The Worlds Famous Orations. America: III. (18611905). 1906.
On The Crime of 1873
John Sherman (18231900)
Born in 1823, died in 1900; elected to Congress from Ohio, 185561; United States Senator, 186177, and 188197; Secretary of the Treasury, 187781; Secretary of State, 189798.
WHEN1 the Republican party came into power in 1861 by the election of Mr. Lincoln, it had to face a formidable rebellion. Gold and silver were alike banished from circulation, and irredeemable paper of all denominations from ten cents to $1,000 was substituted in place of coin. When the war was over the Republican party sought to restore specie payment as soon as practicable. In March, 1869, it pledged the faith of the nation to payment in coin, or its equivalent, of all bonds of the United States, and to redeem the United States notes at the earliest practical moment in coin.
In order to carry out this pledge it became necessary to revise the various coinage laws of the United States. This was promptly and very carefully done by a bill framed in the treasury department while Mr. Boutwell was secretary. It was thoroughly considered by the events of that department, and was printed and submitted to all persons in the United States who were supposed to be familiar with the coinage laws. The bill, containing sixty-seven sections, accompanied by a mass of information that fills a volume, was sent to Congress, April 25, 1870, by Secretary Boutwell, and its passage was strongly recommended by him.
This bill omitted from the coins of the United States the silver dollar, precisely as was done in 1853, but provided for the coinage of the fractional parts of the dollar in accordance with the act of that year. This bill was pending in Congress for three years, was carefully considered in both houses and special attention was called to the omission of the 412.5 grains silver dollar, which was never in the bill at any stage, and the reason for this omission given. It was finally determined at the urgent request of members from the Pacific coast to insert among the silver coins a trade dollar containing 420 grains of standard silver; but this dollar was made, like the silver coins, a legal tender for $5 only. There was but one yea and nay vote on the bill, and that was on the proposition to repeal the charge made by the mints for the coinage of gold. I voted against this appeal.
The bill passed both houses and became a law February 12, 1873, by practically a unanimous vote of both parties, and was specially supported and voted for by the senators and members from the silver States. This has been called the Crime of 1873, and as the bill was under my charge in the Senate I was held to be the chief criminal. It was, in fact, a wise measure of public policy, carefully discussed and considered during three years.
When we test the outcry against this act with the sober facts shown by official records, it appears simply ludicrous. The total number of silver dollars coined from 1792 to 1853 was 8,031,238, while the number of trade dollars issued under the coinage act of 1873, containing 7.5 grains more silver than the old dollar, was 35,965,924, and the number of standard silver dollars coined under the Bland-Allison Act of 1878 was 430,790,041, or fifty-four times the number issued before 1873.
It is strange that the very men who supported and urged this coinage law of 1873 and demanded the exclusive coinage of gold are the very men who now demand the free coinage of silver, and denounce as goldites and robbers all those who believe in the coinage of both gold and silver.
The question will never be settled until you determine the simple question whether the laboring man is entitled to have a good dollar, if he earns it, or whether you are going to cheat him with something else. That is the upshot of the whole thing. Everybody has to say that the laboring man was entitled to a good dollar. That was fought over. They will fight it over again, and the same party will win. There have been a great many battles fought against gold, but gold has won every time. Gold never has compromised. Gold has made the world respect it all the time. The English people once thought they could get along without gold for a while, but they had to come back to it.
On June 1, 1874, Senators Jones and Stewart, and all the representatives and senators of the silver States, were urgent and honest in saying that gold was the best and only standard of value, but they changed their minds when the largely increased and increasing production of silver in Nevada and other States reduced the market value of silver below that of gold at the established ratio of 16 to 1. Then they wanted a market for their silver. They wanted to pay existing debts and obligations contracted upon the gold basis in silver, but took care in their contracts to stipulate for the payment of the gold to them, and this has been, and is now, the general practise in the silver States.
When the coinage law of 1873 was enacted all of the States except those on the Pacific coast conducted their business upon the basis of greenbacks or United States notes, then at a discount of about 13 per cent. Neither silver nor gold was used in domestic transactions, but we collected our customs duties in gold coin and conducted our foreign commerce in gold, the money of the world. It was not until January, 1875, that the first step was taken to resume specie payments, nor did we resume until January, 1879.
During this period silver rapidly fell in market value below gold at the ratio of 16 to 1. Prior and subsequent to 1873 many changes were made in coinage by the leading countries of the world. Germany, in 1812, changed its standard from silver to gold. France, Italy, Switzerland and Belgium had, in 1865, entered into a treaty called the Latin Union, to which other nations became parties, and by which the coins of each of these countries were received and paid out by all of them. This important arrangement was first modified, and finally abandoned and gold became the standard of value in those countries, but in all silver was coined and largely used as a subsidiary coin, precisely as in the United States.
In anticipation of the resumption of specie payments the Resumption Act of 1875 provided silver coins of dimes, quarters and half dollars for the redemption of the fractional currency then in general use in our country. The new silver coins gave great satisfaction. They were limited in legal tender qualities to $10. At this time Mr. Bland of Missouri, introduced his bill for the free coinage of silver at the ratio of 16 to 1, on the demand of the holders of silver bullion. Silver had then declined below that ratio. One ounce of gold was worth more than 16 ounces of silver. The Bland bill, if it had become a law as it passed the House, would have demonetized gold. Such was not the purpose of Congress.
When the bill came to the Senate, an amendment was made on the motion of Senator Allison, who changed the scope of the bill and authorized and directed the secretary of the Treasury to purchase from time to time silver bullion at the market price, not less than $2,000,000, not more than $4,000,000 worth per month, and cause the same to be coined into silver dollars as fast as purchased. It also provided that any holder of the coin authorized by that act might deposit the same with the treasurer of the United States in sums not less than $10, and receive certificates therefor of not less than $10 each, and that the coin deposited should be retained in the Treasury for the payment of the certificates on demand. This bill so amended passed both houses. It was known as the Bland-Allison Act. It greatly added to the difficulties of resumption, and for that reason was vetoed by President Hayes, but became a law over his veto.
Under its provisions the United States purchased over 291,000,000 ounces of silver at the cost of $308,279,260. It was hoped that this enormous purchase would arrest the decline of silver, but in spite of it silver steadily declined in market value, and at the present price the loss to the government on the purchase of silver under this act amounts to over $100,000,000.
When Congress met in December, 1889, there was a strong desire in both Houses to utilize silver as legal tender money under conditions that would not demonetize gold. As the result of long discussions in both Houses, and after a conference between them, a bill was passed July 14, 1890, by which the secretary of the Treasury was directed to purchase from time to time silver bullion to the aggregate of 4,500,000 ounces a month at the market price and to issue in payment of such purchases treasury notes of the United States, which were made a legal tender in payment of all debts, public and private, and were redeemable by the secretary of the Treasury in gold or silver coin at his discretion. This measure, it was thought, would arrest the decline in the market value of silver and enable the secretary to maintain the two metals on a parity with each other at the ratio of 16 to 1. But the market value of silver continued to decline. The government purchased under the act of July 14, 1890, 168,000,000 ounces at a cost of $156,000,000.
When we contemplate the great amount of debt and credit that is unavoidable in a vast but new country like ours, we naturally shrink from any measure that will either rob the lender or do injustice to the borrower. It is impossible to estimate the wrong and injustice that will be done to creditors by the selling of nearly one-half of the debts due them.
The very threat to do it will lead to the prompt and harsh collection of debts before free coinage can become a law. I am advised that already debts that would have remained uncalled for have, in fear of such a law, been enforced. It is certain that before a free coinage bill can become a law the wide distrust caused by the pending of such a measure will lead to the rapid collection of debts, the sacrifice of property and deepen existing financial difficulties growing out of insufficient revenues for the nation as well as for any state government.
It is sometimes said of creditors that they are bloodthirsty Shylocks, aristocrats, blood-suckers, extortioners. It may be that there are among money-lenders some men who merit these epithets, but the great body of creditors of our country are among the thrifty, industrious and intelligent men and women of every community. One great body of creditors here is the 970,000 Union soldiers, their widows and orphans, who are creditors of the United States to the amount of over $140,000,000 a year for services and sacrifices in the Union army. It would be an act of perfidy and meanness beyond expression for this great country to pay them with the money of less purchasing power than gold coin, merely because the overproduction of silver in the United States has reduced the market value of silver bullion contained in a silver dollar. To take advantage of this decline in order to reduce the value of the pittance to these pensioners is worse than to rob the graves of the dead.
There is another class of creditors that the free coinage of silver will greatly injure. It is the depositors in savings institutions and kindred organizations, who, according to official statistics, number nearly 5,000,000 people, and whose deposits amount to more than $1,800,000,000. Will you cheat them by reducing the value and purchasing power of the dollar they have deposited?
Free coinage will also wipe out nearly one-half the value of life insurance, which provident people of the United States have paid to secure in case of death some support and protection to wife and children. It will affect the multitude of clerks and employees who depend upon monthly pay, and will reduce the purchasing power of all salaries of officers and employees in the United States, and of every State, county, city or township in this broad land. But by far the greatest injury resulting from the free coinage of silver will fall upon workingmen. Their wages are now based upon money of the highest value, upon gold coin of standard value. Under free coinage of silver the value of the silver dollar will fall to fifty-three cents in gold, or, as I have already said, the hundred cents of the gold dollar will be worth 194 cents of the silver dollar.
The struggle between workingmen and employer will then commence, and no one knows better than the workingman how difficult it is to get an advance in pay. We have strikes and strife enough now, when the workingman gets his pay in gold coin or its equivalent, but what will be the condition when he is paid in cheaper money of the same nominal amount, but of less purchasing power? Every sentiment of justice will be on the side of the workingman in his struggle for good money or increased wages in cheap money.
I have the confident hope that the great body of the Republican and Democratic parties, representing the conservative elements of our people, will stamp their rebuke upon this measure of infamy and thus preserve intact the honor, the credit and glory of our great country. This matter of the free coinage of silver and the degredation of the standard of value involves not only questions of money, but of honor and good faith. When their honor is involved the people never fail to respond. They have complied with every promise and paid every debt contracted since the organization of the national government as it became due. They have paid four-fifths of the debts contracted during the Civil War, and the prospect was hopeful that all of it would be paid before the close of the century, but this reversing our standards of value has, like the fire bell at night, startled and alarmed our people.