Part 19

Nothing is more sensitive than Credit, which is the essential element of financial restoration. A breath will make it flutter. How can you expect to restore the national credit, now unnaturally sensitive, while the Nation is still uneasy from those Rebel pretensions which have cost so much? Security is the first condition of Financial Reconstruction; and I am at a loss to find any road to it, except through Political Reconstruction. All this seems so plain that I ought to apologize for dwelling on it. And yet there are many, who, while professing a desire for an improvement in our financial condition, perversely turn their backs upon the only means by which this can be accomplished. Never was there equal folly. Language cannot picture it. Every denial of Equal Rights, every impediment to a just reconstruction in conformity with the Declaration of Independence, every pretension of a “white man’s government” in horrid mockery of self-evident truths declared by our fathers, and of that brotherhood of mankind declared by the Sermon on Mars Hill, is a bar to that Financial Reconstruction without which the Rebellion still lingers among us. So long as a dollar of irredeemable paper is forced upon the country, the Rebellion still lives, in its spurious progeny.

Party organization and Presidential antagonism have thus far stood in the way, while at each stage individual perverseness has played its part. The President has set himself obstinately against Political Reconstruction; so also has the Democratic Party; others have followed, according to the prejudices of their nature; and so the national finances have suffered. Not the least of the offences of Andrew Johnson is the adverse influence he has exerted on this question. All that he has done from the beginning has tended to protract the Rebellion and to extend the disorder of our finances. And yet there are many not indifferent to the latter who have looked with indifference upon his criminal conduct. So far as their personal interests depended on an improved condition of the finances, they have already suffered; but it is hard that the country should suffer also. Andrew Johnson has postponed specie payments, and his supporters of all degrees must share the responsibility.

Such is my confidence in the resources of our country, in the industry of its people, and in the grandeur of its destinies, that I cannot doubt the transcendent future. Alas that it should be interrupted by unwise counsels, even for a day! Financial Reconstruction is postponed only. It must come at last. Here I have no panacea that is not as simple as Nature. I know of no device or trick or medicine by which this cure can be accomplished. It will come with the general health of the body politic. It will come with the renovated life of the Nation, when it is once more complete in form, when every part is in sympathy with the whole, and the Rebellion, with all its offspring, is trampled out forever. In such a condition of affairs, inconvertible paper would be an impossibility, as much as a bill of sale for a human being.

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Meanwhile there are certain practical points which must not be forgotten. Foremost among these I put the absolute dependence of the national finances upon the faithful performance of all our obligations to the national freedmen. Pardoned Rebels will never look with complacency upon the national debt, or the interest which testifies semiannually to its magnitude. Their political colleagues at the North will be apt to sympathize with them. Should the scales at any time hang doubtful, it is to others that we must turn to adjust the balance. Therefore, for the sake of the national finances, I insist that the national freedmen shall be secured and maintained in Equal Rights, so that local prejudices and party cries shall be unavailing against them. You who have at heart the national credit, on which so much depends, must never fail to cherish the national freedmen, treating their enemies as if they were your enemies. Every blow at them will rebound upon yourselves.

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In dealing with the financial question, there are two other points of ever-present importance: first, the necessity of diminishing, so far as practicable, the heavy burden of taxation so oppressive to the people; and, secondly, the necessity of substituting specie for inconvertible paper. Here are two objects, which, when accomplished, will add infinitely to the wealth and happiness of the country, besides being the assurance that the Nation has at last reached that condition of repose so much longed for.

Before considering these two points in detail, I venture to remark that there is one condition, preliminary in character and equally essential to both, through which taxation will be lightened and specie payments will be hastened. I refer to the Public Faith, which must be sacredly preserved above all question or suspicion. The word of our Nation must be as good as its bond; and nobody must attempt to take a tittle from either. Nothing short of universal wreck can justify any such bankruptcy. Let the Public Faith be preserved, and all that you now seek will be easy.

A virtuous king of early Rome dedicated a temple on the Capitol Hill itself to a divinity under the name of _Publica Fides_, who was represented with a wreath of laurel about her head, carrying ears of corn and a basket of fruit,--typical of honor and abundance sure to follow in her footprints. In the same spirit another temple was dedicated to the god Terminus, who presided over boundaries. The stones set up to mark the limits of estates were sacred, and on these very stones there were religious offerings to the god. The heathen maledictions upon the violator were echoed also by the Hebrews, when they said: “Cursed be he that removeth his neighbor’s landmark: and all the people shall say, Amen.”[235] In those early Roman and Hebrew days there was no national debt divided into bonds; there was nothing but land. But a national bond is as well defined as a piece of land. Here, then, is a place for the god Terminus. Every obligation is like a landmark, not to be removed without curses. Here, also, is a place for that other divinity, _Publica Fides_, with laurelled head, and hands filled with corn and fruit.

Public Faith may be seen in the evil which springs from its loss and in the good which overflows from its preservation. It is like honor: and yet, once lost, more than dishonor is the consequence; once assured, more than honor is the reward. It is a possession surpassing all others in value. The gold and silver in your Treasury may be counted; it stands recorded, dollar for dollar, in the national ledger; but the sums which the unsuspected credit of a magnanimous nation can command are beyond the record of any ledger. Public Faith is more than mines of silver or gold. Only from Arabian story can a fit illustration be found, as when, after all human effort had failed, the Genius of the Lamp reared the costly palace and stored it with beauty. Public Faith is in itself a treasury, a tariff, and an internal revenue, all in one. These you may lose; but if the other is preserved, it will be only for a day. The Treasury will be replenished, the tariff will be renewed, the internal revenue will be restored. With Public Faith as an unfailing law, the Nation, like Pactolus, will sweep over golden sands; or, like Midas, it will change into gold whatever it touches. Keep, then, the Public Faith as the “open sesame” to all that you can desire; keep it as you would keep the philosopher’s stone of fable, having which, you have all.

And yet, in the face of this plain commandment, on which hangs so much of all that is most prized in national existence, we are called to break faith. It is proposed to tax the national bonds, in violation of the original bargain on which the money was lent. Sometimes the tax is to be by the Nation, and sometimes by the States. The power to do this wrong you may possess, but the right never. Do what you will, there is one thing you cannot do: you cannot make wrong right. It is in vain that you undertake to set aside the perpetual obligation which you have assumed. Against every such pretension, whether by speech or vote, there is this living duty, which will survive Congress and politician alike. Puny as the hand of a child is the effort to undo this original bargain. The Nation has promised six per cent. interest, payable semiannually in coin, nor more nor less, without any abatement; and then, having bound itself, it proceeds to guard against the States by declaring specifically that the bonds shall be “exempt from taxation by or under State authority.” Such is the bargain. There it is; and it must continue unchanged, except by the consent of the parties, until the laws of the universe tumble into chaos.

The rogue in Shakespeare exclaims, “What a fool Honesty is! and Trust, his sworn brother, a very simple gentleman!” In equal levity it is said, “Tax the bonds,” although, by the original bargain on which the money was obtained, amid the trials of war for the safety of the Nation, it was expressly stipulated that these bonds should not be taxed. Nevertheless, tax the bonds! Of course, by taxing the bonds the bargain is brutally broken,--and this, too, after the Nation has used the money. Such a transaction in common life, except where bankruptcy had supervened, would be intolerable. A proud Nation, justly sensitive to national honor, as the great Republic through whose example liberal institutions are commended to mankind, cannot do this thing.

The proposition to tax the bonds, in open violation of the original bargain, is similar in spirit to that other enterprise, which, under various discordant ensigns, proposes to pay the national bonds with inconvertible paper. Here at once, and on the threshold, Public Faith interposes a summary protest. On such a question debate even is dangerous; the man who doubts is lost. The money was borrowed and lent on the undoubting faith that it was to be paid in coin. Nothing to the contrary was suggested, imagined, or dreamed, at the time. Behind all forms of language, and even all omissions, this obligation stands forth, in the nature of the case, explained and confirmed by the history of our national loans, and by the official acts of successive Secretaries of the Treasury interpreting the obligations of the Nation.

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So much stress is laid upon the language of the five-twenties that I cannot let it pass. The terms employed were precisely those in previous bonds of the United States where the principal was paid in coin, some of which are still outstanding. Had there been any doubt about the meaning, it was fixed by the general understanding, and by special declarations of responsible persons speaking for the Nation. On 26th May, 1863, Mr. Harrington, the Assistant Secretary of the Treasury, in an official letter, says: “These bonds will, therefore, be paid in gold.” On 15th February, 1864, Mr. Field, also Assistant Secretary of the Treasury, writes: “I am directed by the Secretary to say that it is the purpose of the Government to pay said bonds, like other bonds of the United States, in coin, at maturity.” On 18th May, 1864, Mr. Chase, at the time Secretary of the Treasury, wrote: “These bonds, _according to the usage of the Government_, are payable in coin.” Mr. Fessenden, while Secretary of the Treasury, in his annual report to Congress, expressed the same conclusion; and his successor, Mr. McCulloch, in a letter of 15th November, 1866, says: “I regard, as did also my predecessors, all bonds of the United States as payable in coin.” There are also numerous advertisements from the Treasury, and from its business agents, all in the same sense.

Here is a succession of authorities, embracing high functionaries of the United States, all concurring in affixing upon these bonds the obligation to pay in coin. As testimony to the meaning of the bonds, it is important; but considering that all these persons represented the National Treasury, and that they were the agents of the Nation for the sale of these very bonds, their representations are more than testimony. Until their authority is disowned by Congress, and their representations discarded, it is difficult to see why their language must not be treated as part of the contract, at least in all sales subsequent to its publication. It must not be forgotten that these original sales were mainly to bankers and brokers, and in large amounts, for the purpose of resale to small purchasers seeking investments. It was in reply to parties interested in these resales that the letters of Assistant Secretary Field and Mr. Chase were written, pledging the Nation to payment in coin. At the date of these important letters Congress was in session, and, although the opportunity was constant, there was no protest against the meaning thus authoritatively affixed to these obligations. The bonds were in the market, advertised and sold daily, with a value established by the representations of these national agents; and Congress did not interfere to set aside these representations. By subsequent Acts similar loans were authorized, and nobody protested. There was the supplementary clause of 3d March, 1864, for the issue of eleven millions of these bonds, to cover an excess subscribed above the amount authorized by the original Act. This was debated in the Senate on the 1st of March; but you will search the “Globe” in vain for any protest. Then came other Acts, at different dates, by which the loan was further enlarged to its present extent, and all the time these representations were uncontradicted. Against them there was no Act of Congress, no protest, nothing. If this is not “acquiescence,” then I am at a loss to know how acquiescence can be shown. Therefore do I insist that these representations are a part of the contract by which the Nation is bound.

It is said that in the five-twenty bonds there are words promising interest in coin, but nothing with regard to the principal. Forgetting the contemporary understanding and the official interpretation, and assuming that at maturity the bond is no better than a greenback, it becomes important to know the character of this obligation. On its face a greenback is a promise to pay a certain number of dollars. It is paper, and it promises to pay “dollars.” Here is an example, which I take from my pocket: “The United States promise to pay to the bearer _five dollars_”--not five dollars in paper, or in some other substituted promise, but “five dollars,” which can mean nothing else than the coin known over the world with the stamp of Spain, Mexico, and the United States, being a fixed value, which passes current in every zone and at the antipodes. The “dollar” is an established measure of value, like the five-franc piece of France, or the pound sterling of England. As well say, that, on a promise to pay so many francs in France, or so many pounds sterling in England, you could honestly acquit yourself by handing over a scrap of printed paper, inconvertible in value. This could not be done. The promise in our greenbacks carries with it an ultimate obligation to pay the silver dollar whose chink is so familiar in the commerce of the world. The convertibility of the greenback is for the present suspended; but when paid, it must be in coin. To pay with another promise is to renew, and not to discharge the debt. But the obligation in our bonds is to pay “dollars” also, _whenever the bonds are paid_; it may be after five years, or, in the discretion of the Nation, not till twenty years, but, _when paid_, it must be in “dollars.” Such is the stipulation; nor could the addition of “coin” or “gold” essentially change this obligation. _It is contrary to reason that a bond should be paid in an inferior obligation._ It is dishonest to force inconvertible paper without interest in payment of an interest-bearing obligation. The statement of the case is enough. Such an attempt disturbs the reason and shocks the moral sense.

Between the bond and the greenback there is an obvious distinction, doubly attested by the Act of Congress creating them both,--for they were created together. This distinction appears, first, in the title of the Act, and, secondly, in its provisions. According to its title, it is “An Act to authorize the issue of United States notes, _and for the redemption or funding thereof, and for funding the floating debt of the United States_.”[236] In brief, greenbacks were made a legal tender, and authority was given to fund them in these bonds. This appears in the very title of the Act. Now the object of funding is to bring what is uncertain and floating into a permanent form; and accordingly greenbacks were funded and placed on interest. The bonds were a substitute for the greenbacks; but the new theory makes the greenbacks a substitute for the bonds. To carry forward still further the policy of the Act, it was provided that the greenbacks might be exchanged at once for bonds; and then, by the Act of 11th July, 1862,[237] it was further provided that these very greenbacks “may be paid in coin,” at the direction of the Secretary, instead of being received in exchange for certificates of deposit, which were convertible into bonds,--thus treating the bonds as the equivalent of coin. The subsequent repeal of these provisions does not alter their testimony to the character of these bonds. Thus, at every turn, we are brought to the same conclusion. The dishonor of these obligations, whatever form it may assume, and whatever pretext it may adopt, is nothing but Repudiation.

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The word _Repudiation_, now so generally used to denote the refusal to pay national obligations, has been known in this sense only recently. In the early dictionaries of our language it had no such signification. According to Dr. Johnson, it meant simply “divorce,” “rejection,” as when a man put away his wife. It began to be known in its present sense when Mississippi, the State of Jefferson Davis, dishonored her bonds. From that time the word has been too familiar in our public discussions. It was not unnatural that a State mad with Slavery should dishonor its bonds. Rejecting all obligations of humanity and justice, it easily rejected the obligations of Public Faith. Slavery was in itself a perpetual _repudiation_, and slave-masters were unblushing _repudiators_. Such an example is not fit for our Nation at this great period of its history.

It is one of the calamities of war, that, while it compels the employment of large means, it blunts the moral sense, and breeds too frequently an insensibility to the obligations incurred. A national debt shares for the time the exceptional character of war itself. Contracted hastily, it is little regarded except as a burden. At last, when business is restored and all things assume their natural proportions, it is recognized in its true character. The country accommodates itself to the pressure. This time is now at hand among us, if not arrested by disturbing influences. Unhappily, the demands of Public Faith are met by higgling and chaffering, and we are gravely reminded that the “bloated bond-holders” now expect more than they gave,--forgetting that they gave in the darkness of the war, at the appeal of the Nation, and to keep those armies in the field through which its existence was preserved,--forgetting also that among these bond-holders, now so foully stigmatized, were the poor, as well as the rich, all giving according to their means. It was not in the ordinary spirit of money-lending that those contributions were made. Love of country entered into them, and made them more than money. If the interest was considerable, it was only in proportion to the risk. Every loan at that time was a contract of bottomry on the Nation,--like money lent to a ship in a strange port, and conditioned on its arrival safe at home,--so that it failed entirely, if Slavery, by the aid of Foreign Powers, established its supremacy. God be praised, the enemy has been overcome! It remains now that we should overcome that other enemy, which, hardly less malignant than war itself, would despoil the Nation of its good name and take from it all the might of honesty. And here to every citizen, and especially to every legislator, I would address those incomparable words of Milton in his sonnet to Fairfax:--

“Oh, yet a nobler task awaits thy hand, (For what can war but endless war still breed?) Till truth and right from violence be freed, _And Public Faith cleared from the shameful brand_ _Of public fraud_.”

The proposition to pay bonds in greenbacks becomes futile and fatuous, when it is considered that such an operation would be nothing more than the substitution of greenbacks for bonds, and not a payment of anything. The form of the debt would be changed, but the debt would remain. Of the twenty-five hundred millions which we now owe, whether in greenbacks or bonds, every dollar must be paid, sooner or later, or be ignobly repudiated. By paying the interest of the bonds in coin, instead of greenbacks, the annual increase of the debt to this extent is prevented. But the principal remains to be paid. If this be attempted in greenbacks, it will be by an issue far beyond all the demands of the currency. There will be a deluge of greenbacks. The country must suffer inconceivably under such a dispensation. The interest on the bonds may be stopped by the substitution, but the currency will be depreciated infinitely beyond any such dishonest saving. The country will be bankrupt. Inconvertible paper will overspread the land, to the exclusion of coin or any chance of coin for some time to come. Farewell then to specie payments! Greenbacks will be everywhere. The multitudinous rats that swam the Rhine and devoured Bishop Hatto in his tower were not more destructive. The cloud of locusts described by Milton as “warping on the eastern wind” and “darkening all the land of Nile,” were not more pestilential.

I am now brought to the practical question, to which I have already alluded: How the public burdens shall be lightened. Of course, in this work, the Public Faith, if kept sacred, will be a constant and omnipresent agency, powerful in itself, and powerful also in its reinforcement of all other agencies.

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It will not seem trivial, if I insist on systematic economy in the administration of the Government. All needless expenditure must be lopped off. Our swollen appropriations must be compressed. Extravagance and recklessness, so natural during a period of war, must give way to moderation and thrift. All this without any denial of what is just or beneficent. The rule should be economy without niggardliness. Always there must be a good reason for whatever we spend. Every dollar, as it leaves the National Treasury, must be able to exhibit its passport. Doubtless the army and navy can be further reduced without detriment to the public service. Beyond this great saving there should be a constant watchfulness against those schemes of public plunder, great and small, from which the Nation has latterly suffered so much. All these things are so plain as to be little more than truisms.

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