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Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States by the best American and European Authors, ed. John J. Lalor (New York: Maynard, Merrill, & Co., 1899). Vol 3 Oath - Zollverein
Part of: Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States, 3 vols.
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UNION, The (IN U. S. HISTORY), the title by which the national life of the United States of America is commonly expressed. The title necessarily implies that which is the unanimous choice of the American people, a federal system of states. It would not necessarily exclude the idea of secession, since a union may be either voluntary or involuntary; but it is notorious matter of history that the American Union was not voluntary, that it was compelled by the same pressure of common interests which still and more strongly holds it together, and that it therefore does exclude the idea of secession. (See NATION, STATE SOVEREIGNTY.)
—The "Roman peace," which was enforced by the great republic and empire of ancient times around the Mediterranean, did not exclude exactions by proconsuls, to which an open war would sometimes have been preferable. The Pax Americana, which the Union enforces upon the great and growing states of central North America, has no such drawbacks, and has been one great secret of the national prosperity. The great state of New York, stronger already in population than Sweden, Portugal, the Dominion of Canada, or any South American state, except Brazil, is surrounded by smaller states, Vermont, Connecticut, New Jersey, Delaware. But these last have no anxieties: no standing armies breed taxes and hinder labor; no wars or rumors of wars interrupt trade; there is not only profound peace, but profound security, for the Pax Americana of the Union broods over all. It seems probable that the steady doubling of population of the United States will, within the next century, force upon the states of Europe some similar or separately developed union for the same purpose. The free trade which is one of the benefits of the American Union, would then have a larger jurisdiction. Perhaps the poet's dream of "the parliament of man, the federation of the world," is not an impossibility; and that with it will come the era of universal peace and universal free trade.
UNION PARTY. (See REPUBLICAN PARTY.)
UNITED STATES NOTES.
UNITED STATES NOTES. A brief sketch in reference to the bills of credit or treasury notes, issued by the government, by the colonies, and of the circulating notes issued by the banks previous to the adoption of the constitution, is given in the article on "Banking in the United States," in the first volume of this Cyclopædia. The committee appointed by the federal convention held in Philadelphia on May 14, 1787, reported, on Aug. 6, a draft of the constitution, which contained, in article thirteen, a clause giving qualified authority to the states to issue paper money, as follows: "No state without the consent of the legislature of the United States shall emit bills of credit, or make anything but specie a tender in payment of debt." This clause, after discussion, was finally so amended as to read as follows: "No state shall coin money; emit bills of credit, make anything but gold and silver coin a tender in payment of debts."
—The eighth clause of the first section of the seventh article of the constitution as presented for the consideration of the convention, provided that "the legislature of the United States shall have power to borrow money, and emit bills on the credit of the United States." This clause, as embodied in the eighth section of the first article of the constitution as finally adopted, reads, "The congress shall have power to borrow money on the credit of the United States." The debate141 on the question of striking out the words "and emit bills," is given in full for the reason that the subject of making bills of credit issued by the government a legal tender, is here for the first time discussed, and was not subsequently at any time, as far as I am aware, discussed at any length by congress, though it was twice presented for their consideration, until the legal tender acts of 1862 were brought before congress for its consideration. "Mr. Gouverneur Morris moved to strike out, 'and emit bills on the credit of the United States.' If the United States had credit, such bills would be unnecessary; if they had not, unjust and useless. Mr. Butler seconds the motion. Mr. Madison: Will it not be sufficient to prohibit the making them a tender? This will remove the temptation to emit them with unjust views. And promissory notes, in that shape, may in some emergencies be best. Mr. Gouverneur Morris: Striking out the words will leave room still for notes of a responsible minister, which will do all the good without the mischief. The moneyed interest will oppose the plan of government, if paper emissions be not prohibited. Mr. Gorham was for striking out without inserting any prohibition. If the words stand, they may suggest and lead to the measure. Mr. Mason had doubts on the subject. Congress, he thought, would not have the power, unless it were expressed. Though he had a mortal hatred to paper money, yet as he could not foresee all emergencies, he was unwilling to tie the hands of the legislature. He observed that the late war could not have been carried on, had such a prohibition existed. Mr. Gorham: The power, as far as it will be necessary or safe, is involved in that of borrowing. Mr. Mercer was a friend to paper money, though in the present state and temper of America, he should neither propose nor approve of such a measure. He was consequently opposed to a prohibition of it altogether. It will stamp suspicion on the government, to deny it a discretion on this point. It was impolitic, also, to excite the opposition of all those who were friends to paper money. The people of property would be sure to be on the side of the plan, and it was impolitic to purchase their further attachment with the loss of the opposite class of citizens. Mr. Ellsworth thought this a favorable moment to shut and bar the door against paper money. The mischiefs of the various experiments which had been made were now fresh in the public mind, and had excited the disgust of all the respectable part of America. By withholding the power from the new government, more friends of influence would be gained to it than by almost anything else. Paper money can in no case be necessary. Give the government credit, and other resources will offer. The power may do harm, never good. Mr. Randolph, notwithstanding his antipathy to paper money, could not agree to strike out the words, as he could not foresee all the occasions that might arise. Mr. Wilson: It will have a most salutary influence on the credit of the United States to remove the possibility of paper money. This expedient can never succeed while its mischiefs are remembered. And as long as it can be resorted to, it will be a bar to other resources. Mr. Butler remarked that paper was a legal tender in no country in Europe. He was urgent for disarming the government of such a power. Mr. Mason was still averse to tying the hands of the legislature altogether. If there was no example in Europe, as just remarked, it might be observed, on the other side, that there was none in which the government was restrained on this head. Mr. Read thought the words, if not struck out, would be as alarming as the mark of the beast in Revelation. Mr. Langdon had rather reject the whole plan than retain the three words, 'and emit bills.' On the motion for striking out, New Hampshire, Massachusetts, Connecticut, Pennsylvania, Delaware, Virginia, North Carolina, South Carolina, Georgia, aye—9; New Jersey, Maryland, no—2. The clause for borrowing money was agreed to, nem. con. Adjourned."
—Nine states voted to strike out, and two states to retain. Virginia voted in the affirmative, and in explanation of his vote, Mr. Madison appended the following note: "This vote in the affirmative by Virginia was occasioned by the acquiescence of Mr. Madison, who became satisfied that striking out the words would not disable the government from the use of public notes as far as they could be safe and proper: and would only cut off the pretext for a paper currency, and particularly for making the bills a tender either for public or private debts."
—The constitution was adopted on Sept. 17, 1787, and three years thereafter, Hamilton, in his report of Dec. 13, 1790, on a national bank, said: "The emitting of paper money by the authority of government is wisely prohibited to the individual states by the national constitution; and the spirit of that prohibition ought not to be disregarded by the government of the United States. Though paper emissions, under a general authority, might have some advantages not applicable, and be free from some disadvantages which are applicable, to the like emissions by the states separately, yet they are of a nature so liable to abuse—and, it may even be affirmed, so certain of being abused—that the wisdom of the government will be shown in never trusting itself with the use of so seducing and dangerous an expedient."
—Although notes of different forms were issued subsequently by the government at various dates, some of which were receivable for all dues payable to the government, no circulating notes were issued, which by the terms of law were made a full legal tender until the passage of the act of Feb. 25, 1862, which was nearly seventy-five years after the adoption of the constitution.
—Some of the treasury notes, issued since the adoption of the constitution, and previous to the passage of the legal-tender act, were receivable for all dues to the government, and others not: some were payable at a fixed date, both with and without interest: some were fundable at any time after the date of their issue, others at a fixed date in United States bonds.
—During the late civil war, treasury notes were also issued of all these different forms, and also notes payable on demand, receivable for all dues to the government, and others payable on demand, not receivable for duties on imports, or payable by the government for interest upon the public debt, but in every other respect a full legal tender to and by the government, and between the people in all payments.
—No notes were issued from 1789 to 1812, a period of twenty-three years. Such notes were issued in the years 1812, 1813, 1814 and 1815, and at various dates from 1837 to 1847. They were again issued in 1857, and subsequently, in the years 1860, 1861 and thereafter. The periods for the issue of these notes may be summarized as follows: first, the war of 1812; second, the financial panic of 1837; third, the Mexican war; fourth, the financial crisis of 1857; and fifth, the war of the rebellion. It will thus be seen that there have been five emergencies in which congress, without any special constitutional authority, has seen fit to authorize such issues. The original debt had, at the beginning of 1812, been reduced from seventy-five millions to forty-five millions.
—TREASURY NOTES OF THE WAR OF 1812. In 1810 it was found impossible to meet all of the annual reduction of the debt required by law from the sinking fund, and a temporary loan was authorized to make up the deficiency, which amounted to $2,750,000. This loan was paid the next year. In 1811, however, recourse was had to a loan, and the one authorized by congress for that year was taken so slowly, that, in May, the secretary for the first time recommended the issue of treasury notes upon the following principle, viz.: "1. Not to exceed, in the whole, the amount which may ultimately not be subscribed to the loan: that is to say, that the amount received on account of the loan, and that of the treasury notes, shall not, together, exceed eleven millions; which limits, therefore, the greatest possible amount of treasury notes to less than $4,900,000. 2. To bear an interest of 5 2/5 per cent. a year, equal to 1½ per cent. per day on a hundred dollar note. 3. To become payable by the treasury one year after the date of their respective issues. 4. To be, in the meanwhile, receivable in payment of all duties, taxes, or debts, due to the United States." He did not propose that the notes should be fundable in the loan which they were intended to re-enforce. This recommendation of Secretary Gallatin was made in his letter of May 14, 1812, to Mr. Langdon Cheves, chairman of the committee of ways and means of the house, and, in conformity therewith, a bill was reported by that committee on June 12, 1812.
—War was declared against Great Britain June 18, 1812. The failure of the loan was due to the fact that the money had to be borrowed from the very classes who had been opposed to the war: therefore, when the bill for authorizing treasury notes was put upon its passage on June 16, it met with much opposition.
—It was argued, that the notes under the bill were not equal in value to gold and silver, and would not be received by the banks or the people, who were prejudiced against such government paper; that if issued they could not be redeemed, and would depreciate; that the measure would be subversive of public and private credit; that it was a confession of impaired credit; that to allow the notes to be deposited in banks and to accept bank paper in exchange was to depreciate the government's paper; that if issued, additional taxes should be imposed and set apart for the redemption of the notes, as in the case of the English exchequer notes; that the proposed notes were the same as the old continental money, and would depreciate in the same way. Others opposed the bill simply because they opposed the war or any preparation for it. In case war proved unavoidable the necessary funds should be raised by taxes and loans. The shortness of the time for which the notes were to be issued, was another objection. The public revenues would not meet the engagement, and engagements should not be entered into without a certainty of fulfillment. Taxes were necessary. It was a paltry expedient never suggested by Hamilton or Wolcott, and not even the spontaneous production of Gallatin; that the first suggestion of the latter was to authorize a loan on such terms as would have insured its success. It was a humiliating spectacle to exhibit the government failing in negotiating its first war loan.
—On the other hand, the supporters of the bill maintained that the notes would be received by the banks in the same manner as any good individual paper was received. The banks would give the government credit for them, and in return the government could draw gold and silver from the banks. The notes would be even more valuable to the latter than specie, as they could be kept as an interest-bearing reserve. They would have currency, being receivable in duties, taxes, and debts due the government, and, as interest accumulated, they would increase in value. In reply to the suggestions that money should be raised by taxes, it was stated, that when, previously, measures of that kind had been proposed, the opposition had refused to consent. The issue of treasury notes, bearing interest at 5 2/5 per cent. only, did not indicate bad, but rather good, credit. Individuals in good credit could not borrow at less than 6 per cent. There was no depreciation of government paper in exchanging the notes for bank paper, as the latter was ready money, while the former were payable one year after date. It was denied that the people had or would have any prejudice against treasury notes. They were not prejudiced against bank notes, and the proposed notes bearing interest had many advantages over bank paper. The proposed notes would be in no way inferior to exchequer bills: in fact, it was only want of credit that compelled the English government to set aside certain revenues to meet the latter. The treasury notes would have two advantages over exchequer bills; one, the superior credit of the United States; and the other, that they were receivable for taxes and public dues. They were also superior to public stocks, in that, while bearing interest, they also can serve as currency, the same as gold and silver, thus enhancing the medium of circulation. There was no resemblance between them and continental money. When the latter was issued, the government was dependent on the pledges of the several states for its revenues, but now its credit was above suspicion, its power to raise revenue complete, and its ability to pay its debts undoubted. War was unavoidable. Both loans and taxes would have to be resorted to. The proposed notes were nothing but a loan with extraordinary advantages, taking, however, but little from the circulating medium of the country. In many transactions they would have all the effect of money. While not secured by any specific fund set apart for their redemption, the entire duties and taxes of the year are indirectly pledged for this purpose, since they are receivable in payment of such duties and taxes. The revenues of the year were estimated at eight millions, and the proposed issue of notes was five millions only. The faith of the government was pledged for their redemption. That faith had never been violated. The resources of the government were ample beyond those of any other nation. Its sources of revenue were unimproved land, a productive agriculture, an extensive commerce, an enterprising people, and an unlimited right of taxation. The anticipated abuse of a privilege was no argument against its legitimate use.
—The bill passed the house June 17, 1812, yeas 85, nays 41. It passed the senate June 26, and became a law June 30, 1812. By it the president was authorized to issue treasury notes to an amount not exceeding $5,000,000. The notes were redeemable, at such places as were expressed on them, within one year of the date of their issue. They bore interest at the rate of 5 2/5 per cent. per annum from the day of issue, being one and one-half cents a day on a hundred dollar note, payable at the place where the principal was payable. They were signed by persons designated by the president, and the compensation of these persons was fixed at one dollar and twenty-five cents each for one hundred notes signed. They were counter-signed by the commissioners of loans for the state in which the notes were respectively made payable. With the approval of the president, the secretary of the treasury was authorized to borrow money upon the security of the notes, and to pay them to such banks as would give the government credit for them at par. When the notes were paid to collectors of revenue and receivers of public money, the interest ceased on the day of payment. The commissioners of the sinking fund were authorized to cause the principal and interest to be paid when due, and to purchase them at not more than par, in the same way as they purchased other public securities, with a view of reducing the debt. They were made payable to order, transferable by delivery and assignment on indorsement by persons to whose order they were made payable.
—The notes were made everywhere receivable for duties, taxes, and in payment of public land, at their par value with accrued interest on the day paid in. Penalties were imposed for counterfeiting them, and an appropriation made for the expense of printing and preparing the notes.
—There was nothing in the law regulating the denominations in which they should be issued, but, as a matter of fact, none were issued of a denomination of less than one hundred dollars.
—The largest amount authorized under this act, outstanding at any one time, was five millions. The notes authorized were all issued before the end of the year 1813, and were all redeemed during the year 1814. The secretary estimated that there would be a deficit of nineteen millions for the year 1813. Congress authorized sixteen millions of this amount to be obtained by loans, without the usual provision that the bonds should be sold at par, or specifying the rate of interest. The loan was placed with great difficulty, the sixteen millions authorized being obtained from the avails of $18,109,377.43 of stock, bearing interest at 6 per cent. To supply the remainder, a bill was introduced into the house on Jan. 27, 1813, to authorize a new issue of treasury notes. The bill was similar in its provisions to the act of 1812: the arguments for and against the measure, were, in the main, the same as those in 1812. The opposition complained that much favoritism had been shown in the dealings of the banks. It was alleged that among the banks granting credit, in return for the treasury notes deposited, as authorized by the law of 1812, were those acting as depositaries of public moneys derived from the deposits of collectors and public agents; that this very money so deposited by the government agents was again loaned to the government on the credit of treasury notes. On the other hand, it was urged that the use of banks as depositaries was unavoidable, and that, in any event, banks would receive incidental benefit from keeping government deposits. Even if a stock loan was substituted for treasury notes the money realized therefrom would be deposited with the same banks until required by the government. The bill passed the house by a vote of 79 to 41, and the senate by a vote of 17 to 9, and became a law on Feb. 25, 1813.
—The greatest amount of notes authorized by this act, outstanding at any one time, was five millions: they were all redeemable by the first quarter of the calendar year of 1815, but at the close of that quarter only $1,483,900 had been redeemed, and all of the remainder was not finally paid until the year 1820, although the greatest portion was called in by 1817. They were issued in denominations of not less than $100. An act similar in all respects to that of Feb. 25, 1813, passed the house by vote of 83 to 48, and the senate without debate, on March 1, and was approved March 4, 1814. It authorized the issue of five millions of treasury notes, and of an additional five millions, which, if issued, was to be considered as part of a stock loan for the year, which was subsequently to be authorized. This loan for twenty-five millions was authorized on March 24 of the same year, and could only be placed at a large discount. An additional five millions was therefore issued in place of an equal amount of stock, making in all ten millions of treasury notes issued under this act. These notes were for the first time issued in denominations of less than $100, notes of the denomination of twenty dollars being placed in circulation. The whole ten millions were issued previous to June 30, 1815. The policy of congress seemed to be to keep the authorized issue of treasury notes each year below the amount of the revenue of the year, or, if more was authorized, they were to be in lieu of, and to re-enforce, stock loans.
—On Dec. 26, 1814, an act was passed which authorized the issue of $7,500,000 of treasury notes in place of portions of the loans of March 24 and Nov. 15 not already placed, and three millions more for the expenses of the war department. These notes bore the same rate of interest and were for the same time as those of the act of June 30, 1812, and under this act, $8,318,400 of notes were issued, a portion of which was in the denominations of twenties and fifties.
—On Aug. 31, 1814, specie payments were suspended except in New England. The accounts of the treasury department show that there were outstanding on Sept. 30, 1814, $10,649,800 of treasury notes. Mr. Crawford was succeeded in October by Secretary Dallas, and the latter, in his report to the committee of ways and means on Oct. 17, 1814, says: "The condition of the circulating medium presents another copious source of mischief and embarrassment. The stock of specie was diminished by exportation, and would remain so withdrawn from use. The multiplication of banks had increased the paper currency so that it was difficult to calculate its amount, and still more difficult to ascertain its value. Bank currency was of no benefit since the suspension of specie payments, and there virtually existed no circulating medium common to all the citizens of the United States. The money transactions of private individuals were at a stand, and the fiscal obligations of the government labored with extreme inconvenience. Under favorable circumstances, the limited issue of treasury notes would probably afford relief, but they were an expensive substitution for coin or bank notes." He concluded by recommending the establishment of a national bank. This statement was called out by a report made by Mr. Eppes, chairman of the committee of ways and means of the house, on Oct. 10, 1874, in which, in order to secure the circulation of treasury notes, it was recommended that notes of small denominations should be issued, to be funded into 8 per cent. stock, payable to bearer, and transferred by delivery, receivable in all payments of public lands and taxes. The internal revenue taxes were to be pledged for payment of interest, and they were to be exchangeable for stock at 8 per cent, or redeemable in specie after six months' notice from the government. On Nov. 24, 1814, in a report to the committee to which a bill for establishing a national bank had been referred, Mr. Dallas mentions, as one of the means at the disposal of the treasury, the issue of treasury notes, "which none but necessitous creditors, contractors in distress or government agents acting officially were willing to accept." He also states that the act of Nov. 15, 1814, authorizing treasury notes to be taken in payment for subscriptions to loans, was passed too late; that the interest on the public debt had not been punctually paid, and that a large amount of treasury notes had already been dishonored. In a subsequent communication of Dec. 14, 1814, he said that the non-payment of treasury notes, and the risk of not paying the interest on the funded debt, were chiefly owing to the suspension of specie payments by the banks, and the consequent impracticability of transferring public funds from the place where they were deposited to the place where they were needed. The difficulty referred to in meeting the interest upon the public debt was in Boston. A state bank had large government deposits, and a draft was sent to meet the interest, upon Oct. 1, 1814. The state bank declined paying in coin or bank notes, and the creditors refused to receive the treasury notes that were offered instead. After the suspension, the government was deprived of the use of specie, and as the banks in each state refused credit and circulation to the notes of banks in other states, no transfer of funds could be made to places where they were wanted to meet treasury notes: consequently the credit of these notes was lessened, and creditors refused to accept them in payment. On Nov. 12, 1814, Mr. Hall, of Georgia, introduced in the house a series of five resolutions to revive the credit of treasury notes. The second resolution provided that the notes should be a legal tender between citizens, and between citizens and foreigners, for all debts then due or afterward to become due, which the house refused to consider by a vote of 95 to 42—more than two-thirds. These resolutions were evidently introduced as measures in opposition to the proposition for a national bank, and the other four resolutions were subsequently laid upon the table by a large majority.
—On Jan. 30, 1815, a bill authorizing the issue of treasury notes was introduced in the house, and referred to a committee of the whole. The bill passed the house Feb. 11, and the senate Feb. 21, and was approved Feb. 24, 1815; it was the last of a series of five acts, commencing with that of June 30, 1812, the first four of which had authorized the issue of treasury notes bearing interest at the rate of 5 2/5 per cent. The following is the form of the large notes issued under this act:
Endorsed on the back: "Pay the bearer, Jos. Delafield."
This act authorized the issue and reissue of treasury notes to an amount not exceeding twenty-five millions upon principles essentially different from those governing prior issues. These notes might be of any denomination: if of a denomination less than $100, they were designated as "small treasury notes," were payable to bearer, and bore no interest; if of a denomination of $100 or upward, they were payable to order, transferable by indorsement, and bore interest at the same rate as those of $100 and upward previously authorized. The "small treasury notes" were of this form:
These notes were not chargeable upon the sinking fund, as in the case of the first three acts of the series, nor were they payable out of any money in the treasury not otherwise appropriated, as in the previous act of Dec. 26, 1814, but rested entirely upon the provision making them fundable into stock. The principal and interest were not payable at any specified time, but the notes were everywhere receivable in all payments to the United States. The act reduced the pay of those signing the notes to seventy-five cents for each one hundred notes, and also provided that treasury notes of previous issue should be fundable into 6 per cent. stock. The holders of the small treasury notes could exchange them at pleasure, in sums of not less than $100, for certificates of funded stock bearing interest at 7 per cent. The treaty of peace was signed on Dec. 14, 1814, but the news reached Washington a few days only before the passage of the bill, which, although a war measure, was carried through, inasmuch as it was considered necessary to the regulation of the disordered finances of the country. The whole amount of treasury notes, absolute and contingent, which was authorized by these five acts, was $60,500,000, of which amount $36,680,794 was issued. The following table exhibits the amount issued under each act:
—Although the treasury notes of 1815 of small denominations originally issued, amounted to only $3,392,994, the law made them fundable into 7 per cent. stock, payable after Dec. 31; and as the notes were reissuable, they were, under various exigencies, again and again paid out, until the whole amount of the 7 per cent. stock, issued for the purpose of funding them, amounted to $9,070,386. On account of the high rate of interest of these bonds, the small treasury notes were in demand, and a small amount was sold at a premium of 4 per cent., and $1,365,000 at a premium of $32,107.64, or about 2½ per cent. The secretary, in his annual report for 1815, says: "The treasury notes, which were issued under act passed previous to Feb. 24, 1815, were, for the most part, of a denomination too high to serve as a current medium of exchange; and it was soon ascertained that the small treasury notes, fundable at an interest of 7 per cent., though of a convenient denomination for common use, would be converted into stock almost as soon as they were issued." 142 The notes of $100 and upward, though fundable into 6 per cent. bonds, were depreciated from 8 to 10 per cent. below bank notes, which bore no interest, but were redeemable in specie.
—In recapitulation, it may be stated that the treasury notes of the period of the war of 1812 were issued under five acts of congress, as stated in the table. The notes of the first three acts were made chargeable to the sinking fund—those of the last two, not; those of the first two acts were in denominations of not less than $100; those of the next two were not less than $20; and those of the last act were in denominations of 3, 5, 10, 20, 50, 100 dollars and upward. Those of the first three acts were not originally fundable into stock, but were made so by the act of Nov. 15, 1814, and by the subsequent act of Feb. 24, 1815. The notes of the acts of Dec. 26, 1814, became fundable by the act of Feb. 24, 1815, but those of the last-named act were fundable by the terms of their authorization. The notes of all the acts but the last were made payable one year from the date of their issue; those of the last act were payable at no fixed date. All of these notes (with the exception of the small treasury notes, which were without interest) bore interest at the rate of 5 2/5 per cent. None of these notes had any legal-tender quality, and congress, without debate, rejected the only proposition for giving them this quality. The denominations, except in the case of the small notes of 1815, were too large for purposes of circulation, and the inducements for funding these were so great that they could not be used for that purpose. As long as the banks redeemed their notes in specie, treasury notes appear to have kept at par, but when specie payments were suspended, they began to depreciate, and appear to have been kept from great discount by the funding acts of Nov. 25, and Feb. 24, 1815. It is said, "that of eighty millions of loans negotiated by the government during this period, the avails were only thirty-four millions, after deducting discounts and depreciations." (See FINANCE.) After the close of the war, in December, 1814, these notes were rapidly funded.
—TREASURY NOTES OF THE PERIOD OF THE FINANCIAL CRISIS OF 1837. In anticipation of a large surplus, congress, by act of June 23, 1836, provided for the distribution of a large amount of government money among the states in proportion to their representation in the senate and house of representatives, and three installments amounting in all to $27,063,430, were so distributed. (See U. S. SURPLUS MONEY, DISTRIBUTION OF, AMONG THE STATES.) In the meantime, about May 1, 1837, specie payments were suspended, owing to the great depression in commercial circles. An extra session of the 25th congress was called in September of the same year. The charter of the second bank of the United States had expired on March 4, 1836, and on June 23, 1836, congress had passed an act authorizing and regulating the deposit of public moneys in state banks. No action was taken during the extra session toward rechartering the bank of the United States. The distribution of the fourth installment to the states was, however, postponed, but the secretary was prohibited from calling for any of the money already distributed without special authority from congress, which has not, up to the present date, been given.
—The revenues for the year (1837) were from six to ten millions short of the expenditures. The public funds already deposited with the states were unavailable, and there was another installment to be deposited on Oct. 1. The secretary recommended the withholding of this installment, and, in order to supply currency, an issue of treasury notes, the small denominations to bear no interest, and the large with interest.
—A large party in congress were in favor of rechartering the bank of the United States. The advocates of treasury notes urged the issue principally upon the ground of necessity, there being no currency upon which the government could rely to make and receive payments. Many were in favor of a substitute to be issued by the proposed new bank of the United States. A bill was presented and passed by the senate. When it came to the house, objection was made that it was a money bill, which the senate had no constitutional right to originate. This point was not discussed, but the committee of ways and means presented their own bill, by which the issue of ten millions in treasury notes was authorized. The bill encountered much opposition, particularly from those in favor of authorizing a new bank, but passed the house on Oct. 9, 1837, by a vote of 127 to 98, which was a strict party vote. In the senate, the next day, Mr. Benton moved to make the lowest denomination of notes $100, instead of $50, as provided in the bill. He presented strong objections to the issue of treasury notes. Nothing but the fact that the government must otherwise stop for want of funds, would induce him to vote for paper money in time of peace. He particularly objected to the policy of reducing the denominations of paper currency. It was the most dangerous feature of the system, and would drive all specie from circulation. Mr. Clay spoke in favor of Mr. Benton's motion, and characterized the whole measure to be, to all intents and purposes, a great bank experiment, and alluded to the inconsistency of issuing, in time of profound peace, ten millions additional notes after decrying the banks for enlarging their circulation. Mr. Webster favored Mr. Benton's motion. It was lost by a vote of 25 to 16. The bill then passed by a vote of 35 to 6, both Mr. Benton and Mr. Webster voting for it, and Mr. Clay against it. This bill authorized the issue of treasury notes to an amount not exceeding ten millions, and in denominations not exceeding fifty dollars. The interest was not to exceed 6 per cent.; and they were to be payable, principal and interest, after one year from date, and were, for the first time, signed by the treasurer and countersigned by the register. They were to be issued in payment of the debts of the United States to any creditor who would receive them, and were to be receivable in payment of all debts and dues to the government. They were not reissuable, and the authority to issue terminated Dec. 31, 1838. The ten millions authorized were issued by Secretary Woodbury previous to July 1, 1838. About two millions were issued at the nominal rate of interest of 1 mill per cent.; three millions at 2 per cent.; and over four millions at 5 per cent. On account of the low rate of interest upon a large portion of the notes, the object for which they were issued, namely, to supply a circulating medium, was thwarted, for they were soon presented in payment of taxes, and over five millions were retired before the whole amount had been issued.
—At the end of 1837 the secretary estimated that the balance in the treasury for July, 1838, would be $34,187,000, of which $28,101,644 was due from the states, $1,100,000 due chiefly from insolvent banks, and $3,500,000 from other banks, payment of which was postponed. These sums, and the bullion fund in the mint, reduced the estimated available balance in July, 1838, to about one million. This estimate was nearly correct, for congress was advised by the president, in May, 1838, that only $216,000 of available funds remained in the treasury. There were several propositions in the house, one of which was a bill for authorizing loan certificates, which should be a legal tender to public creditors, but not receivable for dues to the government. The question of the legal tender was not discussed. Mr. Cambreleng, of New Jersey, from the committee of ways and means, reported a short bill, authorizing the issue of treasury notes to the amount of the issue of October, 1837, which had been redeemed and canceled. The interest upon the issues already made under the laws of 1837 had been too small, and they had been immediately paid into the treasury when due. There were gratifying signs of a revival of prosperity. The northern banks had resumed specie payment sooner than expected. This he ascribed to the firmness of the president in refusing to allow dues to the United States to be paid in notes of banks not paying specie. He referred to the passage of the free banking act of New York as a presage of sound banking in future. He also urged the necessity of providing notes to enable the treasury to meet its payment. The objections to the bill were much the same as those urged in the debate during the previous session, though they were presented with more force and completeness, particularly by Mr. Caleb Cushing. He said that such issues were bills of credit not warranted by the constitution; that they were based only upon the faith of the government; that such measures were considered of doubtful and dangerous character by all the friends of democratic institutions; and that Madison and others had always been opposed to the issues of government paper founded not on funds or specie, but only upon faith or credit, and only consented to its expediency in remarkable exigencies. Experience had shown, that whatever interest they might bear, whether 1 mill or 6 per cent., they would not be above the value of the notes of good banks. It was said, that, if the United States under the constitution could issue these bills, so could the states. They were the same as continental money, although bearing interest. Much of the currency issued by the states, during the revolution, denominated bills of credit, bore interest. Chief Justice Marshall's definition of bills of credit was, "paper issued by the sovereign authority, and intending to circulate as money." These notes are issued by sovereign authority, and intended to circulate as money. They operate unequally, and afford no general relief: they are below par in New York, and at 5 per cent. premium in Charleston. The bill was amended to obviate some technical objections, and finally passed by a small majority, 106 to 99, on May 16, 1838. It came up in the senate on May 18. Wright of New York, Benton, Calhoun, Brown and Talmadge were in favor of it. Webster, Clay, Crittenden and Preston were on the other side. The discussion took a wide range, involving the causes of the condition of the treasury, and the constitutionality of the issue of treasury notes. It passed by a vote of 27 to 13, and was approved on May 21, 1838. Nearly five millions were issued within one month after the passage of the bill, which showed conclusively the pressing needs of the treasury. Under the previous acts of October, 1837, and May 21, 1838, the authority to issue treasury notes expired on Jan. 1, 1839. The whole issue was not to exceed ten millions, and the latter act permitted the reissue of those paid in.
—The whole amount which had been issued to December, 1838, was $15,709,801.01, and bore at different rates interest as follows: $6,888,809.60 bore interest at 6 per cent.; $4,280,273.72 bore interest at 5 per cent.; $2,784,844.73 bore interest at 2 per cent.; and $1,755,881.96 bore interest at 1 mill per cent. There had been redeemed, up to the same date, $7,955,250, leaving $7,754,560 outstanding. The authority to reissue expired with the year.
—On Jan. 1, 1839, there was a large amount of notes in the treasury, which continued to grow larger until March 2, 1839, when an act was passed, extending the authority to reissue until June 30, 1839, providing the whole amount outstanding did not exceed ten millions. In December, 1839, Secretary Woodbury reported that at no time had more than ten millions been outstanding, and that the amount outstanding was less than the amount due from suspended banks, and from the Pennsylvania bank of the United States, to the government, and that the principal and interest on the treasury notes had always been promptly paid when desired. A bill was subsequently presented by Mr. Jones, chairman of the committee of ways and means. Amendments were offered with the object of making it imperative that the notes should bear interest at not less than 2 per cent., and to make them negotiable and transferable only by indorsement, in the same manner as bills of exchange the first to prevent the issuance of notes at the nominal rate of 1 mill per cent., or one-thousandth of 1 per cent., per annum, and the second to prevent their circulation as money, and both to cure, as was alleged, the constitutional difficulty. The whigs refused to vote, leaving no quorum. On March 24, 1840, the house continued in session from ten o'clock until five p. m. of the next day. Finally, when the house adjourned, the consideration of the bill was fixed for the following Friday, and on that day—March 27, 1840—it finally passed the house by a vote of 25 to 8. It passed the senate on March 30, 1840, and was approved the following day. The following is the form of a $100 note issued under this act:
—On each end of the reverse were printed the figures 100. Under this act the issues amounted to $7,114,251. Notes were to be redeemed sooner than one year, if the condition of the treasury would admit, and at any time within the year, after sixty days' notice.
—The secretary, in his report for 1840, states, that treasury notes had been at par during the year, although never hearing interest higher than 5 2/5 per cent., 143 and subject to payment after sixty days' notice. To meet the wants of the treasury, a treasury note bill was introduced, and passed congress on Feb. 15, 1841. This law authorized an issue of notes, in the aggregate, of $10,000,000, one-half to be issued in payment of amounts due and payable prior to March 4, 1841, and the remaining $5,000,000 in payment of amounts due and payable after that date. In all, $7,529,062 were issued under act of Feb. 15, 1841.
—In the fall of 1840, Harrison had been elected president to succeed Van Buren, but died April 4, 1841. He was the representative of the whig party, which had, since the year 1837, so bitterly opposed the issue of treasury notes. Mr. Ewing of Ohio was appointed secretary of the treasury by President Harrison. In his report to congress at its special session of May 31, 1841, he said that, from Jan. 1, 1837, to March 4, 1841, the expenditures of the government had exceeded the revenues by over $31,000,000. Of about twenty-six millions of treasury notes issued under the acts from Oct. 12, 1837, to Feb. 15, 1841, inclusive, all but about six millions had, as claimed by Secretary Woodbury, been issued in anticipation of revenues, or upon the basis of existing debts due to the United States, leaving about six millions outstanding when the new administration came in. Mr. Ewing estimated that the deficit in the revenues for the year 1841, after meeting the current expenses and redeeming the treasury notes then outstanding and to be issued, would be $12,088,215, which he considered to be the amount of the public debt. He objected to the issue of treasury notes, and recommended a loan redeemable after eight years or upon six months' notice by the government.
—A bill was introduced by Millard Fillmore, chairman of the committee of ways and means, on June 24. It provided a loan, payable after Jan. 1, 1856, with interest at 5 per cent., and authority was given the secretary to purchase the bonds out of any surplus in the treasury. It was objected that the loan was unnecessary, and that it was the commencement of a scheme to organize a national bank. The debate was bitterly political. It was urged, that as this was an administration measure the loan should be paid within the term of the administration. This point was foolishly conceded, but the rate of interest was raised to 6 per cent. As thus amended the bill became a law on July 21, 1841. The reduction of the length of the loan from eight to three years, together with the proviso that no stock could be sold below par, destroyed the usefulness of the measure, and less than one-half, or only $5,672,076, of the stock was sold, which was about equal to the amount of treasury notes outstanding.
—On Sept. 13, 1841, Mr. Ewing was succeeded by Secretary Forward of Pennsylvania. The policy of the administration was changed by the death of the president. The repeal of the independent treasury act Aug. 13, 1841, which had been authorized at the close of the Van Buren administration, was about the only point gained by the Harrison administration, and this repeal practically left the treasury to be managed by those who were unfriendly to the policy of the whig party.
—A bill for the issue and reissue of treasury notes was introduced into the house by Mr. Fillmore, Jan. 5, 1842. Among other proposed amendments which were rejected, was one by Mr. Benton, heavily taxing all bank circulation, especially small notes. The bill became a law Jan. 31, 1842. Under it the amount authorized to be outstanding at any one time was limited to five millions, but the total amount issued and reissued was $7,959,994. The subsequent act of Aug. 31, 1842, authorized the issue and reissue of treasury notes, provided the amount outstanding at any one time should not exceed six millions, and under it notes to the amount of $3,025,554.89 were issued.
—All of the notes issued since the act of Oct. 12, 1837, were issued payable either one or two years after date, chiefly for one year. These notes were continually falling due and embarrassing the treasury. Eleven millions of such notes were to fall due during the year 1843, and accordingly another bill was introduced by Mr. Fillmore, providing for the reissue of such notes as should be redeemed before July 1, 1844. The bill became a law on March 3, 1843.
—The treasury notes outstanding on the dates named from November, 1837, to March, 1843, are shown in the following table:144
—John C. Spencer succeeded Walter Forward as secretary of the treasury, on March 3, 1843, and was himself succeeded, on June 15, 1844, by George M. Bibb. Under the act of March 3, 1843, Mr. Spencer issued about $850,000 treasury notes. Each note on its face promised to pay one year after date, fifty dollars, with interest at the rate of 1 mill per $100 per annum. On the back of each note was indorsed, "This note will be purchased at par for the amount of principal and interest thereof, on presentation at either of the Depositories of the Treasury in the City of New York." These notes, which were issued at the nominal rate of interest of one thousandth of 1 per cent. per annum, and by the indorsement made payable on demand, were considered by congress an evasion of the act under which they were issued, and the committee of ways and means were instructed, on Jan. 15, 1844, "to inquire and report whether the notes lately issued by the treasury department, bearing a nominal interest and convertible into coin on demand, and now forming part of the circulating medium of the country, are authorized by the existing laws and constitution of the United States"; and the report of the committee, which also contains a letter of the secretary, giving his views on the subject, is interesting from the fact that it contains the principal constitutional arguments against the issue of paper money by the government.145
— During the second session of the 27th congress, after the veto, by President Tyler, of a bill to authorize the organization of a bank of the United States, the president recommended the passage of a bill for the issue of exchequer bills of not less than $5 in denomination, which notes were to be signed by the treasurer of the United States, and countersigned by the president of the board of exchequer, and redeemable in gold and silver on demand at the agency where issued. This bill, which was prepared at the treasury department, did not become a law, and it was claimed by the committee that the notes issued by Secretary Spencer were in most respects like the exchequer notes proposed in this bill. The principal difference was, that while the exchequer notes were to be in denominations as low as $5, without interest, the notes issued were of denominations not less than $50, and bore a merely nominal rate of interest. It was claimed by the committee that the constitution authorized the government to borrow money, but not to issue bills of credit; that borrowing money implied the paying of interest for the money borrowed; that interest-bearing treasury notes payable at a future day were a temporary loan, not designed to circulate as money, and could properly be issued; while notes bearing no interest and payable on demand were bills of credit, and could be issued only in violation of the constitution.
—From March 3, 1843, until July 26, 1846, no new issues of treasury notes were authorized. From 1837 to 1844 treasury notes amounting to $47,002,900 were issued under eight different acts, of which $46,216,935.82 were redeemed by the close of 1845. The lowest denomination for any one note was $50, but where new notes were issued in place of old ones the accrued interest was often added. The amount authorized to be originally issued by these several acts was thirty-one millions. The remainder consisted of reissues.
—The following table exhibits the amount of treasury notes issued each year, under different acts of congress, from Oct. 12, 1837, to March 3, 1843, from which it will be seen that the total amount issued was $47,002,900, all of which was sold or issued at par. Interest varied from 1 mill per cent. to 6 per cent., and the amount authorized was fifty-one millions.
—TREASURY NOTES OF THE PERIOD OF THE MEXICAN WAR. On July 1, 1844, the public debt of the United States amounted to $24,748,188, and consisted principally of stocks not payable until the lapse of ten and twenty years.146 The 5 per cent. stocks payable in ten years, were at a premium of 106, and the 6 per cent. stocks payable in twenty years, at a premium of 116. The secretary estimated that the revenue under the tariff of 1842 would yield a much larger amount than was necessary. Accordingly, congress, in July, 1846, passed a bill amending the tariff and reducing the duties on imports. In the meantime, during the year 1845, difficulties with Mexico, owing to the annexation of Texas, rendered war inevitable, and on May 13, 1846, war was declared. Secretary Walker estimated, that, if the war should continue for a year, there would be a deficiency of more than twelve millions; and, in order to meet this deficiency, a bill was reported from the committee on ways and means, which, with some additions, embodied the provision of the act of Oct. 12, 1837, as to treasury notes, and that of April 14, 1842, as to a loan. The following is the form of a $100 note issued under this act:
The bill referred to authorized an issue of treasury notes to an amount of ten millions, which could also be reissued, and also a loan which could be issued in lieu of treasury notes; the amount of both not to exceed ten millions. The stock was to be redeemable after ten years, no notes of less than $50 were to be issued, and they were to be signed by the treasurer and the register. The rate of interest was not to exceed 6 per cent. Notes were to be used in payment of public creditors who would receive them, and the secretary could borrow money on them. The bill became a law July 22, 1846. Under this act, $7,687,800 of notes were issued, and $4,999,149 of stock. Of these notes $2,086,550 bore interest at 5 2/5 per cent., and $1,766,450 at 1 mill per cent. per annum.
—In January, 1847, the treasury was again in need, and to meet this necessity a bill was introduced, authorizing the issue of twenty-three millions of treasury notes, and an additional five millions under the act of July 22, 1846. This was an elaborate bill, containing all necessary provisions within itself, without referring back to the provisions of previous acts, as had been usually the case in legislation of this kind. The debate was principally upon the conduct of the war, and, after one or two amendments had been agreed to, the bill passed the house on the same day that it was introduced, by a vote of 166 to 22. In the senate on Jan. 25, a resolution to postpone its consideration was lost, and the debate took considerable latitude, principally upon the tariff question. The general sentiment appeared to be, that in the midst of the war the honor of the country must be sustained. Finally, with some slight amendments, the bill passed, on Jan. 27, 1847, by a vote of 43 to 2, and became a law on the following day.
—Notes issued under this act were not to be of a less denomination than $50, and were receivable in payment of public dues, including duties on imports, and were redeemable at the expiration of one or two years, and the interest was to cease at the expiration of sixty days' notice. The following is the form of a 6 per cent. $100 note issued under this act:
The principal of the notes was fundable into 6 per cent. bonds, redeemable after Dec. 30, 1867, and this privilege was extended to the holders of notes issued under previous acts. Reissues were authorized, but the amount of stock and notes, at any one time, was not to exceed twenty-three millions. The right to issue treasury notes, under the act of July 22, 1846, was extended by the fifteenth section to the period fixed by these acts, and on the same terms, but the issue, under this section, was not to exceed five millions. $12,371,150 of these notes were issued previous to July 1, 1847, and $11,956,950 additional notes were issued during the next fiscal year. The whole amount of issues and reissues under the act was $26,122,100, all of which were either sold or paid to public creditors at par. The rate of interest of the notes was 5 2/5 and 6 per cent., and United States 6 per cent. bonds, chiefly for the purpose of redeeming these notes, were issued under the same act, amounting to $28,230,350.
—The treasury notes issued under the act of Jan. 28, 1847, were all retired, with the exception of about $200,000, previous to July 1, 1850, and no additional treasury notes were authorized, until the passage of the act of Dec. 23, 1857. Secretary Cobb, in his report for that year, estimated that the receipts would exceed the expenditures, but said that the financial revulsion which had caused the banks to suspend specie payment in October of that year, had also caused a large part of the dutiable merchandise to be stored without payment of duty, where it could remain under the law for three years, although it was probable that a considerable portion would be withdrawn and the duties paid previous to that date. Meanwhile, means should be provided for meeting the demands upon the treasury, and he recommended that authority should be given to issue treasury notes "for an amount not exceeding twenty millions of dollars, and payable within a limited time, and carry a specified rate of interest." A bill, in accordance with the suggestion of the secretary, was introduced into both houses of congress on Dec. 18, 1857. It passed the senate on the following day, by a vote of 31 to 18, and the house on the 22d by a vote of 118 to 86, and was approved on the following day and became a law. The bill provided for the issue of notes payable in one year from date of issue to an amount not exceeding twenty millions. $6,000,000 were to be issued at a rate of interest not exceeding 6 per cent. The remainder was to be sold after public advertisement of not less than thirty days, at their par value, for specie, to the bidders offering to take them at the lowest rate of interest, not exceeding 6 per cent. The interest upon the notes was to expire, after maturity of notes, upon sixty days' notice from the secretary, of his readiness to redeem such notes; they were to be issued in denominations of not less than $100, and were to be signed by the treasurer and register; they were receivable in payment of all dues to the United States. The whole amount authorized was issued, and the amount of issues and reissues, in all, was $52,778,900. The interest upon these notes was as follows: $6,323,600 at 3 per cent.; $985,000 at from 3½ to 4 per cent.; $688,000 at 4¼ per cent.; $10,055,700 at 4½ per cent.; $4,532,500 at 4¾ per cent.; $7,533,900 at 5 per cent.; $8,204,500 at 5½ per cent.; $3,514,100 at 5¾ per cent.; and $10,941,600 at 6 per cent. The following is the form of a 3 per cent. $100 note issued under this act:
—The table given at foot of page 971 exhibits the different kinds of treasury notes outstanding on February 1, 1884, which were issued from the organization of the government to the date of the passage of the act of March 2, 1861.
—TREASURY NOTES OF THE PERIOD OF THE CIVIL WAR. The total public debt on June 20, 1860, was $64,769,703.08. The outstanding treasury notes issued under act of June 23, 1857, were $19,690,500. The amount of treasury notes outstanding, issued under acts previous to that date, was $105,111.64. The act of June 22, 1860, authorized a loan of twenty-one millions, at a rate of interest not exceeding 6 per cent., to be reimbursed within a period not more than twenty years, and not less than ten years. The money was to be used in the redemption of treasury notes, and to replace any amount paid to the treasurer in such notes for public dues. Under this authority, proposals were invited by Secretary Cobb, on Sept. 8, 1860, for ten millions of this loan, which amount was "ample to meet all the treasury notes that would fall due before Jan. 1, 1861." In his report for Dec. 4, 1860, he says: "The rate of interest was fixed at 5 per centum per annum, under the conviction that the loan could be readily negotiated at that rate, for, at that time, the 5 per cent. stock of the United States was selling in the market at the premium of 3 per cent. The result realized this just expectation, and the whole amount offered was taken, either at par or a small premium." Before, however, the time had arrived for payment on the part of the bidders, political complications arose, which affected the credit of the government so unfavorably, that the amount realized was but $7,022,000, the subscribers of $2,978,000 having failed to make good their subscriptions. The secretary stated, that, in the present condition of the country, capitalists were unwilling to invest in United States stock at par, and recommended a repeal of so much of the act of June 22, 1860, as authorized the issue of the additional stock, and asked for authority for the issue of treasury notes for the same amount, "to be negotiated at such rates as will command the confidence of the country." He recommended that the public lands be unconditionally pledged for the ultimate redemption of all the treasury notes which it may become necessary to issue, and suggested, "that there should always exist in the department power to issue treasury notes for a limited amount, under the direction of the President, to meet unforeseen contingencies. It is a power which can never be abused, as the amount realized from such source can only be used to meet lawful demands upon the treasury. No secretary of the treasury, or president, would ever exercise it, unless compelled to do so by the exigencies of the public service. On the other hand, it would enable the government to meet, without embarrassment, those sudden revulsions to which the country is always liable, and which can not always be anticipated. I have already stated that provision should be made at once to relieve the treasury from its present embarrassment, produced by the causes referred to. To do this, congress should authorize the issue of an additional amount of treasury notes, not less than ten millions of dollars: with this means the department would be enabled to meet all lawful demands upon it for the present. The extent of the financial crisis, through which the country is now passing, can not new be determined, and until it is better known, no policy can be recommended of a permanent character."
—Secretary Cobb resigned on Dec. 10, but the act of Dec. 17, 1860, was passed in compliance with the suggestions contained in his report. The pledge of the proceeds of the public land was not given in the act, and one of the reasons for withholding such legislation was, that it would interfere with the passage of the homestead bill, which was then under consideration. The act authorized the issue of ten millions of treasury notes in denominations of not less than $50, redeemable in one year from the date of issue, with interest at the rate of 6 per cent., but the secretary was authorized to issue such notes after advertisement at the lowest rate of interest offered. Of these notes, five millions were offered to subscribers. The bids were opened Dec. 28, and only $500,000 were taken at 12 per cent. It was important to negotiate the loan in order to meet the interest on government bonds upon Jan. 1. The remainder of the loan was subscribed by the banks in New York, previous to that date, at 12 per cent. Gen. John A. Dix was appointed secretary of the treasury on Jan. 11, and bids for the remaining $5,000,000 were opened on the 19th, and the notes awarded at the average rate of 10 5/8 per cent., as follows:
The whole ten millions were issued, redeemable at the expiration of one year from date, bearing interest as follows: $70,200 at 6 per cent.; $384,500 at rates varying from 6 to 10 per cent.; $1,027,500 at 10 per cent.; $3,688,700 at rates from 10 to 12 per cent.; and $4,840,000 at 12 per cent. Additional offers bearing interest, ranging from 15 to 36 per cent., were declined. The amount of treasury notes outstanding on Dec. 1, 1860, previous to the passage of this act, was $14,599,700, of which $42,600 was payable in 1859, $3,133,400 in 1860, and $11,423,700 in 1861. Of these notes, $8,684,200 bore interest at 6 per cent., and the remainder at lower rates.
—Secretary Dix, in a letter to the chairman of the committee of ways and means, dated Jan. 18, 1861, says: "Within the last few days the amount of overdue treasury notes presented for redemption has exceeded the power of the treasurer to place drafts for payment on the assistant treasurer at New York, where the holders desire the remittances to be made; and an accumulation of warrants, to the amount of about $433,000, has accrued on this account in the treasurer's hands, which he has been unable to pay." He also says: "That notice issued on the 18th ultimo invited proposals for the exchange of five millions of dollars for treasury notes, and offers at 12 per cent. or less were made only to the amount of $1,831,000; offers to exchange $465,000 for notes bearing interest at rates varying from 18 to 36 per cent. were also received. The offers at 12 per cent. and less were accepted; those above that rate were rejected. The remainder of the five millions offered was soon thereafter taken at 12 per cent., and the whole amount was pledged to the payment of over-due treasury notes and other pressing demands on the treasury. * * During the last quarter, about eight millions of treasury notes were redeemed, which, with the two and one-half millions redeemed since the first instant, make ten and a half millions. The amount received from the loan, a small fraction above seven millions, threw upward of three and a half millions of these notes on the other resources of the treasury for redemption. This is one of the principal causes of the delay and difficulty which have recently existed in providing for other demands of public service." So low had the credit of the government fallen, through the political agitations and troubles just previous to the war of the rebellion, that he closed his communication by calling attention to the fact, that, "there are deposited with twenty-six of the states for safe keeping, over twenty-eight millions of dollars belonging to the United States, for the payment of which the promise of these states is pledged by written instruments on file in this department. The annual statement of receipts and expenditures for the year ending June 30, 1860, represents this amount as part of the 'balance in the treasury' on that day. * * I refer to this final resource as an available one, should the public exigencies demand it. It is not doubted that the greater portion of the amount so deposited would be promptly and cheerfully paid should an exigency arise involving the public honor or safety. If, instead of calling for these deposits, it should be deemed advisable to pledge them for the repayment of any money the government might find it necessary to borrow, loans contracted on such a basis of security, superadding to the plighted faith of the United States that of the individual states, could hardly fail to be acceptable to capitalists."
—During the following month the act of Feb. 8, 1861, was passed, which authorized a loan not exceeding twenty-five millions of 6 per cent. bonds, the avails to be used in the payment of current expenses, for the redemption of outstanding treasury notes, and to replace in the treasury such amounts as had been paid in treasury notes. Of this loan, bearing 6 per cent. interest, and having twenty years to run, $18,415,000 was issued, at an aggregate discount of $2,019,776, or an average rate of $83.03 for $100. In less than a month after the passage of this act providing for the payment of the treasury notes outstanding, the act of March 2, 1861, was passed, which authorized a loan of ten millions at 6 per cent., redeemable upon three months' notice, after July 1, 1871, payable July 1, 1881, or, instead thereof, the issue of $10,000,000 of new notes in denominations of not less than $50, bearing interest at the rate of 6 per cent. per annum, payable semi-annually, receivable in payment of all debts due the United States, including customs duties, and redeemable at pleasure, within two years from the passage of the act. The same act largely increased the duties on imports, and authorized the substitution of treasury notes for the whole or a part of the loans previously authorized. Under this act, $35,364,450 in all, of treasury notes, were issued, of which $22,468,100 were redeemable in two years, and $12,896,350 redeemable in sixty days after date; and a considerable portion of these notes were paid out to creditors.
—General Dix was succeeded by Secretary Chase on March 7, 1861. The great increase of import duties, imposed by the act of March 2, had caused the bonds of the government to advance in the market, and it seemed to be a favorable time to offer the remainder of the bonds authorized by the act of Feb. 8, 1861. Bids for eight millions of the bonds were opened on April 2. Offers at from 94 to par were received for $3,099,000, and 93½ for the remainder of the loans. All bids below 94 were rejected. In the midst of these negotiations it became known that arrangements were being made to send an additional force for the relief of Fort Sumter. No additional bonds were sold until May 31, when $7,310.000 were sold at an average rate of $85.34 for $100. In place of bonds, five millions of treasury notes were offered, and the bids opened on April 11 amounted to only one million; but shortly thereafter the whole amount offered was taken. The United States 6 per cent. bonds were selling in the market at 83, and money at call was worth from 4 to 5 per cent.; but the treasury notes bearing 6 per cent. interest could be held and used or sold at a profit for the purpose of paying duties. Additional treasury notes of the same kind, as has been seen, were subsequently sold, amounting, in all, to more than thirty-five millions, at rates ranging from par to 1 27/100 per cent. premium. On page 974 will be found the form of a $50 note issued under the act of March 2, 1861.
—Civil war was inaugurated by the attack on Fort Sumter on April 12. The fort surrendered on April 14, and on the following day President Lincoln issued a call for seventy-five thousand soldiers. The southern states were declared blockaded. Seven of these states had, by ordinances, publicly declared their secession from the Union, and their defiance of the national authority, and a convention at Montgomery, Alabama, had organized a new government, under the name of "The Confederate States of America." Massachusetts soldiers, on their way to Washington, were attacked by a mob in Baltimore. In the month of May the confederate capital was removed to Richmond; North Carolina and Arkansas seceded, and the Union army crossed the Potomac into Virginia, and took possession of Alexandria and Arlington Heights. In June, Tennessee passed an ordinance of secession, and Gen. Butler was defeated at Big Bethel. The two-year treasury notes which had been recently issued at par, were at 2½ per cent. discount; and the government, instead of disposing of the notes, borrowed five millions at sixty days upon them as collateral security. During the following month the disastrous results of the first battle of Bull Run startled the entire country. The Union army, defeated, fell back upon Washington, and the capital of the country was believed to be in danger. Two days thereafter, President Lincoln called for five hundred thousand three-year volunteers. An extra session of congress had been called for July 4, 1861, and on that day, amid events like these, Secretary Chase transmitted his first report to Congress, which recommended measures to provide the means for continuing a civil war which proved in magnitude to be unequaled in the history of nations. Specie payments were suspended on Dec. 28, 1861. The war was carried on chiefly by the use of treasury notes as a circulating medium. The purchasing power of these notes rapidly declined. Prices of all kinds advanced rapidly, and particularly the prices of articles most needed for the supply of the army. The expenditures of the government during the four years of the war were vastly increased beyond the amount which would have been necessary if the war could have been conducted upon the gold standard instead of upon the fluctuating standard of the legal tender paper dollar.
—Never was a great national debt contracted so rapidly. In 1835, as has been seen, the country was entirely out of debt, and on Jan. 1, 1861, the whole debt of the Union amounted to but 166 millions. Gen. Lee surrendered at Appomattox, on April 9, 1865; which date was four years, lacking five days, after Fort Sumter had surrendered to the enemy. On the first day of July, 1861, the debt was 90 millions; at the close of that fiscal year it had reached 524 millions; at the end of the succeeding year, it was considerably more than twice that amount, being on July 1, 1863, $1,119,772,138. During the following year it increased nearly 700 millions. For the next nine months, to the close of the war, it increased at the rate of about sixty millions a month. An immense amount of obligations against the government were presented, after the close of the war; and, for the five months thereafter, the ascertained debt increased at the rate of three millions a day. The cost of conducting the war, after it was once fully inaugurated, was scarcely at any time less than thirty millions a month. At many times it far exceeded that amount; sometimes it was not less than ninety millions a month, and the average expenses of the war, from the date of its inception to its conclusion, may be said to be not less than two millions each day. The public debt reached its maximum on Aug. 31, 1865, at which day it amounted to $2,845,907,626.56. Of this amount, $1,109,568,191 was in funded debt; $1,503,020 was debt which had matured; and $2,111,000 was in suspended requisitions. The remainder was as follows:
There were more than 684 millions of these obligations, which were a legal tender, of which 207 millions were bearing compound interest at the rate of 6 per cent. 830 millions were in treasury notes, bearing interest at the rate of 7 3/10; per cent. per annum. There were $1,540,483,701 of treasury notes, either payable on demand or bearing interest. If the temporary loans, which were payable in thirty days from the time of deposit, after notice of ten days, and the certificates of indebtedness, which bore interest at 6 per cent., payable one year after date, or earlier, at the option of the government, are included with the treasury notes, the whole would amount to considerably more than three-fifths of the whole public debt of the country.
—Secretary Chase, in his report, estimated the whole sum required for the fiscal year to be not less than 318 millions, of which 215 millions would be required for the war and naval service; more than twelve millions ($12,639,861.64) to pay treasury notes due and to become due; and nine millions to pay interest upon the proposed new debt. He was of the opinion that not less than eighty millions should be provided by taxation, and 240 millions obtained by loans. The principal part of the revenue was to be obtained from the tariff, the remainder by a system of direct taxation or internal duties. Six per cent. bonds, amounting to $18,415,000, had already been sold, at from par to $85.34 for $100, and treasury notes bearing interest at 6 per cent. had been paid to creditors. He considered that "in a contest for national existence and the sovereignty of the people, it is eminently proper that the appeal for the means of prosecuting it with energy to a speedy and successful issue, should be made, in the first instance at least, to the people themselves." Among other recommendations, he proposed a loan of 100 millions, to be issued in the form of treasury notes, or exchequer bills, bearing interest at the rate of 7 3/10 per cent., to be paid semi-annually, and redeemable at pleasure, after three years from date. The interest at this rate was suggested, because it was liberal to the subscribers, convenient for calculation, and, under existing circumstances, a fair rate for the government. The rate would be convenient for calculation; for, the interest being equal to one cent a day on $50, two cents a day on $100, ten cents on $500, twenty cents on $1,000, and one dollar on $5,000, it would be only necessary to consider the number of days since the date of the note, to determine, at the close, the amount due on it. It was proposed to issue these notes in sums of fifty, one hundred, five hundred, one thousand, and five thousand dollars, with the amount of interest for specified periods engraved on the back of each note, and the facility thus secured to the holder of determining the exact amount of interest, it was thought, would enhance its value. "While the rate proposed is thus liberal and convenient, the secretary regards it also as, under existing circumstances, fair and equitable to the government. The bonds of the United States, bearing an interest of 6 per cent., and redeemable twenty years after date, can not be disposed of at current market rates, so that the interest on the amount realized will not exceed 7 3/10 per cent.; nor is there any reason to believe that treasury notes, bearing an interest of 6 per cent., receivable for public dues and convertible into twenty years' 6 per cent. bonds, can be disposed of in any large amounts, so that the interest on the sum realized will fall much, if at all, short of the rate proposed. For the difference of interest, if any, between such notes and those of the proposed national loan, the secretary thinks that the absence of the feature of receivability for public dues in the latter is a sufficient compensation." He also proposed notes of small denominations, ten, twenty and twenty-five dollars, payable one year from date, to an amount not exceeding fifty millions, bearing interest at the rate of 3 55/100 per cent., to be exchanged for the other form of treasury notes, bearing interest at 7 3/10, or, if more convenient, made redeemable in coin, on demand, without interest. "The greatest care," he said, "will, however, be requisite to prevent the degradation of such issues into an irredeemable paper currency, than which no more certainly fatal expedient for impoverishing the masses, and discrediting crediting the government of any country can well be devised."
—Treasury notes authorized by the acts of June 30, 1812, Feb. 24, 1815, and three intervening acts, bore interest, as recommended by Secretary Gallatin, as has been seen, at the rate of 5 2/5 per cent. a year, and were receivable in payment of all duties and taxes laid by the authority of the United States, and for all public lands sold by said authority; and when so received, interest was to be computed at the rate of "one cent and one-half a cent per day" on every one hundred dollars of principal, each month being reckoned as thirty days. It is probable, that the proposition for the issue of the seven-thirty notes was obtained from this act, for a substitute was proposed for the legal tender act, which passed the house of representatives Feb. 6, 1862, which contained a section providing for the issue of transferable certificates bearing interest at the rate of 5 2/5 per cent. per annum. These recommendations of the secretary were embodied in the acts of July 17 and Aug. 5, 1861. The first was passed by nearly the unanimous vote of the house, only five votes (one from Kentucky, two from Missouri, one from Ohio, and one from New York) having been against it. It authorized the secretary to borrow 250 millions, either in twenty-year treasury notes, with interest not exceeding 7 per cent., or in seven-thirty three-year treasury notes, and to issue demand notes, bearing no interest, and receivable for public dues. These latter notes were limited to fifty millions, and to denominations of not less than ten dollars. But the act of August 5 authorized the issue of five dollar notes; also twenty-year 6 per cent. bonds for the amount of the seven-thirty notes issued, which bonds were to be used only in exchange, or for the purpose of funding such notes. Under these acts, nearly 140 millions of seven-thirty notes were issued, and sixty millions of demand notes, without interest; ten millions of these notes having been authorized by the act of Feb. 12, 1862.
—The first demand notes were issued in August, and paid for salaries at Washington. They were received with reluctance, and the merchants and shop-keepers endeavored to discredit them. Railroad corporations refused them in payment of fares and freight; and leading banks in the city of New York refused to receive them except on special deposits. The secretary and other officers of the treasury signed a paper agreeing to accept them in payment of salaries. A circular was issued to the various assistant treasurers, stating that treasury notes of the denominations of five, ten and twenty dollars had been, and will continue to be issued, redeemable in coin on demand in Boston, New York, Philadelphia, St. Louis and Cincinnati. Gen. Scott also issued a circular on Sept. 3, 1861, announcing to the army, "that the treasury department, to meet future payments to the troops, is about to supply, besides coin, treasury notes in five, ten and twenty dollars, as good as gold in all banks and government offices throughout the United States, and most convenient for transmission by mail from the officers and men to their families at home." Of these notes $24,550,325 were issued before the 1st of December, and $33,460,000 were in circulation at the time of the suspension of specie payment on Dec. 28. The whole amount authorized was issued prior to April 1, 1862. Notwithstanding the circular of the secretary, it became necessary to use the available coin in payment of the interest upon the public debt, and there was at times some difficulty in redeeming the notes promptly in gold. At a meeting of the associated banks in the city of New York, in January, 1862, it was resolved, "That before we receive such notes, we must require that such legal provision be made by congress as shall insure their speedy redemption, and that a committee of the association be appointed to consider the subject and report on it at an adjourned meeting." The notes were receivable for duties, and soon obtained good credit. After the suspension of specie payment, efforts were made to retire them as rapidly as possible, for as they were receivable for duties, they embarrassed the government in providing for the gold interest upon the public debt.
—On July 1, 1863, more than fifty six millions had been retired, and a much larger amount of legal-tender notes had been placed in circulation. The demand notes were not, by the terms of the law, made payable in gold, but as they were authorized prior to the suspension of specie payment, and proclaimed as payable in coin by the circular of the secretary, they were considered so payable, and, after the suspension of specie payment, were quoted at times at about the same premium for legal-tender notes as gold. Interest upon the first issue of the seven-thirty notes was also paid in gold. These notes were fundable into twenty-year 6 per cent. bonds of 1881, and but few were presented for payment. The amount redeemed in money to Nov. 1, 1864, was only $63,500, while the whole amount converted into bonds to that date was $125,864,900.147
—The seven-thirty loan was successfully negotiated through the associated banks of New York, who, jointly with the banks of Boston and Philadelphia, made a contract with the secretary on Aug 15, 1861, for the purchase of government securities to the amount of 150 millions, in three different installments. The total amount taken by the New York banks, was 105 millions. Whenever subscriptions were made, 10 per cent. was paid to the assistant treasurers in New York, Boston and Philadelphia, and the remainder was placed to the credit of the United States on the books of the banks subscribing. The arrangement of the associated banks among themselves was to issue certificates to each subscriber, stating the amount so subscribed, and placed to the credit of the government; and, as such deposits were withdrawn, or paid into the treasury, seven-thirty notes were issued for the same amount to the subscribers respectively. An immediate issue was to be made of seven-thirty treasury notes, dated Aug. 15, 1861, to the extent of fifty millions, bearing interest from that date. The associated banks were to take jointly this amount at par, with the privilege of fifty millions on Oct. 15, and fifty millions on Dec. 15; the banks giving their decision on the first days of these months. It was understood, that, if the whole amount should be taken, no other government stock or treasury notes, except demand notes, should be negotiated or paid out by the treasury until Feb. 1, 1862. The details of this negotiation, which was perhaps the most important one during the war, are given in the Bankers' Magazine for September, 1861, and August, 1862.
—The report of June 12, 1862, of the loan committee of the associated banks of New York, states, that, at the time the negotiation was made, "the credit of the government had become impaired to such a degree that a large loan could not be obtained in any ordinary way, nor even a small temporary loan, except for a very short period at a high rate of interest. Men's hearts failed them: the rebellion was on so large a scale, and had so unexpectedly broken out and raged with such fury, that to subdue it seemed to most persons to be impossible. Then it was, after careful deliberation and consultation with the secretary, that the banks decided it to be wise for them to depart from their usual legitimate business, and sustain the government credit, and stand or fall with it. This act restored the public confidence, and was the highest indorsement of the public credit that could then have been given. * * When the banks agreed to advance this large amount to the government, they did so without hope or expectation of profit from it, and they earnestly sought to obtain from the government the assurance that they should be indemnified from loss. It was not until five months after taking the first loan, and two months after taking the third, in the month of January last, that there was any reason to expect the securities to command in the market a price higher than that at which they had been taken. * * Much doubt was expressed, even by our most experienced bankers and financiers, when the contract was entered into, of the ability of the banks to fulfill it. It has been fulfilled by them to the letter, and has proven of more value to the country than can be estimated. As fortunately as unexpectedly, it has resulted profitably for the associates, and has probably enabled them to employ their means to nearly as much advantage as would have been done but for the political disturbances of the country."
—Secretary Chase, in his report for Dec. 9, 1861, thus refers to this negotiation: "Representatives from the banking institutions of the three cities, responding to his invitation, met him for consultation in New York, and after full conference, agreed to unite as associates in moneyed support to the government, and to subscribe at once a loan of fifty millions of dollars, of which five millions were to be paid immediately to the assistant treasurers, in coin, and the residue, also in coin, as needed for disbursement. The secretary, on his part, agreed to issue three year seven-thirty bonds, or treasury notes, bearing even date with the subscription, and of equal amount; to cause books of subscription to the national loan to be immediately opened; to reimburse the advances of the banks, as far as practicable, from this national subscription; and to deliver to them seven-thirty bonds, or treasury notes, for the amount not thus reimbursed. It was further understood, that the secretary of the treasury should issue a limited amount of United States notes, payable on demand, in aid of the operations of the treasury, and that the associated institutions, when the first advance of fifty millions should be expended, would, if practicable, make another, and, when that should be exhausted, still another advance to the government of the same amount, and on similar terms. * * All these objects were happily accomplished. Fifty millions of dollars were immediately advanced by the banks. The secretary caused books of subscription to be opened throughout the country, and the people subscribed freely to the loan. The amounts thus subscribed were reimbursed to the banks, and the sum reimbursed, though then covering but little more than half the amount, enabled those institutions, when a second loan was required, to make a second advance of $50,000,000. Thus, two loans, of $50,000,000 each, have been negotiated for three-year seven-thirty bonds, at par. The first of these loans was negotiated, and the first issue of bonds bears date, Aug. 19, the second Oct. 1, 1861."
—On Nov. 16, a third loan was negotiated with the associated institutions under the seventh section of the act of Aug. 5, 1861, by agreeing to issue to them fifty millions of dollars in 6 per cent. bonds, at a rate equivalent to par, for the bonds bearing 7 per cent. interest, authorized by the act of July 17, 1861.
—The table on page 978 gives quotations of United States 5 and 6 per cent. bonds, of treasury notes and of gold, at the dates stated, compiled from tables in Hunt's Merchants' Magazine for 1862-3-4.
—About three years after the passage of the act authorizing the first issue of seven-thirty notes, another act was passed, on June 30, 1864, authorizing 200 millions of similar notes, and a subsequent act of March 3, 1865, authorized 600 millions in addition, and under this act the whole amount (including $29,992,500 of reissues) was issued. Of this amount forty-four millions were in denominations of fifty dollars; 137 millions, in one hundreds; 228 millions, in five hundreds; 370 millions, in one thousands; and about fifty millions, in five thousands. They were issued in three series, dated Aug. 15, 1864, June 15, 1865, and July 15, 1865. These notes, like those that preceded them, were fundable into 6 per cent. bonds—the former into eighty-ones, and the latter into five-twenties—and this fact was printed upon the reverse of each note. The 800 millions last issued were payable, principal and interest, in lawful money. More than twenty millions, which were authorized by the act of June 20, 1864, were paid to the soldiers direct. Of the 600 millions, authorized by the act of March 3, 1865, seventy millions were issued during that month, and the whole remainder was taken during the following four months. Secretary McCulloch, in his report for Dec. 4, 1865, thus refers to the negotiations and issue of the remaining 530 millions of these notes: "Upon the capture of Richmond, and the surrender of the confederate armies, it became apparent that there would be an early disbanding of the forces of the United States, and consequently heavy requisitions from the war department for transportation and payment of the army, including bounties. As it was important that these requisitions should be promptly met, and especially important that not a soldier should remain in the service a single day for want of means to pay him, the secretary perceived the necessity of realizing as speedily as possible the amount—$530,000,000—still authorized to be borrowed under this act. The seven and three-tenths notes had proved to be a popular loan, and although a security on longer time and lower interest would have been more advantageous to the government, the secretary considered it advisable, under the circumstances, to continue to offer these notes to the public, and to avail himself, as his immediate predecessors had done, of the services of Jay Cooke, Esq., in the sale of them. The result was in the highest degree satisfactory. By the admirable skill and energy of the agent, and the hearty co-operation of the national banks, these notes were distributed in every part of the northern and some parts of the southern states, and placed within the reach of every person desiring to invest in them. No loan ever offered in the United States, notwithstanding the large amount of government securities previously taken by the people, was so promptly subscribed for is this. Before the first of August the entire amount of $530,000,000 had been taken, and the secretary had the unexpected satisfaction of being able, with the receipts from customs and internal revenue and a small increase of the temporary loan, to meet all the requisitions upon the treasury."
—On the opposite page is the form of the seven-thirty note issued under the act of March 3, 1865, with one coupon attached. The whole half year's interest was payable with the note, and there were five coupons upon the right end of the note. On the reverse were printed these words: "Pay to bearer. At maturity convertible at the option of the holder into bonds redeemable at the pleasure of the government, at any time after five years, and payable twenty years from July 15, 1868, with interest at 6 per cent. per annum, payable semi-annually in coin."
—During the month of July, 1862, gold was at a premium for legal tender notes of from 10 to 15 per cent., and demand notes, which were receivable for customs at a premium of about 8 per cent. The subsidiary silver coinage authorized by the act of Feb. 21, 1852, was about 7 per cent. less in intrinsic value than the silver dollar, and this difference in weight was authorized, so that it might be retained in the country for purposes of change. This silver coin soon began to disappear. Considerable amounts were hoarded in the north and south, and larger amounts were exported to Canada and South America; and a premium of from 10 to 12 per cent. was offered for small amounts by business men who desired it for convenience in making change. Many individuals as well as corporations issued small obligations, such as had been issued in 1812 and 1837. Postage stamps were used to a considerable extent for purposes of change. The postmaster general, in his report of December, 1862, says: "In the first quarter of the current year ending Sept. 20, the number of stamps issued to postmasters was one hundred and four millions; there were calls for about two hundred millions, which would have been nearly sufficient to meet the usual demand for a year. This extraordinary demand arose from the temporary use of these stamps as a currency for the public in lieu of the smaller denominations of specie, and ceased with the introduction of the so-called 'postal currency.' "
—On July 17, 1862, an act was passed which authorized the issue of "postage and other stamps of the United States"; which were receivable in exchange for United States notes, and in payment of all dues to the United States, in sums of not less than five dollars. Under this law, notes of the denominations of 5, 10, 25 and 50 cents were issued, and the denominations of 5 and 25 cents were printed on brown tinted paper, with an engraved head of Jefferson, which was the exact counterpart of that used on the five-cent postage stamp. On the twenty-five-cent note the head of Jefferson was five times repeated. The ten-cent note was printed in green, with the head of Washington, the counterpart of that used on the ten-cent postage stamp. Upon the fifty-cent note this vignette was five times repeated. These notes were issued in the month of August, 1862, and were termed "postage currency," and continued in use until they were replaced by the fractional currency authorized by section four of the act of March 3, 1863. The previous act prohibited private corporations, banking associations and individuals from issuing or circulating notes for fractions of a dollar, and imposed a penalty, upon conviction, of a fine not exceeding five hundred dollars, and imprisonment not exceeding six months. The law did not prohibit the issue of fractional currency by cities, and considerable amounts were placed in circulation by various municipalities notwithstanding the fact that in many of the states laws had been passed in the year 1837, or prior thereto, prohibiting such issues.
—The amount of fractional currency was limited to fifty millions of dollars, and denominations of from three cents to fifty cents were issued, which were exchangeable for United States notes in sums of not less than three dollars. On the days on which this small currency was first issued to the public, the offices of the assistant treasurer in New York and in other cities were thronged with long lines of people anxious to obtain this paper currency to supply the deficiency caused by the withdrawal of silver coin. On account of the scarcity of one and two-dollar notes and of fractional currency, whole sheets of these notes when they were first issued were paid to the army, and subsequently were so cut that four 25-cent notes were used in place of a one-dollar note, and four fifty-cent notes in place of a two-dollar note, and in this form considerable amounts were paid out. These notes were universally used for small change in and out of the army. The total issue of "postage currency," which commenced Aug. 21, 1862, and ceased May 27, 1863, was $20,215,635. $4,282,082 was outstanding on June 1, 1883, of which $1,028,332 was in denominations of five cents; $1,243,974 in ten cents; $1,039,203 in twenty-five cents; and $970,572 in denominations of fifty cents. The total amount of issues and reissues under both acts, was $368,720,074. They were out rapidly and became ragged and filthy, and were frequently returned for redemption.
—The first issues under the act of March 3 commenced on Oct. 10, 1863, and ceased on Feb. 15, 1876; and an act was passed on April 17, of the same year, directing the secretary to replace this circulation by the issue of subsidiary silver coin. The fractional paper currency was issued in five different series. The highest amount outstanding at any one time was less than fifty millions. The amount outstanding on February 1, 1884, was $15,363,184. A considerable amount is still held by banks and bankers, which is grudgingly paid out to those customers who desire it for purposes of remittance by letter. The principal portion of the amount outstanding will probably never be presented for redemption. The proportion of loss to the people from this fractional currency is vastly greater than that of any other kind of circulation ever issued in this country, and this loss, in a large measure, must be attributed to the small value of the notes and the many casualties of the war. The proportion of legal-tender notes and national bank notes of the highest amount outstanding at any one time, not presented for redemption in the course of twenty years, is estimated at about 1½ per cent.
—Authority was given by the second section of the act of March 3, 1863, to issue 400 millions of treasury notes; bearing interest at a rate not exceeding 6 per cent. in lawful money for a term not exceeding three years, payable at periods expressed on their face, and in denominations of not less than ten dollars. These notes were exchangeable, together with the accumulated interest for treasury notes not bearing interest. They were made legal tender for their face value, excluding interest. Power was also given to the secretary to issue 150 millions of additional greenbacks, which were to be issued only in exchange for these interest-bearing notes. Under this act, $44,520,000 notes were issued, redeemable one year from date, and $166,480,000 two years from date bearing interest at 5 per cent. per annum, which were known as "one and two year notes of 1863."
—Authority was given by the act of June 30, 1864, for the issue of 200 millions of treasury notes in denominations of not less than ten dollars, not exceeding three years, and bearing interest not exceeding 7.30 per cent. per annum, interest payable semi-annually, principal and interest to be paid in lawful money. The notes were to be a legal tender for their face value. No seven-thirty notes were issued under this act, but, in lieu thereof, $266,595,440 of compound interest notes were issued. The act did not authorize in terms the issue of compound interest notes, but as the interest at 6 per cent. compounded, would be considerably less than at 7.30 per cent. simple interest, their issue was not in conflict with the terms of the act. The notes were in the form shown on the opposite page. Of these notes, $177,045,770 were issued in redemption of the one and two year 5 per cent. notes, and it is not probable that more than 200 millions of these notes were outstanding at any one time. Secretary Fessenden, in his report for Dec. 6, 1864, thus refers to the issue of these notes: "The whole amount of national circulation, not bearing interest, exclusive of fractional currency, and of notes issued by national banks, is limited to four hundred millions of dollars, subject to slight occasional increase from the fifty millions held in reserve for the payment of temporary deposits. Of 5 per cent. interest-bearing notes there were outstanding, on the first of November last, $120,519,110. To a considerable extent these notes have been, and will continue to be, used as currency. Those with coupons have been found particularly objectionable, as, though withdrawn to a certain extent while the interest is maturing, they are liable to be periodically rushed upon the market. In consideration of this feature, a large amount, viz., about ninety millions of the original issue of one hundred and fifty millions of these coupon notes, have been withdrawn and destroyed, and their place occupied by notes payable in three years, bearing interest at 6 per centum, compounded semi-annually. This is believed to be the best form of interest-bearing legal-tender notes, as being more likely to be withdrawn and held until maturity, as an investment. Of these, fifteen millions in amount were issued under the act of March 3, 1863, and about ninety millions under the act of June 30, 1864. The total amount of interest-bearing notes outstanding on the 22d of November last, was $210,222,870. What proportion of these may be considered as an addition to the circulation I am unable to determine. To that extent, whatever it may be, they contribute to the amount of the currency, and thus in some degree occasion and in still greater degree sustain, an increase of prices, and depress values."
On the reverse of these notes, the following table, showing the rates of interest which would accumulate upon the notes, was printed for the convenience of the holder:
—About two years and eight months after the passage of the last act, authority was given for the issue of temporary loan 3 per cent. certificates, for the purpose of retiring the compound interest notes. When these notes were issued, it was expected that they would, as the interest accumulated, soon pass out of circulation into the hands of bankers and capitalists. These expectations were realized, for the interest was only payable at maturity three years from date. Such notes, with accrued interest, would not be paid out by the holders except in cases of absolute necessity. In order to insure the retirement of these notes, "An act to provide ways and means for the payment of compound interest notes," was passed on March 2, 1867.
—This act authorized the issue of 3 per cent. certificates in denominations of not less than $100, payable on demand. The national banks were authorized to hold these certificates is a part of their reserve, provided that not less than two-fifths of the entire reserve should consist of lawful money of the United States. This privilege did not largely diminish the amount of gold coin and greenbacks which the banks were required continually to keep on hand, as most of the banks held a large amount of cash reserve in addition to the amount required by law. This excess could with great profit be invested in the new certificates, and they could be used to advantage for clearinghouse purposes, and the banks at once availed themselves of this privilege. The amount authorized by this act was fifty millions, which was increased to seventy-five millions by the act of July 25, 1868. These certificates were payable on demand, and redeemable at the pleasure of the government: they were chiefly issued during the fiscal year 1868 and 1869, and for the most part retired in the fiscal years from 1869 to 1873—$12,195,000 being retired during the latter year.
—The act of July 12, 1870, authorized the issue of $54,000,000, additional bank circulation, and section two of that act provided, that at the end of each month after the passage of this act the comptroller of the currency should report the amount of such circulating notes issued, whereupon the secretary of the treasury should redeem and cancel a like amount of 3 per cent. certificates; and in order to retire such certificates he may give notice to the holders of said certificates, designating the number, date and amount, that they shall cease to bear interest from and after a certain day designated, and that the certificates so designated shall cease to be available for any portion of the reserve. Thus it will be seen that the compound interest notes were issued for the purpose of retiring 5 per cent. notes, the 3 per cent. certificates for the retirement of the compounds which were maturing, and the act of July 12, 1870, in turn for the retirement of the 3 per cents, and these different acts had the effect of rapidly accomplishing these results, with but little inconvenience either to the banks or to the public.
—The act of March 3, 1863, authorized the issue of gold certificates, of one and two-year notes, and of compound interest notes; and certificates under the fifth section of that act were used for clearing-house purposes soon after the passage of the national bank act. They were authorized to be issued in sums of not less than $20, corresponding with the denomination of United States notes. The coin and bullion deposited were required to be retained in the treasury for the payment of the same on demand. Certificates representing coin in the treasury were authorized to be issued in payment of interest on the public debt, but it was provided that the amount of certificates issued should not, at any one time, exceed 20 per centum beyond the amount of coin and bullion in the treasury. These certificates were authorized to be received at par in payment of duties. The first issue was made on Nov. 13, 1865. On June 30, 1875, there were outstanding $21,796,300, of which the national banks in New York city held $12,642,180. Their issue was discontinued on Dec. 1, 1878, just previous to the resumption of specie payment, and the amount outstanding had decreased on June 30, 1879, to $15,413,700. The amount outstanding on Oct. 3, 1883, was $4,907,440, of which the national banks held $4,594,300. On Jan. 1, 1883, the amount outstanding was $3,568,840. Most of these certificates were issued for clearing-house purposes, in denominations of $1,000, $5,000 and $10,000.
—On June 8, 1872, an act was passed authorizing the secretary of the treasury to receive United States notes on deposit without interest from national bank associations, in sums not less than $10,000, and issue certificates therefor, of denominations not less than $5,000. These certificates were similar to the 3 per cent. certificates just referred to, except that they bore no interest, and were largely used in place thereof for clearinghouse purposes. The certificates were payable on demand in United States notes at the place of issue, and they were authorized to be held and counted by national banks as part of their legal reserve, and to be used in settlement of clearing-house balances. These certificates were not properly treasury notes, and the highest amount issued was $64,780,000, on Aug. 3, 1875, which amount was rapidly reduced after the resumption of specie payments. On June 30, 1875, there were outstanding $59,045,000, of which the national banks held $47,310,000. On June 30, 1876, the amount outstanding was $33,140,000, of which the banks held $27,955. The amount outstanding on June 1, 1883, was $11,805,000, of which the banks held, on May 1, $8,420,000.
—The act of Feb. 26, 1879, authorized the issue of 4 per cent. certificates, of the denomination of $10, which were convertible at any time, with accrued interest, into the 4 per cent. bonds authorized to be issued July 14, 1870. This act was passed for the purpose of facilitating the refunding of 5 and 6 per cent. bonds then falling due into 4 per cents, but the act was really unnecessary, for about the time the certificates began to be issued, the 4 per cent. bonds were above par in the market. Long lines of people gathered at the different government depositories where the certificates were offered, and the amount was taken as fast as they could be furnished. $40,012,750 were disposed of at par, of which $39,398,110 were issued during the fourth quarter of the fiscal year 1879, and the amount outstanding on June 1, 1883, was $358,000.
—The following table exhibits the amount of treasury notes of the different forms issued during the late civil war, outstanding on June 1, 1883, interest upon all of which has long since ceased:
—"An act to authorize the issue of United States notes, and for the redemption or funding thereof, and for refunding the floating debt of the United States," which was signed by President Lincoln on Feb. 25, 1862, is the first law ever placed upon the statute books making treasury notes, or anything but gold and silver coin, a tender in payment of debts. Indeed, it may be said that neither the congress of the United States nor the continental congress, which preceded it, issued any form of legal tender treasury notes. The continental congress had no power to enact such a law. It did, however, pass a resolution, on Jan. 4, 1777, recommending to the legislatures of the different states to pass laws making the bills of credit issued by congress a lawful tender in payment of public and private debts, and a refusal thereof an extinguishment of such debts; that debts payable in sterling money be discharged in continental dollars at the rate of 43.6 sterling per dollar; and that in the discharge of all other debts and contracts, continental dollars shall pass at the rate fixed by the respective states for the value of Spanish milled dollars. In accordance with the recommendation contained in these resolutions, continental money was made a legal tender in Connecticut, Massachusetts, Rhode Island and New Jersey in 1776, and in Pennsylvania, Delaware, Maryland and Virginia in 1777.
—The legal-tender act was passed during the second session of the 32d congress, which met Dec. 2, 1861. The report of the secretary of the treasury bears date Dec. 9. The third installment of fifty millions, of the loan of 150 millions already referred to, had been negotiated on the 16th of November previous, with the associated banks. The secretary was hopeful that the war would be brought to an auspicious termination before midsummer, but at the same time submitted estimates based upon its continuance. In this event, it was estimated that the public debt, which, on July 1, 1861, was $90,867,828, would be, on July 1, 1862, 517 millions, and on July 1 of the following year, 897 millions. He recommended the issue of circulating notes in place of the existing bank note circulation, which depended "on the laws of thirty-four states, and the character of some sixteen hundred private corporations." Two plans for effecting this object were suggested: the first was the withdrawal of the bank circulation, and the issue of United States notes instead thereof, payable in coin on demand; the second contemplated the delivery to banks of notes prepared for circulation under national direction, and to secure prompt convertibility into coin by the pledge of United States bonds, and other needful regulations. Both of these plans were discussed at considerable length in the report, the preference of the secretary being decidedly in favor of the issue of bank notes. The avails of the large loans made from the banks were not allowed to remain on deposit, to be drawn by checks as the necessities of the government should require, but were, from time to time, paid into the treasury, so that it was quite difficult for some of the banks to meet the last installment. The banks were in danger of suspending specie payment at the time of the meeting of congress. Suspension finally took place on Dec. 28, 1861, and two days later, on the 30th, Mr. Spaulding, of the subcommittee of the committee of ways and means, introduced the legal-tender bill.
—A national bank bill had been prepared previously, and when nearly completed, Mr. Hooper, of Massachusetts, also of the subcommittee, incorporated in it several provisions contained in a recent free banking bill, which had passed the legislature of his own state. Two hundred copies of this bill, which was hastily prepared late in the month of December, were printed for the use of the committee of ways and means, and a copy of this bill, which was the basis of the national bank act which became a law about a year afterward, is in the possession of the writer of this article. It being evident that the bank bill would encounter considerable opposition from the friends of banks organized under state laws, and that great delay would necessarily occur from the consideration of an elaborate bank bill of sixty or more sections, arranged for the organization of banks in the different states of the Union, the bill was laid aside, and the bill authorizing the issue of legal-tender notes was considered. An informal letter was read to the committee from Attorney General Bates, in which he gave it as his opinion that congress had not only the right to issue such bills of credit, but also to make them a legal tender. Discussion of the bill continued for several days, and, upon a vote being taken, it was found that the committee was equally divided, but by the change of a vote it was finally reported to the house on July 7, 1862, and published in the leading New York newspapers, only two of which were favorable to the measure. Delegates from ten of the principal banks in the three leading cities appeared in Washington and opposed the bill. The bill was afterward submitted to the secretary of the Treasury by the committee, and, upon its return with his suggestions, was reported to the house on Jan. 22, 1862, with the title above given, as a substitute for the previous bill. The bill passed the house on Feb. 6, 1862, by a vote of 93 to 59. The vote to strike out the legal-tender clause was lost in the senate by 17 years to 22 nays, and the bill passed by a vote of 30 to 7. The chief amendments in the senate were: requiring payment of interest semi-annually in coin on bonds and seven-thirty notes; conferring on the secretary power to sell 6 per cent. bonds at the market value thereof for coin; making the bonds redeemable in five years and payable in twenty years from date at the option of the government, and authorizing temporary deposits in the treasury at 6 per cent.
—There was considerable debate in both houses upon the question of the right of the government to issue demand notes, and the arguments were not unlike those which have already been given in previous debates in congress. The principal discussion was, however, upon the constitutional right of congress to issue legal-tender notes. On the 20th the amendments were returned to the senate with the concurrence of the house in part of them, and non-concurrence in others, and with some amendments to the senate amendments, after which a conference committee was appointed in the house and senate, which committee had a long consultation extending through two or three days. The report of the conference committee was agreed to on the 24th in the house by yeas 97, nays 22, and in the senate on the 25th without a division, and on the same day the bill was approved by the president. It authorized the issue of 150 millions of United States notes, not bearing interest, payable to bearer at the treasury of the United States, and of denominations of not less than $5, fifty millions of which were to be in lieu of the demand treasury notes which had been previously issued; they were similar in form to those notes, but they were not receivable in payment of duties on imports, and were not payable by the government for interest upon its obligations, which were payable in coin: they were to be a legal tender in payment of all other debts, public and private, within the United States. They differed from the first notes issued also, and in this respect, that all holders of legal-tender notes were authorized to deposit any sum not less than $50, or any multiple of $50, with the treasurer, or either of the assistant treasurers, and receive duplicate certificates, upon which were to be issued to the holder an equal amount of bonds of the United States bearing interest at the rate of 6 per centum per annum, payable semi-annually, and redeemable at the pleasure of the United States after five years, and payable twenty years from the date thereof. The second section of the same act authorizes the issue of 500 millions of five-twenty bonds into which the treasury notes were to be funded, in accordance with the previous section and as stated in the title of the bill. The first notes issued were of the date of March 10, 1862, and there was printed upon the back the following words: "This note is a legal tender for all debts, public and private, except duties on imports and interest on the public debt, and is exchangeable for United States 6 per cent. bonds redeemable at the pleasure of the United States after five years."
—On June 7, 1862, the secretary addressed letters to the chairman of the committee of ways and means of the house and the finance committee of the senate, recommending a further issue of 150 millions of dollars of legal-tender notes. He said that nearly the whole issue of sixty millions in demand notes was held by bankers and by capitalists, and was at a premium of ¾ to 1¼ per cent. on account of its availability for the payment of duties; so that there was really only about ninety millions of United States notes in circulation. He said that the United States notes are maintained at near par in gold by the provision for their conversion into bonds bearing 6 per cent. interest payable in coin, and that resumption would be more easily effected "if the currency—small as well as large—were of United States notes, than if the channels of circulation be left to be filled up by the emissions of non-specie paying corporations, solvent and insolvent." With these letters he transmitted bills for the consideration of these committees. The immediate necessities of the government admitted of but little delay, and the bill, substantially as recommended by the secretary, passed both houses, and was signed by the president on June 11, 1862. The bill authorized the issue of 150 millions of legal-tender notes, thirty-five millions of which were to be in denominations less than $5. The subsequent act of March 3, 1863, authorized the issue of an additional 150 millions, making the aggregate authorized issue of legal-tender notes 450 millions of dollars. This act was similar to the previous legal-tender acts, so far as the issue of treasury notes was concerned, except that it provided "that the holders of United States notes issued under former acts shall present the same for the purpose of exchanging them for bonds as therein provided on or before July 1, 1863, and thereupon the right to exchange the same shall cease and determine."
—After the passage of the act of March 3, 1863, the secretary decided to commence the negotiation of 5 per cent. ten-forty bonds, and gave notice that he should decline to allow the holders of legal tenders to fund such notes in bonds bearing a greater rate of interest than 5 per cent. after July 1, 1863. The negotiation of the 5 per cents was not successful at that time, and that portion of the act of March 3 which repealed the right to fund legal tenders into five-twenties, as printed upon the back of the notes, was not only a violation of the contract with the holder, but also a serious financial mistake. It had the effect to materially reduce the value of the treasury notes in the market, prevented for a time the further funding of treasury notes after July 1, and undoubtedly postponed for many months the date for the resumption of specie payment.
—The highest amount of legal-tender notes outstanding at any time was on Jan. 3, 1864, when the amount reached $449,338,902. The second section of the act of June 30, 1864, provided that "the total amount of United States notes issued or to be issued shall not exceed 400 millions, and such additional sum, not exceeding fifty millions, as may be temporarily required for the redemption of temporary loans." The following table shows by denominations the amount of legal-tender notes outstanding on June 1, 1883:
—Secretary McCulloch, in his report for 1865, expressed the opinion, that the legal-tender acts were war measures, and ought not to remain in force one day longer than should be necessary to enable the people to prepare for a return to the gold standard. The house of representatives during the same month passed a resolution, by a vote of 144 yeas to 6 nays, "cordially concurring in the views of the secretary of the treasury in relation to the necessity of the contraction of the currency with a view to as early a resumption of specie payment as the business interests of the country will permit." In order to carry into effect this resolution, congress, by an act approved March 12, 1866, authorized the retiring and cancellation of not more than ten millions of legal-tender notes within six months from the passage of the act, and thereafter not more than four millions in any one month. Under this act, the amount outstanding was so far reduced, that on Dec. 31, 1867, the amount was 356 millions. On Feb. 4, 1868, the further reduction of the volume of such notes was prohibited, leaving the last-named amount outstanding until Oct. 1, 1872. Between that date and Jan. 15, 1874, under Secretaries Boutwell and Richardson, the amount was increased to $382,979,815, and on June 20, 1874, the maximum amount was fixed at $382,000,000; section six of the act of that date providing that "the amount of United States notes outstanding and to be used as a part of the circulating medium shall not exceed the sum of 382 millions, which said sum shall appear in each monthly statement of the public debt, and no part thereof shall be held or used as a reserve."
—Section three of the act of Jan. 14, 1875, authorized an increase of the circulation of national banks in accordance with existing law, without respect to the limit previously existing, but required the secretary of the treasury to retire legal-tender notes to an amount equal to 80 per cent. of the national bank notes thereafter issued, until the amount of such legal-tender notes outstanding should be 300 millions, and no more. Under the operation of this act $35,318,984 of legal-tender notes were retired, leaving the amount in circulation on May 31, 1878, the date of the repeal of the act, $346,681,016, which is the amount now outstanding.
—The following table exhibits the amount of the various issues of treasury notes outstanding on July 1 of each year from 1862 to 1883; together with the amount of national bank notes and the value of the legal-tender treasury note as compared with coin for the same dates:
—The act of Jan. 14, 1875, required the secretary of the treasury, on and after Jan. 1, 1879, to redeem in coin the legal-tender notes on their presentation at the office of the assistant treasurer in the city of New York, in sums of not less than $50. In order that he might always be prepared to do this, he was authorized "to use any surplus revenue from time to time in the treasury not otherwise appropriated, and to issue, sell and dispose of at not less that par in coin any of the 5, 4½ and 4 per cent. bonds authorized by the act of July 14, 1870. Under this act Secretary Sherman, in 1877, sold at par in coin fifteen millions of 4½ per cents, and twenty-five millions of 4's; and in April, 1878, he sold fifty millions of 4½ per cents at a premium of 1½ per cent. This coin was placed in the treasury for purposes of resumption, and on Jan. 1, 1879, the secretary held 135 millions of gold coin and bullion, and, in addition, over thirty-two millions in silver coin and bullion; the gold coin alone being nearly equal to 40 per cent. of the United States notes then outstanding.
—The assistant treasurer of the United States, at New York, became a member of the clearing house, thus facilitating the business of the banks with the government. The banks in New York strengthened the hands of the government by agreeing to receive United States notes, not only for their ordinary balances, but in payment of the interest upon the public debt, and of other coin obligations of the government. The banks of the country, at the date of resumption, held more than one-third of the outstanding treasury notes, but they had so much confidence in the ability of the secretary to maintain resumption that none were presented by them for redemption. The people preferred the issues of national banks and of the government to coin itself. There was, therefore, no demand for payment of the notes of the government, and the gold coin in the treasury, which amounted to 135 millions on the day of resumption, increased more than thirty-six millions in the next ten months. The amount held on Nov. 1, 1879, exceeded 171 millions, and on Nov. 1, 1883, 209 millions. The resumption act is still in force, and gives the secretary unlimited power, with which to provide for the redemption in coin of the legal-tender notes. He is thus enabled, so long as the credit of the government continues good, to check, by the sale of United States bonds, any exportation of coin which might endanger the redemption of United States legal-tender notes.
—From the date of the passage of the act of April 12, 1866, which authorized a reduction of the amount of legal-tender notes, to the passage of the act of July 12, 1882, enabling national banking associations to extend their corporate existence, a period of more than sixteen years, hundreds of bills of almost every conceivable form to regulate the currency were introduced in congress. Throughout the country the subject was continually discussed, not only during political campaigns and at public conventions, but in the smaller gatherings of the school district and the meetings of individuals by the way side. Speeches and political pamphlets by the thousand, essays, campaign papers innumerable, and caricatures of almost every kind and description, upon the subject of the expansion and contraction of the currency, and its effect upon business, were distributed broadcast in all directions. Perhaps the most plausible argument which was presented over and over again in every portion of the country during these continued discussions, was in reference to the retirement of the national bank notes, and the substitution thereof of treasury notes, in order, as was claimed, to save to the government the interest upon the bonds held by the national banks, as security for their circulating notes. Discussions of this subject in its various forms, and statements of the profits of the circulation of the national banks at different dates, may be found in the reports of the comptroller of the currency during the last nine years.
—The act of Feb. 28, 1878, authorized any holder of silver dollars of the weight of 412½ grains troy of standard silver, to deposit the same with the treasurer, or any assistant treasurer, of the United States, in sums not less than ten dollars, and receive therefor certificates of not less than ten dollars, each corresponding with the denominations of the United States notes. It required that the coin deposited or representing the certificates should be retained in the treasury for the payment of the same on demand, and that said certificates should be receivable for customs, taxes and all public dues, and also authorized their reissue. This act did not authorize their use as clearing house certificates, nor make them available as reserve for the national banks.
—The act of July 12, 1882, authorized and directed the secretary of the treasury to receive deposits of gold coin in denominations of not less than $20 each, corresponding with the denominations of United States notes. The coin deposited for the certificates is required to be retained for the payment of the same on demand, and these certificates, and also silver certificates, are authorized to be counted as part of the lawful reserve of the national banks. The act also provides that no national banking association shall be a member of any clearing house in which such certificates shall not be receivable in the settlement of clearing house balances.
—The preceding table shows the amount of standard silver dollars coined under the act of Feb. 28, 1878, which authorized the same, the amount in the treasury and the amount of silver certificates issued on July 1, from 1878 to 1883 inclusive.
—The amount of gold certificates which had been issued under the act of July 12, 1882, was, on Nov. 1, $21,790,000, and on Jan. 1, 1884, $87,874,500.
—AUTHORITIES. American State Papers; Annals of Congress; Madison Papers; Elliot's Debates; Congressional Globe; National Loans of the United States, by R. A. Bayley; Finance Reports; Annual Cyclopædia; Harper's Magazine; Hunt's Merchants' Magazine, New York; Bankers' Magazine, New York; Schuckers' Life of Chase, Spaulding's History of Legal-Tender Money; New York Newspapers, 1861-2-3.
JOHN JAY KNOX.
UNITED STATES NOTES. Legal-Tender Cases—Decisions of the Supreme Court of the United States.
UNITED STATES NOTES. Legal-Tender Cases—Decisions of the Supreme Court of the United States. On April 30, 1866, the legislature of New York provided by law for refunding to the banks and other corporations in like condition, the taxes of 1863 and 1864 collected upon that part of their capital invested in securities of the United States exempt by law from taxation. The board of supervisors of the county of New York was charged with the duty of auditing and allowing, with the approval of the mayor of the city and the corporation counsel, the amount collected from each corporation for taxes on the exempt portion of its capital, together with costs, damages and interest. This act was passed in conformity with the decision of the United States supreme court in the Bank Tax Case (reported in 2d Wallace, 200), which decided that a tax on the obligations of the United States by state authority was void. The bank of New York presented a claim to the said board of supervisors for the refunding of those taxes which the bank had paid on the United States notes, commonly called "greenbacks," during the years aforesaid. The board refused the application on the ground that "greenbacks" were not "securities" of the United States government, but were practically and in effect "money," taxable as cash. The court of appeals of the state of New York sustained the action of the board, but on appeal to the United States supreme court (Bank vs. The Supervisors, 7 Wallace, 26), that court, at its December term, 1868, reversed the opinion of the state court. The court said: "The act of February, 1862, declares that 'All United States bonds and other securities of the United States held by individuals, associations or corporations within the United States, shall be exempt from taxation by or under state authority.' We have already said that these notes are obligations. They bind the national faith. They are, therefore, strictly securities. They secure the payment stipulated to the holders by the pledge of the national faith, the only ultimate security of all national obligations, whatever form they may assume."
—On June 20, 1860, a certain Mrs. Hepburn made a promissory note, by which she promised to pay to Henry Griswold on Feb. 20, 1862, eleven thousand two hundred and fifty "dollars." At the time when the note was made, and also at the time when it fell due, there was, confessedly, no lawful money of the United States, or money which could be lawfully tendered in payment of private debts, but gold and silver coin. Five days after the day when the note by its terms fell due, that is to say, on Feb. 25, 1862, congress passed the first legal tender act, commonly so called, by which the United States notes issued thereunder were made a legal tender for "all debts, public and private, within the United States," except certain public debts. In March, 1864, Mrs. Hepburn tendered payment of the debt, principal and interest, in the United States notes issued under this act. The amount tendered, $11,250 in legal-tender notes, at that time was worth only about $7,000 in coin. The tender was refused. She was sued in the Louisville chancery court in the state of Kentucky. She tendered and paid the same money into court. It was declared by the chancellor to be a satisfaction of the debt. The case was appealed to the court of errors of Kentucky. That court reversed the chancellor's decision, and ordered a contrary judgment to be entered. Whereupon Mrs. Hepburn took the case to the United States supreme court, where it was argued by very numerous and able counsel at the December term, 1868, but not decided until the December term, 1869. (Hepburn vs. Griswold, 8 Wallace, 603.) The court was comprised of Mr. Chief Justice Chase, and Associate Justices Nelson, Clifford, Field, Grier, Davis, Miller and Swayne. Mr. Justice Grier resigned before the opinion of the court was announced, but agreed with the majority in the consultation room, as was announced by the chief justice. The chief justice delivered the opinion of the court. In this opinion Justices Nelson, Clifford and Field concurred. The court held that the language of the act of Feb. 25, 1862, making the United States notes issued thereunder "a legal tender in payment of all debts, public and private, within the United States," included pre-existing debts as well as debts which should be incurred after the passage of the act, and while it might be an exercise of rightful power in congress under those powers granted it by the constitution to declare war, suppress insurrection, raise and support armies and navies, borrow money on the credit of the United States to pay the debts of the Union, and to provide for the common defense and general welfare, to emit bills of credit or United States notes intended to circulate as money, and make the same legal tender for debts to be incurred after the passage of the act, yet inasmuch, as the act by construction declared these notes to be legal tender in payment of pre-existing debts, that the act was inconsistent with the spirit of the constitution, and was not a law "necessary and proper" for carrying into execution the powers vested by the constitution in congress or in the government of the United States. The constitution reads that congress shall have, besides certain powers granted in express terms, "power to make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this constitution in the government of the United States or in any department or offices thereof." The court held that the legal-tender clause was unnecessary and improper. That the notes would have maintained themselves equally well without it. The chief justice quoted the fact that the three hundred million of dollars in notes issued by the national banking associations under the act of February, 1863, and the fifty millions of fractional currency issued under the act of March, 1863, were not made a legal tender, and argued that it was the quality of receivability for public dues, and not the quality of legal tender, which made these United States notes circulate as freely as they did. The chief justice declared that the act was obnoxious to those clauses of the constitution, also, which forbade the impairment of the obligations of contracts, the taking of private property for public use without compensation, and the deprivation of any person of his property without due process of law. And that the constitution was ordained to "establish justice," which this act did not do, so far as regards pre-existing debts. For all of which reasons elaborately stated, the court held the act unconstitutional and therefore void. Mr. Justice Miller, with whom concurred Justices Davis and Swayne, delivered a dissenting opinion. He held that what was "necessary and proper" to carry into execution the powers vested by the constitution in the government of the United States, can not rightfully be construed to mean only such legislation as is indispensably necessary, but that congress has the choice of means, and is empowered to use any means, which are, in fact, conducive to the exercise of the power granted or calculated to produce the end desired. He fortified this position by the clear, strong decisions of the court delivered by Chief Justice Marshall, who announced this exposition of the constitution in United States vs. Fisher, 2 Cranch, 358, and in McCulloch vs. The State of Maryland, 4 Wheaton, 316. He further said, that, while the constitution forbade any state from impairing the obligation of a contract, it said nothing about the power of congress in the premises. And that the provision that private property should not be taken for public use without due compensation, nor any person be deprived of his property without due course of law, had no application to the indirect effect of great public measures whereby lands, stocks, contracts etc., might depreciate in value, because, for instance, such an effect would doubtless succeed an immediate abolition of the tariff on iron by depreciating the value of furnaces and the capital employed in its manufacture, and yet no one would claim that such a repeal was therefore unconstitutional and void. That the whole argument of the injustice of the law and of its being opposed to the spirit of the constitution, was too abstract and intangible for application to courts of justice. That the act was passed to save the life of the government, to pay its soldiers and sailors and other public debts. That the legal-tender clause was considered "necessary and proper" by congress, and that the courts had no right to interfere with that discretion. "It would authorize this court to enforce theoretical views of the genius of the government, or vague notions of the spirit of the constitution and of abstract justice, by declaring void laws which did not square with those views. It substitutes our ideas of policy for judicial construction, an undefined code of ethics for the constitution, and a court of justice for the national legislature."
—One Parker (Legal Tender Cases, 12 Wallace, 457) was under contract to convey a lot of land to one Davis, upon payment of a certain sum of money. The contract antedated, and suit was brought on the same before, the passage of any of the legal-tender acts. After the passage, to wit, in February, 1867, the supreme court of Massachusetts decreed that Davis should pay into court a certain sum of money, and that Parker should thereupon execute a deed to him for the land in question. Davis accordingly paid into court the given sum in United States notes. Parker refused to execute the deed on the ground that he was entitled to coin; whereupon the court changed the decree, and ordered that Parker should execute the deed upon payment by Davis into court of the specific sum in United States notes. From that decree the case was appealed to the United States supreme court. The case was argued at its December term, 1870, and on Jan. 15, 1872, the opinion of the court was delivered by Justice Strong, who, with Justice Bradley, had been added to the court in 1870 by President Grant, making a full bench of nine. The other justices were the same that sat in the case of Hepburn vs. Griswold. The court overruled the latter case and held the legal-tender acts to be constitutional as respects contracts made before their enactment as well as after. The court said, in reference to the case of Hepburn vs. Griswold: "That case was decided by a divided court and by a court having a less number of judges than the law then in existence provided this court shall have. These cases have been heard before a full court, and they have received our most careful consideration." And Mr. Justice Bradley, in his separate concurring opinion said: "And in this case, with all deference and respect for the former judgment of the court, I am so fully convinced that it was erroneous and prejudicial to the rights, interest and safety of the general government, that I, for one, have no hesitation in reviewing and overruling it. It should be remembered that this court, at the very term in which, and within a few weeks after, the decision in Hepburn vs. Griswold was delivered, when the vacancies on the bench were filled, determined to hear the question reargued. This fact must necessarily have had the effect of apprising the country that the decision was not fully acquiesced in, and of obviating any injurious consequences to the business of the country by its reversal." Justice Strong, in delivering the opinion of the court, reiterated and enforced the arguments made by the minority in Hepburn vs. Griswold. He held that the distinction made by the chief justice in regard to the constitutional validity of the act as to debts contracted after its passage and debts contracted before, was not well founded, and that the fundamental question was, Can congress constitutionally give to United States notes the character and quality of money? If they can, then such notes can be made legally available to fulfill all contracts solvable in money, without reference to the time when such contracts were made, unless expressly otherwise provided. "What we do assert is, that congress has power to enact that the government's promises to pay money shall be, for the time being, equivalent in value to the representative of value determined by the coinage acts, or to multiples thereof." And that, therefore, all contracts calling for "dollars" simply can be legally fulfilled by a tender of the government's promises to pay dollars, by force of the legal-tender acts, without regard to date. And on this point Mr. Justice Bradley, in his concurring opinion, says: "So with the power of the government to borrow money, a power to be exercised by the consent of the lender, if possible, but to be exercised without his consent if necessary. And when exercised in the form of legal tender notes or bills of credit, it may operate for the time being to compel the creditor to receive the credit of the government in place of the gold which he expected to receive from his debtor. All these are fundamental political conditions on which life, property and money are respectively held and enjoyed under our system of government, nay, under any system of government. There are times when the exigencies of the state rightly absorb all subordinate considerations of private interest, convenience or feeling; and at such times the temporary, though compulsory, acceptance by a private creditor, of the government credit, in lieu of his debtor's obligation to pay, is one of the slightest forms in which the necessary burdens of society can be sustained. Instead of being a violation of such obligation, it merely subjects it to one of those conditions under which it is held and enjoyed." The chief justice, with whom concurred Justices Nelson, Field and Clifford, delivered a dissenting opinion. He strenuously maintained his former views, as did also Justices Field and Clifford, in separate opinions. The burden of their argument was, that the constitution forbade any state to make anything but gold and silver a legal tender, and granted to the government only the right to coin this gold and silver, and regulate the value thereof and of foreign coin. And while the power to emit treasury notes was conceded as one means of borrowing money, yet that congress had no right to make such notes money, or legal tender as money. Mr. Justice Clifford showed that the words "and emit bills on the credit of the United States" were originally reported in article seven, in the draft of the constitution as submitted to the convention. Mr. Morris moved to strike the clause out on the ground that it was unnecessary, and a vicious suggestion of a power which would be unquestionably used anyhow without it. Mr. Madison thought it would be sufficient to let the clause remain, as it did not contain the hurtful power to make such bills legal tender, but finally voted in favor of striking out the clause entirely, as was done, as eliminating even a "pretext for a paper currency, and particularly for making the bills a tender either for public or private debts," without disabling the government from the use of treasury notes.
JOHN JAY KNOX.
UNITED STATES OF AMERICA
UNITED STATES OF AMERICA, The. —I. COLONIAL HISTORY. 1. Discovery. It is unnecessary to consider here the controversy in regard to the discoveries of the Northmen, for the existence of the United States is due, in the first place, to the discovery of the new world by Columbus (See AMERICA), and, in the second place, and yet much more directly, to the discoveries of John and Sebastian Cabot in 1497 and 1498. There are but scanty records of their voyages; but it is quite certain that Sebastian sailed along the coast of what is now the United States from parallel 38° (Virginia) to its northern limit. As both were in the service of the English king, and Sebastian was probably born in Bristol, England, their discoveries were the foundation of the English claims in North America.
—The discovery of the coast further south was mainly due to voyages from the Spanish West Indies. Ponce de Leon discovered Florida, on the eastern side, in 1512; and in 1528 Narvacz secured a temporary foothold on its northwest coast. In 1520 Ayllon discovered the coast of what is now South Carolina; and in 1524 Verrazzani, an independent voyager in the service of France, filled up most of the gaps by exploring the coast from the southern border of North Carolina to Nova Scotia. It is thus quite certain that the coast of the Atlantic and gulf of Mexico was fairly well known in 1524. There has always been a strong suspicion, however, that the Atlantic coast was just as well known years before 1524, by the voyages of Cortereal in 1500, and of other forgotten sailors before and after him. It is asserted, for example, that a planisphere, dating from 1502, has been discovered (1883) at Modena, in the archives of the Este family, and that it gives the outline of the whole Atlantic coast of the United States, including Florida. There has even been a disposition, in some quarters, to deny the claims of Columbus as a discoverer, and to make him also a mere reproducer of the work of unknown predecessors. However this may be, the political history of the United States can not look back further than Columbus' discovery for the causes of the country's existence. The discovery of the Pacific coast is elsewhere treated. (See NORTHWEST BOUNDARY.)
—All this work was confined to the seacoast, and no attempt was made upon the interior for nearly a century, with a single remarkable exception, the most extraordinary episode in this part of the history of the United States. In 1539 Ferdinand de Soto, with a Spanish force, landed at Tampa bay, marched north into what is now northern Georgia, thence back to Mobile, and thence northwest into Arkansas, discovering and crossing the Mississippi, in April, 1541, near the present southerly boundary of Tennessee. After nearly crossing Arkansas, he moved down the Washita river to the Mississippi. Here he died, in May, 1542, and the remnants of his force built boats, in which they reached Mexico. With the exception of this quixotic affair, and a few expeditions sent northward by the Spanish governors of Mexico into what is now New Mexico and California, the interior of North America was for a long time untouched: the ocean was the base of operations for all the early discoverers.
—2. Colonization. The colonization of the central belt of North America, now covered by the United States, was essayed at different times by five nations of Europe, England, France, Spain, Holland and Sweden. The details of these attempts will be found under the names of the various colonies referred to below. It is intended here only to show the manner in which Great Britain gradually ousted the other sovereignties from this particular territory, and formed here a chain of thirteen homogeneous colonies of her own, fitted for subsequent coalescence into a nation.
—The claim of Spain to the whole of the two Americas, confirmed by a papal bull in 1493, was respected by other nations until they were touched by the influences of the reformation. In 1562 an unsuccessful colony of French Huguenots was planted at Port Royal, and this part of the continent was named Carolina, in honor of Charles IX. of France. In 1564 a more successful colony was planted on the St. John's river, in northern Florida; but this was extirpated by the Spaniards under circumstances of great atrocity. There were no further attempts at colonization by French Protestants; and the energies of Spain were bent toward the richer regions of Mexico and South America; so that central North America remained uncolonized.
—England was now controlled by the reformation; a new era of mental and physical activity was opening; and her policy was taking a line of pronounced opposition to Spain. Her connection with the new world had been kept up by a vigorous prosecution of the Newfoundland fisheries; and in 1578 her preliminary failures in the process of colonization were begun. In that year, and in 1583, two unsuccessful voyages were made to North America by Sir Humphrey Gilbert, Sir Walter Raleigh's half-brother, under patent from Queen Elizabeth. In 1584, under a new patent, Raleigh sent out two small vessels under Amidas and Barlow. They explored the coast of North Carolina, and reported so favorably that Queen Elizabeth named the country Virginia, as a token of the favor of the virgin queen. In 1585 Raleigh fixed the first English colony in America on Roanoke island, in North Carolina: it was starved out in a year. In 1587 he established another at the same place: it had disappeared, when it was searched for three years afterward, and has never since been heard of. Raleigh's ill success discouraged him and others, and there were no further individual efforts at English colonization. English voyagers still skirted the coast and trafficked with the Indians, but at the beginning of the seventeenth century there was not an English colonist in North America.
—English colonization was forced by the general poverty and discontent of the English lower classes; but English statesmen wisely intrusted the execution of the work to joint-stock companies. Two companies were formed, and were chartered by one patent of James I., dated April 10, 1606. To the London company, composed of merchants and gentlemen in and near London, was granted the Atlantic coast between north latitude 34° and 41°, that is, from about Cape Fear to Long Island. To the Plymouth company, whose members lived in the west of England, was granted the coast between north latitude 38° and 45°, that is, from the mouth of the Potomac to the eastern boundary of Maine. From the Potomac to Long Island, where the two grants conflicted, neither company was to plant a settlement within 100 miles of a settlement previously planted by the other. The western extent of both grants was indefinite.
—The patent practically reserved to the crown all powers of legislation, and gave the nominal ruling bodies, the councils, little or no power. But it contained the following important clause, which was always rated as more significant by the colonists than by the crown: "And we do, for us, our heirs and successors, declare by these presents that all and every the persons, being our subjects, which shall dwell and inhabit within every or any of the said several colonies and plantations, and every of their children, which shall happen to be born within any of the limits and precincts of the said several colonies and plantations, shall have and enjoy all liberties, franchises and immunities, within any of our other dominions, to all intents and purposes as if they had been abiding and born within this our realm of England, or any other of our said dominions." The intention of this royal advertisement and contract for the encouragement of emigration always seemed to the colonists too plain for argument. The ingenuity of crown lawyers was easily able to convince the crown, in after years, that there were many "liberties, franchises and immunities," extorted from the crown by English subjects, which did not extend to the colonists. But the colonists were never convinced, and it is difficult to see any reason why they should have been convinced.
—The patent also contained a provision, that, if any resident of the colonies should trade with foreign countries, without first obtaining a license from the crown, his ship and "all his goods and chattels" should be forfeited to the crown. It was evident from this that the British government had no higher conception of colonization than the other governments of the time, and that its purpose was "to monopolize the consumption of the colonies, and the carriage of their produce." (This branch of the subject is fully treated under NAVIGATION LAWS.)
—The Plymouth company, after an unsuccessful attempt to fix a colony at the mouth of the Kennebec river in 1607, did no colonizing for itself, and in 1620 received a new charter, covering the territory between north latitude 40° and 48°, that is from about Philadelphia to Cape Breton island. This charter was also surrendered to the crown in 1635; but, before the surrender, the company had made the grants which resulted in the formation of the several colonies of New Hampshire, Massachusetts and Connecticut (see their names), and the unauthorized settlement had been begun, which became the colony of Rhode Island. (See its name.) Massachusetts was at first two colonies, Plymouth and Massachusetts Bay; and Connecticut, in like manner, was dual, Connecticut and New Haven. It is notable that only two of these six colonies, New Hampshire and Massachusetts Bay, were founded under the auspices of the company. The first settlement in the company's territory, at Plymouth, Dec. 21, 1620, was made without the company's permission or knowledge, and the two Connecticut colonies and Rhode Island were equally unauthorized. After the dissolution of the company, the crown reduced the number of colonies to four, by consolidation, and chartered these at various times.
—The London company was more active and successful. Its first expedition fixed the first permanent English colony in North America at Jamestown, in the present state of Virginia, May 13, 1607. In 1609 it received a new charter, limiting its territory to the present states of Virginia, Maryland and North Carolina. By the subsequent creation of the colonies of Maryland and Carolina the jurisdiction of Virginia was reduced to the area which it covered as a state. (See VIRGINIA, TERRITORIES:) In 1624 the London company was deprived of its charter, and Virginia became a royal province; but the inhabitants were not deprived of the privileges which the company had granted them.
—The grant of land for the new colony of Maryland in 1632 was carved out of the Virginia jurisdiction, and so was the northern half of the grant of Carolina in 1663. (See NORTH CAROLINA.) But, in the latter case, the grant extended far to the south of the original grant to the London company, covering the old French claims to "Carolina." The Spaniards felt no more amicably toward the new than toward the old intruders but were unable to get rid of them in the same summary fashion, and submitted to the intrusion. In 1732 the last of the original thirteen colonies, Georgia, was carved out of South Carolina as a barrier against the Spaniards in Florida; and at the peace of 1763 it was extended a little further south, to its present southern boundary.
—Holland and Sweden were the only powers which disputed the territory of the inchoate nation with England, and their attempts were confined to the region of three degrees between the specific grants to the two English companies, from about Philadelphia to Long Island. The attempt of the Swedes may be briefly dismissed: it was never supported earnestly by the mother country, and fell like an unsupported forlorn hope after the first assault. It was located in the present state of Delaware, but with efficient support from home would have grounded a fair claim to the whole of the present state of Pennsylvania. Unsupported, it was unable to resist the Dutch to the north, who conquered and annexed it in 1655. All the present middle states thus became Dutch.
—Holland claimed the coast line explored in 1609 by Henry Hudson, an Englishman in the service of the Dutch East India company. It extended from Chesapeake bay to the Hudson river, and up that river to where Albany now stands. To this they added claims, by exploration or conquest from the Indians or Swedes, to Long Island, the territory west and northwest of the coast line, and the territory between the Hudson and the Connecticut rivers. In 1621 all this territory, under the name of New Netherlands, was granted by Holland to the Dutch West India company, which colonized and governed it for forty years. In 1664, Charles II. granted the territory comprised in New Netherlands to his brother, duke of York, who took possession at once by force. New York and New Jersey were made separate colonies. (See their names.) In 1681 Pennsylvania was made a separate colony, and Delaware remained united with it, by very loose ties, until the revolution. (See their names.)
—The central zone of North America seems made for a great nation, and the English people had thus seized the whole of its vantage ground, the Atlantic coast. At first the seizure was made almost at one blow and without opposition, so far as regarded the northern and southern portions of the coast; and the natural pressure of these upon the centre had begun the last stage of the work, when it was hastened by force in 1664. The last rival then disappeared from the coast, and the whole gateway to an imperial domain was in English hands.
—3. Colonial Development. The disturbed state of England during the forty years following the landing of the settlers at Plymouth, undoubtedly contributed very essentially to the growth of the colonies. At first, while the high church party controlled the administration of affairs in England, dissenters of every grade of intensity, from the low church puritan to the independent, found safe refuge in New England, and increased the population of this section. In this manner about 20,000 persons emigrated in the eleven years, 1630-41. When the high church party went down, and when the Presbyterians suffered a like misfortune, their adherents found refuge in the colonies to the southward. In either case the emigration was itself a protest against the existing order of things in England, which came little short of rebellion: it was the only substitute for force.
—It is certain, however, that the wonderful increase in the population of the colonies was due to the natural vis generandi of the race, set loose in a boundless and fertile territory, rather than to persecution and immigration. As soon as statistics began to make any approach to accuracy, it became evident that the population of the colonies was doubling steadily once in twenty-five years. And yet Franklin, a man of cautious estimate, could write as follows, in 1751: "There are supposed to be now upward of one million English souls in North America, though it is thought scarce eighty thousand have been brought over sea. Whether this estimate be well or ill founded, it shows the belief at the time that the old English people had not been transferred to America, but that a new English people had grown up there from a small seed.
—But, in spite of the comparative smallness of the seed, its peculiar character, and the reasons for its transfer, were of enormous weight in the history of the United States, and have colored all the subsequent order of events. The original settlers were to frame the institutions of the new nation, to cast the mould in which their descendants were to be developed. In doing the work, they were controlled by the lurking and generally unconscious feeling of incipient rebellion under which they had emigrated. Their minds naturally reverted to the traditions of their race; they rejected most of the forms of class supremacy which they had found so troublesome at home; and in each of the thirteen colonies they established as near an approach to democracy as circumstances would allow. It is a mistake to suppose that the privileges of the people were secure only under the charter governments of New England. In what might be called the palatine governments, Pennsylvania, Delaware, Maryland, and (at first) New Jersey and North and South Carolina, in which the crown resigned the dominion of the colony to a palatine, or proprietor, the patents were very full and liberal in enumerating the privileges of the people, and the people were always more ready to assert them against a proprietor than against the king. In the Carolinas (See NORTH CAROLINA) the proprietors attempted to establish a privileged aristocracy, but were defeated by popular opposition. In the royal colonies, New Hampshire, New York, New Jersey, Virginia, the Carolinas, and Georgia, in which any struggle had to be leveled at the king's vicegerent, the tender plant of popular privilege was effectually shielded by the distance of the colonies from the mother country, and by the uniform contempt of the mother country for the colonies. The former furnished special safeguards, but the latter was a general safeguard. A timely creation of a number of American peerages, with grants of land, and with hereditary privileges, even if only in the royal colonies, would have vitally altered the conditions of the new country and would have immensely increased the difficulties of the final revolution. It must be evident that this was the only policy which could have prevented or checked the establishment of democracy in America, but it had an implacable opponent in the prejudices of the ruling class in England. Thus, from various influences the thirteen commonwealths which grew up on the Atlantic coast of North America were of a generally democratic character. They varied only in degree, from the highly democratic charter commonwealths, through the scarcely less democratic palatine commonwealths, to the royal commonwealths, in which democracy maintained itself successfully against the feeble opposition of a distant king. There were some limitations on the elective franchise; there were, in most of the colonies, attempts to establish an ecclesiastical order; but hereditary privilege, with all its powerful influences on politics, was a complete blank in the colonies. The unwisdom of the English ruling class, its disdainful refusal to recognize any equal class in the new country, had resulted in the spread of democracy over all America—During the first period of their development, the colonies had little or no political connection with one another, but were loosely united by a common allegiance to the crown. Each colony lived its own life, uncontrolled by any or by all of the other colonies. These are the circumstances on which has been built the theory of "state sovereignty." (See that title.) They are admitted, but not the consequences which are sought to be drawn from them. On the contrary, it must be evident that all the materials for a new nation were here present in chaos, waiting for the blow which should crystallize them into permanent form. (See NATION.) So long as there were no controlling common interests, the repelling force between individual colonies showed itself rather in inaction than in action, rather by a negation of union than by positive and individual commonwealth assertion. Just as rapidly as the importance of public action increased, just so surely did the signs of union multiply. They were naturally confined at first to the homogeneous New England colonies, which united for a time in 1643. (See NEW ENGLAND UNION.) When the French wars fairly opened, after 1689, the middle colonies began to take part with the New England colonies in their expeditions against the Canadian strongholds. Finally, when the great French and Indian war broke out, common interests brought all the colonies into something like common action. (See WARS, I.) South Carolina troops were with Washington at Fort Necessity; and wherever troops from different colonies came together, as they frequently did thereafter, they learned to use the common name "provincials" to distinguish themselves from the British troops. There was even a promising but unsuccessful attempt at a formal union of the colonies in 1754. (See ALBANY PLAN OF UNION.)
—A more successful attempt to unite the colonies was made in 1765. (See STAMP ACT CONGRESS.) It was due to the first attempt of the home government to impose internal taxes on the colonies by acts of parliament. Against this attempt there was one general plea, the original promise of the crown to all emigrants to America, that they should "enjoy all liberties, franchises and immunities," "to all intents and purposes as if they had been abiding and born within this our realm of England." Certainly the people of England had secured, as at least one of their "liberties, franchises and immunities," the right to be taxed by their own parliaments, not by a foreign parliament or by the crown. The colonies accordingly claimed the same for themselves; none of them was able to maintain it individually; and they drifted together in common action.
—The action of the congress of 1765 was altogether advisory and deliberative, not legislative, and had only the effect of accustoming the colonists to the idea of union. The case was much the same with the first continental congress of 1774. But events were moving rapidly. It has been stated that the rights of the colonists were not guaranteed at all in the royal colonies, except by the original promise of the crown; that they were considerably better secured in the palatine, or proprietary, colonies; and that they were best secured in the charter colonies of New England. When, therefore, the crown and parliament chose, or were forced, to attack the rights of Massachusetts, one of the charter colonies, the attack was felt by all, and all united to resist it. When the second continental congress met, in 1775, the struggle had taken the shape of force, and the congress was compelled to resort to action, not to deliberation. (See CONGRESS, CONTINENTAL; REVOLUTION; FLAG)
—In theory, the second congress was exactly like the first, a meeting of committees from thirteen independent commonwealths, without any authority to act except what was formally given to each delegation by its own commonwealth. But in practice the case was radically different. The congress became a revolutionary national assembly, and seized all the powers of national government; and the authority for the seizure was not in any grant of power by the states, but in the acquiescence and support of the people at large. It is true that the people universally desired the retention of state lines in the organization of the new nation; but the retention was due to the will of the mass of the people, not to the will of any or all of the states. If the mass of the people had desired it, congress would have blotted out or ignored state lines, as it did in the case of Vermont, and any individual state would have been as powerless against congress as against the crown. The states, then, owe their existence as states, originally and continuously, to the will of a people practically unanimous on that subject. It is very true that this national people can express its will only with the very greatest difficulty, and then mainly by acquiescence or resistance; but it is equally true, that, when it has been necessary, as in 1775 and 1787-9, when the usual machinery of state government has failed, the national people has found a way to express its will, and its will has been obeyed. The statement of conflicting views in regard to the ultimate "sovereignty" of the United States is necessarily reserved to a subsequent section of this article: but the reasons above assigned will explain why this series of articles holds that the ultimate sovereignty of the United States is in the mass of the people; and that state and national governments and constitutions owe their existence to the will of the ultimate sovereignty, and hold from it. This has seemed to the writer the only theory which can account in an orderly manner for the successive changes of national government: it makes the continental congress a legal, even if revolutionary, exponent of the general popular will; the articles of confederation a valid system for its time, even if unnecessarily ratified by the state legislatures; and the convention of 1787 a legitimate exponent of the general popular will to have a change of government, in spite of the state legislatures, but without sacrificing the states. Any other theory makes the continental congress a clique of daring usurpers, seizing national power in defiance of the de jure sovereignties, the states; the articles of confederation a similar successful usurpation by the state legislatures, to which their commonwealths had granted no powers to make any such league; and the constitution itself a contra usurpation by an illegal convention, condoned by the tardy ratifications of state conventions. (See CONGRESS, CONTINENTAL; CONFEDERATION, ARTICLES OF; CONVENTION OF 1787.) Either the sovereignty of the United States is in the mass of the people, divided into states by its own will; or the political history of the United States must be abandoned as only a labyrinth without a clue.
—II. NATIONAL HISTORY. 1. 1775-89. If we take the first instance of the use of force in the struggle between the colonies and the mother country, the fight at Lexington, April 19, 1775, as the signal for the transformation of congress into a revolutionary national assembly, the people of the "United Colonies" were still nominally under the rule of George III. for more than a year thereafter. Congress still addressed them and spoke of them as "his majesty's most faithful subjects in these colonies," even while it was exhorting them to kill the soldiers sent to America by his majesty. When the royal proclamation of Aug. 23, 1775, charged them with "forgetting the allegiance which they owed to the power that had protected and sustained them," the congress, in its answer of the following Dec. 6, defined its position thus skillfully: "What allegiance is it that we forget? Allegiance to parliament? We never owed—we never owned it. Allegiance to our king? Our words have ever avowed it, our conduct has ever been consistent with it." When, however, it was found that the king was irrevocably committed to the enemies of the United Colonies, the congress, July 4, 1776, abolished the royal authority forever. (See DECLARATION OF INDEPENDENCE, ALLEGIANCE.) In 1778 the new nation was recognized by France, and in 1783, by the definitive treaty of peace which closed the struggle, it was recognized by the king of Great Britain. (See REVOLUTION, AMERICAN, and, for the terms of the recognition, STATE SOVEREIGNTY.)
—The congress retained its position as a revolutionary government for six years, 1775-81, though its power was constantly decreasing during the last half of the period. In 1781 it passed, without a jar, into the new government under the articles of confederation. This purported to be a pure federation, a league of sovereign states, and it was soon found to be useless and dangerous. In 1787 a federal convention was extorted from the state legislatures and congress by a general concurrence of the popular will. It framed the constitution, which was ratified by state conventions and became the basis of a new national government. (See CONGRESS, CONTINENTAL; CONFEDERATION, ARTICLES OF, and TERRITORIES for the delay in ratifying them; CONVENTION OF 1787; CONSTITUTION.)
—2. The Federalists, 1789-1801. At the time of the organization of the new government, parties had already been developed, though the line of division was not permanently preserved. All who had supported the new constitution took the name of federalists, as those who opposed it took the name of anti-federalists. The anti-federalists, as a distinct party, disappeared as soon as the new government was fairly organized, and the federalists were left in undisputed control of national affairs. But the latter party contained many members, particularly in Virginia, who were opposed to the growth of national power at the expense of state power, and to strong government or class government at the expense of the individual. These coalesced into a new party of constitutional opposition, the democratic-republican party, which grew stronger all through this period, until, in 1801, it finally overthrew the federal party. (See ANTI-FEDERAL PARTY; FEDERAL PARTY, I.; DEMOCRATIC-REPUBLICAN PARTY, I., II.; CONSTRUCTION; HAMILTON; JEFFERSON.)
—In July, 1788, when the ninth state had ratified the constitution, the congress of the confederation had named New York city as the place, and March 4, 1789, as the time, for the organization of the new government. Difficulty of travel, and the slovenly habits learned under the confederacy, delayed the organization until April 6, when a quorum of both houses was obtained to count the electoral votes. Until 1804 the electors simply voted for two persons, without specifying the vote for president and vice-president. (See ELECTORS.) In this case, Washington was found to have a unanimous vote, and became president, and John Adams, having the next largest vote, became vice-president. (In all cases under this article, for electoral votes see the article ELECTORAL VOTES; for cabinets, See ADMINISTRATIONS; for brief biographies, see the names of the persons mentioned.)
—The federalists, with very little opposition, proceeded to organize the new government by acts defining the powers of the various departments, and organizing inferior courts and territories. Their work was so well done that it still forms the skeleton of the government of the United States. Two other measures, involving the first broad construction of the powers of congress, provoked a warmer opposition. The organization of a national bank (See BANK CONTROVERSIES, II.), and the assumption of state debts (See FINANCE; CAPITAL, NATIONAL), resulted in the rise of the republican party, under Jefferson. Nevertheless, the result of the presidential election of 1792 was the same as that of 1789.
—Foreign affairs now began to control American politics, for the French revolution had begun its destructive course, and the republicans, and still more the democrats, were in pronounced sympathy with it. (See GENET, CITIZEN; DEMOCRATIC CLUBS.) England had begun a systematic effort to drive American commerce into her own harbors, and the republicans were anxious to begin a war of commercial restrictions against her (See EMBARGO, I.); but this question was put to rest for ten years by a treaty concluded in 1794-5. (See JAY'S TREATY.) French agents, however, continued to interfere in American politics, and diplomatic difficulties with France continued through the following term.
—Vermont was admitted as a state in 1791, Kentucky in 1792, and Tennessee in 1796. (See their names.) The rest of the western border was the occasion of more difficulty. Travel was exceedingly difficult, for the roads were so bad as to be almost worse than no roads; internal migration was slow; the Indian title to lands west of Pennsylvania was not extinguished; and border lawlessness was as ready to oppose national laws as to attack the Indians. In 1794 it became necessary to march a militia force into western Pennsylvania to suppress disorders. (See WHISKY INSURRECTION.) A war with the Miamis resulted in their defeat and their cession of nearly the whole of Ohio in 1795; and in the same year, by Jay's treaty, the British gave up the forts in the northwest territory, which they had held for twelve years in violation of the treaty of 1783. Emigration to Ohio increased at once, and the movement of American population was turned finally toward the northwest territory.
—During Washington's second term, party division advanced so far that the republican members of the cabinet successively retired, and the administration became altogether federalist. In 1796 Washington refused to be a candidate for a third term (See FAREWELL ADDRESSES), and John Adams was elected president. Jefferson, however, ran ahead of the other federalists, and became vice-president. Adams' single term was one of great difficulty at home and abroad. The United States came to the verge of war with France (See X Y Z MISSION), and the federal majority in congress seized the opportunity to enact dangerous laws for their own partisan advantage. (See ALIEN AND SEDITION LAWS.) Opposition in congress was so evidently hopeless that the republican leaders at first attempted to use the state legislatures as instruments of resistance. (See KENTUCKY AND VIRGINIA RESOLUTIONS, NULLIFICATION.) But the presidential election of 1800 proved to be a surer instrument: the federal party was defeated, and fell, never to rise again. There were some points which were settled with great difficulty (See DISPUTED ELECTIONS, I.; ELECTORS, VI), but the main question had been settled for the time: the people, as yet, preferred that power should not be granted to the federal government at the expense of the states. (In general, See FEDERAL PARTY, I., DEMOCRATIC-REPUBLICAN PARTY, I., II.).
—3. The Republicans, 1801-29. The methods of the government of the United States were altogether the same after 1801 as before; the constructive skill of the federalists had planned them so wisely that it would have been worse than folly to drop them. But its spirit had changed, and the change was quickly reflected by the states. Democracy had got the bit in its teeth; the hand of the federalists had not been heavy enough to control it. In every state outside of New England, all restrictions upon the right of white males over the age of twenty-one to vote were gradually swept away, with the exception of residence qualifications; and all connection between state and church was severed. It became the fashion to think, talk and act more freely, and with less subservience to the prejudices of the individual's class or creed. In this sense the "revolution of 1800" has never gone backward, every party, court, church and person in the United States feels the influence of the force which was then loosed.
—In foreign affairs, Jefferson's administrations were marked by a war with Tripoli (See ALGERINE WAR), and a revival of the commercial difficulties with Great Britain. (See EMBARGO.) These latter continued through Jefferson's administrations, and into those of his successor, and culminated in the war of 1812. (See WARS, IV.; CONVENTION, HARTFORD.) No part of the political history of the United States is so weak as this period, for the negation of national sovereignty in internal affairs carried with it impotence in foreign intercourse. (See NATION.) In 1807 the British frigate "Leopard" stopped and searched the United States frigate "Chesapeake," and took from her four seamen, claimed to be deserters; and the only retaliation was a proclamation ordering British armed vessels to quit the waters of the United States.
—In domestic affairs, Jefferson's first administration was marked by the annexation of Louisiana, in 1803 (See ANNEXATIONS, I.), which more than doubled the territory of the United States. Four years afterward, in 1807, Fulton produced a usable steamboat, and within four years the building of steamboats on western waters had begun. Fulton's invention carried emigration far more rapidly into the northwest territory, and through it to Louisiana. But Jefferson's second term, said John Randolph, was like the lean kine, and ate up the fatness of the first. It was disturbed, to a dangerous extent, by the distress and discontent produced in New England by the restrictive system. (See EMBARGO, II.; SECESSION, I.; HENRY DOCUMENTS.) The newly acquired Mississippi river became the route of a mysterious expedition, under the late vice-president, Burr, which excited general fears for the safety of Louisiana. (See BURR.) Jefferson's second term ended unhappily, with a general suspension of commerce, discontent, distrust and uncertainty, and he was succeeded by Madison.
—During Madison's first term the embargo system passed by successive stages into open war against Great Britain. (See EMBARGO, III.-V.; WARS, IV.) The war achieved none of the objects for which it was begun, but it served a greater purpose by hardening the gristle of the young nation into something like bone. No test could be so severe, for a nation which still considered itself a "voluntary confederation," as a war to which one of its most influential sections was conscientiously and angrily opposed; but the test was endured successfully. (See CONVENTION, HARTFORD; DRAFTS, I.; NATION, III.) With the close of the war a new era began, which only waited for the introduction of the railroad in 1830 to develop into the full life of the United States. Commerce revived. Manufactures, fostered by the restrictive system and the war, demanded and received protection; and in the process they destroyed the remnants of the federal party. (See TARIFF; FEDERAL PARTY, II.) The war, especially on the northern and southwestern frontier, had forced upon the attention of the people the danger of their shocking lack of good roads, and there was a general movement toward an improvement in some shape. The energies of the national government were at first turned to the construction of roads. (See CUMBERLAND ROAD.) But the state of New York had the enterprise to open a new vein by the construction of the Erie canal, and this turned other states and the national government to a general system of public improvements. (See NEW YORK, INTERNAL IMPROVEMENTS.) A new national bank was created. (See BANK CONTROVERSIES, IV.) All these measures were opposed to that strict construction of the constitution, and that complete supremacy of state life and action, which were the formal basis of the dominant party; but the drift of the party to their support could not be checked. It was aided by the supreme court, whose influence as a nationalizing factor now first became apparent. (See JUDICIARY, II.) The whole change reconciled the federalists to their absorption into the republican party. Indeed, they claimed, with considerable show of justice, that the absorption was in the other direction: that the republicans had recanted; and that the "Washington-Monroe policy," as they termed it after 1820, was all that federalists had ever desired.
—This was an era of state making. Louisiana was admitted in 1812, Indiana in 1816, Mississippi in 1817, Illinois in 1818, Alabama in 1819, Maine in 1820, and Missouri in 1821. (See their names.) In the admission of Missouri there was a series of difficulties which showed that the two sections, the north and the south, were drifting dangerously far apart on the subject of slavery; but these difficulties were settled in a manner sufficiently satisfactory to both sections to quiet the question for nearly thirty years. (See COMPROMISES, IV.; SLAVERY, V.) State admissions ceased for fifteen years after the admission of Missouri; but the organization of territories, and the continued movement of population to the west, were guarantees that state formation had not ceased altogether.
—At the end of Madison's second term, in 1817, Monroe became president with hardly any opposition, except in the matter of his nomination. In 1821 he was reelected without opposition. The federal party had disappeared in national politics, and, during the next three years, it disappeared in state politics also. (See ERA OF GOOD FEELING.) In the all-absorbing republican party, four distinct geographical sections had been developed; the northern, headed by John Quincy Adams, wished for protection to manufactures; the northwestern, headed by Clay, wished for internal improvements; the southwestern, headed by Jackson, without defined economic principles, had a general fondness for democracy; and the southern, headed by Crawford, wished for none of these things, but cared only for state independence. In the presidential election of 1824, all these four leaders were candidates, and the result was that Adams was elected by the house of representatives. (See DISPUTED ELECTIONS, II.) During his single term the Clay and Adams factions united in a common policy as to a protective tariff and internal improvements. (See TARIFF, INTERNAL IMPROVEMENTS.) On the other hand, the Jackson and Crawford factions also drew nearer together; Crawford's severe illness made Jackson the recognized leader of a united opposition; and in 1828 he was elected president over Adams.
—From the close of the war until the end of this period, democracy was assailing the original spirit of the federal government at every vulnerable point. The old federalist system of leaving nominations to conferences and correspondence of leaders had long been abandoned in favor of caucuses of congressmen, as more directly representing the people. Now, this was not democratic enough, and the people began to take the matter of nominations into their own hands. (See CAUCUS SYSTEM; CAUCUS, CONGRESSIONAL; NOMINATING CONVENTIONS.) The electors had long ceased to be anything more than automata; but now congress began to assert a revisory power over their action, which has proved more dangerous as it has grown more complete. (See ELECTORS.) Jackson's election in 1828 was generally demanded as a rebuke to the house of representatives, which had disregarded the wish of a plurality of the people, while it followed the forms and spirit of the constitution, in electing Adams in 1824. About the same time began the long list of attempts, as yet unsuccessful, to make the electoral system still more democratic, or to do away with it altogether. (See ELECTORS, VI.) In one point the movement was more successful: in all the states, excepting South Carolina, the choice of electors was abandoned by the state legislatures, and given to the people.
—In foreign affairs, the most noteworthy event was the formulation of the "Monroe doctrine." This is fully treated elsewhere. (See MONROE DOCTRINE.)—(In general, See FEDERAL PARTY, II.; DEMOCRATIC PARTY, III.; WHIG PARTY, I.)
—4. The Democrats, 1829-49. Since the beginning of Jackson's first term democracy has held social and political control of the United States. It showed itself first in a blind and unhesitating support of Jackson, as the exponent of democracy. To his opponents this seemed like the establishment of a popular tyranny, a Cæsarism. They, therefore, took the party name of whigs, as the opponents of a would-be king, and were joined, after the failure of nullification, by most of the extreme state rights republicans of the south. (See WHIG PARTY, II.) Jackson's supporters very naturally took the name of democrats, though they still asserted a sole right to the name of republicans, when they chose to use it. (See DEMOCRATIC PARTY, IV.) Under the lead of Jackson and the new school of politicians which surrounded him, the democrats attacked the national bank, drove it into politics, and, after a struggle of about five years, destroyed it. (See BANK CONTROVERSIES, III.; DEPOSITS, REMOVAL OF.) They broke up, not without much rebellion in their own ranks, the Adams system of internal improvements. (See that title.) They obtained a gradual reduction of the protective tariff (See TARIFF), while they suppressed the attempt of the South Carolina nullificationists to abolish it suddenly and by revolutionary means. (See NULLIFICATION.) They gave the people a nominal control over the appointing power by introducing the practice of "rotation in office": its real effects are fully treated in a distinct series of articles. (See SPOILS SYSTEM, REMOVALS.) At the same time they gave the people, or rather the politicians who represented the people, full control over nominations by the creation of the modern machinery of a national party. (See NOMINATING CONVENTIONS.) Finally, under Van Buren, Jackson's successor, they completed the "divorce of bank and state," by introducing the sub-treasury system. (See INDEPENDENT TREASURY.)
—All these changes are credited to the democratic party: in reality, most of them were due to Jackson, who toned up and re-enforced any wavering energy in his party by an abundant use of his veto power. (See VETO.) By whatever means accomplished, they still further changed toward democracy the feelings of the people; and the introduction of the railroad in 1830, and the telegraph in 1844, into the vast territory of the United States, fixed the character of its political and social life, particularly in the north and west. The south did not feel the change so much (See SLAVERY, IV.); and from this time the drift of the two great sections apart became more rapid. (See NATION, III.)
—In foreign affairs, the policy of the new leaders was as vigorous as in domestic affairs. Claims for depredations on American commerce during the Napoleonic wars had long been urged against France, Spain, Naples, Portugal and Denmark, Jackson collected them. (See EXECUTIVE, III.) There was much popular sympathy with the Canadian revolt of 1837, but the government suppressed any active interference with its course. (See MCLEOD CASE)
—This whole period, 1829-49, has been assigned to the democrats, in spite of the whig success in the presidential election of 1840. Harrison, the whig president, died after serving but one month, and the new president, Tyler, was a natural democrat. His use of the veto power neutralized the whig majority in congress during the first half of his term; and during the second half he was supported by a democratic majority in the house. In 1844 the democrats returned to the full enjoyment of their temporarily suspended power, by the election of Polk and a democratic congress. As a consequence of the election, Texas was annexed (See ANNEXATIONS, III.); the war with Mexico followed (See WARS, V.); and this was followed by a still larger acquisition of territory. (See ANNEXATIONS, IV., V.) While this was going on, the territory of Oregon was secured by treaty with the only other claimant, Great Britain. (See NORTHWEST BOUNDARY.) By all these changes, the area of the United States took on the rounded and complete form which has not since been altered, except by the later acquisition of Alaska. Six new states were admitted: Arkansas in 1836, Michigan in 1837, Florida and Texas in 1845, Iowa in 1846, and Wisconsin in 1848. (See their names.) The agency of the railroad in hastening the westward movement of population had now become more evident, and several other incipient states were developing. Foreign immigration had not yet swelled to the enormous proportions which it was soon to take; but the population had grown about 600 per cent. larger in sixty years, from 3,900,000 in 1790 to 23,000,000 in 1850. A little people had become a great people. (See, in general, DEMOCRATIC PARTY, IV.; WHIG PARTY, II.)
—5. Sectional Conflict, 1849-61. Southern leaders always blamed the growing spirit of democracy in the north and west for the anti-slavery agitation which began about 1830. (See ABOLITION, II.; PETITION.) There was, no doubt, very much truth in the assertion: Garrison, Wendell Phillips and other abolitionists were the product of the modern democratic spirit, not of the temper of colonial or earlier constitutional times. The spirit which moved them was one which cared more for the equal rights of all mankind than for political theories, nationality, state rights on constitutions, and they became the Ishmaelites of politics. They have claimed and received a large share of the credit for the final overthrow of slavery; and yet it is very difficult to locate the reasons for their claim, unless he who provokes a wild beast to such frenzy that his neighbors have to kill it may justly claim the credit for its death. Most of them were absolute impracticables, unable to suggest a policy or a remedy for slavery, except, possibly, the forcible expulsion of slave-holding states from the Union. The liberty party of 1840 and 1844 had neither growth nor effects; and the free-soil party (see its name) of 1848 and 1852 was hardly an improvement on the liberty party, if we leave out its mere political allies. From 1830 until 1848 it can hardly be said that the real abolitionist feeling or influence increased even in proportion to the growth of population. The only real result of the twenty-years anti-slavery agitation was to exasperate the slaveholders, to convince them that the north was against slavery, instead of against slavery extension, and thus to embitter the conflict of the sections over the territory wrested from Mexico. Anti-slavery agitation never had the faintest prospect of success by its own exertions: its first chance of life came from the Mexican annexations, its first prospect of success from the Kansas-Nebraska bill, and its final victory from the civil war; and each of these events took place against the will of the abolitionists. Slavery was destroyed by no human skill or foresight.
—In 1846, when the first indication appeared of a purpose to acquire territory from Mexico, outside of Texas, as "indemnity for the past, and security for the future," it was proposed to add a proviso forbidding slavery in any such acquisition. (See WILMOT PROVISO.) For four years this was the controlling question of national politics. At first the proviso did not seem to be very objectionable to the south or to the dominant party: its proposer was a democrat, and it was favored by the Polk administration. As the discussion went on, the south came to consider the proposal as an attack upon slavery; and when the proviso failed in 1850 several southern states had on record declarations of their intention to secede if it was adopted. The governing purpose of the democratic party was to preserve its national organization intact. It succeeded in so doing by evolving the idea that the question was to be settled, for each territory, by its own people (See POPULAR SOVEREIGNTY): this was acceptable to the northern wing, and was not as yet repudiated by the southern wing. Nevertheless, its inevitable result was to make the former somewhat smaller than the latter, and thus to begin to unbalance the party. The whigs proposed no solution of the great question, and thus their two wings, while maintaining their relative strength, were steadily drifting away from one another. In 1848 they succeeded in electing Taylor president and Fillmore vice-president, by means of nominating a popular and successful general, without a platform; but the success was deceptive. All through the administration of Taylor and Fillmore the two great parties were shifting their material. In the south, pro-slavery whigs went into the democratic party; in the north, anti-slavery democrats went into the free-soil party. Thus the democratic party, while remaining national, was becoming unbalanced, and stronger in the south than in the north. The northern whigs, abandoned by all the factions, were the only stationary feature in the political kaleidoscope; and in the presidential election of 1852 they were left completely in the lurch by their former southern associates.
—The Taylor administration proposed, as a solution of the territorial question, the immediate erection of the territories into states, with full power to govern their own affairs. This was followed out in the case of California, because of the discovery of gold in it and the consequent increase of population. In the other territories, Utah and New Mexico, both sections were content, in 1850, to ignore the Wilmot proviso and leave the question untouched. (See COMPROMISES, V.) The whole difficulty was thus covered out of sight for a time. But there was an uneasy feeling that further difficulties were not far off, and that the country was in worse shape to meet them, not only from the shifting of parties, but from the changes of leaders. In the four years before 1853, Clay, Webster, Calhoun, Polk and Taylor had died; and the new men who took their places can hardly be ranked as first-class men. Most of them had laid the foundations of their political characters in the belief that the great business of politics was to evade and ignore slavery. The abler men were those who had an active programme to offer, the radicals of both sections; Jefferson Davis in the south, and Seward, Sumner and Chase in the north. Thus all the ability in politics was a sign of disunion. The same tendency was shown in every direction. Calhoun's speech of March 4, 1850, is a clear statement of the manner in which the political, ecclesiastical and social cords that held the Union together were being snapped in every direction. Even the churches obeyed the general impulse, and divided into churches "north" and "south": only the Roman Catholic and Episcopal organizations, of those which had a national extent, were able to resist it. When the whig party succumbed to it, after the presidential election of 1852, there was no great tie left, except the national organization of the democratic party, and that had lost much of its spirit. It is a remarkable evidence of the innate strength of the American Union that the two fragments of the planet, thus rent asunder by slavery before 1852, should for nine years longer have gone in close and parallel courses, held by such weak ties, before the force of repulsion finally mastered them.
—In spite of the general uneasiness in respect to the future, the first four years after the compromise of 1850 passed quietly, except for the excitement attending the execution of the new fugitive slave law, and the opening movements of the attempts to obtain new slave territory by "filibustering." (See FUGITIVE SLAVE LAW, FILIBUSTERS, OSTEND MANIFESTO.) In 1854 the slavery question was again brought on the political field in larger proportions than ever by the passage of the Kansas-Nebraska bill, which virtually repealed the Missouri compromise. (See KANSAS-NEBRASKA BILL.) The passage of the law not only provoked but compelled a struggle between the sections, for it threw between them the territory of Kansas, as a prize for the more active. Slave state immigrants and free state immigrants were at once arrayed against one another; and the struggle continued for more than four years, marked by all sorts of fraud and violence, and most of the characteristics of civil war. (See KANSAS.) The struggle, at any rate, cut away the dead material from politics. It put an end to the whig party. Many of its members endeavored to galvanize its corpse, and reunite its southern and northern portions, by introducing opposition to foreigners as an issue paramount to slavery; but the attempt was a failure. (See AMERICAN PARTY.) In 1856 the American party nominated presidential candidates, Fillmore and Donelson; and their defeat put an end to their party. When the boards were cleared, it was found that there were but two rivals in politics: the democratic party, having a national organization, strong in the south, and weaker in the north; and the republican party, sectional of necessity, and confined to the north. (See DEMOCRATIC PARTY, V.; REPUBLICAN PARTY, I.) This division made the election of 1856 almost entirely sectional, Fremont, the republican candidate, carrying most of the northern states, and Buchanan, the democratic candidate, carrying the southern states, with enough northern states to elect him. (See ELECTORAL VOTES, XVIII.) But Fremont's defeat was a Pyrrhic victory for slavery. For the first time in our history an electoral vote had been east for a candidate pledged against the extension of slavery; and his party had so nearly united the free states that he was defeated only by the failure of Pennsylvania and Illinois to vote for him. Both these states were evidently drifting straight to the republican party, and it was not difficult to forecast the result of the next election, unless some great change of policy took place in one section or the other.
—No such change took place: on the contrary, both sections became more aggressive. The administration, since 1852, had steadily sustained the southern view, that the constitution protected property, recognized slaves as property, and therefore protected slavery in the territories, while they were territories. In 1857 the supreme court also sustained the southern view. (See DRED SCOTT CASE.) This was the last re-enforcement which the south could hope for, and it was a failure. The dominant party of the north received it with more wrath than respect, and answered it with an increase of state laws to nullify or modify the fugitive slave law. (See PERSONAL LIBERTY LAWS.) A few of the bolder advanced the skirmish line of the war which was to follow, and attempted a fugitive slave migration on a grand scale. (See BROWN, JOHN.) Kansas had achieved her destiny, and had really become a free state; there was little on the surface to fight about; and yet the wider divergence of the sections was yearly becoming more apparent.
—During Buchanan's administration the first conflict took place with the Mormons in Utah, and they made a nominal submission. (See MORMONS.) The admission of California in 1850, Minnesota in 1858, and Oregon in 1859, increased the number of states to 33; but the increase was a new danger to slavery. The south had always abandoned the control of the house of representatives to the superior numbers of the north, while the admission of states had been calculated as carefully as possible to secure to the south an equal share in the senate, without whose assent no law could be passed. For the first sixty years after 1789, each new free state was balanced by a new slave state; but this process had now ceased to be possible. Texas was the last slave state that ever was admitted; and since its admission five new free states had come in, Kansas was in readiness, and the germs of others had appeared. If this majority of free states was to continue the previous drift to the republican party, that party would soon control both houses of congress, elect the president, and pass such laws as it pleased. Nor was the supreme court safe from it: if the natural change in its personnel by death and appointments to fill vacancies should prove too slow a process, a law to increase the number of justices would quicken it and put the Dred Scott decision at the mercy of a republican majority. This was the underlying danger, seldom referred to but often thought of, which compelled slavery to strike for its life while it yet had time.
—In 1860 the last of the old natural cords which held the Union together was snapped by the disruption of the democratic party. (See DEMOCRATIC PARTY, V.) There were now four parties in the political field, a northern democratic party, a southern democratic party, a republican party, and a "constitutional union" party. (See the names of the two latter.) In the election the free states at last became practically unanimous, and Abraham Lincoln was elected president by the republicans. It should be noted, however, that in the congress which was to make the laws during the first half of his administration, the republicans were in a decided minority. Nevertheless, his election by a union of the free states against the slave states offered a casus belli which southern leaders were not disposed to neglect. Secession was begun by South Carolina; the six other gulf states followed at once; and in February, 1861, the seceding states formed a new government under the name of the "Confederate States of America." The forts, custom houses, mints, navy yards, and public buildings of the United States within the seceding states were seized, and the few regular soldiers were compelled to surrender, except at the forts near Key West, Fort Pickens, at Pensacola, and Fort Sumter, in Charleston harbor; and the two latter were closely invested. Buchanan was successful in keeping the peace until the end of his term; but, when Lincoln was inaugurated, the authority of the United States was suspended in the gulf states, from South Carolina to Texas. (See, in general,SECESSION; CONFERENCE, PEACE; CONFEDERATE STATES; BUCHANAN.)
—6. The Rebellion, 1861-5. Early in April, President Lincoln decided to put an end to the almost successful process of starving out Fort Sumter, and sent a provision fleet to supply it. The batteries around it at once opened fire on the fort, and it surrendered April 14. Then followed a call for troops to suppress the rebellion, and a declaration of war by the confederate states, early in May, against the United States. The first attempt at "coercing" the seceding states was followed by the secession of the southern tier of border states, North Carolina, Tennessee and Arkansas, and of Virginia in the northern tier. Delaware, Maryland, Kentucky and Missouri refused to secede. (See BORDER STATES, and the names of the states). These secessions brought the area of the confederacy to its maximum.
—The financial history of the war is fully given elsewhere. (See FINANCE, BANKING IN THE UNITED STATES, INTERNAL REVENUE, DISTILLED SPIRITS, INCOME TAX, TARIFF.) An outline of its military and naval history is elsewhere given. (See REBELLION, ALABAMA CLAIMS, GENEVA AWARD.) Its political history is also given elsewhere. (See ABOLITION, III, EMANCIPATION PROCLAMATION; HABEAS CORPUS; REPUBLICAN PARTY, II.; DEMOCRATIC PARTY, VI.; DRAFTS; RECONSTRUCTION, I.) At the close of the rebellion no one was criminally punished for participation in it. (See TREASON, AMNESTY.) Almost the only civil victim was President Lincoln, who was assassinated just after the fall of Richmond. (See his name).
—Three states were admitted during this period: Kansas in 1861, West Virginia in 1863, and Nevada in 1864.
—7. Reconstruction, 1865-70. The war of the rebellion and its result are usually regarded as the decisive proofs of the stability of the American form of government. And yet the five years following were, for it, a still more crucial test. The formation of the confederacy made the theatre of war pseudo foreign soil during the rebellion; and the territory remaining under the direct control of the United States government was spared many of those effects of war which are most evil to a republic. And those evils which were felt were met with the reserve power arising from years of peaceful constitutional discussion and long settled habits of political thinking. The difficulties of reconstructing the Union were to be met without any such reserve power, and even with the counteracting influences of the passion of war and victory. That the reconstruction should have been accomplished under such difficulties, and yet with so little alteration of the spirit of the system, is the most decisive proof that the American system is impregnably fixed in the affections of the people. It is easy to find blunders and contradictions in the process: it is far harder to find any difference in the status of New York and Mississippi, now that the smoke has cleared away.
—When the war began, there was a general idea that any seceding state might again secure its former privileges in the Union on the simple conditions of ceasing hostilities and organizing a loyal state government. Under this theory the so-called "Pierpont" government of Virginia was recognized as the government of the state; its consent to the organization of the new state of West Virginia was accepted as valid; and its senators and representatives were admitted to congress. As the war grew warmer, and slavery was attacked, the original simple plan of reconstruction was necessarily modified. The executive President Lincoln, first, and afterward President Johnson, only modified it so far as to require an assent to the abolition of slavery as an additional requisite: the repudiation of the ordinances of secession and of the state war debts seems to have been required only as an evidence of loyalty and good faith. In congress there was a growing belief after 1862, that the national government, by legislation and its execution, should supervise the process of reconstruction, fix the qualifications of voters, and decide on its satisfactory completion. As this belief grew stronger, the southern members admitted under the influence of the original theory were excluded from congress; the reconstructed governments of Virginia, Arkansas and Louisiana were carefully ignored; and, as far as possible, all evidences of the original theory were wiped out. President Johnson still held fast to it, and in 1865 the remaining states of the defunct confederacy were reconstructed under his leadership. This reconstruction was still ignored by congress, which proposed, officially and unofficially, terms of its own. These became harder as the resistance of the southern people, backed by President Johnson and the democratic party of the north, was overcome, until in 1867 negro suffrage and the disfranchisement of leading confederates became a part of the terms. Reconstruction was then carried out under military supervision; most of the seceding states were readmitted in 1868; and in February, 1871, all the states were represented in congress, for the first time since December, 1860. (See, in general,RECONSTRUCTION.) During this period three amendments to the constitution were ratified (See CONSTITUTION, III.); Nebraska was admitted as a state; and Alaska was purchased. (See ANNEXATIONS, VI.)
—During the struggle between congress and the president over reconstruction, other acts were passed over his veto (See FREEDMEN'S BUREAU, CIVIL RIGHTS BILL, TENURE OF OFFICE, VETO, JOHNSON); and the struggle ended in an unsuccessful impeachment of the president in 1868. See IMPEACHMENTS, VI.) In the presidential election of 1868 the republicans were successful in electing Gen. Grant.
—8. The Republicans, 1870-84. The congressional plan of reconstruction had undoubtedly had a view to the party advantage which would come from a unanimous negro vote for the republican party in the south. But, during Grant's two terms of office, this advantage almost entirely disappeared. One after another, the reconstructed governments of the south passed under the control of the white voters, until the last of them, South Carolina and Louisiana, followed the others in the opening months of the Hayes administration, in 1877, and the so-called "solid south" was formed. (See, in general,KU-KLUX KLAN; INSURRECTION, II; RECONSTRUCTION, III.) As one result of the struggle to maintain the reconstructed governments, there was a secession from the republican party in 1872, under the name of "liberal republicans"; but its only immediate result was the re-election of Grant, and the defeat of the democrats and liberals. An indirect result was the reinstatement of the democrats as a national party, by their abandonment of their opposition to the consequences of the war. (See LIBERAL REPUBLICAN PARTY; DEMOCRATIC PARTY, VI.)
—The loose methods of dealing with large amounts, which had grown up during the war, became more noticeable as the expenses of the government decreased, and the inevitable result, during Grant's two terms, was a great crop of public scandals. (See CRÉDIT MOBILIER; WHISKY RING; IMPEACHMENTS, VII.; SALARY GRAB.) An effort was made to reform the civil service, but it was a failure for the time. (See CIVIL SERVICE REFORM.) In 1873 a period of financial depression set in; it continued for several years, and had considerable influence on politics. It helped to give the democrats a majority in the house of representatives which met in 1875, and it brought to the surface of politics a struggle between "hard money" and "soft money," between a resumption of specie payments and a continuance of paper emissions. The republican party was first brought under control, and, before it lost the house of representatives in 1875, it had passed an act to resume specie payments Jan. 1, 1879. The democrats opposed the act, and, in their national platform of 1876, demanded its repeal on the ground that it was premature and an impediment to resumption. A third party grew up rapidly, which opposed resumption altogether. (See GREENBACK PARTY.) In spite of the opposition, the republican support of the act was successful, and resumption took place on the date assigned.
—In foreign affairs, the great interest of Grant's two terms was in the treaty of Washington of 1871. It submitted to arbitration the various unsettled questions pending between the United States and Great Britain. (See ALABAMA CLAIMS; GENEVA ARBITRATION; TREATIES, FISHERY; NORTHWEST BOUNDARY.) There was an unsuccessful attempt to annex San Domingo. (See SAN DOMINGO.) In October, 1873, a Spanish vessel captured the "Virginius," which was carrying recruits and supplies to the insurgents in Cuba, and a number of those on board were shot. For a time there was a probability of war, for the "Virginius" was sailing under the United States flag; but it was shown clearly that she had forfeited her right to carry it.
—Indian affairs were much disturbed. An attempt in 1873 to remove the little tribe of Modocs from southern Oregon to a reservation was only successful after a war which was made difficult by the character of the country, a region of extinct volcanoes, abounding in hiding places. In 1876 the Sioux Indians in Montana left their agencies: Gen. Custer attacked the whole tribe with but five companies, and was killed with his whole party. The Sioux were then driven into British America.
—The presidential election of 1876 fell into complete confusion, but ended in the success of the republicans, and the inauguration of President Hayes. (See DISPUTED ELECTIONS, IV.; RETURNING BOARDS; ELECTORAL COMMISSION; ELECTORS.) He withdrew the troops which had been supporting the reconstructed governments of Louisiana and South Carolina, and these also passed under the control of the white voters. The whole administration was a welcome period of unwonted calm in politics. Its only serious breaks were the attempts of the democratic majority in the house to repeal some of the war legislation (See RIDERS, VETO), and the transfer of public interest to silver. An act of 1870 had made the bonds of the United States payable in "coin"; and, as silver was falling in price, the act of Feb. 12, 1873, dropped the silver dollar from the list of United States coins. In 1878 a general vote of both parties passed the "Bland silver bill" over the veto. It made the silver dollar a legal tender for public and private debts, and directed its recoinage at the rate of not less than $2,000,000 a month. (See COINAGE, PARIS MONETARY CONFERENCE.) In the close of this and the beginning of the following terms the national debt was refunded, its term lengthened, and its interest charges largely decreased. (See FINANCE.)
—In the presidential election of 1880 the republicans were successful, and Garfield was elected president. His death, in September, 1881, left his office to President Arthur. (See both names, and EXECUTIVE, IV.) In the domestic politics of the country the controlling interest of his term has centred upon the tariff. (See that article.) There have also been efforts in various southern states to form third parties, under various names, in which both whites and blacks could join, in order to break up the "color line" in politics. These have been supported by the administration, but have not been successful, except in Virginia, and, in part, in Tennessee. (See those states.) In the inevitable reform of the civil service a great step in advance has been taken, and for the first time the public sentiment of the country has supported it strongly (See SPOILS SYSTEM, REMOVALS.)
—In foreign affairs, Chinese immigration has been restricted in accordance with the terms of a treaty negotiated under the preceding administration. (See CHINESE IMMIGRATION.) The proposed cutting of a canal through the isthmus of Panama, under French control, brought up the idea that the Monroe doctrine (see that article) required the control of the canal to be in the United States. The Garfield administration began a diplomatic correspondence to that end with Great Britain, which was dropped by its successor. Peru had begun a war against Chili, and had been completely conquered; and the United States interfered to prevent the extreme spollation of the conquered nation. But, as Chili refused to yield to moral force, and the United States was not disposed to use physical force, the interference came to nothing. There was some fear of difficulty with Great Britain on the question of extradition, which had long been troublesome. (See EXTRADITION.) There had been for years an enormous immigration from Ireland to the United States. (See EMIGRATION.) A very large part of it was the real or imagined result of former English misgovernment in Ireland. As might have been expected, this class of immigrants gave a warm support to revolutionary movements in Ireland, but there was no remedy for it, since their support did not pass beyond legitimate bounds. The further question whether refugees charged with violence are subject to extradition, or are insured against it by the political purpose and character of their acts, has not yet been formally and officially raised (1884).—(See, in general, the names of the various persons and political parties mentioned; ADMINISTRATIONS, for the presidents, vice-presidents and cabinet officers; CONGRESS, SESSIONS OF, for the duration of congresses, the speakers of the house, and their parties; JUDICIARY, II., for justices of the supreme courts; the names of the various states for their political leaders; ELECTORAL VOTES.)
—Presidential electors are chosen in such manner as the legislature of each state shall direct. Until about 1824 the general rule was that electors were chosen directly by the state legislatures, and choice by popular vote was exceptional. Since 1824 choice by popular vote has been the rule, except in South Carolina until 1868. (See ELECTORS.) The electoral votes for all the elections are elsewhere given. (See ELECTORAL VOTES.) The popular votes at the elections since 1824 are given in the tables shown on pages 1001, 1002. In each election the name of the successful candidate for president is placed first. (For full names, and names of candidates for vice-president, see the names of the parties under the year.)
—III. THE CONSTITUTION OF THE UNITED STATES.
—1. General Character of the Union. The Union is an anomaly in at least one respect: it is the only great nation in which the location of sovereign power is, and has always been, a fairly disputed point. No one has any doubt as to the location of sovereign power in Russia, France or Great Britain; but in regard to the United States there are almost as many opinions as there are commentators. There is a general agreement that sovereign power is in "the people of the United States," by whose will the constitution, which governs the government, was established; but this only pushes back the difficulty one step further to an equally general disagreement about this "people of the United States." In this general disagreement there are three great divisions of opinion, as follows: 1st. The people of the United States is the people of the several states, each having sovereign control over its own life and action, its entrance to the Union, its continuance therein, and its departure therefrom. (See STATE SOVEREIGNTY, and the authorities under it.) This would make the Union continuously voluntary on the part of each state, and would make each state the sovereign and protector not only of its own life, but of the life of the Union within its borders. It is contradicted by the facts of our history, and fell at the first attempt to enforce it in practice. (See SECESSION.) 2d. The people of the United States is the people of the several states, holding sovereignty only as a unit, the people of those states which voluntarily remain united (including the doctrine of possible state-lapse); and the possession of sovereignty by the people as a mass is nothing but an hypothesis, and has no political consequences whatever, except as some person or persons may succeed in using sovereign power in the name of such people. This has been best elaborated by J. C. Hurd, as cited below. It is objectionable because, as Mr. Hurd not only acknowledges, but maintains, it makes the national government really sovereign. "Sovereign governments" are the very things to escape which the American people was organized; and if it should ever unwittingly become subject to one, it would very soon provide a new means of escape. 3d. The people of the United States is the national people, organized by its own general will into a nation, and divided by its own general will into states. The existence of nation and states alike is bottomed on the same foundation, the ultimate sovereignty of the whole people, which has as yet shown itself only in this attitude of protection. In other respects it rules only through its ministers, the state and national governments, and no crisis has yet proved too great to be met through one or other of these agencies. This view has been best elaborated by Jameson, as cited below. The objection to it is that the national people has never yet acted politically as a unit, but always under the state formation. Nevertheless, it has been adopted in this series of articles as apparently the least objectionable of all. If it is correct, the sovereign power of the United States depends for its strength upon its unanimity, and is least palpable when it is most nearly unanimous, and, consequently, strongest. As it is now practically unanimous on the questions of state and national existence, it is wholly impalpable, and agencies or ministers only are visible. Of course, so distant a sovereignty will appear to many to be worse than no sovereignty at all; but it seems to the writer that its distance is just the reason that the American people has always been satisfied with it, and that there is as yet no symptom of a desire to replace king Log by king Stork. At any rate, enough has been said to call attention to one of the most curious features of the American Union. (See STATE SOVEREIGNTY, NATION.)
—In its first form the government of the United Colonies, or United States, was revolutionary, depending for its powers solely on the general obedience of the national people. It received no powers from state governments or state peoples, and asked for none; on the contrary, the states were at first consciously and confessedly dependent on it even for their existence and defense. As the danger from the enemy became less urgent, the authority of the revolutionary government waned, and that of the state legislatures increased, until they assumed the ungranted power to frame a national government by the articles of confederation. As no such power had been granted to them by their state peoples, it also could have been valid only by the general acquiescence of the national people in the surrender of power by their revolutionary government. The same objection holds good to the convention of 1787, as bottomed on the sovereign power of the states, either separately or collectively: there was no warrant in any state constitution or in the articles of confederation for the selection of delegates by the state legislatures, or for the action of congress in standing sponsor to the convention. It seems to have represented only the universal, and, consequently, sovereign, will of the people of the whole country, that the form of government should be changed, but that the change should impair state rights as little as possible. Even in the ratifications, the same quiet pressure of the national will was the controlling factor. Without it, if the consideration and decision of each state had really been entirely autonomous, as it purported to be, the present constitution would never have gone into effect, for it would have been rejected by at least six states, Rhode Island, North Carolina, Massachusetts, New Hampshire, New York and Virginia. All these states ratified only in deference to the general will, as represented by heavy minorities in their own states and heavy majorities in the others. In this case, as in all others, the sovereign power avoided the use, or suggestion, of force, and only materialized itself so far as was absolutely necessary. If the constitution had been rejected, the sovereign power would have materialized itself further; very few men at the time doubted that, or wished to make the step necessary. That the states yielded to this sovereign power without the employment of force is no impeachment of the power of the sovereign. If that were so, every peaceful presidential election would make the sovereign power more doubtful. (See CONGRESS, CONTINENTAL; CONFEDERATION, ARTICLES OF; CONVENTION OF 1787; CONSTITUTION; STATE SOVEREIGNTY.)
—Under this third form of government, the constitution of the United States, the country still continues. It restricts the power of the states in many points, and it grants many powers to the national government; and by one of the amendments, but still more by the whole spirit of the instrument, it maintains the states in all powers not forbidden, and forbids to the national government the exercise of all powers not granted by it. (See CONSTRUCTION.) The operation of its provision for admitting new states, with the successive acquisitions of new territory, has given the country for which the constitution was made its present shape. There are now (1883) thirty-eight states, eight organized territories, two unorganized territories, and a federal district. The states are self-governing commonwealths in all points reserved to them by the federal constitution, and their state governments take cognizance of everything not forbidden to them by the federal constitution or by their state constitutions. The territories are theoretically in absolute subjection to the federal government; but the consistent policy of the federal government has always been to grant self-government to them as rapidly as possible, in order to encourage their conversion into states. (See TERRITORIES; ANNEXATIONS; and the names and admissions of the states under CONSTITUTION, I.)
—All through the state and territorial organizations runs the national organization, acting on individuals, however, not on states, with the exception of the judicial veto referred to hereafter. It is limited by the oath of its members to respect and obey the federal constitution, by the power of the judiciary to nullify or veto those of its acts which are unwarranted by the constitution, and by the general disposition of the people to punish by the ballot any unwarranted assumption of power. The last is incomparably the most important safeguard, without which the others would be worthless; and it is the only form in which the ultimate sovereignty of the United States exhibits itself. Attempts have been made to substitute for it the will of an individual state, but they have been failures (See NULLIFICATION); and it is now settled that the individual owes his privileges as a state citizen to the will of the whole people, not to that of his state. If the federal government assumes ungranted powers, its acts are void. The final decision upon their validity is entrusted to the supreme court in matters on which a case can be made up; in other matters, the decision is left to the voters in the presidential and congressional elections. It is, therefore, but partly true, that the supreme court is the arbiter of disputed constitutional questions. If a state government assumes ungranted powers, or if a state people in forming a state constitution, insert a provision in conflict with the federal constitution, these acts are also void; but in these cases the supreme court is the sole final arbiter. (See JUDICIARY.)
—As a general rule, then, it must be admitted that the state must yield, in a conflict with the federal government, when the federal judiciary has finally pronounced against her, and that the state is subordinate, though not subject. But every unprejudiced observer must admit, that, in any such conflict, the state has a greater prospect of success than the federal government, even in the federal supreme court. (See State Rights, under STATE SOVEREIGNTY.) Even in the matter of the last two amendments to the federal constitution, carefully drawn for the express purpose of curbing state action, the federal judiciary in 1883 is interpreting them far more favorably to the states than any state court would have done in 1873. If the state should choose to carry the conflict further, into forcible resistance, her citizens are bound to take sides against her, and with the more direct representative of the general will. (See TREASON, ALLEGIANCE.)
—Division of Powers. The federal government has been proved by experience to be an exceedingly simple and effective piece of machinery. It has served as a model for the constitutions of new states, and the constitutions of the original states have been so changed as to follow it. Its leading characteristic is its careful division of the powers of government into three departments. The power of legislation is given to two houses, co-ordinate in rank and power, but with different constituencies. The executive power is given to a single person, with a limited veto on the legislative: he is responsible to the legislative department by impeachment, but is not elected by it. The power to interpret the laws, and to veto such as are in conflict with the will of the people, as expressed in the constitution, is given to an organized judiciary. Most of the state constitutions follow this division of powers exactly, except for their restrictions on the powers of the legislative. (See RIDERS.) Where they differ from it, it is mainly on three points: the election of the executive by the legislative, in default of a choice by popular vote; the greater or less limitation of the executive veto power (See VETO); or the election of judges by popular vote or by the legislative, and for a term of years, while the federal judges hold by appointment of the executive, and during good behavior. (See JUDICIARY, ELECTIVE; STATE CONSTITUTIONS.)
—Amendments. Amendments are made in the same manner as the original constitution, by convention and ratification (See this subject fully treated under CONVENTION, CONSTITUTIONAL): or by proposition of congress and ratification by three-fourths of the state legislatures. In the states the same is true, except that the proposition is by the legislature or convention, and the ratification is by popular vote. There is no point in the state constitutions in which amendment is forbidden, and but one (Art. V.) in the federal constitution: "no state, without its consent, shall be deprived of its equal suffrage in the senate." (See also COMPROMISES, III., VI.) Its terms forbid the passage of any amendment to strike out this prohibition. It must be confessed that the terms of the articles of confederation, forbidding any amendment not ratified by all the state legislatures, were still more sweeping, and yet that a way was found to override their letter and spirit by the adoption of the constitution. But the single prohibition of the constitution has a far stronger safeguard in the universal will that it shall be maintained. (See, for amendments ratified and for amendments proposed, CONSTITUTION, III.)
—Citizenship. From the beginning the constitution took citizens as it found them, made so by state laws, and only interfered to secure to the citizens of each state the privileges and immunities of citizens in the other states. It was and is possible, for example, for a person who has only declared his intention to become naturalized, to be a state citizen by state laws, and thus to vote at congressional and presidential elections. When the abolition of slavery had been accomplished, the fourteenth and fifteenth amendments were made parts of the constitution. There was at first a strong disposition to take them as having transferred from the states to the federal government the whole control of citizenship and suffrage. But the authoritative interpretation of them by the supreme court has since shown that they are exactly in the line of the original interference of the constitution; that they are restrictive, not constructive; and that they are to prevent unjust discrimination by the state, not to assume the state's former functions. (For a full discussion of this subject, (See NATIONALITY, LAW OF; SUFFRAGE.)—2. The Federal Legislative; the Congress. Congress, or "the congress," as it is properly called, is made up of two houses, the house of representatives and the senate. The house of representatives has (1883-5) 325 members, elected by the states in proportion to population. (See APPORTIONMENT.) The senate has 76 members, two from each state. Laws must be passed by a majority vote of both houses, and approved by the president, though the disapproval of the latter may be overridden by a two-thirds vote of both houses. (See VETO.) The legislative powers of congress are considered elsewhere. (See CONGRESS, POWERS OF.) The house has the sole power to prefer, and the senate to try, impeachments. (See IMPEACHMENTS.) The senate is an executive council in the matters of treaties and appointments. (See TREATIES, JAY'S TREATY, CONFIRMATION BY THE SENATE.) Each house has its own officers and rules, and its own distinctive features. (See, in general, CONGRESS; SENATE; HOUSE OF REPRESENTATIVES; CONGRESS, SESSIONS OF; PARLIAMENTARY LAW.)
—3. The Federal Executive; the President. The executive power is given to a president, elected by electors for a term of four years. (See ELECTORS AND ELECTORAL SYSTEM.) He is commander-in-chief of the army and navy; he has power to grant reprieves and pardons for offenses against the United States, except in cases of impeachment; he makes appointments, and concludes treaties, with the concurrence of the senate; he takes care that the laws are faithfully executed, and is responsible to congress by impeachment. (See EXECUTIVE, MESSAGE, IMPEACHMENT, CONFIRMATION BY THE SENATE, TREATIES, JAY'S TREATY, TENURE OF OFFICE.) With him is elected a vice-president, who presides over the senate, and succeeds to the presidency in case of the death, resignation, removal or inability of the president. (See EXECUTIVE, V.) The list of presidents and vice-presidents is given elsewhere. (See ADMINISTRATIONS.)
—Departments. The subordinates of the executive are divided into seven departments—the departments of state, the treasury, war, the navy, the interior, justice, and the postoffice. The heads of these departments form what is called the cabinet, though that title is wholly extra-constitutional. The cabinet functions of the heads of departments depend entirely on the right given to the president by the constitution to "require the opinion in writing of the principal officer in each of the executive departments upon any subject relating to the duties of their respective offices"; and "cabinet meetings," in the form which they have taken, depend on the president's will. The functions of the various departments and their heads are strictly defined by law (See ADMINISTRATIONS, and the articles on the various departments.) One department, that of agriculture, has been so constituted by law, while its head is not recognized as a cabinet officer. Each department has its own building at the national capital, the city of Washington, where its business is transacted and its records are kept. (See CAPITAL, NATIONAL.) Each department has its subdivisions, called bureaus. The most numerous are those of the department of the interior, as follows: Indian affairs, pensions, patents, public lands, census and education. In like manner customs, internal revenue, the currency, the coast survey, the lighthouses, and statistics, are under control of the treasury department.
—The appointment and removal of the subordinate officials of the departments is, in general, the province of the president. (See TENURE OF OFFICE, CONFIRMATION BY THE SENATE.) In the practical execution of his powers, the president has come to rely upon the advice of heads of departments, members of congress, and leading politicians of his own party in the various states. The public service has thus come to be the cement for party organizations (See NOMINATING CONVENTIONS); and its efficiency has been seriously injured. (See SPOILS SYSTEM, PATRONAGE.) In 1883 the passage of the so-called Pendleton bill made a serious inroad into the system which had controlled appointments and removals for the preceding half century. It authorized the application, after July 16, 1883, of the system of appointments and promotions by examination to public offices in which there are fifty or more employés. (See CIVIL SERVICE REFORM.)
—4. The Federal Judiciary. The organization and powers of the supreme court, the circuit courts, the district courts and the territorial courts of the United States are given elsewhere. (See JUDICIARY.) The judges hold office during good behavior, and are responsible only through the long and doubtful process of impeachment. There is also a court of claims, which deals with claims against the United States; with an appeal to the supreme court.
—5. The State Legislatures. The organization of these bodies is given elsewhere. (See ASSEMBLY.) Their powers of legislation cover the whole field of subjects not prohibited to them by the federal constitution or their several state constitutions, so that, in general terms, they control all matters pertaining peculiarly and exclusively to their several states. They regulate the right of suffrage within their states, under certain limitations. (See SUFFRAGE.) They elect United States senators, and prescribe the manner of the election of presidential electors, and, in default of action by congress, of representatives also. (See ELECTORS, APPORTIONMENT, GERRYMANDER, HOUSE OF REPRESENTATIVES.) It is, therefore, not an uncommon event for the elections in a few doubtful legislative districts to rise to a national importance, since their result may decide the political complexion of a legislature which is to choose a United States senator, and his election may decide the political complexion of the United States senate and the general character of United States laws. A minor local election may thus be of the very greatest moment to the country at large. In matters which are peculiarly of state interest, the tendency is to limit both the duration and the powers of the legislature: the former by making sessions biennial; the latter by requiring general, instead of special, legislation. (See RIDERS; and, in general, see CAUCUS SYSTEM, PRIMARY ELECTIONS.)
—6. The State Executive; the Governor. When the colonies were transformed into states, at the beginning of the revolution, their executive was regularly styled president. The appropriation of this title to the national executive by the constitution led to the universal adoption of the title of governor for the state executives. At present all the state constitutions provide that "the executive power of the state shall be vested in a governor": some of them vary it by calling it the "supreme" or "chief" executive power; and two, Massachusetts and New Hampshire, give the governor the title of "his excellency." Massachusetts, New Hampshire and Rhode Island elect the governor for one year; New Jersey and Pennsylvania, for three years; and the other states, for either two or four years. (See the names of the several states and STATE CONSTITUTIONS.) The only qualifications are those of age (usually thirty years), residence and citizenship. The chief executive officers, under the governor, are the lieutenant governor, secretary of state, auditor or comptroller, treasurer and attorney general, regularly chosen by election, though some of them are appointed in some of the states. To these offices are frequently added others, such as superintendent of public instruction or public works, inspector of prisons, etc. In Florida and North Carolina these subordinate officers are the governor's cabinet, or council of state; in Maine, Massachusetts and New Hampshire, an advisory body, called a council, is elected by the people; in the other states there is no council, but in most of them the governor may call for his subordinates' opinions or advice in writing. A vacancy in the governor's office is generally filled by the lieutenant governor, president of the senate, and speaker of the house, in the order named.
—The governor, as the representative of the state's physical force, has power to execute the laws, preserve the peace, suppress insurrection, and repel invasion. In this capacity he is given various titles, from the simple title of "commander-in-chief" to the higher distinction (in Rhode Island) of "captain-general and commander-in-chief of the military and naval forces of the state." He has the power of pardon or reprieve, though in many of the states the council, or a special board of pardons, shares the power with him. In most of the states he has a more or less limited veto power. (See VETO.)
—7. The State Judiciaries. The state constitutions agree in giving judicial powers to justices of the peace, to a supreme (or superior) court, and to such inferior courts as may be established by the constitution in some states, or by law in others. The inferior courts are usually circuit or district courts, county or parish courts under various names, probate, orphans', surrogate's or prerogative courts, and a great variety of minor criminal and city courts. A few states retain the court of chancery, together with a court of errors and appeals from both common law and equity courts; but in most of the states the supreme court has also equity jurisdiction. In Maine, Massachusetts, New Hampshire and Rhode Island, the supreme court is to give its opinion on constitutional questions whenever requested to do so by the executive or legislative.
—The most marked tendencies in the historical development of the state judiciaries have been toward a codification of the statutes, and an elective judiciary. (See JUDICIARY, ELECTIVE.) The former tendency has been formally resisted by a few states, but even in these it has had great influence upon the practice in the courts; while, in those states which have fully yielded to it, it has radically altered the practice. The latter tendency, to an elective judiciary, seems to be in some manner akin to the former, for the states which have resisted or succumbed to the one have generally done the same with the other. Both innovations are due to the advancing spirit of democracy, and it therefore seems probable that all the states will finally yield to both, though at different times and in different degrees. Codification has been adopted in part by congress for the federal judiciary, but the constitution has as yet proved an insuperable barrier to an elective federal judiciary. (See JUDICIARY, VII.)
—The reader's attention has been directed, in another article (See State Rights, under STATE SOVEREIGNTY), to the vigorous individuality of life which characterizes the states, and which does not need the stimulant of a delusive "sovereignty." The American federal system has certainly proved a very powerful check to the tendency of a democracy to reduce all men to uniformity as well as political equality; and it can hardly be said that any part of the federal system has contributed more largely to state individuality than the state judiciaries. State constitutions have come to look somewhat as if they were cast in one mould, and state laws as if they were made after one pattern; but the state judiciary, which finally and authoritatively interprets both, retains and gives full force in the interpretation to every tradition, prejudice and peculiarity of the state life. State legislatures are naturally very prone to enact innovations only on the strength of their success in other states, and, perhaps, under very dissimilar circumstances; but that must be a very reasonable innovation indeed which can pass unscathed the gauntlet of the state courts, and make for itself a permanent place in its new location. The divergences of form are no less marked than the divergences in spirit. However similar the forms of the states may be in other respects, their courts exhibit the most bewildering diversity of form, name and jurisdiction. Lawyers are apt to complain of such a diversity, and to wish that courts and practice were uniform throughout the states. It is to be feared that the wish, if it were granted, would bring far more serious and pregnant evils in its train than those of the present diversity.
—IV. STATISTICS. 1. Area and Population. Exclusive of Alaska, the land area of the United States is 2,970,000 square miles, and the water area 55,600 square miles; total, 3,025,600 square miles. Until 1880 the census made the total area 3,026,494 square miles; but careful remeasurements have altered the recorded areas of all the states and territories, and fixed the total as above. The most striking result of the remeasurement is the reduction of the area of California from 188,981 to 158,360 square miles. The area of Alaska can not be considered as even approximately ascertained. It has always been placed at 577,390 square miles, and is so given elsewhere (See ANNEXATIONS); but the areas of its six subdivisions, as estimated by the special agent for the census of 1880, make a total of but 531,409 square miles. The total area of the United States, on the first estimate of Alaska, is 3,602,990 square miles; on the second estimate of Alaska, 3,557,009 square miles.
—The population in 1880 was 50,155,783, excluding Alaska, and was divided as follows: male, 25,518,820; female, 24,636,963—native, 43,475,840; foreign, 6,679,943—white, 43,402,970; colored, 6,580,793; Chinese, 105,465; Japanese, 148; Indians, 66,407. The population of Alaska is given by the special agent as 33,426: 430 white, 1,756 creole, and the rest Innuit and kindred tribes. The ratio of population to square miles of area was 17.29 in 1880; 13.3 in 1870; 10.84 in 1860; and 7.93 in 1850. The number of families in 1880 was 9,945,916, a ratio of 5.04 persons to a family. In 1870 the ratio was 5.09; in 1860 it was 5.28; in 1850 it was 5.56. The territories and Pacific states (except Oregon) have an excess of single men, and low family ratio. In the more eastern states, the lowest ratios of persons to a family are: New Hampshire, 4.32; Connecticut, 4.55; Vermont, 4.55; Maine, 4.58; Rhode Island, 4.59; Massachusetts, 4.70; and New York, 4.71; and the highest, West Virginia, 5.54; Minnesota, 5.45; Kentucky, 5.45; Tennessee, 5.38; Missouri, 5.38; Virginia, 5.36; and Texas, 5.35. There were 8,955,812 dwellings in 1880, or 5.6 persons to a dwelling. The densest urban population was in New York city, where there were 16.37 persons to a dwelling. The five cities which led in population were: New York city (1,206,299), Philadelphia (847,170), Brooklyn, N. Y. (566,663); Chicago, Ill. (503,185), Boston, Mass. (362,839). The one hundredth in rank was Springfield, Ill. (19,743).
—The following table gives the land areas in square miles, the population, the ratio of population to square miles of land area, and the gross land and water areas, in the several states and territories in 1880 (territories in italics). The unorganized Alaska and Indian territories are not included in the ratio, and Alaska is not included in the areas.
—Increase of Population. The decennial census has been a feature of the United States government since the establishment of the constitution. (See CENSUS, APPORTIONMENT.) Mr. Bancroft, taking the ground that the ratio of increase was about as constant before the year 1790 as after it, estimates the population of the colonies in the years 1750-90, as follows: 1780, 2,945,000; 1770, 2,312,000; 1760, 2,195,000; 1750, 1,260,000. The census records give the population, at intervals of ten years, and the increase per cent., as follows:
—Immigration. No authentic record of immigration is available before 1819. Contemporary writers estimate immigration at 4,000 per annum up to 1794; and Dr. Adam Seybert, in 1818, considered 6,000 per annum, or 180,000 for the whole period 1788-1818, a liberal estimate. The act of March 2, 1819, required quarterly reports of immigrants by collectors of customs, and these have been brought together in the annual reports of the secretaries of state. (See EMIGRATION.)
—Centre of Population. This is defined, in Walker's "Statistical Atlas," (1874), as "the point at which equilibrium would be reached were the country taken as a plane surface, itself without weight, but capable of sustaining weight, and loaded with its inhabitants, in number and position as they are found at the period under consideration, each individual being assumed to be of the same gravity as every other, and consequently to exert pressure on the pivotal point directly proportioned to his distance therefrom." On this basis the census bureau has calculated the position of the centre of population, at intervals of ten years, as follows. Its approximate location by important towns, and its westward movement during the preceding ten years, are also given.
It was, in 1880, in Kentucky, one mile from the Ohio, and one and a half miles southeast of the village of Taylorsville.
—Urban Population. The following table shows the growth of the urban population of the United States: it gives, at intervals of ten years, the number of cities of 8,000 or more inhabitants, total population, and its percentage of the total population of the country:
—School, Military and Voting Population. The following table gives the population of school age (male and female, 5 to 17), military age (male, 18 to 44), and voting age (male, 21 and over), in the several states and territories. (Territories are given in italics.)
—Education and Illiteracy. The census of 1880 reports 225,880 public schools in the United States, including 16,800 separate schools for colored children, and 5,430 high schools or high school departments. Pennsylvania stands first with 18,616 schools, New York second with 18,615, Ohio third with 16,473, and Wyoming lowest with 55. The school buildings number 164,832. Pennsylvania stands first in this respect with 12,857 buildings, Ohio second with 12,224, New York third with 11,927, and Wyoming lowest with 29. The total number of teachers is 236,019; white male 96,099, white female 124,086, colored male 10,520, colored female 5,314. The aggregate of months of teachers' service was 1,539,303, at an average monthly salary of $36.21. The monthly average is highest in California ($76.54), and lowest in North Carolina ($21.27). The total number of pupils is 9,090,248: white male 4,687,530, white female 4,402,718, colored male 433,329, colored female 422,583; and the average daily attendance is 6,276,398, 5,715,914 white, and 560,484 colored. The receipts of the public schools, mainly derived from taxation, were $96,857,534; and the value of their school property was $211,411,540. (See, in general,EDUCATION AND THE STATE; EDUCATION, BUREAU OF.)
—The following abstracts are from the report of the commissioner of education for 1880:
—The newspapers and periodicals number 11,314, of which 971 are issued daily, 8,633 weekly, and 1,167 monthly. The aggregate circulation per issue is 3,566,395 for the dailies, and 28,213,291 for the others. English is the language of 10,515 of them, and the others range from 641 in German to three in Indian, two each in Chinese, Polish, and Portuguese, and one each in Catalan and Irish.
—Out of a total population of 36,761,607, of ten years old and upward, 4,923,451, or 13.4 per cent., are returned as unable to read, and 6,239,958, or 17 per cent., as unable to write. It must be confessed that these are uncomfortable figures for a republic based on manhood suffrage, but it must be taken into account that they are abnormally increased by the still prevailing illiteracy of the colored race. Of the 32,160,400 white persons of ten years old and upward, the number unable to write is 3,019,080, or 9.4 per cent.; while the corresponding figures for the colored race are a total of 4,601,207, of whom 3,220,878, or 70 per cent., are unable to write. There are 11,343,005 white males of twenty-one years old and upward (voters), and 886,659, or 7.8 per cent., of these are unable to write. There are 1,487,344 colored voters, and 1,022,151, or 68.7 per cent., of these are unable to write. These terrible percentages of colored illiteracy can only be regarded as survivals of antebellum conditions, and private benevolence is supplementing public energy in the effort to reduce them. The Peabody fund distributed $1,191,700 among the southern states for educational purposes during the years 1868-80, and the various missionary associations probably increased the amount to about $10,000,000. The following is a summary of the higher educational institutions in the southern states for the colored race.
—Agriculture. The total number of farms was 4,008,907 in 1880, against 2,659,985 in 1870, an increase of 50 per cent. The increase was altogether in farms of fifty acres and over; farms of less than fifty acres show a decrease, as follows:
It will be noticed that the changes for 1870-80 are in exactly the opposite direction to those of 1860-70. The average size of farms was 134 acres in 1880, against 153 acres in 1870, and 199 acres in 1860. The total number of acres in farms was 536,081,835 in 1880 (284,771,042 acres improved), against 407,735,041 in 1870 (188,921,099 improved), and 407,212,538 in 1860 (163,110,720 improved). The value of farms is put at $10,197,096,776 in 1880, $9,262,803,861 in 1870, and $6,645,045,007 in 1860. The value of farming implements and machinery is put at $406,520,055 in 1880, $336,878,429 in 1870, and $246,118,141 in 1860. Production of leading crops was as follows:
There should be added to the wool production in 1880 about 85,000,000 pounds for the wool of "ranch" and slaughtered sheep, as estimated after special investigation. The value of live stock in 1880 was $1,500,464,609, against $1,525,276,457 in 1870 (the average value of the paper dollar in 1869-70 being 81 cents in gold), and $1,089,329,915 in 1860. The total number of animals was as follows:
There should be added to the number of sheep in 1880 about 7,000,000 on ranches and public lands, as estimated after special investigation.
—Manufactures. The general results of the census in 1880, 1870, and 1860, are as follows:
Out of the 332 manufacturing and mechanical industries specified in the census report of 1880, the following are selected:
The seven leading states are as follows, arranged according to capital:
These seven states lead in product also. For other aspects of this branch of the subject See CUSTOMS DUTIES, TARIFF, DISTILLED SPIRITS, EXCISE LAW, INTERNAL REVENUE.
—Mining, Fisheries, State Debts, Finance, Banking. For these subjects See MINES; FISHERIES; DEBTS, NATIONAL, STATE AND LOCAL; FINANCE; COINAGE; BANKING IN THE UNITED STATES; CLEARING HOUSE.
—Commerce. The following table gives the specie value of imports and exports of merchandise, 1861-83, each year ending June 30, and the excess of imports or exports:
The percentage of the total exports and imports of all kinds carried by American vessels (See AMERICAN MERCHANT MARINE) was as follows: 1861, 65.2 per cent.; 1862, 50 per cent.; 1863, 41.4 per cent.; 1864, 27.5 per cent.; 1865, 27.7 per cent.; 1866, 32.2 per cent.; 1867, 33.9 per cent.; 1868, 35.1 per cent.; 1869, 33.1 per cent.; 1870, 35.6 per cent.; 1871, 31.8 per cent.; 1872, 29.1 per cent.; 1873, 26.4 per cent.; 1874, 27.2 per cent.; 1875, 26.2 per cent.; 1876, 27.7 per cent.; 1877, 26.9 per cent.; 1878, 26.3 per cent.; 1879, 22.9 per cent.; 1880, 17.6 per cent.; 1881, 16.2 per cent.; 1882, 15.5 per cent.; 1883, 16.3 per cent.
—The following are the exports and imports of merchandise to and from the various countries of the world, for the year ending June 30, 1883:
—The following table gives the quantity or value of imported merchandise for the year ending June 30, 1883, by classes, free and dutiable, ordinary duty received, and average rate of duty:
—The following table gives the values of merchandise imported for consumption since 1867, the ordinary duty received, average rate, and consumption and duty per capita of estimated population:
—The following table gives the values of the principal classes of exports of domestic merchandise for the year ending June 30, 1883, and the percentage of each to the total:
—The following are the exports and imports of gold and silver bullion since 1860, and the excess of exports or of imports:
—Mr. Mulhall estimates the earnings or income of the world and leading nations for 1880 as follows, in millions of pounds sterling: World, 6,773; United States, 1,406; Great Britain, 1,156; France, 927; Germany, 851; Russia, 632; Austria, 460; Italy, 252; Spain, 186; Holland, 104. In his "Balance Sheet of the World for 1870-80," he gives the following estimates of the capital or wealth of the nations named, and the increase for ten years. The figures are millions of pounds sterling:
—Railroads. Following tables are from census report of 1880. The respective groups are composed of the following states and territories: (group I.) Maine, New Hampshire, Vermont, Massachusetts, Rhode Island and Connecticut; (group II.) New York, Pennsylvania, Ohio, Michigan, Indiana, Maryland, Delaware, New Jersey and District of Columbia; (group III.) Virginia, West Virginia, Kentucky, Tennessee, Mississippi, Alabama, Georgia, Florida, North Carolina and South Carolina; (group IV.) Illinois, Iowa, Wisconsin, Missouri and Minnesota; (group V.) Louisiana, Arkansas and Indian Territory; (group VI.) Dakota, Nebraska, Kansas, Texas, New Mexico, Colorado, Wyoming. Montana, Idaho, Utah, Arizona, California, Nevada, Oregon and Washington. Miles under construction are included in miles projected.
The total amount of permanent investments above is made up as follows: construction of roads, $4,112,367,176; equipment, $418,043,458; lands, $103,319,845; stock of other companies, $184,866,527; bonds of other companies, $158,933,605; telegraph lines and miscellaneous, $204,913,196; total, $5,182,445,807. The average per cent. profit upon the capital stock was as follows: Group I., 6.16; Group II., 6.92; Group III., 4.84; Group IV., 7.02; Group V., 5.91; Group VI., 4.86; general average for the United States, 6.32.
—The summary of accidents includes 364 killed and 1,438 injured through causes beyond their own control, and 2,174 killed and 4,174 injured through their own carelessness (For a fuller treatment of the whole subject, See RAILROADS.)
—Canals. The canals of the United States in operation in 1880 had a length of 2,515.04 miles, with 411.14 miles of slack water. Their cost of construction was $170,028,636; their gross income was $4,538,620; their total of expenses was $2,954,156; and their freight traffic amounted to 21,044,292 tons. The abandoned canals made up a total length of 1,953.56 miles, constructed at a cost of $44,013,166.
—Telegraphs and Telephones. There were, in 1880, 110,726.65 miles of telegraph lines, 291,212.9 miles of wire, and 12,510 stations, employing 14,928 persons in all, 9,661 of whom were operators. The messages sent numbered 31,703,181, of which 3,154,398 were for the press, and 28,548,783 were for the public. Their gross receipts were $16,696,623.38, of which $13,312,116.17 came from messages; and the expenses were $10,218,281, leaving net receipts of $6,573,843.04, including deficits of some companies. Deducting charges of $604,341.27, there was a net income of $5,969,501.77, of which $4,136,749.75 went to dividends. The stock issued for cash was reported at $66,529,200. The total length of telegraph lines in 1883 is probably over 144,000 miles, not including private, railway, government, and other lines, as to which statistics are not obtainable. The telephone statistics were not complete in 1880: they aggregated 148 companies and private concerns, with 34,305 miles of wire, 54,319 receiving telephones, 48,414 subscribers' stations, and 3,338 employés. The total capital stock issued was reported at $13,358,720; debt, $1,247,067; receipts, $3,098,081; expenses, $2,373,703; net income, $770,516; and dividends, $302,730. The length of telephone wires in 1883 is estimated at about 100,000 miles. One company, the American Bell company, with a capital stock of $5,950,000, had in use by license. Jan. 1, 1883, 245,000 telephones, with 69,000 miles of wire.
—Tonnage. Full statistics of the merchant service are given elsewhere. (See AMERICAN MERCHANT MARINE.) It seems proper to add here the figures for the three years following the close of that article, as follows:
This was distributed as follows:
The new vessels built in 1882 and 1883 were as follows:
—Occupations. The following table is from the census report of 1880:
The census report concludes that the figures for the first two classes are to some extent confused by reporting as "laborers" persons who should have been reported as "agricultural laborers." It has thus resulted that the second class shows much the greatest increase of the four classes since 1870. The number of farmers and planters is reported as 4,225,945; of "agricultural laborers," 3,323,876; of "laborers," 1,859,223. The particulars of some of the occupations under the various classes are as follows: clergymen, 64,698; domestic servants, 1,075,655; hotel and restaurant keepers and employés, 133,856; lawyers, 64,137; army and navy, 26,761; civil service, 115,531; physicians and surgeons, 85,671; teachers, 227,710; saloon keepers and bartenders, 68,461; bakers, 41,309; blacksmiths, 172,726; shoemakers, 194,079; butchers, 76,241; cabinet makers, 61,097; carpenters, 373,143; fishermen, 41,352; lumbermen, 43,382; printers, 72,726; tailors and milliners, 419,157; tobacco workers, 77,045.
—Valuation and Taxation. The following table presents a summary of the census report on these subjects for 1880:
Maryland and the District of Columbia are placed in the middle states, and Missouri and the Pacific states in the western states.
There should be added to the taxation of minor civil divisions of the western states $10,457,783, the estimated amount of taxation so indefinitely reported as to be useless. The total taxation for the western states would then be $129,117,979, and for the United States $312,750,721.
—Debt. This subject is fully discussed elsewhere. (See DEBTS, NATIONAL, STATE AND LOCAL.)
—Army. In November, 1882, the army of the United States numbered 25,186, as follows:
The last class included the engineer battalion, recruiting parties, ordnance department, hospital service, Indian scouts, West Point signal detachment, and general service. The force was commanded by one general, William T. Sherman, one lieutenant general, Philip H. Sheridan, three major generals, Winfield S. Hancock, John M. Schofield and John Pope, and six brigadier generals, O. O. Howard, Alfred H. Terry, C. C. Augur, George Crooke, Nelson A. Miles and Ranald S. Mackenzie. Gen. Sherman retired in November, 1883, and was succeeded by Gen. Sheridan. There were 66 colonels, 85 lieutenant colonels, 242 majors, 607 captains, 570 first lieutenants and 448 second lieutenants. The country is divided into three military divisions, each of which is divided into departments. The military division of the Missouri (Sheridan commanding) included the departments of the Missouri (Pope), Texas (Augur), Dakota (Terry), and the Platte (Howard). Its headquarters were at Chicago; its force was eight regiments of cavalry and twenty of infantry. The division of the Atlantic (Hancock) included the departments of the east (Hancock) and of the south (Col. H. J. Hunt). Its headquarters were at New York; its force was four regiments of artillery and two of infantry. The division of the Pacific (Schofield), included the departments of California (Schofield), the Columbia (Miles), and Arizona (Crooke). Its headquarters were at San Francisco; its force was one regiment of artillery, three of cavalry, and four of infantry. The assignments vary from time to time, and are only given in order to show the organization of the army. The pay of officers and men is increased according to their years of active service. The men receive from $13 a month and rations (first two years) to $21 a month and rations (after twenty years' service). The maximum pay of the principal classes of officers is as follows: general, $18,900; lieutenant general, $15,400; major general $10,500; brigadier general, $7,700; colonel, $4,500; lieutenant colonel, $4,000; major, $3,500; captain $2,800; first lieutenant, $2,240; second lieutenant, $2,100. A deduction of two-sevenths will regularly give the pay for the first five years of service. The expenditures for the army, 1860-83, have been as follows:
—West Point, where the United States military academy is located, was a department of the division of the Atlantic until Sept. 1, 1882. The military academy was founded by act of March 16, 1802, and various subsequent acts have established professorships, and made the academy subject to the articles of war. In 1843 the present system of appointment was begun: it assigns one cadetship to each congressional district and territory, with ten appointments by the president. The number of cadets is limited to 312. There were, in 1882, seven professors, 145 cadets, and 204 enlisted men at West Point.
—Navy. The navy of the United States is the subject of a separate article, in which the reader will find full statistics. (See NAVY.)
—Pensions. Payments on this account were never large until the war of the rebellion. They never rose to more than $1,000,000 per annum until 1819, and from that time until 1865 they remained below $5,000,000 per annum. Since that time they have increased, particularly since the passage of the act of Jan. 25, 1879, for paying arrears of pensions to persons whose claims were barred by failure to apply within five years. The following are the payments for pensions, 1865-83:
The number of pensioners on the rolls, June 30, 1883, (increase for year, 17,961), is shown in the table at the top of the opposite column:
—Patents. The number of patents issued has steadily increased since 1837. The most prolific year was 1876, when there were 21,425 applications, 2,697 caveats and 17,026 patents issued. The following table gives the applications, caveats and issues since 1840, at intervals of ten years:
—Postoffice. In June, 1883, out of the whole length of 353,166 miles of postoffice routes in operation, 110,208 miles were by railroad, 16,093 by steamboat, and 226,865 by other conveyances. The whole number of domestic letters mailed during the year 1882 was estimated at 1,046,107,348; the whole number of foreign letters, 43,632,547. The dead letters and parcels numbered 4,440,822. The domestic money orders numbered 8,807,556, for $117,329,406; and the foreign money orders 466,326, for $7,717,832. The business of the postoffice department since 1790, at intervals of ten years, has been as follows:
—Debt. The history, growth and decrease of the national debt, are elsewhere considered. (See DEBTS, FINANCE.) The following is a somewhat detailed statement of the public debt, as given by the treasury department, Dec. 1, 1883:
The non-interest bearing debt was as follows:
This statement of net debt shows a reduction of $41,306,146.63 since June 30, 1883, and of $179,129,399.87 since June 30, 1882. The highest point touched by the debt was on August 31, 1865, when the interest-bearing debt was $2,381,530,294, with annual interest of $150,977,697 ($4.29 per capita); and the debt, less cash in the treasury, was $2,756,431,571 ($78.25 per capita). The table at the top of the opposite column gives the net debt for preceding years since 1860, the debt per capita, the annual interest, and interest per capita. (Under the article DEBTS will be found the gross debt for corresponding years.)
—Receipts and expenditures of the United States, excluding loans and interest on debt, for the six years ending June 30, 1883, have been as follows:
To these items of ordinary expenditure is to be added the interest on the public debt, which was $59,160,131 for 1883, making a total expenditure of $265,408,137. This, with $1,299,312 from the treasury accounts of 1882, left a surplus revenue of $134,178,756, which was applied to the redemption of the public debt.
—The principal officers of the United States government were as follows, July 1, 1883: President, Chester A. Arthur, of New York; president of the senate, and acting vice-president, George F. Edmunds, of Vermont; secretary of state, F. T. Frelinghuysen, of New Jersey; secretary of the treasury, Charles J. Folger, of New York; secretary of the interior, Henry M. Teller, of Colorado; secretary of war, Robert T. Lincoln, of Illinois; secretary of the navy, William E. Chandler, of New Hampshire; postmaster general, Walter Q. Gresham, of Indiana; attorney general, Benjamin H. Brewster, of Pennsylvania; commissioner of agriculture, George B. Loring, of Massachusetts. All these belong to the republican party. In the congress of 1883-5 the relative strength of political parties is as follows: In the senate there are thirty-eight republicans, thirty-six democrats, and two "readjusters" (from Virginia), who will regularly act with the republicans. In the house of representatives there are 194 democrats and one independent democrat, 120 republicans and two independent republicans, six readjusters, one greenbacker, and one vacancy (July 1, 1883). If a vote for president should devolve on the house of representatives, voting by states, in 1885, there would be twenty-two democratic states, fourteen republican states, one (Virginia) readjuster, and one (Florida) divided.
—It is hoped that the bibliographies under the articles referred to above will be sufficient to give the reader a guide to both sides of political questions, and that these articles, with the subsidiary articles referred to under them, will cover the field of American political history. Reference is particularly suggested to the following articles: ANTI-FEDERAL PARTY, DEMOCRATIC-REPUBLICAN PARTY, FEDERAL PARTY, WHIG PARTY. REPUBLICAN PARTY, ANTI-MASONRY, AMERICAN PARTY, LIBERAL REPUBLICAN PARTY, GREENBACK PARTY, the names of the presidents, and the names of the states. In the following list it is only intended to give the general authorities, and the special authorities for the last section of the article. The latter, government publications, are obtainable on application to the proper officer at Washington. (I.) 1-6 Bancroft's History of the United States; 1, 2 Hildreth's History of the United States; 1, 2 Bryant and Gay's History of the United States; Force's Tracts relating to the Colonies, and American Archives; Hazard's Historical Collections; Anderson's Discovery by the Norsemen; Kohl's Discovery of America; Da Costa's Northmen in Maine; Hakheyt's Divers Voyages touching the Discovery of America; Helps' Spanish Conquest of America; Robertson's History of America; Parkman's France and England in America; Neill's English Colonization in America; Burke's European Settlements in America; Nicholls' Life of Cabot; Edwards' Life of Raleigh; Lodge's English Colonies in America; Doyle's English Colonies in America; Holmes' Annals of America; Grahame's History of the United States (to 1783); Palfrey's History of New England; Marshall's History of the Colonies; Chalmers' Annals of the Colonies, and Revolt of the Colonies; Walsh's Appeal from the Judgments of Great Britain; Gordon's History of the Independence of the United States; 1 Pitkin's History of the United States; Frothingham's Rise of the Republic; Scott's Constitutional Liberty in the Colonies; Pownall's Administration of the Colonies; 1 Story's Commentaries; H. Sherman's Governmental History of the United States; Poore's Federal and State Constitutions (for charters). (II.) 7-10 Bancroft's History of the United States; 3-6 Hildreth's History of the United States (to 1820); von Holst's Constitutional History of the United States; 2 Pitkin's History of the United States (to 1797); Ramsay's History of the United States (to 1814); Schouler's History of the United States (to 1820); 3, 4 Bryant and Gay's History of the United States; McMaster's History of the American People; J. C. Hamilton's History of the Republic of the United States; Tyler's History of American Literature; Holmes' Annals of America; Bradford's History of the Federal Government (to 1840); Tucker's History of the United States (to 1840); Spencer's History of the United States (to 1857); Statesman's Manual; Sumner's Politics in the United States, 1776-1876 (N. A. Rev., Jan. 1876); Bishop's History of American Manufactures; Journals of Congress (1774-89); Annals of Congress (1789-1824); Register of Debates in Congress (1824-37); Congressional Globe (1833-72); Congressional Record (1872-83); Benton's Abridged Debates of Congress (1789-1850); Statutes at Large; Revised Statutes of the United States; Niles' Weekly Register (1811-36); Porter's Outlines of the Constitutional History of the United States; Sterne's Constitutional History of the United States; Johnston's History of American Politics; Tribune Almanac (1838-83); Appleton's Annual Cyclopædia (1861-83); Spofford's American Almanac (1878-83); McPherson's Political Manuals; Greeley's Political Text Book (1860), and American Conflict; Cluskey's Political Cyclopædia (1860); Benton's Thirty Years View; Young's American Statesman; Stephens' War Between the States; Democratic Review (1841-52); Whig Review (1844-52); Skinner's Issues of American Politics; Winsor's Reader's Hand-Book of the Revolution; Foster's Monthly Reference Lists (1883); C. K. Adams' Manual of Historical Literature. (III.) Story's Commentaries; Kent's Commentaries; Duer's Constitutional Jurisprudence; Hurd's Law of Freedom and Bondage, and Theory of our National Existènce; Brownson's American Republic; Mulford's The Nation; Jameson's Constitutional Convention; "Centz"'s Republic of Republics; Tucker's Blackstone's Commentaries; Curtis' History of the Constitution; Bancroft's History of the Constitution; Elliot's Debates; De Tocqueville's Democracy in America; Cooley's Constitutional Limitations, Treatise on Taxation, and Constitutional Law; Sedgwick's Statutory and Constitutional Law; Pomeroy's Constitutional Law; Bump's Notes of Constitutional Decisions; Farrar's Manual of the Constitution: The Federalist; Paschal's Annotated Constitution; Desty's Federal Citations; Abbott's Digest of United States Statutes and Reports, and United States Digest; Brightly's Digest of Federal Decisions; Myer's Inder to Supreme Court Reports: Rapalje's Federal Reference Digest; McCrary's Law of Elections; Brightly's Election Cases; Rorer's Inter-State Law; Dillon's Municipal Corporations; The Municipalist (1869); Morse's Citizenship; Ford's American Citizen's Manual; Lamphere's United States Government; Seaman's American System of Government; Hough's American Constitution; Poore's Federal and State Constitutions; Barnes' Ante-bellum Constitutions (with post-bellum changes); Bowen's Constitutions of England and America. (IV.) In general, Compendium of the Tenth Census (1880); ib., 1850, 1860, 1870; in particular, Walker's Statistical Atlas of the United States (1874); Annual Report of the Commissioner of Education (1880); Report of the Department of Agriculture; issues of the Bureau of Statistics for 1882 and 1883, particularly Statistical Abstract of the United States, and Reports on Foreign Commerce, Imported Merchandise, and Imports, Exports, Immigration and Navigation; Poor's Railroad Manual (1882); Report of the Register of the Treasury (for tonnage); Reports of the General of the Army, and Secretary of War; Official Army Register; Reports of Commissioner of Pensions, Commissioner of Patents, Postmaster General, and Secretary of the Treasury (1883).
UNITED STATES OF COLOMBIA.
UNITED STATES OF COLOMBIA. (See NEW GRENADA.)
UNITED STATES PENSION LAWS AND THE PENSION LAWS OF OTHER COUNTRIES
UNITED STATES PENSION LAWS AND THE PENSION LAWS OF OTHER COUNTRIES. A pension is defined by Webster to be an annual allowance of a sum of money to a person by the government in consideration of past services. In theory at least a pension is an arbitrary payment of money by the money-giving power in a country—in this country, congress; in another, the crown or parliament—for what it considers services. A secondary definition, historically the primary one, in Webster, shows us the aspect in which a pension used to be regarded: "An allowance or annual payment considered in the light of a bribe." The more modern idea is to consider it in the light of a payment on an insurance policy. We will briefly consider how these different ideas about a thing called by the same name arose.
—After a man or set of men have done any signal service to their country, it has in every country and in every age been thought only right and just that the popular appreciation and thanks should be expressed in something more than words. And consequently, after such services have been rendered, whether in peace or war, it seems perfectly proper for the country, by its representatives, to vote a pension or any other reward that may seem fit, whether it is to a class of men, an army or an individual. For instance, in this country, pensions in general have, at least until quite recently, been looked upon as un-American and unrighteous. But after every war of any consequence statutory provision has been made for the payment of pensions and bounties to those who have been wounded in it, or to the families of those who have died in it, and this without objection. Special acts of congress also have at every period of our history been passed, giving pensions where needed and deserved.
—Such pensions as these have been, as we have said, at all times natural and proper. It can be easily understood, that in the old days of monarchical independence and independent bounty, the step from this class of pensions to gifts for what the crown called services—that is, personal service or complaisance rendered or to be rendered—was a very short and easy one. And so a door was opened for a vast amount of corruption and bribery. Salaries had to be paid to those who took up the profession of courtiers, just as to any officers of government. The king was the state, and his personal servants were civil servants, and were to be provided for for life as such. When Neckar assumed the administration of the French finances, the public pension list of France amounted to twenty-seven million livres; the private one had to be kept a secret. Every one knows what a shameful use was made of this privilege in England in the times of Charles II., and how from that time for a long period of history the free use of pensions was the only method by which cabinets and governments in that country could hold their own; members of parliament became civil servants too, and had to have their salaries and provisions for life. Finally, the abuses became so great as to force a reform, and an act was passed forbidding any pensioner or placeman to occupy a seat in parliament. Even now, cabinet officers and holders of offices of emolument under the government, when they accept the position, have to resign their seat in parliament. Finally, the subordinate clerks of government began to claim such provision, and while by a gradual process these arbitrary powers were curtailed in nearly all European countries, the principle of pension giving was enlarged, and subjected to statutory provisions. More and more officers of government and classes of officers were embraced in pension giving systems.
—Mr. Dorman B. Eaton, in his book on the "English Civil Service," sketches the rise of the system in England, and we may take his remarks to illustrate the growth of such a system, and his reasoning as to the difference among different kinds of pensions, as an example of the arguments by which the growth has always been aided.
—In 1809 an English statute provided for superannuation allowances to persons in the excise service, reciting, "Whereas no provision is made by law for persons employed in the revenue of excise, to the great discouragement of such officers and other persons, and to the manifest injury of the revenue." In 1810 a law proves a fact already suggested, that the voluntary contributions of those in certain branches of the service had provided a sort of retiring allowance by creating a fund in the nature of an insurance fund. This act is known as 50 Geo. III., ch. 117. The same law also provides for annual statements of persons in the public service, and of their salaries, pensions and allowances. It also establishes a system of superannuation allowances. Other laws from time to time were passed on the subject. In 1859 they were finally revised by 22 Vict., ch. 26, "An act to amend the laws concerning superannuation, and other allowances to persons having held civil offices in the public service." The allowance is given "to all persons who have served in an established capacity in the permanent civil service of the state, whether their remuneration be computed by day pay, weekly wages or annual salary." There is to be granted "to any person who shall have served ten years and upward, and under eleven years, an annual allowance of ten-sixtieths of the annual salary and emoluments of his office; for eleven years, and under twelve years, an annual allowance of eleven-sixtieths of such salary and emoluments; and in like manner a further addition to the annual allowance of one-sixtieth in respect of each additional year of such service, until the completion of a period of service of forty years, when the annual allowance of forty-sixtieths may be granted; and no addition shall be made in respect of any service beyond forty years." There is then a provision for computing the amount of superannuation to persons holding professional and other special offices not embraced by the foregoing provisions. There are also provisions for granting allowances at discretion up to a fixed limit in cases of exceptional merit, severe bodily injury, disability in the service, abolition of offices, etc. Where the pensioner is under sixty, evidence of infirmity incapacitating him from discharging his duties, and of the probable permanence of such infirmity, must be given; and, even when these facts are established, he is liable to be required to serve again at any time before the age chosen as a limit. But persons (§12) retain the right to superannuation on transfer to other employment under the crown. All allowances are to be paid free of taxes. The system is made in principle analogous to pensions in military life. On the other hand, a deduction may be made from such allowances against any person when "his defaults or demerits in relation to the public service appear to justify such diminution. The act further provides, that no person (save a few especially excepted) shall be deemed to be in the civil service in such a sense as to entitle him to any superannuation or retiring allowance, unless he has been admitted to the civil service with a certificate from the civil service commissioners. This being the act under which pensions are now given in England, it has been rather more fully recited than in Mr. Eaton's book. Mr. Eaton further distinguishes between these superannuation allowances and pensions granted by crowns or administrations. Those allowances are really a part of the compensation of the office, of the conditions on which he entered public service, and are not, therefore, given on any theory of a gratuity or of favor. Looked at from the side of the government, they are regarded as presenting an ingenious and just method of receiving a good quality of service at the most reasonable rates; and from the side of the officer, as an inducement to greater economy, at the opening of official life, in order to secure, by reason of what he then forbears to receive, a certain provision for his declining years. The pension proper (in civil life) is a different matter altogether; being the bribe of the crown or administration for political effect, or its favor bestowed upon some person deemed fit for its charity or deserving of its honor, and often irrespective of such person being or having been in the public service. There was an available pension fund apparently in the discretion of the crown for political purposes until 1830, in spite of various statutes. In that year all the pension lists were consolidated. In 1837 Queen Victoria ascended the throne; and, by an act passed in her first parliament, the right of the crown to grant pensions was limited to about six thousand dollars a year (in addition to the previous list), and they can only be granted in that amount "to such persons as have just claims on the royal beneficence, or who by their personal services to the crown, by their performance of duties to the public, or by their useful discoveries in science and attainments in literature and the arts, have merited the gracious consideration of their sovereign and the gratitude of their country." (1 Vict., ch. 11.)
—There are nine classes of civil pensions in England: 1, annuities; 2, compensation allowance; 3, compassionate allowance; 4, hereditary pensions; 5, political pensions; 6, pensions; 7, retiring allowances; 8, special pensions; 9, superannuation allowances: and the amount thus spent was in 1881 over twenty millions. The oldest pension is to the heirs of Sir Thomas Clarges. The date is put at 1673. Nearly a million dollars have been paid to him and his heirs, and over three and a half millions to the duke of Marlborough and his heirs.
—In France, pensions are awarded to civil, military and naval officers, to ecclesiastics, and to those distinguished in literature, science and the arts; also to the widows and children of high officials. In 1874 thirty-six thousand francs were awarded to aged and infirm ecclesiastics. Pensions for long services are given to non-commissioned officers and privates in the army who have served twenty-one years in the infantry, or twenty-four years in the cavalry, or sooner in case of disability from wounds, loss of health, etc.
—In Germany the military pension list was, in 1874, 37,996,878 marks.
—We will now briefly consider the advantages and disadvantages of a pension system, with especial reference to the United States, and then go somewhat into detail concerning the pension laws and system now existing here.
—In our consideration of the general theory of pensions, we may withdraw one class from discussion. That is the first class we have spoken of: those which, combined with the wish of men to live without working, originated all the other kinds; what are called in France national recompenses, granted by legislative or kingly acts for distinguished services. As we have already said, these have always been granted, whether to armies or individuals, and so long as such are carefully scrutinized, and the merits for which they are given are first weighed in the balance and found worthy, no objection can be raised. They should be given, too, if the primary object should die, only to his dependent relatives, and not to his children after they attain a self-supporting age. It follows from this, that military pensions should be granted after any especial service or war, and with immediate reference thereto. And besides these, if any one enters the government service where there is a pension in existence already, he has a right to demand the pension. That does not affect the question whether such system should be abolished for the future, or the question whether any should ever be introduced.
—Leaving these matters, therefore, out of the question, what we are to discuss is the advisability, or otherwise, of a pension system as a part of the method by which a government agrees to pay its servants, civil or military, for services not yet rendered.
—1. There is an objection in theory to a government's either creating an insurance fund for the benefit of, or promising to confer a gift on, its agents, civil or military, for future services, by any statutory provision. It is not within the province of government, as that province has been limited and defined by history and by writers on the subject. A government's business is to protect its citizens' rights and to transact the clerical business of the state as a whole. There may be many things the government does now which do not come within this rule; but because it is difficult or not advisable to remove those already there, is no reason why, if the theory be true, still more exceptions should be added to the list. But, it is said, the government may hire a clerk or a soldier at so much a year to do certain duties. Has it not a right to choose its own manner of paying? may it not each year subtract so much from the salary, telling its servant, "If you work for me for a certain number of years without conducting yourself so badly as to get turned out, you shall get the proceeds of this investment that is made for you; and if you do get turned out, it will go to others who serve out their time"? Or, looking at it in another light, may it not, when the clerk or soldier enters its employ, say, "If you work for me for so many years, and I don't meantime dismiss you, I will at the end give you so much in every future year, and you need do no more work for it"?
—It will readily be seen, that here, in a very finely drawn line, comes up the old question as to the powers of a government. Shall a government be "strong" or "weak"; paternal and grandmotherly, or not? shall it build and run railroads and telegraph lines, subsidize and regulate industries and arts and society, and institute social reforms? or shall it let all these things arrange themselves, so far as the rights of its citizens remain unimpaired, and confine itself closely to the business as we have defined it? The moment discretion is given a legislature or other governing body, to create and distribute funds for servants who may become invalid; or to confer in the future benefits on other servants if they perform good service; or to make any arrangement other than one of a strictly business nature, whether it be to establish an insurance fund or otherwise; that moment it takes to itself new powers, and these seem to us to be dangerous in their tendency, as liable to abuse. Their utility in fact we will deal with next. There are a great many arguments on both sides of the theory of the government question, and this is not the place to examine them. (See GOVERNMENT INTERVENTION, and other articles.) Each individual looks at it from his own standpoint. Here the writer can only express his personal opinion, that for a government to do anything more than pay its servants so much for so much work on an ordinary business or cash basis, is wrong in theory and outside its proper powers.
—2. Utility. It is admitted, that if it can be proved that any great advantage would accrue to the state by the introduction of such a system, that would in some degree atone for its wrongfulness in theory; but it is submitted that that fact can not be proven, and the balance of evidence tends to prove the reverse.
—To put the question broadly, do public servants perform better work for the public if they have a pension in prospect? They ought not to; if a man undertakes to do work for so much, he should do his work honestly and completely, no doubt. It is therefore not the duty of government to try and get them to work harder by promise of a higher, even if it be a deferred, reward. But, as Gen. Washington said to a committee of Congress, Jan. 29, 1778, in urging the adoption of a half-pay system for the army, "A small knowledge of human nature will convince us that with far the greater part of mankind interest is the governing principle, and that almost every man is more or less under its influence. * * Few men are capable of making a continual sacrifice of all views of private interest or advantage to the common good. It is in vain to exclaim against the depravity of human nature on this account: the fact is so; the experience of every age and nation has proved it; and we must, in a great measure, change the constitution of man before we can make it otherwise. No institution not built on the presumptive truth of these maxims can succeed." Mr. Eaton has taken, as the motto for his book on civil service, already quoted from, a saying of John Locke's: "I think every one, according to the way Providence has placed him in, is bound to labor for the public good so far as he is able." We may notice the different ways of looking at a thing which a practical and a theoretical statesman have, and pass on to the point we wish to make, which is rather, can the public get better servants by giving so much annual salary and a pension at the end of a certain period, or by giving a higher annual salary and no pension? For no pension fund can be instituted on sound principles if the salaries are to be as high as if there were no pensions. In France, a few years since, the amount derived from the pension fund was only one-third of the amount of pensions to be paid, proving the existence of a vicious system.
—The advantages of the system are very well put by Mr. Worthington C. Ford: "In the administration of government, there is employed a large number of public servants, servants of many grades, who give their time and energies to the performance of their duties. As a rule, and the exceptions are to be found only in the higher positions, the salary these servants receive is their only resource. Let the government be overthrown, or let the offices be abolished, and these men are thrown upon the world to obtain their living in other occupations through what ever capacity they have developed in the public employ. Nor are these the only chances of hardship that they must fear. Sickness and infirmity may come upon them and render them incapable of performing any task whatever. They have the alternative then of becoming a burden on their relations or a charge upon the state or locality it which they reside. In order to prevent this, and in consideration of long and faithful service, most governments have instituted a system of pensions This is all the more necessary where the salary of public employés is somewhat lower than those that can be obtained in other walks of life. It might be added that this is rarely the case, and it is certainly not so in the United States, where, through a variety of causes, many of which were intended to have but a temporary effect, the salaries of public servants are very much higher than those obtained for the same kind of labor in trade and industry." "In theory nothing could be more just than such a system. As the right to a pension is generally guarded by some restrictions, such as age, time of service, position in the civil service, special disability, etc., it is practically a premium offered to such as will perform the necessary conditions, and so insures a better class of public officers. It encourages a strict performance of duty on the part of the employé, and inspires him to discharge the functions of his office to the best of his ability in order that he may in the end secure this reward. It holds out to him the promise of a competence in his old age or in the event of any infirmity that might make him unfit for labor, and gives him the encouragement that after his death his family will not be left wholly in want. He more cheerfully gives the best of his years to toil and fatigue when conscious that the benefits derived from his labor will not end with his death or incapacity. A pension is not, in such cases, a charitable donation, nor a gift bestowed without any return. It is, as I have said, rather an insurance fund; a gift, if you please, but one that is earned by honest toil and by a devotion to the employer's interest." But Mr. Ford adds: "The expediency or necessity of civil pensions has never been recognized in this country. The pay is good, and there is always an abundance of applications for positions. The introduction of civil service rules has made the occupants of positions more certain of retaining them during good behavior, and has thus given a reason even for reducing salaries. * * Whenever a special case of hardship occurs in the civil service it is usually treated by a special enactment of congress."148 The three general objects which, we are told, are gained by a pension fund are therefore: 1, increased happiness on both sides; 2, economy—smaller wages are given, and the balance accumulated, but it is not every one who comes to get his pension, and therefore by the pensions of so many is the government a gainer; 3, permanency in office, by increasing the value of the salary and office as time goes on. All of these points are involved in the general question of utility.
—In reply to this argument let us quote Mr. Bentham, when discussing his proposition, that such pensions are needless, and therefore given in waste. In his "Constitutional Code," under the head Finance, he says: "Labor applied directly to a man's own use, or indirectly in exchange for an equivalent given by an individual in return for it, is one source of subsistence: labor employed for an equivalent in the service of government, that is, of the public at large, is another source. In the first case, generally speaking, no such allowance of reward, after service has ceased, has place. In the case of him whose subsistence is derived from dealings with the public at large, as in the case of a wholesale or a retail trader, a master manufacturer, an artisan, or a manufacturer, it is impossible. In the case of habitual service rendered by contract to an individual there is no custom for it. The case of incapacity produced by age or disease is a case equally open to expectancy in both instances. From the time of his embarking in his profit-seeking occupation a man makes for all such contingencies such provision as his means enable him, and his prudence disposes him, to make. For the securing to individuals any such extraordinary supply at the expense of the public there is, if there be any difference, less demand in the case of an occupation pursued by the rendering of service to the public for hire, than in the case of him whose subsistence as above is derived from commercial dealings with individuals. In the case of a public functionary a man's income is completely certain; certain as to its existence, certain as to its quantity. In the other case it is altogether uncertain in both respects."
—Another objection is, that there is a tendency, under a promise of pensions and rewards, in government servants to endeavor to secure the approbation of their immediate superiors in ways outside the duties of their office for a long enough time or in a sufficiently intense degree for them to obtain the reward. And vice versa in the case of the superiors toward their inferiors and superiors both. It is to their interest to remain together for the given time, and as long as they approve of each other reciprocally they are certain of their pension. This gives rise to a class and privileged feeling among the employés, which in turn causes an inattention to and carelessness of the interests of private individuals, more noticeable, and perhaps largely on this account, in the public offices in Great Britain than here, where the government servants have been, if anything, too independent of their official superiors and too dependent on extra-official protection. Mr. Eaton urges, as a reason in its favor in his book, that "the provision it makes for old age and misfortunes, besides promoting a better feeling in the service toward the state, and making effective discipline easier, actually enables the state to purchase the services of its officers at a less cost to the public treasury. The allowances for special merit and the deductions for bad conduct are based on records kept in the departments, and they are considered to have a salutary influence (analogous to promotions, prize money and brevet rank in the naval and military service) in stimulating honorable exertions in the public interest." This is our objection put in another way. It creates an esprit du corps among the young people in a circumlocution office like that in an army. The longer the clerks are there the more they become, superiors and inferiors, knit together in interests as against the outside world. An official class, or even aristocracy, is created.
—If a pension is to be obtained at the end of a term of years, the nearer that end comes the harder and more ungrateful it becomes for a superior to dismiss an inferior, often in disregard of the wishes of his own superiors, especially in countries where a free press and a popular assembly give the inferior opportunity for revenge and retaliation. In other words, it may tend to permanence in office, but the permanence is not of a healthy kind, and is not so dependent merely on good work as it would otherwise be.
—Again, it is to be remembered that the people filling the positions go into them at their own request and wish, and they give so much work for so much money. When they first enter, if they find themselves underpaid they may resign, and go into another business. In every country there are more applicants for government positions than there are positions for them to occupy. It is not necessary, therefore, that any more favorable pay should be given to such employés than to those in another occupation. Nor is there any reason on account of the nature of the work. And in this country, at any rate, the clerks in the public offices would strongly object to any pension fund being instituted if their salary should be lowered in consequence. Most American clerks are quite capable of investing their surplus income themselves, and they would say that they did not need to have the government, and the government had no right to, do it for them.
—Again, it causes poor work in a great many cases. Many men will cling on after their time for usefulness is entirely over, merely to get their pension, or a larger one than they would get if they were to then retire. This often happens in England, although the commissioners do their best to prevent it. We have in this country recently had an example in a very high place, where a justice of the United States supreme court, long past any ability to do any work, insisted on keeping his place until his pension should accrue, and so doing a great injury to the business interests of the country.
—In this country it is very doubtful whether any salaries could be lowered for such a purpose, and so there would be very little economy. The salaries of the United States judges were not lowered when pensions were extended to them. Besides, if our other suggestions are true, if the service became less effective on account of such a system, it would be poor economy to introduce it just to gain a few lapsed pensions. The making money out of its employés in such a way by the government in this country would only create disgust and disaffection on the part of the employés; and, through them, of the public.
—Again, there are computed to be over one hundred thousand civil servants in the employ of the national government in this country, besides the ordinary employés, messengers and lower servants employed about a government office and building, numbering perhaps as many more. This fact alone ought to be enough to deter any one from making any attempt to introduce such a system here.
—The principle suggested by its advocates is to institute a pension fund, like any insurance fund. "The average life of the persons who are to share in the benefits of the fund should be accurately determined, in order to learn how large a proportion of the total number will be able to perform all the requirements, and be able in the end to obtain their portion. This involves a determination of the death rate, the probability of life. From these data may be found the actual sum that must be set aside each year in order that the pensions falling due may be met. If, to take a simple example, it is found that the average number of persons entitled to a pension of say $500 each year is three, at least $1,500 must annually be obtained from the pension fund. If such a system were instituted here it would probably be carried on much as the naval pension fund is. The secretary of the navy, as trustee, invests so much of the fund then in the United States treasury as may not be required for the payment of the naval pensions for the then current fiscal year, together with the interest of the preceding year, and he gets 3 per cent. on it. Under section 4759 the privateersman fund is maintained. Two per cent. on the net amount after deducting all charges and expenditures of the prize money arising from captured vessels and cargoes, and on the net amount of the salvage of vessels and cargoes recaptured by the private armed vessels of the United States, shall be secured and paid to the collector or chief officer of the customs at the port where such vessel comes, or with the United States consul or agent, if out of the United States. And the moneys arising thereupon are pledged by the government of the United States as a fund for the support and maintenance of the widows and orphans of such persons as may be slain or wounded, etc., on board of the private armed vessels of the United States, in any engagement with the enemy. The secretary of the navy is trustee to assign and distribute this fund according to law. (Rev. Stat., secs. 4753, 4754.)
—The history of pension legislation in the United States forms a most interesting and curious chapter, and in no other nation has the principle of rewarding military and naval service been carried to such a limit as by congress. Early in the revolution it was seen that the discipline of the troops depended much upon the characters of the officers placed over them; so congress recommended to the several states that they should use their utmost endeavors to appoint in the service men of honor and of known abilities. On Oct. 7, 1776, as an encouragement for men of that class to enlist as commissioned officers, their monthly pay was increased, and somewhat later it was resolved that those who should continue in the service till the end of the war should receive half pay for seven years from the establishment of peace. This applied only to military service, and was more in the nature of a bounty than a pension, still it contained the germs of a pension system. Meantime, however, owing to the difficulties which arose from the inability of congress to fulfill its obligations save in a greatly depreciated paper currency, it became evident that few officers could remain, even if willing, in active service till the end of the war, without making great personal sacrifices. And, although Washington prepared a scheme of half pay and pensionary establishments, and strongly urged upon congress the necessity of making some provisions, the matter dragged, opposed by some as tending to create a standing army, and by others, because they thought the states should be first consulted. The result was a compromise measure. All military officers, commissioned by congress, who should continue in the service during the war, and not holding any office of profit in the states, should be entitled to receive half pay for seven years after the war, provided that this gratuity should extend to no officer who should not take an oath of allegiance to the United States, and actually reside within the same. The provisions of this act were in 1780 made to apply to the widows and orphans of such officers as had died in service. Non-commissioned officers were to receive a specific reward of $80 at the end of the war. This measure, however, did not allay the discontent of the officers, and in 1780 an act was passed granting half pay for life to officers who served till the close of the war. It is curious to find a law passed three years later commuting this half pay for life into full pay for five years, and reciting, that "as the officers of the several lines under the immediate command of his excellency General Washington, did, by their late memorial, transmitted by their committee, represent to congress, that the half pay granted by sundry resolutions, was regarded in an unfavorable light by the citizens of some of these states," etc. In 1780 some of the states had already made provisions for their officers. For example, Pennsylvania granted half pay for life, and the result was that the troops from this state were in excellent condition, few resignations being made, while in the quotas of other states resignations were frequent.
—But it would be a mistake to imagine that the results of these laws were at all in proportion to the promises they contain. When in 1783 half pay for life was commuted into full pay for five years, certificates bearing 6 per cent. annual interest were issued, and because of the refusal of the states to fulfill the requisitions of congress, the value of these certificates became greatly depreciated, falling until they could command but one-eighth of their nominal value. The army was disbanded, and the officers were compelled by their necessities to part with their certificates for whatever they could obtain. At the end of eight years the principal and interest were funded at 3 per cent., but the paper was now chiefly in the hands of speculators, and it was not until nearly forty years had elapsed that congress undertook to do justice to the revolutionary officers. When the matter came up for settlement in 1826, out of 2,480 commissioned officers (exclusive of foreigners) who came out of the war, only 230 were alive. In all that time there existed a deeply rooted opposition to pensions, as a system of favoritism by which those in power made provision, at the public expense, for their friends and followers.
—Up to this point, however, we have been concerned only with the officers of the army. In 1785 congress recommended to the states the propriety of making adequate provision for invalids. In 1788 it was further resolved that "each state shall have credit in its general account with the United States, for such sums as may become due to invalids." Subsequent laws, both of a public and a private character, were passed applying to invalids, and in the organization of the army a like provision was incorporated. By 1806 a general system of pensions had been framed, and in 1808 the United States assumed the state pension obligations. From that time until 1818 the principle was settled that all persons disabled in the course of military or naval service should be provided for at the public expense, whether they had served in the land or sea service of the forces of the United States, or any particular state in the regular corps, or the militia, or as volunteers. The law, however, was surrounded by many safeguards against fraud, and a pension was to be allowed only for disabilities incurred in the service. So limited and confined was it that the abuse arising under it was comparatively unimportant. Abuse, however, there was, and in 1804 it called out the saying that "the revolutionary claimant never dies; he is immortal."
—In 1818 the first departure from this conservative policy was made, and was followed by others in 1820 and 1823. On March 18, 1818, an act was passed granting pensions to all who had served in the army of the revolution "for a period of nine months or longer at any period of the war"; and "who, by reason of reduced circumstances, shall stand in need of assistance from their country for support." Here the principle which limited the granting of pensions to such as were disabled in actual service was abandoned, and the length of service and the poverty of the pensioner are made the conditions on which pensions were hereafter to depend. It was doubtless the intention of the framers of the bill to have its provisions apply only to those who had during the revolution given up their private pursuits and devoted themselves exclusively to military service, and not to men who had rendered casual service; and in support of this view it may be said, that, as originally introduced, the bill would cover the demands of those who had served for three years, and who stood in need of assistance from the government for their support. During the passage of the bill the three years' requirement was displaced by one of nine months, and in that form the measure became a law. It was estimated that the annual charge upon the treasury would amount to about $160,000, but the results proved that this estimate was far from correct, and that the door had been opened to frauds so extensive that they became unimportant only in the light of subsequent pension legislation. 27,948 persons applied for the benefit of the act of 1818—a number greater than that of Washington's army at any period of the war, and exceeding the whole number of soldiers that could by the established rate of mortality be supposed to be alive in 1818. The claims of upward of 18,000 were admitted, and it was afterward discovered that fully one-third of this number had no legal claim to government bounty. The money required to pay these claims was between two and three millions annually; the appropriations for this branch of expenditure being in the first year under the act, $1,847,900, and in the next, $2,766,440. Then congress interfered, as the country was becoming alarmed. Men who had never served at all, or for very short periods, men who had given away their property to their children, or conveyed it in trust for their benefit; in short, every one who was old enough to have served in the revolution found little difficulty in getting himself placed on the pensions list. To correct this open scandal a law was passed May 1, 1820, which retained the "nine months" and "indigent circumstances" requirements, but provided greater safeguards against fraud by requiring every applicant to submit a schedule of his property and to take the necessary oaths. This caused 6,000 names to be stricken from the list. In 1829 an attempt to pass what was known as the "mammoth pension bill" called out a vigorous protest from Mr. Hayne. Its effects, he said, would be to open the door of the treasury to "mere sunshine and holiday soldiers, the hangers-on of the camp, men of straw, substitutes who never enlisted until after the preliminaries of peace were signed."
—An act of June 7, 1832, was followed by more extensive frauds, and this was adverted to in the president's message for 1834. The provisions of the pension laws had by this time been extended so as to apply to wars other than the revolution, and in subsequent years they were made to include all military service wherever rendered. A list of the wars will be found at the end of this article. The results of legislation are shown in the following brief statement contained in a report to congress made in 1834: "There are supposed to be now living about 42,600 persons who receive pensions or gratuities from the government under different laws. Of these about 3,900 are invalid pensions, 10,500 come under the act of 1818, 700 under that of 1828, and 27,500 under the law of June 7, 1832. The amount expended in the previous year reached three millions of dollars."
—It would be unprofitable even to attempt to trace minutely the effects of the many laws relating to pensions passed between 1832 and 1860. Enough has been said to show that the tendency of such legislation was to pass from a strictly defined and on the whole well-guarded system, to one which allowed extensive frauds, and in reality gave the government's bounty to the undeserving. As the laws were more generally applied, and included a greater and greater number of subjects, the opportunity for fraud was ever present, and was not allowed to pass unnoticed.
—The rebellion, however, gave rise to some pension legislation which deserves more than a cursory notice, because it gives ample proof of the tendency of such laws to run into wasteful expenditure, and also to become a political engine, a device for gaining the votes of the "soldier" population. It may be premised that pensions were offered early in the war to secure volunteers; and further, as every such volunteer was subjected to a medical examination, and was—at least theoretically—allowed to serve only when sound in body, it followed, that, if he were not sound at the end of the war, he must have been disabled or become diseased while in service. This fact becomes important in the light of legislation after the close of the war.
—Since the rebellion the following are the more important laws relating to the granting of pensions to soldiers and their families: July 14, 1862; July 4, 1864; March 3, 1865; June 6, 1866; July 25, 1866; July 27, 1866; July 7, 1870; July 8, 1870; June 6, 1874; June 18, 1874; June 20, 1874; June 22, 1874 (consolidation act); Aug. 15, 1876; Feb. 27, 1877; Feb. 28, 1877; March 3, 1877; March 8, 1878; March 9, 1878; June 17, 1878; June 18, 1878; June 20, 1878; Jan. 25, 1879 (arrears of pensions act); March 1, 1879; June 9, 1880; June 16, 1880; Feb. 26, 1881; Aug. 7, 1882; and in addition to these, countless bills of a public or private nature became laws or were rejected. Under these laws the most liberal provisions were made for those who had suffered, directly or indirectly, while in the army during the rebellion. It is doubtful whether any other nation has provided so liberally for its disabled soldiers and seamen, or for the dependent relatives of the fallen. "If any person, whether officer or soldier, belonging to the militia of any state, and called out into the service of the United States, be wounded or disabled while in actual service, he shall be taken care of and provided for at the public expense." (Revised Statutes, §1639.) This principle has governed the pension legislation of the country almost from the beginning (1792). The government undertook to make good, as far as possible, the loss of health or members, when such loss was incurred strictly in its military or naval service, and to furnish regular pecuniary aid to the families of those whose lives or health were thus sacrificed. From a very simple impulse of justice has sprung an entire system of rewards, or rather of recompense, which has grown to proportions little anticipated by those who framed the first laws. In place of laws for particular emergencies, cautiously limited to retrospective action, we now have statutes which regard on an equal plane all branches of the service, regulars, volunteers and militia, and further providing for the future as well as for the past. The few simple and efficacious safeguards which were imposed upon the earlier laws have been abolished, or so modified as to be, to all intents and purposes null and void, and step by step, as the system was expanded, its benefits have largely fallen to the undeserving, to professional schemers for public plunder. And of this the arrears of pensions act is a notorious example, the history of which throws a strong light upon the methods of shrewd lobbyists who thrive upon the necessities of others. Briefly stated, that history is as follows: The laws then in force, it was claimed, were faulty, and it was expedient to abolish certain inequalities which the pension system was believed to contain. Under the existing acts certain restrictions or limitations were imposed upon the time within which application for a pension should be made. If a man was unable to secure the necessary papers and proofs required by the practice of the bureau within the appointed time, his pension could not be granted until the defects were remedied and the proper documents filed in the department. It thus happened, that, while many obtained pensions beginning from the date of discharge or disability, a large number of others, who were equally deserving, had their claims for many years delayed, and when allowed drew their bounty from the date of the issue of the proper documents, and not from the date of discharge or disability. The law prevented any dating back, and it was claimed that as a simple act of justice this defect should be remedied and the operation of the system made more equal. "By the act of July 14, 1862, the first on the subject of pensions growing out of the war of the rebellion, it was provided that if the soldier made application within one year after his discharge, his pension should commence with the date of such discharge, but if he failed to make his application until after the expiration of the year, then his pension, when granted, should commence with the date of such application. This was a statute of limitations of one year, and deprived the crippled soldier of one year's pension money or more, if, for any reason, he was not prompt in presenting his claim within the time prescribed. It was a vicious principle with which to begin our pension system. No government can afford to higgle with its preservers over the price of their blood, nor is it a becoming thing to thrust a contemptible statute of limitations, the last resort of a dishonest debtor, into the faces of the maimed who are living, or of the widows and orphans of the dead, in full payment of the most sacred obligations ever incurred by a nation in the history of the world. By subsequent acts amendatory of the act of 1862, the statute of limitation, or the time within which to file an application so as to carry a pension from the date of discharge or death, was extended first to three and then to five years, and it stood at this latter period in January, 1879. The arrears act was designed to eliminate from the then existing law that meanest form of defense to a debt ever interposed by an individual or a government, the defense of the statute of limitations. It destroyed the detestable argument so often heard, that the lapse of time can pay an honest debt; that if you can successfully evade the payment of a claim for a certain number of years, either through your own ingenuity or the ignorance and helplessness of your impoverished creditor, the claim becomes an old claim; then, in the pompous and stupid parlance of the day, a stale claim, and that at this point it is to be considered paid and wiped out."
—It would, however, be a mistake to suppose that the law arose from such philanthropic motives as the sentences just quoted from a speech in defense of it would indicate. In fact, it was nothing more than a piece of selfish and interested legislation, originated by a ring of pension claim agents who made a living by trading upon the necessities of deserving pensioners, and it was by their efforts more than by any other influence, that the arrears act was hurried through congress. In 1871 the total number of applications filed was 43,969; in 1872, 26,396; in 1873, 18,303; in 1874, 16,734; and in 1875, 18,704. The claim agents saw that their business was falling off, and took measures for increasing it. In 1875 and 1876 they had begun their peculiar methods, and were flooding the country with blank petitions. The commissioner of pensions said, in his report for 1878: "A comparatively small number of professional claim agents and claim firms at Washington and some other points of the country, through the intervention of sub-agents, and by extensive advertising, employing for that purpose in some instances sheets issued in the form of periodical newspapers purporting to be published in the interest of the soldiers, the columns of which contained matter in which apparent anxiety for the soldiers' welfare and appeals to their love of gain were cunningly intermingled, always representing the advertisers as in the enjoyment of special and peculiar facilities for the successful prosecution of claims, and usually adding the suggestion that no charge would be made unless a pension should be obtained." The result of this activity was to bring before congress a host of petitions praying for further legislation. Already a measure providing for arrears of pensions had been introduced into the 44th congress, but it was killed in committee, and in the next congress a like measure promised to experience the same fate, when it was unexpectedly taken up and passed under a suspension of the rules without debate, and apparently without having been considered by the proper committee. The bill was rushed through the senate in the same unceremonious manner, and in the short debate there is an absence of any effort to discover what would be the effects of the bill should it become a law. Making an estimate based upon a communication from the commissioner of pensions prepared three years previously, it was stated that the arrears might amount to nineteen or twenty millions annually. The secretary of the interior thought that $41,000,000 would be all that was needed to meet the provisions of the new law, and accepting this estimate, the secretary of the treasury asked for authority to issue bonds to that amount. This estimate was prepared, however, after the measure was passed and has received the signature of the president. The pension bureau never made an estimate of the cost of the arrears bill until after it had become a law. Such was the loose manner of framing and discussing an important law.
—The truth, however, was soon seen. The practical operation of the law was to offer a bonus of $1,000 down, in addition to subsequent periodical payments, to all persons who might thereafter file and prosecute to a successful issue, pension claims against the government. Even while the bill was in the hands of the president, its real results were beginning to be foreshadowed. Secretary Sherman told his associates in the cabinet that it would require an expenditure of $150,000,000. On Jan. 25, Secretary Schurz read in a cabinet meeting a letter from the commissioner of pensions, saying that the bill would require an immediate expenditure of $36,000,000, and largely increased annual requisitions. In spite of these damaging statements the president, Mr. Hayes, signed the bill. In February, 1879, Secretary Schurz addressed a letter to congress calling attention to the vast sum probably involved by the arrears act, and urging upon that body, in the most emphatic terms, the necessity of adopting legislation to protect the government against the frauds which the new measure would be sure to encourage. At once the flood gates were opened. In his report for the year ending June 30, 1879, a date less than six months after the passage of the act, the commissioner said that the new claims of invalids, widows, minor children and dependent relatives, had come in at "an unprecedented rate." The claims of invalids, he said, were more than double in number those of any previous year, except 1866 (just at the close of the war), and nearly double that year, while other claims were large in an almost equal proportion. Furthermore, at the time the arrears act was passed there were about 100,000 unsettled claims which were regarded as alive and pending; besides these, there were not less than 80,000 on the files which had been rejected for one reason or another. Among these claims, which were on the files and had not been admitted, were about 45,000 which were counted as dead claims, the claimants having abandoned their prosecution, or died leaving them unsettled. The arrears act not only brought in new original claims at the rate of 10,290 per month for the whole period of seventeen months from February, 1879, to June 30, 1880—while the average from July 1, 1878, to Feb 1, 1879, was only 1,597 per month—but it revived from thirty thousand to forty thousand old cases which were on the rejected files. The drain on the treasury was greatly increased. The largest annual disbursement previous to the passage of this act was in 1871, and amounted to about thirty-three millions. In 1878 it was $26,844,415; in 1879, $33,780,526, in 1880, $57,240,540; and in 1881, $50,620,538; In this last year the commissioner estimated that the act would consume, sooner or later, more than $510,000,000. This piece of legislation, which is little else than a gigantic swindle, has remained unchanged in spite of efforts to overturn it. It was conceived for private advantage, and carried through without consideration or debate, and by means of political pressure. It is the old story of the prætorian guards repeated; the soldiers' votes formed the main object to be secured by its passage.
—One more point deserves attention, as showing the great stimulus exerted by pension legislation. When the bill granting pensions to all the survivors of the war of 1812, and to the soldiers' widows, was before congress, it was generally asserted and believed that the number of persons entitled to such pensions, about seventy years after the war, must necessarily be small. The armies of the United States in 1812-14 had not been large, and the number of people who attain the age of eighty or ninety years can never be very large. Yet in the table we give, we find more than 7,000 survivors and more than 24,000 widows drawing pensions! "Either the war of 1812 must have had a mysteriously vitalizing effect upon those in any way engaged in it, or the passage of the pension bill must have resuscitated a large number of those who, in the ordinary course of nature, had died years ago." And in his report for 1882 the commissioner of pensions makes some interesting speculations regarding the pension population of the country. "The proposition is as follows: How many persons are there now living who served in the army during the late rebellion, or who bore a pensionable relation to those who served, who have not yet applied for a pension? The adjutant general of the United States reports the following aggregate of enlistment for the different periods of service:
Taking this as a basis of my calculation, I have endeavored to ascertain the number of individual enlistments; that is, excluding second, third, fourth, and subsequent enlistments of the same person. The result of my investigation and estimate upon this point shows an aggregate of 2,049,969 different individuals who enlisted for greater or less periods during the war. To this number should be added the number of persons serving in the regular army and navy at the commencement of the war, viz., 16,422. So that the grand total of individual persons who entered the service during the war may be approximately stated to be 2,063,391. Up to July 1, 1882, there have been filed by army invalids, 450,890 applications for pensions. Up to the same date there have been filed 294,277 applications on behalf of the service of deceased soldiers. There have been filed by navy invalids 7,633, and by those representing deceased sailors, 3,294. This makes an aggregate of those who have applied for pension of 756,119 out of the whole number who enlisted, as before stated. As near as I can ascertain, there are about 86,800 representatives of deceased soldiers who have not yet applied for pension, and 1,000,469 survivors of the war who have not yet applied for pension, and 220,000 who died during and since the war, who left no pensionable relatives surviving them. * * The general proposition, however, is presented, with the best available information at hand, that there is a surviving soldier population of a little over ten hundred thousand, out of which claims for pension in the future may be made by those who incurred pensionable disabilities."
—In the United States special acts have, as we have said, with great frequency been passed for pensioning any person not falling within the provisions of the law in force at any given time. For instance, cap. 43, approved June 17, 1844: "Be it enacted, etc., that the secretary of war be and he is hereby authorized and directed to pay to Milly, an Indian woman of the Creek nation, and a daughter of the prophet Francis, a pension at the rate of $96 per annum, payable semiannually, during her natural life, as a testimonial of the gratitude and bounty of the United States, for the humanity displayed by her in the war of 1817 and 1818 in saving the life of an American citizen who was a prisoner in the hands of her people, and about to be put to death by them," etc. In another case Baron de Steuben was granted a pension of $2,500 a year during life, "which said annuity shall be considered in full discharge of all claims and demands whatever of the said Frederick William de Steuben against the United States." Many of these private acts granted pensions to private individuals who had, like Milly, the Creek woman, performed some act of heroism. They did not fall within the provisions of the pension laws, and form the first exceptions to the rule that in the United States there are no civil pensions. Up to 1869, so far as the writer is aware, such form the only exception. In that year (Statutes at Large, vol. xvi., p. 45), a bill was passed to increase the United States judges, and it provided, among other things, that "any judge of the United States, who, having held his commission as such at least ten years, shall, after having attained the age of seventy years, resign his office, shall thereafter, during the residue of his natural life, receive the same salary which was by law payable to him at the time of his resignation."
—Since then, a new precedent has been created as to ex-presidents' widows. First, Mrs. Lincoln was given one, then Mrs. Garfield, then Mrs. Polk and Mrs. Tyler. The life-saving department has had a pension arrangement made by law for a certain definite period. The internal revenue servants and the railway mail servants also have had endeavors for a pension system made in congress in their behalf. Employés in the quartermaster's and paymaster's departments have received them. Also nurses, and in one case the widow of a professor in the naval academy. The New York municipal police have also had a pension system introduced for their benefit, recently. Many bills have been introduced for such purposes, the most sweeping being Senator Edmunds', in the 47th congress. Its object was to allow all officers who may retire or be retired, one year's pay; after fifteen years of service, two years' full pay; after twenty years, a pension of half pay; after twenty-five years, two-thirds pay; after thirty years, three-fourths pay; after thirty-five years, four-fifths pay; and after forty years, full pay.
—The subject of civil pensions has already been discussed. It is not contended that so far any but very excusable departures from the rules thus far in force in this country have been made, but every new departure from the same should very closely examined and criticised as long as the rule remains in force. If, after a full discussion, it shall be decided to put in force a system of civil pensioning, it will be an interesting, but at the same time a dangerous, experiment.
—The existing provisions of the pension laws are too numerous to be given in this article, and the reader must be referred to the manuals prepared under the authority of the bureau. A word, however, as to the practice of the department. The applicant for a pension first sends a declaration, of which he can get a blank form from the office, giving the necessary dates and figures and circumstances, in detail. His identity must be shown by the testimony of two credible witnesses, who must appear before the officer. Then, on receiving this, the interior department makes application to the adjutant general and surgeon general or to the navy department, as the case may be, for the applicant's record and evidence as to the disability. If there be none, the applicant must obtain the affidavit of a commissioned officer who had personal knowledge of the facts. If there is no record even that there was a disability, the applicant must obtain the evidence of the surgeon by whom he was treated, and must prove that his own habits had no agency in the production of such disability. If the disability arises from disease, he must, in addition, get evidence from his physician setting forth the history of his disease and disability since its first appearance. The administrator or executor of a soldier is not entitled to arrears if the deceased had filed no application. If claimant died pending application, the pension, when granted, does not belong to the estate, but to the widow or children. If there are none, then the pension lapses, except that the expenses of the claimant's last sickness may be paid. Death is to be presumed in cases where more than two years elapse since the date of the soldier's supposed death in action. No pension in hand or to come, or in whosever hands it is, is liable to attachment, levy or seizure by or under any legal or equitable process whatever. No pensioner may have more than one pension at a time. Helplessness means (act of 1876) dependence on another, and also inability to gain a subsistence by one's own exertions. The abandonment of her minor child by the widow forfeits her title to a pension. Any pledge, mortgage, sale, assignment or transfer of any right, claim or interest in any pension, which has been or may hereafter be granted, shall be void and of no effect. No pension money will be paid to any agent or attorney of the pensioner, and no agent is to recognize any warrant or power of attorney, except in the case of insane or Indian pensioners or those under disabilities. (Act of Aug. 7, 1882.) All pensioners must have been loyal during the war of the rebellion. At the outbreak all the pensioned in other wars who were in the insurgent states were cut off, and also those in the northern states known to be disloyal. In 1867, widows who could prove their loyalty during the war were restored. A pardon by the president does not restore the right to the former or any pension. As to what constitutes disloyalty, it has been held that compulsory service with the rebels does not. Making clothes and tents for them, does. Applying to the confederate congress for a federal pension does not.
—On the next page we give a table of the pension claims filed and allowed since 1861.
—There are fifty-eight agencies in the United States. Payments are made quarterly, and there is a biennial examination of the pensioners. New York contains the most pensioners, then Pennsylvania, then Ohio; the commissioners have said that there is not a single county or parish in the United States without its pensioner. The average age of our soldiers in 1863 was only twenty-six, and so this state of affairs is likely to continue for some time. Formerly the Washington office kept an alphabetical list of the rejected and admitted pensioners and of the claims filed, but this was found very cumbersome, and now all names are indexed according to their companies and military organizations. In the course of making the change (November, 1880) more than 3,000 duplicate claims for pensions were found, and fifty-three cases in which two pensions had been granted the same person. These new records consist of 176 volumes, of 250 pages each, and have claims for pensions on account of service in 2,268 regiments, 194 battalions, 706 independent companies, 208 batteries, and 46 staff corps. Besides this, the old three-fold invalid, widows and bounty lands divisions were abolished, and everything was arranged by states. The commissioners have therefore evolved a method by which the government may be better protected from fraud, and this they submit every year to congress, which, with equal regularity, pigeon-holes it. This is to have a number of pension commissions all over the country, consisting each of one surgeon and one pension clerk, appointed from Washington, whose duty it shall be in each case to go to any place in their district from which a claim has been forwarded, and there to summon the claimant and his witnesses, and such other witnesses as they themselves may wish or as may volunteer their testimony, and to examine such evidence thus furnished, and report thereon to Washington. The advantages of this system are, that: 1. "The testimony and proceedings will be public and reliable, facilitating prompt and liberal decisions, and the treasury will be protected from fraud." The claimants' expenses will be rather diminished. 2. "The medical examination will be made by an unprejudiced government surgeon. No one will be made a victim of the ignorance, prejudice or carelessness of a neighborhood surgeon." 3. There need be no more special agents' investigations. "The publicity of the proceedings will operate to restrain fraudulent claims, and give the government a guarantee against their success." The neighbors of any claimant are likely to come forward to expose any fraud in such a matter. Now, the honest claimants who are not able to fill a want in their evidence get injured, while the dishonest ones who fill such a gap by fraud succeed. There will therefore be less perjury, forgery and false personation under such a scheme. The old, and present, scheme "provides for the settlement of claims on ex parte testimony exclusively, given by witnesses who are entirely unknown to the office, and whose affidavits are almost universally prepared by claim agents, who can receive no compensation for their services unless the claim is allowed." The examining surgeon is usually the neighborhood practitioner, whose professional interest it is to please the claimant at the expense of the government. (Commissioner's Report, 1877.)
—The following table shows the annual expenditure of the government of the United States on account of pensions, from March 4, 1789, to June 30, 1883 (by calendar years to 1843, and by fiscal years, ended June 30, from that time):
—AUTHORITIES. Army and Navy Pension Laws to 1861, Robert Mayo, M. D., 4th ed.; Mayo 8 Moulton's Treatise on the Pension Laws, Washington, 1861; A Manual of the Pension Laws of the U. S., Henry C. Harmon, Washington, 1867; A Manual of Pensions, Bounty and Pay, George W. Raff, Cincinnati, 1864; The War Claimants' Guide, George W. Raff, Cincinnati, 1866; Practice under the Pension, Bounty and Prize Laws of the U. S., Robert Sewell, New York, 1864; A Digest of the Laws of the U. S. governing the granting of Army and Navy Pensions, etc., compiled by order of the Commissioner of Pensions, Calvin B. Walker, deputy commissioner, Washington, 1881; Civil Service in Great Britain, Dorman B. Eaton, New York, 1880; The Annual Reports of the Commissioner of Pensions and the Secretary of the Interior; The Congressional Record; Dumont on Pensions, Bentham's translation.
DAVID A. WELLS, and EUSTACE CONWAY.
UNITED STATES SURPLUS MONEY
UNITED STATES SURPLUS MONEY, Distribution of, among the States. The secretary of the treasury (Ingham), in his report to congress, in December, 1829, estimated that the revenues of the government for that year would amount, including the balance on hand on Jan. 1, to $30,574,666; and the expenditures to $26,164,595, of which $9,841,011 was on account of principal and $2,563,994 on account of interest of the public debt. He also estimated that the public revenue for the next five years would be such as to leave free for application to the payment of the public debt about twelve millions yearly. The amount of debt becoming due or payable during the next five years was $48,522,869. The surplus, after paying this indebtedness, would be twelve millions. The secretary did not favor a sudden change in the tariff, but recommended such gradual changes as would reduce the revenues to correspond with the existing expenditure. President Jackson, in his message to congress in 1829, said: "After the extinction of the public debt, it is not probable that any adjustment of the tariff, upon principles satisfactory to the people of the Union, will, until a remote period, if ever, leave the government without a considerable surplus in the treasury beyond what may be required for its current service. As, then, the period approaches when the application of the revenue to the payment of debt will cease, the disposition of the surplus will present a subject for the serious deliberation of congress, and it may be fortunate for the country that it is yet to be decided. Considered in connection with the difficulties which have heretofore attended appropriations for purposes of internal improvement, and with those which this experience tells us will certainly arise whenever power over such subjects may be exercised by the general government, it is hoped that it may lead to the adoption of some plan which will reconcile the diversified interests of the states, and strengthen the bonds which unite them. Every member of the Union, in peace and in war, will be benefited by the improvement of inland navigation and the construction of highways in the several states. Let us, then, endeavor to attain this benefit in a mode which will be satisfactory to all. That hitherto adopted has, by many of our fellow-citizens, been deprecated as an infraction of the constitution, while by others it has been viewed as inexpedient. All feel that it has been employed at the expense of harmony in the legislative councils. To avoid these evils, it appears to me that the most safe, just and federal disposition which could be made of the surplus revenue, would be its apportionment among the several states according to their ratio of representation: and should this measure not be found warranted by the constitution, that it would be expedient to propose to the states an amendment authorizing it. I regard an appeal to the source of power, in cases of real doubt, and where its exercise is deemed indispensable to the general welfare, as among the most sacred of all our obligations." It thus appears that President Jackson regarded as unconstitutional the appropriation of money for internal improvements by congress, and, in view of the anticipated surplus, suggested that its distribution among the states would enable them to make such improvements, without the assistance of congress. He intimated that such a distribution would be constitutional, but if there was any doubt on this point, an amendment would remove the difficulty.
—During the session of congress of 1829-30, the duties on tea, coffee, cocoa, salt, and also on tonnage, were reduced, but the reductions were not sufficient to exhaust the surplus after the debt then maturing should be paid. In his message for December, 1830, President Jackson referred to this subject as follows: "In my first message I stated it to be my opinion that it is not probable that any adjustment of the tariff, upon principles satisfactory to the people of the Union, will, until a remote period, if ever, leave the government without a considerable surplus in the treasury beyond what may be required for its current services. I have had no cause to change this opinion, but much to confirm it."
—The secretary of the treasury, in his report for 1832, says: "After Jan. 1, 1833, no part of the public debt, except the remaining fragments of the unfunded debt, of which only small portions are occasionally presented, will be redeemable before the following year; and, though there will be in the treasury during the year ample means to discharge the whole debt, they can be applied only to the purchase of stock at the market prices." The whole public debt was virtually extinguished by Jan. 1, 1835, on which date the balance of available funds in the treasury was $5,586,282. It was estimated that for the year 1835 the receipts from all sources would be twenty millions: but the actual receipts were $35,430,087, receipts from the sale of the public lands during that year having greatly increased. In 1834 these receipts were only $4,857,600, but in 1835 they were $14,757,600. The receipts from the sales of public lands in 1834-5-6 were $44,492,381, and the total receipts from this source, from 1796 to 1834, had been but $44,595,000. The balance left in the treasury at the beginning of the year 1833, was $2,011,777; in 1834, $11,702,905, in 1835, $8,892,858, and on Jan. 1, 1836, $26,749,803.
—In view of this large balance, and its probable large increase by Jan. 1, 1837, the act of June 23, 1836, was passed, authorizing the distribution of the surplus among the states. As has been seen, this method of disposing of the surplus was favorably suggested by President Jackson in his message for 1829, and again indorsed by him in his message for 1830. In 1836, however, the views of the president appear to have changed. Secretary Woodbury, in his report for 1835, disapproved of the distribution of the surplus among the states, intimating that it was unconstitutional. He said: "The people themselves, it is believed, can best manage all their own money, which they and their representatives think may not be wanted for public purposes; and it would seem to be far preferable to leave it originally in their possession, than to withdraw it for the expensive operation of returning it substantially to the place whence it came, and that probably in a manner not conformable to the constitution, till after the delay of procuring an amendment to it; and even then not expedient, because calculated injudiciously to strengthen the general government, and to render the states more dependent on a great central power for yearly and important resources. Indeed, a reduction in the price of public lands, whose unusually large sales the past year are the source of most of the present surplus, would, if their sales should not thereby be much increased, seem another mode far more natural to obviate the present difficulty. But, before adopting it, this and various other considerations must be weighed, and it must be fully considered whether all the revenue anticipated from them at their present prices would not be necessary, after the great reductions in the tariff in 1842, and whether a resort to a higher tariff would not then become indispensable, if the average receipts from lands or customs should, from any new legislation, become then much diminished below the estimates which have been submitted on the present occasion." This change in the opinion of the administration from 1829 to 1836 was probably owing to the hostility of the president to the bank of the United States, resulting in the veto of the bill for renewal of its charter on July 10, 1832, and the removal of the United States deposits from the bank by order of the secretary of the treasury of Sept. 26, 1833. (See BANKING IN THE UNITED STATES.)
—In 1835 and 1836 the revenues of the government were deposited with the state banks, the favorites of the administration, and the distribution of the surplus at this time among the states would have deprived these banks of the deposits. In his message to congress of 1836, after the passage of the act of June of that year, regulating the public deposits, and providing at the same time for the distribution of the surplus in the treasury on Jan. 1, 1837, President Jackson said: "Without desiring to conceal that the experience and observation of the last two years have operated a partial change in my views upon this interesting subject, it is nevertheless regretted that the suggestions made by me in my annual message of 1829 and 1830 have been greatly misunderstood. At that time the great struggle was begun against that latitudinarian construction of the constitution which authorizes the unlimited appropriation of the revenues of the Union to internal improvements within the states, tending to invest in the hands, and place under the control, of the general government, all the principal roads and canals of the country, in violation of state rights, and in derogation of state authority. At the same time the condition of the manufacturing interest was such as to create an apprehension that the duties on imports could not, without extensive mischief, be reduced in season to prevent the accumulation of a considerable surplus after the payment of the national debt. In view of the dangers of such a surplus, and in preference to its application to internal improvements, in derogation of the rights and powers of the states, the suggestion of an amendment of the constitution to authorize its distribution was made. It was an alternative for what were deemed greater evils—a temporary resort to relieve an overburdened treasury, until the government could, without a sudden and destructive revulsion in the business of the country, gradually return to the just principle of raising no more revenue from the people, in taxes, than is necessary for its economical support. Even that alternative was not spoken of but in connection with an amendment of the constitution."
—In the meantime Jackson, in his attack on the bank of the United States, had been bitterly opposed by Clay, Calhoun, Webster, and a majority of both houses of congress, by whom many of his acts were regarded as an exercise of arbitrary power. In his first message in 1829 he recommended that the bank of the United States should not be rechartered. In January, 1832, the bank's memorial for recharter was presented both in the house and senate, and, after some debate, the bill for the recharter passed both houses. This bill was vetoed, on July 10, by the president, and the recharter of the bank was made one of the issues of the campaign of 1832. Henry Clay was defeated, and Jackson reelected, and the latter claimed that the result was an indorsement of his policy against the bank.
—During the summer of 1832, Jackson, as a measure of hostility against the bank, conceived the project of the removal of the United States deposits. Benton, in his "Thirty Years' View," (vol. i., p. 377), says: "General Jackson was not the man to tolerate these illegalities, corruptions and indignities. He therefore determined on ceasing to use the institution any longer as a place of deposit for the public moneys; and accordingly communicated his intention to the cabinet, all of whom had been requested to assist him in his deliberations on the subject. The major part of them dissented from his design; whereupon he assembled them on the 22d of September, and read to them a paper containing his views on this subject. This paper concludes as follows: 'Under these convictions he feels that a measure so important to the American people can not be commenced too soon; and he therefore names the first day of October next as a period proper for the change of the deposits, or sooner, provided the necessary arrangements with the state banks can be made.' "
—Secretary Duane refused to carry out the wishes of the president without a previous reference to congress. Roger B. Taney, then attorney general, was made secretary of the treasury, and issued the order for removal of the deposits on Sept. 26, 1833. The opponents of the administration, looking at the surplus revenue, regarded the propositions made for distribution of the surplus among the states favorably, as tending to deprive the president of a portion of an immense patronage.
—The deposit of the public money in the pet banks had been followed by great financial distress, continuing during the year 1834; and previous to and during that year propositions were frequently made in the public press for distribution of the surplus revenue among the states as a measure of relief. These propositions were first in the form of a distribution of the revenue from public land, then a distribution of the public lands themselves, and finally the distribution of both land and customs revenues.
—During the session of 1835, on motion of Mr. Calhoun, a select committee, consisting of Calhoun, Webster, Benton, Bibb, Southard and King, were appointed to inquire into the extent of executive patronage, the increase of public expenditures, and the number of persons employed or fed by the executive government. The committee assumed that there would be an annual surplus of nine millions for the next eight years. It regarded the disposal of this surplus as a problem to be solved with great difficulty, but one which was important to determine, lest the executive should greatly increase his power by depositing the public funds with the favorite banks. The committee accordingly "reported a resolution so to amend the constitution that the money remaining in the treasury at the end of each year till Jan. 1, 1843, deducting therefrom the sum of $2,000,000 to meet current and contingent expenses, shall annually be distributed among the states and territories, including the District of Columbia; and, for that purpose, the sum to be distributed to be divided into as many shares as there are senators and representatives in Congress, adding two for each territory and two for the District of Columbia; and that there shall be allotted to each state a number of shares equal to its representation in both houses, and to the territories, including the District of Columbia, two shares each. Supposing the surplus to be distributed should average $9,000,000 annually, as estimated, it would give to each share $30,405, which, multiplied by the number of senators and representatives from a state, will show the amount to which any state will be entitled." This resolution was opposed by Benton, who represented the administration in the senate. He argued that the customs revenues could be largely reduced by changes in their methods of collection; that the revenues from the sale of land could be made to disappear by selling these lands at nominal prices to the people. If, after this, there should still be a surplus, he advocated its use in the construction of fortifications to protect the coasts and frontiers of the country. The proposition of the committee to amend the constitution to authorize the distribution was never brought to a vote. In the spring of 1836, the following paragraph appeared in the "Philadelphia National Gazette": "The great loss of the bank has been in the depreciation of the securities, and the only way to regain capital is to restore their value. A large portion of them consists of state stocks, which are so far below their intrinsic worth that the present prices could not have been anticipated by any reasonable man. No doubt can be entertained of their ultimate payment. The states themselves, unaided, can satisfy every claim against them; they will do it speedily, if congress adopt the measures contemplated for their relief. A division of the public lands among the states, which would enable them all to pay their debts, or a pledge of the proceeds of sales for that purpose, would be abundant security. Either of these acts would inspire confidence, and enhance the value of all kinds of property."
—A bill for the distribution of the revenues was introduced in the senate, and supported both by Mr. Clay and Mr. Webster. It was opposed by Mr. Benton, who introduced an antagonistic bill devoting the surplus revenues to public defenses. The bill passed the senate by a vote of 25 to 20. Being sent to the house for concurrence, it became evident that it could not pass that body, as a majority of its members regarded the project in its form of a distribution as unconstitutional. The friends of the measure in the senate determined to change its form so as to remove the difficulty. Instead of a distribution it was to be a deposit, and the faith of the states was to be pledged to the return of the money.
—There was another bill in the senate for regulating the deposit of public moneys with the state banks, and the proposition in the form of a deposit with the states became sections thirteen and fourteen of this bill, which passed with only six dissenting votes. It passed the house by a large majority, 155 to 38. In the form of distribution it had no chance of passing the house. "It was approved by the president," Benton says, "but with a repugnance of feeling and a recoil of judgment which it required great effort of friends to overcome." Probably, if he had returned it with his veto, it would have had two-thirds of each house in its favor.
—The following is a copy of the 13th and 14th sections of the act of June 23, 1836: "An act to regulate the deposits of the public money. Section 13. That the money which shall be in the treasury of the United States, on the first day of January, eighteen hundred and thirty-seven, reserving the sum of five millions of dollars, shall be deposited with such of the several states, in proportion to their respective representation in the senate and house of representatives of the United States, as shall, by law, authorize their treasurers, or other competent authorities, to receive the same on the terms hereinafter specified; and the secretary of the treasury shall deliver the same to such treasurers, or other competent authorities, on receiving certificates of deposit therefor, signed by such competent authorities, in such form as may be prescribed by the secretary aforesaid; which certificates shall express the usual and legal obligations, and pledge the faith of the state for the safe keeping and repayment thereof, and shall pledge the faith of the states receiving the same, to pay the said moneys, and every part thereof, from time to time, whenever the same shall be required by the secretary of the treasury, for the purpose of defraying any wants of the public treasury, beyond the amount of the five millions aforesaid: Provided, that if any state declines to receive its proportion of the surplus aforesaid, on the terms before named, the same shall be deposited with the other states, agreeing to accept the same on deposit in the proportion aforesaid: And provided, further, that when said money, or any part thereof, shall be wanted by the said secretary, to meet appropriations by law, the same shall be called for, in ratable proportions, within one year, as nearly as conveniently may be, from the different states with which the same is deposited, and shall not be called for, in sums exceeding ten thousand dollars, from any one state, in any one month, without previous notice of thirty days for every additional sum of twenty thousand dollars which may at any time be required. Section 14. And be it further enacted, That the said deposits shall be made with the said states in the following proportions and at the following times, to wit: one-quarter part on the first day of January, eighteen hundred and thirty-seven, or as soon thereafter as may be; one-quarter part on the first day of April, one quarter part on the first day of July, and one quarter part on the first day of October, all in the same year."
—In his message for December, 1836, President Jackson objected to the method of distribution provided in the law, viz., according to representation, and advocated a method founded on the population of each state.
—On Jan. 1, 1837, the surplus in the treasury, after reserving the five millions required by law, was $37,468,859.97, and the apportionment among the several states is shown by the following table:
The table on preceding page, with the exception of the last column, is copied from the report of Mr. Woodbury to congress, of January 3, 1837.
—It will be noticed, that, by the law authorizing the deposit of the surplus, each state was required to authorize its treasurer by law to receive the deposit and to give certificates of deposit therefor. The necessary forms for carrying out this plan were prepared by the secretary of the treasury, and may be found in Ex. Doc. and Reports of Committees, 1st Sess. 25th Congress, Doc. No. 30.
—All of the states named in the foregoing table of apportionment passed laws authorizing the receipt of the deposit, and some took the opportunity of instructing their representatives to protest against, or to endeavor to obtain changes in, some of the features of the law. The legislature of the state of New Hampshire, by resolution, declared that any distribution of surplus was unconstitutional. They instructed their delegates to vote for a reduction of revenue and against any measure for relinquishment, by the United States, of the sums on deposit with the states. The legislature of the state of Indiana requested its senators and representatives to use their exertions to procure the passage of an act of congress for the relinquishment on the part of the United States of all claims of surplus revenue deposits under act of June 23, 1836. These resolutions show conclusively that these states regarded the money received as a deposit to be likely to be recalled, and not as a gift.
—The first three installments were paid to the states as nearly as possible on the following dates, viz.: one-fourth on Jan. 1, 1837, one-fourth on April 1, and one-fourth on July 1, following. The sums were paid by transfers from the deposit banks. On Nov. 1, 1836, the secretary of the treasury notified the banks of the requisition which would be made upon them to meet the installments due, on Jan. 1, to the several states. On Feb. 18, 1837, he gave similar notification in reference to the next three installments. Forms of the letters sent to each of the deposit banks are given, also, in Document 30, Sept. 26, 1837, before referred to. The installments payable on Jan. 1, April 1, and July 1, were transferred to the states on or near those dates. They amounted in all to $28,101,645, and proportionate amounts were deposited with and receipted for by each state.
—In May, 1837, the financial pressure became so great that the banks generally suspended specie payments. The fifth section of the act of June 23, 1836, for regulating deposits of public money, provided that no bank shall be selected or continued as a place of deposit of public money which shall not redeem its notes and bills on demand in specie. On May 1, 1837, the number of the deposit banks was 88, distributed by states as follows:
The number of deposit banks on Nov. 1, 1836, was 89. Their capital was $77,576,449; United States deposits, $49,377,986; other deposits, only $26,573,479.149
—The difficulties arising from the necessity of discontinuing as public depositories those banks which refused to pay specie, made it apparent that it would be very inconvenient, if not impossible, to transfer the fourth installment of the deposit with the states. Further legislation was deemed necessary in this emergency, and an extra session of Congress was called by President Van Buren. Congress met on Sept. 4. Among other reasons for the extra session, the president in his message mentioned, that "questions were also expected to arise in the recess in respect to the October installment of those deposits, requiring the interposition of congress."
—Secretary Woodbury, in a report made on the safe keeping of the public moneys, on Sept. 23, in answer to a resolution of the house of representatives, said. "This last mode [viz., deposit with selected state banks] ceased by operation of law during the last spring, except in relation to five or six deposit banks which have continued to redeem their notes in specie. The direct losses sustained under it appear to be large. But, in the end, they are not considered likely to amount to anything, though the disappointments, delays and injuries under it, must, it is manifest, in several cases be great. The indirect losses to the public creditors and contractors have been considerable, and are difficult to be computed." From this it will be seen that only six out of the eighty-eight banks designated as public depositories on May 1, could be used as such in September.
—Benton says, in relation to these payments: "The deposit with the states had only reached its second installment when the deposit banks, unable to stand a continued quarterly strain of near ten millions to the quarter, gave up the effort, and closed their doors. The first installment had been delivered on Jan. 1, in specie or its equivalent; the second in April, also in valid money; the third one, demandable on July 1, was accepted by the states in depreciated paper; and they were very willing to receive the fourth installment in the same way."
—The secretary's report shows that there would be a deficiency in the revenues to meet expenditures of over ten millions of dollars, which would render it necessary either to recall some of the money deposited with the states, or to postpone the payment of the fourth installment due on Oct. 1. The secretary mentioned the inconvenience of paying the fourth installment, arising from the difficulty of transferring from the west and southwest, where the money received from sales of public lands had accumulated. The lack of revenue was his principal reason for urging the withholding or postponement of the fourth installment. Believing the money would be immediately necessary to the government, he thought it would be less inconvenient to withhold payment than to pay and immediately recall.
—On Sept. 11, 1837, Mr. Silas Wright, from the senate committee on finance, reported a bill which provided "that the transfer of the fourth installment of deposits directed to be made with the states, under the thirteenth section of the act of June 23, 1836, be and the same is hereby postponed until further provision by law." The bill was brought up for consideration on the 14th, when he said, that, according to the report of the secretary of the treasury of the 28th ult., there was then in the treasury subject to draft, available and unavailable, but $8,100,000. If the expenses of the month of September were deducted, which were estimated at two and a half millions, there would be in the treasury, subject to draft on Oct. 1, less than six millions without the transfer of a dollar to the states toward the October installment. If the October installment was to be transferred to the states, all the means in the treasury on the day when that installment was made transferable would not be equal to two-thirds of the amount, and money must be borrowed upon the credit of the United States to supply the deficiency. The largest portion of the funds in the treasury was wholly unavailable; they were in the western and southwestern banks, and experience had already shown, that the drafts of the treasurer upon these banks would not be received in payment by the public creditors, neither would the states, other than those in which the banks were located, take these drafts, and give their obligations for a repayment of the amount in money in pursuance of the provisions of the deposit law. The transfer to the states, therefore, could not be made, even to the amount of the funds in the treasury subject to draft, by reason of the character of the funds to be drawn upon. The whole means in the treasury on the first day of October next would be from three and a half to four millions less than the transfer required. If congress should insist upon this transfer, it must authorize a loan of money upon the public credit in order that that money when loaned, may be deposited with the states for safe keeping. Mr. Webster thought that it was a mere question of convenience, the distributed money would go to all the people, and any deficiency in the treasury must be supplied by all the people. He thought the most convenient way was to pay the installment, and provide for the necessities of the treasury by other means. Mr. Preston opposed the bill on the ground that many states had already appropriated the money, and had undertaken public works on the strength of it, etc. Mr. Crittenden, of Kentucky, opposed it on the same ground. By other senators the deposit act was treated as a contract which the United States was bound to carry out. Mr. Buchanan proposed an amendment, the effect of which, it was urged, was to change the character of the deposit act and make it a distribution measure. By the act it was the duty of the secretary of the treasury to call for a return of the deposit when needed by the federal treasury. The amendment superseded this, and enacted that the deposits should remain until called for by congress. Mr. Niles pointed out the effect of this amendment. He said the majority of those who voted for the deposit act did so because it was a deposit and not a distribution, and merely withdrew the public moneys from the banks and deposited them with the states. The amendment would change the deposit to a loan, or, more properly, a grant, to the states. Mr. Buchanan's amendment, however, passed by a vote of 32 to 12, and thus the recall of the deposits already made was taken from the hands of the secretary and placed with congress.
—In the house of representatives the disposition to regard the deposit act as a contract was even stronger than in the senate. Mr. Caleb Cushing argued that it had all the features of a contract, that it was a "contract of deposit." It was a contract in honor, and, as far as there could be a contract between the United States and the states, a contract in law. On the other hand, it was argued very forcibly that neither in honor not in law was there any reason for paying the fourth installment when there was no surplus in the treasury. Mr. Halsey, on the same side, said, "In reference to the deposit act, if a contract, it was a contract based alone upon the distribution of an existing surplus, not wanted for the ordinary or extraordinary expenditures of the government. The structure was reared upon that rock, and was so understood at the time the statute was enacted. The money to be distributed was out of a surplus fund. Where was there a surplus fund? There was none." The opponents of the bill, apart from the argument of contract, mainly founded their arguments on the fact that the states had been induced to undertake public works and other engagements by the promise of the money, and the inconvenience to which they would be put by withholding the fourth installment. It was justly observed by their opponents, that the states should have regulated their action by the actual terms of the law of congress, to which they agreed when they accepted the deposits. The opposition to the bill was persistent, the debate was long, and many members were participants, among whom were Adams of Massachusetts, Fillmore and Sibley of New York, Bell of Tennessee, and Wise of Virginia. It finally passed the house by the close vote of 119 to 117. A motion to reconsider was made by Mr. Pickens, and carried. On reconsideration, Mr. Pickens moved to amend so that, instead of postponing the payment indefinitely until further action by congress, it be postponed to Jan. 1, 1839, a day certain. This amendment was agreed to and concurred in by the senate, and the bill finally passed in that form.
—The effect of the postponement of the payment to a fixed day has been held by some to bind the United States to such a payment; and the making the withdrawal of the first three installments received by the states dependent on an act of congress, has, by the same kind of construction, been regarded by some as altering what was originally a deposit to a gift.
—As Jan. 1, 1839, approached, it became apparent that there would be no funds in the treasury available for the deposit of the postponed installment. The secretary of the treasury, in his report for December, 1838, stated that the available balance on Jan. 1, 1839, would be $2,765,342 only, and at the date of the report the treasury notes outstanding amounted to over $7,754,560. He said, "It will be perceived by these statements that no surplus balance will probably exist either on Jan. 1, 1839, or during that year, to be deposited with the several states for safe-keeping as a fourth installment under the deposit act of June 23, 1836." Since Jan. 1, 1839, there has never been a time when the United States had in its treasury a surplus over and above all its debts and estimated expenditures. The amount deposited in the first three installments with the states, has always been carried as funds of the treasury unavailable; and, under the terms of the acts relative to its deposit, it could now be recalled at any time by an act of congress.
—General John A. Dix, secretary of the treasury, in a letter to the chairman of the committee on ways and means, of Jan. 18, 1861, called attention to the fact that "there are deposited with twenty-six of the states, for safe-keeping, over twenty-eight millions of dollars belonging to the United States, for the payment of which the promise of these states is pledged by written instruments on file in this department. The annual statement of receipts and expenditures for the year ending June 30, 1860, represents this amount as part of 'the balance in the treasury' on that day. * * I refer to this final resource as an available one, should the public exigencies demand it. It is not doubted that the greater portion of the amount so deposited would be promptly and cheerfully paid should an exigency arise involving the public honor or safety. If, instead of calling for these deposits, it should be deemed advisable to pledge them for the repayment of any money the government might find it necessary to borrow, loans contracted on such a basis of security, superadding to the plighted faith of the United States that of the individual states, could hardly fail to be acceptable to capitalists." (See UNITED STATES NOTES.)
—It is easy to see that there can be no constitutional authority for the claim that this money, already in the possession of the states, irrevocably belongs to them, since, according to the constitution, it is still in the treasury of the United States. The only method of taking money out of the treasury is by an appropriation by congress, upon which the secretary of the treasury is authorized to issue his warrant, and no such method was ever adopted in relation to this money. The whole object and intention of the act was to deposit the surplus, not distribute it, as it has been seen that a distribution act was known at the time to be unconstitutional. Upon the delivery of the money the treasurer of each state gave to the United States, not a receipt, but a certificate of deposit, subject to the future requisition of the government. The amount of the deposit has always been held among the "unavailable funds of the treasury," and is annually so reported among other like funds, as may be seen by reference to page 383, Finance Report, 1882, and previous reports. But whether a deposit or a distribution, no constitutional method has been taken to authorize the payment of the money out of the treasury. Moreover, it was a deposit of surplus and surplus only, and when the surplus did not exist was suspended by act of congress until a certain date; and, when at that date there was still no surplus, the deposit was again withheld by the executive, and, on the same principle, has been withheld ever since. Congress at any time can authorize the withdrawal of the whole amount from the states, and it doubtless could authorize the perpetual withholding of the fourth installment in view of the fact that at some time in the future, after the national debt is paid, there may be a surplus similar to that which existed Jan. 1, 1877.
—Benton, in his Thirty Years' View, thus refers to the use made of the deposits by the different states: "All sorts of plans were proposed for the employment of the money; and combinations, more or less interested or designing, generally carried the point in the universal scramble. In some states a pro rata division of the money per capita was made; and the distributive share of each individual, being but a few shillings, was received with contempt by some, and rejected with scorn by others. In other states it was divided among the counties, and gave rise to disjointed undertakings of no general benefit. Others, again, were stimulated, by the unexpected acquisition of a large sum, to engage in large and premature works of internal improvement, embarrassing the state with debt, and commencing works which could not be finished."
—A claim has been made within a few months (1884) upon the secretary of the treasury, under authority of an act passed by the legislature of the state of Virginia for the deposit of the amount of the fourth installment ($732,809,33) under the act of June 23, 1836. A similar claim has also been made by the treasurer of the state of Arkansas, through Senator Garland of that state, to which the secretary replied, on Oct. 8, 1883: "I find that the tradition of this department for over a dozen years has been to consider that act as obsolete, or at least not imperatively effective during a season of large public federal indebtedness. I can for the present follow in the path of my predecessors in the office of the secretary of the treasury. It is not improbable that I may ask the attention of congress to the matter in the next annual report from this department."
JOHN JAY KNOX.
UNIVERSAL SUFFRAGE. (See SUFFRAGE.)
UNIVERSITIES. Purport of this Article. In Europe the university has its definite character, well understood by educated men, although it is not easy to define its functions within the limits of a single sentence. In the United States, on the contrary, the word is used carelessly, as if it were quite unimportant to remember its real significance. Sometimes it is applied to a strong institution which combines the four traditional faculties; and sometimes to schools of a very low grade, or to those which promote but a single department of knowledge. There are indications in many parts of this country that the true idea is hereafter to be more clearly recognized; generous gifts for such purposes have been made by states and individuals; and legislation has been sought in order that the university may hereafter be developed on a proper basis. In this epoch of munificent foundations, it is of the utmost importance that correct ideas should prevail among us; for, otherwise, the United States will remain behind the other countries of christendom in the highest department of education.
—Meaning of the Word. Something may be gained by retrospect. The word university, which, in these days and in all the modern languages of Europe, has an educational meaning, was primarily a word of wider use. In its Latin origin it signified the entirety, the whole, the unit made up of individuals; thus universitas incolarum oppidi meant the community—universitas canonicorum, the company of canons. It was nearly equivalent to our word society or corporation. Gradually it was restricted to a society of teachers and scholars, and more especially a society in which several faculties were combined. Hence it came to signify an association in which all branches of knowledge were taught, especially the highest educational body in a city or country—the supreme "high school." Sometimes universitas pointed to the governing authority of the corporation, while in contrast studium generale indicated its teaching function. Societas magistrorum et discipulorum was early employed as an almost synonymous phrase. In modern times the buildings, libraries, museums and other possessions of the corporation are often spoken of as the university. But in all legitimate uses of the word the idea has never been lost sight of, that the university is an organization for advanced instruction in the chief departments of knowledge; it is a high school in which the principal arts and sciences are taught. An essential element in its plan is comprehensiveness, or breadth; it is a unit made up of many constituents; a confederation under a sovereignty.
—To be distinguished from other Words. Hence it is acknowledged by the best authorities, that a single faculty, whether of law, medicine, theology or philosophy, does not constitute a university. Such a faculty, however far its instructions may be carried, is too narrow to claim legitimately the title which belongs to a different and broader organization. Universities must also be distinguished from learned societies (like the Royal society, the French institute, the American academy, etc.), in which no instruction is offered; and they should never be confounded, as they often are in this country, with colleges (corresponding to the German gymnasia, or the French lycees), in which youth are trained by well-known methods for the higher work of more advanced students. The university (like Oxford and Cambridge) may well include one or more colleges in its organization, as the greater includes the less, but the higher authority of the greater should always be recognized—as it is, for example, by such titles as these: Trinity college in the university of Dublin; the university of McGill college in Montreal; the college of agriculture in the university of California; and Adelbert college in the Western Reserve university at Cleveland.
—In every true university, all departments of learning should find a congenial home as members of one family governed by one authority. Within their precincts, pupils trained for freedom by preparatory discipline should be encouraged to go forward in the pursuit of science, as deep as they will, as far as they can. The dangerous effects upon the mind of an individual, of his devotion to a single subject, will be counteracted by living among men who attach equal, if not superior, value to very different studies. With occasional exceptions, it may be stated, as a rule, that the self-taught man suffers from disadvantages which the society of other scholars tends to remove. Association in studies of a superior character, under some recognized combining and coordinating authority, is the most efficient method which is known for the development of talents, and also for the promotion of knowledge. Hence, under all phases of organization, the purpose of the university has remained the same; namely, to collect, weigh, perpetuate and disseminate systematic knowledge on important subjects, by the employment of eminent scholars in the instruction of properly qualified youth.
—Origin of Universities. It is commonly said that universities had their origin in the thirteenth century, but this date can not be considered exact, nor can any one foundation claim unquestioned priority. The faculty of philosophy can be traced as far back as the sixth century when its courses included the trivium (grammar, logic, rhetoric), and the quadrivium (music, arithmetic, geometry, astronomy), the seven liberal arts, of which a liberally educated man should be the master (artium magister). A mnemonic hexameter150 thus recalls the sequence:
GRAMM. loquitur; DIA vera docet; RHET. verba colorat;
In the eleventh and twelfth centuries, when the dawn of better things began to follow the mediæval darkness, schools of law grew up (as at Bologna), and of medicine (as at Salerno), and of theology in the monastic foundations. The first clear indications of the general study of philosophy are seen in Paris, where at length the four faculties began to co-operate in the government of students, and where, in 1209, the word university was employed in connection with the affair of Amaury de Chartres.151 It is found in use, a few years later, at Oxford, where an aggregation of colleges had been growing up for many years, perhaps (though not certainly, nor even probably) since the days of King Alfred. The university of Paris early exerted an influence upon the organization of other high schools. Its methods, its regulations, its usages, were adopted in distant countries, and may now be traced in the history of English, Scotch, German and American foundations.
—Modern Notions of the University. From this retrospect, let us turn to some of the modern statements of the proper scope of a university. Discussions on this subject have been rife in Germany, France and Italy, but for our purposes citations will only be drawn from British writers: for it is on the basis of English educational experience that American high schools have been organized.
—In an article which was published in October, 1837, by Sir William Hamilton, the Scotch philosopher, the following remark is found: "We shall find no difficulty in proving that university, in its proper and original meaning, denotes simply the whole members of a body (generally incorporated) of persons teaching and learning one or more departments of knowledge;152 and not an institution privileged to reach a determinative circle of sciences, and to grant certificates of proficiency (degrees) in any fixed and certain departments of that circle (faculties)."
—In his efforts for the foundation of a Catholic university in Ireland, John Henry Newman, now cardinal, published, in 1852, a series of "Discourses on the Idea of a University," which begin with this sentence: "The view taken of a university in these discourses is the following: That it is a place of teaching universal knowledge. This implies that its object is, on the one hand, intellectual, not moral; and on the other, that it is the diffusion and extension of knowledge rather than the advancement. If its object were scientific and philosophical discovery, I do not see why a university should have students; if religious training, I do not see how it can be the seat of literature and science."
—In 1868, during the discussions which related to the reorganization of Oxford, Goldwin Smith, then about to withdraw from his connection with that university, wrote as follows: "Experience seems to show that the best way in which the university can promote learning and advance science is by allowing its teachers, and especially the holders of its great professorial chairs, a liberal margin for private study; by this, by keeping its libraries and scientific apparatus in full efficiency and opening them as liberally as possible, by assisting, through its press, in the publication of learned works which an ordinary publisher would not undertake, and by making the best use of its power of conferring literary and scientific honors."
—While the proposal was under consideration to establish the Victoria university in Manchester (in 1882), Professor A. W. Ward brought forward some interesting evidence from the German renascence, saying, among other things: "The renascence age was in its way singularly alive to the uses of associated study; and if I may speak of different times, I may say in passing that there is no side of modern university life better worth not only preserving, but developing, than that of combination in study. Between teachers and learners, the laboratory and the seminary; among learners, their own associations connected with the studies of their academical life—are the real and necessary supplements of the lecture room." And again: "A well-organized system of university education should carefully lead from a common basis of sound general training to the several main branches of study, and in these again leave room for the closer pursuit of special lines of research."
—In a consideration of the "Future of English Universities," Professor James Bryce (1883) urges that these foundations should aim to attract and educate the whole nation [meaning all classes of the nation]. Secondly, he argues that "it is their business to offer to all comers the best possible teaching on every subject—that is, to attract the most learned, skillful and energetic men, give them a platform to speak from, set them to teach, both by public oral instruction and by showing pupils how to study, and give them every motive of honor and interest for doing their best as teachers." Thirdly, he speaks of what can be done for the advancement of letters and sciences; and finally, he calls attention to the importance of "bearing a part in movements for improving the education and raising the culture of those who can not come to the university as students."
—This modern conception of the university is most completely worked out in the German empire and in Austria, where, under the control of each state (Austria, Prussia, Baden, Saxony, etc.), the system of public instruction is crowned by one or more universities. Those Germans only can gain access to the lecture rooms who bring the certificates of thorough preparatory discipline, though foreigners are welcomed on terms less rigid. The ultimate authority is the government, which is bound to supply the requisite financial support, has the appointment of professors, and prescribes the general regulations. But within these limitations the professors are free to give such instruction and by such methods as they think wise, and their wishes are usually, if not always, considered by the sovereign authority in the state. In fact, the professorships make the university. As a rule, the universities have four faculties—philosophy, law, medicine and theology. Sometimes there are two divisions—Catholic and Protestant—in the faculty last named; and, in a very few instances, the faculty of philosophy has been subdivided, but the general sentiment at the present time is adverse to such sections.
—The universities of Switzerland, Sweden, Norway, Holland, Russia, etc., are largely influenced by the example of Germany and Austria. The development of universities in England has been quite different. Oxford and Cambridge have perpetuated the idea of collegiate discipline under university control; but, whatever may be the nominal rule, actually the colleges control the university. The Scotch universities have other peculiarities. Ireland has still a different system. France, again, has an organization of its own. Until 1875 (when a law was passed making university education free), there was but one university in France, and that had control, under the government of the state, of all the faculties. It has lost its exclusive powers, but is still an administrative, teaching and examining authority, with jurisdiction over the public foundations, not alone in Paris, but throughout the state.
—The Essentials of a University. Gathering up the experience of the past, and comparing it with what is now in progress, it is safe to say that these are the essentials of a university which shall be worthy of its noble name. The first requisite is a superior staff of teachers—men gifted with unusual powers, proficient in particular departments of learning, trained to habits of exact inquiry, and skilled in the art of presenting what they know. It is the business of such men to inspire as well as to inform their pupils; to show the right method of study, as well as to bring forth ascertained results. This function is best exercised by meeting students face to face. A library can never take the place of an assembly of living teachers, though books are made efficient by the teacher's presence. Even in the advancement of knowledge, experience has shown that the most successful agents are superior teachers engaged in the tuition of superior scholars. The university must therefore, in the second place, bring together a company of pupils qualified to profit by the guidance of the professors. For both, in the third place, books, collections, instruments and buildings must be liberally provided. Fourthly, examinations must be held, in order to ascertain what progress has been made in study. The bestowal of academic degrees and prizes should be made to stimulate intellectual exertion, and to protect the public against pretentious ignorance. In the fifth place, universities may be called upon to pronounce opinions for the benefit of the public upon important matters in dispute. Sixthly, universities should promote the publication of learned treatises which would not otherwise see the light, either by the maintenance of a printing press, or by giving their corporate sanction to works of unusual importance.
—University Education in America. The condition of university education in America can not be understood without reference to our history. The earliest settlers in New England and in Virginia brought with them the idea of a liberal education as it was provided at the beginning of the seventeenth century by the English universities. At least ninety university men had immigrated to New England prior to 1648, about three-fourths of them being from Cambridge, and one-fourth from Oxford.153 At that period in England college life completely overshadowed university life. Residence within academic walls, tutorial discipline, ecclesiastical obligations, were much more important elements in the system than the bringing together of eminent professors and requiring attendance upon their lectures. Harvard, Yale, and William and Mary, the three foundations of the seventeenth century, were colleges in the definite and restricted English sense, though they exercised the right to confer degrees, even in faculties where no instruction was provided. Their younger sisters, in New York, New Jersey, Pennsylvania, New Hampshire and other states, were planned upon the New England model. Down to the close of the revolutionary war the highest schools of the colonies were colleges, and nothing but colleges. The year of the peace, 1783, was marked by the foundation of a medical faculty in connection with Harvard college, but it was more than thirty years before the faculties of law and theology were added. In New Haven, also, the medical faculty was the first addition to the college faculty, in 1813, and several years later came the faculties of theology and law. Gradually the college faculties of Harvard and Yale have been greatly expanded, and now correspond closely with the German faculties of philosophy, although engaged in the instruction both of graduate and undergraduate students. It thus appears that the two foundations which have become at the present time the most completely organized universities in this country, include a group of faculties grafted upon a college stock. The same mode of development is in progress elsewhere, with more or less success. For want of a better name, this type may be called "the collegiate university." As the foundations were laid in the interests of the church, the term ecclesiastical university might be thought more appropriate. It is still the form of development preferred by many of those who have watched the steady and successful growth of the older institutions.
—But it is not the only type. As early as 1812, the state of Maryland authorized the college of medicine (incorporated four years before) to annex to itself "the other three" colleges or faculties, viz., law, divinity, and arts and sciences. Of these faculties two have continued until now. Upon a similar plan, in 1826, the university of Virginia was organized by Thomas Jefferson, who disregarded the historic foundation of William and Mary for an institution of much broader scope. He brought out the continental notion of a university as quite distinct from the college. He did not favor the ecclesiastical organization which prevailed in the original American establishments; but induced the state, as a purely civil government, to give name, funds and authority to the university of Virginia. The success of this institution had much influence, especially in the new states, where, however, the traditions of New England were still powerful. Thus the second type, "the state university," has been developed in Michigan, Wisconsin, California and many other parts of the Union. The bestowal of public lands for university education has greatly helped this class of institutions, but for a long time to come there is likely to be friendly rivalry between the advocates of colleges under ecclesiastical or denominational control and the friends of freer and more comprehensive universities under legislative control.
—A third type of university organization is beginning to appear, quite distinct from the historic collegiate or the modern state universities. Individuals are giving large sums of money to endow universities, organized under special acts of incorporation more or less private in their character. The gift of Rich, in Boston; of Cornell, in Ithaca; of Packer, in Bethlehem; of Johns Hopkins, in Baltimore; and recently of Tulane, in New Orleans, are examples of this tendency. The large funds thus bestowed, at a period when the country is awakening to the need of university work as distinguished from collegiate, are very significant. This type may be called "the privately endowed."
—Mention should also be made of a fourth form of university organization, of which the chief example is the university of the state of New York, wherein, with the authority of the state, a supervision is exercised, of a very gentle but definite nature, over the colleges and seminaries of the state. No instruction is given by this university, and the only degrees conferred are honorary. This is "the supervisory type."154
—The embodiment of authority in a university is a problem of much difficulty in this country, where the decentralization of civil government is so complete. European precedents have but little value here. The governing bodies of Harvard and Yale are close corporations, having exclusive responsibility for their proceedings under their charters. For the state universities, trustees or regents are sometimes elected by popular vote, and are sometimes appointed by the governor or the legislature; they have even been considered civil officers (as in California), liable to be removed or superseded at the pleasure of the legislature. Gradually the usage is coming into vogue of allowing the graduates of an institution to have a voice in the election of the trustees. In some places the president is the head of the legal corporation, as well as of all the faculties. He is the lineal descendant of the ancient rector, or chancellor, and has corresponding powers. In other institutions he is a member of the corporation, but not its head. Elsewhere he has a seat among the trustees, but has no vote. In some places he is precluded from listening to their deliberations, and is only an agent or executive officer. Consequently his functions vary, from those of a king in council to those of a servant in livery. Usually the professorial responsibility is limited to the instruction and government of the students, and does not extend to the selection of their colleagues, the management of funds, or the construction of buildings—functions retained by the trustees. In consequence of these uncertainties, the educational growth of new foundations has generally been less steady than it should be; a wavering policy has been followed. It has been found difficult to retain the services of good men, particularly in the executive or administrative office; and probably for a long while to come, with now and then an exception, our institutions, especially those of the second type—state universities—will suffer from this fact. Stability is of incalculable value in a seat of learning; instability will sooner or later result in the casting off or slipping away of valuable teachers. In the long run the success of universities will be promoted by entrusting the chief powers to the professorate, with supervision and support from a body of educated trustees.
—University degrees have varied very much in their significance and value. Originally, they were steps in the academic life. The bachelor had attained to one rank; the master or doctor, to a higher. The right to bear these titles was also the right to enjoy certain corresponding privileges; and it was carefully guarded by examinations, certificates and regulations, like other social positions. This dignity of academic titles has diminished in modern times, partly because they have been distributed almost haphazard, as bonbons are thrown to a carnival crowd; partly because they have been conferred by some universities in Germany in absentia, and for pecuniary returns; partly because of the extravagant distribution of honorary distinctions, especially in this country, where the height of absurdity has been reached; and partly because so many variations of the academic titles have also been introduced in this country, that their meaning is lost sight of. Fortunately, signs of reaction against these bad usages are visible, and possibly degrees may yet be restored to their former significance.
—From this brief review, it is apparent that the American universities are likely to be the outgrowth of our own free institutions, ecclesiastical and civil, and of the outpouring of private generosity. They are not likely to be based upon English, German or French models, but are to be benefited by the experience of all existing foundations. They are to be truly American, in the sense of being adapted to our schools, our history, our laws, our ways, our land. It may be long before they equal in magnitude and renown the historic foundations of the old world; but if they succeed in enlisting and retaining illustrious and powerful teachers, their success will be assured.
D. C. GILMAN.
USURY. When every one produced nearly everything that he consumed, and commerce consisted in almost accidental exchange, loaning was only a friendly service or charitable act. Morality or religion might then have justly branded the greedy man who made a vile use of the distress of his neighbor. But the relations of men to one another increased, and became complicated; in one way or another capital came into existence. Here, a conqueror took violent possession of lands, houses and animals; there, a pirate came to shore loaded with booty; elsewhere, wealth was accumulated by labor and saving. The surplus thus acquired (whether rightly or wrongly) was transformed into capital by the employment which was made of it. For, it is the use for which an object is intended which constitutes it capital. By the force of things the remunerated loan gradually lost part of the reprobation which attached to it, and interest was enabled to establish itself, but not without a struggle. Unfortunately, capital long remained a monopoly, and the loaning of it was necessarily dear, and all the dearer since loans were made in the beginning less by industry than by luxury and dissipation. The capitalist drew from his possessions all that he could; this he had a right to do, a right which, doubtless, he sometimes abused. Hence governments, having been long accustomed to look upon subjects as minors, believed themselves obliged to fix the rate of interest. Since then times have changed; labor has become more general; the sciences have pointed out the means of increasing its products by rendering it more efficient; wealth has accumulated in the hands of many; there is competition among lenders; and now luxury is scarcely ever, and industry almost always, the borrower: yet in certain countries prejudice has preserved a restrictive legislation. This is much to be regretted. The hiring of capital differs in nothing from that of any other object; and its price, too, depends on the action of demand and supply, as do the prices of all objects. In this world all abundant things are cheap, and all rare things dear. Human laws are powerless to modify this natural law, to which we may apply the words, dura lex, sed lex.
—Restrictive laws on the subject of usury can only aggravate the evil which they propose to prevent. Interest is composed of at least two elements: 1, the remuneration of the service rendered by the loan (or, which is the same thing, the compensation which the lender imposes on himself); and 2, insurance against the risk of loss. Solvent and honest borrowers may, by a combination of unfavorable circumstances, find it impossible to return the principal. There are times in which these circumstances become frequent; and if the law prevents the capitalist from insuring himself against loss by his proportionately raising the rate of interest, one of two things will happen: either the capitalist will abstain from giving credit, or he will raise the rate of interest by the addition of a third element, insurance against the risk of punishment.
—A pretense is made to justify the limitation of the rate of interest, by the obligation of protecting the needy person who borrows. Many objections to this immediately present themselves to the mind. 1. If the borrower agrees to pay the price, the reason is that the service rendered him does not seem to him too dear; a man may borrow at 20 or 30 per cent. if he foresees that he can gain 40 per cent. 2. Is the case that of a spend-thrift? You can not prevent him from wasting his fortune; if he does not do it in one way, he will in another. 3. Why not put one's self at the lender's point of view also? If the return of the funds he loans seems to him more or less doubtful, why should he not have the right to cover his risk? 4. What difference is there between goods and money? and can not the former be sold legally at any price one wishes? 5. Lastly, admitting that some abuses are inevitable (and where is abuse wanting?), must we interfere with the use which is frequent, nay daily, to reach some abuses which are relatively rare? Are these abuses sufficient to warrant the putting of all those under the guardianship of the law, who for one reason or another desire to borrow? It is of general utility that trade in money should be as free as trade in merchandise; fraud alone should be punished. Moreover, to limit the rate of interest we should know what its normal rate is. But who can fix it? The legal rate is 5 per cent. in France, and 10 per cent. in Algeria. What is the legal rate in Turkey? What was the legal rate at Rome or during the middle ages?
—The arguments we have just given have not escaped legislators, and in many countries the crime of usury has been blotted from the penal code, and gradually it will be blotted from the penal codes of all countries.155 (Compare INTEREST.)
UTAH, a territory of the United States. Its area was a part of the first Mexican cession (see ANNEXATIONS, IV.); and at the organization of the territory, by the act of Sept. 9, 1850 (see COMPROMISES, V.), it contained 220,196 square miles. Since its organization it has been largely reduced by portions which have been taken from it and added to Colorado, Nebraska, Nevada and Wyoming. It is now a compact, nearly square territory of 84,476 square miles. Its population, by the census of 1880, was 143,963, so that it is the most populous of the territories, if we except the District of Columbia. Its capital is Salt Lake City, and its governor (1880-84) is Eli H. Murray.
—The American territorial system (see TERRITORIES) is essentially and altogether an adjunct to the federal system. A more complete antipode to the mercantile colonial system of a century ago could hardly be stated or imagined. The American territory is practically under the absolute control of congress; and yet it is never thought of except as on the way to self-governing statehood. It is useless, indeed, is worse than useless, unless it is considered as an inchoate state. And yet here is a territory, already containing the full voting power of a congressional district, whose possible statehood not only is unconsidered, but would be considered only as a worse peril to American institutions than its present absolute government. The territory of Utah is the anomaly of the American system; and the question of its proper treatment is one of the most serious and perplexing problems of American politics. It has two distinct aspects, that of Mormon polygamy, and that of the Mormon hierarchy. In considering them, two features of the American system must be constantly kept in view. 1. The subjects of marriage and divorce are exclusively state concerns. Congress may forbid polygamy in a territory, but, as soon as the territory becomes a state, its legislature acquires entire control of marriage within its jurisdiction. If any of the present state legislatures should abolish their penal laws against bigamy, and either expressly or tacitly permit plural marriages, there is no power outside of the voters of the state which could intervene. 2. Once a state, always a state. When a state once secures the power of self-government, whether by surprise, by secret purchase, or after deliberate consideration, no power can legally revise the action of congress in the admission: even congress is unable to reconsider its action, and the state is equally unable to forfeit its position, except by expressly abandoning its statehood and expressly demanding a return to a territorial condition. (See RECONSTRUCTION.) Mr. S. G. Fisher, as cited below, some twenty years since stated and advocated what he considered as the right of congress to expel a state, or the right of a state to secede with the express permission of the same congressional authority which admitted it: but this view has never been accepted. One of the fundamental provisions of the constitution is, that not even an amendment shall be passed to deprive any state, without its consent, of its equal suffrage in the senate. The population of a state may diminish to almost nil, or its moral conditions may be shocking to the rest of the country, but its statehood must continue as long as it demands it.
—Mormon Polygamy. The growth and conditions of this institution have been elsewhere stated. (See MORMONS.) The revised statutes of the United States prohibit polygamy in the territories, and jurisdiction of offenses against the prohibition is in the federal courts of the territories, with a power of writ of error, by act of June 23, 1874, from the United States supreme court to the supreme court of the territory. This was found ineffectual from the difficulty of obtaining evidence; and the stringent "Edmunds Act" was passed March 22, 1882.
—The provisions of the Edmunds act are, in general, as follows: 1. The offense of bigamy (U. S. Rev. Stat., § 5352) is restated, and made punishable by fine and five years' imprisonment. 2. Cohabitation with more than one woman is made a misdemeanor, punishable by fine and six months' imprisonment. 3. Jurymen may be challenged for being guilty of bigamy or of unlawful cohabitation, or for believing it right to commit such offenses. 4. The president is authorized to grant amnesty for past offenses. 5. The issue of Mormon marriages up to Jan. 1, 1883, is legitimated. 6. Bigamy, polygamy and unlawful cohabitation are made bars to voting and to eligibility for election or appointment to any office under the territory or the United States. 7. All the registration and election offices of Utah are declared vacant. 8. Five commissioners are to be appointed by the president, with exclusive power to appoint subordinates for the purpose of registering voters, conducting elections, receiving or rejecting votes, canvassing and returning votes, and issuing certificates. 9. More opinion as to the right of bigamy or polygamy is not to be a bar to a seat in the legislature.
—The first election held under the provisions of the Edmunds act resulted in an almost exclusively Mormon legislature, devoted to the maintenance of the corporate right of the church of latter-day saints to hold and enjoy its wealth. It is very evident, that, while polygamy is to be retained as a distinguishing mark for a peculiar people, it is to be practiced only by those who have an exclusively ecclesiastical ambition, and that the church will always take care to have monogamists ready to care for its political interests. No one can suggest any further step in the direction of the Edmunds act, except to make opinion a bar to a seat in the legislature. And that would mean the temporary abolition of legal government for Utah, and the relegation of government functions to the moral control of the church, through its unofficial courts of arbitration.
—As a final remedy, it has been proposed to adopt an amendment to the constitution, prohibiting polygamy in the United States, and empowering congress to enforce the prohibition. An amendment to that effect was introduced at the opening of congress in December, 1883, but has not yet been acted upon. It may be that such an amendment, with appropriate legislation to back it, might solve the problem and make it safe to admit Utah as a state. But considerable caution should be felt in coming to this conclusion after our experience with the fourteenth and fifteenth amendments. They were supposed, at the time of their passage, to be so carefully framed that they had transferred the protection of the civil rights of the enfranchised negro race to congress. But the supreme court has decided, in effect, that these civil rights were primarily under the protection of the states; that a diminution of the power of the states must be express to be valid; that these amendments gave to congress only a veto power over unconstitutional state legislation; and that individual offenses are still in the domain of the states. Why may not the proposed anti-polygamy amendment meet the same fate? Suppose that Utah is admitted after the amendment is passed; and that her legislature as carefully refrains from passing laws permissive of polygamy as from punishing polygamy by individuals. May we not then find that the sixteenth amendment is as much of a practical delusion as its two predecessors? And it will then be too late, it must be remembered, to return Utah to a territorial condition. Surely the hazard of such a chance is too great to be taken.
—The only alternative seems to be to limit the sphere of the states by words that can not be mistaken or evaded, and to add to the powers of congress that of exclusive legislation, by general laws only, on the subjects of marriage and divorce within the United States. Utah might then be admitted with absolute safety, for no legal argument could emasculate such an amendment. Bigamy and polygamy would then be federal crimes; and no marriage would be valid, or its issue legitimate or capable of inheritance ab intestato, unless the marriage had been contracted according to the forms prescribed by a federal statute. Growth of population, wealth and culture in Utah would only increase the force of the influences, material and moral, which would aid the amendment to enforce itself. This remedy, succeeded by the immediate admission of Utah as a state, seems to the writer the only remedy for polygamy in the territories which holds out a fair promise of final and permanent success. It is open to the objection that a two-thirds majority in both houses of congress, or simple majorities backed by the president, might force free-love on the United States. But, if that time should ever come, all would be lost; and our posterity would be too busily engaged in guarding fundamental interests to have time to spare for Utah. The danger is on a par with that of the suspension of the privilege of the writ of habeas corpus; and is only one of a class of dangers which a democratic republic must meet and surmount or die.
—The Mormon Hierarchy. Federal officials, who have honestly endeavored to execute federal laws in Utah, are almost unanimously of opinion that a greater danger than polygamy is in the Mormon hierarchy, supported by the immense resources of rigidly exacted tithes, bulwarked by the fanatical obedience of the people, and willing, if it could see its way clear, to turn secret into open rebellion. Governor Murray, late in 1883, gave very forcible expression to this view in a newspaper interview, and urged strongly that the whole territory should be placed under an absolute military despotism until the hierarchy should be crushed out. One who has not been upon the spot must speak with diffidence upon such a subject. But, from all the information open to reach, it seems probable that this view is only the natural outcome of unsuccessful contest, and that the fate of the Mormon hierarchy is conditioned by that of Mormon polygamy in the following fashion—Polygamy seems to be primarily purposed to make the Mormons a "peculiar people," to give them a sense of homogeneity which the other elements of their "faith" will not supply, and thus to secure an obedience founded on faith rather than on force. Secondarily, it has divided the Mormon leaders into polygamists, with church ambitions, and monogamists, with political ambitions. To the polygamists are given the present and future honors of the church, and the pleasure and profit of managing an enormous church revenue, without responsibility of accounting, except to the hierarchy. To the monogamists are assigned the present political honors of the territory, and the future political honors of the possible state. It is plain, from the results of the Edmunds act, that the monogamists, though at present of a humbler rank, are not only important, but absolutely essential, to the polygamists. Without the political auxiliaries, the hierarchy would be powerless; with them, it can endure patiently, labor, and wait with hope. To cut off the political auxiliaries would be to cut off hope. It seems to the writer, then, that the mistake has been in aiming all operations at the polygamists, while every blow fell harmless on the monogamous shield before them. The true policy would be to strike at the monogamists, to push them into a compulsory choice between their allies and their own hopes of political preferment. What blow would do so more effectually than the passage of the marriage and divorce amendment, followed by the admission of Utah as a state? If a record of conviction for bigamy, or for aiding a bigamous marriage, is to be a bar to office-holding, to citizenship, and even to voting, how long will political leaders, in the hot conflicts of real state politics, hold to an organization which can not even provide them with votes? Whichever side the church takes, it must bring votes in its hands. Mormonism is a democracy of revelation, in which a revelation is tested by its general acceptance. A new monogamous revelation would thus be the inevitable result of the gift of statehood, if we could give it safely; and such a revelation would only result in the disappearance of the Mormons as a "peculiar people," and the downfall of the hierarchy. Separate the political monogamists from the ecclesiastical polygamists by the marriage and divorce amendment; fling the apple of discord among them by granting statehood and introducing state politics; and it seems evident that the problem of the hierarchy will be found to be only an outgrowth of the problem of polygamy, and that they stand or fall together.
—It is not intended to make polygamists and ecclesiastical leaders exactly coincident classes. Some of the ecclesiastical leaders are certainly monogamists, but they are exceptions.
—Authorities will be found under MORMONS. See 9 Stat. at Large, 453 (act of Sept. 9, 1850); Fisher's Trial of the Constitution, 173.
UTILITY. This word has the same meaning in politico-economic language as in the usual vocabulary. What it designates, in things, persons or acts, is the power they have of rendering us some service, the service, for instance, of sparing us certain privations, inconveniences or suffering, or of procuring for us satisfactions and enjoyments. Economists, however, employ the word in the plural, when, instead of considering utility as an abstraction, made up of every distinct particularity, they look upon it as it exists in different objects with differences of nature and destination.
—The first distinction to be made between utilities is, that there are natural and artificial utilities. Natural utilities are those which supply the necessities of our existence without our having to do anything to obtain them. Such are the utilities furnished us by the air which surrounds us, by the heat and light which the rays of the sun bring to us. These utilities are the work of nature entirely. Nature makes them a gratuity to us. Artificial utilities are those which we obtain only at the price of more or less painful efforts. It is for us to learn to produce them, and we never acquire their possession and use, except for some consideration or on the performance of certain services.
—Political economy has scarcely anything to do with natural utilities. It may say that they are not all spread in the same measure over all parts of the globe; that there are no two regions in which heat, the force of the wind, water or arable land, is distributed in exactly like proportions, and that such a fact exercises a necessary influence on the modes of the activity, the facility of the development and the destiny of the populations of those regions; but here ends what political economy has to say about them. We are here in presence of a phenomenon whose essence it is not given to man to change, for it emanates from laws over which his will can not possibly have any efficient action. Everything, on the other hand, which relates to artificial utilities belongs to the domain of political economy, and challenges its investigation.
—To produce utilities is all that it is in the power of men to do. When nature placed matter at their disposal, it did not wish that they might have the power to add one single particle to it. All they can do is to change the place of, to separate, to combine and to transform the elements of matter in such a way as to cause them to acquire properties which they do not possess in their raw state. The labor of men consists only in giving the things on which it is brought to bear qualities and forms which adapt them to use; more than this, human labor can not do. Nature has reserved creative power to itself entirely; to men it has granted only the power to utilize its gifts.
—It is easy to conceive that human labor can propose to itself no end but that of producing utilities. All labor involves pain and fatigue, and no one would surrender the sweets of rest if he had not in prospect the compensation which is the reward of labor. But there is no work which can reap reward unless it produces fruits endowed with some quality. Mistakes may, indeed, be made in this respect; it may be, that, from ill-advised endeavors, the results which the men who made them promised themselves may not come; but these are mere accidents. In the normal state of things, there is no labor which has not the production of pretty manifest utilities for its object, utilities sufficiently desired by others to make the advantage of disposing of them compensate for the sacrifices necessary to the obtainment of them.
—In proportion as nations become enlightened and wealthy, they strive to produce utilities more diverse and in greater numbers. After those utilities which serve to satisfy the principal necessities of life, they create others which answer only factitious wants and tastes, which grow more and more elegant and refined. It is the eternal task of nations to seek for and endeavor to obtain all that can add to the well-being already acquired, to the satisfactions already enjoyed; and the better they accomplish this task, the higher is the degree of power and prosperity which they attain.
—Artificial utilities, those which are the fruit of man's own labor, have given rise to distinctions. At first they were divided into material utilities and immaterial utilities. The former are these utilities which man communicates to matter, which he fixes and incorporates in matter either by changing its place or form; the latter are those which do not assume a form either tangible or ponderable. These latter again have been divided into two categories. To the first of these categories belong such utilities as are incorporated in persons, and fit them to render services to themselves or to others. Utilities attached to talent, to information or knowledge, are of this kind, as are also utilities whose use is beneficent and profitable. To the second category belong those utilities which emanate from services and acts that produce no change in the productive capacity of persons or in the condition of things. Of this latter kind are the utilities which result from the labor of judges, soldiers, public functionaries physicians, lawyers, musicians and actors. These utilities may answer to very real social wants; but they have not, at least in appearance, directly reproductive effects; neither are they susceptible of accumulation or duration.
—Utility is produced under forms so diverse that it would be easy to add to the number of these classifications and to establish new subdivisions among them. But it is in view of the correlations and affinities which exist between utility and wealth that the classifications we have made have been admitted; and the ideas or notions to which they answer merit serious attention. The term utility is a generic one; and everything which, it matters not by what way or in what manner, has the power of satisfying our wants or relieving our sufferings, of contenting our desires, or contributing to our pleasure, possesses the quality characterized by the term utility. The meaning of the word wealth is a more restricted one. Although there can be no wealth whose basis is not utility, utility alone does not suffice to constitute wealth; it constitutes wealth only by allying itself in things to certain qualities of a particular order. Most assuredly natural utilities are indispensable to us; but as every one uses these utilities at pleasure, and gathers them without cost of any kind, and as they are not susceptible of private appropriation, it would be wrong to apply the term wealth to them. What constitutes wealth is exchangeability, it is the value things owe to the possibility of procuring us, by our delivering them to others, this quantity or that of other things. All economists, however, do not admit that exchangeable utility, or utility having a price, is sufficient to give things the name of wealth; they claim, that, in order that that name should properly belong to the things in which this utility is to be met with, these things should, besides, be susceptible of accumulation and duration; in other words, that they should exist under a material form. It is easy to see, that, according to the definition given to the word wealth, the number of utilities which is admitted to constitute a part of it, must increase or decrease, and that the classification adopted by some writers should not be adopted by others. Be this as it may, the question of immaterial products and unproductive labor is the one that suggests itself à propos of utilities. Of artificial utilities, there are some which are not converted into material wealth or into the means of producing material wealth; such utilities are considered by some writers as unproductive; and, in the eyes of these writers, the labor to which the utilities just referred to is due is in as much disfavor as sterile labor. Whatever the distinctions that may be established among the different kinds of utility, it is a mistake to suppose that there can be any utilities which do not contribute more or less actively to the production of all the others. All the utilities which man succeeds in realizing have the same destination, the improvement of his lot; they all assist one another, combine with one another, and mutually fecundate one another, in such a way that those least material are as much as the others essential to the formation and accumulation of wealth, and serve as much to produce it.
—Take wealth in the form under which that name can be least denied it, the form of utilities fixed and incorporated in material objects: such wealth can be produced only with the aid and concurrence of immaterial utilities. It is intellectual conceptions that the workman realizes in his action on matter; it is the knowledge he has acquired that decides the success of his work; and the more precise and extensive this knowledge is, the more fruitful are his efforts, and the more do these efforts increase the things they are intended to produce. But in what does knowledge consist if not in the acquisitions of the mind? And is it not certain that the nations which possess most knowledge are those which obtain material wealth in greatest abundance? Assuredly nothing is more indispensable to the production of material wealth than the formation and accumulation of the capital the employment of which that production necessitates. But it is to the action of utilities of the moral order that the creation of capital is due. It is love for one's family, temperance, economy, and care for the future, which determine or permit the making of savings. If these qualities were wanting, no one would lay by, in order to reap a remote advantage from them, resources whose consumption would increase the well-being of the present; and there can be no doubt that the countries in which these qualities are found are always those in which capital continually extends its conquests and increases wealth most rapidly.
—Many economists admit rightly that the knowledge, skill and constancy of artisans and workmen are as much a part of the wealth of a country as the tools, machines and instruments which they use. Doubtless these kinds of utilities contribute powerfully to the formation and increase of wealth; from the point of view of the production of material wealth, there are, however, between them and the utilities which become incorporated in persons, differences only as to the modes in which their action respectively becomes manifest. And, in fact, that labor may produce wealth, it is not sufficient that it be enlightened, active and intelligent; it is further necessary that those who perform it be certain of reaping the fruits of their endeavors. But it is to insure this very certainty that the work of judges, magistrates, and even of armies, is intended; and such is the utility which results from the performance of such work. If the laborer, the manufacturer and the merchant display all the activity of which they are capable; if they make savings in order to extend the field of their operations; if they seek for and apply to production better and better processes, it is only because they have faith in the efficacy of the services of all those who are charged with guaranteeing the security of person and property. The utility produced by the prosecution, sentencing and punishment of crimes and misdemeanors, does not vanish, as is supposed, with the acts in which it is embodied; on the contrary, it continues to subsist in the minds of all, intimidating these who might be tempted to do wrong, and demonstrating to others that neither violence nor spoliation can attack them unpunished, and that they may devote themselves to their work in security. We have seen the services rendered by the agents of authority cease to keep their habitual course; and, at that very instant, we witnessed, too, the production of wealth affected by languor and discouragement; so true is it that in the kind of utility which these services produce, is to be found the most indispensable stimulant to the success and energy of industrial labor.
—We may boldly assert, that nothing which is useful, nothing which serves to enlighten minds, to quicken the moral sense, to propagate healthy habits, or to guarantee peace and security among a people, can be without effect on the success of the efforts employed in producing material wealth. Those immaterial utilities even which seem the least productive; those even the obtaining of which, according to eminent economists, instead of making nations richer in material products, impoverish them to the amount of the sum total of material products consumed by the men employed in the service of the public, contribute their share to the formation of wealth; so true is this, that the formation or production of wealth would become impossible if the immaterial utilities above referred to were either entirely wanting or not to be found in the proportion required by the wants which they serve to satisfy.
—We have still to examine one other correlation of utility with wealth. It is certain that utility is a necessary condition to wealth. A product incapable of rendering any service whatever, unfit for any use, would find no one willing to give anything whatever for it; it would, consequently, be wanting in all exchangeable value, that is, in the quality, lacking which, it could not become wealth. This constant association of wealth and utility could not fail to attract attention; and, therefore, many writers supposed that there must exist between them relations such that the one might serve as a measure for the other. Although this error is refuted in the article VALUE, we can not pass it over in silence here. Although the utility inherent in things depends, so far as the estimate made of it is concerned, on circumstances momentarily variable, it is none the less certain, looked at from the general point of view, that it has its measure marked by the species of wants to which it relates. Thus, that utility exists in the highest degree in those things which supply the prime necessities of life, necessities which must be provided for under pain of inevitable death. It exists, in an inferior degree only, in the things which merely serve to defend us against privations and sufferings which do not jeopardize life, and in a degree still lower in those things whose use has no effect out to procure us pleasure or amusement. This gradation of utilities, based on the very nature of the evils or perils attached to the non-satisfaction of the wants which they enable us to satisfy, is simple and easy to understand. There is no one who does not recognize and assert that utility is much greater in the alimentary substances, without which we would have to suffer the deadly pangs of hunger, than in the products to which we owe enjoyments, the privation of which would be attended by neither pain nor harm.
—But if utility finds its measure in the greater or lesser absolute exigency of the wants of our nature, that measure is far from being found again in the value itself of the things we may use, and far from contributing, according to their degree of distinction, to make those things integral parts, more or less considerable, of public or private wealth. It is in vain that the bread which nourishes us and the woolens that cover us are of prime necessity to us: that does not prevent an object which, at best, is good only to relieve for a moment the ennui of the person who buys it, being paid for at a price infinitely higher. The reason of this is, that there are men rich enough to give full rein to tastes and desires which others are entirely ignorant of or can not satisfy. Those to whom it is easy to provide for the most essential wants of life, think of procuring all the enjoyments compatible with the size of their fortune. It is not enough for them to be well fed, comfortably lodged and warmly clothed; they offer incense to pleasure, and seek it in everything. They must have things which charm the eye, which afford them delicate impressions and sensations, whose possession flatters their vanity, which sometimes borrow all their attraction only from a fancy or from the caprice of a moment; and the value conferred on these objects by what those who desire them are willing to give in exchange for them, assures to them, among things considered wealth, a much greater place than they would occupy if nothing but the quantum of real utility they contain were taken into consideration.
—It is only when the products indispensable to the satisfaction of the wants of existence are lacking that the utility which they contain makes its empire felt, and becomes the dominating principle of their value. When the things which can be dispensed with without peril or injury cease to be supplied in sufficient quantity, fewer of them are bought, and the rise in the price of them has its limit in the reduction of the number of those who ask to acquire them. The same is not the case with those whose use no one can give up without running the risk of death. In times of famine men dispute the means of subsistence with one another. The rich, to procure bread, sell everything which ministers only to their pleasure. The poor despoil themselves of their furniture, their clothing and their shoes. People must then perish or assuage their hunger: each sacrifices to the first of all wants, that of self-preservation, everything which is not of a nature to satisfy that want. Such cases present themselves in besieged cities when their stores are exhausted, and in deserts when, devoured by thirst, the merchants crossing them give for a few drops of water the treasures carried by their camels. But in the normal condition of things, when all kinds of utility are to be found in their customary proportion, their particular destination or quality has no influence on the value at which they figure in exchanges or at which they are estimated in the sum total of wealth. What operates, then, across the variations in price due to the fluctuations of supply and demand, is the amount of the cost of production of each.
—These considerations suffice to show in what the correlation which exists between utility and wealth consists. If value attaches to things only on condition that they be gifted with the utility which alone has the power to render them exchangeable, the value in attaching to them by no means takes for its measure the character of that utility. It is the quantity of other things which each of them permits us to obtain that determines its value; and a precious stone, a pearl or a jewel which serves only to adorn the lady who wears it, has, with like weight and quantity, a thousand of times the value of the wheat or fuel without which we should fall victims of hunger or cold, but which costs little to produce, abounds in the markets, and sometimes has to wait for purchasers.
—To resume. Nature gratuitously gives up to men certain utilities which all enjoy equally: it imposes on them the necessity of creating the others. Their labor can produce only artificial utilities, and never has any end but to produce such utilities. The utilities which human labor obtains are of various kinds: some, becoming fixed and incorporated in matter, communicate to it the qualities which constitute wealth; the others are not realized under a material form; they attach to the persons of men, fitting them to render services to themselves or to others, or they attach to acts or services the performance of which has for effect to insure to the individuals or nations to whom they belong, satisfactions, advantages or guarantees, the absence of which would infallibly react in an injurious manner on their interests and on their well-being. It must be remarked, that, although immaterial, these utilities contribute actively to the formation as well as to the accumulation of the products which constitute material wealth; from which it follows, that, even considered solely in their relations to that wealth, the labor by means of which it is obtained has a character of productiveness not less real than the labor which acts more directly on matter itself.
—Utility is one of the constituent conditions of wealth; it is inseparable from wealth, but can not furnish a measure of wealth. The utility inherent in things is greater in proportion as the wants to which they are fitted to give satisfaction are more urgent and intense; the wealth inherent in things, on the contrary, is greater in proportion as the cost of production of the latter is greater.
UTOPIA (from the Greek, that which exists in no place, nowhere). The word is the invention of Thomas More; the title given by him to one of his works which soon became celebrated; but the thing is much older than the name. By utopia is meant a certain organization of society and of the state, to which imagination and the spirit of system contributes not most but everything, without examining whether it is realizable in a given place or time, and without investigating whether or not it is compatible, even in a general way, with the moral and physical conditions of human nature. It follows from this, that the utopia necessarily changes character according to the system which produces it. And, in fact, there are religious utopias and philosophical utopias; idealistic and sensualistic, sensual and even materialistic utopias. Lastly, there are utopias which have their origin in pantheism; and this is true of the greater number of utopias. The pretension of Gregory VII, to make christendom a republic entirely subject, in things temporal as well as spiritual, to the sovereign authority of the holy see; a pretension afterward developed in a systematic form by the great theologians of the thirteenth and fourteenth centuries, is a religious utopia. The republic of Plato is a philosophical, and, moreover, an idealistic utopia. On the other hand, we observe the inspiration of sensualism in the doctrine of Fourier, the inspiration of materialism in the "Leviathan" of Hobbes, and in the "Positivist Catechism" of Auguste Comte, and that of pantheism in the reveries of Campanella and Saint-Simon. The utopia is, therefore, different from the ideal, although the ideal may sometimes be found in the utopia. The ideal which applies to society, as well as to the individual, raises us above what we are, to show us what we should be, and, therefore, can be. The utopia deceives us in regard to both, by placing before our eyes a chimerical goal, which may at the same time be a type of debasement and servitude; for it is impossible to create a new form of society, without concerning ourselves with the government adapted to it, and the best suited to preserve it. We, therefore, can not admit the distinction made by some publicists between the social utopia and the political utopia. Every utopia is necessarily both political and social.
—The age of utopias does not begin, as is generally supposed, with Plato; it is much more remote. It would not be difficult, for instance, to demonstrate that the republic of the Hebrews, such as we may represent it to ourselves in accordance with the institutions and the laws of the Pentateuch (see MOSAISM), was in great part a utopia which was never realized; that that sacerdotal race, a people of priests, who acknowledged no sovereign but God, never existed; that the periodical restoration of inheritances to their primitive boundaries and of slaves to liberty, any more than the perfect equality of fortunes, was never put in practice. But we are quite willing to accept as the extreme bound of antiquity the history of Greek philosophy. Even in that history Plato is not the first utopist. Aristotle ("Politics," book ii., ch. v., vi.) introduces us to two utopists, more ancient than Plato, one of whom, Phaleas of Chalcedon, gave social order, as its principle, the most perfect equality, and the other of whom, a celebrated architect called Hippodamus of Miletus, having introduced regularity and symmetry into the construction of cities, desired to impose these same qualities on the organization of the state. Thus he demanded that the citizens, to the number of ten thousand, should be invariably divided into three classes: artisans, laborers and warriors; or, according to other testimony, into magistrates, warriors and workmen; and that a distinct portion of the territory of the republic should be allotted to each of these three classes. The two probably belonged to the Pythagorean school, which both commanded and practiced a community of goods. But no one before Plato knew, as well as he did, how to give a body to these imaginary conceptions, and to make the most of them by the graces of poetry and the power of dialectics. We know that he has connected his name with two entirely distinct utopias, one of which is developed in the "Republic," and the other in the dialogue on the "Laws." Both, according to his own avowal, belong solely to the world of ideas, but the second is nearer to reality than the first. The first has for its object perfect unity, the unity which consists in entirely melting the existence of the individual into that of society, and the real person of the individual into the ideal person of the state; the second, in default of unity, is satisfied with equality, which is also a means, but an inferior means, to hold together, under the empire of a common law, the different parts of the body social. All the elements of which the two Platonic constitutions are composed are explained, and, to a certain extent, excused, in these two primary ideas. Thus, the three classes of citizens, or rather the three castes of the "Republic," answer to the three faculties of the human soul, the magistrates to the intellect, the warriors to the will or the sentiments, and the laborers to the appetite. And because the appetite should be subordinate to the sentiments, and the sentiments to the intellect, the same hierarchy should exist in the classes which represent them. The most important of these classes is, beyond contradiction, the class of warriors; for the rôle of the lowest class is reduced to obedience; and the magistrate or philosopher, once he has performed his task, once he has founded the city on the supreme laws of the intellect, has nothing more to do. This explains why it is that the warriors should afford us the expression of the ideal unity of which we have just spoken. Hence the community of goods and women which Plato, by restricting it to them, considers a sacrifice, and not a privilege.
—It is evident that in this organization the human person and individual liberty count for nothing. They are not quite so entirely annihilated, but they are still oppressed under the régime of equality presented to us in the "Laws." For instance, the division of the territory having to remain in variable, it is necessary that the number of citizens fixed by Plato at 5,040 should be invariable likewise. So much the worse for the children born in excess of that fatal figure. They will be forced to emigrate. Sterile families will be obliged to complete their number by adoption. The law will see to it that personal wealth shall not disturb the equilibrium of fortunes. It will trammel industry, commerce and the increase of capital in such a way that industry, commerce and the increase of capital will become almost impossible. A fortiori, the burden of the law is felt in what concerns marriage, the education of children, and wills. It prescribes, as it did in Sparta, meals in common, prohibits travel, except in certain cases of necessity or of the public interest, subjects to the inspection of the authorities the most intimate relations of life, and lays down the most inflexible rules for all the occupations it is so good as to allow the citizens to engage in.
—Pagan antiquity affords no other examples of the utopian spirit; for we can attach no value to a few lost fragments like those of Hecatæus of Abdera, of Evemerus and Theopompus, which are evidently only reminiscences of the ideas of Plato; and, as to the "republic" of Cicero, it is less a work of the imagination and spirit of system than of patriotism and the political passion; it contains only a partial apology for the old institutions of the Roman republic.
—The middle ages bring us to the religious utopias, of which the boldest and most brilliant is assuredly the utopia of Gregory VII. Universal theocracy never existed except in the ambition of that great pontiff. The condition of the world at the period in which it was produced, and the general state of society, have always made it an unrealizable dream. But after it had met with the resistance of facts, the idea of Gregory VII. entered the domain of speculation. It took possession of philosophy and theology through the works of Thomas Aquinas, of Giles of Rome, and notably through the De regimine principum and the treatise De ecclesiastica potestate. Another utopia, hatched at the same epoch, between the end of the twelfth and the beginning of the thirteenth century, but which savors perhaps as much of philosophy as of religion, is that which bears the name of the abbé Joachim, and which is described in the "Eternal Gospel" (L'Evangil éternel). Joining the pantheistic principles of Amaury de Bène and of David de Dinant to some misconstrued texts of the Gospels, the adherents of this doctrine expected the reign of the Holy Ghost or of love to succeed the Son, as the Son had succeeded the Father. During this last period of our history, for which the two preceding periods had only paved the way, all differences and inequalities were to disappear from the earth, even the difference between vice and virtue; for all the passions were to be sanctified; the flesh and the spirit reconciled with one another, or rather, confounded together, were to cease their struggle for pre-eminence; and the suppression of war and a community of goods and of women were to make all men one family.
—With the renaissance the purely philosophical utopia reappeared; and it was the minister of a despot, the chancellor of Henry VIII., Thomas More, who, in calling it back to life, gave it its real name. Everything in Thomas More's book is not chimerical. It contains an extremely profound and sensible criticism of the politics, the political economy and legislation of his time. And even when he seems to abandon himself to the caprice of his imagination, when with complaisance he gives us an exposition of the laws and institutions of the country of Utopia, there is a distinction to be made between its political conception and its social organization. The former is simply a representative government, with a leaning toward the republic, having a senate, an assembly of the people, a president appointed for life, and election to all the degrees of power, spiritual as well as temporal. The latter is summed up in communism, with some of the elements which subsequently served in the construction of the phalanstery system. This is sufficient to convince us that the communism of Thomas More does not flow from the same philosophical system as that of Plato. The latter remains as much an idealist, even in its most deplorable applications, as the former inclines to sensualism. It is no longer with a view to their moral perfection, but in the interest of their common happiness, that men, according to the English philosopher, should renounce property. It is sufficient that this end be proposed to them for labor, grown both more pleasant and more fruitful, to satisfy all the wants of society. The day in this system was to consist of only six hours: three hours before dinner and three hours before supper. Fatigue was to be avoided by diversity of occupation; every citizen, exercising several professions at the same time, might alter natively pass from one to the other. He would, therefore, have leisure enough to give himself up to all the enjoyments of study and conversation, and to taste the pleasures procured by the fine arts.
—Thomas More, however, does not carry the illusion so far as to believe that all trades, without distinction, could lend themselves to this combination. He recognizes that there are rude and repulsive trades, which are carried on only from necessity. But these trades are to fall to the lot of the public slaves, reduced to that condition in expiation of their crimes, or purchased by the state in foreign countries. Thus we see the utopian spirit resuscitating, in the bosom of Christianity, the institution of the helots. We must remark, however, that the citizens themselves are not treated much better. The law, like the discipline of a barracks, or the rule of a monastery, intervenes in all the details of life. It prescribes what their clothing, their food, their work and relaxation shall be, and leaves not the least place for freedom or intellect.
—If Thomas More thinks little of liberty, he has at least some regard for morals. He respects marriage, and, to a certain extent, preserves the rights of conscience by basing the national religion on deism. No such consideration for them is to be found in the system of Campanella, which is easy to account for, since pantheism is its basis. Pantheism confounds man, nature and God; it does away with the individual, and recognizes only the collective existence of society. This is precisely what Campanella does in his famous "City of the Sun." All the actions, and even the sentiments and thoughts, of its imaginary subjects, are submitted to an absolute authority. The chief of this solar people is something like the Supreme Father in the Saint-Simonian system, that is, he is both a monarch and an infallible pontiff, a man clothed with the attributes of God. Under him are three ministers in the departments of wisdom, of power, and of love; and under these three ministers are divers classes of magistrates set over all the virtues and all the faculties, who assign to each man his rank, his task, and, according to the manner in which he performs it, his share in the enjoyment of the common goods; the community is not here confounded with equality. And so, although women are in common, they can be enjoyed only in accordance with the rules established by the minister of love affairs, and only on the days, at the hours and under the circumstances most favorable to the improvement of the human race. Despotism was always dear to Campanella. In his "Discourse on the Spanish Monarchy," written many years before the "City of the Sun," he reaches this conclusion: the only and the true monarch of the world will be the sovereign pontiff; all peoples will constitute only one flock under the staff of only one shepherd; the king of Spain will play the part of the dog charged to bring back to the fold the sheep which have strayed away, and to devour them if they resist!
—At the same time that Campanella was taking up the ideas of Gregory VII, and paving the way for those of Saint-Simon, Bacon was writing his "New Atlantis"; but there is no reason why we should concern ourselves here with that work, since it relates more to the reformation and reorganization of learned societies than to the reorganization and reformation of the state. It offers, as it were, an anticipated plan of the institute of France. Hobbes and Harrington had another aim. It is laws and institutions which they pretended to make over from top to bottom, after a preconceived model which they present us with, Hobbes in the "Leviathan," and Harrington in the "Oceana." Although diametrically opposed to each other in their principles, since the former, in the name of materialism, invites us to servitude, whereas the latter, appealing to our moral dignity, urges us on to the conquest of liberty, these two writers have this in common, that their views do not extend beyond the domain of politics. Nevertheless, both are utopists; for the unity of power, as Hobbes conceives it, the absolute monarchy which disposes of men's bodies and souls, of conscience and interests, of religion and of the state alike, is not more easy to realize than the perfect equilibrium between power and property which Harrington seeks to effect, and which he bases on the agrarian law, as if the agrarian law was not itself a source and instrument of oppression.
—The Histoire des Severambes, by Denis Vayrasse, containing only a mixture, without any consistency (being, so to speak, only a weakened echo of them), of the two systems of More and Campanella, it may be said that the history of utopias in the seventeenth century closes with the two creations of Fenelon, the Bétiqus and the République de Salente. The first of these presents us not so much with a hope for the future as with a souvenir of the past. It is a classical reminiscence of the Arcadia of the poets. It transports us among a pastoral people like those who lived under the fabulous sceptre of Saturn. It introduces us to men who have none of the passions, and consequently none of the vices, of humanity; who have put everything in common, since they possess nothing, and have scarcely any wants; and to children, enjoying the peace and innocence of their tender years, while nature, like a kind mother, relieves them of all care and trouble. The Republique de Salente unveils to us much more clearly the real thought of the illustrious archbishop. It is the picture of a people, who, with no industry but agriculture, were able to attain the highest degree of perfection and happiness. Population is to that people the source of all wealth, and war the source of all misery. This is the very reverse of the maxims which guided the government of Louis XIV. But there is something more in Fenelon's republic. It is, despite the simplicity of its life and customs, an aristocratic state, the citizens of which, divided into seven classes, are distinguished from one another by their conditions, their occupations, their rights, their clothing even, and in which the first rank belongs to birth. It is the ideal republic of Plato modified by Christian morals and by the prejudices of race borrowed from feudalism.
—The eighteenth century, independent and fruitful in every other matter, was only slightly inventive in social and even in political utopias. Rousseau and Mably confined themselves to reproducing, with some necessary development, the institutions of Lycurgus. Theirs was a retrospective utopia. Morelly, in his Code de la Nature, is only Rousseau's echo, while Babœuf proposed to become Rousseau's testamentary executor. All, while they never tired talking of liberty, succeeded only in imagining a system of slavery on the foundation of demagogy and communism.
—The first half of the present century it is that witnessed the birth of the boldest, the most radical and the most brilliant utopias: Saint-Simonism, Fourierism, positivist socialism and the atheistic theocracy of Auguste Comte. Even a summary exposition of these different doctrines would carry us beyond the limits allotted to us here. (See SOCIALISM.) But we must remark at least, that, while these doctrines are no less chimerical than the ideas of Plato, of Thomas More, Campanella, Hobbes and Rousseau, they are not, at bottom, more liberal. The tendency of Saint-Simonism is to reestablish, to the advantage of pantheism, the universal theocracy of Gregory VII. He hands over the destinies, not only of the state, but of humanity, to the discretion of one man, who is at once prince, pontiff and infallible arbiter of the works of human thought. There is no refuge from this universal despotism, since both property and the family have ceased to exist. Fourierism also destroys these two fundamental institutions: property and the family. The former it would replace by shares of stock delivered by the state to each in proportion to his labor, his talents and his capital. Of the latter, thanks to the consecration of free love, not a trace would be left. Nevertheless, it is not directly by the establishment of despotism, but indirectly by license in morals and the letting loose of all the passions, that Fourier annihilates liberty. To Fourier man is only a kind of machine, of which passion is the motive power, and which, putting itself in gear with an analogous machine, produces the effect desired without its knowledge. He reaches fatalism by the way of sensualism, and from sensualism he draws the most extravagant and unclean consequences that can present themselves to human thought. Lastly, in the materialistic Utopia of Auguste Comte, the priests of humanity, or rather of atheism, have a power no less exorbitant than the power of the Saint-Simonian Supreme Father. They have the right of life and death over all works of the mind, old and new, existing or to come into existence. They are the absolute masters of public education and of the state itself. They dispose, besides, of the honor of citizens, and regulate private life after their fancy, leaving to the lay power only the looking after of material interests. The proletariat Comte makes a public institution. Majorats and substitutions he re-establishes under another form, and extends them not only to landed but to commercial and industrial property.
—The conclusions to be drawn from this succession of chimeras are these: that the progress and perfecting of social institutions are not sudden creations, issuing full-fledged from a human brain, and governed by one single idea, but the fruit of experience and time, of the thoughts and the efforts of a long series of generations; that no society is lasting or perfectible except the society which is founded on the liberty which respects the rights of the individual, and leaves him responsible for his acts and for the government and use of his faculties; that liberty is inseparable from property, and that it is impossible to preserve or suppress the one without preserving or suppressing the other; that liberty and property, in turn, suppose the moral dignity and the inviolability of the human person. Utopias have this advantage, that they bring these truths into greater relief, and compel the human mind never again to separate the progress of the social order from the conquests of civil and political liberty.
[141.]Madison papers, vol. iii., p. 1343.
[142.]Report of the Secretary of the Treasury, 1815, p. 26.
[143.]Finance Report, vol. iv., p. 854.
[144.]Page 186, 3d Session, 27th Congress, Appendix. Speech of Woodbury.
[145.]Report No. 379, 28th Congress, 1st Session, H. of R.
[146.]Report of Secretary Bibb, 1844.
[147.]Finance Report, 1864, p. 10.
[148.]In justice to Mr. Ford it should be added, that he draws a distinction between pensions granted to civil servants of the government and those granted to military and naval servants, and this distinction is manifestly a just one to make. While the dangers of corruption attending the liberal use of civil pensions are many, and in fact might be said to be inseparable from the system, there exist strong reasons for granting allowances for military and naval service when there exist also the proper safeguards against abuse. If there be any principle recognized and established in this country it is that pensions must be confined to those who were separated by the nature of their service from the great mass of the community, and who devoted themselves exclusively to military duties; who laid aside the character of a citizen, and became a soldier; who, in abandoning the pursuits, extinguished also the habits, of private life. But, in bestowing military pensions, it should be recognized that provision should be made only for those who, being unable to support themselves, are necessarily thrown upon public or private charity. "It would not, I think," wrote Attorney General Rush in 1815, "be going too far to say that in every case where an officer or private loses his health while in service, to such a degree as to be disabled from performing his duty any more, he is contemplated, prima facie, as an object of this charitable relief from the legislature." And more recently the expediency of military and naval pensions was defended in congress as follows: "The service which the soldier renders may be voluntary, but it is not a service which he may give or withhold at pleasure, but one which, if not offered, may be compelled by the strong arm of the government. The recognition by the state of the distinguished military services of its citizens in its support and defense in the form of a pension, though sometimes granted as a charity, or as an act of grace, is generally given in fulfillment of some promise made by the government, or inducement held out to the soldier either at the time or after his enlistment. It is not given to every man who performs military service, however distinguished and meritorious that service may be, but to those only who receive wounds or contract disease while in the line of duty. The purpose and design of the government is to make the soldier good, as far as money can do it, for the injuries he received, or in other words, to make up to him as much as he could have earned at his trade or vocation if he had not been wounded or had not contracted the disease. Under this rule—and in my judgment it is both just and magnanimous—no man is entitled to a pension for military service except those who have received disabling wounds or injuries during the war, and the widows, minor children and dependent relatives of those who were killed or who have since died from the effects of such service. This is the humane policy recognized and acted upon by every civilized country on the globe. It has been truly said that every pensioner is, in one sense, a burden upon his fellow-citizens, either directly or indirectly; and no reason can exist for imposing such a burden on behalf of men who did only their plain, simple duty as citizens, and received no material injury in its performance. A disabled soldier is not a pauper for taking a pension. A well man would be nothing else if he were to accept one. For this reason I do not deem it right or expedient to select out any particular class of soldiers, or men who rendered any particular service, or suffered any peculiar hardships and privations, and pension them, regardless of whether they can show any pensionable disability or not. Under the lenient rules adopted by the present commissioner of pensions, every soldier who was wounded or contracted disease while on active duty in the field, or during confinement in rebel prisons, can, if not already pensioned, apply for and receive one now under the general law. It is impossible for congress to grade and adjust pensions to the different degrees of suffering and hardship endured in the service. All that we can do is to grant them in cases where the evidence shows there is a pensionable disability: but it we should go beyond this rule we should be simply pensioning a large number of men, who, while they endured great suffering and privations, received no material injury, and are now able to earn their living. In this connection I desire also to say that I would not create a civil pension list by granting pensions to men who are injured in the civil service of the government. They go into that service voluntarily, and can not be compelled to enter it against their will, and can leave when they please. When they assume the duties they take all the risks, and are paid for doing so. I believe pensions should only be granted to men who have been injured in the military or naval service of the country; and, without stopping here to elaborate the point, I will simply say that in my judgment we are not called upon in granting pensions to break down the barriers set up by our fathers between the military and civil service, and launch out into a sea which I fear would prove shoreless and bottomless." Nor is it any condemnation of such pensions to point out the great frauds that have arisen under various systems. That is the fault of the laws. "The state has in time of war a fundamental right to the money, the services, and, if need be, the life of every citizen, without other compensation than the security and protection it affords him at all times. The pension laws are not passed to secure to the maimed survivor of the war, or to the helpless dependents on those who lost their lives in the struggle, a right existent independently and in the nature of things, but as a voluntary and fitting assumption of care over those who, in the service of the nation, have lost the ability to care for themselves. It is doubly demoralizing and doubly shameful that beneficent laws like these should be made the cover of fraud and robbery—it not only despoils the public treasury and unjustly burdens the shoulders of the tax-paying masses, but it delays and often fatally prejudices the cause of really deserving applicants."
[149.]For statement of resources and liabilities of these banks see Report of Comptroller of the Currency, 1876, p. 43.
[150.]Quoted by Hallam, Lit. Eur., i., 26.
[151.]The disciples of this philosopher were condemned for heresy by a council held in Paris in 1209.
[152.]The fault of this definition is that it might include a kindergarten, or a school of Choctaw.
[153.]So ascertained by Prof. F. B. Dexter.
[154.]It is proper to add, that two or three instances of fraudulent universities have been detected and crushed. They were simply scandalous ventures of unscrupulous persons to entrap the unwary into purchasing diplomas—and would not here be mentioned were it not that foreigners have sometimes been misled by announcements which to every educated American are obvious frauds. These sporadic appearances are counterfeit, not entitled to any nomenclature.
[155.]Instead of the prohibition of interest which prevailed in mediæval times, most modern states have established fixed rates of interest, the exceeding or evasion of which, by contract or otherwise, is declared null and void, and is usually punishable as usury. It the fixing of the rate is intended to depress the rate of interest customary in the country, it uniformly fails of its object. If governmental control were great enough, vigilant and rigid enough, which is scarcely imaginable, to prevent all violations of the law, it is certain that less capital would be loaned than had been, for the reason that every owner of capital would be largely interested in employing his capital in production of his own. More capital, too, would go into foreign parts, and there would be less saved by those not engaged in any enterprise of their own. All this would happen to the undoubted prejudice of the nation's entire economy.