The Writings of Carl Schurz/To Lyman J. Gage, September 10th, 1900
TO LYMAN J. GAGE[1]
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Bolton Landing, Lake George, N. Y., |
Sir: The object of my open letter of September 1st was, by offering a means of escape from the dangers pointed out by you, to call public attention to the fact that the present campaign is by no means a repetition of that of 1896, and that the money question now has no right to stand in the way of a fair consideration of other important questions on their own merits. I thank you for the courtesy of your answer, but I must regret that, instead of favorably receiving my well-meant suggestion, it only shows to what lengths partisan zeal will go in the attempt to frighten the people into the belief that only Mr. McKinley's reëlection can save them from general ruin, and that no objection to him in any other respect must have any weight with them.
To help on the alarm, you quote from a speech made by me in 1896, showing what disastrous consequences I predicted would be brought on by the election of Mr. Bryan. I believed at the time, and I believe now, that those consequences would have followed had Mr. Bryan been elected then, after a campaign turning wholly upon the financial issue, with no existing law seriously to hamper him, and with majorities in both houses of Congress prospectively at his back. But you know as well as I do that circumstances have essentially changed, and that there is an immense difference between a President so elected and free to act and a President elected after a campaign run on other issues, with adverse majorities in Congress, and bound hand and foot by a law such as now exists, or as you and your friends in power may still make it. Is it quite ingenuous, is it not doing violence to truth, to quote words uttered under one set of circumstances as applicable to a set of circumstances so essentially different?
To my suggestion that, if the present law is defective, the Republican Congress and Administration would before the inauguration of the next President have ample power and opportunity to prevent the Executive action, with its disastrous consequences, which you so luridly depict, you object that Congress would “probably” find it difficult to use that power owing to possible obstructive tactics of the minority. Whatever those who insist upon the necessity of Mr. McKinley's reëlection for the preservation of the gold standard may say, my parliamentary experience teaches me that if you, as Secretary of the Treasury, prepare a simple measure of remedial legislation and have it introduced in Congress on the first day of the session, and the majority presses it with a sincere determination to use all legitimate means to overcome obstructive tactics, the three months of the session will be more than sufficient to put through such a bill.
There will be no trouble about this if the Republican majority is willing to do it. Or do you suspect that it might not be willing, even if such action appeared necessary to save the gold standard? If not willing then the Republicans would be saying to the American people substantially this:
We are the men to maintain the gold standard. Therefore, you must keep us in office and permit us to do whatever else we please, however obnoxious it may be to you. For, if you vote us out, we shall let the gold standard go to perdition even while able to save it. We have you by the throat and mean to hold you so.
If this be really the spirit of the Republicans in power the people will soon conclude that they are a public danger and a nuisance and ought to be got rid of at any cost. You certainly cannot wish your party to stand in such a light.
I repeat, therefore, that the Republican majority in Congress not only can, but, if only for its own moral salvation, will do this thing in case of necessity, and you, Mr. Secretary, then relieved of your partisan campaign service, will, as a good citizen, be one of the first to urge it to be done, if you sincerely think the currency law to be as defective as in your recent threat of disaster you represent it to be.
But do you really think that it is so defective and that the dangers you predicted owing to that defectiveness really threaten? In your letter you say that, since I had accepted “for argument's sake” your statements on these points, “there is no particular difference between us as to what Mr. Bryan, as President, could do under the law or in spite of the law as it now is.” You must pardon me for observing, Mr. Secretary, that when you tell the public that I agree with you on those points, you strain the truth rather violently. Accepting a statement “for argument's sake” means that we admit it only as a basis for reasoning, while we may really hold an entirely opposite opinion. And in this case I have, indeed, strong authorities for differing from you, and, curiously enough, among these authorities you, Mr. Secretary, occupy a very prominent place. About July 15th you gave out an interview on the identical points here in question, which has recently been republished, and which stands in strange contrast to the alarm blast sounded a month later. It is worth while to place the two utterances side by side:
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Mr. Gage, August 25th. There is no doubt Mr. Bryan could order his Secretary of the Treasury to make payment in silver of all the public debt payable in coin, and for all current disbursements of the Government as well, which amount to from $1,500,000 to $1,750,000 per day. That he would give such an order, too, is very certain, if he is in the same mind that he was in 1896. . . . He would have great difficulty in doing that at once. The Treasury of the Government at present is very firmly established on a gold standard. Including the reserve of $150,000,000 held against the legal-tender notes, the Government owns and controls over $200,000,000 in gold coin and bullion, while it owns and controls only about $16,000,000 in silver, the rest of the silver being out in circulation among the people, either in the form of silver certificates or silver coin. But the announcement by the Treasury Department of its purpose to pay silver in settlement of all interest on the public debt not specifically payable in gold, and to |
Mr. Gage, July 15th. I am satisfied that the new law establishes the gold standard beyond assault, unless it is deliberately violated. . . . It is quite true that the legal-tender quality has not been taken away from the silver and paper money of the United States. It would have been a remarkable and disquieting thing to do. . . . What difference would it make to me if I held some bonds and Mr. Bryan should direct his Secretary of the Treasury to sort out some of his limited stock of silver dollars for the purpose of redeeming the bonds? Would I not immediately deposit the silver in my bank and draw checks against it just as I would if the Secretary had exercised the more rational policy of paying me with a sub-Treasury check? I believe that silver will never drop below par in gold. The crux of the proposition is that adequate measures have been taken by the new law to prevent such a contingency. . . . It is wholly immaterial whether some Secretary of the Treasury pursues the infantile policy of paying silver dollars upon these bonds |
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make its daily disbursements to its creditors in silver, would stop the inflow of gold, or at least very largely diminish payments in gold and correspondingly increase payments into the Treasury of silver and silver certificates. It therefore might be anticipated that, with a good deal of perverse ingenuity, the time would come at no distant day when all the revenues of the Government would be paid to it in silver dollars or silver certificates, and all disbursements made by it will be made in silver dollars or silver certificates. There would thus be established a circuit of silver out of the Treasury into the hands of the people, from the people into the banks, from the banks into the customhouse and into the hands of the collectors of internal revenue. The Government then would be practically on a silver basis, would it not? That would no doubt be accomplished, and the Government, properly speaking, would be on a silver basis. How would this affect the credit of the Government? Most disastrously, I have no doubt. |
instead of checks, when, as I have shown, all money of the United States is convertible into gold. These are the distinct provisions of the new law, and they cannot fail to maintain the gold standard except by the deliberate violation of the duty imposed by the law upon the Secretary of the Treasury. In the event of Mr. Bryan's election, I think the gold standard would be resolutely maintained so long as the law remained on the statute-book. |
You concluded the interview of July 15th by saying that the law might indeed be subjected “to a severe strain from the November day that Mr. Bryan's election were made known until the Treasury was turned over to him on March 4th,” and that the present Administration would probably have to “use to the uttermost the powers con ferred by the new law to maintain the gold standard,” owing to possible apprehensions that might be created among the business community, which, however, does not impugn your previous statements as to the safety of the gold standard under the law as it stands.
Thus it is Mr. Gage who brings against himself the charge of spreading “false alarms.” In the one column we hear you as the financier and the conscientious public officer who feels it to be his duty not to excite but to allay unnecessary disquietude. If it be suggested that Mr. Bryan, if elected, might announce his purpose to pay interest on bonds, and the current expenses of the Government in silver, and thereby gradually bring us on the silver basis, the conscientious public officer answers:
Do not excite yourself about this. Even if Mr. Bryan were ever so much so inclined, he would under the law not be able to accomplish this mischief. And if there be a flurry of apprehension in the case of Mr. Bryan's election, always remember that the gold standard will find protection under the law any how. Be not unnecessarily frightened, but go quietly about your business.
In the other column we hear the partisan, who, in order to terrify the public for the benefit of his candidate, decries all manner of deviltry and trouble that may happen under the law; who, when a way to strengthen the law is pointed out to him, as I did point it out, lightly puts that aside as impracticable; and who—an almost unheard of thing even in our political warfare—suggests that the possible successors of the present President and the present Secretary of the Treasury may intend deliberately to violate the law by the exercise of “perverse ingenuity”—all this to put the people into a panicky mood, and thus to drive them to Mr. McKinley as their only savior from a vague sort of disaster.
Of the same color is the prediction that the sound-money majority in Congress may be wiped out, and that then the gold-standard law will be repealed. You know, Mr. Secretary, that this is no more likely to happen than a heavy snowstorm in July in the latitude of Washington. It is admitted that there will be a sound-money majority in the Senate for at least two years longer. And if in two years the gold standard should appear to be in the slightest danger, is it not absolutely certain that then the same forces that carried the election of 1896 would be on hand to elect a sound-money House of Representatives? There can be no doubt of this.
No candid person can have watched recent political developments without concluding that even a Democratic House of Representatives, elected under the influence of the present public sentiment, would always have sound- money Democrats enough in it to prevent a subversion of the gold standard. You need only observe the present condition of the Democratic party to become convinced that the silver movement has lost its vitality, and that the talk about silver now is a mere rattling with dry bones, kept up on one side to have an appearance of consistency, and on the other to frighten people into forgetting all other questions and voting for Mr. McKinley. And this, Mr. Secretary, is the task you are now performing. It is an attempt so to terrorize the American people with a threat of business disaster that they may be deterred from considering any other question, and from casting a vote which would amount to a condemnation of Mr. McKinley's imperialistic policy. I, for one, refuse to be so terrorized. I am certainly as anxious to maintain the gold standard as you are. I say this as one who, during more than a quarter of a century, has made the advocacy of a sound monetary system one of the principal parts of his public activity; who looks back upon that feature of his work with especial satisfaction, and who, if he has somewhat, however little, contributed to the accomplishment of good results, would not lightly expose those results to jeopardy. But I am convinced that the battle for sound money is substantially won, and that whatever apparent danger to the gold standard may still arise, it must and can be overcome without the people subjecting themselves to a moral thralldom keeping them from independent and conscientious action upon other public questions of equal, and even superior, importance. And I may assure you, Mr. Secretary, that there are such questions with regard to which many American citizens have very strong convictions of duty.
- ↑ An open letter to the Secretary of the Treasury.