"General, your brother, Secretary Sherman, seems to be doing some telling work just now in the State of Maine; in fact, it is conceded that his recent financial triumphs have made him a power."

"Well, yes, I think John's doing right well. He made a good speech at Portland, one that seemed to me carefully prepared. I think he answered his critics quite conclusively, but if I were in John's place I would now save my breath and make no more speeches, but simply say in reply to other invitations, 'Read my Portland speech,' because whatever other efforts he may make during the campaign must be more or less a rehash of that."

In the canvass that followed in Maine but little attention was paid to the sectional question, and the Republican party gained a complete victory.

About the middle of August the business of the treasury department, being confined to routine duties, was left under the management of Assistant Secretary John B. Hawley. I determined to spend the remainder of the month in the campaign in Ohio, then actively progressing, but confined mainly to the issue between the inflation of paper money and the solid rock of specie payments. I made my first speech in that canvass at Steubenville on the 21st of August. The meeting was a very large one. Every available seat was occupied by an intelligent audience, and the aisles and corridors were filled with people sitting or standing. I opened my speech as follows:

"I am happy to be again among the people of Ohio, to whom I am under the highest obligations of duty and gratitude, and especially to be here in this good county of Jefferson, whose representatives have thrice honored me by their vote when a candidate for the Senate of the United States. I cheerfully come to speak on matters in which you, as well as the whole people of the United States, have a common interest; and I will best meet your wishes by stating, in a plain, frank way, such facts and reasons as appear to me to justify the support you have uniformly given to the Republican party since its organization in 1854, and to present adequate grounds for supporting it now.

"Three parties present candidates to the people of Ohio for the highest offices of the state. It will not be necessary or just for me to arraign the personal character, standing, or services of either of the candidates on either of these tickets. They are all respected citizens, and each would, no doubt, if elected, satisfactorily perform the duties of the office for which he is nominated.

"But the issues involved are far more important than the candidates. I assure you that upon the election in Ohio depend questions of public policy which touch upon the framework of our government and affect the interests of every citizen of the United States. The same old questions about which we disputed before the war, and during the war, and since the war, are as clearly involved in this campaign as they were when Lincoln was elected, or when Grant was fighting the battles of his country in the Wilderness.

"There are also financial questions involved in this contest. The Republican party proposed, maintained, and executed the resumption act as the best remedy for the evils that followed the panic of 1873. Under that act it has brought about the resumption of specie payments. By its policy all forms of money are equal to and redeemable in coin. It has reduced the interest on all the public debt that is now redeemable. It has maintained and advanced the public credit. It now declares its purpose to hold fast to what it has done, to keep and maintain every dollar of paper money in circulation as of equal value to the best coin issued from the mint, and as soon as possible to complete the work of reducing interest on all the public debt to four per cent. or less.

"The Greenback party not only denounces all we have done, but proposes to reverse it by the issue of an almost unlimited amount of irredeemable paper money, to destroy the system of free national banks, and to call in and pay off all the United States bonds with irredeemable money.

"The Democratic party of Ohio, both in its platform and by its candidates, supports more or less all of these dogmas; but it does so not as a matter of principle, but for political power. Its main object is, by any sort of alliance on any real or pretended popular issue, to gain strength enough to unite with the solid south, so that it may restore to power, in all departments of the national government, the very same doctrines that led to the Civil War, and the very men who waged it against the Union. To obtain political power, the democracy seek, by party discipline, to compel their members to abandon the old and cherished principles of their party of having a sound currency redeemable in coin. For this, they overthrew Governor Bishop; for this, they propose to reopen all the wild and visionary schemes of inflation which have been twice rejected by the people of Ohio. Our contest with them is not only on financial questions, but upon the old and broad question of the power and duty of the national government to enforce the constitution and laws of the United States in every state and territory, whether in favor of or against any citizen of the United States.

"Let us first take up these financial questions, and in charity and kindness, and with due deference to opposing opinions, endeavor to get at the right, if we can.

"The great body of all parties are interested in and desirous of promoting the public good. If they could only hear both sides fairly stated, there would be less heat and bitterness in political contests, and more independent voting."

I then proceeded with a full discussion of the financial questions, referring especially to the speeches made by General Ewing, with whose opinions I was conversant. I closed with a brief discussion of the southern question, and especially the nullification of the election laws in the southern states. This speech was the best of many made by me in different parts of the state. I was engaged in the canvass in Ohio for two weeks afterward, during which I visited my home at Mansfield.

In traversing the state I was surprised at the remarkable change in the condition of business and the feelings of the people, and at the evidences of prosperity not only in the workshops but on the farms. It was jokingly said that the revival of industries and peace and happiness was a shrewd political trick of the Republicans to carry the state. As I rode through the country I saw for miles and miles luxuriant crops of thousands of acres of wheat, corn, oats and barley. It was said that this was merely a part of the campaign strategy of the Republicans, that really the people were very poor and miserable and on the verge of starvation. This was the burden of the speeches of General Ewing, who attributed the miseries of the people to my "wicked financial policy," and said that I was given over to the clutches of the money power and stripped and robbed the people of Ohio for the benefit of the "bloated bondholders."

While General Ewing was fighting in the shadows of the past, caused by the panic of 1873, a revolution had taken place, and he who entered into the canvass with the hope that the cry of distress would aid him in his ambition to be governor, must have been greatly discouraged by the evidences of prosperity all around him. I found in my home at Mansfield that business was prosperous, the workshops were in full blast, and smoke was issuing from the chimney of every establishment in the place.

My coming to Ohio naturally excited a good deal of comment and of opposition from Democratic speakers and papers. I was charged with nepotism in appointing my relatives to office, but upon examination it was found that I had appointed none, though several, mostly remote, were holding office under appointments of General Grant. On the 25th of August I left Mansfield for Columbus and Cincinnati, and on the train met Charles Foster and others on their way to Mount Vernon. On their arrival they were met by flags and music, and in response to the calls I made a brief speech.

On the 27th of August I made my usual annual visit to Cincinnati and the Chamber of Commerce of that city. That body is composed in almost equal numbers of members of the two great parties, and therefore, in addressing it, I carefully refrain from discussing political topics. At that time there was a good deal of discussion of the order made by me on the 13th of August, addressed to the treasurer of the United States, directing him not to withdraw from bank depositaries the money deposited for the payment of called bonds, until it was required for that purpose. At the date of that order over $70,000,000 of called bonds were still outstanding, but only $52,000,000 remained on deposit with national bank depositaries to pay them, thus showing that $18,000,000 United States notes had been withdrawn from the depositaries into the treasury in advance of their need for such payment. These sums were fully secured by the deposit with the government of bonds to the amount of such deposits and a further sum of bonds to the amount of five per cent. of the deposit.

I felt that the withdrawal of this great sum in advance of the presentation of the called bonds would necessarily create an injurious contraction of the currency. To meet this condition of affairs, upon the advice of the treasurer at Washington and the assistant treasurer at New York, and the pressing complaints of business men not interested in depositary banks, I issued this order:

"Treasury Department, August 13, 1879. "Hon. James Gilfillan, Treasurer United States.

"Sir:—With a view to closing as soon as practicable the accounts of the department with depositary banks on loan account, without unnecessary disturbance of the money market or the withdrawal of legal tenders from current business, you will please receive from such depositaries in payment called bonds to be credited when passed through the loan division. You will require from such depositaries sufficient money in addition to the called bonds, to insure the withdrawal of all deposits on loan account on or before the 1st of October next. The letter of the department of March 26 is modified accordingly.

"Very respectfully, "John Sherman, Secretary."

It was said that this was done to relieve the banks, and especially the First National and the National Bank of Commerce, of New York, which in closing out the refunding operations had, as already stated, made large subscriptions for themselves and others, and it was intimated that I was interested in these banks. This innuendo was without foundation or excuse, and was made merely to create a political sensation. This order was made, not at the request of the banks, for they were entirely prepared to pay the money, but at the urgent demand of business men, that the currency should not be withdrawn from the banks where it was employed in active business, and be deposited in the treasury where it would lay idle.

I thus explained the matter to the Chamber of Commerce, and to the public at large. I felt that it would not be advisable for me to drain the money market of legal tenders, and to hoard them in the treasury to await the presentation of called bonds. If such a course had been adopted, the clamor would have been louder and more just. The order, no doubt, had a happy effect, as the running accounts were rapidly and quietly closed, by the payment of the called bonds, without any disturbance in the money market. The clamor made was beneficial because it induced the holders of the called bonds to send them in for payment, in which I greatly rejoiced.

In the evening of that day a reception was given to me at the Lincoln club. While it was going on a large crowd, headed by a band, approached the clubhouse, and loudly insisted that I should speak to them. As this was a political club, I felt at liberty, on being introduced by Warner M. Bateman, to make a political speech, mainly devoted to my early friend, General Ewing, and his peculiar notions of finance. This was reported in the papers at the time. If there was too much political feeling manifested in my speeches at this period, it may be partly excused by the extreme violence of denunciation of me by Democratic speakers and newspapers.

Later in the evening I visited Wielert's pavilion, on Vine Street, where the usual evening concert was being given. The visitors were mainly German citizens, and, as such, were known to be in favor of a sound currency based upon gold and silver. The orchestra at once stopped the piece they were playing, and played the "Star Spangled Banner," amid the cheering of the assemblage. They insisted upon a speech, and I said:

"When I came here to-night I did not expect to make a speech, as I have made one already. I only came to see the people enjoy themselves, to drink a glass of that good old German beverage, beer, and to listen to the music. I am very happy to meet you, and shall carry away with me a kindly remembrance of your greeting. All I want, and that is what we all want, is honest money. A dollar in paper is now worth a dollar in gold or silver anywhere in this country, and we want affairs so shaped that the paper money issued may be exchanged anywhere or under any circumstances for gold or silver. That is my idea of honest money. [Cries, 'That is so.' 'That is ours, too,' etc.] We may be assured that such shall be the character of the money in our country if the people will sustain the party which has equalized the values of the paper and metal moneys. Again I thank you for your kind reception."

I returned to Washington and remained there during the month of September, actively employed in the duties of the department. During this month nearly all the outstanding called bonds were presented and paid, and all sums deposited with national banks during the operation of refunding were paid into the treasury and these accounts closed.

Fruitful crops in the United States, and a large demand for them in Europe, caused an accumulation of coin in this country. Much of it came through the customhouse in New York, but most of it was in payment for cotton and provisions. It was readily exchanged for United States notes and silver certificates. As all forms of money were of equal purchasing power and paper money was much more convenient to handle than coin, the exchange of coin, by the holders of it, for notes or certificates, was a substantial benefit to them and strengthened the treasury. I promoted these exchanges as far as the law allowed. I deemed it wise to distribute this coin among the several sub-treasuries of the United States, maintaining always the reserve for the redemption of United States notes in the sub- treasury in New York as the law required. For this purpose I issued the following order:

"Treasury Department, } "Washington, September 19, 1879.} "Gold coin beyond the needs of the government having accumulated in the treasury of the United States, by the deposit in the several public assay offices of fine bars and foreign coin, for which the depositors have been paid, at their option, in United States notes, the treasurer of the United States, and the several assistant treasurers at Boston, New York, Philadelphia, Baltimore, Cincinnati, Chicago, St. Louis, New Orleans and San Francisco, are hereby authorized to pay out gold coin as well as silver coin and notes upon the current obligations of the government, and upon advances to disbursing officers, as may be convenient and practicable. Transfers of coin for this purpose will be made to any assistant treasurer, when necessary, by the treasurer of the United States, upon application to him. The treasurer of the United States in this city, upon the receipt by him of a certificate of deposit issued by the United States assistant treasurer at New York, stating that there has been deposited with him legal tender notes in the sum of $100 or multiples thereof, will also cause to be shipped from the mint to the depositor, at his risk and expense, a like amount of gold coin. Standard silver dollars may also be obtained as heretofore.

* * * * *

"John Sherman, Secretary."

The result of this policy was beneficial, though the demand for coin rarely existed except for foreign exchange, and this was generally in New York, and largely depended upon the balance of trade. Our people had been so accustomed to the use of paper money that they received and paid United States notes in preference to coin, and this more readily since these notes were equal in purchasing power to coin.

Senator Thurman, my colleague and personal friend, was active in the canvass in Ohio. His term expired on the 4th of March, 1881, and he was a candidate for re-election by the legislature about to be chosen. I heard of his speeches, especially those in respect to resumption. He commented upon the fact that United States notes were only redeemed in the city of New York, and claimed that we had not actually resumed, for gold was not in circulation. He appealed to his audiences to say whether they had any gold and whether they were not compelled to receive the same greenbacks then as they had since the period of the war, and said if they wanted gold they had to go to New York for it. I regarded this as a piece of demagogism, for he knew the difference between the greenbacks then and the greenbacks before resumption. Hearing that he was to speak in Bellaire shortly I arranged to have certain disbursements for wages in that neighborhood made in gold coin. When he made his speech in Bellaire, soon afterwards, he repeated the same statements that he had previously made, and appealed to the audience to know whether they had seen any of the gold coin they had heard so much about. Much to his surprise and embarrassment quite a number of persons held up and shook gold coin. This put a stop to his inquiries. The people appreciated the advance in the purchasing power of their money, and neither demanded coin nor cared for it.

Early in October I yielded to the urgent request of Mr. Foster to help in the closing days of the canvass, and, on the evening of the 8th, addressed a meeting at the west front of the capitol in Columbus, far exceeding in numbers any political gathering during the campaign. My opening will indicate the general trend of my remarks:

"It is not within my power to reach with my voice all who have assembled on this occasion, and besides, for some time I have not been much in the habit of speaking in the open air, and don't know how long my voice will hold out, but I think I will be able to say all that you will desire to hear from me, as I will be followed by a gentleman distinguished in war and able to supply any imperfections in my address.

"When I was here in August last it appeared that the great point in the political contest in which we were about to engage was whether the people of Ohio would stand fast to the resumption of specie payments, which the Republicans, by a steady and patient courage and unswerving conviction, had finally brought to a successful consummation on the 1st day of January last, or whether the people of Ohio would yield to the wild and fanciful ideas of inflation, and desert the great good that had been accomplished after so long a trial.

"The Democratic party, which had been holding the honored principles of that party, seemed to be willing to go after strange gods, and to form new alliances, to do anything to gain success, and that old party sought to form at least temporary alliances, so that the people would forget the great issue, and follow after these strange and delusive ideas of which I will speak. Therefore it was that my friend General Ewing was nominated for Governor of Ohio, with the expectation that as he had advanced some such ideas in times past, a coalition would be made between the parties naturally hostile, and that the State of Ohio would be thus gained for the Democratic ticket."

In the course of my remarks I read an extract from General Ewing's speech of the year before, in which he stated that if we were out of debt to foreign countries, and if our foreign commerce floated under our own flag, resumption in gold and silver would be impossible on the then volume of paper money; that if it were attempted the desperadoes of Wall street and the money kings of England would present greenbacks, and take the gold as fast as it could be paid over the counter of the treasury. I said in reply:

"Not a year rolled around until this resumption came, and these Wall street desperadoes and these money kings of Europe, instead of coming and demanding our gold in exchange for greenbacks, now bring their gold to us and want greenbacks for it.

"The money kings of Europe have brought us gold—$36,900,000 in gold coin from France—and the English have brought their gold and exchanged it for United States notes. And these Wall street desperadoes are as eager to get our greenbacks as you are. They don't want the gold at all and we cannot put it on them. Why, my countrymen, United States notes may now travel the circuit of the world with undiminished honor, and be everywhere redeemed at par in coin. They are made redeemable everywhere, and at this moment the greenback is worth a premium on the Pacific coast and in the Hawaiian Islands, and in China and Japan it is worth par; and in every capital of Europe, in Berlin, in Paris, in London, an American traveling may go anywhere in the circuit of the civilized world, and take no money with him except United States notes.

"Well, now, General Ewing was mistaken. Well, why don't General Ewing come down and say 'I was mistaken?' [A voice, 'He will come down.'] Yes, after next Tuesday he will."

On the next day I spoke at Springfield to an audience nearly as large, following the general lines of my Columbus speech. On the following day I spoke at Lancaster from a stand in front of the town hall, in plain sight of the house in which General Ewing and I were born. I spoke of General Ewing in very complimentary terms, said we had been intimate friends from boyhood, that our fathers had been friends and neighbors, but that he and I then found ourselves on opposite sides of a very important question. I expressed my respect for the sincerity of General Ewing's motives, but believed that he was thoroughly and radically wrong. I said I wished to state frankly how he was wrong, and to what dangerous consequences the fruit of his errors would lead, and I wanted the people of Lancaster to judge between us.

On the Saturday before the election I spoke in Massillon. By some misunderstanding I was advertised to speak on that afternoon at both Massillon and Mansfield, but, by an arrangement subsequently made, I spoke at Massillon to one of the largest meetings of the campaign, and then was taken by special train to Mansfield in time to make my closing speech in the canvass. It was late in the afternoon, but the crowd that met to hear me remained until my arrival, of which the following account was given by the local paper:

"But the grand ovation was reserved for our distinguished townsman, Secretary Sherman. There were acres of men, women, and children and vehicles at the depot to meet him, and as he stepped from the cars he was greeted with the booming of cannon, the music of half a dozen bands, and the loud and long acclaim that came from the throats of the immense concourse of friends. A thousand hands of old neighbors were stretched out to grasp his as he moved along with great difficulty, piloted by the reception committee, through the vast and surging crowd. Cheer after cheer went up on every imaginable pretext, and many times calls for 'Three cheers for John Sherman, our next President,' were honored with a power and enthusiasm that left no room for doubt as to the intensity of the devotion felt for him at his old home."

In this connection I wish to say once for all that I have been under the highest obligations to the people of Mansfield during my entire life, from boyhood to old age. I have, with rare exceptions, and without distinction of party, received every kindness and favor which anyone could receive from his fellow-citizens, and if I have not been demonstrative in exhibiting my appreciation and gratitude, it has nevertheless been entertained, and I wish in this way to acknowledge it.

In opening my address in the evening I said:

"My fellow-townsmen, I regret your disappointment of to-day, that, by some misunderstanding as to the hour of your meeting, I felt it my duty, in obedience to the request of the state committee, to attend the great mass meeting as Massillon this afternoon, and now come before you wearied and hoarse, to speak of the political questions of the day.

"When I was in Ohio in August last, the chief question in the pending political canvass was, whether the resumption of specie payments, so long and steadily struggled for, and happily accomplished by the Republican party, should be maintained, or whether it should give way to certain wild and erratic notions in favor of irredeemable paper money. Upon this issue General Ewing was nominated by the Democratic party, in the hope that he would gain support from a third party committed to inflation. Since then it would appear that the Democratic leaders seek to change the issue. The same old questions about the rights of states to nullify the laws of the United States—the same old policy to belittle and degrade our national government into a mere confederacy of states—are now thrust forward into prominence."

On the following Tuesday I voted, and immediately started for Washington. The news of the triumphant election of Foster and Hickenlooper, by over 30,000 majority, and a Republican majority of twenty-five in the legislature, reached me while on the train.

The management by Governor Foster of his canvass, and his work in it, was as laborious and effective as any ever conducted in Ohio. He visited every county in the state, often made four or five speeches in a day, and kept special railroad trains in motion all the while, carrying him from place to place. He is not, in the usual sense, an orator, but in his numerous campaigns he has always made clear and effective statements which the people could understand. His manner is pleasing, without pretension or gush. He had been elected to Congress several times in a district strongly Democratic. In the campaign of 1879 he adopted the same plan that had been so successful when he was a candidate for Congress. He was an experienced and efficient hand-shaker.

CHAPTER XXXIX. LAST DAYS OF THE HAYES ADMINISTRATION. Invitation From General Arthur to Speak in New York—Letter to Hon. John Jay on the Subject—Mr. Evarts' Refined Specimen of Egotism— An Anecdote of the Hayes Cabinet—Duty of the Government to Protect the Election of All Federal Officers—My Speech in Cooper Institute —Offers of Support to Elect Me as a Successor of Senator Thurman —My Replies—Republican Victory in New York—President Hayes' Message to Congress—My Report as Secretary of the Treasury— Modification of My Financial Views Since that Time—Bank Notes as Currency—Necessity for Paper Money—Mr. Bayard's Resolution Concerning the Legal Tender Quality of United States Notes—Questions Asked Me by the Finance Committee of the Senate.

In the latter part of September I was invited by General Arthur, as chairman of the Republican state committee of New York, to speak to the Republicans of that state during the pending canvass, in aid of election of Mr. Cornell as governor. The circumstances of the removal of Arthur and Cornell caused some doubt whether I should accept the invitation, as it seemed that the nomination of Cornell and the management of the canvass by Arthur was an expression of triumph, and my acceptance would be regarded as a humiliation of the President. I did not think so and in this opinion the President concurred. I, therefore, accepted the invitation by the following letter:

"Treasury Department, } "Washington, September 29, 1879.} "Dear Sir:—I have to acknowledge the receipt of your letter of the 25th inst., inviting me to speak to the Republicans in New York some time during the pending campaign. It will give me great pleasure to do my utmost in aid of the election of Mr. Cornell and the Republican ticket at the coming election, and I wish I could accept your invitation without reserve; but in view of engagements made in Ohio, and the official duties incumbent upon me, I cannot make any more definite reply than to say that by the middle of October I hope to be able to set aside two or three days to be spent in your canvass at such places as you may think I can render the most satisfactory service. I have also received an invitation from Mr. Johnson, secretary of your committee. Please consider this an answer.

"Very respectfully, "John Sherman. "To General C. A. Arthur, "Chairman Republican State Committee, New York."

Shortly afterward I received a letter from Hon. John Jay, expressing regret at my acceptance, for the reasons I have stated. To this I replied as follows:

"October 4, 1879. "My Dear Sir:—Your note of the 2nd is received.

"I feel as you do that the nomination of Mr. Cornell, and the appointment of Mr. Arthur to conduct the canvass, has the look of a reproach to the President for their removal. If only their personal interests were involved, I should feel great indifference to their success, but it so happens that Republican success in New York is of such vital importance to the people of the United States, that their personal interest in the matter, and even the motive of the nomination and appointment, should be overlooked, with a view to secure the country against the return to power of the Democratic party.

"We must carry New York next year, or see all the results of the war overthrown and the constitutional amendments absolutely nullified. We cannot do this if our friends defeat a Republican candidate for governor fairly nominated, and against whom, there are no substantial charges affecting his integrity. Besides, the nomination of Mr. Cornell could easily have been prevented if the friends of the President and the administration had aided to defeat it. He was nominated by our acquiescence, and we should not now complain of it. The expediency of holding the meeting you propose, depends entirely upon the question whether or not it would aid the Republican cause this fall. I am inclined to think it would not, that such a meeting would deter Republicans from supporting the regular ticket and, therefore, is ill advised. I thus frankly state my opinion as you ask it, but without any desire in any way to influence that of others.

"Very truly yours, "John Sherman. "Hon. John Jay, Katonah, N. Y."

After the election in Ohio I received from General Arthur a list of appointments for me in New York, which if I had attempted to fill would have overtaxed my strength. Mr. Evarts had also been invited, but limited his acceptance to one speech to be made in Cooper Institute. I complained to him that it was not fair to request of me so many speeches where he, a citizen of that state, agreed to make but one. His answer was characteristic. He said: "Well, Mr. Sherman, when the people of New York wish my views upon public questions they arrange for a meeting in Cooper Institute, or some such place. I make the speech and it is printed and is read." I thought this, under the circumstances, a refined specimen of egotism, meaning that he had only to pronounce his opinion to attract universal attention and he need not therefore repeat his speech at any other place.

This incident recalls to my mind a specimen of his keen wit. Among the early meetings of the cabinet President Hayes announced three or four personal appointments that he intended to make, mainly in the foreign service, in the department of which Mr. Evarts was the head. Evarts seemed to be surprised at these appointments, and after some pause he said: "Mr. President, I have never had the good fortune to see the 'great western reserve' of Ohio, of which we have heard so much." For a moment Hayes did not perceive the quiet sarcasm of Mr. Evarts, which was a polite expression of his feeling that he should have been consulted about these nominations before they were announced. We all caught the idea and the President joined heartily in the laughter. Mr. Evarts is not only a man of keen wit, but is a great lawyer and able advocate. I learned, from my intimate association with him in the cabinet, and subsequently in the Senate as a member of the committee on foreign relations, to respect and love him.

On the 25th of October, when on my way to New York, at the request of General Kilpatrick I made a speech at Paterson, New Jersey, on the occasion of the ratification of the Republican nominations. In this speech I expressed my opinions upon the subject of fraudulent elections, especially in the south, and, while the government has not been able at any time to completely protect the ballot box in several states, the opinions I then expressed are still entertained. I believe the right of each lawful voter to vote in national elections should be enforced by the power of the national government in every state and territory of the Union. I said at this time:

"Now I want to serve notice on the Democratic party, that the Republican party has resolved upon two things, and it never makes up its mind upon anything until it is determined to put it through. We are going to see that every lawful voter in this country has a right to vote one honest ballot at every national election, and no more. If the Democratic party stands in the way, so much the worse for the Democratic party. If the south, rebellious as it is, stands in the way again, we will protect every voter in his right to vote wherever the constitution gives the right to vote. Local elections must be regulated by state laws. Southern voters may cheat each other as they please in local elections. The Republican party never trenched on the rights of states, and does not intend to.

"Whenever national officers or Congressmen are elected, those are national elections, and, under the plain provisions of the constitution, the nation has the right to protect them. The Republican party intends, if the present law is not strong enough, to make it stronger. In the south 1,000,000 Republicans are disfranchised. With the help of Almighty God, we intend to right that wrong. Congress has a right to regulate congressional elections. The Tweed frauds, reversing the vote of New York state in 1868, led to the passage of the first federal election law, breaking up false counts. Then the Mississippi plan was introduced in the south.

"If Congress was purged to-day of men elected by fraud and bloodshed in the south, the Democrats would be in a pitiful minority in the capital. At the last session the Democrats tried to repeal the election laws, and were met by veto after veto from the stanch Republican President. Then they tried to nullify existing laws. We must as firmly resist nullification now as when Jackson threatened 'by the eternal God' to hang the original nullifier, Calhoun. We must have free elections. We are determined to assert the supremacy of the United States in all matters pertaining to the United States, and to enforce the laws of the United States, come what will."

This declaration of mine at the time created a good deal of criticism, especially in the New York papers, but, in spite of this, my convictions have grown stronger with time that it is the imperative duty of the national government to protect the election of all federal officers, including Members of Congress, by wise conservative laws.

On the 27th of October I spoke in Cooper Institute, confining myself mainly to an exposition and defense of the financial policy of the administration. This was hardly needed in the city of New York though, as Evarts said of his speech, I knew what I said would be printed, and people who were not familiar with financial topics could read it. The commercial papers, while approving the general tenor of the speech, complained that I did not advocate the retirement of the legal tender notes of the government. They seemed then, as they do now, to favor a policy that would withdraw the government from all participation in furnishing a currency. I have always honestly entertained the opinion that the United States should furnish the body of circulating notes required for the convenience of the people, and I do yet entertain it, but the notes should always be maintained at parity with coin. In the cities generally, where banks have great influence and where circulating notes are superseded in a great measure by checks, drafts and clearing house certificates, the wants of the people for paper money secured by the highest sanction of law and by the promise and credit of the government are not appreciated. In this speech I referred to the banks as follows:

"They [the banks] are interwoven with all the commercial business of the country, and their loans and discounts form our most active and useful capital. . . . The abolition of the national banks would inevitably lead to the incorporation of state banks, especially in bankrupt states, where any expedient to make paper money cheap will be quickly resorted to. . . . It will open the question of the repeal of the provisions of the loan laws fixing a limit to the amount of United States notes, and thus will shock the public credit and raise new questions of authority which the Supreme Court would probably declare to be unconstitutional. Free banking open to all, with prompt and easy redemption, supplies a currency to meet the varying wants of different periods and seasons. Who would risk such a question to the changing votes of Congress?"

I must add, however, that I do not believe the banking system would be sustained by popular opinion unless the great body of our currency was in the form of United States notes or certificates based upon coin. If there is any profit in the circulation of such notes, it ought to inure to the government. The circulation of banks should only be equal to the local demands for currency and should always be amply secured, as now, by the deposit of United States bonds, or some substitute for these bonds equally valuable, when the national bonds shall be redeemed. This security ought not to extend beyond the amount of bank notes actually outstanding, leaving the security of deposits by individuals to depend upon the assets of each bank. The duty of the government is performed when it guards with undoubted security the payment of the circulating notes issued by the banks. In this speech I spoke of the resumption act and the history of resumption as follows:

"The resumption act was a Republican measure, supported, advocated and voted for by Republican Senators and Members, and without the aid of a single Democrat in either House of Congress. It has been adhered to and successfully executed by that party. The Republican party has won no victory more complete than the passage, execution and success of the resumption act. This measure was adopted in January, 1875, in the midst of the panic, when our paper money was worth only 85 cents on the dollar. It was a period of wild speculation and inflation. The rate of interest was higher than before or since—the government paying six per cent. in gold, corporations in fair credit from eight to ten per cent., and individuals from ten to twelve per cent. Recklessness in contracting debts was universal. Railroads were built where they were not needed; furnaces were put up in excess of all possible demands; and over-production and over-trading occurred in all branches of business. The balance of trade for ten years had been steadily against us, with an aggregate excess of imports over exports of over $1,000,000,000.

"The panic of 1873 put an end to all these wild, visionary schemes, and left the country prostrate and in ruin. All business enterprises were paralyzed. Congress, in a hopeless quandary, looked in vain for some way of escape from the bankruptcy which threatened every interest and every individual. Then it was the Republican party devised and placed upon the statute book the resumption act, and, against noisy opposition and continual speaking, steadily persevered in its execution.

* * * * * *

"Now that resumption is a success, Democrats say the Republican party did not bring it about, but that Providence has done it; that bountiful crops here and bad crops in Europe have been the cause of all the prosperity that has come since resumption. We gratefully acknowledge that Providence has been on the side of the Republican party, or rather, that, having sought to do right, we find ourselves supported by Divine Providence, and we are grateful to the Almighty for the plentiful showers and favorable seasons that brought us good crops; but we also remember that it was the passage of the resumption act, the steady steps toward resumption, the accumulation of the coin reserve, the economy of the people, and their adjustment of business affairs to the time fixed for resumption, that, with the blessings of Divine Providence, brought us resumption.

"We should be, and are, thankful to the Almighty, but we are under no thanks whatever to the Democratic party. It has not, for twenty- five years, had Providence on its side, but we may fairly infer that, as it has steadily resisted Providence and patriotic duty for more than twenty years, it must have had the devil on its side. Democrats can claim no credit, but stand convicted of a blundering mistake in abandoning the old and tried principles of their party, and following after strange gods with the hope of a brief and partial success. They have failed, and that dogma for hard money, which they abandoned, has been adopted by the Republican party, as the corner stone of its greatest success."

I spoke at Albany, Rochester, and Syracuse, and, on my way to Washington, at New Brunswick, New Jersey.

After the election in Ohio, I received several letters from members of the legislature, offering their support to me as a candidate for United States Senator, to be elected in January to succeed Mr. Thurman, for the term commencing on the 4th of March, 1881. Among them was a letter from L. M. Dayton, a member of the general assembly from Hamilton county, to which I replied as follows:

"Washington, D. C., November 2, 1879. "My Dear Sir:—Your note of the 30th ult., in which you inquire whether I will be a candidate for election as Senator of the United States in place of Senator Thurman, is received.

"Early last summer, when this subject was first mentioned to me by personal friends, I freely expressed my conviction that as the general assembly of Ohio had three times conferred upon me this high and much coveted honor, I ought not to stand in the way of others who might fairly aspire to that position. I am of the same opinion now. During the recent canvass I stated to several gentlemen who had been named in the public press as probable candidates, that I would not be a candidate, and I could not now recede from that position without just reproach.

"Please say so to your fellow members, and accept my hearty thanks for your partiality.

"Very truly yours, "John Sherman. "Hon. L. M. Dayton, Cincinnati, Ohio."

I also wrote the following letter to Senator A. B. Cole, of Portsmouth, in reply to a similar offer:

"Washington, D. C., November 11, 1879. "My Dear Sir:—Your very kind letter of the 10th inst. is received. I thank you again for your offer to support me for the Senate, but you will have seen from the letter I wrote to Colonel Dayton, that I have determined, under the circumstances stated therein, not to be a candidate, so that members may feel entirely free to follow their judgment in the selection of the Senator. I must be impartial between the several candidates.

"I thank you also for what you say about the nomination for the presidency. Such a nomination would be a very exalted honor, so much so that I ought not to do anything to promote or to defeat it. I would be very glad to get the hearty cordial support of the Ohio delegation, and that being granted I am perfectly willing to abide the decision of the national convention, and will be ready to support anyone who is nominated.

"I should be glad to see your son, and hope you will give him a letter of introduction to me.

"Very truly yours, "John Sherman. "Hon. A. B. Cole, Portsmouth, Ohio."

Cornell was elected Governor of New York, and with him a Republican legislature. The elections generally that fall were in favor of the Republican party, but, as both Houses of the 46th Congress were Democratic, President Hayes had to conduct executive business with a Congress not in political harmony with him until the 4th of March, 1881, when the term of Congress and of the President expired. I feel bound to say that no merely obstructive financial measures were adopted during that Congress.

The message of the President, communicated to Congress on the 1st of December, 1879, dealt with the usual topics of such a document; but, instead of commencing with our foreign relations as usual, he began by congratulating Congress on the successful execution of the resumption act and the funding of all the public debt redeemable, into bonds bearing a lower rate of interest. He recommended the suspension of the coinage of the silver dollar, and the retirement from circulation of United States notes with the capacity of legal tender. He held that the issue of such notes during the Civil War was not authorized except as a means of rescuing the country from imminent peril, and the protracted use of them as money was not contemplated by the framers of the law. While I did not concur in all the views stated by the President, especially as to the policy of retiring United States notes then in circulation, yet his general conclusions in favor of the coin standard were, in my view, sound and just. I was very willing to hold on to the progress made in making United States notes equivalent to coin rather than to attempt to secure their retirement from circulation.

In the report made by me as Secretary of the Treasury I stated my opinion that the existing law was ample to enable the department to maintain resumption upon the volume of United States notes then outstanding; but added, that in view of the large inflow of gold into the country, and the high price of public securities, it would seem to be a favorable time to invest a portion of the sinking fund in United States notes to be retired and canceled, and in this way gradually to reduce the maximum of such notes to the sum of $300,000,000, the amount named in the resumption act.

I would not make such a recommendation now, as I am convinced that United States notes based on coin in the treasury are the best form of currency yet devised, and that the volume might be gradually increased as the volume of business increases. Since resumption such notes have been maintained at par with coin by holding in the treasury coin to the amount of thirty per cent. of the notes outstanding. This coin, lying idle and yielding no interest, costs the government the interest on an equal amount of bonds, or a fraction over one per cent. on the sum of United States notes in circulation. These notes are a part of the debt of the United States, and if redeemed, must be paid by the issue of $346,000,000 of bonds. I see no reason why the people of the United States should not have the benefit of this cheap loan rather than the national banks, and there are many reasons why the issue of a like amount of notes by national banks cannot fill the place or perform the functions of United States notes. The issue of bank notes would be governed by the opinions and interest of the banks, and the amount could be increased or diminished according to their interests and without regard to the public good. As an auxiliary and supplement to United States notes, bank notes may be issued as now when amply secured by United States bonds, but it would be a dangerous experiment to confine our paper money to bank notes alone, the amount of which would depend upon the interest, hopes and fears of corporations which would be guided alone by the supposed interests of their stockholders.

There is another objection to a sole dependence on bank notes as currency: They cannot be made a legal tender either by the states or the United States, while it is settled by the Supreme Court that notes of the United States may be made a legal tender, a function that ought to belong to money.

I know that my views on this subject are not entertained by the influential class of our citizens who manage our banks, but in this I prefer the opinion and interest of the great body of our people, who instinctively prefer the notes of the United States, supported by coin reserves, to any form of bank paper that has yet been devised. The only danger in our present currency is that the amount may be increased to a sum that cannot be maintained at par with coin, but the same or a greater danger would exist if the volume of paper money should be left to the interested opinion of bankers alone.

It is sometimes claimed that neither the government nor banks should issue paper money, that coin only is money. It is sufficient to say that all commercial nations have been constrained by necessity to provide some form of paper money as a substitute for coin. The experience of the United States has proven this necessity and for many years our people were compelled to rely upon state bank notes as a medium of exchange, with resulting loss and bankruptcy. For the want of paper money at the commencement of the Civil War, the United States was compelled to issue its notes and to make them a legal tender. Without this the effort to preserve the Union would have utterly failed. With such a lesson before us it is futile to attempt to conduct the business of a great country like ours with coin alone. Gold can only be a measure or standard of value, but cannot be the current money of the country. Silver also can only be used as money for the small transactions of life, its weight and bulk forbidding its use in commerce or trade. The fluctuations in market value of these metals make it impossible to permit the free coinage of both at any ratio with each other without demonetizing one of them. The cheaper money will always be the money in circulation. Wherever free coinage now exists silver is the only money, while where gold is the standard, silver is employed as a subsidiary coin, maintained at par in gold by the mandate of the government and its receipt for or redemption in gold. The only proposed remedy for this fluctuation is an agreement by commercial nations upon a common ratio, but thus far all efforts for such an agreement have failed. If successful the result might not be as satisfactory as anticipated.

I urged, in my report, the importance of adjusting the coinage ratio of the two metals by treaties with commercial nations, and, until this could be done, of limiting the coinage of the silver dollar to such sum as, in the opinion of Congress, would enable the department to readily maintain the standard dollars of gold and silver at par with each other.

In this report I stated the refunding transactions already described, and recommended the refunding of all bonds of the United States in the same manner as they became redeemable. This was successfully executed by my successors in office. I was able to say truly of the treasury department, in conclusion:

"The organization of the several bureaus is such, and the system of accounting so perfect, that the financial transactions of the government during the past two years, aggregating $3,354,345,040.53, have been adjusted without question, with the exception of a few small balances now in the process of collection, of which it is believed the government will eventually lose less than $13,000, or less than four mills on each $1,000 of the amount involved."

The question of the legal tender quality of United States notes, discussed in my report, was followed, on the 3rd of December, by the introduction in the Senate of a resolution by Mr. Bayard as follows:

"Resolved, etc., That from and after the passage of this resolution the treasury notes of the United States shall be receivable for all dues to the United States excepting duties on imports, and shall not otherwise be a legal tender; and any of said notes hereafter reissued shall bear this inscription."

This resolution, while pending in the committee, was debated at some length, and reported back adversely on the 15th of January, 1880, by Mr. Allison, from a majority of the committee. Mr. Bayard presented the views of the minority in favor of the resolution. It was subsequently discussed at considerable length by Mr. Coke, of Texas, and Mr. Bayard, on opposite sides. No definite action was taken and the matter rested, and I do not recall that it was ever again brought before the Senate. I felt satisfied with the majority report, as I doubted the expediency or power of Congress to deny to these notes any of the qualities conferred upon them by the law authorizing their issue, as was the legal tender clause. The beneficial result of resumption was appreciated by both parties and there was no disposition of Congress to pass any legislation on the subject. The speech of Mr. Bayard, made on the 27th of January, 1880, was a careful and able review of the whole subject of legal tender, but it was evident that neither House of Congress agreed with him in opinion.

A bill in regard to refunding the debt maturing after the 1st of March, 1881, was introduced in Congress on the 27th of December, 1879, by Fernando Wood, chairman of the committee of ways and means of the House. It provided for a change of existing laws so as to limit the rate of interest upon the bonds to be issued in such refunding to not to exceed three and a half per cent. per annum. This bill, if it had been passed, would have prohibited the sale of all bonds for resumption, as well as for refunding, at a greater rate of interest than three and a half per cent. I opposed this proposition, as it would impair the power of maintaining resumption in case such bonds could not be sold at par, and the existing law did not prevent the secretary from selling those already authorized at a premium. No action was taken upon the bill by that Congress, and Mr. Windom, my successor, found no difficulty in refunding these bonds on more favorable terms without any change of existing law.

On the 30th of January, 1880, I appeared before the finance committee of the Senate in response to their invitation. The committee was composed of Senators Bayard (chairman), Kernan, Wallace, Beck, Morrill, Allison and Ferry, all of whom were present. Mr. Bayard stated that a number of propositions, upon which it was desired to obtain my views, had been submitted by Senator Beck, and then read them as follows:

"1. What reason, if any, there is for refusing to pass a bill authorizing the receipt of legal tenders for customs dues.

"2. Why the trade dollar should not be converted into a standard dollar.

"3. What has been the cost of converting the interest-bearing debt, as it stood July 14, 1870, to what it is now, including double interest, commissions, traveling expenses of agents, etc., and the use of public money by banks, and the value of its use, so as to determine whether the system should be continued or changed.

"4. The effect of the abolition of the legal tender quality of greenbacks upon the paper currency.

"5. The necessity for a sinking fund and how it is managed.

"6. Whether silver coin received in payment of customs duties has been paid out for interest on the public debt; and if not, why not."

Senator Allison desired to know if this interview was to be stenographically reported, and the committee decided that it should be.

My answers to these questions and the colloquy with the committee in respect to details cover fifty-four printed pages, and give by far the most comprehensive statement of treasury operations during the two or three years before that meeting, and suggestions for future legislation, that has been written or published. The length of the interview prevents its introduction in full, but a statement of some portions of it may be interesting. In answer to the first question I said:

"The act of February 25, 1862 (section 3694, R. S.), provides that all the duties on imported goods shall be paid in coin; and the coin so paid shall be set apart as a special fund to be applied to two purposes, one of which is the payment in coin of interest on the bonds of the United States, and the balance to the sinking fund.

"This is an obligation of the government that its coin revenue should be applied to the payment of interest on the public debt. So long as legal tender notes are maintained at par and parties are willing to receive them in payment of coin interest, there is no objection to receiving legal tender notes for customs dues.

"Since resumption it has been the practice of the department to thus receive them, but this practice can be kept up only as long as parties holding interest obligations are willing to accept the same notes in payment thereof. If, by any unforseen and untoward event, the notes should again depreciate in value below coin, the obligations of the government would still require that interest on the public debt be paid in coin; and if customs dues were payable in legal tender notes, the department would have no source from which to obtain the coin necessary to the payment of interest, for of course holders of interest obligations would not accept a depreciated currency when they were entitled by law to coin."

I reminded the committee that in my report of December, 1878, I stated that on the 1st of January following I would receive United States notes for customs duties. As these notes were redeemable in coin, it was unreasonable to require the holder of notes to go to one government officer to get coin for his notes to pay customs duties to another government officer. I held that the United States notes had become coin certificates by resumption, and should be treated as such. I informed them that I issued the order with some reluctance, and only after full examination and upon the statement of the Attorney General, who thought technically I could treat the note as a coin certificate. I called their attention to the fact that I had informed Congress of my purpose to receive United States notes for customs duties and had asked specific authority to do so, but no action was taken, and I was assured that none was needed. The conversation that followed showed that they all agreed that what I did was right. It was evidently better not to provide by specific law that the United States notes should be receivable for customs dues, for in case of an emergency the law would be imperative, while, if the matter was left to the discretion of the Secretary of the Treasury, he could refuse to receive notes for customs dues and compel their payment in coin.

This led to a long colloquy as to whether the time might come when the United States notes could not be redeemed in coin. I entered into a full explanation of the strength of the government, the amount of reserve on hand, the nature of our ability, and said: "Still we know that wars may come, pestilence may come, an adverse balance of trade, or some contingency of a kind which we cannot know of in advance may arise. I therefore think it is wise to save the right of the United States to demand coin for customs duties if it should be driven to that exigency."

The question then arose as to the propriety of confining redemption of notes to one place. Mr. Wallace inquired whether the government notes should not be receivable and interchangeable at every government depositary. I answered that the notes should be received everywhere at par with coin, but I doubted the propriety of paying coin for United States notes except at one place and that in New York, the natural center for financial operations, where most of the customs dues were paid and where coin could be most safely hoarded.

Mr. Beck examined me at considerable length, and, with his usual Scotch tenacity, insisted, in spite of the attorney general, that I was not authorized to receive legal tender notes for customs dues. He asked me by what authority I claimed this power. I quoted the third section of the resumption act, and gave him a copy of my circular letter to officers of customs, dated on the 21st of December, 1878, in which, after calling attention to that section, I said:

"By reason of this act, you are authorized to receive United State notes, as well as gold coin and standard silver dollars, in payment of duties on imports, on and after the first day of January, 1879.

"Notes thus received will in every instance be deposited with the treasurer, or some assistant treasurer of the United States, as are other collections of such duties, to be redeemed, from time to time, in coin, on government account, as the convenience of the service may demand."

Mr. Beck then said:

"I desire to know, Mr. Secretary, whether it is not better, in your opinion, that the Congress of the United States should prescribe the duties of executive officers, so that they can act in pursuance of law, rather than the executive officer should be acting on his own notions of what is best?"

I replied:

"I say yes, decidedly."

Mr. Beck inquired:

"Is not that what we are proposing to do now, by the passage of this law which I seek to have enacted, and are you not opposing that condition of things?"

I replied:

"An executive officer, when there is a doubt about the law, must give his own construction of it, but should, of course, readily conform to the action of Congress as soon as it is declared. The objection I make is not to the passage of a law, but that the bill as proposed applies it to a possible future state of affairs such as did not exist when this order was made and does not now."

The subject then turned to the exchange of trade dollars for standard dollars. Mr. Beck said: "I have introduced several bills to facilitate the exchange of trade for standard dollars." I said:

"The bill which I have here is a House bill. There is no objection in my mind to the object of this bill; that is, to provide for the exchange of the trade dollar for the standard silver dollar; the only point is whether the trade dollar shall be treated as bullion, or as a coined dollar of the United States. Now, I am clearly of the opinion that it ought to be treated as so much bullion, issued at the expense of merchants, for their convenience and benefit, and without profit to the United States, and therefore not entitled to any preference over other bullion, and we might say not to so much, because it was issued to private parties for their benefit and at their cost, but stamped by us merely to enable the coins to be used to better advantage in a foreign market. I have not, therefore, any objection to the bill if you allow us to pay the same for these trade dollars as for other bullion."

This reply led to a long examination about silver at home and in foreign markets, and the objections made to having two silver dollars, one coined for private persons, from bullion furnished by them, and the other coined for the United States from bullion purchased by it.

Mr. Beck next inquired what effect the abolition of the legal tender quality of the greenbacks would have on our paper currency. This led to a long colloquy between him and myself, in which all the laws relating to the subject and the practice of the government, from its organization to that time, were discussed.

On the question whether United States notes ought still to be a legal tender, I referred him to my report, in which I said: "The power of Congress to make them such was asserted by Congress during the war, and was upheld by the Supreme Court. The power to reissue them in time of peace, after they are once redeemed, is still contested in that court."

I soon found that Mr. Bayard and Mr. Beck were quite opposed to each other on this topic, and I suggested that I thought that the argument upon it should be between them. My own opinions were sufficiently stated in the report in which I submitted to Congress whether the legal tender should not be repealed as to all future contracts, and parties be left to stipulate the mode of payment. I said that United States notes should still be receivable for all dues to the government, and ample provision should be made to secure their redemption on demand.

The examination, or, rather, conference, took a wide range between the members of the committee and myself. Mr. Beck pressed me to express my opinion of the legal tender which was contained in the bill introduced by him, providing for a mandatory legal tender of all forms of money. I answered:

"I do not think, Mr. Senator, you ought to ask me that question, because that is a matter you are called upon to decide and pass upon in your sphere as a Senator. I would say, on the other hand, that I do not think it ought to have any such effect. I suppose, however, Mr. Bayard would very frankly tell you what the intention of the resolution is."

Mr. Bayard then said:

"I know one thing: That banks cannot compel me to receive their notes for debts due me, nor can any man compel me to receive them. If the government owes me my salary, I think they could, perhaps, pay me in the national bank notes, under the existing law, but you cannot compel the payment of a debt between private parties with it."

I said:

"If you will allow me, I should like to amplify a little on one point: I think if Congress would take up this question of the modification of the legal tender note and make certain rules of evidence (which would be clearly constitutional), which good lawyers undoubtedly approve, declaring that where a contract is made between parties upon the basis of United States notes, it shall be presumed by courts, in the affirmance of contracts, that the payment in United States notes shall be a sufficient compliance therewith, and that, in the absence of any absolute provision to the contrary, paper money, or promises to pay money, shall be a legal tender in discharge of any obligation."

In respect to the cost of refunding, the next subject of inquiry, I was able to give them full details, with all the orders of the treasury department from the 16th of January, 1878, until the close of these operations in the summer of 1879. Many of these details had not then been published, but I furnished the fullest information available. In response to an inquiry as to the amount of commissions paid to the national banks on account of the sale of the four per cent. bonds, a full table was exhibited of the subscriptions of, and commissions paid to, the twenty-six national banks chiefly engaged in this business, in which the total amount of sales made by them was shown to be $552,929,100, and the amount of commissions paid was $1,363,070.34. In exhibiting these tables I said:

"Here is a table showing the sales and commissions of certain banks. I have taken all banks who sold over $1,000,000. There were twenty- six of them. The First National Bank, having been always connected with the national securities and having been the agent of the syndicate, continued to be the agent of the foreign syndicate, and continued to have altogether the largest business. They sold of the four per cent. bonds $262,625,000. The sales of the other banks are kept here in the same way. The Bank of New York (National Banking Association), I think, was the next. It sold $57,259,500. The National Bank of Commerce sold $51,684,000; the National Bank of the State of New York sold $46,915,000, and so on down."

I called attention to the fact that in the last sale of about $200,000,000 four per cent. bonds, we received one-half of one per cent. premium, or a million dollars, which nearly covered the entire commissions paid to the twenty-six banks named. Full details were given of the various loans, and it was shown that the cost of selling the last loan was less expensive to the government, in proportion to the amount sold, than any previous loan.

In reference to the sinking fund, about which I was asked my opinion, I said it was the same old question that had been so often debated. I explained that a sinking fund is nothing but an obligation or promise, on the part of the government or an individual, to pay a certain amount annually of the principal of the debt in addition to the interest. In this way the debt is gradually liquidated and the annual interest lessened. A sinking fund promised by a government is nothing more or less than a name for the surplus revenue of the government. A government without a surplus revenue cannot possibly have a sinking fund. There is no way to pay a debt except by having an income above your expenditures, and you can call your surplus revenue a sinking fund if you choose. I said that under existing law the department was required to purchase one per cent. of the entire debt of the United States each fiscal year, and to set the amount apart as a sinking fund, and to compute interest thereon to be added with the amount to be subsequently purchased each year. This act can only be construed as an authority to purchase the debt in case of surplus revenue for the purpose.

In practice, while keeping a book account with the sinking fund, we have reduced the debt by the application of surplus revenue more rapidly than if the requirements of the sinking fund had been literally complied with. At several periods we, in fact, did not reduce the debt, but actually increased it, and especially within the last two years, but in other years of prosperity, when the revenues exceeded our expenditures, we were able to pay a much larger amount of the debt than the sinking fund required by law.

Mr. Beck said: "I propose to inquire pretty carefully, before we get through with this interview, concerning the immense reduction of the public debt which has been made, of over $700,000,000, from the highest point down to the present, so that we may be governed in the future taxation by actual requirements of the public service." He expressed his wish, after he had carefully examined the interview thus far, to continue it at a future day, but I was not again called upon.

CHAPTER XL. THE PRESIDENTIAL NOMINATION IN 1880. Talk of Grant for President for a Third Term—His Triumphal Return from a Trip Around the World—The Candidacy of Mr. Blaine and Myself —Many of My Opponents Those Who Disagreed with Me on Financial Questions—Accused of Being a Catholic and of Using Patronage to Aid in My Nomination—My Replies—Delay in Holding the Ohio State Convention—My Interview with Garfield—Resolution of the State Convention in My Favor—National Convention at Chicago, on June 2, 1880—Fatal Move of Nine Ohio Delegates for Blaine—Final Nomination of Garfield—Congratulations—Letter to Governor Foster and to Garfield—Wade Hampton and the "Ku-Klux Klan."

During the entire period of this session of Congress the nomination for President by the Republican national convention was naturally the chief subject of interest in political circles. General Grant returned from his voyage around the world arriving in San Francisco in December, 1879, and from that time until he reached Washington his progress was a grand popular ovation. He had been received in every country through which he passed, especially in China and Japan, with all the honors that could be conferred upon a monarch. He made no open declaration of his candidacy, but it was understood that he was very willing to again accept the office of President. His friends openly avowed their intention to support him, and answered the popular objection against a third term by the fact that a term had intervened since he last held the office. Mr. Blaine was also an avowed candidate and had strong supporters in every part of the Union. My name was mentioned as a candidate, and it was generally supposed that one of the three would be the nominee of the Republican convention. I soon found that the fact that I held an office which compelled me to express my opinions was a drawback rather than a benefit, and, while I had the natural ambition to attain such a distinction, I was handicapped by my official position.

The friends of General Grant succeeded in getting control of the national committee and could dictate the time and place for holding the convention. Senator Cameron was chosen chairman of that committee. He openly avowed his preference for the nomination of General Grant, and exercised all his influence and power to promote it. It was decided to hold the convention on the 2nd of June, 1880, at Chicago.

The chief topic of all the newspapers and politicians was the merits and demerits of the three candidates then recognized as the persons from whom the choice was to be made. Every charge against either the personal character or conduct of each was canvassed with the broadest license, and often with great injustice. The life and conduct of General Grant were analyzed, and praised or blamed according to the bias of the speaker or writer. Mr. Blaine always had a warm and ardent support by the younger Republicans in every part of the United States. His brilliant and dashing manner and oratory made him a favorite with all the young and active politicians, but, as he was a bold and active fighter, he had enemies as well as friends. My strength and weakness grew out of my long service in the House, Senate and cabinet, but, as my chief active work was connected with the financial questions, upon which men of all parties differed widely, I had to encounter the objections of all who were opposed to my views on these questions. The idea was that in the certain contest between Grant and Blaine I might be nominated, in case either of them should fail to receive a majority of the votes cast in the convention.

It is scarcely worth while to point out the changes of opinion during the popular discussion that preceded the meeting of the convention of which every newspaper was full, the discussion being universal. Votes were taken and expression of opinion sought in every community in the United States.

My letter book at this time became a curious mixture of business and politics, so that I was early compelled to ask two of my personal friends to take an office, which I furnished them in the Corcoran building in Washington, to answer such letters as grew out of the contest, and as a place where conferences could be held by persons interested in my nomination. In this way I severed all connection between my duties in the treasury and the necessary correspondence caused by my being named as a candidate for President. I was at once charged in the newspaper and even by personal letters, with all sorts of misdemeanors, of which I was not guilty, but which I felt it a humiliation to reply to or even to notice. Among the first was a statement that in some way or other I was under the influence of the Catholic church, and was giving Catholics an undue share of appointments. My answer is here inserted, not as important, but as a specimen of many such communications upon various subjects:

"March 1, 1880. "My Dear Sir:—Your note of the 20th is received.

"I appreciate your kindness and frankness and will be equally frank with you.

"There is not one shadow of ground for the suspicion stated by you. I was born, bred, educated and ingrained as a Protestant and never had any affinity, directly or indirectly, with the Catholic church, but share the common feelings and prejudices of Protestants against the special dogmas and rites of that church. Still I believe the Catholics have as good a right to their opinions, their mode of worship, and religious belief as we have, and I would not weaken or impair the full freedom of religious belief, or make any contest against them on account of it for all the offices in Christendom. I have no sympathy whatever with the narrow dogmatic hate and prejudice of Mr. Cowles on this subject, though no doubt much of this is caused by the unfortunate fact that his daughter has become a Catholic, and I am charitable enough to take this into consideration when thinking of him. Mrs. General Sherman, it is true, is a Catholic. She was born so and will remain so. She is a good Catholic, however, in good wishes and good works, but has also too much of the dogmatism and intolerance of a sectarian for my ideas. She neither claims to have nor has any sort of influence over me.

"It is a mean business to get up such a prejudice against me when men are so ashamed of it that they are afraid to avow it.

"Very truly yours, "John Sherman. "Hon. Geo. H. Foster, Cleveland, Ohio."

Another allegation made was that I was using the patronage of my office to aid in my nomination. In regard to this I wrote as follows to a friend:

"I think the impression has been made upon the public mind that the patronage of this department has been used in my favor. This ought to be met. Of the two men who parcel out the patronage of this department, one, General Raum, commissioner of internal revenue, is a known personal friend of General Grant, appointed by him, and the great majority of the officers under that bureau are believed to be for General Grant. I have not sought to control any of them. McCormick, my first assistant secretary, was a known Blaine man. The second, Hawley, was a known personal friend of General Grant, and recently resigned to run for nomination as Governor of Illinois. McPherson, a known Blaine man, was chief of the bureau of engraving and printing, which employs some seven hundred people. The officers named have practically made all the appointments in the treasury other than the presidential ones. Probably no one who ever held my position has ever been so utterly indifferent to the distribution of patronage, except that I always insisted that good Republicans should be appointed to every position, small or great. I never inquired who they were for for President. In official letters, a copy of one of which I could furnish you if desired, I gave distinct instructions that I would not permit anyone to remain in the service who was making himself obnoxious to citizens generally, by pressing my claims or advocating my nomination for President by the next national convention, or by opposing me."

I also soon learned that nearly every applicant whose appointment I could not give or secure harbored this as a reason why I should not be nominated for President, and in three or four cases where the applicants were men of influence they opposed the selection of delegates friendly to me. I do not mention any names, for most of these gentlemen, years afterwards, became my warm friends.

I early announced that unless the State of Ohio would give me a substantial indorsement, my name would not be presented to the convention. James S. Robinson was the chairman of the state committee and A. L. Conger was a prominent member. They disagreed as to the time of holding the state convention for the appointment of delegates to the national convention, which my friends were anxious to have at as early a period as possible, so that the position of Ohio might be known to, and possibly influence the action of, other states. The disagreement between these two gentlemen resulted in a postponement of the convention until a period so late that before it met most of the delegations were selected by the other states. That was thought to be inimical to my success, and led to ill-will and contention. Governor Dennison and Governor Foster had frankly and openly avowed their purpose to support my nomination, and actively did so. They advised me of the condition of opinion from time to time, and early represented that I might reasonably expect the support of all the districts, except perhaps those represented by Garfield and McKinley, and the Toledo district.

I went to Mansfield on private business about the latter part of March, and as usual was called upon to make a speech, which I did, at Miller's Hall, on the 31st of March, and which was reported in full at the time. I stated my position in regard to the nomination, as follows:

"By the course of recent events, and not by my own seeking, my name is mentioned among those from whom the Republican party will select one to carry its banner in the approaching presidential contest. It is not egotistic to state this fact, and it would not be manly to shrink from the criticism and scrutiny which such a choice necessarily invites and provokes.

"I accepted the position without a pretense of mock modesty, because I do not think it right to allow friends to put themselves to trouble on my account without a frank avowal that I was willing to accept, and without delaying until certain of success; but with a firm determination not to detract from the merits or services of others, nor to seek this lofty elevation by dishonorable means or lying evasions or pretense. In this way, and in this way only, am I a candidate; but with great doubt whether, if nominated, I would meet the expectation of friends, and resolved in case of failure that I will abide, cheerfully and kindly, by the choice of the convention.

"There is one condition, scarcely necessary to state, upon which my candidacy depends, and that is, if the Republicans of Ohio do not fairly and fully, in their convention, express a preference for me, and support me with substantial unanimity in the national convention, my name will not be presented to that convention with my consent.

"This, fellow-citizens, is about all, and is perhaps more than I ought to say about personal matters, for in the great contest in which we are about to engage, the hopes, ambitions, and even the lives, of men, are of but little account compared with the issues involved."

I proceeded, then, to discuss the political questions of the day.

During the month of April delegates were selected from the different congressional districts of the state to attend the state convention, to meet on the 28th of that month. Prior to the convention the question of the nomination was the subject of discussion in every district. The sentiment in my favor was clearly expressed in nearly every county or district of the state. On the 8th of April I wrote the following letter to a friend:

"McKinley is still in Ohio, and I presume will be there for some days. I have to-day written to him at Canton covering the points you name. You had better write to him yourself giving the list of appointments desired.

"There is a strong feeling that Garfield, in order to save his district, should go to the Chicago convention as a delegate. He is placed in a very awkward attitude now. If this district should be against my nomination it would be attributed to either want of influence on his part, or, what is worse, a want of sincerity in my support. In view of the past this would be a very unfortunate thing for him. This is a delicate matter for me to take any part in, and I leave it entirely to your good judgment and kind friendship."

While in Ohio I had a consultation, at Columbus, with Governor Foster, ex-Governor Dennison, and a number of other personal friends, all of whom expressed great confidence that by the time the state convention met, the friendly feeling in favor of Blaine, in some of the districts of Ohio, would be waived in deference to the apparent wishes of the great majority. In that event, in case my nomination should prove impracticable, the whole delegation could be very easily changed to Mr. Blaine. As to General Grant, though he had many warm personal friends in Ohio, yet, on account of objections to a third term, very few desired his nomination.

Prior to the state convention I had an interview with General Garfield which he sought at my office in the department, and he there expressed his earnest desire to secure my nomination and his wish to be a delegate at large, so that he might aid me effectively. He had been chosen, with little or no opposition, United States Senator, to fill the place of Thurman, whose term expired March 4, 1881. I had not a doubt of the support of Governor Foster, with whom I had been in close correspondence, and who expressed a strong desire for my nomination. I was permitted practically to name the four delegates at large, and had implicit confidence that these delegates would take the lead in my behalf.

The state convention, which met on the 28th of April, was exceptionally large, and was composed of the leading Republicans of Ohio, who proceeded at once to the business before them. The persons named by the convention as delegates at large to the national convention, to assemble in Chicago on June 2, were William Dennison, James A. Garfield, Charles Foster and Warner M. Bateman, who were instructed for me. The following resolution of the convention expressed the preference of the Republicans of Ohio in favor of my nomination, and recommended that the vote of the state be cast for me:

"Resolved, That the great ability, invaluable services, long experience, full and exalted character, and unwavering fidelity to Republican principles of our distinguished fellow-citizen, John Sherman, entitle him to the honors and confidence of the Republican party of Ohio, and of the country. His matchless skill and courage as a financier have mainly contributed to accomplish the invaluable and difficult work of resumption and refunding the public debt, and made him the trusted representative, in public life, of the business interests of all classes of the American people. He has been trained from the beginning of his public life in advocacy of the rights of man, and no man has been more unfaltering in his demand that the whole power of the government should be used to protect the colored people of the south from unlawful violence and unfriendly local legislation. And in view of his services to his country, and his eminent ability as a statesman, we, the Republican party of Ohio, present him to the Republican party of the country, as a fit candidate for president, and respectfully urge upon the Republican convention at Chicago, his nomination, and the district delegates are respectfully requested to vote for his nomination."

The trend of public sentiment, as shown by the newspaper, indicated that Grant and Blaine would each have a very strong following in the national convention, but that the contest between them might lead to my nomination. After the state convention, it was generally assumed that I would receive the united vote of the delegation in conformity with the expression of opinion by the convention. During this period a few leading men, whose names I do not care to mention, made a combination of those unfriendly to me, and agreed to disregard the preference declared by the state convention.

During the month of May the feeling in my favor increased, and many of the leading papers in New York and in the eastern states advocated my nomination as a compromise candidate.

At this time I was in constant communication with General Garfield, by letters and also by interviews, as we were both in Washington. On the 10th of May he wrote me:

"I think it will be a mistake for us to assume a division in the Ohio delegation. We should meet and act as though we were of one mind, until those delegates who are hostile to you refuse to act with us, and if we fail to win them over, the separation will be their act, not ours."

The national convention met June 2, 1880. It was called to order in the Exposition Hall, Chicago, by Senator J. Donald Cameron, and a temporary organization, with Senator George F. Hoar as president, was soon perfected. An effort was made by the friends of General Grant to adopt the unit rule, which would allow a majority of each state to determine the vote of the entire delegation. This was rejected.

Four days were occupied in perfecting the permanent organization, and the nomination of candidates for President. During this time a minority of nine of the delegation of Ohio announced their determination to vote for Blaine. This was a fatal move for Blaine, and undoubtedly led to his defeat. Nearly four-fifths of the delegation were in favor of my nomination, in pursuance of the express wishes of the Ohio convention, but they were all friendly to Blaine, and whenever it should have become apparent that my nomination was impracticable, the whole delegation could easily have been carried for him without a division, and thus have secured his nomination. The action of those nine delegates, who refused to carry out the wishes of the state convention, prevented the possibility of the vote of Ohio being cast for Mr. Blaine.

Long before the convention I had declared, in a published interview, that "Blaine is a splendid man, able and eminently fit for President. If nominated he will find no one giving him a heartier support than myself." We were connected by early ties of association and kinship, and had been and were then warm friends. Blaine, when confident of the nomination, said of me: "To no living man does the American people owe a deeper debt of gratitude than to John Sherman, for giving them resumption with all its blessings. As Secretary of the Treasury he has been the success of the age. He is as eminently fit for President as any man in America, and should he be nominated all I am capable of doing will be done to aid in his election. Should it be my fortune to become President, or should it fall to the lot of any Republican, no one elected could afford to do less than invite Secretary Sherman to remain where he is." The folly of a few men made co-operation impracticable. I received opposition in Ohio from his pretended friends, and he therefore lost the Ohio delegation, which, but for this defection, would have made his nomination sure had I failed to receive it.