A bushel of potatoes that formerly sold for a dollar now sells at two dollars. A farmer who has mortgaged his farm for $1,000 and who relies upon his sales of potatoes to pay off his debt is highly benefited by the change, while the creditor is correspondingly harmed. The debtor is obliged to raise only half as many potatoes; the creditor receives money that buys half the commodities that could have been purchased with his money at the time of the loan.

On the other hand, suppose the number of pieces of money is instantly halved and all other factors continue unchanged. There is now twice as great a demand for each piece, it becomes more desirable and will purchase more goods. Prices, that is to say, go down. Dollar potatoes now sell for fifty cents. The debtor farmer must grow twice as many potatoes as he had contemplated; the creditor finds that he receives money that has doubled in purchasing power.

It has already been said that the quarter century after the war was, in the main, a period of falling prices. The farmer found the size of his mortgage, as measured in bushels of wheat and potatoes, growing steadily and relentlessly greater. The creditor received a return which purchased larger and larger quantities of commodities. The debtor class was mainly in the West; the creditors, mainly in the East. The westerners desired a larger quantity of money which would, as they believed, send prices upward; the East, depending upon similar reasoning, desired a contraction in supply. The former were called inflationists; the latter, contractionists. Much of the monetary history of the country after the Civil War was concerned with the attempt of the inflationists to expand the supply of currency, and the contractionists to prevent inflation.

The intellectual background of the twenty-five years after the war, so far as it can be considered at this point, was to be found mainly in the development of education and the growth of the newspaper and periodical. Before the Civil War, except in the South, the old-time district school had given way, in most states, to graded elementary schools, supported by taxation. After the war the southern states made heroic efforts to revive education, in which they were aided by such northern benefactions as the Peabody Educational Fund of $2,000,000 established in 1867. In the northern states the schools were greatly improved, free text-books became the rule, the free public high-schools replaced the former private academies, and normal schools for the training of teachers were established. The period was also marked by the foundation of scores of colleges and especially of the great state universities. The Morrill Act of July 2, 1862, had provided for a grant to each state of 30,000 acres of public land for every senator and representative in Congress to which the state was entitled. The land was to be used to promote education in the agricultural and mechanic arts, and in the natural sciences. The advantages of the law were quickly seen, and between 1865 and 1890 seventeen state universities were started, most of them in the Middle and Far West. Many of these underwent a phenomenal growth and had a great influence on the states in which they were established.

The newspaper press was also undergoing a transformation in the quarter century after the war. The great expansion of the numbers and influence of American newspapers before and during that struggle had been due to the ability of individuals. James Gordon Bennett had founded the New York Herald, for example, in 1835, and from then on the Herald had been "Bennett's paper." Similarly the Tribune had represented Horace Greeley and the Times, Henry J. Raymond. The effect of the war was to develop technical resources in gathering news, to necessitate a larger scale of expenditure and a wider range of information, and to make a given issue the work of many men instead of one. Raymond died in 1869, Greeley and Bennett in 1872; and although the Sun was the embodiment of Charles A. Dana until his death in 1897, the Nation and the Evening Post of Edwin L. Godkin until 1899, nevertheless the tendency was away from the newspaper which reflected an individual and toward that which represented a group; away from the editorial which expressed the views of a well-known writer, to the editorial page which combined the labors of many anonymous contributors. The financial basis of the newspaper also underwent a transition. As advertising became more and more general, the revenues of newspapers tended to depend more on the favor of the advertiser than upon the subscriber, giving the former a powerful although indirect influence on editorial policies.

The influence of the press in politics was rapidly growing. A larger number of newspapers became sufficiently independent to attack abuses in both parties. The New York Times and Thomas Nast's cartoons in Harper's Weekly were most important factors in the overthrow of the Tweed Ring in New York City, and in the elections of 1884 and later, newspapers exerted an unusual power. Press associations in New York and the West led the way to the Associated Press, with its wide-spread cooperative resources for gathering news.

As important as the character of the press, was the amount and distribution of its circulation. Between 1870 and 1890 the number of newspapers published and the aggregate circulation increased almost exactly threefold—about five times as fast as the population was growing. In the latter year the entire circulation for the country was over four and a half billion copies, of which about sixty per cent. were dailies. So great had been the growth of the press during the seventies that the census authorities in 1880 made a careful study of the statistical aspects of the subject. It appeared from this search that newspapers were published in 2,073 of the 2,605 counties in the Union. Without some such means of spreading information, it would have been impossible to conduct the great presidential campaigns, in which the entire country was educated in the tariff and other important issues.

The expansion of the press is well exemplified by the use of the telegraph in the spread of information. When Lincoln was nominated for the presidency in 1860, a single telegraph operator was able to send out all the press matter supplied to him. In 1892 at the Democratic convention, the Western Union Telegraph Company had one hundred operators in the hall. Mechanical invention, meanwhile, was able to keep pace with the demand for news. The first Hoe press of 1847 had been so improved by 1871 that it printed ten to twelve thousand eight-page papers in an hour, and twenty-five years later the capacity had been increased between six and sevenfold.

BIBLIOGRAPHICAL NOTE

Nearly all material on party history is so partisan that it should be read with critical scepticism: Francis Curtis, The Republican Party, 1854-1904 (2 vols., 1904); J.D. Long, Republican Party (1888); for the Independent attitude, consult Harper's Weekly during the campaign of 1884. As the Republicans were in power most of the time from 1865-1913, there is more biographical and autobiographical material about Republicans than about Democratic leaders. Local studies of political conditions and the social structure of the parties are almost entirely lacking. On the personal side, the following are essential: G.F. Parker, Writings and Speeches of Grover Cleveland (1892); T.E. Burton, John Sherman (1906); J.B. Foraker, Notes of a Busy Life (2 vols., 1916), throws light on the ideals and practices of a politician; G.F. Hoar, Autobiography of Seventy Years (2 vols., 1903), gives the New England Republican point of view; Rollo Ogden, Life and Letters of E.L. Godkin (2 vols., 1907); G.F. Parker, Recollections of Grover Cleveland (1909), is useful, but sketchy, there being as yet no thorough biography of Cleveland; T.C. Platt, Autobiography (1910), interestingly portrays the philosophy of a machine politician, but should be read with care; John Sherman, Recollections of Forty Years in House, Senate and Cabinet (2 vols., 1895); Edward Stanwood, James G. Blaine (1905), is highly favorable to Blaine; W.M. Stewart, Reminiscences (1908), is interesting, partisan and unreliable. For a general estimate of the autobiographical material of the period, consult History Teachers' Magazine (later the Historical Outlook), "Recent American History Through the Actors' Eyes," March, 1916.

Jesse Macy, Party Organisation and Machinery (1904); M.G. Ostrogorski, Democracy and Political Parties (2 vols., 1902), gives a keen and pessimistic account of American political practices in vol. II; J.A. Woodburn, Political Parties and Party Problems in the United States (1903, and later editions) gives a succinct account in good temper.

For the Fourteenth Amendment: C.G. Haines, American Doctrine of Judicial Supremacy (1914); C.W. Collins, The Fourteenth Amendment and the States (1912), is a careful study, which is critical of the prevailing later interpretation of the Amendment. The Slaughter House case, giving the earlier interpretation is in J.W. Wallace, Cases argued and adjudged in the Supreme Court (Supreme Court Reports), XVI, 36.

L.H. Haney, History of Economic Thought (1911), on laissez faire; J.L. Laughlin, Principles of Money (1903); and Irving Fisher, Why is the Dollar Shrinking (1914), present two sides of the quantity theory of money.

Most useful on the development of education are F.P. Graves, A History of Education in Modern Times (1913); and E.G. Dexter, History of Education in the United States (1904).

The growth of newspapers is described in The Bookman, XIV, 567-584, XV, 26-44; see also Rollo Ogden, Life and Letters of Godkin, already mentioned; G.H. Payne, History of Journalism in the United States (1920); J.M. Lee, History of American Journalism (1917). The effects of education and the press on American social, economic and political life have not been subjected to thorough study.

* * * * *

[1] Addresses on Government and Citizenship, 202.

[2] In practice, new elements do enter into the situation so that the theory requires much qualification. Cf. Taussig, Principles of Economics (1915), I, ch. 18.



CHAPTER V

THE NEW ISSUES

Out of the economic and political circumstances which have just been described, there were emerging between 1865 and 1875 a wide variety of national problems. Such questions were those concerning the proper relation between the government and the railroads and industrial enterprises; the welfare of the agricultural and wage-earning classes; the assimilation of the hordes of immigrants; the conservation of the resources of the nation in lumber, minerals and oil; the tariff, the financial obligations of the government, the reform of the civil service, and a host of lesser matters. The animosities aroused by the war, however, and the insistent nature of the reconstruction question almost completely distracted attention from most of these problems. Only upon the tariff, finance and the civil service did the public interest focus long enough to effect results.

The tariff problem has periodically been settled and unsettled since the establishment of the federal government. Just previous to the war a low protective tariff had been adopted, but the outbreak of the conflict had necessitated a larger income; and the passage of an internal revenue act, together with a higher protective tariff, had been the chief means adopted to meet the demand. By 1864 the country had found itself in need of still greater revenues, and again the internal and tariff taxes had been increased. These acts were in force at the close of the war. The internal revenue act levied taxes upon products, trades, and professions, upon liquors and tobacco, upon manufactures, auctions, slaughtered cattle, railroads, advertisements and a large number of smaller sources of income.

The circumstances that had surrounded the framing and passage of the tariff act of 1864 had been somewhat peculiar. The need of the nation for revenue had been supreme and there had been no desire to stint the administration if funds could bring the struggle to a successful conclusion. Congress had been willing to levy almost any rates that anybody desired. The combination of a willingness among the legislators to raise rates to any height necessary for obtaining revenue, and a conviction on their part that high rates were for the good of the country brought about a situation eminently satisfactory to the protectionist element. There had been no time to spend in long discussions of the wisdom of the act and no desire to do so; and moreover the act had been looked upon as merely a temporary expedient. It is not possible to describe accurately the personal influences which surrounded the passage of the law. It is possible, however, to note that many industries had highly prospered under the war revenue legislation. Sugar refining had increased; whiskey distilling had fared well under the operation of the internal revenue laws; the demands of the army had given stimulus to the woolen mills, which had worked to capacity night and day; and the manufacture and use of sewing machines, agricultural implements and the like had been part of the industrial expansion of the times. Large fortunes had been made in the production of rifles, woolen clothing, cotton cloth and other commodities, especially when government contracts could be obtained. Naturally the tax-levying activities of Congress had tended to draw the business interests together to oppose or influence particular rates. The brewers, the cap and hat manufacturers, and others had objected to the taxes on their products; the National Association of Wool Manufacturers and the American Iron and Steel Association had been formed partly with the idea of influencing congressional tariff action.

After the close of the war, the tariff, among other things, seemed to many to require an overhauling. Justin S. Morrill, a member of the House Committee on Ways and Means, and one of the framers of the act of 1864, argued in favor of the protective system although he warned his colleagues:

At the same time it is a mistake of the friends of a sound tariff to insist upon the extreme rates imposed during the war, if less will raise the necessary revenue.... Whatever percentage of duties were imposed upon foreign goods to cover internal taxes upon home manufactures, should not now be claimed as the lawful prize of protection where such taxes have been repealed.... The small increase of the tariff for this reason on iron, salt, woolen, and cottons can not be maintained except on the principle of obtaining a proper amount of revenue.

Sentiment was strong against the tariff in the agricultural parts of the West and especially in those sections not committed to wool-growing. Great personal influence was exerted on the side of "tariff-reform" by David A. Wells, a painstaking and able student of economic conditions who was appointed special commissioner of the revenue in 1866. As a result of his investigations he became converted from a believer in protection to the leader of the opposition, and his reports had a considerable influence in the formation of opinion in favor of revision. The American Free Trade League was formed and included such influential figures as Carl Schurz, Jacob D. Cox, Horace White, Edward Atkinson, E.L. Godkin, editor of The Nation, and many others. William B. Allison and James A. Garfield, both prominent Republican members of the House, were in favor of downward revision.

In 1867 a bill providing for many reductions passed the Senate as an amendment to a House bill which proposed to raise rates. Far more than a majority in the House were ready to accept the Senate measure, but according to the rules it was necessary to obtain a two-thirds vote in order to get the amended bill before the House for action. This it was impossible to do. Nevertheless, the wool growers and manufacturers were able "through their large influence, persistent pressure and adroit management" to procure an act in the same session which increased the duties on wool and woolens far above the war rate. In 1869 the duties on copper were raised, as were those on steel rails, marble, flax and some other commodities in 1870.

The growth of the Liberal Republican movement in 1872, with its advocacy of downward revision, frightened somewhat the protectionist leaders of the Republican organization. It was believed that a slight concession might prevent a more radical action, and just before the campaign a ten per cent reduction was brought about. In 1873 the industrial depression so lowered the revenues as to present a plausible opportunity for restoring duties to their former level in 1875, where they remained for nearly a decade.

The lack of effective action on the part of the tariff reformers of both parties was due to a variety of causes. In the years immediately following the war, the Republicans in Congress were more interested in their quarrel with President Johnson than in tariff reform. Furthermore, the unpopular internal revenues were being quickly reduced between 1867 and 1872, and it was argued that a simultaneous reduction of import taxes would decrease the revenue too greatly. Moreover there was no solidarity among the Democrats, the South was discredited, and at first not fully represented. Wells was driven out of office in 1870, the Liberal Republican movement was a failure, the protected manufacturers knew precisely what they wanted, they knew how to achieve results and some of them were willing to employ methods that the reformers were above using. As time went on and the country was, in the main, rather prosperous, many people and especially the business men made up their minds that the war tariffs were a positive benefit to the country. For these reasons a war policy which had generally been considered a temporary expedient became a permanent political issue and a national problem.

The positions of the two political parties on the tariff were not sharply defined during the ten years immediately following the war. The Democrats seemed naturally destined for the role of revisionists because of their party traditions, their support in the South—ordinarily a strong, low-tariff section—and because they were out of power when high tariffs were enacted. Yet the party was far from united on the subject. Some prominent leaders were frankly protectionists, such as Samuel J. Randall of Pennsylvania, who was Speaker of the House for two terms and part of another. The party platform ordinarily was silent or non-committal. In 1868, for example, the Democratic tariff plank was wide and generous enough for a complete platform. The party stood for

a tariff for revenue upon foreign imports, and such equal taxation under the internal revenue laws as will afford incidental protection to domestic manufacturers, and as will, without impairing the revenue, impose the least burden upon, and best promote and encourage, the great industrial interests of the country.

In 1872 the "straight" Democrats, that is those who refused to support Greeley, were for a "judicious" revenue tariff; but in 1876 the party denounced the existing system as "a masterpiece of injustice, inequality and false pretence." Democratic state platforms were even less firm; in fact, the eastern states seemed committed to protection. In Congress, however, most of the opposition to the passage of tariff acts was supplied by the Democrats.

The attitude of the Republicans was more important, because theirs was the party in power. There was, as has been shown, a strong tariff-reform element, and in some of the conventions care seems to have been taken to avoid any definite statement of principles—doubtless on account of the well-known differences in the party—and for many years there was no clearly defined statement of the attitude of the organization. Yet it must be emphasized that Republicans were usually protectionists in the practical business of voting in Congress. Skillful Republican leaders gave way a little in the face of opposition but regained the lost ground and a little more, after the opposition retreated. Since the war-tariffs had been passed under Republican rule, it was easy to clothe them with the sanctity of party accomplishments.

Fully as technical as the tariff problem, and presenting a wider range for the legislative activities of Congress, was the financial situation in which the country found itself in 1865. The total expenditures from June 30, 1861 to June 30, 1865 had been somewhat more than three and one-third billions of dollars, an amount almost double the aggregate disbursements from 1789 to 1861. Officers accustomed to a modest budget and used to working with machinery and precedents which were adapted to the day of small things, had been suddenly called upon to work under revolutionized conditions. Prom the point of view of expense, merely, one year's operations during the war had been equivalent to thirty-six times the average outlay of the years hitherto. As has been shown, the major part of the income necessary for meeting the increased expenses had been obtained by means of the tariff and internal revenue taxes.

The tariff worked to the advantage of many people, and its retention was insistently demanded by them; the internal revenue taxes were disliked, and few things were more popular after the war than their reduction. In 1866 an act was passed which lowered the internal revenue by an amount estimated at forty-five to sixty millions of dollars. In succeeding years further reductions were made, so that by 1870 the scale was low enough to withstand attacks until 1883.

The national debt was the source of more complicated questions. It was composed, on June 30, 1866, of a variety of loans carrying five different rates of interest and maturing in nineteen different periods of time. Parts of it had been borrowed in times of distress at high rates; but after the struggle was successfully ended, the credit of the government was good, and enough money could be obtained at low interest charges to cancel the old debt and establish a new one with the interest account correspondingly reduced. Hugh McCulloch and John Sherman as secretaries of the treasury were most influential in accomplishing this transition, and by 1879 the process was completed and a yearly saving of fourteen million dollars effected.

Differences of opinion concerning the kind of money with which the principal of the debt should be paid brought this matter into the field of politics. When the earliest loans had been contracted, no stipulation had been made in regard to the medium of payment. Later loans had been made redeemable in "coin," without specifying either gold or silver; while still later bonds had been sold under condition that the interest be paid in coin, although nothing had been said about the principal. There was considerable demand for redemption of the bonds in paper money, except where there was agreement to the contrary, although the previous custom of the government had been to pay in coin. The proposal to repay the debt in paper currency, the "Ohio idea," gained considerable ground in the Middle West, as has already been explained. In the campaign of 1868 the Democratic platform advocated the Ohio plan. Some of the Republicans, like Thaddeus Stevens, agreed with this policy; some of the Democrats opposed it—Horatio Seymour, the presidential candidate, among them. Nevertheless the Democratic platform committed the party to payments in greenbacks unless express contract prevented, while the Republicans denounced this policy as "repudiation" and promised the payment of the debt in "good faith" according to the "spirit" and "letter" of the laws. The credit of the government was highly benefited by the payment of the debt in gold, yet the bonds had been purchased during the war with depreciated paper, and gold redemption greatly enriched the purchasers at the expense of the remainder of the population. It is hardly surprising that the debtor classes were not enthusiastic over this outcome. The Republicans on being successful in the election and coming into power, carried out their campaign promises and pledged the faith of the country to the payment of the debt in coin or its equivalent.

The income tax was a method of raising revenue which did not produce any considerable returns until after the war was over. Acts passed during the war had levied a tax on all incomes over six hundred dollars and had introduced progressively increasing rates on higher amounts. Incomes above $5,000, for example, were taxed ten per cent. The greatest number of people were reached and the largest returns obtained in 1866 when nearly half a million persons paid an aggregate of about seventy-three million dollars. The entire system was abolished in 1872.

Aside from the tariff, the "legal-tender" notes gave rise to the greatest number of political and constitutional tangles. By acts of February 25, 1862 and later, Congress had provided for the issue of four hundred and fifty million dollars of United States paper notes, which were commonly known as greenbacks or legal-tenders. The latter name came from the fact that, under the law, the United States notes were legal tender for all debts, public or private, except customs duties and interest on the public debt. In other words, the law compelled creditors to receive the greenbacks in payment of all debts, with the two exceptions mentioned. Three main questions arose in connection with these issues of paper: whether Congress had power under the Constitution to make them legal tender; whether their volume should be allowed to remain at war magnitude, be somewhat contracted or entirely done away with; and whether the government should resume specie payments—that is, exchange gold for paper on the demand of holders of the latter.

The first of these questions was twice decided in the Supreme Court. In 1870, in Hepburn v. Griswold, the point at issue was whether the greenbacks could lawfully be offered to satisfy a debt contracted before the legal-tender act had been passed. As it happened, Salmon P. Chase, who had been Secretary of the Treasury during the war, was now Chief Justice of the Supreme Court and delivered its opinion. By a vote of four to three it decided that the greenbacks were not legal tender for contracts made previous to the passage of the law. At the time when the case was decided, however, there were two vacancies on the bench which were immediately filled, and shortly thereafter two new cases involving the legal-tender act were brought before the Court (Knox v. Lee, and Parker v. Davis). The decision, which was announced in 1871, over-ruled the judgment in Hepburn v. Griswold and held by a vote of five to four that the legal-tender act was constitutional as applied to contracts made either before or after its passage.

The second question relating to the greenbacks was that in regard to their volume. At first Congress adopted the policy of contraction and when greenbacks came into the treasury they were destroyed. As continued contraction tended to make the volume of currency smaller and to make money harder to get, and therefore, to raise its value, the debtor classes began to object. As early as 1865 there was strong sentiment against contraction and in favor of paying the public debt in paper. Economic distress in the West furthered the movement and some of the Republican leaders were doubtful of the wisdom of reducing the outstanding stock of paper. Contraction was stopped, therefore, in 1868, and only President Grant's veto in 1874 prevented an increase in the amount. Eventually, in 1878, the amount then in circulation—$346,681,000—was fixed by a law forbidding further contraction.[1]

The western farmers, meanwhile, were feeling the pinch of falling prices. Believing that their ills were due to the scarcity of money, they opposed the policy of contraction and even launched the Greenback party to carry out their principles. In 1876 it polled 80,000 votes, and in 1878 at the time of the congressional elections over 1,000,000, but thereafter its strength rapidly declined. Neither the East nor the West understood the motives of the other in this controversy. Eastern congressmen considered western insistence upon a large volume of currency as a dishonest movement to reduce bond values by legislation. Such an action, they asserted, would do away with the national integrity. The people of the West thought of the eastern bondholders as "fat bullionists" who dined at costly restaurants on terrapin and Burgundy and paid for their luxuries with bonds whose values were raised by a contracted currency.

The third question relating to the greenbacks was that of the resumption of specie payments. At the close of the war practically all the money in circulation was paper, which passed at a depreciated value because it was not redeemable in coin. The obvious thing was to resume the exchange of specie for paper and thus restore the latter to par value, but serious obstacles stood in the way. A money crisis in 1873 aroused a clamor for larger supplies of paper; gold was hard to procure, as France and Germany were both accumulating a redemption fund and specie was actually flowing out of the country. Outside of the treasury there was little gold in the United States, the amount being less than one hundred million dollars as late as 1877. The friends of resumption could not be sure of the feasibility of their project, and the opponents were aggressive and numerous.

In the elections of 1874 the Republicans were severely defeated, and it was seen that the Democrats would have a clear majority in the next House of Representatives. Hence the Republicans hurried through a resumption bill on January 14, 1875—a sort of deathbed act. It authorized the secretary of the treasury to raise gold for redemption purposes, and set January 1, 1879, as the date when resumption should take place. As in the case of the tariff, the political parties found difficulty in determining which side of the resumption question they desired to take. Although the Democratic platform of 1868 contained a greenback plank, yet some of its leaders opposed, and the state platforms of 1875 and 1876 demanded resumption. The national platform of the latter year both denounced the Republicans for not making progress toward resumption and demanded the repeal of the act of 1875, without disclosing whether the party was prepared to offer any improvements. In November, 1877, a bill practically repealing the resumption act passed the House—the western and southern Democrats furnishing most of the affirmative votes, assisted by twenty-seven Republicans. A resolution declaring it to be the opinion of Congress that United States bonds were payable in silver was introduced and advocated by many Republicans. On the other hand, eastern state Democratic and Republican platforms were much alike. Apparently, therefore, differences of opinion in regard to the greenbacks and resumption were caused as much by sectional as by party considerations.

More lasting than finance as a political issue but less enduring than the tariff, was the reform of the civil service. In its widest sense, the term civil service included all non-military government officers from cabinet officials and supreme court judges to the humblest employee in the postal or naval service. The reform, however, was directed mainly toward the appointment and tenure of the lower officers. Before the Civil War the "spoils system" had been in full swing; appointments to positions had been frankly used as rewards for party activity; office-holders had been openly assessed a fraction of their salaries in order to fill the treasure chest at campaign times; rotation in office had been the rule. During the war, President Lincoln had found his ante-room filled with wrangling, importunate office-seekers who consumed time which he needed for the problems of the conflict. As he himself had expressed the situation, he was like a man who was letting offices in one end of his house while the other end was burning down. During the war, also, the patronage at the disposal of the government had vastly increased. Not only had the number of laborers, clerks and officials become greater, but numerous contracts had been let for the production of war materials, and manufacturers and merchants intrigued for a share of federal business. "Influence" and position had been more powerful than merit in procuring the favor of government officers.

After the war many abuses that had earlier been overlooked began to attract the attention of a few thoughtful men. It was estimated that not more than one-half to three-fourths of the legitimate internal revenue was collected during Johnson's presidency, so corrupt and inefficient were the revenue collectors. Endless Indian troubles and countless losses of money resulted from the corruption of the federal Indian agents. Conditions were even worse during the Grant regime. The President's appointments were wretched; he placed his relatives in official positions; revenue frauds amounting to $75,000,000 were discovered during his second administration. In certain departments, it was customary, when vacancies occurred, to allow the salaries to "lapse"—that is, accumulate—so as to provide a fund to satisfy patronage seekers. In one case, thirty-five persons were put on the "lapse fund" for eight days at the end of a fiscal year, in order to "sop up" a little surplus which was in danger of being saved and returned to the treasury. One customs collector at the port of New York removed employees at an average rate of one every three days; another, three every four days; and another, three every five days, in order to provide places for party workers. One secretary in an important department of the government had seventeen clerks for whom he had no employment. The party assessments on officeholders became little short of outrageous. Two or three per cent. of the salary of the lower officers was called for, while the more important officials were expected to contribute much larger sums. In New York—for the system held in the states and cities—candidates for the mayoralty were reputed to pay $25,000 to $30,000; judges, $10,000 to $15,000; and representatives in Congress, $10,000. While these conditions were by no means wholly due to the spoils system, the method of appointment in the civil service made a bad matter worse.

Conditions such as these could hardly fail to produce a reform movement. In fact, as far back as 1853 some elementary and ineffective legislation had attempted a partial remedy. The war gave added impetus to the movement and attention turned to the reform systems of Great Britain and other countries, where problems similar to ours had already been met and solved. The first American who really grasped civil service reform was Thomas A. Jenckes, a member of Congress from Rhode Island. He introduced reform bills in 1865 and later, based on studies of English practice and on correspondence with the leaders of reform there; but no legislation resulted. In brief, his plan provided for the appointment of employees in the public service on the basis of ability, determined by competitive examinations. After a time Jenckes and his associates achieved considerable success and finally interested President Grant in their project. In 1871 they got a rider attached to an appropriation bill which authorized the chief executive to prescribe rules for the admission of persons into the civil service and allowed him to appoint a commission to put the act into effect. George William Curtis, a well-known reformer, was made chairman, and rules were formulated which were applied to the departments at Washington and to federal offices in New York. Grant, although favorable to the reform, was not enthusiastic about it, and soon made an appointment which was so offensive that Curtis resigned. Congress, nothing loath, refused to continue the necessary appropriations and the reform project continued in a state of suspended animation until the inauguration of President Hayes.

The human elements in the struggle for civil service reform, both during the decade after the war and for many years later, are necessary for an understanding of the course of the controversy and its outcome. These elements included the advocates of the patronage system, the reformers and the president.

Sometimes the advocates of the patronage system viewed the reform with contempt. Roscoe Conkling, for example, expressed his sentiments in the remark, "When Dr. Johnson said that patriotism was the last refuge of the scoundrel he ignored the enormous possibilities of the word reform!" Sometimes they attempted to discredit the project by an exaggeration of its effects, as when John A. Logan declared that he saw in it a life-tenure and an aristocratic caste. "It will not be apparent how great is its enormity," he declared in Congress, "how vicious are its practices and how poisonous are its influences until we are too far encircled by its coils to shake them off." The strength of the exponents of the patronage system, however, lay not in their capacity for contempt and ridicule, but in a theory of government that was founded upon certain very definite human characteristics. The theory may be clearly seen in the Autobiography of Thomas C. Platt, a colleague of Conkling in the Senate and for many years the boss of New York state. It may be expressed somewhat as follows.

In the field of actual politics, parties are a necessity and organization is essential. It is the duty of the citizen, therefore, to support the party that stands for right policies and to adhere closely to its official organization. Loyalty should be rewarded by appointment to positions within the gift of the party; and disloyalty should be looked upon as political treason. One who votes for anybody except the organization candidate feels himself superior to his party, is faithless to the great ideal and is only a little less despicable than he who, having been elected to an office through the energy and devotion of the party workers, is then so ungrateful as to refuse to appoint the workers to positions within his gift. Positions constitute the cohesive force that holds the organization intact.

The second of the human elements, the reform group, was led by such men as George William Curtis, Dorman B. Eaton and Carl Schurz, with the support of periodicals like Harper's Weekly and The Nation. The career and character of Curtis is typical at once of the strength and the weakness of the group. As a young man Curtis had intended to enter a business career, but finding it unsuited to his tastes he had abandoned his ambition, spent some years in European travel and then devoted himself to literary work, first on Harper's Magazine and afterwards, for many years, as editor of Harper's Weekly. He had early interested himself in politics, had been in the convention which nominated Lincoln, had taken part in numerous state and national political conferences and conventions, was president of the Metropolitan Museum of Art in New York and chancellor of the University of the State of New York. For many years, during the period when civil service reform was making its fight for recognition, Curtis was the president and one of the moving spirits of the National Civil Service Reform League. In politics he was an independent Republican. Although of the intellectual class, like the other prominent leaders of the reform movement, he was a man of practical political ability, not a mere observer of politics, so that he and his associates made up in capacity and influence what they lacked in breadth of appeal. Some of the leaders were patient men who expected that results would come slowly and who were ready to accept half a loaf of reform rather than no loaf at all, but there were also such impatient critics as E.L. Godkin who put so much emphasis on the failures of the reformers as to overshadow their positive achievements. Moreover, there were the well-meaning but impracticable people who constituted what Theodore Roosevelt once called the "lunatic fringe" of reform movements.

The attitude of the exponents of the patronage system toward the reformers was one of undisguised contempt. In a famous speech delivered at a New York state convention in Rochester in September, 1877, Conkling poured his scorn on the reform element in general and on Curtis in particular, as "man-milliners," "carpet-knights of politics," "grasshoppers in the corner of a fence," and disciples of ladies' magazines with their "rancid, canting self-righteousness."

The third personal element in the reform controversy was the chief executive. Beginning with Grant, if not with Lincoln, the presidents were favorable to the progress of reform, but they were surrounded by circumstances that made vigorous action a difficult matter. The task of distributing the patronage was a burden from which they would have been glad to be relieved, yet the demands of the party organization were insistent,—and to turn a constantly deaf ear to them would have been to court political disaster. The executive was always in the position of desiring to further an ideal and being obliged to face the hard facts of politics. The progress which he made, therefore, depended on how resolutely he could press forward his ideal in the face of continued opposition. A great difficulty lay in getting subordinates-in the cabinet, for example-who were in sympathy with progress, and sometimes even the vice-presidential nomination was given to the patronage element in the party in order to placate that faction, while the presidential nominee was disposed to reform.

Public opinion was slow in forming and was lacking in the means of definite expression. For many years after the war there was widespread fear that the installation of a Democratic president would result in the wholesale debauch of the offices, and sober northerners believed, or thought they believed, that "rebels" would again be in power if a Democrat were elected. Under such conditions and because the offices were already filled with Republicans, the Republican North was willing to leave things as they were.

The party pronouncements on civil service reform were as evasive as they were on finance and the tariff. To be surer the Liberal Republicans in 1872 sincerely desired reform and made it the subject of a definite plank in their platform, but the wing of the Democratic party that refused to ally with them was silent on the civil service, and the "straight" Republicans advocated reform in doubtful and unconvincing terms. In 1876 both party platforms were even more vague, although Hayes himself was openly committed to the improvement of the service.

BIBLIOGRAPHICAL NOTE

The best work on the tariff is F.W. Taussig, Tariff History of the United States (6th ed., 1914), a scholarly and non-partisan account, although giving slight attention to legislative history; Ida M. Tarbell, Tariff in Our Times (1911), emphasizes the personal and social sides of tariff history and is hostile to protection; Edward Stanwood, American Tariff Controversies (2 vols., 1903), devotes considerable attention to the historical setting and legislative history of tariff acts, and is distinctly friendly to protection.

The most useful single volume on financial history is D.R. Dewey, Financial History of the United States (5th ed., 1915), which is concise, accurate and equipped with full bibliographies; A.B. Hepburn, History of Currency in the United States (1915), is by an expert; A.D. Noyes, Forty Years of American Finance (1909), continues the same author's Thirty Years and is reliable; T.B. Burton, John Sherman (1906), is useful here. The legal-tender decisions are in J.W. Wallace, Cases argued and adjudged in the Supreme Court, VIII, 603, and XII, 457.

The standard work on the civil service is C.R. Fish, The Civil Service and the Patronage (1905); the reports of the Civil Service Commission, especially the Fourth Report, are essential; the articles by D.B. Eaton in J.J. Lalor, Cyclopaedia of Political Science (3 vols., 1893), are justly well-known; G.W. Curtis, Orations and Addresses (2 vols., 1894), and Edward Cary, George William Curtis (1894), are excellent. The politician's side may be found in A.R. Conkling, Life and Letters of Roscoe Conkling (1889), and T.C. Platt, Autobiography (1910).

* * * * *

[1] This is the amount still outstanding.



CHAPTER VI

THE ADMINISTRATION OF RUTHERFORD B. HAYES

The conditions which confronted President Hayes when the final decision of the Electoral Commission placed him in the executive chair did not make it probable that he could carry out a program of positive achievement. The withdrawal of troops from the South had been almost completed, but the process of reconstruction had been so dominated by suspicion, ignorance and vindictiveness that sectional hostility was still acute. As has been seen, the economic problems which faced the country were for the most part unsolved; on the subjects of tariff, finance and the civil service, neither party was prepared to present a united front; and the lack of foresight and statesmanlike leadership in the parties had given selfish interests an opportunity to seize control. Nor did the circumstances surrounding the election of Hayes tend to simplify his task, for the disappointment of the Democrats was extreme, and they found a natural difficulty in adjusting themselves to the decision against Tilden. Democratic newspapers dubbed Hayes "His Fraudulency" and "The Boss Thief," printed his picture with "Fraud" printed across his brow and referred to his election as the "steal" and a "political crime."

The man who was to essay leadership under such conditions had back of him a useful even if not brilliant career. He had been born in Ohio in 1822, had graduated from Kenyon College as valedictorian of his class, attended Harvard Law School and served on the Union side during the war, retiring with the rank of a brevet Major General. He had been twice elected to Congress, but had resigned after his second election to become governor of his native state, a position which he had filled for three terms.

Hayes was a man of the substantial, conscientious and hard-working type. He was not brilliant or magnetic, he originated no innovations, burst into no flights of imaginative oratory. His state papers were planned with painstaking care—first, frequently, jotted down in his diary and then elaborated, revised, recopied and revised again. The vivid imagination and high-strung emotions that made Clay and Blaine great campaigners were lacking in Hayes. He was gentle, dignified, simple, systematic, thoughtful, serene, correct. In making his judgments on public questions he was sensitive to moral forces. The emancipation of the slaves was not merely wise and just to him—it was "Providential." He favored a single six-year term for the President because it would safeguard him from selfish scheming for another period of power. Partly because of the lack of dash and compelling force in Hayes, but more because of the low standards of political action which were common at the time, his scruples seemed puritanical and were held up to ridicule as the milk-and-water and "old-Woman" policies of "Granny Hayes." His public, as well as-his private life, was unimpeached in a time when lofty principles were not common and when scandal attached itself to public officers of every grade. To his probity and the "safe" character of his views, as well as to his record as governor of an important state, was due his elevation to the presidency.[1] In his habit of self-analysis, Hayes was reminiscent of John Quincy Adams. Like Adams he kept a diary from his early youth, the serious and mature entries in which cause the reader to wonder whether Hayes ever had a childhood. When he had just passed his twentieth birthday he confided to his diary that he found himself unsatisfied with his progress in Blackstone, that he must curb his "propensity" to read newspapers to the exclusion of more substantial matter, and in general that he was "greatly deficient in many particulars." Then and in later years he noted hostile criticisms of himself and combated them, recorded remarks that he had heard, propounded questions for future thought, expressed a modest ambition or admitted a curbed elation over success.

In the field of politics Hayes was looked upon as a reliable party man, a reputation which was justified by his rigid adherence to his party and by his attitude toward the opposition. In both these respects he was the ordinary partisan. Nevertheless he thought out his views with unusual care, made them a matter of conscience and measured policies by ethical standards that were more exacting than the usual politician of the time was accustomed to exercise. The only remark of his that gained wide circulation reflects his type of partisanship: "he serves his party best who serves his country best." In these latter respects—his thoughtfulness, conscientiousness, exacting standards of conduct and less narrowly partisan spirit—he formed a contrast to the most influential leaders of his party organization. Altogether it seemed likely at the start that Hayes might have friction with the Republican chiefs.

The opening of the administration found public interest centered on the inaugural address and the Cabinet.[2] The inaugural set forth with clearness and dignity the problems which the administration desired to solve: the removal of the barriers between the sections on the basis of the acceptance of the war amendments, southern self-government and the material development of the South; reform in the civil service, thorough, radical and complete; and the resumption of specie payments. To the choice of a cabinet, Hayes devoted much painstaking care. For Secretary of State, he nominated William M. Evarts of New York, an eminent lawyer who had aided Charles Francis Adams in his diplomatic battle with England during the Civil War and later in the Geneva Arbitration, had shown wit and finesse in the defence of Andrew Johnson in the impeachment trial, and had valiantly assisted the Republican cause before the Electoral Commission. In addition, Evarts was a man of the world who knew how to make the most of social occasions and was an orator of reputation. The Secretary of the Treasury was John Sherman of Ohio, who had been for years chairman of the finance committee of the Senate, and was an example of the more statesmanlike type of senator of war and reconstruction times.

The nomination of Carl Schurz, as Secretary of the Interior, and David M. Key, as Postmaster-General, caused an uproar among the party leaders. Schurz was a cosmopolitan, a German-American, a scholar, orator, veteran of the Civil War, friend of Lincoln, and independent thinker. His devotion to the cause of civil service reform recommended him to the friendship of the President and to the enmity of the political leaders. The politicians scored Schurz as not a trustworthy Republican—he was independent by nature and had been a leader in the Liberal Republican movement; and they denounced him as an impractical man, whose head was full of transcendental theories—which was a method of saying that he was a civil service reformer. No little excitement was occasioned by the appointment of Key. The President had desired to appoint to the cabinet a southerner of influence, and had thought of Joseph E. Johnston as Secretary of War. The choice of General Johnston would have been an act of great magnanimity, but since General Sherman, to whom Johnston had surrendered only twelve years before, was commander of the army, it would have placed Sherman in the singular position of taking military orders from a former leading "rebel." When Hayes consulted his party associates, however, he found their feelings expressed in the exclamation of one of them: "Great God! Governor, I hope you are not thinking of doing anything of that kind!" He thereupon reluctantly gave way and turned to Key. The latter was less prominent than Johnston, but had been a Confederate leader, was a Democrat and a man of moderate counsels. The remaining members of the cabinet were men of much less moment, but altogether it is clear that few presidents have been surrounded by so able a group of advisers.[3]

Seldom, also, has a president's announcement of his cabinet caused so much dissent among his own supporters. Senator Cameron, of Pennsylvania, had urged a cabinet appointment for his son, and on being refused became hostile to Hayes. Senator Blaine, of Maine, was piqued because Hayes refused to offer a place to a Maine man; the friends of General John A. Logan, of Illinois, were dissatisfied at the failure of Hayes to understand the qualifications of their favorite; Conkling disliked Evarts and besides desired a place for his associate Thomas C. Platt; and the latter considered the nomination of Evarts a "straight-arm" blow at the Republican organization. Departing, therefore, from the custom in such cases, the Senate withheld confirmation of the nominations for several days, during which it became apparent that the rest of the country had received the announcement of the cabinet with favor, and then the opposition disappeared. During the remainder of his presidency, however, Hayes fared badly in making his nominations to office, for fifty-one of them were rejected outright, a larger number than had ever before been disagreed to when the President and the Senate were of the same party. The frequency with which the nominations were rejected and the combative manner in which the contests were carried on by the Senate indicated that it was determined to regain and hold fast the influence in federal counsels that it had relinquished to the executive during the war.

Aside from the nomination of members of the cabinet, the first important executive action that tested the attitude of the Senate toward the President was in relation to the southern problem. By March, 1877, all the former Confederate states except Louisiana and South Carolina had freed themselves from Republican rule by the methods already mentioned, and in these states the Republicans were kept in power only by the presence of troops. In Louisiana, both Packard, a Republican carpet-bagger, and Nicholls, a Louisiana Democrat, claimed to be the rightful governor. In South Carolina, the Republican contestant was Chamberlain, a native of Massachusetts; the Democrat was Wade Hampton, a typical old-time southerner. Hayes could withdraw the troops, in pursuance of his conciliatory policy, but if he did the Republican governments would certainly collapse because they were unsupported by public opinion. Furthermore, the returning board which had declared Hayes the choice of Louisiana in the presidential election had asserted that the Republican Packard was elected. Blaine, in the Senate, championed the doctrine that Hayes could not forsake the southern Republicans without invalidating his own title. Speaking in a confident and aggressive manner, he held that the honor, faith and credit of the party bound it to uphold the Republican claimants. Nevertheless, the President investigated conditions in both states, satisfied himself that public opinion was back of the Democratic governments and then recalled the troops, hardly more than a month after his inauguration. The Republican governments in the two states promptly gave way to the Democrats, and the storm was on in the Senate.[4]

The Republican politicians believed that no good thing could come from the "rebels," that the President was abandoning the negro, and that he was surrendering the principles for which the party had contended. "Stalwarts," was the name applied by Blaine to these uncompromising party men who would not relinquish the grip of the organization on the southern states. Hayes was freely charged with having promised the removal of the military forces in return for the electoral votes of the two states concerned, and some color seemed to be lent to this accusation when he proceeded to reward the Louisiana and Florida returning boards with appointments to office. Even the New York Times, which usually supported Hayes with vigor, characterized the Louisiana settlement as "a surrender." William E. Chandler who had assisted Hayes as counsel in the disputed election attacked him in a pamphlet, "Can such Things be and overcome us like a Summer Cloud without our Special Wonder?" Most of the influential leaders in both houses of Congress scarcely disguised their hostility. Indeed the discontent went back into the states where, as in New Hampshire, a contest over the endorsement of Hayes was so bitter that the newspaper reporters had to be excluded from the state convention to prevent public reports of schism in the party. The Democrats could not come to his support since they were unable to forget the election of 1876 even in their satisfaction over the treatment accorded the South. In six weeks the President was without the backing of most of his party leaders. On the other hand, a few men of the type represented by Hoar and Sherman commended the President's policy. Independent publications such as Harper's Weekly did likewise, and when the Republican convention of 1880 drew up the party platform the leaders made a virtue of necessity and adopted a plank enthusiastically supporting the Hayes administration.

After he had finished with the southern problem, Hayes confided to his diary, "Now for civil service reform!" And for appointments in general he recorded several principles: no sweeping changes; recommendations by congressmen to be investigated—not merely accepted; and no relatives of himself or his wife to be appointed, however good their qualifications might be. In the meanwhile Secretary Schurz set to work to put the Department of the Interior on a merit basis. The principles that Hayes set up for himself and the steps that Schurz took were in conformity with the party platform of 1876 and with the President's inaugural address; nevertheless the party leaders were displeased, if not surprised, for platform promises were lightly regarded and inaugural addresses were sometimes not to be taken very seriously.

The earliest acts of Hayes were not such as to facilitate the further progress of reform. The appointment of the members of the Louisiana Returning Board to federal offices gave color to charges that they were receiving their reward for assisting the President into his position. Furthermore, on June 22, 1877, he issued an executive order forbidding any United States officials to take part in the management of political organizations and declaring that political assessments on federal officers would not be allowed. So drastic an order brought amazement to the party leaders, who had not dreamed of anything so radical. Perhaps the order was too sudden and sweeping, considering the practices of the time. At any rate it was not enforced and the President seemed to have set a standard to which he had not the courage to adhere. Nevertheless, reform principles were successfully tested in the New York Post Office by Thomas L. James, a vigorous exponent of the merit system who had been appointed by President Grant and was now re-appointed and upheld by President Hayes.

But the great battle for the new idea came in connection with the New York Custom House. Through the port of New York came two-thirds to three-fourths of the goods which were imported into this country, and the necessity for a businesslike conduct of the custom house seemed obvious. Yet there had for some time been complaints concerning the service, and Sherman appointed commissions, with the approval of the President, to investigate conditions in New York and elsewhere. The commission which studied the situation in New York reported that one-fifth of the persons employed there were superfluous, that inefficiency and neglect of duty were common, and that the positions at the disposal of the collector had for years been used for the reward of party activity. The commission recommended sweeping changes which Secretary Sherman and President Hayes approved. It then appeared that the New York officials were not favorable to the President's reform plans. Furthermore, Chester A. Arthur, the collector of the port, was a close friend of Roscoe Conkling, the head of the state machine; and A.B. Cornell, the naval officer, was chairman of the state and national Republican committees; It was evident that an attempt to change conditions in New York would precipitate a test of strength between the administration and the New York organization.

As Arthur and Cornell would not further the desired reforms and would not resign, the President removed them. When he nominated their successors, however, the Senate, led by Conkling, refused to add its confirmation and there the matter rested for some months. Eventually the President's nominations were confirmed, an outcome which seems to have been brought about in part at least by letters from. Secretary Sherman to personal friends in the Senate in which he urgently pressed the case of the administration. The President's victory emphasized the disagreement of the powerful state organization with the reform idea, and while the reformers rejoiced that the warfare had been carried into the enemy's country, newspaper opinion varied between the view that the President was playing politics and that he was actuated by the highest motives only. Agitation for reform, meanwhile, continued to increase. The literary men among the reformers, aided by scores of lesser lights, conducted a campaign of education; the New York Civil Service Reform Association, founded in 1877, and the National Civil Service Reform League, in 1881, gave evidence of an effort towards the organization of reform sentiment.

While the attention of the President and the politicians was directed toward the reform of the civil service, there occurred an event for which none of them was prepared. Early in the summer of 1877 train hands on the Baltimore and Ohio Railroad struck because of a reduction in wages, the fourth cut that they had suffered in seven years. The strike spread with the speed of a prairie fire over most of the northern roads between New England and the Mississippi. At the height of the controversy at least 100,000 strikers and six or seven thousand miles of railway were involved, while at several points especially Martinsburg, West Virginia, and Pittsburg, rioting and destruction took place. A considerable number of people were killed or wounded, and the loss of property in Pittsburg alone was estimated at five to ten millions of dollars. Eventually, when the state militia failed to check the disorder, the President was called upon for federal troops and these proved effectual. That even so thoughtful and conscientious a man as Hayes was far from understanding the meaning of the strike was indicated in his message to Congress in which he merely expressed his gratification that the troops had been able to repress the disorder. Repression, that is to say, was the one resource that occurred to the mind of the chief executive and to the majority of the men of his day. That repression alone could not remedy evils permanently, that salutary force ought to be immediately supplemented by a study of the rights and wrongs of the two sides and by a dispassionate correction of abuses,—all this did not even remotely occur to the thoughts of the political leaders of the time.

The breach in the ranks of the Republicans which was made by the events of the early days of the Hayes administration was closed in the face of an attack by the common enemy—the Democrats. The latter, being in control of the House, appointed the "Potter Committee" to investigate the title of Hayes to the Presidency, hoping to discredit him and thereby turn the tables in the election of 1880. The committee examined witnesses and reported, the Democrats asserting that Tilden had been elected and the Republicans that Hayes had been. The Republican Senate, meanwhile, had prepared a counterblast. By legal proceedings a committee had obtained from the Western Union Telegraph Company over thirty thousand of the telegrams sent by both parties during the campaign. The Republicans declared that the "cipher despatches" among these messages showed that the Democrats had offered a substantial bribe for the vote of an Oregon Republican elector. Before the dispatches were returned to the telegraph company, somebody took the precaution to destroy those that concerned Republican campaign methods and to retain those relating to the Democrats. The latter were published by the New York Tribune and revealed attempts to bribe the Florida and South Carolina Returning Boards. Most of them had been sent by Tilden's nephew or received by him, so that the corrupt trail seemed to lead straight to the candidate himself, but the evidence was inconclusive. The Potter Committee then investigated the telegrams, together with a great number of witnesses, and another partisan report resulted. It thus appeared that both pot and kettle were black and there the matter rested. The Democrats had done themselves no good and had done the Republicans no harm.[5]

The Democrats also attacked the election laws, under which federal officials supervised elections, and federal judges and marshals had jurisdiction over cases concerning the suffrage. Under these laws, also, troops could be used to enforce the judgments of the Courts. There is no doubt that intimidation, unfair practices and bribery were all too common in the North as well as in the South. The lack of official ballots and secret voting made abuses inevitable. In New York, Cincinnati and other northern cities, and on a smaller scale in the rural districts, abuses of one sort or another were normal accompaniments of elections. Intimidation in the South was notorious and not denied. The existing election laws gave the dominant party an opportunity to appoint large numbers of deputy-marshals—largely party workers, of course-paying them from the national treasury and so solidifying the party organization. In the election of 1876 about $275,000 had been spent in this way. Some of the federal supervisors had been extremely energetic—so much so that in one case in Louisiana their registration lists showed 8,000 more colored voters in 1876 than were discovered by the census enumerators four years later.

If the Republicans saw involved in the laws both a principle and a party weapon, the Democrats saw both a principle and an opportunity. They attached a "rider" to an army appropriation bill, which made it unlawful to use any part of the army for any other than the purposes expressly authorized by the Constitution or by act of Congress. Since the Constitution allowed the use of troops only to "execute the laws of the Union, to suppress Insurrections and repel Invasions," the new law would prevent the employment of armed forces for civil purposes at the polling places. The President was compelled to yield to save the appropriation bill.

In the next Congress the Democrats controlled both House and Senate and they advanced to the attack on the remainder of the election laws. Attempts were made to prevent the appointment of special deputy-marshals by forbidding the payment of any compensation to them or to the regular marshals when used in elections. Each time that Congress passed such a law the President vetoed it, even though special sessions had to be called to make up for lost time. He saw in the use of the rider a dangerous assertion of coercive power on the part of Congress. By means of it, Congress was withholding funds essential for military and civil purposes until the President should assent to legislation totally unconnected with the appropriations. He felt himself being threatened and driven by a hostile legislature. For the President to give way before such constraint would be to lose the veto power and to destroy the independence of the executive as a branch of the government. The Democrats were unable to muster force enough to overrule the veto, and here the matter rested while other forces, which have already been described, were sapping the strength of the election laws. On the whole, the result was probably to bring the Republican factions together and so to strengthen the party for the election of 1880. The Democrats, on the other hand, probably lost ground.

In the meanwhile a difficult and technical problem—the monetary question—was forcing itself upon the attention of Congress and of the country. The rapid development of the economic life of the United States was demanding an increased volume of currency with which to perform the multitude of exchanges which constantly take place in the life of an industrial people. Unless the volume of the currency expanded proportionately with the increase of business, or there was a corresponding increase in the use of bank checks, the demand for money would cause its value to go up—that is, prices to go down. If the volume expanded more rapidly than was necessitated by business, the value of money would fall and prices would go up. A change in the price level in either direction, as has been seen, would harm important groups of people. The exact amount, however, by which the volume should be increased was not easy to determine. Furthermore, assuming that both gold and silver should be coined, what amount of each would constitute the most desirable combination? What ought to be the weight of the coins? If paper currency was to supplement the precious metals, what amount of it should be in circulation? These are difficult questions under any circumstances. They did not become less so when answered by a bulky and uninformed Congress acting under the influence of definite personal, sectional and property interests.

Several facts tended to restrict the kind of money whose volume could be greatly increased. It was not advisable to expand the greenbacks because legislation had already limited their amount and because such action would unfavorably affect the approaching resumption of specie payments. The quantity of national bank notes, another common form of paper money, was somewhat rigidly determined by the amount of federal bonds outstanding, for the national bank notes were issued upon the federal bonds as security. Moreover, the bonds were being rapidly paid off during the seventies and it was, therefore, impossible to expect any increase of the currency from this source. Normally the supply of gold available for coinage did not vary greatly from year to year and certainly did not respond with exactness to the demand of industry for a greater or smaller volume of circulating medium. It seemed to remain for silver to supply any needed increase.

But silver was not in common use except as a subsidiary coin. For many years the value of the bullion necessary for coining a silver dollar had been greater than the value of the coin. Nobody therefore brought his silver to the mint but sold it instead in the commercial markets. Indeed so insignificant was the amount of silver usually coined into dollars that an act of 1873 systematizing the coinage laws had omitted the silver dollar completely from the list of coins. The omission was later referred to by the friends of silver currency as the "Crime of 1873." At the same time a remarkable coincidence was providing the motive power for the demand that silver be more largely used as currency. Early in the seventies Germany and the Latin Monetary Union, (France, Switzerland, Belgium, Italy and Greece), had reduced the amount of their silver coinage, thus throwing a large supply of bullion on the market. Simultaneously, enlarged supplies of silver were being found in western United States. A Nevada mine, for example, which had produced six hundred and forty-five thousand dollars' worth of ore in 1873 had turned out nearly twenty-five times that amount two years later. Naturally the market price of silver fell and the mine owners began to seek an outlet for their product. Thus the people who were convinced that the volume of the currency was insufficient for the industrial demands of the nation received a new and powerful reenforcement from the producers of silver ore. There arose what the New York Tribune referred to as "The Cloud in the West."

Inevitably the cloud in the West threw its shadow into Congress where the demand was insistent that the government "do something for silver." A commission had been appointed in 1876 to study the currency problem and make recommendations. When the report was made it appeared that the opinions of the members were so divergent that little was gained from the investigation. While the commission was deliberating, Richard P. Bland of Missouri introduced a bill providing for the free and unlimited coinage of silver. Under its provisions the owner of silver bullion could present any quantity of his commodity to the government to be coined under the conditions which controlled the coinage of gold. The House responded readily to Bland's proposal. In the Senate, under the leadership of William B. Allison, the free and unlimited feature of the bill was dropped and a provision adopted limiting the purchase of bullion to an amount not greater than four million dollars' worth per month and not less than two million dollars' worth. The bullion so obtained was to be coined into silver dollars, which were to be legal tender for all debts public and private. Bland was ready to accept the compromise because he hoped to be able to increase the use of silver by subsequent legislation. "If we cannot do that," he said, "I am in favor of issuing paper money enough to stuff down the bond-holders until they are sick." The remark was typical of the sectional and class hatreds and misunderstandings which this debate aroused, and of the maze of ignorance in which both sides were groping. To the silver faction, their opponents were "mendacious hirelings" and "Gilded Shylocks." God, in His infinite wisdom had imbedded silver in the western mountains for a beneficent purpose. "The country," said one speaker, "is in an agony of business distress and looks for some relief by a gradual increase of the currency." On the other hand, the opponents of silver scorned the "delusion" of a "clipped" coin and the dishonest proposition to make ninety cents' worth of silver pass as a dollar. The "storm-driven, buffeted, and scarred" ship of industrial peace, an easterner declared, "deeply laden with all precious and golden treasure is sighted in the offing!... shall we put out the lights?... Dare we remove the ship's helm, leaving her crippled and helpless!"

Sherman believed that this limited amount of silver could be taken into the currency system without difficulty, but President Hayes thought that harm would result from making the silver dollar a legal tender when the market value of the bullion in the coin was not equal in value to that of the gold dollar. He therefore vetoed the bill on February 28, 1878. He could not carry Congress with him, however, and the measure was passed over the veto on the same day.

Party lines had disappeared during the debates over the passage of the act. Eastern members of both houses and of both parties had been opposed, with few exceptions, to the increased use of silver; the westerners had been equally united in its favor. The East, the creditor section and the holder of most of the Civil War bonds, had no desire to try an experiment with the currency which would, in their opinion, reduce the purchasing power of their income. The debtor West looked with disfavor upon an increase in the real amount of their debts which was brought about by an inadequate supply of currency. Since prices continued to decline they believed that the remedy was a greater quantity of money. Evidently the greenback controversy was reviving in a new garb.

The approach of the resumption of specie payments which had been set, it will be remembered, for January 1, 1879, increased the burden under which the westerners and the debtor classes in general were working. Favorable commercial conditions and Sherman's foresight, tact and intelligence made it possible to overcome the various difficulties in the way of accumulating a sufficient reserve of gold, and on December 31, 1878, the Treasury had on hand about $140,000,000 of the precious metal, an amount nearly equal to forty per cent. of the paper in circulation. Despite the desirability of resumption, the first effects of preparations for it were harmful to considerable bodies of people. As January 1 approached, the greenbacks, which had been circulating at a depreciated value, rose nearer and nearer to par. Debts which had been incurred when paper dollars were worth sixty cents in gold, had to be paid in dollars worth eighty, ninety or a hundred cents, according to the date when the debt fell due. Business men who were heavily in debt and farmers whose property was mortgaged found their burden daily growing in size.

Notwithstanding the steady advance of paper toward par value, Sherman nervously awaited business hours on January 2, 1879, (since the first fell on Sunday) to see whether there would be such a rush of holders of paper who would wish gold that his slender stock would be wiped out. New York, the financial center, was watched with especial anxiety. To Sherman's surprise, only $135,000 of paper was presented for redemption in gold; to his amazement and relief, $400,000 in gold was presented in exchange for paper. Evidently, now that paper and metal were interchangeable, people preferred the lighter and more convenient medium. Favorable business conditions enabled the government to continue specie payments; a huge grain crop in 1879, coupled with crop failures in England, caused unprecedented exports of wheat, corn and other products, and a corresponding importation of gold. The damage resulting from the appreciation of paper was temporary in character; the public credit was vastly benefited; and the greater amount of stability in the value of paper proved invaluable to industry.

Happily Hayes's stormy political relations were balanced by comparative quiet in foreign affairs. Only Mexico caused trouble, and that was of negligible importance. A few raiders made sporadic excursions into Texas, which necessitated an expedition for the punishment of the marauders. General Ord was directed to cross the border if necessary, but General Diaz, at the head of the Mexican government, concluded an agreement for cooperation with the United States in the protection of the boundary. The agreement was only partly successful, however, and on several occasions troops crossed the Rio Grande and fought with bandits.

On the Pacific Coast, meanwhile, the Chinese question was becoming a political issue. In earlier times the immigration of the Chinese had been encouraged because of the need of a cheap labor supply when the transcontinental railroads were being built. As the coast filled up, however, with native population, and the demand for laborers fell off, there arose numerous objections to the oriental. It was seen that since he was willing to work for extremely low wages he could drive American laborers out of their places. Labor leaders such as Dennis Kearney held meetings on the "sand lots" in San Francisco and aroused anti-Chinese feeling. Riots and violence, even, were not unknown.

Just before the inauguration of President Hayes a commission of inquiry had visited the coast and examined many witnesses. The commission reported that the resources of the Pacific states had been more rapidly developed with coolie labor than they would otherwise have been, but that the Chinese lived under filthy conditions, formed an inferior foreign element and were, on the whole, undesirable. It recommended that the executive take steps in the direction of a modification of the existing treaty with China, for fear that the problem might spread eastward with increasing immigration. The electioneering possibilities of the subject had appealed to both parties and they had earnestly demanded action in their platforms of 1876. Opinion was forming throughout the country, aided by Bret Harte's famous lines:

Which I wish to remark And my language is plain, That for ways that are dark And tricks that are vain, The heathen Chinee is peculiar Which the same I would rise to explain.

Action by Congress was hindered by the Burlingame treaty of 1868 with China, which covered the subject of immigration in unmistakable language. By its provisions citizens of China were to have the same rights of travel and residence in America as the subjects of the most favored nation. Reciprocally, China was to grant equal privileges to citizens of the United States. The process of modifying a treaty through the ordinary diplomatic channels was so slow that Congress sought to avoid delay by passing a law forbidding shipmasters to bring in more than fifteen Chinese at one time, and calling upon the President to notify China that the terms of the Burlingame treaty, in so far as they related to immigration, would not hold after July 1, 1879, when the proposed legislation would take effect. President Hayes sympathized with the purpose of the bill but felt obliged to veto it because of the Burlingame treaty. The veto message recalled that the treaty had been of American seeking and that its ratification had been applauded all over the country. The abrogation of part of the agreement would be equivalent to abrogation of the whole, leaving American citizens in China without adequate treaty protection. Furthermore Hayes felt that treaties could not rightfully be violated by legislation, but advocated other measures for the relief of the people of the Pacific Coast. He thereupon sent to China a commission, headed by James B. Angell of Michigan, which succeeded in liberally modifying the existing treaty. Under the new arrangement the United States might "regulate, limit, or suspend" the immigration of Chinese laborers; and as the treaty was promptly ratified, it redounded somewhat to the credit of the Republicans in the election of 1880.

The administration of Hayes was, on the whole, an admirable one. The problems which he faced were varied and difficult, but most of them were met sensibly and with success. To be sure, he did not grasp the social and economic forces behind the monetary agitation; nor did he have the insight and originality necessary for attacking the problem of industrial unrest as it appeared in the strike of 1877. But neither did his associates, nor his successors in the presidency for many years to come. On the other hand, the ethical standards of the administration were high and the atmosphere of the White House sane and wholesome. The home life of the President was exceptionally attractive, for Mrs. Hayes was a woman of unusual charm and social capacity. The attitude of Hayes on the southern question and on civil service reform was courageous and progressive. And most of all, his ideas on public questions were stated with unmistakable clearness in a day when old issues were sinking into the background and both parties were reluctant to define their position on the new ones.

BIBLIOGRAPHICAL NOTE

A great contribution to the understanding of Hayes's administration was made by the publication of C.R. Williams, Life of Rutherford B. Hayes (2 vols., 1914). It is complete and contains copious extracts from Hayes's diary, but is written with less of the critical spirit than is desirable; J.F. Rhodes has a valuable chapter in his Historical Essays (1909); J.W. Burgess, Administration of R.B. Hayes (1916), is a eulogy; V.L. Shores, Hayes-Conkling Controversy (1919), describes the civil service quarrel; J.R. Commons and others, History of Labor in the United States (2 vols., 1918), describes the strike of 1877; so also does J.F. Rhodes, History of the United States from Hayes to McKinley (1919), with full references. On the Chinese affair, consult Mrs. M.E. B.S. Coolidge, Chinese Immigration (1909). Most of the general histories already mentioned dwell at length on the Hayes administration.

For the official messages of this and succeeding administrations, the most convenient source is J.D. Richardson, Messages and Papers of the Presidents (10 vols., 1903).

* * * * *

[1] For a time public interest was absorbed by the determination of President and Mrs. Hayes to serve no wines of any kind in the White House. Finally a delicious frozen punch was served at about the middle of the state dinners, known to the thirsty as "the Life-saving Station." It was popularly understood to be liberally strengthened with old Santa Croix rum, but the President later asserted that he had caused the punch to be sharpened with the flavor of Jamaica rum and that no drop of spirits was inserted. What the chef really did, perhaps nobody knows. At any rate, both sides were satisfied. Williams, R.B. Hayes, II; 312 note.

[2] Because March 4 fell on Sunday, the oath of office was privately administered to Hayes on Saturday evening, March 3. Williams, Hayes, II, 5.

[3] George W. McCrary was Secretary of War; Richard W. Thompson, Secretary of the Navy; Charles Devens, Attorney-General.

[4] Chamberlain, the Republican claimant in South Carolina, wrote in 1901 that he was "quite ready now to say that he feels sure that there was no possibility of securing permanent good government in South Carolina through Republican influences." Atlantic Monthly, LXXXVII, 482.

[5] Many of the dispatches were in a complicated cipher which resisted all attempts at solution. The Tribune published samples from time to time, keeping interest alive in the hope that somebody might solve the riddle. Finally two members of the Tribune staff were successful in discovering the key to the cipher in a way that recalls the paper-covered detective story. The newspaper aroused and excited public interest by publishing specimens and eventually achieved a sensation by putting the most damaging material into print on October 16, 1878. One of the telegrams, with its translation, ran as follows:

"Absolutely Petersburg can procured by Copenhagen may Thomas prompt Edinburgh must if river take be you less London Thames will."

Translation: If Returning Board can be procured absolutely, will you deposit 30,000 dollars? May take less. Must be prompt. Thomas.



CHAPTER VII

THE POLITICS OF THE EARLY EIGHTIES

The Hayes administration was scarcely half over when the politicians began to look forward to the election of 1880. At the outset of his term, Hayes had advocated a single term for the executive and there was no widespread movement among the politicians to influence him to change his attitude. His enemies, indeed, had already turned to General Grant. There had been a third-term boom for the General during his second administration and he had indicated that he was not formidably opposed to further continuance in office. Suddenly, however, the anti-third-term feeling had risen to impressive proportions, whereupon the House of Representatives had adopted a resolution which characterized any departure from the two-term precedent as "unwise, unpatriotic, and fraught with peril to our free institutions." As the resolution passed by an overwhelming vote—233-18—nothing further was heard of a third-term boom.

The Hayes administration put a different complexion on the matter. The wheel-horses of the party were not enthusiastic over the President or his policies, and in their extremity they looked to Grant. The New York State Republican Convention, under control of Roscoe Conkling and his forces, instructed delegates to support the General as a candidate for the nomination and endeavored to forestall opposition to a third term. It declared that the objection to a third presidential term applied only to a third consecutive term and hence was inapplicable to the re-election of Grant. Grant, meanwhile, presented a spectacle that was at once humorous and pathetic. He had not expected, on leaving the presidency, to return to power again, had dropped consideration of the political future and had given himself up to the enjoyment of foreign travel. The royal reception accorded him wherever he went suggested to his political supporters that they utilize his popularity. It was foreseen that when he returned to America he would receive a tremendous ovation, on the wave of which he might be carried into office. He was flooded with advice and entreaties that he act in accordance with this plan. His family was eager to return to the position of social eminence which they had occupied, and pressure from them was incessant. At first he did nothing either to aid or to hinder the boom, then gave way to the pressure and at last became extremely anxious to obtain the coveted prize.

If the politicians did, in truth, desire a relaxation from the patronage standards of the Hayes regime, they did not make that the ostensible purpose of their campaign. They argued that the times demanded a strong man; that foreign travel had greatly broadened the General and given him a knowledge of other forms of government; that he had been great as a commander of armies, greater as a President, and that as a citizen of the Republic he "shone with a luster that challenged the admiration of the world." Behind him were Conkling and Platt, with the New York state organization under their control, Don Cameron who held Pennsylvania in his hand, General Logan, strong in Illinois, and lesser leaders who wielded much power in smaller states. Many business men were ready to lend their aid; the powerful Methodist Church, to which he belonged, was favorable to him; and, of course, his popularity as a military leader was unbounded. His return to the United States while the enthusiasm was at its height was the signal for an unprecedented ovation. The opponents of a third term painted in high colors the danger of a revival of the scandals of Grant's days in the presidential chair, formed "No Third Term" leagues, called an "Anti-Third-Term" convention and decried the danger of continuing a military man in civil office. The Nation scoffed at the educational effect of foreign travel on a man who was fifty-seven years of age and could understand the language in only one of the countries in which he travelled. A large fraction of the Republican press, in fact, was in opposition. "Anything to beat Grant" and "No third term" were their war-cries. Nor was there any lack of Republican candidates to oppose the Grant movement and to give promise of a lively nominating convention. Blaine's popularity was as widespread as ever. Those who feared the nomination of either Grant or Blaine favored Senator George F. Edmunds of Vermont or Secretary Sherman. Both of these men were of statesmanlike proportions, but Edmunds was never widely popular and Sherman was lacking in the arts of the politician—"the human icicle," T.C. Platt called him.