain or seigniorage arising from the coinage was to be paid into the treasury.

These provisions in respect to subsidiary coin were in a large measure executed prior to the 4th of March, 1877, and tended, in my opinion, to facilitate the progress of the resumption of specie payments on the 1st of January, 1879. The debate on these measures occupied a large portion of the time of both Houses of Congress, and presented in every possible aspect all the financial questions involved in coinage, resumption and refunding. Anyone desiring a full knowledge of the view then taken of the act revising the laws in respect to coins and coinage, approved February 12, 1873, will find in the debate a full history of that act, given at a time when it was fresh in the memory of the great body of Senators and Members.

I supported the coinage of the old silver dollar in a speech in the Senate made on the 8th of June, 1876, two years before the appearance of the "Bland bill," or the "Allison bill." Silver bullion was then declining in market value. The resumption act provided for the gradual replacement of fractional currency by silver coins of the character and form provided for by the coinage act of 1853. When that act passed the old silver dollar was not coined or in circulation. It was more valuable in the market than a dollar in gold, and, if coined, would have been exported as bullion. In the revision of the coinage laws of 1873, it was dropped from the list of coins, and its further coinage was prohibited by a clause providing that no coins should be made at the mint except those provided for in that act. The history of this act and the reasons for prohibiting the coinage of the old dollar have been fully stated in a previous chapter of this work. In place of the old dollar the trade dollar, containing 420 grains of silver, was provided for. This trade dollar, coined for, and at the expense of, the owner of the bullion deposited at the mint, was, in the revision of the laws of the United States, unintentionally made a legal tender for five dollars, the same as the minor coins issued by the mint on government account. As silver declined in value, the trade dollar became less valuable than a dollar in gold, and the owners of bullion deposited it in the mint, and received in exchange trade dollars costing less than a dollar in gold, but, being a legal tender for five dollars, it could be forced upon the people of California, then upon the gold standard, at a profit to the owner of the bullion. Mr. Sargent, a Senator from California, early in the session introduced a bill enlarging the limit of legal tender of minor coins, and repealing the legal tender quality of the trade dollar. This bill was referred to the committee on finance, and was reported with an amendment to strike out all after the enacting clause, and insert:

"That section 3586 of the Revised Statutes of the United States be, and hereby is, amended to read as follows:

"The silver coins of the United States, except the trade dollar, shall be a legal tender at their nominal value for any amount not exceeding five dollars in any one payment."

This simple bill was made the text of a long debate in the Senate that continued during the greater part of that session. The provision that "the trade dollar shall not hereafter be a legal tender" was transferred to the joint resolution already mentioned which became a law on the 22nd of July.

In my speech on Mr. Sargent's bill I said:

"This bill proposes to restore the old silver dollar, and with it and the subsidiary coins of the United States to redeem the United States notes and fractional currency. The dollar to be restored is the same dollar that had existed from 1792 to 1873; and the subsidiary coins to be issued are the same in form and value as have been issued since 1853. I have already stated in my remarks, made on the 11th of April last, the history of these silver coins and the relation of silver and gold to each other, not only in the United States, but in the countries with which we have the most extensive commercial relations.

"The two main questions are:

* * * * *

"First. Shall silver coin be exchanged for United States notes as well as for fractional currency? And,

"Second. Is it wise to recoin the old silver dollar with a view to exchange it for United States notes?"

In this speech I favored the restoration of the silver dollar of the precise character and description of the dollar that existed from 1792 to 1873, but, as the market value of the silver in this dollar had greatly fallen, I insisted that the dollar should be coined from bullion purchased by the government at market price, so that the people of the United States would receive the difference between the cost of the bullion and the face value of the coin, the same principle that was adopted in what is known as the Bland- Allison act of 1878. I did not, however, propose the full legal tender quality that was given to the dollar by the act when adopted, but that it should be placed among the other silver coins, and be a legal tender only for twenty dollars.

The plan proposed by me was to set aside a portion of the surplus revenue or sinking fund of each year applicable to the payment of the public debt, for the purchase of silver bullion to be coined into silver dollars of the old standard. I said:

"The bill reported by the committee on finance thus provides for an immediate resumption of specie payments in silver coin, and thus completes the first and most difficult step of the problem. It neither disturbs nor deranges business, nor stirs up the phantom of contraction. It is in exact accordance with existing law, and leaves the silver coin, as now, a subsidiary coin, a legal tender only for limited amounts.

"The next question presented by this bill is, shall we return to our silver coinage the old silver dollar. And here I am met by the objections of the Senator from Vermont, but his objections are rather to the amendments proposed by the Senator from Missouri, than to the report of the committee. The committee propose the silver dollar, not as a legal tender for gold contracts, but only as a tender for currency contracts not exceeding twenty dollars in any one payment. I would prefer to leave the silver dollar and stand upon its intrinsic value as a legal tender the same as the smaller coin; but there is no injustice in enlarging the limit to twenty dollars, and but for the reasons I will state hereafter there is no injustice in making it a legal tender for all currency contracts. The silver dollar has that intrinsic value which in all periods of our history has made it a favorite coin, not only for domestic uses but for exportation. It furnishes silver bullion in a shape and form more convenient for handling than any other form of coin.

* * * * *

"When the old silver dollars are issued at par with the United States notes, a large amount of them will be taken as a reserve by the people to meet future needs, with or without a legal tender quality. As their issue is not peremptory, and the aggregate cannot exceed the surplus revenue or sinking fund, there is no danger of an overissue, while their existence among the people will be the best reserve when gold alone becomes the full standard of value.

"Every argument already mentioned in favor of subsidiary silver coins is equally potent in favor of the silver dollar. It will be eagerly taken in payment of United States notes. It is purely a voluntary exchange. It is the cheapest mode in which we can redeem United States notes. It is specie resumption in the old time- honored standard of silver dollars of full weight and fineness. It will accustom our people to distinguish between the real dollar that pays where it goes and a paper dollar which only promises to pay. It will prepare the way for full resumption in gold. To the extent proposed by the committee, and to be used as a purely voluntary approach to a full specie standard, it is open to no objection or criticism, and should be assented to by gentlemen who have differed with each other on the present resumption law or on the merits and dangers of contraction and expansion."

The vital difference between the free coinage of silver, and the limited coinage of that metal on government account, is that with free coinage the standard of value would be the cheaper money. With silver at its present price in the market the dollar would be worth but a little over fifty cents. The coinage being free to the holders of silver bullion no other coins would be made except the cheaper coins of least purchasing power. On the other hand, the coinage of silver on government account enables us to maintain the silver coins at par with gold, without respect to the market value of the silver bullion. Any nominal profit from this coinage inures to the benefit of the whole people of the United States and not merely to the producers of silver bullion. This distinction has always appeared to me so marked and clear, and the argument so strong in favor of limiting the coinage of silver to the amount demanded as a convenience of the people for the smaller transactions of life, that I cannot sympathize with a policy that aims merely to secure the cheapest money for the discharge of obligations contracted upon more valuable money.

Among the measures that became a law at this session was a concurrent resolution, introduced by me in the Senate on the 5th of July, 1876, to provide for the completion of the Washington monument.

On the morning of the 4th of July, 1876, the 100th anniversary of American independence, I was making some preparation for the celebration of that day in the vicinity of Washington. Animated by the patriotic feeling inspired by the day, and sitting in view of the unfinished monument of George Washington, I felt that the time had come when this monument should no longer continue a standing reproach to a patriotic people. Shortly after the death of Washington, a resolution providing for the erection of a monument to his memory, was agreed to by both Houses of Congress. Subsequently, on January 1, 1801, a bill was passed by the House of Representatives appropriating $200,000 for this purpose, but, in the political excitements of that day, the Senate failed to concur. In the absorbing public questions that ensued, resulting in the War of 1812, the subject was dropped in Congress for the time.

In 1833 the "Washington Monument Society" was formed, with Chief Justice Marshall as its president. This society proposed to raise the necessary sum to erect such a monument by voluntary subscriptions of individuals, and in 1854 it had, by such means, constructed about one-third of the height of the monument and then suspended work. Thus it had remained for years for want of means to complete it, a glaring evidence of failure. The portion of the monument already reared to the height of 156 feet stood in rude outline, an abandoned failure in the midst of a reservation partly covered with water and broken stone. The society was incorporated by Congress in 1859, but no further progress was made. It was manifest that the work could not be completed by the existing organization, and doubts were expressed whether the foundation was sufficient to bear the superstructure. Under these conditions, on the 100th anniversary of the declaration of American independence, it occurred to me the time had arrived when a great country like ours should complete this unfinished monument to George Washington. Under the inspiration of this thought I wrote this resolution on the morning of the 4th of July, and on the next morning offered it for adoption in the Senate:

"Whereas, It has pleased Almighty God to guide the United States of America safely through one hundred years of national life, and to crown our nation with the highest blessing of civil and religious liberty, Therefore,

"The Senate and House of Representatives in Congress assembled, in the name of the people of the United States, in reverent thankfulness acknowledge the fountain and source, the author and giver of all these blessings, and our dependence upon His providence and will; and,

"Whereas, We recognize, as our fathers did, that George Washington, 'first in peace, first in war, and first in the hearts of his countrymen,' was one of the chief instruments of Divine Providence in securing American independence and in laying broad and deep the foundations of our liberties in the constitution of the United States:

"Therefore, as a mark of our sense of the honor due to his name and to his compatriots and associates, our revolutionary fathers,

"We, the Senate and House of Representatives in Congress assembled, in the name of the people of the United States at this, the beginning of the second century of national existence, do assume and direct the completion of the Washington monument in the city of Washington, and instruct the committees on appropriations of the respective Houses to propose suitable provisions of law to carry this resolution into effect."

In submitting this resolution I said:

"I desire to offer at this time a concurrent resolution I wish to say before it is read that I believe if it were passed to-day it would be a matter of profound satisfaction to the great body of the people of the United States. I ask that it be read."

After the resolution was read, there was a pause, when Mr. Edmunds said: "Let us consider this resolution. It will be agreed to unanimously, I am sure."

The resolution was therefore considered and agreed to unanimously. It was sent to the House of Representatives the next morning, when Mr. Hopkins, of Pennsylvania, pending a motion to adjourn, asked unanimous consent to take from the speaker's table the concurrent resolution in reference to the Washington monument. Upon the resolution being read, the House seemed to be impressed, as was the Senate, with the fitness of the time, and the propriety of the measure proposed, and it was unanimously adopted without debate.

Thus Congress undertook to execute the unfinished work of the Washington Monument Society. The requisite appropriations were subsequently made, and the monument, as completed, is now the most impressive token of the appreciation, by the American people, of the name and fame of George Washington. It is visited daily by nearly every American or stranger who enters the city of Washington. Its dedication will be hereafter mentioned.

CHAPTER XXVIII. THE HAYES-TILDEN PRESIDENTIAL CONTEST. Nomination of R. B. Hayes for President—His Fitness for the Responsible Office—Political Shrewdness of Samuel J. Tilden, His Opponent—I Enter Actively Into the Canvass in Ohio and Other States —Frauds in the South—Requested by General Grant to Go to New Orleans and Witness the Canvassing of the Vote of Louisiana— Departure for the South—Personnel of the Republican and Democratic "Visitors"—Report of the Returning Board—My Letter to Governor Hayes from New Orleans—President Grant's Last Message to Congress —Letter from President Hayes—Request to Become his Secretary of the Treasury.

The Republican national convention of 1876 met at Cincinnati on the 14th of June of that year. After the usual organization the following eight nominations for President were made: Blaine, Morton, Conkling, Bristow, Hayes, Hartranft, Wheeler and Jewell. The total number of delegates was 754. Blaine was greatly in the lead, receiving on the first ballot 285 votes, some from nearly every state. Morton received 124, Bristow 113, Conkling 99, Hayes 61, Hartranft 58, Jewell 11, and Wheeler 3. There were 7 ballots, in which Blaine steadily held his vote and slightly gained, receiving on the final ballot 351 votes. The vote for Hayes increased at each ballot until on the seventh ballot he received 384 votes, a majority over all.

Undoubtedly Blaine was the favorite of the convention, but the antagonisms that existed between him and Conkling probably defeated his nomination. I still believe that the nomination of Hayes was not only the safest, but the strongest, that could be made. The long possession of power by the Republicans naturally produced rivalries that greatly affected the election of anyone who had been constantly prominent in public life, like Blaine, Conkling and Morton. Hayes had growing qualities, and in every respect was worthy of the high position of President. He had been a soldier, a Member of Congress, thrice elected as Governor of Ohio, an admirable executive officer, and his public and private record was beyond question. He was not an aggressive man, although firm in his opinions and faithful in his friendships. Among all the public men with whom I have been brought in contact, I have known none who was freer from personal objection, whose character was more stainless, who was better adapted for a high executive office, than Rutherford B. Hayes.

Governor Hayes wrote me the following letter in recognition of my aid in his nomination.

"Columbus, O., June 19, 1876. "My Dear Sir:—I trust you will never regret the important action you took in the inauguration and carrying out of the movement which resulted in my nomination. I write these few words to assure you that I appreciate, and am gratified for, what you did.

"My kindest regards to Mrs. Sherman.

"Sincerely, "R. B. Hayes. "Hon. John Sherman."

His opponent, Samuel J. Tilden, was a man of singular political sagacity, of great shrewdness, a money-making man, who professed to represent, and perhaps did represent, as fairly as anyone, the ideas of the New York politicians of the school of Van Buren and Marcy. I knew Mr. Tilden personally and very favorably, as we were members of a board of railroad directors which frequently met. He seemed to take pleasure in talking with me about political events, and especially of the famous New York politicians, of whom Silas Wright and Mr. Van Buren were his favorites. He had acquired great wealth as the attorney of corporations, and was undoubtedly a man of marked ability and sagacity. He had taken an active part in defeating the corruption of Tweed in New York politics. He had been elected governor of the State of New York, as the candidate of reform and honesty in politics.

The long and important session of Congress adjourned on the 15th of August. It had been the arena for long debates, mostly on political topics growing out of reconstruction, and financial measures heretofore referred to. The pending presidential contest also excited much debate in both Houses. The administration of General Grant had not been entirely satisfactory, and the long continuance of the Republican party in power was an element of weakness. The complaints, unavoidable in the most honest administration, and the disappointments of office-seekers, placed that party on the defensive. The south had, by reconstruction, been practically restored to political power, and the body of the negroes had been substantially disfranchised, though legally entitled to the suffrage. Riots and crimes of every degree were committed in the south, notably in Louisiana, South Carolina and Florida. Organized mobs and violence had deterred many from voting, and in some cases had prevented even the semblance of a free election.

I entered actively into this canvass, more so than in any previous one. Three days before the adjournment, I made my opening speech at Marietta, Ohio, in which I discussed fully the dangers of the restoration of the Democratic party to power, the probability of their failure to enforce the constitutional amendments, and the protection of the rights of the freedmen. I claimed that the election of Mr. Tilden would result in the virtual nullification of the constitutional amendments, and amount to a practical restoration to power of the old Democratic party. The revival of the rebel claims, the refunding of the cotton tax, and the damages done to rebels, were fully commented upon, as were the outrages committed upon freedmen during the second administration of General Grant, the organization of Ku-Klux Klans, and the White League, and the boldness with which the laws were disregarded in the south. It is difficult now to realize the condition of public affairs in all the states then lately in rebellion. The people of the south are certainly entitled to the highest credit for the great change that has recently been made in the government of their states, but it cannot be denied that during the ten years after the war their condition bordered on the despotism of mob rule and violence. Financial questions, no doubt, entered into the canvass, but in this respect Governor Tilden and Governor Hayes did not materially differ, while public opinion in the southern states was almost a unit in favor of the larger use of paper money. Their bankrupt condition made this policy almost universal there.

I continued until the day of election to make speeches, not only in Ohio, but in several of the states. I engaged in a joint debate with Senator Voorhees, of Indiana, at Columbia City, in that state, in September, which probably had more fun and humor in it than argument. It so happened that appointments were made for each of us at Columbia City, on the same day, and the managers of the two parties concluded that they would have a joint debate, and arranged for it, to which we both assented. There was a great crowd, and besides Mr. Voorhees and myself, "Blue Jeans" Williams, the candidate for governor, was to open the meeting in his peculiar way, to which, as it would not at all interfere with our debate, I did not object. The debate was fully reported in the Chicago "Inter-Ocean," and is a very graphic specimen of popular debates in which each side claims to be the victor. I think it would be safe to say that from the close of Congress until the day of election I spoke on nearly every week day in some one of the five or six states which I visited.

The result of the presidential election in November, 1876, was extremely doubtful. It was soon asserted that the majority either way would be very small, and that the probabilities were that Mr. Tilden was elected. Zachariah Chandler, chairman of the national Republican committee, however, confidently telegraphed, on the morning after the election, that Hayes was elected by a majority of one in the electoral college. Further reports developed that on account of intimidation, frauds and violence, committed in the election in Louisiana, South Carolina, and Florida, the vote of each of those states was doubtful, and could only be ascertained by the reports of the returning boards. All of their electoral votes were needed to give Hayes the majority of one. Both parties claimed in each of the states a majority of the popular vote. In the heated state of political feeling in those states, it was a matter of grave doubt whether the count of the vote might not result in violence, tumult or war. On the evening of November 11, I received from President Grant the following telegram:

"Philadelphia, Pa., November 11, 1876. "Received at Mansfield, O., 8:35 p. m. "Senator John Sherman.

"I would be much pleased if you would join other parties, who have already accepted same invitation, to go to New Orleans to witness the canvassing of the vote of Louisiana.

"U. S. Grant."

I replied that I would go as soon as practicable, and received the following answer:

"Washington, D. C., November 12, 1876. "Received at Mansfield, O., 4 p. m. "Hon. John Sherman.

"Unless you can reach there by Friday morning it will be too late.

"U. S. Grant."

I at once started for New Orleans, stopping on the way at Columbus to confer with Governor Hayes, who said he wished I would go to New Orleans, and witness the count, but expressed, in the strongest possible language, his opposition to any movement on the part of anyone to influence the action of the returning board in his favor. He said that if Mr. Tilden was elected he desired him by all means to have the office. I proceeded to Cincinnati, where I met some of the gentlemen whom General Grant had requested to witness the count. When we arrived in New Orleans I found far less excitement in respect to the count than in Ohio. I there met the other gentlemen who had been, like myself, invited by General Grant. They were Messrs. Stanley Matthews, Ohio; J. A. Garfield, Ohio; E. W. Stoughton, New York; J. H. Van Alen, New York; Wm. D. Kelley, Pennsylvania; Job E. Stevenson, Ohio; Eugene Hale, Maine; J. M. Tuttle, Iowa; J. W. Chapman, Iowa; W. R. Smith, Iowa; W. A. McGrew, Iowa; Sidney Clarke, Kansas; C. B. Farwell, Illinois; Abner Taylor, Illinois; S. R. Haven, Illinois; J. M. Beardsley, Illinois; John Coburn, Indiana; Will Cumback, Indiana; C. Irving Ditty, Maryland.

At New Orleans I was for the first time introduced to the members of the returning board, who, under the laws of Louisiana, were required to verify the count and whose return was final. We met also a large number of gentlemen who were there at the request of the national Democratic committee to perform the same duty that had been imposed upon us by General Grant. These gentlemen were John M. Palmer, Illinois; Lyman Trumbull, Illinois; William R. Morrison, Illinois; Samuel J. Randall, Pennsylvania; A. G. Curtin, Pennsylvania; William Bigler, Pennsylvania; J. R. Doolittle, Wisconsin; George R. Smith, Wisconsin; J. E. McDonald, Indiana; George W. Julian, Indiana; M. D. Manson, Indiana; John Love, Indiana; Henry Watterson, Kentucky; J. W. Stevenson, Kentucky; Henry D. McHenry, Kentucky; Oswald Ottendorfer, New York; J. B. Stallo, Ohio; Lewis V. Bogy, Missouri; James O. Brodhead, Missouri; C. Gibson, Missouri; John Lee Carroll, Maryland; William T. Hamilton, Maryland; W. G. Sumner, Connecticut; P. H. Watson, Ohio; F. R. Coudert, New York.

Before my arrival a correspondence had occurred between what was called the Democratic visitors and the Republican visitors in regard to our respective duties. This correspondence, all of which was reported to President Grant, resulted in the attendance of a certain number of each of the bodies of visitors at each session of the returning board, and thus a constant surveillance of the proceedings of the board was had. At the same time we received from the returning board the following letter:

"State of Louisiana, Office Board of Returning-Officers,} "New Orleans, November 18, 1876. } "Sir:—At a meeting of the board of returning-officers, held this day, the following preamble and resolution, introduced by General Thomas C. Anderson, was unanimously adopted, viz:

"Whereas, This board has learned with satisfaction that distinguished gentlemen of national reputation from other States, some at the request of the President of the United States, and some at the request of the national executive committee of the Democratic party are present in this city with a view to witness the proceedings of this board in canvassing and compiling the returns of the recent election in this state for presidential electors, in order that the public opinion of the country may be satisfied as to the truth of the result and the fairness of the means by which it may have been attained; and whereas, this board recognizes the importance which may attach to the result of their proceedings, and that the public mind should be convinced of its justice by a knowledge of the facts on which it may be based, therefore, be it

Resolved, That this board does hereby cordially invite and request five gentlemen from each of the two bodies named, to be selected by themselves respectively, to attend and be present at the meetings of the board while engaged in the discharge of its duties, under the law, in canvassing and compiling the returns, and ascertaining and declaring the result of said election for presidential electors, in their capacity as private citizens of eminent reputation and high character, and as spectators and witnesses of the proceedings in that behalf of this board.

"J. Madison Wells, "Chairman Board of Returning-Officers. "Hon. John Sherman, St. Charles Hotel, New Orleans."

On the same day I answered in behalf of my associates as follows:

"St. Charles Hotel, } "New Orleans, November 18, 1876.} "Sir:—I have received your note of to-day, with a copy of the resolution of the board of returning-officers of the State of Louisiana, and have communicated the invitation contained in it to the gentlemen who are here at the request of the President of the United States to witness the canvassing of the vote at the recent election in this state for presidential electors, and am instructed by them to inform you of their acceptance of the invitation, and that they will designate a committee of five of their number to attend the meetings of the board. And I take this occasion to express my thanks for the courteous terms of this invitation, my deep sense of the importance of your proceedings, and my confident hope that they will be so conducted as to convince the public mind of the justice of your finding.

"John Sherman. "Hon. J. Madison Wells."

A similar invitation was extended to the Democratic visitors, and substantially the same reply made. The returning board then proceeded to perform its duty under the law. At each session the Republican and Democratic visitors were present, and I neither know of nor have ever heard of any act being done or testimony taken by the board except in the presence of committees of the two bodies of visitors. The proceedings of the returning board were reported for each body of visitors and for the returning board, and all the evidence taken was not only delivered in the presence of the two visiting bodies, but was reported to the President and was published by Congress. Whatever opinions may be expressed as to the correctness of the findings of the returning board, there can be no doubt that its proceedings were open, fair and impartial. The board arrived at the conclusion that the Republican electors received a majority of the votes cast in Louisiana at that election, and were entitled to cast the vote of the state for President of the United States.

During the great excitement over this controversy, and also over that in South Carolina and Florida, exaggerated statements, without the slightest foundation, of frauds and improper conduct on the part of the returning officers were made and published. As to the action of the returning board of Louisiana, I feel bound now, after a long lapse of time, to repeat what was reported to General Grant by the Republican visitors, that it made a fair, honest and impartial return of the result of the election. In concluding our report we said:

"The proof of violence and intimidation and armed disturbance in many other parishes, is of the same general character, although more general and decisive, as to the five parishes particularly referred to. In the others, these causes prevailed at particular polling places, at many of which the Republican vote was, to a considerable extent, prevented.

"We hope to be able to furnish full copies of all testimony taken by the board, that the justice of its conclusions may be appreciated. It is a tribunal, from which there can be no appeal, and, in view of the possible consequences of its adjudication, we have closely observed its proceedings and have carefully weighed the force of a large mass of the testimony upon which that adjudication has been reached.

"The members of the board, acting under oath, were bound by law, if convinced by the testimony that riot, tumult, acts of violence, or armed disturbance did materially interfere with the purity and freedom of election at any poll or voting place, or did materially change the result of the election thereat, to reject the votes thus cast, and exclude them from their final return. Of the effect of such testimony, the board was sole and final judge, and if, in reaching a conclusion, it exercised good faith and was guided by an honest desire to do justice, its determination should be respected, even if, upon like proof, a different conclusion might have been reached by other tribunals or persons.

"To guard the purity of the ballot; to protect the citizen in the free and peaceful exercise of his right to vote; to secure him against violence, intimidation, outrage, and especially murder, when he attempts to perform his duty, should be the desire of all men, and the aim of every representative government. If political success shall be attained by such violent and terrible means as were resorted to in many parishes in Louisiana, complaint should not be made if the votes thus obtained are denounced by judicial tribunals and all honest men as illegal and void."

Pending the action of the board I wrote to Governor Hayes the following letter, giving a general view of the testimony:

"State of Louisiana, Executive Department,} "New Orleans, November 23, 1876. } "My Dear Sir:—I have not written you sooner, for the progress of our visitation will be known to you through the papers sooner than from my letters, and the telegraph office here is more public than a sheriff's sale. We sometimes hear of private telegrams before they are delivered. The action of the returning board has thus far been open and fair and only confirms the general result known before. We are now approaching the contested parishes. To five of them, viz: Baton Rouge, East and West Feliciana, Morehouse and Ouachita, the evidence of intimidation is so well made out on paper that no man can doubt as to the just exclusion of their vote. In these parishes alone we ought to have a majority of 7,000, but under the law the entire return must be excluded of all election districts where intimidation has affected or changed the result. If this is done the result will give the Hayes electors majorities aggregating 24,111, and the Tilden electors 22,633, but in almost every parish the official return varies somewhat from the stated majorities, and thus far slightly reduces the Republican majority.

"The vote of each disputed parish has thus far been laid aside, and among them two parishes where a most foolish blunder, or something worse, was made in omitting from the Republican tickets the names of all the electors but the two Senatorial and one district elector. The Democrats claim this will lose over 2,000 votes, but our friends, whose information we have generally found confirmed, say it will lose us at most 1,193 votes. The law seems conclusive that the defective ballots cannot be counted for any electors but those named on the ticket; though it is conclusively shown that the remaining electors were omitted by reason of the mistaken idea that the district could only vote for one elector. The whole trouble has grown out of the fact that in these two parishes a candidate for district judge was not named on the ticket printed by the state committee. We undertook to correct this by printing new tickets, which were voted in those parishes. The result of this blunder will leave the poll so close as to render it probable that one or more of the Tilden electors would have a majority.

"There are other parishes where the organized intimidation was not so general as in the parishes named, though in single election precincts it was effective. These parishes, where formal protests have been filed, are Bienville, Bossier, Caldwell, Franklin, Grant, Iberia, Lincoln, Richland and Sabine. How far the proof in these parishes will sustain the protests we cannot judge till the evidence is heard before the returning board.

"We are now collecting the testimony as to the bulldozed parishes. It seems more like the history of hell than of civilized and Christian communities. The means adopted are almost incredible, but were fearfully effective upon an ignorant and superstitious people. That you would have received at a fair election a large majority in Louisiana, no honest man can question; that you did not receive a majority is equally clear. But that intimidation of the very kind and nature provided against by the Louisiana law did enter into and control the election, in more election polls than would change the result and give you the vote, I believe as firmly as that I write this. The difficulty of gathering this testimony and putting it in the legal form has been very great, but I believe has been fully met.

"The whole case rests upon the action of the returning board. I have carefully observed them, and have formed a high opinion of Governor Wells and Colonel Anderson. They are firm, judicious, and, as far as I can judge, thoroughly honest and conscientious. They are personally familiar with the nature and degree of intimidation in Louisiana. They can see that the intimidation, as organized, was with a view of throwing out Republican parishes rather than endangering Democratic parishes. Our little party is now dividing out the disputed parishes, with the view of a careful examination of every paper and detail. Many are impatient of the delay, and some have gone home. We will probably be able to keep about ten here. We have incurred some liabilities for reporting, printing, etc., but hope the Republican national committee will make this good. If not, we must provide for it ourselves. We are in good hope and spirit. Not wishing the return in your favor, unless it is clear that it ought to be so, and not willing to be cheated out of it, or to be 'bulldozed' or intimidated, the truth is palpable that you ought to have the vote of Louisiana, and we believe that you will have ti, by an honest and fair return, according to the letter and spirit of the law of Louisiana.

"Very truly yours, "John Sherman."

To this General Hayes responded as follows:

"Columbus, O., November 27, 1876. "My Dear Sir:—I am greatly obliged to you for your letter of the 23rd. You feel, I am sure, as I do about this whole business. A fair election would have given us about forty electoral votes at the south—at least that many. But we are not to allow our friends to defeat one outrage and fraud by another. There must be nothing crooked on our part. Let Mr. Tilden have the place by violence, intimidation and fraud, rather than undertake to prevent it by means that will not bear the severest scrutiny.

"I appreciate the work doing by the Republicans who have gone south, and am especially proud of the acknowledged honorable conduct of those from Ohio. The Democrats make a mistake in sending so many ex-Republicans. New converts are proverbially bitter and unfair towards those they have recently left.

"I trust you will soon reach the end of the work, and be able to return in health and safety.

"Sincerely, "R. B. Hayes."

I met Governor Hayes on my return and his conversation was to the same effect, that he wished no doubtful votes and would greatly prefer to have Mr. Tilden serve as President if there was any doubt about his (Hayes') election. The Republican visitors did not return until after the meeting of Congress at its regular session on the 4th of December, 1876.

President Grant, in the beginning of his annual message of that date, said:

"In submitting my eighth and last message to Congress, it seems proper that I should refer to, and in some degree recapitulate, the events and official acts of the past eight years.

"It was my fortune, or misfortune, to be called to the office of Chief Executive without any previous political training. From the age of seventeen I had never even witnessed the excitement attending a presidential campaign but twice antecedent to my own candidacy, and at but one of them was I eligible as a voter. Under such circumstances it is but reasonable to suppose that errors of judgment must have occurred. Even had they not, differences of opinion between the Executive, bound by an oath to the strict performance of his duties, and writers and debaters must have arisen. It is not necessarily evidence of blunder on the part of the Executive because there are these differences of views. Mistakes have been made, as all can see and I admit, but, it seems to me, oftener in the selections made of the assistants appointed to aid in carrying out the various duties of administering the government, in nearly every case selected without a personal acquaintance with the appointee, but upon recommendations of the representatives chosen directly by the people. It is impossible, where so many trusts are to be allotted, that the right parties should be chosen in every instance. History shows that no administration, from the time of Washington to the present, has been free from these mistakes. But I leave comparison to history, claiming only that I have acted in every instance from a conscientious desire to do what was right, constitutional within the law, and for the very best interests of the whole people. Failures have been errors of judgment, not of intent."

This modest statement by General Grant was appreciated by Congress and by the country. No one doubted the sincerity and patriotism of the President. His modest confession of errors did not in the slightest degree impair the universal confidence in him.

On the 18th of January, 1877, Mr. Edmunds, of the select committee of the Senate on the counting of electoral votes, submitted a report in writing with an accompanying bill. It was, with one exception, signed by the members of the committees of the two Houses without distinction of party. The bill provided in full detail a prescribed manner for counting the electoral vote. It was adopted by both Houses and voted for by a great majority, but, believing that it was extra constitutional, I, with other Republicans, did not vote for it. The history of the electoral commission provided for in this bill is part of the history of the country, and it is not necessary to here enter into it in detail. It is sufficient to say that it resulted in the counting of the votes of Louisiana, South Carolina and Florida for Mr. Hayes, electing him President by a majority of one vote. I took an active part in the debates on the questions involved and gave in detail my view of the action of the returning board of Louisiana.

During this period I received a number of personal letters from Governor Hayes, some of which may be of interest:

"Columbus, O., December 25, 1876. "My Dear Sir:—I have your esteemed favor, and have also met Judge Taft and Governor Dennison. There will not be the slightest difficulty growing out of the matter you refer to. You know my general course of conduct. It has always seemed to me wisest, in case of decided antagonisms among friends, not to take sides—to heal by compromise, not to aggravate, etc., etc. I wish you to feel authorized to speak in pretty decided terms for me whenever it seems advisable—to do this not by reason of specific authority to do it, but from your knowledge of my general methods of action.

"Sincerely, "R. B. Hayes. "Hon. John Sherman, etc., etc."

"Columbus, O., January 5, 1877. "My Dear Sir:—I have your note of the 3rd. I do not wish to influence the action of our friends, and do not volunteer opinions. But you have a right to my opinion. I believe the Vice President alone has the constitutional power to count the votes and declare the result. Everything in the nature of a contest as to electoral votes is an affair of the states. The rest is a mere ministerial duty. Therefore it is not right, in my judgment, for Congress to interfere.

"Sincerely, "R. B. Hayes. "Hon. John Sherman, U. S. S."

"Columbus, O., February 15, 1877. "My Dear Sir:—I have two letters from you since I last wrote. It if becomes my duty to make a cabinet I want your views fully and specifically. If possible a personal interview would be extremely desirable. Boynton writes to Smith that an assurance of my views on the southern question, which are truly set forth in my letter, with such additions as I could properly make, would be useful. I prefer to make no new declarations. But you may say if you deem it advisable that you know that I will stand by the friendly and encouraging words of that letter and by all that they imply. You cannot express that too strongly.

"Sincerely, "R. B. Hayes. "Hon. John Sherman."

"Columbus, O., February 16, 1877. "My Dear Sir:—If the issue of the contest is in our favor I shall want to see you at once if it is at all practicable. Don't you want to visit Mansfield? I can meet you there or here—or possibly at a point east of there.

"Sincerely, "R. B. Hayes. "Hon. John Sherman."

"Columbus, O., February 19, 1877. "My Dear Sir:—The more I think of it the more difficult it seems for me to get ready to come to Washington before Wednesday or Thursday of next week. I must fix affairs at Fremont, and cannot begin it until I know the result. Why can't friends be sent or come here?

"It seems to me proper now to say that I am extremely desirous that you should take the treasury department. Aside from my own personal preference, there are many and controlling reasons why I should ask you to do this. It will satisfy friends here in Ohio. I understand Governor Morton and our friends in Washington like it. The country will approve it. You are by all odds the best fitted for it of any man in the nation. Your resignation from the Senate will be a great loss to that body, but it will cause no serious dissensions or difficulty in Ohio. Do not say no until I have had a full conference with you. There is no reason why you should not visit Ohio as soon as you can be spared from Washington. Of course the public will know of our meeting. But they will be gratified to know it. No possible harm can come of it. I should have said all this before, but I did not want to embarrass you in your action on the presidential question.

"Sincerely, "R. B. Hayes. "Hon. John Sherman."

(Telegram.) "Columbus, O., February 20, 1877. "Hon. John Sherman.

"I will be greatly obliged if you can come to Columbus, but will meet you at Zanesville if you think it important.

"R. B. Hayes."

"Columbus, O., February 28, 1877. "Hon. John Sherman, Washington, D. C.

"Dear Sir:—Governor Hayes will be obliged to you if you will be kind enough to speak to Mr. Evarts with respect to his acceptance of the place in the cabinet referred to in the interview with you last week. It was the governor's intention to make this request at that time, and he may have done so, but not being quite sure of the fact, desires me to write you with reference to it.

"Yours very respectfully, "W. K. Rogers, Secretary."

President Hayes frequently, in personal conversation and in writing, had expressed a strong desire that I should become the Secretary of the Treasury. I was disinclined to accept this position, as I was content to serve my constituents in the Senate. It was not until after his urgent request in his letter of February 19, 1877, that I seriously considered his desire that I should accept that office. I went to Columbus to ascertain the views of the legislature, and whether there would be any difficulty in selecting a Republican to my place in the Senate. Having found that there would not be, I, with reluctance, accepted his offer. Stanley Matthews was elected on the 21st of March to serve out my unexpired term, which ended on the 3rd of March, 1879.

President Hayes arrived at Washington a few days before the 4th of March and was my guest until he was inaugurated as President. The 4th day of March was on Sunday, and to avoid any questions about an interregnum, he was sworn into office on that day, but took the formal oath on the next day, the 5th of March, and made his inaugural address. He nominated the members of his cabinet to the Senate and they were promptly confirmed.

I received many letters of congratulation and encouragement in assuming the duties of Secretary of the Treasury, two of which I insert:

"New York, March 6, 1877. "My Dear Mr. Secretary:—Allow me to congratulate you on having been selected by President Hayes to administer the financial affairs of the nation.

"I deem it a happy augury that the President's choice of members of his cabinet has fallen upon men who have made their mark as statesmen, and whose advent to power will, I feel convinced, inaugurate an era of prosperity for our country.

"With yourself at the head of the treasury department, there is no fear of public credit being shaken and commercial interests imperiled by crude and experimental legislation.

"With great respect, I remain, my dear Mr. Sherman,

"Very truly your friend, "Cyrus W. Field. "Hon. John Sherman, Washington."

"Consulate General of the United States for Great Britain and Ireland,} "London, E. C., March 12, 1877.} "The Hon. John Sherman, Secretary of the Treasury.

"My Dear Sir:—When I begin to write to you, I am reminded of what General Sherman said, in my hearing, to General Grant, after the latter was made General in Chief: 'I cannot congratulate you; the responsibility is too great.' You have certainly succeeded to the most difficult post in the government, one in whose successful administration Americans abroad feel an especial interest, for no department is more important to foreigners or more discussed by them.

"It may not be unsatisfactory to you to know that Americans—both those long domiciled here and those in transit—applaud the appointment of the new Chief of the Treasury.

"I beg to offer my best wishes and belief that the reputation he has already achieved in the Senate will be increased in the cabinet; and to say how glad I was that the unanimity of his late compeers showed that they were of the same mind.

"With great respect, I am, my dear sir,

"Very faithfully yours, "Adam Badeau."

CHAPTER XXIX. I BEGIN MY DUTIES AS SECRETARY OF THE TREASURY. Legislative Training of Great Advantage to Me in My New Position— Loan Contract in Force When I Took the Portfolio—Appointment of Charles F. Conant as Funding Agent of the Treasury Department in London—Redeeming Called Bonds—Sale of Four Per Cent. Bonds Instead of Four and a Half Per Cents.—Popularity of the New Loan—Great Saving in Interest—On a Tour of Inspection Along the Northern Atlantic Coast—Value of Information Received on This Trip—Effect of the Baltimore and Pittsburg Railroad Strikes in 1877 Upon Our Public Credit.

When I assumed the office of Secretary of the Treasury I had the advantage of some of my predecessors in that I was acquainted with the organization and duties of the treasury department. Ever since 1859 my connection with the committee of ways and means in the House and with the committee on Finance in the Senate had brought me into official relations with the head of that department. This legislative training gave me a full knowledge of the several laws that were to be executed in relation to public revenue, to all forms of taxation, to coinage and currency, and to the public debt. The entire system of national finance then existing grew out of the Civil War, and I had participated in the passage of all the laws relating to this subject. My intimate association with Secretaries Chase, Fessenden and McCulloch, and my friendly relations with Secretaries Boutwell and Richardson, led me, as chairman of the Senate committee on finance, to have free and confidential intercourse with them as to legislation affecting the treasury. Secretary Bristow had not had the benefit of experience either in Congress or the department. He was a good lawyer and an able man. He doubted whether resumption would be effective without a gradual retirement of United States notes, a measure that Congress would not agree to. Congress repealed even the limited retirement of such notes provided for by the resumption act. Secretary Morrill, of Maine, my immediate predecessor, was in hearty sympathy with the policy of Congress, of which he had been a useful Senator, and but for his failing health would have been an efficient secretary. Upon my assuming the duties of secretary, and for some time before, he had been confined by illness to his lodgings in Washington. The treasury department was then well organized. Most of the principal officers had been long in the service. But few changes were made by President Hayes or by myself, and only as vacancies occurred or as incompetency was demonstrated. The following loan contract was in force at the beginning of my administration of the treasury department:

"This agreement, entered into this 24th day of August, in the year of our Lord, 1876, between the Secretary of the Treasury of the United States of America, of the first part, and Messrs. August Belmont & Co., of New York, in behalf of Messrs. N. M. Rothschild & Sons, of London, England, and associates, and Messrs. J. & W. Seligman & Co., of New York, for themselves and associates, and Messrs. Drexel, Morgan & Co., on behalf of Messrs. J. S. Morgan & Co., of London, England, and Messrs. Morton, Bliss & Co., of New York, representing the First National Bank of the city of New York, the American Exchange National Bank of New York, the Merchants' National Bank of New York, the Third National Bank of New York, Messrs. Kuhn, Loeb & Co., of New York, the Bank of New York National Banking Association, and Messrs. Morton, Rose & Co., of London, and themselves, of the second part:

"Witnesseth, That the said Messrs. August Belmont & Co. of New York, on behalf of Messrs. N. M. Rothschild & Sons and associates, hereby agrees to purchase from the Secretary of the Treasury sixteen million five hundred thousand dollars ($16,500,000) of the United States bonds known as the four and a half per cent. funded loan of 1891, issued under the acts of July 14, 1870, and January 20, 1871; and that Messrs. J. & W. Seligman & Co., for themselves and their associates, hereby agree to purchase from the Secretary of the Treasury six million seven hundred and fifty thousand dollars ($6,750,000) of the bonds hereinbefore described; and that Messrs. Drexel, Morgan & Co., on behalf of Messrs. J. S. Morgan & Co., of London, England, hereby agree to purchase from the Secretary of the Treasury six million seven hundred and fifty thousand dollars ($6,750,000) of the bonds hereinbefore described; and that Messrs. Morton, Bliss & Co., of New York, representing the First National Bank of the city of New York, to the extent of four million dollars ($4,000,000); the American Exchange National Bank of New York, to the extent of one million and fifty thousand dollars ($1,050,000); the Merchants' National Bank of New York, to the extent of six hundred thousand dollars ($600,000); the Third National Bank of the city of New York, to the extent of seven hundred and fifty thousand dollars ($750,000); Messrs. Kuhn, Loeb & Co., of New York, to the extent of one million and fifty thousand dollars ($1,050,000); the Bank of New York National Banking Association, to the extent of three hundred thousand dollars ($300,000); Messrs. Morton, Rose & Co., of London, to the extent of one million one hundred and twenty-five thousand dollars ($1,125,000), and Messrs. Morton, Bliss & Co., of New York, to the extent of one million one hundred and twenty-five thousand dollars ($1,125,000), hereby agree, to the extent severally for each as above stated, to purchase from the Secretary of the Treasury ten million dollars ($10,000,000) in the aggregate of the bonds hereinbefore described, making a total aggregate of forty million dollars ($40,000,000), upon the terms and conditions following, to-wit:

"First. Of the said aggregate amount, not less than ten million dollars ($10,000,000) are hereby subscribed for, the subscription to take effect on the 1st day of September, 1876, and the remaining amount, namely, thirty million dollars ($30,000,000), may be divided at the pleasure of the parties of the second part into several successive subscriptions of not less than five million dollars ($5,000,000) each, to be made prior to the 4th day of March, 1877.

"Second. The parties of the second part shall have the exclusive right to subscribe, in the same proportion to each of the subscribers, for the remainder, namely, two hundred and sixty million dollars ($260,000,000), or any portion of said loan authorized to be issued by the acts of Congress aforesaid, by giving notice thereof to the Secretary of the Treasury on or before the 30th day of June, 1877; but the party of the first part reserves the right to terminate this contract at any time after March 4, 1877, by giving ten days' notice thereof to the parties of the second part.

"Third. That the Secretary of the Treasury shall, when subscriptions are made by the said parties of the second part, issue calls with even date with said subscriptions for the redemption of an equivalent amount of six per cent. 5-20 bonds of the United States, as provided by said act of July 14, 1870.

"Fourth. The parties of the second part agree to pay for said four and a half per cent. bonds par and interest accrued to the date of application for delivery of said bonds, in gold coin, matured United States gold coin coupons, or any of the six per cent. 5-20 bonds called for redemption, or in United States gold certificates of deposit issued under the act of March 3, 1863, with the understanding that payment to the extent of the amount of any call shall be made within the time during which such call shall mature: Provided, That, if the parties of the second part shall elect so to do, they may have the privilege of making any of said subscriptions payable specifically in uncalled six per cent 5-20 bonds of the United States, in which case the Secretary of the Treasury may, to the extent of such payments, omit the calls mentioned in condition No. 3.

"Fifth. The parties of the second part shall receive in coin a commission of one-half of one per cent. on all bonds taken by them, as allowed by the act of July 14, 1870, and shall assume and defray all expenses which may be incurred in sending bonds to London upon their request, or by transmitting bonds, coupons, or coin from there to the treasury department at Washington, including all cost of making exchange of bonds, and shall also be charged with the preparation and issuing of the bonds.

"Sixth. No bonds shall be delivered to the parties of the second part, or either of them, until payment shall have been made in full therefor in accordance with the terms of this contract.

"Seventh. During the continuance of this contract any sales of bonds ordered by the Secretary of the Treasury, by authority of law, except those that it may become necessary to sell to pay judgments of the Court of Commissioners of Alabama Claims, shall be made through the parties of the second part, who shall be allowed thereon a commission of one per cent. in gold coin. And it is provided that the amount of bonds so ordered shall not exceed in the aggregate $25,000,000, unless by mutual agreement of the parties.

"Lot M. Morrill, Secretary of the Treasury. "Aug. Belmont & Co., On behalf of N. M. Rothschild & Sons, London. "J. & W. Seligman & Co., On behalf of Seligman Brothers. "Drexel, Morgan & Co., On behalf of J. S. Morgan & Co., of London. "Morton, Bliss & Co., For themselves and associates, as named above."

By its terms the contract provided for the sale of $40,000,000, four and a half per cent. bonds of the United States at par in gold coin. The contractors had the exclusive right to subscribe for all or any portion of the remainder of the four and a half per cent. bonds, amounting to $260,000,000. The right to terminate this contract at any time after March 4, 1877, after ten days' notice, was reserved by the United States. The proceeds of the bonds sold were to be applied solely to the payment of the six per cent. 5-20 bonds of the United States. No provision was made in this contract for the accumulation of coin for the redemption of United States notes. The process of refunding under it progressed slowly.

I felt it to be important that I should have some personal representative in London, to protect the interests of the United States in the execution of this contract, and, therefore, on the 31st of March, 1877, I appointed Charles F. Conant, as the funding agent of the treasury department, and directed him to assume the general management and supervision of all business in London, arising from the funding of bonds. A letter of instructions prescribing his duties was given him. He was directed to pursue the same general plan under which former negotiations had been conducted, except as modified by these instructions, which were based upon the contract before mentioned. All bonds, money, or coupons received by him were to be securely kept in safes, furnished by the department for that purpose, to be deposited in the vaults of the Messrs. Rothschild. Combination locks were provided for each safe, and no safe could be unlocked except by three persons on distinct combinations, each person using a combination unknown to the others. He was to keep me fully advised as to the course of the market, of the price not only of American securities, but of foreign securities, and was to receive the new bonds and deliver them to the Rothschilds in exchange for the bonds redeemed. He proved to be a very competent and faithful agent, and furnished me important financial information, which aided me greatly in refunding operations. His compensation and allowances, as well as those of all persons sent to London in connection with the refunding of the public debt, were paid by the syndicate, so that no expense whatever was incurred by the treasury on this account.