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26 June, 2013
The Great Republic by the Master Historians
Currency, Labor and Politics
by Bancroft, Hubert H.

[To detail the history of the many stirring questions and movements that arose in the twenty years following the close of the war would be beyond the scope of this work. It is necessary, however, to give a fairly comprehensive though brief narrative of each controversy, to which end strict chronological order is subordinated to general interest.]

Whatever radical difference existed as to the choice of remedies, all parties were agreed that some heroic measure must be devised that would place national finance on a sounder foundation than that of the panic year. Resumption of specie payments was the prescription of farseeing statesmen, but its practicability seemed out of the question. The two leading parties took opposite sides as a rule, though the dividing line was not as strictly drawn as usual in party politics. There were subsidiary questions, which affected the main one varyingly, as sectional interests asserted their views.

In 1873 a law was passed which demonetized the silver dollar, making gold the sole legal tender coinage of the United States. This act is still the subject of acrimonious discussion. Comparatively little silver had been coined since 1834, the total value during the century was only about $8,000,000. As the ratio of our dollar was sixteen to one by weight to gold, and the Latin Union rate was fifteen and a half, a large proportion of our silver coinage was taken by Europe and recoined at a profit. It was generally believed that the immense annual output of gold would establish that metal as the standard of the world. The Monetary Conference at Paris in 1867 advised the demonetization of silver, and the United States, which was represented, agreed to this recommendation. There had been in 1872 an effort to increase the issue of Treasury notes, the popular "greenbacks," from $356,000,000 to $380,000,000. A further "Inflation Bill" in 1874 was vetoed by the President. A compromise measure was passed for the relief of the banks, which fixed the maximum issue at $382,000,000, no part of which was to be held in reserve. It was not until the immense output of Colorado's silver mines, subsequent to 1873, had exceeded the demand that the allegation of fraud was hurled against those who had quietly demonetized the dollar in the Act of that year. Legal tender silver dollars had ceased to be coined, and Europe was acting on the same lines. The Resumption Act was passed in January, 1875, providing that the Treasury should resume specie payments, redeeming the greenbacks in coin from and after January 1, 1879. The Secretary of the Treasury was authorized to sell at not less than par, sufficient bonds to provide the necessary coin, all of which was supposed to be gold. The national debt was also to be paid in coin. In 1875 began the agitation for the restoration of silver to its legal status. The "trade dollar," for use in China, had not been interfered with. Gold had appreciated and prices had fallen. Alarm was widely felt that if debts could not be paid in legal silver coinage it would mean severe hardship if not ruin to taxpayers and traders. A bill was introduced by the Representative from Missouri, known as the "Bland Bill," restoring the silver dollar to its former position as legal tender. It provided that "any owner of silver bullion may deposit the same at any coinage mint or assay office to be coined into dollars, for his benefit, upon the same terms and conditions as gold bullion is deposited for coinage under existing laws."

The bill passed the House but the Senate hesitated to sanction the payment of government bonds, issued when silver was at sixteen to one, with a coinage the ratio of which had fallen to eighteen to one, with the probable continuance of decrease in value. Not until 1878 did the "Bland Bill" become a law, and its passage was only rendered possible by Senator Allison's amendment or substitute, which enacted that the Secretary of the Treasury should buy, at the current market price, from $2,000,000 to $4,000,000 worth of silver each month and coin it into silver dollars, which should be legal tender for all debts. This was accepted by Congress, and on being vetoed by President Hayes, was passed by both Houses on the same day, February 28, 1878. This legislation was supplemented in 1890 by the "Sherman Law" creating Treasury notes issued on deposit of silver bullion. The status of gold was not materially affected by these silver measures. The purchase clause was repealed in 1893. The continued and serious depreciation of silver occasioned a re-discussion of the whole question. The results of the elections of 1896 and 1900 indicated a virtual acceptance, at least for the time, of the universal adhesion to a gold standard. From 1862 until the resumption of 1897 gold had been above par, reaching the high premium of 285 in 1864. It first touched par a few days before January 1, when the Resumption Act came into force.

The organization of labor as a political force culminated in the National Labor Congress of 1870, which formulated demands for cheap money, the creation of a labor department, the exclusion of Chinese immigrants, and an eight-hour working day. The Department was formed in 1888. Many causes contributed to the disturbances, some being veritable labor wars, which began in the seventies. Among these were unwise immigration facilities, demagogism, and short-sighted policy by some large employers. Workmen combined against wholesale importation of illiterate foreigners who were content with a wagescale which meant humiliation if not starvation to American competitors. Employers combined to assert and maintain their legal right to buy labor in the cheapest market. The conditions made bad blood inevitable. It showed first and fiercely in the mining districts of Pennsylvania. A few years before these outbreaks there had been a government investigation in England into a series of deliberate atrocities perpetrated at the instance of certain tradesunion leaders in the cutlery district, where employers and workmen had been killed by explosions and air-guns for disregarding the organization's rules in the matter of wages, apprentices, and "scabs." A number of the suspects came to this country, and, as a coincidence, the same machinery of intimidation soon got at work in Pennsylvania.

A thousand men en masse forced certain mines to shut down in June, 1875. Coal "breakers" were set on fire, trains had to be guarded by armed men to prevent derailing, watchmen and officials were shot, and harmless passengers were fired at in this reign of terrorism. Policemen and employers received the usual tragi- burlesque illustrated "warnings," and the threats were usually carried out, often with fatal results. This was the infamous "Mollie Maguire" organization. Its members not only murdered at pleasure, but were able to control elections and stop business. The State railway companies preferred to do the national duty of ferreting out and punishing the leaders of the Maguires, distrusting the local police machine. By the efforts of a detective spy, who entered the organization, the conspiracy was crushed, nine leaders were hanged and others imprisoned for life.

The management of sundry railway companies in those years was not noted for wisdom, economy, or considerateness in dealing with workmen. Bad as times were, their attitude towards their employees was ill-graced, irrespective of the merits of the questions at issue. Wages were reduced ten per cent, employment was irregular, and other irritating grievances were alleged by the army of men, in justification of the strike of 1877. No pleas of this sort justify the excesses that made this conspicuous as a reckless crusade of destruction. On July 14 the railway men and "sympathetic strikers" from other bodies opened hostilities by suspending freight traffic completely, and passenger trains partially. The Baltimore and Ohio line in West Virginia was first attacked, and this was quickly followed by operations against the Pennsylvania, Erie, and New York Central. New hands were deterred by guns. Pittsburg was the storm centre. The Philadelphia militia were besieged in a roundhouse which was fired by burning cars. They escaped with four killed. Elsewhere the local militia sympathized with the rioters and refused to fire. When the President sent United States troops to the three affected States, Pennsylvania, Maryland and West Virginia, the rioters gave in. During the two weeks of lawlessness nineteen were killed at Chicago, nine rioters at Baltimore, eleven of the crowd killed at Reading, and two hundred soldiers wounded. Pittsburg had $10,000,000 worth of property destroyed, of which Allegheny county alone refunded $3,000,000. A hundred thousand workingmen are said to have had part in the rioting, and they controlled some six thousand miles of railway for the time.

Sparks from the Eastern explosion set California aflame. Labor was in a discontented state. A notice to lower wages was withdrawn by the railway corporation on hearing of the consequences in Pennsylvania, but a meeting was convened at which the working men recorded their sympathy with the strikers. It happened that a simultaneous attack was made that night on some Chinese laundries, of which a number were burnt within a few days and several men were killed. A vigilance committee was formed to suppress violence, and the agitation developed into the "sandlots" meetings under the lead of Denis Kearney, whose war-cry was "The Chinese must go!" It rose, flourished, and died, but left its mark in the legislation forbidding further immigration of the Chinese.

Other notable strikes and riots were those of 1892, at Homestead, Pennsylvania, where the militia was sent to quell the ironworkers, the affair costing several lives; and the Chicago strike at Pullman, where property valued at millions was destroyed and railway traffic suspended, being finally quelled by Federal troops. There were less extensive but very destructive labor wars in 1884 and 1886 in Cincinnati and St. Louis. Chicago had its memorable tragedy when the anarchist members of a mass-meeting, agitating for short hours and sympathizing with a local strike, discharged a bomb killing several policemen, for which four anarchists were hanged. The labor party polled seventy thousand votes for Henry George in the mayoralty election of New York city in 1887, but the Hon. Abram Hewitt was elected. Despite all agitation and honest attempts on both sides to reconcile capital and labor the century closed with little appreciable progress towards so desirable an ending of disputes, which would be easier of solution were inventions and combinations and population on the downward plane.

The course of national politics has run no more smoothly than that of labor. The Presidential controversy of 1876 opened a period of sharp struggle over doctrines of great import to the commonweal. The Republican nominee, Rutherford B. Hayes, was declared elected by the Electoral Commission, though Tilden, the Democratic candidate, had the larger popular vote, which stood, Hayes, 4,033,950, Tilden, 4,284,885. The new administration commanded general respect for quality and character. "One of the first acts of President Hayes' administration was to remove a prominent cause of ill-feeling between the two sections of the country, in the withdrawal of the United States troops that had sustained the Republican State governments in South Carolina, Florida, and Louisiana. With this withdrawal all distinction in the political relations of the States ceased, and the States named fell quickly under Democratic control." The President showed active sympathy with the movement for Civil Service reform. A commission had been appointed in 1871, whose report urged that fitness, and not political favoritism, should be the ground of appointment to government offices. The efforts of the President were loyally followed by his colleagues, and the merit system made substantial headway against the established practice by which the victors claimed the spoils. The public began to see the practical advantage of having and retaining servants who had proved their worth during four years of apprenticeship. The idea of swapping experienced for inexperienced officials for no better reason than the greed of political hangers-on was admittedly in contradiction to all the principles and practices that have made the nation so great, despite such survivals of crude politicianism. The matter assumed a larger phase when Garfield became President. He, too, favored the common-sense plan, and, whatever reasons outside this may have influenced him in the same direction, he raised a storm when he acted on his right to make appointments without consulting Conkling and Platt, the "boss" Senators from New York. Not being pleased, they resigned their seats, but were disappointed when their constituencies declined to re-elect them.

The assassination of President Garfield in the fourth month of his term by an aggrieved minor official out in the cold, may indirectly have sprung from the widespread hostility to reform. Two years later the merit system was embodied in an Act of Congress, and its operation, though slow, is gaining popular approval. Under the Administration of President Arthur a new tariff law was passed, increasing some duties, lowering others, and extending the free list. The Monroe doctrine had been raised by the effort to construct the Panama Canal. The later international discussion of the proposed Nicaragua Canal makes it of interest to note certain official utterances made by President Hayes and his successor. In a special message, 1880, President Hayes said: "The United States cannot consent to the surrender of control.. to any European power or to any combination of European powers.. An inter-oceanic canal across the American isthmus will be a great ocean thoroughfare between our Atlantic and our Pacific shores and virtually a part of the coastline of the United States. No other great power would under similar circumstances fail to assert a rightful control over a work so closely and vitally affecting its interest and welfare." The Clayton-Bulwer treaty virtually permits the control of such a canal by England. In Garfield's time, Blaine, as Secretary of the Interior, made a strong effort to have the treaty modified, and the English government made the objection that sole control by the United States would lead other powers to build fortifications to command the approaches to the canal in the interests of their commerce, in view of possible trouble. The discussion was continued by Secretary Frelinghuysen of Garfield's Cabinet but with no agreement upon vital points. The status of the proposed Nicaragua Canal, and recent related matters are considered more fully elsewhere.

Oliver H. G. Leigh


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