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Maps, plates, charts, etc., may be filmed at different reduction ratios. Those too large to be entirely included in one exposure are filmed beginning in the upper left hand corner, left to right and top to bottom, as many frames as required. The foMowing diagrams illustrate the method: Les cartes, planches, tableaux, etc., peuvent dtre filmds d des taux de reduction diff^rents. Lorsque le docume.it est trop grand pour dtre reproduit en un seul cliche, il est filmd d partir de Tangle sup^rieur gauche, de gauche d droite, et de haut en bas, en prenant le nombre d'images n^cessaire. Les diagrammes suivants illustrent la mdthode. 1 2 3 1 2 3 4 5 6 \ "^tft f \ (^"^^^a,^ y^^^y^^<^ ft P IH^ TT, n H F. SI w SUBJECTS. :^' LIJAH WAMD. If F W Y r> t: K 6-, M.it CC5, K ^Vtl. ■IM*'"*"' "' 'IS*».. W it '^ /^l ' -S-f-i-*^.-;}^ .^A ■if ■ Copyright, I8J7. hy G. W. Car k ton & Co., Publishers. LONDON: S. LOW & CO. MDCCCLXXVII. 14UtJ91 I L CONTENTS. A Ship-Canal, connecting the Atlantic and Pacific Oceans : its Value to the ''*''* Commerce of the United States and other Nations. House of Repre- sentatives, February 15, 1859 jj A Just Bankrupt Law : its Present Necessity, and Importance as a Perma- nent Act. House of Representatives, June 3, 18C3 34 A Just Bankrupt Law: its Present Necessity, and Importance as a Perma- nent Act. House of Representatives, June 3, 1864 54 Our Commercial Relations with the British North American Provinces House of Representatives, May 18, 1864 ' rg Our Commercial Relations with the British North American Provinces House of Representatives, May 26, 1864 * go The Tariff and the True Principles of Taxation. House of Representatives June 2, 1864 ^^ The Treaty with the Hawaiian Islands : its Relations to our National Com- merce. House of Representatives, March 4, 1876 113 ^"'isTsT"'^^ ^'''*'°°' ""'^^ ^'°^^- "°^''°* Representatives, May 124 Our Coimnercial Relations with Canada and the Extension of Markets for our Productions. House of Representatives, February 1, 1877 157 The Knancud Condition of the Nation. House of Representatives, January ' 183 ' 205 The Distribution of the Geneva Award. House of Representatives, May 23, 226 ;i 3 H ^"*i CONTENTS. Nationality of the Democratic Party. Uouae of Rtpresentatives, March 31.'"' ^^'^ m The True Policy of the Government as to the Conduct of the War, with a View to the ProKervation of the Union. House of tteprcsentativcs, January 9, 1865 ' ^„ The Best Policy toward the Southern States. Letter to the New York World, September (i, 1875. ... „-„ 4 Jo The Shipping Act relating to Merchant Seamen. House of Representatives. Junel, 1870 ^^^ A Coinage Department at the Assay Office in New York : its Utility to Com- merce, and Importance on Grounds of Local and National Justice and Economy. House of Representatives, February 1, 1877 235 The Questions of the Times. At a Meeting Ratifying the Nomination of the Hon. Ehjah Ward for Election to the Forty-fifth Congress. November 4, 1870 „„„ 298 A Free Canal Policy : the best Guarantee for the Preservation and Increase of our Inland Commerce ^. , . q^o Wi PREFACE. TnK speeches selected from those of the TTon, Elijah Ward, and presented in this volume, are laid before the public because they refer chiefly to measures of immediate and jdactical moment in the national commerce and finances, but yet remaining unaccomplished. Much lal)or lias been spent with a candid and impartial spirit in accpiiring the information they contain, and it would bo difficult of access, and thus of comi)aratively little use, unless collected and concentrated. The subjects will con- tinue to demand more and more the attention of American statesmen, until they are finally settled. They include the much needed ship-canal to connect the Atlantic and Pacific Oceans, an extension of our commerce, especially of the markets for our manufactures and agricidtural productions, through an American or continental system of trade with Canada, Mexico, Cuba, and other countries, revenue reform and the restoration of our mer- cantile marine on the ocean, the necessity of a just, uniform, and permanent baidcrupt law, the importance of conferring the right of coinage on the Assay Office in New York, a free canal policy in the State of New York as essential to the preservation of her inland commerce and valuable to the nation, a safe and gradual return to a sound cur'*ency, redeemable in coin, and the renewal of concord and prosperity in the Southern States. On the whole, the speeches refer more or less directly to com- merce at home and abroad as the best means of stimulating pro- duct'on and increasing the employment aiid comfort of the people throughout the Union. For many years these material interests have been conspicuously neglected in the national Legislature, and it was the object of Mr. Ward to present those views which he believed to be true in regard to them without yielding to the prevalent prejudices or supineness of the times. X TREFACE. More than any other single eentlment pervading tlio Bpoechcs, is coniidonco in the belief that " all legititnato interests are har- monious." Mr. Ward holds that the Monroe doctrine, however gratifying to an honorable national pride, is little more than a barren ideality, unless, in an enlightened self-interest, we asso- ciate with it a performance of its obligations, including a friendly care for the commercial prosperity of the States we have so far taken under our j)rotection, by extending the exchanges of in- dustry with our neighboi-s on the north and south, thus promoting such a system of intercourse and of benefits reciprocally given and received as will tend to prevent those wars and chronic apprehensions which in the Old \Vo"ld cause the constant main- tenance of large standing armies, with frequent loss of life on a scale of stupendous magnitude, and at all times the infliction of heavy burdens upon the people. n i SPEECHES or THE HOIST. ELIJAH W^A-KD. SJiIP-CANAL CONNECTING THE ATLANTIC AND PACIFIC OCEANS: ITS VALLE TO THE COMMERCE OF THE UNITED STATES i^ND OTHER NATIONS. HoDSE OF REPIIKSBNTATIVK8, February 15, 1859, At the present time no one pul/lic work, of so much vahie to tlie commerce of tlie world as the union of the Athintic and Pacnfic Oceans hy a ship-canal throiii^h some part of the Isthmus of Darien, remains uncompleted. Nearly twenty years have now elapsed since Mr. Ward directed the tl)oiiy their great ex- perience. A friendless and unknown American citizen was treated by these men as though he was a brother, not because he was eminent in science, but because they recognized in him the zeal, the prophetic hope and self-devotion which are ever the hand- maids of science." * The important results thus far attained were brought to the attention of the Thirty-Fourth Congress at its second session. Appreciating the efforts made, and the great results to flow from interoceanic communication, an appropriation was made by the Government of the Uni- ted States for a verification of the surveys to which I have alluded. Congress authorized the Secretaries of War and the Navy, under direction of the President, to detail officers for the survey and have the verification made. The Navy Department selected Lieutenant Cra- ven, and the War Department detailed Lieutenant Mich- ler, of the topographical engineers. These officers, upon their return, proceeded to prepare their reports ; and the result of the expedition will pi'obably be laid before Congress at the present session. While I am not able to give the detail of the survey, I am sufficiently informed to state that their reports will confirm the physical facts as represented, including harbors, rivers, rock and earth excavation, and the general character and quantity of material to be removed to form the canal, upon which * Eelley^B Pamphlet on the Atrato Ship-CanaL v.. flp 22 SHIP-CANAL. the former estimate of the cost of this work was based. This estimate of cost had been computed by several ex- perienced engineers in this country. By tlie ])roceeding8 of tlie Institution of Engineers of London for 1858, 1 nnd that body — perhaps as competent as any in the world to judge — indorses the estimate made by our own engineers. I have also seen the written ex- pressions of many able and intelligent American engi- neers on the subject; letters from distinguished engineers — Robert Stephenson, George Rennie, and other English and French engineers of eminence — verifying the estimates made for the work in this country. In April and May, 1856, the Royal Geographical Society, at Mr. Kelley's request, discussed this question at great length, and took very decided ground in favor of the work being done. The President, who was Minister to England while Mr. Kelley was abroad, did all in his power to advance this great measure, and suggested the application to the Uni- ted States for verification. The French Emperor also appointed a commission to examine the plans and surveys, and they reported favorably to him, and he, I learn, ex- pressed a willingness to unite with England and the United States in building the canal. The plans were submitted to Baron Humboldt, and his approval was obtained. Mr. Chairman, having drawn the attention of this honorable body to the subject of ship-canals, briefly re- ferred to the various projects, and given a rapid sketch of the Atrato, I will now refer to the benefit which the commerce of this country and other nations would derive through such a channel of communication from the Atlantic to the Pacific Ocean. I have already alluded to the great saving in travelling distance, and refer to the Appendix for the detail. The first influence felt would be from the supply of a colony of workmen, consuming the bread- stuffs, manufactures, tobacco, and other products of the United States, during the construction of the work. I find, by official statistics, that the total tonnage owned by the United States, that would use this canal, if con- structed, is 1,857,485 tons. The cargoes are valued at $100,294,687, and the ships at $92,874,250; making a H^ SHIP-CANAL. n total amount of value afloat, belonging to the Unitefti States, of $193,168,937. This includes the whale fishery, but not the precious metals from California. Takinjj the diminution of time as a basis, the benefit by the gam in sailing distance from one part of the woi'ld to the other by the Atrato Canal, estimating the saving of insurance, interest on money, wages of men, freight, wear and tear, it appears that the sum of $35,995,930 would be annually saved to the United States alone, as follows : Table showing the saving in money to the trade of the United States that would result from the use of the Atrato Canal, ac- cording to the official statistics for the year 1857. Insurance on vessels and cargoes saved $3,863,378 Interest saved on cargoes 3,008,840 Saving of wear and tear of ships, 5 per cent. 4,()43,712 Saving of freight-money (by time) 11,250,000 Saving of wages, provisions, crew, etc 13,230,000 Total yearly saving to the United States. . $35,995,930 Should the United States assume to pay the whole in- terest on the work, during its pi-ogress and completion, the amount thus saved to the commerce of the country im one year exceeds, by $8,500,000, the entire sum that would be required to be paid in twelve years, or seventeen times the average annual payment. If England and France unite, it is over forty times the annual sum that would be required. We find the tonnage of England, that would pass this canal is 1,029,295 tons ; the value of tonnage and trade is $190,649,750. The saving to England, upon the fore- going basis, would be $9,950,348, as follows : Table showing the yearly saving in money to the trade of England^ as ascertained by the official returns for 1856, if the trade went through the Atrato Canal, instead of round the Oa2)e8. Insurance on vessels and cargoes $1,906,495 ;. Interest on cargoes ] ,858,826 ^- - Saving of wear and tear of shij)s 2,573,237 Saving of wages, provisions, finding, etc 3,611,790 Total *. $9,950,348 II « I I .»■■ f4 SHIP-CANAL. The tonnage of France that would pass tlirough the Atruto route in 102,735 tons; the tonnage and trade is valued at $07,210,609; the saving to Franco would be as follows : 2'able xJiowing the saving in money to the trade of France that would rcHult from the use of the Atrato Canal, according to the ojficial atatiHticH for the year 1857. Iiuuu'anco on vessels and cargoes $753,000 Interest saved on eargoes 452,084 Saving of wear and tear of ships 325,470 Saving of freight-money, estimated by time. . 270,949 Saving of wages, provisions, and outfit of siiips. 376,427 Total yearly saving to France $2,183,930 Of countries other than those named — the tonnage that would use this communication is 16,802,000 tons; the fiaving would be about $1,400,000. The aggregate value of the foregoing tonnage and trade is $407,831,296 ; and the total saving would be $49,530,208 annually. These statements are predicated upon the present state of commerce. The average increase for the last ten years was about one hundred and ten per cent., and it is fair to assume that the trade will increase one hundred per cent, in the next ten years, in which case it is estimated the saving to the world would be $99,060,416. Having presented the trade in an aggregate form, it is perhaps proper to say that there are many specific in- terests that would be greatly benetiied. It is believed that the whaling flcvit, for example, could go into the fishing grounds, and return with as much oil and bone as they do now, in two-thirds of the time they new spend, and the coasting vessels of New England and the north- east could find employment in the Pacific, during the sea- sons they are now idle, by procuring guano, etc. Notwithstanding the vast benefits that would be secured to commerce, it might be urged that the Government, in addition, should have some direct benefit. In answer to this, in rendering the aid required. Congress could pro- vide that all national vessels and munitions of war should pass free of charge for a certain period. SniP-CANAL. 25 In transporting heavy mercliandise (which is ahoiit ninety one-luiiidrcdfhs of all the trade) aeroHs the Isthmus, the canal can only he resorted to on account of ec^oiioniy ; railroad coiiununication heinL,' too costly, besides the dilli- culty in uidoadin<; and loadins^. The char;^e for trans- porting a ship and cargo of one thousand tons by the canal would not probably cfjual the twenty-fifth j)art of what the cargo would cost by railroad. If, instead of constructing a canal, it were det(n'inined to build railroads across the Isthmus, it would be found that there is not only a want of room to build tluMu upon, l)ut that it would re(|ulre twenty roads, each of tliem e([ual in capacity to the Panama road, to be (!apal)le of doing the business of the canal ; these twenty roads, if built, would cost at least double as much as the canal, and could not l)e kept in order for many times as much as would be required for the canal. Independently of th(^ risk and expense of loading and iink)ading, the cost of transportation by railroad in that country h nearly forty-five times as much as it would be by canal ; or, in other words, the canal can do the entire freighting trade of the world in this direction, ])ay an interest on the cost and the interest sunk during construc- tion, and maintain and operate itself for $8,140,000 per annum. To do the business by railroad that the canal could do at this cost, at the prices now })aid to the rail- road, would amount to $360,000,000. I would next invite your attention, and that of Jiis honorable body, to another branch of the subject; which is, the physical advantages of this route as comi)ared with all others for communication between the oceans. When it shall have been determined that any road, railroad, or canal, is necessary in any direction, (nir next duty is to decide which wall be most useful, and in con- nection with the expense to be incurred, involving and evolving one question with the other, to settle its final place. Many situations are only suited for wagon roads, and these are ample and sufficient for the v/ants of the Government and the country they accommodate. Other places, again, require more rapid communication, and a greater amount of tonnage is expected to pass over them. 26 SHIP-CANAL. Here it is proper to employ the facilities afforded by modern science, and construct railroads or canul^. If swiftness of movement, as in the case of passengers and mails, be desirable, then railroads should be preferred. If the commodities to be moved are heavy, and water- carriage can be employed, more particularly where a part of the journey is performed in ships fi'om the necessities of the case, it is advisable to make a canal, more es- pecially if the goods can be carried, ship and all, through without handling, so as to avoid the process of loading or unloading. If goods could be conveyed to our inland cities in the same ships that cross the ocean, with their cargoes on board, no one would desire to unload them into a canal-boat, or on to a railroad. These considera- tions become elements in the process of reasoning by which we should d> cide what method is best adapted to oarry on our enormous and constantly-increasing business between the two great oceans of the world. If equal advantages exist for loading and unloading, and water is abundantly deep, no commercial man would prefer to have his goods unloaded from his ship fifty miles from the entrepot, and brought by wagon or railroad to his warehouse, when his ship could as well come to the wharf at his door. The same rule would govern in crossing the Isthmus. The estimated cost of this project is $73,687,141. (See Appendix.) It is evident that a work of this magnitude can only be completed by the aid of the Government, as a means for postal facilities, and for the transportation of military and naval stores. It is estimated that it will require at le.ast nine years to complete it. To raise the requisite means, it is proposed that the United States should guarantee to pay interest at the rate of five per cent, upon the amount expended in the process of the work, from year to year, for the period of twelve years. The amounts in each, annually, would be as follows : Fii-st year $150,000 Second year 400,000 Third vear 800,000 FourthVear 1,250,000 Fifth year 1,700,000 SHIP-CANAL. 27 ded by il^. If iva and jferred. [ water- ) a part jGSSities lore es- through loading • inland th their d them nsidera- ling by pted to 3usines8 f equal vrater is •efer to es from I to his e wharf 3ing the (See gnitude aent, as ^rtation it will ^ise the States ive per of the 3 years, vvs: ,000 000 ,000 ,000 000 Sixth year $2,150,000 Seventh year 2,600,000 EiL'hth year 3,150,000 Ninth year 3,750,000 Tenth year 3,750,000 Eleventh year 3,750,000 Twelfth year 3,750,000 Total interest money $27,200,000 The above is based upon the supposition that this Gov- ernment is the sole promoter. In case England and France joined, it would be for one-third the amount. The interest being guaranteed by the United States, or in conjunction witli England and France, it is believed that those engaged in the construction of the canal would be able to obtain the money necessary for their object upon the most favorable terras. The estimated cost of this great work, I am prepared to admit, is a large sum ; but this estimate is founded upon the actual cost of doing the same kind of work in the same kind of a country, and is based upon the amount of cuoic }ards of rock and earth to be excavated, and dredging to be done, and is no theoretical hypothesis of something yet never undertaken. The 3ost of this canal, Mr. Chairman, is predicated on a depth of thii-ty feet at low water, and a width of one hundred feet. It is maintained that this is ample and sufficient to pass the largest vessel afloat. There is scarcely a liarDor that admits vessels drawing over thirty feet of wr.ter ; the great commercial marts of this conti- nent, Europe and Asia, do not allow vessels of this draft to enter, or at least do not allow those drawing more to pass over their bars, hence ships are not built of more draft than this when loaded ; but as the harbors of the world mostly used do permit vessels of twenty-eight or twenty-nine feet draft to enter, it is deemed best to make the canal, at low water, as deep as the deepest harbors. In width, it is proposed that it shall be, as I before said, one hundred feet ; this will pass abreast two of the large- sized merchantmen, Vith their yards clewed back, but not two of the largest steamers, because the width of ► ■ 28 SHIP-CANAL. Hill oil m I their guards and wheel-housos ; these steamers must pass by signals, singly in each direction, through the rock cut. Up the Atrato River, vessels of any size, and three or four together, can pass one another, so that there would be little or no detention from any of larger size, as the wide part ex- tends for more than half the distance from ocean to ( 3an. No attempt whatever has been made to under-estimate the cost, or to keep from the public the information upon which the calculations are based. If, however, it is not in all respects correctly estimated, a percentage of five or ten per cent, of error in the calculation would not alter our position. This canal would be a sound and proper investment for the country to make, at $75,000,000, in the manner proposed ; and, if necesyary, at twice that amount. I In furtherance of the work, the Government of New Granada has nofc only given all proper facilities to the private and Government engineers that conducted the ex- plorations ; but it has, by a formal concession, under prop- er restrictions, given the right to construct, maintain, and operate the canal forever, accompanying this grant with various desirable privileges extended to those thit may undertake the work. The State of New York has also granted a special charter, under which a company may be organized to build the canal. I Mr. Chairman, I have merely presented some prominent points bearing on this interesting subject. It is too vast to be discussed in all its details under the rule of this House. T present it to this honorable body as worthy of its most serious consideration. The gentleman (Mr. Kelley) whose name is identified with this great work has quietly and unobtrusively, at a large individual expense, been endeavoring to solve the great problem of the age. He has brought this project to a position that invites the attention of not only our own country, but the whole world. I feel the deepest in- terest in this subject, in consequence of the great benefit, as I ha ^e shown, that is to flow to trade. The extension of commerce is not only important to national wealth, power, and prosperity, but is also the great lever which conquers and maintain' peace and tends to bind the na- tions of the earth in perpetual amity. SHIP-CANAL. APPENDIX. Table of the saving in distance from New Yorh to the followinq places by the Isthmus of Panama over the Cape routes. From New York to — Calcutta CantoH ...... Shan<^hae . . , , Valparaiso.. . Callao Guayaquil Panama San Bias Mazatlan San Diego. , . . San Francisco Miles. 17,500 19,.500 20,000 Miien. 23,000 21,500 22,000 12,900 13,500 14,300 16,000 17,800 18,000 18,500 19,000 Miles. 13,400 10,000 10,400 4,800 3,500 2,800 2,000 3,800 4,000 4,500 5,000 4,100 8,900 9,600 Miles. 9,600 10,900 11,600 8,100 10,000 11,500 14,000 14,000 14,000 14,000 14,000 SHIP-CANAL. Table sho^oing the trade of the United States that would pass through the Atrato Canal, if noio finished, taken Jrom the o^- cial returns oj" the year 1857.* Goontries traded with. Exports and im- ports. Tonnpge. Eussian North American possessions Dutch East Indies British Australia and New Zealand. British East Indies $126,537 904,550 4,728,083 11,744,151 98,432 9,601,063 5,375,354 425,081 6,645,634 716,679 48,979 1,151,849 12,752,062 80,143 10,796,090 35,000,000 5,735 16,589 52,105 177,121 3,665 French East Indies Half of Mexico Half of New Granada 34,673 131,708 36,599 Central America Chili 63,749 193,131 Pern Ecuador 1,979 33,876 123,578 4,549 116,730 861,698 Sandwich Islands China Other ports in Asia and Pacific Whale fisheries California to east United Statesf.. . Value of carsroes $100,294,687 92,874,250 1,857,485 at $50 per ton. Value of ships Total value of ships and cargoes. . . $193,168,937 $92,874,250 * CongreBsionai Reports on Commerce and Navigation, f Exclusive of gold dust. Whale ships and coasting vessels have been estimated gener- ally throughout this appendix at $40 per ton. The United States and European commerce round the Capes is conducted in first class ships, ^A'hich often cost $80 per ton ; $50 have therefore been taken as the fair average value in the construction of this table, which does not include coasting trade. mid pass m the offi- 'onnpge. 5,735 16,589 5'2,105 177,121 3,665 34,673 131,708 36,599 63,749 193,131 1,979 33,876 123,578 1 4,549 116,73C 861,698 1,857,485 50 per ton. 92,874,250 of gold dust. ted gener- ted States ed in first therefore on of this Table showing the trade of England that would pass through the Atrato Canal, if now finished, taken fron the official returns for the year 1856. Countries traded with. Exports and im- portti. Half of Mexico Half of Central America Half of New Granada Chill Peru Ecuador China. . . . ) Outward only 40 days i^^^ f saved bv f^anal. Singapore, ) Australia and New Zealand Sandwich Islands California Value of trade. Value of ships . Total vahie trade and ships. $2,775,137 1,244,817 2,437,605 15,486,110 20,473,520 360,015 7,077,390 3,821,410 4,364,070 78,246,005 520,560 2,378,105 §130,184,834 51,464,750 S190,649,5S4 Tonnage. 11,833 5,615 10,188 118,311 244,319 1,820 68,530 16,003 16,500 522,426 1,950 11,800 1,029,295 at $50 per ton. $51,464,750 TahU showing the trade of France that would pass through the Atrato Canal, if now finished, taken from the ofiicial returns for the year 1857. Countries traded with. Chili Peru Half of Mexico Half of New Granada. Ecuador Bolivia California Stch East Indies. |««tward only Sandwich Islands Philippine Islands Australia Value of cargoes Value of ships Total value 31 Exports and im- porta. Tonnage. $10,000,000 25,688 13,160,000 35,096 2,790,000 10,004 1,090,000 2,389 440,000 -:. 1,651 100,000 1,000 2,073,859 8,997 ( 2,180,000 I 4,440,000 2,028 20,400 2,000,000 4,119 1,000,000 1,463 19,800,000 50,000 $59,073,859 162,736 8,136,750 at $50 per ton. $67,210,609 $8,136,750 u ^ I .• , >■■ % I! 'l-f: . .'^ 32 SHIP-CANAL. m ;( ' Table showing the total tonnage that would pass yearly through the Atrato Canal, if now finished, from official returns. United States 1,857,485 tons. England 1,029,295 " France 163,735 " Other countries 44,555 " Total 3,094,070 tons. Table showing the general results of the preceding tables. Tonnage and trade of United States $193,168,937 " " England 190,649,584 " « France 67,210,609 " •" other countries 16,802,000 Total trade aCected by the canal $467,831,130 Table showing the saving to the trade of the world by using the Atrato Canal. United States $35,995,930 England 9,950,348 France 2,183,930 Other countries 1,400,000 Total $49,530,208 Exports of Great Britain increased one hundred and seven per cent, in ten years. Exports of France increased one hundred and thirty per cent, in ten years. Exports of the United States in- creased ninety-three per cent, in ten years. The average increase is one hundred and ten per cent, in ten years. If the trade in- crease one hundred per cent, in the next ten yeare, the saving to the world will then be $99,060,416 per annum. A swrnmary of the estimated cost of the canal and appurtenances. Works at the mouth of the Atrato $550,800 Excavations under water in Truando 3,280,000 " at confluence of open cut, etc. . 20,000 Excavation between confluence, as above, and Pacific (excepting tunnel), calling all ' the quantities rock, and estimating that " - the grubbing and clearing would be thus . included 39,941,997 - - Tunnel $2, heading $10 12,701,920 Harbor at Kelley's Inlet 1,150,000 SHIP-CANAL. 33 Lidithouse $35,000 Piers 55,000 Depota on Pacific 50,000 " on line, and Hospitals 35,000 Depot at Junction 15,000 Executive Department 120,000 Engineer Department 375,000 Medical Department 80,000 Pay Department 90,000 Commissary Department 120,000 Quartermaster's Department 135,000 Dredging machinery 350,000 Hoistmg and pumping engines and machinery 875,000 $58,949,717 Add 25 per cent, contingencies 14,737,434 Total $73,687,141 The following table will show the money to be spent year by year, and the interest on each year's expenditure, as long as paid by the Governments, and the amount of interest-money to be paid each year : Spend. Pay interest at 5 per cent. Ist year $3,000,000 $150,000 for 12 years $1,800,000 2d " 5,000,000 250,000 for 11 « 2,750,000 3d " 8,000,000 400,000 for 10 " 4,000,000 4th " 9,000,000 450,000 for 9 " 4,050,000 5th « 9,000,000 450,000 for 8 " 3,600,000 6th " 9,000,000 450,000 for 7 " 3,150,000 7th « 9,000,000 450,000 for 6 « 2,700,000 8th « 11,000,000 550,000 for 5 " 2,750,000 9th « 12,000,000 600,000 for 4 " 2,400,000 Total cost . . $75,000,000 Total interest $27,200,000 Note. — I take pleasure in acknowledging my obligation to F. M. Kelley, Esq., for valuable information, and the statistics con- tained in my remarks and the appendix. 3 :v-\ (1 ill 4 ■f ■■I • . t i 5 1^ A JUST BANKRUPT LAW: ITS PRESENT NECESSITY AND IMPORTANCE AS A PERMANENT ACT. HousB OF Bbpresentativeb, June 8, 1862. When this speech was delivered, events arising from the war had caused an ahnost unprecedented number of mercantile fail- ures. They had befallen the sufferers suddenly, unexpectedly, and from causes entirely beyond their control. Ilence, measures of relief were due to them. Mr. Ward showed that, reasoning from the ordinary principles of human nature and the experience of commercial countries, a bankrupt law, duly guarding against fraud, but releasing the honest debtor, is for the interest of the creditor himself, and should be a part of every just and well-con- Bidered code. . Mr. Chaieman: The recent action of this honorable body, in postponing until the third Monday of December next all consideration of the bill reported by the Special Committee " to establish a uniform system of bankruptcy throughout the United States," is viev , 1 with much sur- Erise and regret by a large class of our citizens who are owed down bv pecuniary obligations, from which there can be no relief except through the provisions of such a law. Supposing that adequate measures to relieve honest but insolvent debtors, and to afford creditors increased facilities for collecting their just debts, would be reported at the proper season, early during the present session of Congress, 1 purposed making some remarks when the bill should be discussed, but as the House has, I think, incon- siderately and without a full knowledge of the subject summarily disposed of it for a time, I deem it my duty to my constituents, and to the country itself, to bring for- ward the chief points of the question to a fair and just con- sideration of the representatives of the people. Such an act A JUST BANKRUPT LAW. 85 I regard as of vast public moment, and one that should not be delayed, even in a crisis like the present, unparalleled in the history of nations, when treason is seeking to over- throw the government. While crushing out this most unnatural rebellion, we should not be unmindful of im- {)ortant measures, which, in addition to conferring present )enefit8 upon the people, will also contribute to the future welfare of the country upon the return of peace. A more deep interest is felt upon this subject in our commercial cities than in other sections of the Union. The benefits of a well-regulated bankrupt law would be confined to no Ic^cality, but affect all parts of the country. The objections to such an act are chiefly made by those who, from the nature of their pursuits, are least conver- sant with the operations of commerce, and who will be the least concerned in the proposed change. It would be conducive, I think, to the common weal if, on this point, something were yielded to the mature judgment of the people in those places which are chiefly concerned in this subject — to the commercial classes, who, by their energy, do so much to give life and vitality to industry and pro- duction throughout every State. Some concessions should be made by each for the common good. If trade and commerce are fettered, a corresponding injury is felt in the agricultural and manufacturing districts. Every por- tion of the country looks to New York and other com- mercial cities for capital and business facilities. Stagna- tion or paralysis, to whatever extent they prevail in the great emporia, injure the national system of trade to its most remote extremities. The enactment of a just bankrupt law, impartially and by proper rules regulating the relations and interests of debtor and creditor, has demanded the attention of Con- gress ever since the organization of our Government. I deem the attention of the House is now especially due to the subject in consequence of the effects produced by the present rebellion, the ruin of many honorable and loyal men, who, by their commercial and manufacturing pursuits, promoted in better times the prosperity and employment of labor in the North, contributing, at the same time, no little to supply the necessities and comforts of life to the i M A nil m ' ¥■■ ' J IIW ■iMMMHI ft A JUST BANKRUPT LAW. I South, thus tending to unite the two sections of our country bv the firm bond of frequent intercourse and material interests, now for a time suddenly snapped asunder to the infinite injury of the States composing this Union, and of the world itself. The rebellion which we are struggling to repress has its victims not only on the battle-field, but also in the ranks of commerce. The abundant crops of the North, and the foreign demand for our breadstuffs, have preserved many of our citizens from the experience of these disasters — perhaps from a knowledge of their existence. In other cases, the manu- faciture of fire-arms, clothing, and other articles necessary for the welfare of the army, or progress of the wai", has occasioned a local and limited prosperity ; but the pressure caused by cutting off the Southern i;rade increased tlie mercantile failures so greatly that in the aggregate last year they exceeded by 2,041, or more than 40 per cent., the number of those who became insolvent in the great crisis of 1857. A careful estimate of these failures shows that they amounted to 6,993 in 18G1, while in 1857 they were only 4,932. In this calculation those only are in- cluded whose separate liabilities amount to at least $5,000. Were it possible to enumerate the smaller debtors, who have failed from the same causes, the aggregate would be enormously increased. We cannot restore their lost wealth to men who have been overwhelmed by calamities which they did not merit, and of which they could not foresee the origin or consequences, but it is at once our duty and our wisest policy to enable those who are thus embarrassed and are willing to surrender all they possess on earth for the benefit of their creditors, to labor again with renewed hopes on behalf of themselves and their families, thus also contributing to the enlargement and reinvigoration of that commerce and those varied industrial callings on which the collection of the large revenue imperatively required for national purposes now so greatly depends. Mr. Chairman, there are many friends of the Union in the Southern States who have lost their property through their loyalty to the Constitution, and whose losses we should endeavor to alleviate. Whenever peace is restored, the solvent merchant of the South will no 1 A JTJST BANKRUPT LAW. 87 of our '8e and napped npoHini; 11 wliich only on i. The demand citizens from a B manu- ecessary war, has pressure ased tlie Tate last )er cent., he great res shows 857 they y are in- (t $5,000. ors, who vvould be st wealth les which foresee luty and ^arrassed earth for renewed lies, thus igoration Uings on >eratively spends, le Union property id whose ver peace will no douht pay his obligations, but we need such a law as shall interpose between tha debtor and the creditor in the South as well as in the North, so as to counteract the tendency of popular and neighborly feeling to do injus- tice, and favor home creditors instead of those residing at a distance, or in other States, by facilitating preferen- tial or fraudulent assignments, the system now unfortu- nately prevailing. In this way creditors will receive their just proportion of whatever assets may remain. The same laws v/hich tend to create general dividends, and to make men honest, will operate in each section of the Union upon the same human nature, and tend to pro- duce the same results. The South is alre/wly deeply im- poverished, and as long as she remains so, tlie interests of our merchants must suffer with her. On the return of peace, the restoration of prosperity to all parts of the Union will be no less conducive to Northern than to Southern interests. A humane and permanent bankrupt law, enacted by the General Government, will save rail- lions of dollars to the Northern creditors, and prevent endless delay and litigation. In 1841 an extra session of Congress was called, chiefly for the purpose of adopting some measures of relief for the embarrassed condition of the country, and especially for the relief of debtors. In my judgment, this class of our fellow-citizens never deserved our atten- tion so much as at the present time. Comparatively few of the recent insolvencies have resulted from headlong speculations like those which culminated in 1837. Many debtors yet remain weighed down by the cares and diffi- culties caused by the financial embarrassments of 1857, when, in eight weeks alone, after a long-continued expan- sion of loans and the circulating medium, the banks of the city of New York called in twenty-one millions of bank debt, and the other one thousand three hundred and fifty banks of the United States adopted the same policy. The revulsion was not confined to this country or this con- tinent, but swept over the world, and was, perhaps, felt with more severity by other nations than our own. No foresight on the part of many who were then sub- stantial and prosperous men of business could have 88 A JUST BANKRUPT LAW. f.\ provided against the complicated disasters of that year, rrudent men, engaged in their ordinary piiraiiits, were struck down without any .sufficient warning, and many who had nianon to })elieve thetiiHelves rich, and beyond the reacli of the casualti(!s of fortune, suddenly became bank- rupts. But wiiile the num})er of those who were reduced to insolvency is greater than in 1857, it is equally certain that tlie sources of their difficulties were unantici})ated alike by the Government and merchants of this country. So far as commcircial causes alone were concerned the prospects of a successful and stable business were seldom more flattering than theirs were a year and a half ago. The causes of recent insolvencies are for tlie most part entirely political, and the unhappy men who have thus been ruined should no more be punished for these misfor- tunes than for any of the numerous accidents to which mankind is liable. The present iadebtidness of the Southern to the North- ern States is carefully estimated to be about $300,000,000, of which $159,000,000 are due to the cjty of New York, $24,100,000 to Philadelphia, $19,000,000 to Baltimore, and $7,600,000 to Boston. By the losses thus incurred many men of honor and integrity, whose means of meet- ing all their pecuniary engagements were as little doubted by themselves as by all who knew them, are undergoing tlie slow torture o: mercantile failure, hopeless and life- long if they arc r* o relieved by the Government of their country. In not .«, few cases the amount of their debts is many times less than that due to them by their former customers in the Southern States. Last year, in the city of New York, nine hundred and thirteen mercantile houses V)ecarae insolvent, whose separate liabilities were in no case under $50,000, and in several instances amounted to some millions. Out of two hundred and sixty-six lead- ing dry-goods houses reported as good when the rebellion began, only sixteen remain, and their condition is preca- rious. These firms cannot well be spared from our com- mercial circles at this present crisis. The common rules of humanity require our sympathy in their behalf, and no less do justice and a regard for the interests of the repub- lic require that, after a strict examination of the affairs of at year. ta, were (1 many yond the lie bank- reduced y certain bicipated country, rned the •e seldom lialf ago. loat part ave thus ^e misf or- to which. 16 North- 1,000,000, cw York, Baltimore, incurred of meet- loubted idergoing and life- t of their eir debts ir former a the city lercantile ties were mounted ^-six lead- rebellion is preca- our com- non rules If, and no ;he repub- ; affairs of 3 ( 1 ■i 1 i r-i- 4 ■■*' ^f A JUST BANKRUPT LAW. 39 each insolvent, if he uj)rightly and honorably surrender IiIh property for the be?ieHt of liis creditors, he shall be juirmitted to begin the world anew. Sir, it is a striking fact, and little to our credit, that while in most respects the United States adopt a system more lenient to the debtor than that existing in any other nation, they should not have adopted such meisures for exacting justice to creditors, and affording relief to honest and unfortunate debtors, as England, France, and most other commercial countries have long ago adopted and found, by long-tried experience, to be at once expedient and humane. Tlie just r)rotection of the weak and un- fortunate is eminently characteristic of our institutions and of the customs and wishes '^f our people ; and yet no wise and equitable law exists by which each bankrupt may be compelled to distribute his assets fairly and im- partially am(mg his creditors, and may then be free to devote his energy and ability to future acquisitions. Our States have, for the most i)art, long ago abolishetion will Rurcly Txot complain of a law mak- ing the course they pursue obligatory upon other creditors, thus preventing fraudulent and preferential assignments and much expensive litigation and delay. Those who conscientiously oppose such a law as will tend to render justice to both parties by exacting from the debtor all he possesses, to be divided equally among his creditors, guarding, by stringent and effective laws, against frauu, and restore him again to active life, are, I think, influenced rather by habit and custom than by due consideration. A bankrupt law, properly regulated, is a necessary element of every well-adjusted commercial system. Commerce has always been and always will be attended with many hazards. In an early period of human history, before credit became an element generally recognized in commercial ti-ansactions, and when the artificial wants of the people were few and unimportant, the risks attending the exchange of commodities were chiefly those connected with carriage xrom place to place> including dangers from the elements and from the inva- sions and robberies incident to an unsettled condition of society. Trade was chiefly limited to payments in hand. The code of laws was founded upon piinciples less hu- J i m A JUST BANKRUPT LAW. 41 mane and exalted than those we now recognize as of the Highest Wisdom. The imfortunate debtor was regarded as a criminal who could only discharge his obligations to a wronged and indignant community by a protracced or life-long confinement in prison, or V)y becoming a slave for a term of years or for life, It may have been that the losses wh\ch then occurred were often caused either by collusion with others or by some violation of common honesty. In our time we have ceased to hold the com- mon carrier responsible for those calamities or injuries which are caused by the act of God or of the public enemy, but the debtor is not the less held to his obliga- tions, althoug)i the losses which have overwhelmed him are caused by war or rebellion, or by those natural causes in v/hicb man had no direct or immediate agency. In early history, the annals of all maritime and trading nations are red with the blood with which the laws as to debtors have been written. There was a period in Roman history when the body of the debtor was divided among his creditors ; and in our century and time he has been placed in close confinement, with no means of subsistence except such as were afforded by the charity of friends, as if thus he would be enabled to disohaj-ge his debts to his creditors. The heart sickens, in this age of better hu- manity, at the lecital of those disasters which in former times overtook the poor delinquent and thobe who, under Providence, were naturally depending upon him for sus- tenance and support. The history of Great Britain affords us many instruc- tive suggestions on this subject. Occupying only a nar- row territory, her commerce, more vast than was ever at- tained by any other country, is supported by a system of credit. The most close investigation of economic science and a careful practical application of sound jirinciples are necessary to maintain the prosperity, it might almost be said even the existence of her people. Her credit system, like our own, is liable to many reverses, which the records of her courts of bankruptcy, stringent as they are, show to be unavoidable. The peculiar hazards necessarily attendant upon widely-diversified commercial operations early induced her statesmen to turn their attention to ,'t m ni! 42 A JUST BANKRUPT LAW. I * . some method of rapidly and certainly distributing the remaining assets of insolvent debtors. Accordingly, about the year 1543 (35 Henry VIII.), more than three centuries ago. Parliament enacted the first bankrupt law in that kingdom. It is worthy of notice that early legis- lation upon this subject arose from a regard to the interests of creditors only. It was intended chiefly to guard against the frauds which, even then, and under the former system of severe punishment, were supposed to account for a large proportion of the failures. It had become a common occurrence for delinquent debtor? to flee from the kingdom in order to avoid the impri^ >P7r ' consequent upon failure, taking with them wnatever valuables they could carry; and the first enactments of bankruptcy were for the purpose of preventing these summary and inconvenient methods of payment. Severity towards debtors had been found to defeat its own pur- poses. From time to time these laws had been modified for the benefit of debtors. From the first enactment of a bankrupt law in England, they have been regarded as necessary parts of every well-adjusted commercial code. The broad principle is fully recognized that whoever shall, in good faith, surrender all hi^^ property for the equal benefit of his creditors, shall be discharged from his debts. The law of that country now provides both for voluntary and compulsory bankruptcy, and the interest of both parties, so far as they can be protected by statutory provisions. For many reasons, a bankrupt law is more necessary in the United States than in any other country. Al- though we rank high among the chief maritime and com- mercial nations, transacting a vast trade between the different States of our own union, and a widely-extended commerce throughout the world, our business is done with comparatively limited capital, and is, therefore, at- tended with more than ordinary hazard. A common spirit rif enterprize arises from the general intelligence of our people, the character of our institutions, and the unlimited resources of our vast territory. But here nearly all business men unavoidably encounter greater perils than in European nations. The financial revulsions ■■if A JUST BANKRUPT LAW. *■■#■ which occur in all commercial countries are here pecu- liarly severe. Our business men depend, to a great extent, upon the facilities and paper money furnished by the banks. Great fluctuations continually occur in the amount of the currency, loans, and discounts obtained from these institutions. Upon this subject the panic of 1837 is suggestive. In January, 1834, bank loans and discounts amounted to $324,119,499, but in the corre- sponding date in 1837 they reached the amount of $5'J5,- 115,702, having increased more than 60 per cent, in three years. The extraordinary expansion in the circulation and loans, stimulated by the removal of the public deposits from the United States Bank to the State banks in Octo- ber, 1833, led to a great increase in importations, which rose up from $108,118,311, in 1833, to $189,980,035 in 1836, and largely affected the sale of public and other lands. The receipts from the public lands in 1833 were $3,967,682, and in 1836 $24,877,179. The over-trading and speculation thus engendered were brought to a close in 1837, by the "specie circular," and the panic of that year ensued, resulting in the suspension of specie pay- ments by the banks and in a general bankruptcy. Instead of a natural increase in the loans and discounts of the banks, in accordance with the increase of popula- tion and the exchangeable pi'oducts of the country, a decrease continued until 1843, when they were only $254,544,937, or less than half of the amount six years before. Not until 1854, a period of seventeen years, did they again attain the same amount as in 1837. They then had gradually increased to $684,456,887 by January 1, 1857, but in the year following were suddenly dimin- ished by more than $100,000,000. The circulation in current bank notes fluctuated in the same manner. From $94,839,570, about January 1, 1834, it increased to ^149,- 185,890 in 1837, decreased to $58,533,608 before 1843, then gradually incieased to $.il4,778,822 at the begin- ning of 1857, but during that year was suddenly dimin- ished by about $60,000,000, or nearly one-third its amount, bein^ only $155,208,344 on January 1, 1858. The financial revulsion of 1857, the effects of which . 'ii m 44 A JUST BANKRUPT LAW. jsfiii are yet in existence, arose from causes in some respects different from those of 1887. Until 1857 commerce and bank facilities had seemingly kept pace with the pv^pula- tion and resources of the country. The origin of these reverses may chiefly, I think, be traced to the increased diversion of capital from its legitimate purpose to rail- road enterprises and Western land speculations. Prior to 1858, about 24,290 miles of railways were constructed at a cost of not less than $1,000,000,000. An impetus was thus given to land operations along the lines of many new routes of travel. From 1854 to 185G, inclusively, the proceeds from land sales amounted to $20,404,691. No less than 26,091,670 acres were approj)riated to bounty land warrants and 18,372,550 acres more were granted by the 34th Congress to railroads. These figures, tjiken from the financial report of the Secretary of the Treasury, furnish an unerring index to some of our commercial revulsions. The system should be familiar to us all. ITor many consecutive years there is a gradual increase in the circulating medium and in the accommodations of the banks. When the crisis ap- proaches money is said to be abundant. Those who re- ceive loans from the banks are enabled to extend their owTi credit and give credit in return to the numerous tra- ders, manufacturers, and adventurers who, in this country, are never at a loss for opportunities of speculations or public improvements. Notes of hand, mor' ^ages, stocks, and even real estate itself, being then readily convertible into money, become, to a conside able extent, a medium of exchange, and swell the volume of the currency. The system pervades every class of society. Hope and inex- perience ever suggest that the new prosperity will be permanent and progressive. Each epoch presents new features. The lessons of past teachings are held to be inapplicable to the present time, and are unconsidered, or where they are remembered, the days of adversity are confidently believed to be remote. Personal property of nearly all kinds is bought and sold on an extended system of credit. Stocks are negotiated which when the time of pressure arrives are swept away by earlier liens. The amount of railroad stocks and securities alone, which 'i A JUST BANKRUPT LAW. 45 ceased to bave any cash or negotiable value in 1857-58, is believed to have been not less than $500,000,000. Real estate is often bought and deemed the most secure invest- ment, a quarter or half the purchase money being paid down, and a bond and mortgage given for the bal- The mortiraefe is foreclosed during the revulsion, ance. "CO" at a sale where there is little competition or none at all, and the mortgagor is held for the remaining balance of the debt. In many cases the rent of costly edifices in large cities is diminished at least one-half of its previous amount. Public works are suspended. Manufactories are stopped, wholly or in part ; and the grain itself, which would have been exchanged for other products, remains in the granaries of the farmer or unthrashed upon the prairies, for need of the requisite money or mutual confi- dence to bring it to market. Suddenly, and without any warning :ntelligible to the public, a financial collapse occurs. Men whose credit was unimpeachable, and whose pecuniary responsibility was as little doubted by themselves as by others, become unable to sell their property or negotiate new loans, while they are required to pay the debts they have already contracted. Their "means have been invested." Tens of thousands become insolvent who have abundant prop- erty to pay the whole of their debts, if it could be sold at the average price of the few preceding years ; but the relative value of money and of property has been changed. Frequently creditors are willing, under such circumstances, to release the debtor and assist him with credit in re- newed exertions, but their good intentions are frustrated by others who insist on the full letter of the law which gives them their pound of flesh, and continues the useless bondage of the debtor. He is free to go where he chooses, but he can accumulate no saving, either for the benefit of his family, for his own use in sickness or old age, or as a small capital by which he might be enabled to pay the debts conscientiously contracted in more prosperous times, with full })elief in his ability to pay them. He is like those who are said to have been sentenced laboriously to draw water, pouring it into empty vessels whence it es- capes as quickly as it enters. This is the penalty our tltf M ii Kfff*^ ^■fyi)H|]piBpi 46 A JUST BANKRUPT LAW. Pfffi ,'.:.■ «:' laws inflict on undeserved pecuniary misfortune. No sooner is a frugal debtor known to lay aside a small surplus from his earnings, than he is stripped by the creditor. Hence artifices are adopted. Recourse is often had to indirect ownership, sometimes involving actual perjury without offending against legal enactments, but destroying self-respect and inflicting the penalties of con- scious guilt upon the perpetrator, who often drifts on fradually through much suffering, to greater and greater emoralization. His family is reared and its character formed amid a cloud oi adverse circumstances. If we cannot make men honest, we can lessen the temptations which often lead them to do wrong. Let us see who is benefited by the laws which inflict so much misery upon debtors, even when they are honest, and upon their no less innocent families. The percent- age of debts paid out of insolvent estates is larger where bankruptcy laws exist. The experience of England is conclusive on this point, for the chief object of the bank- rupt law of that country, found by the experience of sev- eral centuries to be attained, is to render the estate of the bankrupt available in liquidation of his liabilities before it can be €• ncealed by fraud or dissipated by bad man- agement, or other means. As the morals and philosophy of trade advanced, it was found that humanity to the debtor did not diminish the payment of debts, but had the contrary effect ; and then the present creditable sys-* tem found a place in the statute books of England. The creditors at once receive the proceeds of the bankrupt's estate, and he is wholly released from his liabilities. Business men of the widest commercial knowledge concur in the belief that such a law would produce good results in our own country. The belief has a broad foundation in human nature itself. The first intentions of men are less selfish than their second thoughts. The trader who has recently become insolvent is boch able nm\ willing to do more for his creditors than he is either aule or willing to do after long protracted despair and in- solvency. Those who, for commercial purposes, have made this sul)ject their special study aflirm that, when- ever a moderate compromise has been offered immediately A JUST BANKRUPT LAW. 47 after failure, and been repelled, in hopes of obtaining a better settlement, the creditors, in ninety cases out of a hundred, would afterwards be glad if they could com- promise the debt at a smaller percentage, but usually fail to realize anything — the debt becoming a total loss. An attempt to settle with their creditors is usually one of the first efforts on the part of those who become insol- vent. If the debtor fails in this through want of con- currence among his creditors, and the claims against him are pressed, he foresees long years of thraldom and em- barrassment, and his next impulse is to secui'e provision for himself and family. In his despair of meeting with justice, he often has recourse to many subterfuges, few of which ever reach the public ear; but the common course is to make a preferential assignment, permitted by law, thus placing his assets in the hands of one or more friends, irom whom he hopes to obtain employment or assistance in business, or perhaps support and money from the actual proceeds. The remainder of tho«e to whom he is indebted remain unsatisfied, and he bids them defiance. Creditors, on the other hand, fearing assignments of this kind, often submit to compromises which they know to be unjust. A proper bankrupt law prohibiting these assign- ments would diminish, if it did not destroy, such dangers, and thus befriend the creditor. In many cases through these assignments, or by other means, the debtor is tempt- ed to keep all he can until some such terms as he thinks favorable can be effected. From this time he leads a surreptitious and demoralizing life. Perhaps one credi- tor alone objects to the offers made. The debtor is de- termined not to pay one unless he can pay all. It is necessary his family should be maintained. Time passes, and his assets are diminished. Often the creditor, fear- ing preferential assignments, hesitates to use legal meas- ures. The only dividend that can now be offered seems paltry. The debtor, finding that neither tne world nor the world's law befriend him, and believing that the bondage of debt will be perpetual, not unfrequently sets aside the common restraints of prudence and morality, and becomes an iucubus, an injury to society, instead of devoting his intellect and energies to its benefit. If of a '■it m m: A JUST BANKRUPT LAW. nature too scrupulous and honorable to yield readily to temptation, his sufferings are severe and constant. He endeavors to provide for those dependent upon him, but their respect for him is diminished by his own loss of conscious independence, and the change experienced in the social position of them all, arising from the ne- cessity of proper retrenchment. This he and they can meet, but society always attaches a certain degree of odium to the insolvent, who in his turn is humiliated, and often so far depressed that he resorts to dissipation as the means of finding a temporary forgetfulness. He feels weak and degraded in the eyes of that little domestic circle of his wiie and children, of those whom he is bound by every honorable and sacred instinct of our nature to maintain and defend at all legitimate hazards, by the daily labor of his life, receiving in return, as his natural right, the cherished equivalent of their affection and re- spect. He can bestow upon them nothing more than a temporary subsistence, taking care at best that he never has at his command more than the savings of a limited number of days. The law has done all it can to make honesty no longer the best policy for him, and the only hope he has of worldly prosperity, of competence, or of maintaining his family depends upon the successful practice of dishonorable concealments. It is urged by many persons that the bankrupt act of 1841 was unpopular, and led to the overthrow of the party that was chiefly instrumental in its passage. I regard such an objection as unworthy of statesmen of wide and liberal views, who comprehend a true and enlarged commercial policy. The passage of that act was preceded by an extraordinary financial panic, resulting in general insolvency, the causes of which I have briefly traced already. There was no relief for these bankrupts except through the passage of such a l&w. It was urged upon exaggerated grounds, as to the number of the insol- vents and the amount of their indebtedness, and formed a part of the series of financial measures of the party then in power. Under a great pressure it was passed. It was objectionable in some respects ; in these particu- lars it could have been afterwards amended; but in its A JUST BANKRUPT LAW. 49 main features it would have operated beneficially. As soon as the voluntary applicants, who were 83,739 in number, with au agt^regate indebtedness of $440,934,- 61'3.01, were relieveci, or in the process of relief, the law was repealed — just when, tlirough the involuntary clause, it would have become sei'viceable to the creditor, con- tributed largely to prevent futui'e jmnic, and exercised a wholesome influence upon trade and commerce. The error was not in the passage of the act of 1841, but in its too early repeal, before it had received a fair trial. Another prominent argument against affording relief to the unfortunate but honest debtor who has become the victim of casualties which, perhaps, as in the case of our present war, the statesmen and Government of our country were unable to prevent or foresee, is founded upon the fac<. that the assets of those who l)ecame bank- rupt, under the law of 1841, yielded only a small per- centage to tlieir creditors. Merely a moment's reflection would be suflUcient to make it plain to any man that the losses then broucrht within the reach of statistical research were the accumulated losses of many previous years, created under the operation of laws like those now existing, when, as now, there was no general law of bank- ruptcy. No such enormous aggregate of hopeless debt could have been accumulated under a permanent bank- rupt law. In almost every case the creditor would have compelled an equitable distribution of the estate of the insolvent, before it was dissipated tlirough delay ; or the debtor would have availed himself of the prospects opened to every honest man by just enactments, before his assets had been so fully consumed or squandered. These losses were incurred under a legal system per- mitting preferential assignments, and thus encouraging unjust concealments. Under a proper system the cred- itor would not be restrained by threats from enforcing his claims, but would compel bankruptcy and obtain a divi- dend before the estate could be concealed by fraud or spent in the maintenance of the despairing and entram- melled debtor. It should also be borne in mind that a large portion of the liabilities of bankrupts in 1841 was created in the ' f I. a h\ 50 A JUST BANKRUPT LAW. I^il 4 ,1 . ■ ; ' ! .' .t'tii in purchase of unimproved property, partly paid for cash, and the remainder secured by bond and mortcjaije, After the panic, the mortgagor failing to meet the prin- cipal, the real estate was sold, and bought in by the mortgagee, at, in many cases, less than the amount of the mortgage; thus securing his cash payment, and finally the whole property. The bankrupt act did not disturb pi'ior liens. Again, the assets were put up at auction by the general assignee, in many cases, without an investiga- tion as to their value, and were bought up by some friend of the bankrupt who had more accurate informa- tion as to them. Sir, reckless speculators will continue to encounter risks, whatever may be the statutes, but the history of the world assures us that the most flagrant speculations have occurred where insolvent debtors wore treated as criminals. We are yet without experience to guide us as to the comparative percentage paid under the present system, and the amount that would be paid under a just, stringent, and permanent law of bankruptcy ; but it is worthy of note, that while under the insolvent laws of England, which release the body but do not discharge the debt, few dividends are made, a dividend is almost always made under the bankrupt laws which encourage integrity, by permitting the debtor to have brighter pros- pects for the future, by releasing him alike from pj-ison and the debt — giving him no hope of prosperity- but through perfect honesty, yet allowing him through this course of conduct, a relief, complete and permanent. Such laws present all possible motives for honesty, and power- ful incentives to abstain from fraud. Sir, it seems to be a just view of the case, in accordance with the opinions usually entertained by business men, that the parties to commercial transactions, where credit is given, are, to a certain extent, adventurers in common. For fraud c^ dishonesty, the guilty should be punished — but in sales on credit, the risk is borne by each party, although not in equal proportions. The vendor enquires closely as to the pecuniary means of the purchaser, his habits of life, his knowledge of business, and his adapta- tion to its pursuits. He calculates the chances of his A JUST BANKRUPT LAW. ftl customer's success, by inquiries as to the competition he will experience, his practice of selling on time or on credit, and by information from all possible sources. In this case he may be regarded as an insurer of his own debts, and generally charges his debtor a higher price uj)on credit than for cash. Hence in those cases where misfortune and not his own crime has overwhelmed the debtor, he should, upon surrender of his efEects, meet Avith an honorable discharge. Various systems of insolvency regulating the relations of debtor and creditor pi-evail in different States. Special enactments for this purpose are necessary in every com- mercial community. In some cases his present assets are distributed, ami he obtains no release from the debt — his future acquisitions being deemed also the property of his creditors. In others the person of the debtor is discnarged, and he is free to acquire property in future, if a specified proportion of his creditors vote in his favor. In yet other cases he is discharged if his assets pay a certain percentage of his debts, and the consent of his creditors is not essen- tial to his release. Insolvent laws, of which any debtor whether imprisoned or not may have the lienefit, exist in California, Michigan, Ohio, Indiana, Louisiana, Missouri, Connecticut, New York, Massachusetts, and Rhode Island. Those persons who are imprisoned on civil process are alone entitled to relief in Delaware, Maryland, Tennessee, North Carolina, South Carolina, Georgia, Alabama, Mississippi, Illinois, and New Jersey. In Maine, New Hampshire, Kentucky, and Virginia, the relief is confined to debtors charged in execution. In California, Michigan, and Massachusetts statutes provide for the discharge of the insolvent from the debt itself if his assets are assigned and distributed among his creditors, while in many other States his person only is excepted. In the State of New York the insolvent laws enable the debtor, with the consent of "two-thirds in value" of his creditors, and on the dae surrender and disclosure of his property, to be discharged from all his debts contracted within the State, with certain exceptions. For commercial purposes the different States are a unit. II it'll -il'i'l m Tj^jfOWP**" A JUST BANKRUPT LAW. At present their laws do not extend beyond the limita of the separate States, and tlie persons subject to their separate jurisdiction. In this varied legislation of the different States we find a valid reason for comprehensive enactments. A law which will embrace the whole Union in its provisions has now become indispensable. Nothing less can relieve '>ur insolvent citizens from the heavy pecuniary obligations which oppress their energies, blight their future, and deprive the country of the benefit of their services and industry. It is estimated that the aggregate number of failures during the last five years, considering only those cases in each of which the deV^ts amount to $5,000 or more, and leaving out the numerous class of insolvents who owe less, is nearly twenty-five thousand, and the amount of indebtedness in them is nearly seven hundred i Ifty millions. The liabilities last year alone were n ^ as large as in the preceding three years. Many of these liabilities have been discharged by vol- untary compromise, but this condition of our commercial affairs cleai'ly requires the intervention of Congress, and this honorable body will fail in the discharge of an im- portant duty if it does not perform its share in affording proner relief. Upon this subject some differences of opinion exist be- tween the commercial and agricultural interests — the former urging a bankrupt law, and the latter inclining to oppose it. I see no good ground for opposition. Both parties would, I think, be satisfied with such an act as in its voluntary provision should apply to all persons, but in its compulsory clauses only refer to those who are merchants using the trade of merchandise, all retailers of merchandise, bankers, factors, brokers, underwriters or insurers. The agricultural interests . would not be in- juriously affected by such an Act. It seems to me that we can meet upon this subject in a spirit of harmony, and, without the imaginary rivalry of different interests, adopt some suitable measure that will do justice to that class of our citizens in whose behalf I now appeal to this honorable body. Society itself has at all times an interest in the subse- A JUST BANKRUPT LAW. 63 quent life and exertions of the bankrupt. The hope or expectation of future acquisition, by conducing to tlie in- dustry, honesty, and morality of tlie unfortunate debtor, contributes to the welfare of the community. A due regard for the public good demands that the future ac(|ui- sitions of the debtor who has faithfully surrendered all he owned for the benefit of his creditors, should be placed under his own control, and fully justifies prudent and careful enactments for that purpose. 'J i I ■ tnh\ f* |: 1 ' > I .1 '.";■■«■' I'f: .■! "it m m JjIaMU A JUST BANKRUPT LAW. ITS PRESENT NECESSITY AND IMPORTANCE AS A PERMANENT ACT. House of Beprbsentatives, Jons 3, 1864. ..'■ ■< , Although the necessity of a bankrupt law was sufficiently ob- vious, itB passage was so vigorously opp')8r d that it was not secured without perseverijig support. At the ;loi:o of the debates at this tiino, a few minutes were yielded to Mr. Ward. Having already presented the subject almost exhaustively, little remained to be done except to review the remarks of his opponents and recapitu- late the arguments he had advanced, and wliich remained luian- swered. Mr. Speaker : T am indebted to the courtesy of the gentleman from Ohio for the opportunity of making a few remarks. I feel veiy reluctant, having of late been so frequently before the House, to occupy its time now, nor would I do so if this were not a subject vitally affecting commercial and manufacturing interests of the city which I have the honor in part to represent. The large cities will be much more affected than the agricultural districts by the passage of a bill of this character ; but a just and reasonable settlement of the questions involved must be beneficial to all parties of the community, and I hope this Congress will have the honor of passing a bill that will relieve a large number of well-disposed but insolvent debtors from a bondage so nearly akm to slaveiy. I have already, durmg the last session of Congress, ad- dressed the Ilouae at length on this topic. The members of this honorable body do not often look into the details of statistics on a subject of this kind, and ^ feel it my duty, not only to this House, but to my constituents, to present briefly some of the main facts to be considered in this connection. A JUST BANKRUPT LAW. 55 A large number of those who will be relieved by the passage of this act became bankrupt from causes origin- ating in the present war ; from causes which they could not foresee and over which they could not possibly exert any control. » * * * * * It has been urged as an objection to the passage of this bill that it will release debtors in the Southern States. A little reflection will lead us to the conclusion that as the principles of human nature are nearly the same everywhere, Northeril creditors will, on the restora- tion of peace, receive a larger percentage of their claima against debtors resident in the South, under the mingled operations both of the voluntary and compulsory clausea of this national bill, than if the laws reffulatir.nr the rela- tions of debtor and creditor are left subject to a system of preferential assignments, or whatever other policy may be the choice of State or local governments. ****** The city of New York, from its commercial character and the extent of its business, is always, in every mone- tary crisis, the largest sufferer. No accurate statement of the insolvencies of last year has come under my notice, but the amount of their liabilities is computed to be about $50,000,000. I think it will be readily perceived by the House that this enormous aggregate of indebtedness can never be relieved except by means of a general law iu« eluding the various States. In the absence of such an act the energies of a large portion of the people are crushed. Tliere are probably twenty or thirty thousand individuals in this country wlio are now unable to extri- cate themselves from the evils of insolvency. If they could be discharged by a full and fair surrender of their assets they would again become useful members of the commercial community. I trust that the House will pass this bill. The subject has been fully discussed before Congress and in the country at different periods, and such a measure as ia now proposed has, with scarcely any exception, been uni- versally approved by the leading organs of public opinion throughout all parts of the United States. W: 11 11 ' ' i}(' W-^^ :lllf III I •• r 1! 56 A JUST BANKRUPT LAW. ■••ill * • 4 ' ■ ^l t. .«■, iri; During the last Congress no less than from thirty to forty thousand persons petitioned for the passage of a bankrupt law. I am satisfied that its enactment will benefit creditors as well ns debtors ; for the very moment that the avenue to escape is opened, men in failing cir- cumstances will extricate themselves from their embar- rassments by surrendering their property for the benefit of their creditors, and thus the creditor, instead of being paid as at present a small percentage of his debt, or fre- quently none at all, will receive a much larger dividend, as the necessary and direct tendency of the proposed law is to cut ofE the system of pi'eferential assignments yet permitted by law, but prejudicial to the interest of cred- itors in general, and frequently adopted by debtors be- cause no other means of escape are open to them. It has been urged as an objection to a general and permanent law of bankruptcy that under the experimental and temporary law of 1841 only a small percentage of dividends was paid to the creditors. To arrive at a just conclusion on this point it is necessary to remember that for a long period before the passage of that law, including the disastrous year of widespread insolvency, 1836-37, no national remedy existed for the relief of debtors. In the meantime, for the purpose of maintaining their fam- ilies, insolvents, having no legal means of restoration to an honorable position, were naturally but too frequently induced or driven to resort to indirect methods of con- cealing some portions of their property which had thus become gradually exhausted, so that when the law was passed there were few assets. A permanent law tends to produce a contrary result, and to prevent the waste of assets, both by its compulsory clauses and by opening out avenues of future and hopeful employment to every debtor who passes through the ordeal with an unblem- ished reputation. I regard it as a stigma on the age and country that, af- ter we have abolished imprisonment for debt, and done so much towards enlarging the privileges and rights of debt- ors, we should not have a bankrupt law. It is often said that if a man in failing circumstances will give up his property, his creditors will release him ; A JUST BANKRUPT LAW. 57 jral and rimeiital itage of it a just ber that icluiing 836-37, ors. In eir fam- ation to quently of con- ad thus law was tends to iaste of ling out every unblem- that, af- done so of debt- istances 36 him ; but practically it is well known that there is seldom a case m which there is not some creditor who will insist on having his pound of flesh. If nine-tenths of a man's creditors are willing to release him on the surrender of his property, the other one-tenth should be compelled to acquiesce and not force the debtor to pay them a hundred cents on the dollar, to the injury of the more liberal credi- tors, and at the risk of forcing the debtor to the adoption of a preferential assignment, or some other arrangement equally injurious to the general interests of his just creditors. Every member of this House is, or should be, familiar with those principles of legislation which are to be con- sidered in reference to a bankrupt law, an enactment de- manded alike on the grounds of expediency, humanity, and justice. The United States alone, among all com- mercial nations, refuse this measure of relief to the hon- est but unfortunate debtor, and at the same time permit in its stead a system of preferential assignments, unjust to the creditor and demoralizing to the public. I advo- cate no new and untried theory. Legi lation which has existed for several centuries in England, France, and the other leading nations of Europe, where it has been found by experience to attain the object for which it was enact- ed, compelling the just treatment of creditors, and affording relief to honest and unfortunate debtors, is worthy of our most earnest and respectful considera- tion. It is far more needed in this country, where monetary fluctuations are frequent, unforeseen, and vio- lent, than in the Old World, where the changes of trade are less common and embarrassing. It is in es- pecial accordance with the spirit of our institutions and of our people, who desire the protection of the weak, and that none shall be hopelessly oppressed. In all other respects our laws are lenient to the debtor. But let no one regard this side of the subject alone. The interests of the creditor are also to be considered. It is proposed to render the estate of the debtor available in payment of his debts before it has been dissipated by bad management or delay, or concealed by fraudulent contrivances. The creditor, as soon as due investigation, I h < I .1 ■■ tr S !:•• . i ,1. .«■. I * , ■ ^• 58 A JUST BANKRUPT LAW. just to all parties concerned, can be had, is to receive his share of the banki'upt's estate ; and if there has been no profligacy, no culpable carelessness, nor any attempt at fraud on the part of the debtor, he is set free once more to resume his accustomed labors for the benefit of his family and society. This course, while it is more profit- able to the creditor and more humane to the debtor than the customs already prevailing, tends also to create and maintain a higher standard of mercantile integrity and honor — a possession of inestimable value to the nation. The number of debtors who became insolvent in the Northern States in 1861, the first year of the war, was nearly six thousand, more than double the number of the same class in each of several previous years. These people were the victims of casualties which neither they nor the statesmen and Government of our country were able to foresee. At other times the sudden contraction of paper money and banking facilities, after a long peri- od of expansion and easy credit, has produced unmeri- ted calamities like those by which merchants and others dependent upon the Southern trade were overwhelmed in that truly calamitous year. It is our duty to provide for these people a ready and legitimate method of extrication from their difiiculties. They have been left — the victims of the war — wounded and disabled on the field of commerce. I am satisfied that no law which it is in the power of Congress to pass will be more acceptable to the people, or more beneficial to the countiy, than the one now under consideration. I therefore hope it will be promptly pass- ed. I now move the previous question. OUR COMMERCIAL RELATIONS WITH THE BRITISH NORTH AMERICAN PROVINCES. ! ':4 !'8f House of Representatives, May 18, 1864. • 1 if I: The treaty for promoting commerce with the British North American Provinces caused an enormous and profitable addi- tion to our trade with them ; but a subseqaent increase of duties by Canada, and other injurious enactments on her part, stimulated by her need of larger revenue, created much dissatisfaction in the United States. Under these circumstances the Legislature of the State of New York passed concurrent resolutions, saying that "free commercial intercourse between the two countries, developing the natural, geographical, and other advantages of each for the good of all, is conducive to the present interest of each, and the only proper basis of our intercourse for all time to come." The resolutions were referred by the Committee on Commerce to Mr. Ward, and he sought to give practical effect to their principles both by speeches and reports. Mr. Speaker: Among the many subjects of import- ance requiring our attention, none, except those iramedi- diately relating to the deplorable events transpiring in our own country, so justly occupy our time as our re- lations to the young and rising nation inhabiting the territory contiguous to our own on the north. If Mex- ico, our neighbor on the south, ready, perhaps, to form an alliance with the insurgent States, is to be ruled by a power hostile to us and our institutions, does it not form a proper portion of our public policy to cultivate the most friendly relations with the British Colonies ? Mex- ico has, it 18 true, been called a republic. She has striven after the realization of popular government, but has been too weak to attain it. The result has been anarchy, followed by her falling an easy prey to Euro- llfi \hl '^if ilili 60 OUR COMMERCIAL RELATIONS WITH CANADA. pean invaders, insignificant in number compared with her own forces. In the British Provinces the principle of government by the people through their representatives IS more fully acknowledged than in any country of mag- nitude except our own. Already they contain a popula- tion more numerous than all the free inhabitants of the United States in 1790, several years after the Revolu- tionary war had terminated in peace. Their territory is capable of maintaining in affluence a population much Larger than ours now is. Our commerce with the single province of Canada alone has, for the last five years, been larger tLan with any other country, excepting Eng- land, France, and Cuba. Can there be any doubt that it is more reasonable to attempt by negotiation the removal of any objectionable features which 7iay have arisen in connection with the existing treaty, than to disturb the industry and investments of the large portion of our citizens now directly or indirectly engaged in this trade ? Besides the limited provisions as to reciprocal trade and navigation, the treaty settled many difficulties which had long occupied the attention of our statesmen. The free use of the St. John Kiver was considered important to the eastern lumber trade. But the most pressing and urgent motive undoubtedly arose from the value of the fisheries near the maritime Provinces, and the imminent probabili- ty of hostilities with Great Britain unless some method could be devised by which the fishermen of the United States might pursue their calling on those coasts. -A large number of our fellow-citizens are engaged in these fisheries. Their lifetime is one of difficulty and peril. From the energy and character formed by a continual struggle with the rough elements in the northern seas spring the multitude of those who, through their uncon- querable perseverance and hardihood, enrich us by pro- moting our foreign commerce, and carry our nation s flag into the ports of every sea. A practical acquiescence had to some extent been given to our limited participation in the fisheries. The Provincial coast abounds in deep bays and inlets, very extensive, and forming an important por- tion of the fishing grounds. It was claimed by Great Britain that as she had jurisdiction within three miles of OUR COMMERCIAL RELATIONS WITH CANADA. 61 the coast, the old-time limit of cannon shot, the distance should be measured, not along the shore, but from cer- tain specified and prominent headlands. This was for a Ion"- time an essential point in the controversy. By the Convention of 1818, between Great Britain and the United States in relation to the fisheries, we re- nounced forever any liberty theretofore enjoyed or claimed by American citizens to take, dry, or cure fish on or within three marine miles from any of the coasts, bays, creeks, or harbors of British North America, but stipulated that they should have forever, in common with the subjects of Great Britain, the liberty to take fish of every kind on certain parts of the coast of Newfound- land, around the Magdalen Islands, and on the coast of Labi'ador. Complaints having been made by the several Colonies that the British Government did not enforce the pro- vision of the convention, but permitted Americans to encroach upon the fishing grounds thus renounced, a case was prepared in 1841 by the Legislature of Nova Scotia, to be 8ul)mitted to the imperial crown officers; and the Advocate-General and Attorney-General of England gave it as their deliberate opinion that " by the terms of the convention, American citizens are excluded from any right of fishing within three miles from the coast of British America, and that the prescribed distance of three miles is to be measured from the headlands or ex- treme })oint8 of land, next the sea, of the coast, or of the entrance of bays or indents of the coast, and conse- quently that no right exists on the part of Amei'ican citizens to enter the bays of Nova Scotia, there to take fish, although the fishing, being within the bay, may be at a greater distance than three miles from the shore of the bay ; as we are of opinion that the term ' headland ' is used in the treaty to express that part of the land we have before mentioned, including the interiors of the bays and the indents of the coast. ' The Colonial authorities maintained this view of tlie case, and it was confirmed by Mr. Webster, then Secre- tary of State, who, after quoting the first article of the convention, used the following terms: ■'Hi ml ,11 < 1 i j • ■ V ' ■ ■ * I 62 OUR COMMERCIAL RELATIONS WITH CANADA. " It would appear that bv a strict and rigid construction of tliis article, fishing vessels of the United States are precluded from entering into the bays or liarbors of the British Provinces, ex- cept for the purposes of shelter, repairing damages, and obtnin- ing wood and water. A bay, as is usually understood, is an arm or recess of the sea, entering from the ocean between capes or headlands ; and the term is applied equally to small and large tracts of water thus situated. It is common to speak of Hud- son's Bay, or the Bay of Biscay, although they are very large tracts of water. " The British authorities insist that England ha? a right to draw a line from headland to headland, and to captu'-e all American fish- ermen who may follow their pursuits inside of that line. It was undoubtedly an oversight in the Convention of 1818, to make so large a concession to England, since the United States had usually considered that those vast inlets or recesses of the ocean ought to be open to American fishermen, as freely as the sea itself, to within three marine miles of the shore." It would be difficult to devise a system more likely to embroil the citizens and subjects of the respective coun- tries. From the nature of the occupation itself, and the natural character of those who are engaged in it, frequent infringements of such rules would arise. The precise distance of three miles could seldom be readily ascer- tained. Through the interests of men and the ardor of the chase, very different estimates would be made. A settlement of the questions regarding the fisheries in such a way as to give peace and security to the people on both sides was exceedingly desirable. The British authorities, at the instigation of the Colonies, insisted upon the strict construction of the convention, which had long been inoperative or partially enforced. Applications for the navigation of the St. Lawrence, previously granted by courtesy, were withheld. A large number of armed ves- sels were sent by Great Britain to the Colonial stations. An excited state of public feeling prevailed. Mr. Web- ster gave official information that an American iishing vessel had already beeA taken by the British naval force on the Provincial coast. Its crew were carried as pris- oners into a British port. An expedition from other American vessels had hastily been armed and organized, and had forcibly retaken the captured vessel. It was OUR COMMERCIAL REIATIONS WITH CANADA. G3 deemed prudent by the statesmen of each nation to arrest the progress of events which might, almost at any- time, have precipitated the two countries into war, and if possible, to prevent their recurrence in the future. There was, as the present Secretary of State then said, " only one way that Congress could act, and that was by reciprocal legislation with the British Parliament or the British Colonies." By the treaty the impending dangers were wisely and honorably averted. The fish cured by the Colonists was admitted free of duty into our mar- kets, and we acquired for our fishermen " in addition to the liberty secured to them by the above-mentioned Con- vention of 0(5tober 20, 1818, of taking, curing, and diy- ing fish Oil certain coasts of the British North American Colonies tlt'^rein defined, the liberty, in common with the subjects of her Britannic Majesty, to take fish of every kind, except shell-fish, on the sea-coasts and shores, and in the bays, harbors, and creeks of Canada, New Brunswick, Nova Scotia, Prince Edward's Island and of the several islands thereunto adjacent, without l)eing restricted to any distance from the shore, with permis- sion to land upon the coasts and shores of those colonies and the islands thereof, and also upon the Magdalen Islands, for the purpose of drying their nets and curing their fish ; provided that in so doing they do not inter- fere with the rights of private property, or with British fishermen, in the peaceable use of any part of the said coast in their occupancy for the same purpose." Bills of reciprocity had from time to time been pre- viously reported to the House, but none were adopted. After the repeal of preferential duties favoring Colonial produce in the home mai-kets of Great Britain, measures for its free admission into the United States were more strenuously urged on behalf of the Colonies. The name and intention of Reciprocity, and the hope of approach to a system which could not fail to be mutually beneficial, were hailed with delight by manj'^ of the best and wisest of the nation. The plan w^as earnestly advocated on behalf of those great principles which, overlooking sec- tional boundaries, seek to allow free and practical scope to the natural alliance of material interests with the most U'; 'a • 4 I I i 'M ''; !i i • lU'i aW^^^^ iilll^l^ j. m " ' .• 1 ■ '. • ■».! . )-. *• ■■< ' ' • . ■ ..!• ■«' ...„J; t ;i; Hi t 64 OUR COMMERCIAL RELATIONS WITH CANADA. n()])le and benevolent designs of public or international policy. The British and Colonial authorities refused to nego- tiate on the subject of the fisheries or the navigation of the St. Lawrence apart from tlie subject of our commer- cial relations with trie Colonies, and they were all included in the Treaty of 1854. Our commercial relations with Canada and the other British possessions in North America have been viewed from so many local points — the trade of one city or dis- trict has so often been considered as fairly illustrating the character of the whole commerce between us and our neighbors on the north — statistics have frequently been so partially examined ^vith a desire to vindicate some foregone conclusion rather than to discover and deduce the truth — isolated facts have been reiterated without due regard to others of no less importance — that few enter upon consideration of this question without having formed unjust or acrimonious opinions in relation to it. I do not believe that calm argument, and candid, patient investigation are inconsistent with those just conclusions on all international subjects which are essential to the greatest prosperity of the public; or that it is more patriotic for us who have been sent here to assist in forming laws for the government of this people, to be rigorous and special advocates of some preconceived opinions or local interest than to be unbiased judges desirous of promoting the interests of the nation at large. I would be influenced by no hasty opinion, still less by any inveterate prejudice, considering details, but only con- sidering them in connection with the broader views relat- ing to the aggregate, by no means singling out especially for attack such a condition of international trade as may be presented at some one minor point of entry, but in- cluding as far as practicable the whole commerce of the United States with the countries whose territory extends far beyond our own oh the north-east shore, and follows inland the projection of Maine, the Great Lakes of the interior, the wilds of our extreme north-western Terri- tories, and the Rocky Mountains ; and is as near to the gold-beai'ing States on the Pacific as to New England and OUR COMMEllCIAL RELATIONS WITH CANADA. 05 tlie Atlantic, prencnting a frontior coterminous with our own for jit Ic'ftst four or five thousand miles, from Maine to Oregon. A widespread impression as to the operation of the treaty has been created by imperfect or mistakejn ie[)re- sentations. The injury wrought by them is not confined within these walls. The people look to us, if not for guidance, at least for the results of careful thought and deliberate investigation. It is essentially the nature of our trade with the Prov- inces that our exports from cei'tain Western ports should be very large and their imports compai^^'vely insignifi- cant, while the j)roduce from these regions and Canada is poured into easterly places of entry, whence scarcely any exportation of the same articles takes place. Hence, ou one side, the amounts of our sales, which are supposed to be beneficial, are regarded too exclusively, and on tne other our purchases are chiefly considered, and these are sup- posed to be injurious to our interests, in accordance with a popular but erroneous theory, applying to great inter- national questions between ourselves and foreigners such principles as are evidently false in individual transactions l)etween man and man. Ave must consider the interests of the whole country, studying the facts presented by the whole case. We shall then, I think, be led to the conclusion expressed by the concurrent resolution of th(; State of New York, that " free commercial intercourse between the United States and the British North American Provinces and Possessions, developing the natural, geogra[)hical, and other advantages of each for the good of all, is conducive to the present interest of each, and is the only proper basis of our intercourse for all time to come." Let us approach the subject of our relations to the people of these countries with a desire to comprehend it accurately and fully as it is, and a conviction that errors made in the spirit of liberality and friendship are less likely to be in- jurious than the perverse misunderstandings and recrimi- nations which, with their natural results of hatred, war, devastation, and bloodshed, have hitherto contributed the largest portion to human history. There is, I think, a general belief that the balance of vH , , , i 1 |: ft m Hi 06 OUR COMMERCrAL RELATIONS WITH CANADA. trade, as it is called, is against us in our intercourse with these Colonies, but the statistics recently furnished by th«! Secretary of the Treasury show that during tln^ ])erio, while our unports have been only $144,18.'{,. 090, showing that we have sold to them more by $26,445,- 6815 than we have bought from them. It ap])ears on the same authority that while the amount of our exports to Canada Jilone, since 1855, has been $134,614,J{76, we have imported thence articles to the value of $183,147,000, leaving a balance in our favor of $1,400,770. The exports of 1803 include $3,502,180 of gold coin. If there were no Ijalance on the otiier. side, this fact would be unimportant. The articles brought to the United States from Canada are never articles of luxury, but of the plainest and most absolute utility, for the most part necessary to the maintenanc(i of human life. Hence they are intrinsically more valuable than the pre- cious metals, and usufi^y may be readily exchanged in the markets of the woi id either fov specie or any other commodity. Tiie isolated fact of this exportation, due to the peculiar condition of our currency, was eagerly seized And used to make an unfavorable impression upon the public mind. As the statistics of the Canadian Govern- ment credit us with some such amount as I have named, it was inferred at once that our exports to that Province alone are annually $10,000,0(J0 in gold or its equivalent. It needed only a little breath, a few words, ready self- deception, bold assertion, with sufficient confidence in the credulity of the public, to ex[)and a statement, itself im- perfect and erroneous, into a bubble of these vast propor- tions. Upon this airy foundation were erected batteries of invective against the treaty, as if by some means we had been robbed of our just rights by the Canadians; and a vivid picture was drawn of the canals which they had widened and the railroads they had constructed through their forests, with the unjust proceeds of the robbery. In view of our temporary need of many arti- cles in the present national crisis — for instance, to supply m- OUR COMMERCIAL RELATIONS WITH CANADA. C7 our cavalry with hor8(is and tlie f^rain most Hiuta))le for tlieir maintenance — I (rihoiild not deem it inconsiHtent with sound political economy to pmvhase them witii tlie metal so alnnidantly Hupj)lie(l by our inexhaustil)le mines. Nearly the whole trade betwet^n the two countries is car- ried on by niea^is of gold and silver or their ecpiivaleJit in bills of exchange, or paper money redeemable in specie. For these reasons the exportation of three millions and a half of dollars in specie is not much to be regretted, but tlie j)ersistent habit of regarding one side only is deejdy to 1)0 deplored. It led to oversight of the fact that (luring the year in question we imported through Chani})lain alone nearly five millions of dollars in coins of the pre- cious metals. The balance of trade represents in the main the amount of gold and silver or their ecjuivalents sent from one coun- try to another ; and between us and the Provinces, since the treaty went into operation, that balance has been more than twenty-six millions of dollars. Under the influence of an aninms unfavorable to fair discussion the error loomed up into gigantic proportions, and it was stated and sent lorth to the lation that no otlier country presents so unfavorable a balance-sheet with us. This method of reasoning is little adapted to ])romote the interests of our people or to increase tlieir political intelligence, and more than likely to diminish the respect and good-will enter- tained towards us by the people of other countries. I may well be excused from further reference to the errors with which the subject has been invesicl. It is l)etter to examine the results and character of the trade itself, considering how far reciprocity and mutual benefit do or do not exist in our relations with the Provinces, than to follow to their end the those who are opposed to the principle itself. I have the satisfaction of knowing that this is no party question, and that many gentlemen on the other side of the House unite with me in efforts to establish or extend such a liberal policy towards the Provinces as shall nmtually benefit both of us, knitting us together by the bonds which are of all the most powei-ful, those of mutual [interest, well judged, in necessary conformity to higher delusive arguments of ! '<>'] 11 i': .;!d fiiir ,t :. m n G8 OUR COMMERCIAL RELATIONS WITH CANADA. principl(;8. I am less desirous of an union of tho govern- ments than for an union of the people. I do not wish to admit into our family of States any who are not imbued with the spirit of our institutions, and do not appreciate as we do the benefits reaultinff from them, or the principles on which they are established. Prudent men of business are not accustomed in buying and selling to limit their transactions to those who hold the same political or religious opinions as themselves. There is no need for the liabitant of Lower Canada to quarrel with the staple article of his food because it is made from wheat grov/n in Iowa, Wisconsin, or Illinois, or for the workman m the factories of New England to ask, for conscience' sake or for the sake of his country, whether the white loaf or biscuit ornamenting his table is the product of the golden grain which once waved on the fields of Upper Canada. The facts carefully collected by the Provincial govern- ments fully concur with our own in proving that an immense amount of y)enefits has accrued to the people of both countries by the increase of their respective freedom th.'ough the yet limited removal of artificial obstacles to their intei'course. Upon the plainest principles of com- merce, the individual transactions constituting the vast aggregate of tliis trade since 1855, and amounting to more than fifty millic 's of dollars in 1863 alone, must year after year liave been sufficiently profitable to re- munei'ate those who produced the substantial materials of the exchanges and those who were engaged in the traffic, who, in tlieir tarn, could not have continued their business if they haa not found in the people at large customers or consumers who were benefited by the pur- chases they made. The treaty was dated June 5, 1854, and its salutary effects were partially experienced during that year. Our exports to the Provinces during the seven preceding years have been multiplied nearly three-fold in the seven years which have elapsed since the treaty, having been $69,H86,- 107 in the former, and $171,628,779 in the latter period; while our imports from the same regions have increased more than four-fold — having been $34,815,885 in the OUR COMMERCIAL RELATIONS WITH CANADA. 09 former period, agair^i $145,183,096 in the seven years since the treaty went fully into effect. Taking a general view of the subject commercially considered — sliowing the results in the aggregate with- out entering into special and partial details — it does not appear that the sj^stem as a whole is one of mere favor to our northern neighbors or of injury to ourselves. It is to be expected that of the raw or unmanufactured products of the field, the forest, and the sea, computed altogether, the Provinces will sell more to us than we can sell to them. This naturally arises from the maritime position of the Eastern Provinces, and because the Prov- inces stand in much the same relation to the United States as that occupied by the new Western States to the older settlements in the East. We receive from them the products free under the treaty to a greater extent than similar articles are exported co them in return, but may reasonably expect to make up the deficiencies by selling more manufactures and commodities of tropical, Asiatic, or other foreign origin, either the products of our own labor or brought from over the seas, chiefly in American vessels, and purchased to a considerable extent with the manufactures or productions of this country ; thus era- ploying and enriching our manufacturers, merchants and commercial marine. We find, in accordance with this view, that from these sources we have exported to the Provinces an amount which, added to that of the raw material sold by us to them, is sufficient to make up the balance of $2(),44:5,()83, during the period in considera- tion, more than we have bought from them — a sum which has l)een paid in specie or its ecjuivalent. The value of the foreign merchandise (exclusive of articles passed through the United States in bond) ex- ported by us to the Provinces during the seven years im- mediately following the ratification of the treaty, was $81,300,286 — purchased chiefly with productions of the United States, and which yielded employment to the farmer and manufacturer, shipper and sailor, as well as profit to the merchant. The amount of our exports of manufactures and other articles of United States origin, not included in the treaty, is officially stated to have been m 1 I- 70 OUR tJOMMERCIAL RELATIONS WITH CANADA. $47,269,139, during the first six years after it went into effect. When investigating this question it is necessary to re- member the j)eculiar relations of the Provinces to each other, and to tlie mother country. Although owing in common a political allegiance to one sovereign, each of the colonies is, in fact, an empire within an empire, having a legislature of its own. Each of them has a separate tariff, and charges the same duties upon the products of the others, and of Great Britain, as upon those of foreign countries. Their union is political, but not commercial; and the treaty received the sanction, not only of the British Government, but of the colonial legislatures of Canada, New Brunswick, Nova Scotia, Prince Edward's Island and Newfoundland. So far as I have been informed, the results of the treaty with those colonies, which for the sake of distinction, may be termed the "Maritime Provinces," have l)een satisfactory, although as to them, it should be regarded as neither complete nor final in itself, but as only one link in a chain of events, permitting the people of both cimntries to perceive more clearly the benefits of mutual intercourse, and to start with increased proljabilities of success towards a system of unfettered, absolute and complete reciprocity, so that each may enjoy fully the natural advantages of friendly neighborhood to the people, territory, and possessions of the other. Of all the Provinces, Canada is much the most im- portant. In 1860, the inh ibitauts of them all numbered 3,258,000. Of these, more thar 2,500,000 constituted the population of Canada, and less than 700,000 that of the others. This Province, projecting from the northern extremity of Maine, southerly to Detroit, and thence northerly as far as any considerable settlements are to be found near our frontiei", occupies a position whence the best route for passengers and freight to the ocean, and by that common highway to other parts of the world, for the whole year is through the territory of the United States. For nearly half the year, when owing to a rigorous climate the riv(!r St. Lawrence is impassable, the oiuy practicable means of intercourse for Canada with other nations are through this country. Different routes OUR COMMERCIAL RELATIONS WITH CANADA. 7l of communication may be opened through the Maritime Provinces, but none of them can permanently be so. beHeficial as the lines of travel leading to the great natural centres of the commerce and shipping of this contineuu — the Northern American cities on the Atlantic. Nor are those facilities unimportant to the United States, which would create a free right of way, unquestioned, and unencumbered by forms, across the large peninsula of Upper Canada, separating several of the North-western and grain-producing States, together with a vast area of fertile territory yet unoccupietf, from the commercial and manufacturing regions in the East. Canada also extends up the St. Lawrence on both sides for several hundreds of miles of the ocean. jHence, mutual rights of transit are exceedingly advantageor.3 to both countries, and our commercial relations with this Province are worthy of special consideration. General dissatisfaction with the treaty exists along the whole of our northern frontier near Canada, and the moral and political effects, Avhich it was hoped would result from it, have been destroyed — the effect of the Canadian tariffs enacted since 1855 having been to de- crease very materially the amount of manufactures and goods of foreign ori- in sold by the people of this country to those of the Provinces. This alone constitutes a sufficient reason *'or a revision of our mutual conmiercial relations, so that oni- manufacturers may not only receive from the regions on 'le North of us, a considerable portion of their necessary ,- pplies of timber, l>readstuffs, and animal food, but m;. also enjoy a less restricted, and if practicable, an entirely free market for the products of their labor. During the last five years the manufactures of the United States, expoi'ted to Canada, have in the aggregate decreased from $4,l85,51t) in 1858-9, to $1,510,802 in 1862-3, and although the fluctuations in our own currency, and the scarcity of labor arising from the war, have tended to produce this result, there can be no doubt that the chief cause of this important change is to be found in the increased ta^'iffs of Canada, by which the duties on man) articles, such as are manufactui'ed iu the United :l i I L : -■ '1: ■ -rt .'J 72 OTJR COMMERCIAL RELATIONS WITH CANADA. :!li • :.■ t , ,1, i) ! mm States, have been gradually increased since the time when the treaty was made, when those chiefly levied on such imports mto Canada were 12^ per cent., but have since been changed, and are now at rates varying from 10 to 20, 25, and 30 per cent. In some instances, such as cigars and spirituous liquors, a higher fate is levied. The effect of these duties is to permit the importation of British and Fi'ench manufactures of the finer qualities into Canada as heretofore, but to stimulate the home production of goods of the coarser and more substantial qualities, such as those of the United States chiefly are. Canada cannot, even under a high tariff, compete with the nations of the Old World m the most costly and delicate manufactures, but with the same amount of pro- tection can, and does to a considerable extent, exclude those of the United States — a nation less advanced in this branch of industrial production. There is scarcely any manufacture of this country which has not, or will not be transplanted to Canada, and stimulated, under the present protective duties of twenty per cent. The only exceptions are those requiring a more extensive market than the comparatively narrow territory and scanty popu- lation of the Province can afford. Indeed, it has been deliberately calculated by some Canadian statesmen that they will persevere in a protective system against tlie manufactures of the United States until the time arrives when they shall not only be capable of supplying their own market, but will prefer free access to this country for the sale of their goods, to a continuation of the pro- tective duty in Canada. The result of a free interchange would no doub'" be to encourage in both parts of the con- tinent those manufactures for which each is especially adapted — thus benefiting the people of the two countries by supplying their necessities with less expenditure of useless labor. It is just to add that the tariff of duties levied by Canada, during the period in question, has been much lower than those charged by us upon her manufactures, and that while our expoi'ts of these articles amount to many millions, it is very doubtful if the actual matiufac- tures of Canada bought by us reached in the aggregate to OUR COMMERCIAL RELATIONS WITH CANADA. 73 more than a few liiui(lred thousand dollars, throughout the whole of the last ftve years, during which the diminution has arisen, although in that time the Canadians alone bought from us manufactures to the value of $15,343,004. The whole amount of our import from Canada, subject to duty, for the eight years which have elapsed since the treaty, is only $3,595,350, including not only Canadian manufactui'es, but also goods from all other parts of the world. Of these, one class alone — iron and its manufac- tures — amounted in value to about $1,500,000 — not pro- duced in Canada — a fact, which others of a similar character gives good ground for believing, that if the articles really and exclusively made in the Province were selected, it would be seen they are no more than those minute matters which are scarcely cognizable in legisla- tion or national. statistics. Adding $33,071,475, the valut; of foreign merchandise, exported by us to Canada, during the same eiglit years to the domestic manufactures also thus sold, the aggregate value of these classes of our exports to Canada cannot be less than $60,514,479, against $3,505,350— the amount in like manner bought by us from that Province. In addition to the existing and increased impediments to the importation of our manufactures into Canada, one of the obstacles to a fair reciprocity consists in the method enacted by Canadian tariffs, since the treaty, of levying duties on articles according to their value at the place where last purchased, not according to their value in Canada, or by specific duties, thus pj-actically creating a discrimination against the merchants and carriers of the United States. The intention was explicitly avowed, and the results are already known by our experience. Under the operation of natural laws the trade of Canada in many important articles will flow to and through the Atlantic cities, such as New York and Bos- ton. Under the present system of Canadian legislation our exports of foreign goods to Canada have decreased from $5,501,125 in 1859 to $1,500,397 in 1802, and $1,468,113 in 1863. They attained a yet higher value previous to 1859, when they amounted to $8,769,580, but for purposes of fair comparison I avoid the years of great U . 1 ■'( i ; 1 i 1 m f B£ sTuY f. . 'r ! ? 1 t " ■ ■'; t> i 1 1 1 1 I v. It# 74 OUR COMMERCIAL xlELATIONS WITH CANADA. expenditure and undue speculation. In 1863 this portion of our trade was only one-half of tl.e average it reached in each of the five years preceding the treaty ; was less by 25 per cent, than in 1849, and since which time our total exjiorta of all kinds to Canada have increased five- fold, or from $4,234,724 to $19,898,718. That the deficiency in our exports of foreign goods to Canada has not arisen from decreased consumption, but from legislative enactments by duties practically discrimi- nating against tlie Atlantic cities, is made yet more evident, by the official records of the Province, whence it a])pears that the value of merchandise imported into Canada, and passed through the United States under bond, was, in 1860, $3,041,877 ; in 1861, $5,688,952 ; and in 1862, $5,508,427. A circumstance which has justly created much dissatisfaction in the provinces is that the governor of Canada, by a departmental ordei", might dis- criminate in favor of particular I'outes througli the United States — a singular violation of the comity or hospitality of the United States in extending unusual facilities not required by any treaty for the transfer of goods on the Grand Trunk railroad, via Portland into Canada. The chief articles of commerce between the two coun- tries are grain and flour. Of wheat and flour we have exported to Canada between the years 1856 and 1863, inclusive of both years, a quantity amounting in value to $30,643,772, and imported to the value of $49,940,127; the imports exceeding the exports by $19,296,355. Of wheat alone from this Province our imports have been 20,956,322 bushels, and our exports to it 22,933,7(53 bushels. Of oats and other grain our imports have been $15,230,364 in value, making an aggregate of $65,170,- 491. The value of the same products from the otlier Provinces was $1,990,787, while our exjwrts were $i^9,- 422,918, so that upon the whole we have sold the people of the Provinces more of cereals and their products by $360,474 than we have bought from them, our exports having been $67,521,752, and our imports, $67,161,278. Of flour and breadstuffs alone, from 1856 to 1861, our exports to all the Provinces exceeded our imports from >i;i'' OUR COMMERCIAL RELATIONS WITH CANADA. 75 them by $0,184,224. From the nature and geographical position of our territory we have }>een, anil, under a free system, sliall contiaue to be the forwarders and merchants between the people of the different Provinces. The question on both sides as I'egjirds wheat and flour is not one of rev^enue or consuin])tion, but rather of com- merce and transportation. If our ^vllole crop of bread- stuifs were sold to Canada, and sent as it would be, unless sold to the United States, to a foreign market, via the St. Lawrence, the market value of the Canadian crop would neither be enhanced nor diminislied ; nor would our farmers be affected if the Canadian sur[)lu8 were sent through the Erie canal or over our railroads and the Hudson river, except that in both cases the local demands would be increased by the amount required for the use of that part of the population which would be employed in transacting the increased business. Many beneficial results are produced in the course of these exchanges. A large amount of Canadian wheat is mixed and ground with western wheat by our millers, with results profitable to themselves and their customers. New England consumes much of the best wheat and flour of Canada West ; and I am not one of those who are desirous of protecting the manufactures of New England by taxing their bread as well as their fuel. According to the census of 1861 Canada East contains 1,111,566 inhabitants, pro- ducing only 2,563,114, and consuming, it is estimated, nearly three millions of bushels of wheat. From habit and other causes these people prefer the spring wheat of Wisconsin and Illinois. The corn pi'oduced in great abundance and. at small cost in the rich warm valleys of the Wabash and Illinois is consumed to a considerable extent in the Provinces, especially in the n^anufacture of alcohol, and we in our turn import and use a large quantity bf barley and oats — gi-ains grown in great per- fection by the people of the Provinces. The products of tho forest are the next in value amon^ our importations from the Provinces, having amounted during the last eight years to $23,537,203, of which $19,- 894,930 were from Canada, and $3,642,273 from the other Provinces — an annual average of $2,942,150, while our ^ 1 ■ ■ ■ 1^ 'it ii^ p 1 , I . i I , h ■. r 76 OUR COMMERCIAL RELATIONS WITH CANADA. • v, sales of the same class to them have been comparatively small. No inconsiderable share of this timber has re- placed old rail-fences on our farms, or enclosed new land, or built the house of the pioneer on the prairies. With the progress of our settlements our own supply of this necessary article has been seriously diminished, and its sources have gradually become more remote and inacces- sible. Unlike the crops of the farmer., which may be produced year after year, a second crop of pine-timber is never expected from the same land. Protection may seem to have some force in favor of those manufactures which we are led to believe will ultimately be sold cheaper if we grant a temporary monopoly to their producers, but the more the manufacture of lumber is increased the fur- ther we shall have to go for it, and the higher will be the f)rice of an article of which there is necessarily only a iniited supply. In the freedom and expansion of this trade the Government relinquished a small amount of revenue, but the traffic of our northern lakes and canals was greatly increased, employing profitably a large num- ber of our citizens, fhe carrier and consumer, together with the manufacturers of New York and New England, partake of these benefits. Timber, a necessary article of consumption in building, and especially the material used for thi.i purpose by people of moderate means, is also essential in the conporuction of ships — an important branch of national industry and element of greatness, compelled to face the eager competition of the whole world — and the supply of timber suitable for ship-build- ing has been so much reduced in the United States that memorials have been presented to this House, asking that its exportation may be prohibited. We sell timber exten- sively to the British Colonies and other countries, so that the exports the last two years have been nearly seven millions. Our importation from the Provinces of the raw materials, used to a considerable extent in these manufactures, is annually $2,942,150, and our exports of the manufactures themselves in the last two years have been more than ten millions. The class of importations next in value is that of ani- mals and their products. These during the last eight OUR COMMERCIAL RELATIONS WITH CANADA. 77 years have amounted to $11,813,332 from Canada alone, with the other Provinces this trade is of nominal value. We export large quantities of pork, beef, lard, buttei', ttc, to Canada, making in all an aggregate of exports in tliis class of $12,057,510 — rather more than our imports — the nature of the trade being that we chiefly import animals themselves and sell their products. The remaining miscellaneous articles are for the most part of no large amount separately, but consist of such materials as should be supplied to our people and manu- facturers at as low a price as possible. Among the most important of those not yet named is coal — an essential element of household life and comfort, and the chief pro- ducer of the great labor-saving power of steam. The exports from -Ohio and Pennsylv^ania to Upper Canada are nearly of the same value as our importations from the lower Provinces. In Canada West the coal of these States has superseded that brought from Liverpool and the lower Provinces; and, at Montreal, the anthracite of the easterly portions of Pennsylvania also competes with the coal brought from Liverpool and Nova Scotia. These minerals are not found in the geological formations of Upper Canada, and as the forests disappear, and wood becomes too valuable to be used as fuel, that part of the Pi'ovinces will ultimately depend exclusively upon the United States for the most economical supply of this necessary article. Anthracite coal, although found abundantly on the eastern slope of the AUeghanies, is found nowhere in the Colonies, and will always, in the natural course of events, be imported by them, while for many purposes of fuel, in the eastern States, economy dic- tates the use of the coal of Nova Scotia. Bituminous coal, of the kind most commonly used in the manufacture of gas, is not found in our territory east of the Alleghany mountains, within an available distance of our chief At- lantic cities. It would be needless to say that a trade of til is kind is mutually beneficial. Under a system of free trade in coal the people of each country are supplied more cheaply than they otherwise could be with neces- sary light and fuel; and both save throughout large re- I I I ' ' Ml • '1 li; I" 1 y »4 , i 1 1 1 '• '' " 1 ' ,■ i'.- w 78 OUR COMMERCIAL RELATIONS WITH CANADA. gions the expense and labor of carryinr^ a heavy and bulky article for several hundreds of miles. Nearly all the various coininodities received free of duty by each country from the otlier under the provi- sions of the Treaty, are the simplest and plainest necessa- ries for the support of human life. I am opposed to any permanent legislation tliat would prevent tlie free impor- tation of them, to every system that under any specious name, hiding an error or pretence, signifies dearer food and increased taxation on the raw materials used in the manufactures — to any system, whether called protective or not, which means diminished commerce by expelling colonial produce from ourcinals and railroads to increase the employment of Briti^ diipping through British sea- ports at the expense of cur own. As regards the objection sometimes urged, that if by reciprocal legislation we admit certain raw materials free of duty from the Provinces, it becomes necessary to admit them by similar reciprocal legislation from several other countries, I answer that like enactments would in all such cases prove highly advantageous to the United States, and that the law might safely and beneficially be extended so as to admit also on the same terms of mutu- ally free import and export the same articles from every nation in the world. Our supplies might be little in- creased by such arrangements, but oar markets would be immensely extended. There is much in British policy which should serve as a warning to us — much to be condemned — much serving to teach us what we should always shun as examples; but we cannot imitate s better or more honorable ])rece- dent than the removal of taxes from human food, from the daily bread and nutriment of men, women, and chil- dren, whether rich or poor. When the markets of Great Britain were in effect thrown open to the grain uiid pro- visions from the United States and the world, the old exclusive policy was reversed and one of the greatest tri- umphs of popular liberty, f)f progress towards the well- being of mankind was achieved. It is common to quote with admiration the sentiments of Greek and Roman ora- tors, who, sometimes indeed, conquered the narrow limits IliH'lUIUSIMniiii: "^ OUR COMMERCIAL R^ILATIONS .V'lTH CANADA. 79 f)f t'leir creed and censed to treat the masses with con- tempt, but I liold in higher esteem and deem more conso- Tiant with justice, humanity, and the religion y)y whicli we profess to regulate our a-tions — those words of a modern statesman, Sir Robca-t Peel, who when renouncing the office of Prime Minister of England and severing all his old party ties, said : " I shall leave a name execrated, 1 know, by every monopolist, who, ])rofessing honoi-able ojtinions, would maintain protection for his own individ- ual benefit ; but it may be I shall leave a name souKstiniea I'emembered with expressions of good- will, in the al)ode9 of those whose lot it is to earn their daily bread by the sweat of their brow; when they shall recruit their ex- hausted energies with abundant and untaxed food, the sweeter because no longer leavened by a sense of injus- tice." These words it seems to me, contain in substance an essential portion of the principles oy which we should be rictuated in the imposition of all taxes — leaving free as water, light and air those articles which are absolutely necessary for the sustenance of human life. Nor can I regard this principle as less applicable to the people of the United States than to those of the British Pj-ovinces ; and it may reasonably be hoped that in a fair confijrence between parties, each of whom has so much to gain by commerce with the other, and so much to lose by exclu- sive legislation, existing difficulties may be removed and the interests of both may be regarded and weighed in a just balance. As regards the navigation of the St. Lawrence, I am not so much disposed as some others have l)een to find fault with the Treaty, because we have made less use of this river thau was expected. They Avould have had an a?'2;ument mc^e in accordance with their usual method of reasoning, if the Canadian carriers had diverted more and more traffic from our own railroads, canals, and rivers, from our own port-? on the lakes or the sea-coast. Looking forward with certainty to the time when the artificial barriers separating mankind on this continent shall be overthrown, and a system of free commercial intercourse e\.4 through( ,i' ■ . V ■ -i'.'u ■ if ■/:]'■ It I. 'Xm 1 ^g^ : r m ♦•■•;, ' i .( . 80 OUR COMMERCIAL RELATIONS WITH CANADA. canals and docks or ereetinof cities in places wliero it will not be remunerative. As tlu; cheapest and ))est routcH are those wiiich nuist ultimately j)revail, the sooner com- petition is fairly open the btjtter for the people — the i^r(!ater will be the benefits reciaved by the greatest num- ))er, ^vitllout any injustice to any. We cannot in thu end {H'event this consununation if we would, and we oui^ht to lave no desire to prevent it if we could. The city oi New York, occupying a central position between the Al- leghany mountains on the Western and the Blue Moun- tanis on the Eastern side, is pre-eminentl) the emporium of commerce on this continent. It is the market or ex- change for chartering vessels. So true is this that ship brokers are engaged there when tiie St. Lawrence is open, in chartering vessels to go thence to Quebec for the pur- pose of carrying cargoes to J'^uropean ports, thereby adding the cost of a long and circuitous route to their expenses, instead of naaking a direct voyage acrossi* the Atlantic from New York. Freights ai'e usually cheaper from Canada West via. New York than the St. Law- rence, provided there are no governmental restrictions on either route. The great increase in our trade with Can- ada, and the diminution of the exports and impoi'ts by that river immediately af t(M- the Ti-eaty, pi-oves this broad fact. It was fully admitted by the Canadian Minister in the establishment of discriminating and countervailing duties which, although injurious, were not sufficient to conti'ol fully the natural laws by which this commerce is reguhited. The river at Quebec and Montn al is open only for about half the year-, and yet docks, w^arehouses, hired attendants and otlier necessary appliances of trade must be maintained for the whole year. The navigation, when open, is full of perils.' Narrow strait^, heavy fog.><, strong currents, and dangerous ice, sometimes sunk be- neath the water and unseen, beset the adventurous mar- iner. Eight steamships belonging to the line subsidized by the Canadian Government, with many passengers, have been lost since 1857, while the old Cunard line, estab- lished almost with the beginning of steam navigation on the oc*^an, lost only one vessel and no passengers in tho whole period of its existence. That solitary loss was on OUR COMMERCIAL RELATIONS WITH CANADA. 81 S- the coasts of the Provinces and caused hy tlie (U'nsc; foijfs and uiic.\|)ected cuirents. The rates of frei<^ht on flour from (^uclx'c to Liverpool an; usually higluM" tluin they are from HufFah* (m Lake Erie to Liveri)ool by way of New York. The same laws of trade dett^rmine the cheapest route as to more bulky artichfs. The rate of freight from that city to Europe is usually only one-half of the rate fi'om Quebec. New York being the great port for the entry or arrival of merchandise or passen- gers, vessels coming to it receive remunerative rates on mbound cargoes, while going from Europe to Quebec they usually proceed in ballast, and hence are compelled to charge such a price for freight to the Eastward alone, as will yield them a profit both on the inward and out- ward passage. Beyond the merely statistical views presented by the subject, the relative position of the two countries forces itself upon our attention. They form together by far the larger portion of the vast North American continent — • extending from one great ocean to the other. The neigh- l)oring British Possessions reach down beyond the centre of the region on this side of the Rocky Mountains, and separate the wide and rich domain of the North-west from those of the East, while on the North-east of the Provinces our territory projects far between them and the great Atlantic highway of the world — thus pointing out clearly how advantageous, almost how necessary, mutual riglits of way and free commercial union are to the i)eo})le ot each country through the territory of the other, unless we mutually condemn ourselves to a jierpetual system of useless and wasted labor by carrying round the long pro- jections made by the territories of each. We have in common the great lakes. As their country rests upon the Arctic seas, ours is washed by the warm waters of the Gulf of Mexico. Between us we have so great a variety of soil and climate as to be capable of yielding almost every production necessary or conductive to the comfort and happiness of civilized man. There is no reason why the commercial relations of the States and Provinces can- not be mutually as beneficial as those of the difFerent States are to each other. The wages of labor, which, it 6 ? ! ]'}' ' ■• 82 OUR COMMERCIAL RELATIONS WITH CANADA. is held by some, debar us from unrestricted commercial intercourse with other countries, lest we reduce the remuneration of our own people to the Eui'opean or Asiatic standard, are on ordinary occasions nearly e(iual on both sides of the frontiei'. T^he impediments to free communication exist only through laws made b}- man, and which we and those with whom we have to negotiate can make or unmake as we choose. Why then })y Gov- ermental action seek to force the capital, labor, and traffic of the two countries into barren and wasteful channels, instead of mutually protecting home industry by per- mitting it to attain its most profitable results ? Difficul- ties which now appear to ])e insuperable may vanish before united effort and by the conference of intelligent commissioners on botii sides. Revenge and retaliation are sentiments by which the mind and policy of a true statesman can never be gov- erned. It was well said by De Toc(|ueville, who had not before him the illustration of his subject, f urnislied to ns by the condition of our own country at this day : " The first notion Avhich presents itself to a party, as well as to an individual, when it has acquired a consciousness of its own strength, is tliat of violence ; the notion of persuasion arises at a later period, and is derived from experience." Let us, at least, try what can be done through reason and negotiation, before we resort to a rupture of the ex- isting ties, and undo the work already accomplished in the right direction, after much effort. I trust there are few who deem it the part of wisdom or sound policy, or consistent with due regard to tlie character of the nation represented by us here to attach any weight to whatever ebullitions of temporaiy ill-will may have arisen from individuals in the Provinces or Great Britain. These manifestations, Iiaving tlieir sources in ignoi'ance or imworthy motives, may safely be left to tlie class of minds in which they originated. Let ns avoid degrading this Houso to that ignoV)le level, but in conformity with our own dignity and honor aspire to be the leaders in such a wise and enlightened policy, as, in- stead of irritating the people of the Colonies and induc- ing them to mistake a pitiful hatred to this country for ^m OUR COMMERCIAL RELATIONS WITH CANADA. 83 patriotism towards their own, sLall aid and assist liberal statesmen on either side of our Northern boundary or of the Atlanti(; ocean in their efforts to develop those mutual interests constituting a great international law, and which are the more clearly seen to]jeharni<»niousand identical, the more closely they are examined. By adoi)ting the principle of comi uercial retaliativ^n or exclusion we can injure the people of tb^ Provinces, but in liostilities of this kind, as well as i; i^tual warfare, although one party ofteii suffers more '. .\ the other, yet both are injured. It may be that, even although we adopt an isolating policy, the people of the Provinces will be too wise to exclude our products from their mark- ets on the present terms of equality and freedom. Can- ada at least admitted them without duty before the treaty — a liberal policy, dictated on her part by the soundest financial considerations, for while her people were bene- fited by chea})er prices on some commodities, it drew trade to her canals, seaporis, and shipping. Even this has been turned into an argument against our practising the same system towards her. It was ratlier an example of a jnst and comprehensive idea of self-interest for our imitation, by no longer refusiiiL, our forwarders permis- sion to carry her pi'oducts to the ocean on our canals and luilroads, for remunerative r.nd satisfactory prices. The course pursued by Canada before the treaty is probably a fair indication of the course she w^ould adopt if it were unconditionally annulled, and we should show ourselves determined to maintain an exclusive position. Until 1847 the produce of the colonies was admitted under special privileges into the markets of Great Bri- tain, but when these were removed the authority of that country over the financial affairs of tlie colonies was also relaxed. At that time the Canadian duties on American manufactures were seven and a half per cent, more than on similar articles made in Great Britain, but one of the first uses made by the colonies of their increased power was to equalize taxation on the manufactures of both countries by an uniform tariff of seven and a half per cent, on all. As colonies of Great Britain the Provinces may easily I ' i i m i 84 OUR COMMERCIAL RELATIONS WITH CANADA. .' m t.l • iUM return to preferential duties in favor of the nation with which they are politically connected. If they did not establish between themselves and the mother country a system of imports, exports, and transit, entirely free, like that prevailing between tlie different States of tliis Union, they might have recourse to direct taxation., and adopt so low a rate of duties on the products of all the nations of the world, that it would be almost impossible to enforce the trti-iff of tl^e United States along the vast frontier of the North. Already the project of unlimited free trade finds its advocates in Cnnada, and leading organs of pub- lic opinion, while admitting the benefits of reciprocity to them, and affirming theii' readiness to do all that consist- ently with their own lionor can be done by them to main- tain the most fiiendly commercin) -elations with us, sig- nitifaiitly intimate that a different course, perhaps in the end not less beneficial. Is open to them. There is little room for doubt that if we rashly and persistently ])ursue a hostUe and exclusive course, most of this trade now in our possession will be divided be- tween the colonies themselves and Great Britain. The Provinces will be compelled to execute their old project of an inter-coh)nial railroad from Halifax and St. John, and perhaps other ports to the interior of their country, thus completing the only remaiiiing link in their present vast system of internal communication, and giving them uninterru])ted access from Lake St. Clair and Lake Huron to the ocean, through their own territory, at all periods of the year. Their people, by commercially uniting tlie Provinces together, may soon accomplish the development of a system of home industry which will make them in- dependent of our manufactures, and competitors with us in every neutral market. They may become their own shippers and traders for all commodities of foreign origin. Although we may banish them and their produce and merchandise fi'om our routes of communication with the Atlantic, it is not likely we shall divert the traffic in American produce via the St. Lawrence by any legisla- tion we can adopt. We cannot legislate for the Canadi- ans. We can cut them off from tlie use of our railroads and canals, but may fail in persuading them to adopt le- OUR COMMERCIAL RELATIONS WITH CANADA. 85 o-islation of the same suicidal character. It is to be ex- pected that they will keep their channels for freight open to our produce. We cannot compel them to grant us a monopoly of this kind ; but if we should exclude them from our thoroughfares, their carrying system will reaj) the benefit of doing business for both countries — we transacting a part of it for one only — and we shall pre- sent to the world the instructive l)ut undignified spectacle of men who, instead of cherishing this branch of our industry and directing it to the full fruition of its natural advantages, sever it from the trunk, even while it is sup- portmg us. Let those whose duty it is to watch over and promote the permanent and substantial interests of the country be led away by no narrow view, no temporary and transient feeling, but consider and reflect upon the calm and sober judgment formed in times of less excitement, by them- selves, the statesmen who have gone before them, and the nation at large. " There has rot," said Heniy Clay, often called the author of the American system, " been a moment since the adoption of the present Constitution, when the United States have not been willing to apjdy to the trade between them and the British colonies principles of fair reci])rocity and equal competition." As it was with him so also was it with Adams, Webster, Van Buren, Marcy, Doiiglas, and all those of every party who have left among us an enduring fame as statesmen. The appointment of Commissioners on both sides to consult cai'efully as to the course most conducive to our mutual benefit appears to be less liable to objection and to combine more advantages than any other plan. On oui' side there are varied interests to be consulted — those of the Eastern, Central and Western States, whether they more especially consist in the promotion of manu- factures, agriculture, or commerce — or in the united and harmonious progress of all these pursuits. On the side of the Colonies are separate legislatures or governments of several provinces, where different views will be taken on many points of detail — perhaps of economical prin- ciples. The whole will require so much consideration that I should despair of complete success unless it should 8G OUR COMMERCIAL RELATIONS WITH CANADA. receive full and undivided attention. It will be the duty of such commissioners to ascertain how far we may re- move the obstacles which since the date of the Treaty have through the legislation of Canada impeded the trade of our great commercial cities, impaired our manufactur- ing interests, and tended to diminish the amount of in- land navigation and transit trade which would otherwise have accrued to the States bordering on the British Provincei. We are too apt to think the interests of the nation can only be advanced at the expense of injury to another. In reality and under a true system of reciprocity each of us would receive the benefits of natural advantages enjov"d by the other, which in its turn is benefited, not by with- holding participation, but by inviting i* This principle is as true and should be as uni versa". ■■■ emitted as those of mechanical improvemtnts or labor-saving machinery. Hence, the words of the resolutions passed by the Legis- lature of the State of New York express clearly and definitely the principle by which we should be guided, saying "that free commercial intercourse between the United States and the British North American Provinces and Possessions, developing the natural, geographical, and other advantages of each, for the good of all, is con- ducive to tlie present interest of eacn, and is the only proj)er basis of our intercourse for all time to come." It has been well illustrated by a French writer in the fable of the blind man and the lame, who between them pos- sessed all that was necessary for both. One guided the other, who in his turn was carried, and each receiving important benefits disdained too close inquiry as to which of the two rendered the most valuable sei'vice. We are considering the commercial relations of one- eighth of the habital>le surface of the world. Of this vast region, the United States and the people of the Colonies, subjecit to a beneficent Providence, control the present condition and shape the future histc ; T'. ^'.as been given to us, in the maturity of hur.ua. .■Jvili>..*f.!i>. . as a new parchment on which we may inscrib - v^'hitttve eharacters we choose; and the op^ tunity '.'■)!; I'vei return again in all the plentitude of the pres- at time. OUR COMMERCIAL RELATIONS WITH CANADA, 87 With nations, as with individuals, those habits and ten- dencies are easily formed in youth, which are afterwards developed and control the career through long years or centuries of the future. We may differ from the peoj)le of the Provinces, in opinion as to the best form of gov- ernment, but other nations can judge better for themselves than we can for them as to their own method of legisla- tion. A prohibitory or exclusive system would be no less unnatural and injurious as to every commercial, po- litical, and moral result than if we separated New York from Massachusetts, and both of these from Ohio, Illinois, or Iowa. Let us then regulate om' intercourse, not by mutual fear or destruction, but by creating or rather by developing reciprocal benefits in accordance with the manifest designs of Him who made the world, and who should never be mentioned except upon occasions worthy of Him. Such a system is doubly beneficial : " It droppeth as the gentle dew from Heaven Upon the place beneath ; it is twice blessed — It blesscth him that gives and him that takes." Under its influence, assisted by a wise application of the reason with which man is endowed, old animosities will he forgotten, and in days to come the people of both countries seeing plainly tliat the social body of mankind — like tlie material bod}'^ of the individual — is provided by nature with a healing power, will find additional reasons to reverence Ilim by whom the universe itself was framed. l!- I M 'V ■1§ ! !!;■ : ■;■!' I \ ^ ■ f- '■ y 1 ; i. ; ^ - ,j 1. . ■1' OUR COMMERCIAL RELATIONS WITH THE BRITISH NORTH AMERICAN PROVINCES. House of Rbpbebentatives, May 26, 1864. The House having proceeded in the regular order of business to the consideration of a joint rer-olution. authorizing the Presi- dent to give the requisite notice for terminating the treaty made with Great Britain on behaif of the British Provinces in North America, and to appoint commissioners to negotiate a new treaty with the British Government, based upon the true principles of reciprocity, and several members having discussed the subject, Mr. Ward summed up the debate. Mr. Speaker : In the consideration wliich I have given to this question I have regarded it from no sectional or partisan point of view, but have studied it in its inter- national aspects, and thus I sliall continue to present it. I know there are objectionable features in the working of the treaty, but with very few exceptions the points raised in opposition to it were presented in the report of the Committee on Commerce, and also in my remarks when opening this discussion. I named impartially the merits and the defects, the advantages and evils existing in the present arrangements. !Notliing was HupprcKsecl, nothing was exaggerated, and I endeavored to judge the Bubject with the utmost possible justice and imp;irtialiiy. I confide in the honor and iiaracter of this House to treat this great international (question as to our northern neighbors in the same candid and honest spirit of good- will and truth with which we rightfully wish them to re- gard us and our affairs. I trust this House will rise above mere local considerations. It must rise above OUR COMMERCIAL RELATIONS WITH CANADA. 89 I prejudice. I have no fear of Great Britain. I have con- sidered this question as one affecting many of the most important interests of i^his nation. Thus I trust this House also will consider it, uninfluenced by any fear or intimidation of Great Britain. I cannot regard with com- placency the frequent assertions made by several honorable members as to our national reputation. There is no need to vindicate it. It should be, like the character of CaBsar's wife, above suspicion, and I am impatient when I hear it unnecessarily asserted or called into question. I propose to review as briefly as I can the chief re- marks made during this debate in opposition to the treaty, or rather to any equitable and. nuitually beneficial and satisfactory arrangement of our commercial relations with the provinces. The gentleman from Ohio [Mr. Spalding] referred to the treaty of 1817 — a treaty entirely irrelevant to the present subject. We have the power on a notice of six months to terminate that treaty ; but there is no necessary connection between the two. If the resolution of the Committee on Commerce be adopted, questions regarding the armaments of both nati(jns on the lakes may, I think, without impropriety be discussed, and very probably would be discussed by the proper authorities on both sides. It has been attempted to influence the action of this House by the introduction of letters from different in- dividuals. I have not endeavored to a< '|uire any support for my views from this source, although I have received many letters from various gentlemen of eminent ability and character. I may, however, V>e permitted to give portions of letters from Hon. Edward Everett, who warn Secretary of State during a considerable part of the n«' f^otiations leading to the treaty. When acknowledging the receipt of a copy of the report of the Committee on Commerce in 1862, he said: "It seem* quite evident that the Provincial Govern inent hflf violatoil the spirit of tlie treaty in vari'Xis ways. J trust, howevcir, that ai<':v will be no countenaM.* ^ven to the thrtaa* of abrogat- ing it, a lueai^re r^wm" adtnissr.j^ b«t in a case of tj»* greatest trovrvTStion frorn tW ^{n*--* party. Ma**«^ tht interestB <;f CanaHfi (V^esi t'uliBtcd ill favor of ^ just ^j^^f tnidei* the treaty, and f \; j,i M i, llti.Ji 90 OUR COMMERCIAL RELATIONS WITH CANADA. presnmc also tlie sympatliics of tho Imperial Government in tlio same direction, there will 1)0 no difficulty, I imagine, in pei-stiad- ing the provincial Parliament that there is nothing to be gained by a war of tariffs." In a 8ul)sequent letter lie said : " In saying that 1 hoped the abrogation of the treaty would not be thonght of, I meant its abrogation before the time ap- pointed by the instrument itself. When that time arrives, if it shall appear that the colonial legislation ia in contravention of the spirit and policy of the convention, security must be taken for a change in that legislation, or the convention be given up, which I trust will not be the case. " 1 have reason to think we shall have the Imperial Govern- ment with us in a fair and honest execution of the convention." I will, in passing, make one remark in regard to tlie Constitution, so far as this question is concerned. The gentlemen from Vermont (Mr. Morrill") occupied a col- umn and a lialf of his speech in att<'mptmg to show that no treaty can deprive us of our right to legislate in re- gard to revenue measures. All I have to say is, tliat this truaty did not deprive this honorable body oi any portion of our rights in this respect. The treaty was inoperative until an act was passed by this House on the Htii day of August, 1854, for the purpo.se of carrying 't into effect. The House may by its own sanction and by a solemn act give eft'ect to such a treaty. I nhall, without any fui'ther general remarks, confine myself mainly to the coiiHideration of ihe chief points whicli have been most freipiently urged in f'/ivor oi ah I'lipdy taitial]y \u^f> OUR COMMERCIAL RELATIONS WITH CANADA. 91 operation in 18i54, extensive tmnsuctions having tluit year been made, based upon the expectation that drawbacks would be, as I am tohl tliey ultimately were, allowed. That was the year of the ti*eaty — neitlier before nor after. Its transactions were mixed. Therefore its trade should be excluded from the statistics of (V)mmerce in the peri- ods before and after tlie treaty. No full and fair infer- ence can be drawn from that year, as it belongs to neither epoch. In 1858, the year l)efoi'e the treaty, our imports from the Provinces were $7,550,718 and our exports were $13,140,642, leaving a balance in our favor of less than 16,000,000; and the change was so great that in 1855, the year after the treaty to()K effect, our exports increased to 627,80(),020, being more than double those of 1853. As these imports in 1855 were $15,186,734, the balance in our favor the year after the treat}' was more than $12,600,000, a larger amount than we either sold to or bought from them, with one exception, in any year before the treaty. Yet it is at least implied by the mend)er from Maine that when we made tiie treaty there was annually a lialance in our favor, paid to us in gold, of al)out six- teen million dollars ; a sum larger by about three millions than the amount we ever sold to them in any year what- ever before the year when the treaty was made. I (lce|)ly deplore the niisrepicsentMlIons widch are cur- rent on this Hubjuci. l)o they iu'ochkmI liom a on. ' 1 attributt' no unworthy iiiotivMH t/i IKi/ um^ l/yi •/rk/ljvt'I- v/iU examine the uiJiuittJ tttcvldi* ii| 1 1 ■ i 1 il ! 1 ! : r i i ; I • ; I ,1 ' 1 ■ h ( ■s . f!""^?" 92 OUR COMMERCIAL RELATIONS WITH CANADA. M our own Government will find that ray statements are accurate. It was aaid by the honorable member — he repeated the remark several times — tliat the balance of our trade with the Provinces is against us. The statement aj^pears slightly modified in liis remarks as printed in the (ilobe, but is substantially retained there. Did he mean during tlie last Y<'ai' o^ which we have official infornintion 'i It was then nearly two millions in our favor. Did he mean during the whole time since the treaty went into operation? In that time it was more than twtmty-six milli(»ns in our favor. There is nothing vague about this. There is no mystery in the figures. There is no need of passion or declamation. The solution is as easy as that of any school-boy sum in arithmetic or of any ovdinary settle- ment of accounts between individuals. I find my data on the sixth page of the letter from the Secretary of the Treasury in answer to the resolution of this House on the 17th day of last December, asking for information as to the operations of this treaty. We asked liim for infor- mation, and it is furnished to us. Shall we ignore it, and- substitute for it such conclusions as our several fancies may suggest? We may in this way point a paragraph or lend some illusory brilliancy to a speech ; but that is not stf.tesmanship. It does not accord with our duty to the nation. The balance of gold on which so much sti-ess has been laid was not paid by us to the Provinces, V)ut by them to us. It amounted to $26,445,(592. This is the state of affairs as to which the honorable member says he " would if necessary use force to put an end to an alliance so injurious." The subject has been treated as if there were no dif- ference between paying money for foreign gewgaws or costly luxuries, and for such articles as are daily and hourly necessary to the support of our Army and Navy, and for that yet larger army — the industrial army — the laboring population, on whom the existence of the Army and Navy and of all classes of society must depend. With exceptions too trivial to be worthy of notice, all our importations free under the treaty are the plainest necessaries of life. It is an outrage upon the best and OUR COMMEliCIAL RELATIONS WITH CANADA. 03 wisest principlt'M of modern political science to tux thern. Tiiey are an essential part oi all that enal)l('s as to pay tiix('<, and siipj)ort either Army or Navy — of all that makes iis strong or pro-perous either in war or peaee. There is another consideration to be regarded in con- nection with this ])alance of trade in relation to these colonies — a reason why this trade is not identical in prin- cii>le with many other transactions, but is an exceptional ojise. I will illustrat" the point by a familiar and j)rac- tical example. It is readily understood that if a mer- chant or dealer goes over to Canada, and there buys certain articles — say, for instance, a thousand barrels of flour or five thousand ])usliel3 of wheat- he iloes an act which, so far as it goes, creates a balance against the United States, to be paid in gold or its equivalent. But if he sends the floui' or wheat over American railroads or canals to Boston oi New York, and thence has it re- shipped to England, France, Cuba, or elsewhere, he, by his series of actions, gives freight and profit to our inland carriers and Atlantic shijipers, employs a large number of our people in various occupations, and brings home at last the original outlay, increased by the additional sura invested for freight, storage, commissions, and labor of various kinds, together with additional ])rofit for himself, all in the same precious metal or its equivalent. Gentle- men who reason as the honorable member has argued, forget that this nation has commercial dealings ; and that in such a case as I have described, it is (juite as just to complain of the balance of trade being against us as it would be for a nit rchant who has extensive transactions in all part- of the world to complain of the farmer or manufacturer from whom he buys more than he sells to him. H^ buys from one man for the purpose of selling to another While liie honorable member takes a narrow and lim- ited view of our commercial relations with the Provinces, he has goiie a long way back in his statf^ments-as to the colonial policy of Great Britain. He quoted certain laws enacted by the Government of that country a hun- dred and fifty years ago, ordaining that none of the colonial trade should be carried in any but British vessels. m IMAGE EVALUATION TEST TARGET (MT-3) // 4p "' <#-c. 1.0 I.I 11.25 s IS EM J4 U 11.6 S* p:». ^> ^;. w ^ J" / Photographic Sciences Corporation 23 WEST MAIN STREET WEBSTER, N.Y U5B0 (716) 872-4503 \ 4. \ \ ^'■~.*. '^'I'V.. '*'Q>^ |!- i. ;' f 94 OUR COMMERCIAL RELATIONS WITH CANADA. f !•'. :• : } :'A;f Since the time to which he referred five generations of men, ^vith their inventions, tlieir experience, and their changes, iiave lived and died. The folly of those laws was long i'.go demonstrated. They were tried, found wanting, and have been repealed. Even the colonial tariffs discriminated in favor of British and colonial produce and manufactures until 1843, when these dis- criminations were abolished. The (colonies now make their own tariffs and tax British manufactures at high rates, to encourage production in their own territory. For several years — for all the years, so far as I know — since the treaty the trade of Canada with the United States was greater not only than with Great Britain, but than with all other countries but our own added together. I wish to accept facts as I find them. Should I do otherwise I should be unworthy of a place in this House, and false in my duty to my country. Coming down as closely as I can to the present time and to the special point named V)y the honorable member, I find on refer- ence to our own reports on commerce and navigation, that during the last five years the entries and clearances of tonnage employed in carrying on the trade between the United States and the British North Amei'ican Prov- inces liave been about fifty per cent, in favor of this coun- try. They were 20,768,512 of United States tonnage, and 18,844,919 of foreign tonnage. A very large increase in our exports to the Provinces, both of our own manufactures and agricultural produce and of goods of foreign origin, did result from the treaty, as was reasonably expected. Our domestic exports in- creased from $7,404,087 in 1853, to $15,806,642 in 1855, and $22,714,697 in 1856, having doubled and trebled in periods of one and two years respectively. Our exports of goods of foreign origin were $5,736,555 in 1853, being larger in that year than they had ever been before. In 1855, the year next after the treaty, they were $11,999,- 378, having doubled in full accordance with the natural tendency of the treaty. My statements rest on tlie (jflicial authority of our o\vn Government. They cannot be refu- ted. No attempt has been made to meet them. No no- tice was taken of them by the honorable member, or by OUR COMMEECIAL RELATIONS WITH CANADA. 95 any gentleman who has spoken in opposition to the reso- hitions of the Committee on Commerce. A few more words as to this balr^nce of trade. Before the treaty Canada admitted the cereals and many other ])roducts free of duty. Consequently we sold to her, al- though we refused to buy from her. The result was that a large amount of these articles went abroad through the St. Lawrence, to the injury of our merchants, canals, rail- roads, Seaports, ocean shipping, and of all classes of our population. The year after the treaty, the trade by the St. Lawrence decreased to the amount of $15,20.3,600, and so soon as the routes and markets of the United States were opened the whole was transferred to our carriers, for in the same time the trade to the United States in- creased $15,856,624, or fr.mi $24,971,096 to $40,827,720. In this way a change was made in the "balance of trade," and that cLnnge was beneficial. Much has been said in this connection about the Ala- bama and the Florida. I fully concur witli those who have condemned the outrages perpetrated by these vessels. Tlie honorable member spoke at some length of the south- erly port of Nassau. I am unable to discover in his remaiks upon this subject any adequate reason for our injuring oui'selves by curtailing or destroying a profitable trade with the colonies in North America, still less why Ave should not endeavor to make it more profitable than it is, and to place it on a just and equitaide basis. He dis- cussed at one time two subjects which have no proper or logical connection with each other. All such inquiries as I have been able to make, and a careful study of a considerable portion of the organs of provincial opinion, from day to day, since the beginning of the war, have led me to the result that although, as must be the case in every country where freedom of thought and utterance prevail, where men think and speak for themselves, some will be right and some will be wrong (and the various minds of individual colonists have arrived at very differ- ent conclusions as to the present war, some taking the side of the South, some friendly to the North and ap- proving of the course of tiie Administration, and some equally friendly, but believing that a different policy • I •► tan 1. "'^ Mr} •^nt •■ ■■.^i» w ■ ■ !i 96 OUR COMMERCIAL RELATIONS WITH CANADA. would have been more conducive to our interest), the flagrant expi-essions adverse to us, and which sometimes obtain wide circulation, are the words only of individuals or cliques, and not of the vast majority or masses of tlie people of these provinces on whom it is proposed as re- taliation to inflict commercial injuries which will equally injure our own people, before we have made any effort to remove those oljstacles which some years after the treaty took effect have prevented each nation from reap- ing the full benefits which would naturally have accrued from it. I have already, in my previous remarks, ex- plained the operation of the increased tariffs of Canada, espv'cially of tlie tariff of 1859. These enactments, which substituted artificial restrictions for free and nat- ural la"'s, should not be mistaken for the principles or I'esiilts to which they are in direct contradiction. I am desirous of remedying the evils thus created. It is argued that the treaty has deprived us of rev- enue. During the last year the imports and exports betAveen tiie United States and Canada of articles free under the treaty were nearly equal. If we levy duties on their productions, they may do the same on ours. This principle is a two-edgec! sword. Or they may admit our products free of duty, as they did before the treaty, and thus be the carriers of a considerable portion of our produce as well as of their own. When a revenue was paid to our Government on Ca- nadian productions, the provincial railroads and means of communication were imperfect and its population Avas comparatively scanty. By renewing the duties we shall drive away the trade and render our people less able to pay taxes. The utmost amount of revenue the Government can derive from duties on colonial pro- ductions is inconsiderable compared with the loss of commerce we shall sustain, and the consequent loss of employment to the laborer and profit to the merchant or capitalist. Under a reciprocal system, instead of attempting to make money by restriction and injuries, each will partake of those natural advantages which have appropriately and eloquently been termed " the gratuities of nature." OUR COMMERCIAL RELATIONS WITH CANADA. 97 I i E rev- cports 8 free duties ours, may >efore lerable own. .n Ca- [means ilation lies we le less lue the ll pro- :)89 oi OSS of. [reliant ling to partake "11 riately iture. Otherwise, if a restrictive policy is mutually adopted, we destroy the trade of such ports as Osw^ego and Portland, and two or three men will be employed to do the work of one, as in the case of compelling the Canadians to carry sugar from Cuba to Toronto, round by way of the St. Lawrence instead of carrying it ourselves lor adequate remuneration to the benefit of our people, through New York, Boston, or Portland ; or in the case of coal, com- pelling the people of each country to carry this essential element of success from remote mines, hundreds of miles from the places where it is used. It is as necessary to the comfort and maintenance of the poor as to the accu- mulations and luxuries of the rich. It saves labor, ena- bling one man, throu-'h the creation and application of steam, to do the work of twenty. Thus ic creates wealth and powder, diiEusmg its beneficent results through every department of society on each side. It is a just illustra- tion of the whole subject. Let us place no fetters upon these beneficial exchanges, nor compel the people of either country to a perpetual system of labor in vain, wasting in circuitous routes the labor and capital which might be profitably expended. The waste of labor is a waste of human beings and of life. As to smuggling, which it is said exists to a great ex- tent on our frontier, I ask if it is likely to be diminished by the increased duties created by our own recent tariffs, or by entering upon a system of commercial hostilities with the whole population of the Provinces and stimu- lating all their sympathies in favor of the smuggler. Neither we nor they are alone in the world, or can carry out in all respects our own wishes and desires. England and France, with a most expensive and numerous coast- guard, were never able to prevent smuggling except by mutual liberality. Still less can we prevent it from countries which are so near to us that a merchant may have one-half of his store in the United States and the other in the Provinces. Alreadv two free ports exist in Canada. All goods from the United States, from France, Germany, England, and all other parts of the world, are admitted free of any duty into these ports, which are not, i as might be inferred from their names, mere cities. One I ; I I 4 $ •i ■ V I ' .'% < ;.'t I r I 98 OUR COMMERCIAL RELATIONS WIIH CANADA. of them in the Northeast extends, at the month of the St. Lawrence, over a pea-coast twelve or fifteen hundred miles in extent. The other " free port " is in the Northwest, and, under the name of Sault Ste. Marie, includes prac- tically a coast on Lake Huron and Superior and their islands of more than one thousand miles in extent. Do those who oppose the appointment of commissioners and our whole system of reciprocity think it is wise to reject all approach to any unity of legislation between us and the Provinces, and impe^ them to an extension of any- thing like this system of free ports, which already ex- tends over some twenty-rive hundred miles of coast, until it prevails over the remainder of the Provinces 'i It is a case where each Government can assist the other or in- jure it. Various memorials from different parts of the United States have been presented to Congress and referred to the Committee on Commerce. They proceed from persons having distinct interests, and living, some of them on the western and some of them on the eastern extremity of orr frontier. Although they all unite in requesting mod- ifications of the treaty, not one of them is in favor of its unconditional abrogation. There is no exception. Tlie State of Maine, in March last, through its Legislature, passed resolutions decisively in favor of the appointment of commissioners to negotiate a more extended and im- partial system of commercial relations with the provin- ces ; and in my opinion scarcely any State in the Union Las a stronger interest in a liberal settlement of this question. After mature deliberation, the Committee on Commerce believes that the appointment of commissioners on both Bides to consult together as to the course most conducive to our mutual interest, combines more advantages th.an any other plan. The treaty was made between the United States and Great Britain, but as regards the man- agement of financial affairs the colonies are independent of Great Britain. More than this, the British North American colonies of Canada, New Brunswick, Nova Scotia, Prince Edward's Island, and Newfoundland are commercially distinct and independent of each other. OUR COMMERCIAL RELATIONS WITH CANADA. 99 each placing tlie other provinces, and the United States, Great Britain, France, and other countries upon a footing of equality as regards importations. The subject in- volves on our side an adjustment of the interests of the eastern, central, and western States — an earnest and full consideration of the course best adapted to promote manufactures, agriculture, and commerce, and the removal of such restrictions as exist, by means of the legislation of Canada, inconsistent with the general expectations when the treaty was made. No other plan can bring the parties whose interests are involved so closely and directly into communication with each other, and its importance demands the full and undivided attention of able and comprehensive statesmen. I will say in addition, that the terms of the resolution do not seem to be fully understood. The resolution con- templates that the notice shall be given at the proper time, unless in the interim a convention shall have met and agreed upon a treaty based upon the true principles of reciprocity, and that whenever Great Britain shall in- dicate a willingness to enter into negotiations for that purpose, the President is authorized to appoint commis- sioners to ascertain on what terms such treaty can be made. f fc . f . f'P i$k r] 'if THE TAKIFP, rii AND f . !Pii THE TRUE PRINCIPLES OF TAXATION. HouBE OP Representatives. June 9, 1864. When this speech was made wild and ineoiisiderate ideas reji^ard- ing the tariff nad reached their climax in Congress. Inordinate indiscriminations, abrupt and unstable taxation, were the practice of the times. Mr, Ward advocated such a tariff upon the fewest articles as would yield the largest revenue with the least injury to the people. Since his speech was delivered many changes have been made in accordance with these views, but much yet remains to be done. The rev,3nue reformer of to-day will recognize in it an enunciation of the best principles of taxation. Mr. Chairman : The importance of proper tax and tariff bills ia evident. The present financial condition of the country invites our earnest attention, and every effort should be made to maintain the public credit. A funda- mental error was long ago committed in enacting the sys- tem of legal tender ; and the earnest convictions of many who knew better than to depart from truth and i-eality have been changed into faint scruples, and then entirely overcome. The spectral doctrine that we can make money by printing it has superseded the dissolving views of specie payments; and the effect of all the redundancy of paper is that $100 in gold will buy national securities to the amount of $190. This is the deliberate estimate placed upon our system, our credit, our honor, and the policy we are pursuing by the capitalists of our own country and of the world. I speak of things as they are. The national debt is increasing, and will continue to increase. We can judge of the future in no better way than by the experience of <• THE TARIFF AND TAXATION. 101 the past ; and if the Secretary of the Treasury has hitlier- to, when the prevailing temper of the people has natur- ally been more sanguine and enthusiastic than it will be hereafter, found himself unu!)le to place any larger pro- f)()rtion of the public debt in the shape of permanent oans, it is impossible to avoid the darkest forebodings as to the future. Every day the war continues we grow poorer and poorer ; the most vigorous and energetic por- tion of our people, those who are best capable of pro- ductive labor, are transferred from the fields of ordinary industry to the work of mutual destruction, and their number is diminished to an extent which already has feai-ful results upon the actual income of the nation. We must treat the public debt as something to be actually paid. We must treble our revenue by a well- considered system of taxation, pressing as lightly as pos- sible upon the working and producing classes, and we must cease to inflate the currency by fictitious values. There is no subject of more essential and permanent im- portance to the people than this collective indebtedness. One dollar raised by taxation is, as has been said by the Secretary of the Treasury, of more real value to the country than two made as money is now supposed to be made, and the tariff should be so arranged as to yield the largest possible revenue to the country with the least possible incovenience to the people. When the war is over, and the enthusiasm and passion it has created and kept alive have subsided, the monu- ment of debt will remain. It cannot be obliterated by brave words and patriotic apostrophes. The public credi- tor will demand that the mortgage he holds upon the bones and sinews of the producing population shall be satisfied to the last fraction. Our legislation, therefore, should tend to no inflation of prices. We should make our money go as far as we can, by no means creating arti- ficial values and incurring liabilities to be paid when the currency will be measured by a different standard. For my own part, I do not believe it is now possible to end this war without having incurred a debt of at least $4,000,000,000. Our expenses are increasing with the rise of prices and the increased necessity of more 1 1 5|i .1 I' . 102 THE TARIFF AND TAXATION. .'■5 I ' vigorous exertions. Urider the policy we have adopted, no spirit of reunion with us at present exists in th« Southern Confederacy. Some of its people — many of them — desire peace ; but as was remarked l)y the honor- able member from Maryland, on the other side of the House, who knows them well, it is not peace and union, but peace and disunion. They desire peace, but only with victory and triumph for themselves and defeat of our forces. Under these circumstances, it is impossible to foresee how long the war will continue or what will be its ultimate cost in money or in men ; but, in my judg- ment, the debt we shall incur cannot be less than $4,000,- 000,000, and may be far more. I take it for granted that, under the policy of the Ad- ministration, we are engaged in a war of subjugation, and I assume, for the purpose of this argument, that the party at present in power will realize its wishes, will conquer and forcibly revolutionize, by external force, the whole political, social, and itidustrial system of the South, in direct opposition to the opinions, or, if we choose so to call them, the prejudices, most cherished by them — form- ing their habits and the basis of their thoughts and sentiments. Let us calculate the cost of retaining the fruits of the victories we have yet to gain. We may be sure that we cannot compel a population numbering eight millions, and equaling ourselves in courage, determination, and all the essential elements of military character and power, to submit to the absolute control of our Government un- less we have a standing army of at least three hundred thousand men. At sea we shall need a force quite as powerful as at present. Our civil list will be increased by the large number of officials necessary to collect the additional revenue required for the support of the Army and Navy. I endeavor to estimate, on the most moder- ate basis, the amount of our expenditure when such a peace as is sought by the majority of this House shall be attained. We shall need annually, at least, for — The War Department $300,000,000 The Navy Department 100,000,000 . Interest on public debt, of say $3,000,000,000. . 180,000,000 ifj,.'.; !! IJ -If 1 iarp.i',iffifi." THE TAKIFF AND TAXATION. 103 Civil Hat, coUectio!! of rcvetiiio, foreign inter- course, nnd tnis(!ollaneou8 40,000,000 Interior, pensions, Indians, itct ^ 25,000,000 Total |G'45,000,000 If the South should willingly return to the Union, we shall, at least, need an army of a hundred thousand men. Taking this estimate and reducing the cost of the War Department by two-thirds, there will yet remain the necessity for a revenue of $^50,000,000 to be paid by taxation and duties. As England is the only country on the globe which is cursed with so large a national debt as we shall incur before the war is ended, comparisons are often nuule with her as to ability to pay the principal and endure the in- terest. What are the facts? The real and personal property of the British Isles is stated to be $,'}-J,()i)0,0()0, 000. The value of the proj)erty, both real and personal, in the States of the Union which are supposed to adhere to the national Government is about $11,000,000,000, and that of the other States is little more than $9,000,000,000. By this it appears that Great Britain has, rejkoning value in ready money, thi*ee times as much property as the United States ; and therefore has, in this respect, three times as much ability to pay her del)t. Ultimately, as our country is developed and our population augmented, the relative position will be changed, but the disparity in our present I'esources is even greater than this. The wealth of Great Britain is largely in manufactures and commerce, easily convertible into cash, nnd paying large revenue upon the investment. That of the United States is prin- ci])ally in land and in agriculture, wliich is not easily convertible into money, and which pays but a small per cent, upon the investment. Great Britain has immense colonies in all parts of the world, whose wealth and pro- dactive industry, through the medium of her commerce and manufactures, contribute to her prosperity. If peace .should now be made, it would be three times more diffi- cult for the United States to pay their debt than for Great Britain, whose statesmen and people, in conse- m ill. \W' t. 104 THE TAHTFF AND TAXATION. H^^ quonce of the vast magnitude of the obligation, never exneet to discharge its jn-incipul. Now, sir, let us look at the interest of the respective debts. That of England is from three to three and a half, that of the United States fi'om five tc seven per cent. Tlie interest of our debt, estimating it at even $n,()()(),()0(),0()0, will be $180,000,000, while the intercsi on the iJi'itish debt is $140,000,000; in other words. $180,000,000 interest money will have to be collected off our $11,000,000,000 of i)ro]H'rty, while England only ccdlects $140,000,000 from her $;32,00(),0()0,000 of prop- erty. The burden of our inttfrest will therefore be three times as great as that of Great Britain, v/hose debt ih this comparison with ours ap{)ears light. For genera- tions to come the laboring men of the United States must labor for several hours more per day. They must stint themselves and their families in necessary comforts, not to speak of accustomed auvl almost necessary luxu- ries, in order to repair the results of this deplorable war. I have mentioned these facts because it has been too C(mimon upon the floor of this House to exaggerate the manufacturing, agricultural, and commercial resources of the country, so far as regards their ability to bear taxa- tion with the ])resent population, after the vast destruc- tion which the war has produced among the most valu- able classes of our producers. I know the ultimate mag- nitude of our resoui'cea, but no true and wise friend of his country can speak of our appalling debt as if it wei e an affair of trifling moment, and could be discharged as readily as it has been and yet continues to be created. I believe there is a disposition on the part of the people to sustain the Government in this war, and to bear the just burdens which result from this source. It is of vital moment that this rebellion should be put down, and that the pi'oblem of self-government should be successfully solved. The revolt is an attempt on the part of the few to create a revolution against the wishes of the many. \i we admit the right of secession , there is an end to the Government; and if we cannot put down the rebellion, this Republic will cease to occupy its proper position among the nations of the world. THE TARIFF AND TAXATION. 105 I buliove, Mr. Chairman, that the city of New York is willing to agree to any Just tarifp to meet the exigtmcie.s of the country. But all the communications that I have received on the suhject are to the effect that the tariff should be for revenue and not j)rohil)itory. In the tax hill I noticed sora(^ peculiar features in th(^ imposition of taxes where taxation was injudicious. It passed from one extreme to another; from a disposition to tax lightly, it rushed to inordinate and indiscriminating taxation. The same course also has been pursued in reference to this tariff ])ill. I pass now to the consideration of the joint resolution ill reference to the tariff which passed Congress some time since. I suppose that scarcely evcc, whom it inighi injure, or what it might pr<^liibit. S-- ue articles would bear the in- creased taxation and others would not ; yet this was a tariff to continue only for sixty days, and included goods in bonded warehouse and on slii])board. What is the effect of it ui)on goods on hand ? There are large firms which, upon the first intimation that congressional action was expected, pro})ably took from the custom-house mer- chandise of the value of millions and millions of dollars. They at once put up the price of these goods at rates cor- responding to this new tariff of fifty per cent., although they paid no portion of the increase ; while others, of smaller pecuniaiy means, being unable to remove their ])roperty from the warehouses upon such a brief notice, Mere compelled to pay the additional duty. Goods on shipboard were also subject to this increase. There is no (Mjuality or justice in such hasty action. I object on behalf of the great interests I represent to this kind of abrupt, unstable, and temporary legislation. It creates a feeling of danger and insecurity exceedingly prejudicial to the public welfare. Impose a tariff fair and just, exact taxes which are liberal, and my constitu- ents will submit to them cheerfully ; but what I ask for them is that they shall not be subjected to fluctuations — ..- - i - - ■ —TT' • \'-', .-*_,4 : -, - :*«jj v\u..ms 106 THE TARIFF AND TAXATION. in legislation which shall break uj» and destroy their trade. My statements may he illustrated by reference to our action on the subject of taxing liquors on hand, a subject which is very familiar to this House. A tax of forty cents was imposed upon whisky on hand, and in con- formity with the general tenor of these measures ray pro- posal in this House to exempt foreign liquors which were :n bonded warehouses or on sliipboard in tra7is?'tu to this country was defeated. The bill passed the House, went to the Senate, passed that body in an amended form, came back, and was returned to the Senate again. Tlie Senate finally receded from their amendments to which we had disagreed, thus striking ofc the tax on domestic whisky on hand, but leaving it to operate upon imported liquors. Thus our importing merchants were com})elled to pay a duty or tax of forty cents per gallon on foreign liquors on hand. I think few enactments can be more likely to alienate important interests from the support of the constituted authorities than this system of taxation. No Govern- ment can afford to destroy or weaken the friendship of those who support it, and who intend to support it honestly, fairly, justly, and liberally. The measures to which I have referred were no sooner passed than a dis- contented feeling was create*!. And now to-day that tax of forty cents on foreign liquors on hand is charged to the importers of New York, while there isntme on liquors of domestic manufacture. I opposed and voted against the imposition of any tax (m stock on hand. I believe it would have been far better for the Government if the House had, vv^hen the revenue bill was reported, promptly })assed the bill putting a liberal tax on liquor thereafter manufactured, but leaving stock t)n hand untouched. V/e fchould have realized a larger revenue, for we should not have lost t vo months, during which the bill was pending between the two Houses, in the collection of additional taxes. I have seldom thought proper to quote in this House fi'ora articles published in the newspapei's. I will, how- ever, read an extract from an article published in one of THE TAniFF AND TAXATION. 107 I I the most sound, impartial, reliable journals in this coun- try, entirely in conformity with ray own views. In speaking of this tariff resolution it says : "The 8n<^ ':ennes3 and absoluteness of this sixty days' tariff javors more of the edict of some .absolute monarch than the acts of representatives of a free people. Not the least consideratiore is shown for the convenience of traders, althouji;h they are the parties Lo whom the Government has to look for its thief support. The contracts of importers are totally disregarded : and tliey are treated as though tliey had no other business than to pay the b>'ios of ai bitrary enactments. Such conduct tends to convulse and paralyrce legitiinate business ; it goes (>n the :nppo8itinn that merchants have no interests that ought to be respected by the Government, and that they are bound to subi^'t to every whim and caprice of »n arbitrary power without warning or redress. There is no Government in Christendom that, in these days, would be foul''' "■uilty of such discourtesy and injustice toward foreign tradeio and the large class of domestic merchants whoso interests are interwoven with foreign commerce. Such legisla- tion is producing the most serious alarm among commercial men, and wearing their affections from a Government which they have proudly esteemed as the truest pr(»tector of commerce, because tiie truest representative of the people, in whom all the interests of commerce ave invested." It will be seen that there is a great deal of truth and force in the article. Now, all I ask of the House is to so adjust the tarifB duties as to do justice to my region as well as to others. I am willing you should tr.x liberally, but to whatev^er eAt'^iit you prohibit or prevent the im- portation of foreign goods to that extent you diminish the power of the foreigner to purcliase the i)roducts of this country. We injure ourselves \,hen we injure the foreign labor. I am willing that the tarifE shall be largely increased on many articles ; but I ask that you shall not tax articles on hand, and that you shall not by these sudden and violent ciianges aifect the great in- terests of the country diaa^ti'ously. I trust before this session closes the House will correct much of its present legislation. If you do that, you will appeal pow'erfuUy to the suppoi-t of the peoph^ of my sec- tion, 'rhe interests affected are too great to be treated hastily with immature or hostile consideration. Let us K) : J I ■ ' 1 . 1 !' > I". 108 THE TARIFF AND TAXATION. not make rash experiments where so much of the welfare of our country Is at stake. We passed a measure called the gold bill because honorable members alleged this would put down the price of gold ; but it ought to have been evident to every member of this House that the sale of $11,000,000 would not reduce the relative value of the precious metal. The steady increase in price is caused by the inflation of the currency, and until that 18 diminished the price cannot be permanently reduced The nominal value of specie did not go down upon the passage of the gold bill, but continued to go up. and it IS, I believe, to-day at a premium of over ninety per cent. • The House took alarm, and sought by legislation to do that which no nation in the world has ever accomplished, to reduce the price of gold by legislation. But as the value of gold in comparison to paper money continued to increase steadily, a sort of panic was created in the House, and the cr;jr was, " Tariff ! tariff ! tariff ! " " Tax ! tax ! tax ! " This was done indiscrimmately. I ask the House to deliberate upon these questions, affecting, as they do all the interests of the country. I trust that we shall not permit ourselves to commit injustice because gold may have gone up or down. Calm and deliberate legislation is absolutely needed in an emergency like this ; I ask that we shall not legislate hastily or intemperately on any subject. But, as men comprehending the great issue be- fore the country, and the great stake involved in tlie gigantic war on our hands, we should consider Pleasures carefully in all their aspects, and endeavor to raise as large a revenue as possible with the least injustice to any interest. I have no doubt that by a judicious system of internal rf^venue, and by duties on imports, we shall be able to : ;iise in time a sufficient revenue to meet the exigencies of he country. But we shall certainly gain nothing by such a course of legislation ms we have pursued for tlie last sixty days. Every member who will reflect one moment on the subject must see that it is far better for us to be deliberative rather than liasty, and to examine and weigh well every measure, and see v/liat are to be its results and effects. In appealing to th(; House in behalf of the city ii; THE TARIFF AND TAXATION. 109 of New York, I appeal to them in behalf of a city equal in population to one or two of the smaller States of the Union, and in behalf of a community that has a large and vital interest in everything affecting the preservation of the Union. That city has done everything in its power to aid the Government, and will continue to do it what- ever may be said to the contraiy. Now. Mr. Chairman, with regard to this question of taxation and tariff, there are many features in the mod- ern policy of England, enacted there by the earnest ad- vocacy and efforts of the middle and laboring classes, which, I think, we might advantageously adopt. My colleague, (Mr. Stebbins,) whose absence I regret, said, in substance, diu'ing his remarks on the tax bill, that he was in favor of our surrounding ourselves as with a Chinese wall, isolating oui'selves from all foreign commu- nication and commerce, and making ourselves, as it were, a self-sustaining machine. " Prohibit," said he, " the exportation of every dollar of gold and silver, of every bushel of grain and every pound of beef and pork, or adopt the policy of a prohibitory tariff.'' He would "hold no intercourse with foreign nations until the war was over; none whatever." In my judgment, we need all the support we can derive from every source, and none of the accustomed supplies should be cut off. We should derive all the strength we can from profitable commerce as well as agricultural and manufacturing in- dustry. Perhaps this thought also was suggested to the mind of my colleague, for almost in the next breath he told us that we should derive ^100,000,000 from such an increase of the duties on imports as would not be prohibitory. It would be a very unwise policy for us to isolate ourselves now from the rest of the world. We are in a position when we cannot well afford to lose the sympathies of the people of foreign nations, especially when so great an effort is now being made on the part of the Confederate States to secure them. We should not needlessly and unprofitably alienate from ourselves the laboring and producing population of other coun- tries. What I understand we desire to attain in the adoption ^ 1 r ' 'HI;' ■ ■! m Am ■■4ma !«ii3ta ^% 110 THE TARIFF AND TAXATION. m. ■' *'';il of a new tariff system in this country is to secure the most revenue in the best way, and that it should be derived as far as practicable more especially from articles of luxury; and while my friend (Mr. Morrill) feels great hostility to the British Government, there are still certain features in the policy of that Government which I presume he will admit we may follow to advantage so far as they are beneficial to the masses of the people. Now, in Great Britain, the receipts in 1862 from customs were $120,000,000, and of that amount ninety per cent, was obtained from five or six articles, namely : coffee, tea, su^ar, spirituous liquors, and tobacco, as will appear in the following statement : The revenue of the United Kingdom in 1862 was about $355,000,000, and was derived as follows : CiiBtoms $120,000,000 Excise 90,000,000 Stamps 45,000,000 Lands and assessed taxes 15,000,000 Property tax 55,000,000 Post Office 19,000,000 Other receipts 12,000,000 Total $355,000,000 Of the receipts from customs, ninety per cent, are ob- tained from six articles, namely, coffee, spirits, sugar, tea, tobacco, and wines, as will appear from the following statemenc : Coffee, duty 6 cents per pound $ 2,000,000 Spirits, duty $2 50 per gallon 13,000,000 Sugar, duty 3 cents per pound 33,000,000 Tea, duty 35 cents par pound 28,000,000 Tobacco, duty 75 cents per pound 28,000,000 Wines, duty 50 cents per gallon 5,000,000 Six articles $109,000 000 All other articles 11,000,000 Total $120,000,000 The authentic accounts show some remarkable facts. THE TARIFF AND TAXATION. Ill Of the whole revenue of $355,000,000, spirits contribute $63,000,000, or 17^ per cent; beer contributes $30,000,- 000, or 8^ per cent. ; tea and coffee contribute $30,000,- 000, or 8^ per cent. ; tobacco contributes $28,000,000, or 8 per cent. ; sugar contributes $33,000,000, or 9 per cent. ; wine contributes $5,000,000, or 1 ^ per cent. ; stamps con- tribute $45,000,000, or 12^ per cent. ; income and prop- erty contribute $55,000,000, or 15^ per cent.; land tax contributes $6,000,000, or 1^ per cent. ; excise, besides spirits, contributes $10,000,000, or 2^ per cent. ; post office contributes $18,000,000, or 5 per cent. ; assessed taxes contribute $9,000,000, or 2^ per cent. ; sundries contribute $23,000,000, or 6^ per cent. The whole amount of revenue in Great Britain is double the amount of circulation, thus disposing of an alleged necessity for a great expansion of currency in order to collect high taxes. One of the objects of a tariff bill, as of every descrip- tion of tax bill, IS to realize as lai'ge an amount as can be raised on articles of luxury, to simplify the whole sys- tem, to diminish the expense of collection, prevent smug- gling or illegal trade, and subject the public to as little vexation and inconvenience, as few unnecessary burdens as possible, to relieve the masses of the people as far as possible from any increased price in the necessary articles of living ; but we, on the contrary, as will be noticed by this bill now before us, propose to put a tariff upon almost every article that is imported. I hope this House will endeavor, in the course they may pursue in regard to this and every other measure affecting the revenue, to adopt such a policy as will enable mt to support the bill. At the proper time I shall move some amendments to the different sections of the bill, and I hope it may be so amended as to obviate the objections which now present themselves to my mind. •m- i ji. ! : . ''¥ : 'i •: iii: lfl ml' A ■ H THE TREATY WITH THE HAWAHAN ISLANDS: ITS RELATIONS TO OUR NATIONAL COMMERCP]. House of Representativks, March 4, 1876. Through a singular combination of circumstances a commercial treaty with the Hawaiian Islands had been advised by a large majority in the Senate. Mr. Ward advocated its approval and the appropriate legislation in the House, as it would to some ex- tent open a market for our manufacturers and furnish freiglit for our shipping. Regarding the completion of a canal through the Isthmus of Darien, as a question only of time, and as China and Japan are among our chief fields for connnercial and manu- facturing enterprise, he believed it to be important that we should have friendly naval stations in the Pacific Ocean, but he sup- ported the treaty most earnestly on the ground that it would direct attention to our incomparably more important relations with Canada, Mexico, and Cuba, and might serve as a precedent for an extension of them. Mr. Speaker : I have observed with much pleasure tliat the convention for the extension of the trade of the United States with the Hawaiian Islands was advised in the Senate by the triumphant majority of fifty- one against twelve votes, and has been sent to this House for its approval and the appropriate legislation. Under the policy which has now for many years controlled the le- gislation of this country, the industry of tlie people has been unduly diverted to manufacturing pursuits. Over- production and a want of employment have followed. For the present the home demand can scarcely be in- creased, a.nd it has become incumV)eut on Congress to do whatever is fairly in its power to open or extend markets abroad. This is one of the direct results which will be accomplished by the proposed treaty, and hence it should i.l TREATY WITH HAWAIIAN ISLANDS. 113 be supported by the representatives of the people with- out distinction of party. The treaty also provides for the admission of certain articles, and, notably, uni-efined sugar, into the United States, free of duties. It cannot be expected tliat com- mercial privileges, such as vv^e shall obtain if the treaty should be fully confirmed, can be accorded to us without some ecjuivalent. At the same time it is clear to me that the advantatjes given to the people of the Hawaiian Islands by the proposed arrangement are also advantages to ourselves. By the stimulus given to in dustry in the islands an increased demand not only for our manufactures, but also for our agricultural produc- tions, most of which are essentially difBerent from those of the tropics, will be created, and the mutually beneficial exchange will be effected by our own sailors and ships, thus giving another impetus to our national progress. The discussions which have encjaijed so lar!2:e a share of public attention, as to the opposing doctrines of free trade and "protection," are now of diminished importance. Tlie taxation needed for the expenses of government and interest on the national debt is ali'eady so burdensome that argument as to the expediency of levying further taxes on the many for the benefit of the few should, by common consent, be postponed. Revenue, with the least possible injury to the people, is the proper object of the tariff. So long as our observation of the prices we are com- pelled to pay on the articles we use or consume is con- fined to our own country only, we lose sight of their inju- rious effect. When we compare prices in our own country with those of the world at large, we ascertain our condi- tion with tolerable precision. The competition to which our shipping is subjected on the ocean, in trade with other countries, affords a strong illustration of this rule. Be- fore 1860, seventy-five or eighty per cent, of our foreign commerce was in American vessels. The proportions are now almost literally reversed, over seventy-two per cent, being carried in the vessels of other countries. Of our whole foreign carrying trade little more than one-fourth is under oui* own flag. The earnings of the trade were recently estimated by the Secretary of the Treasury to be 8 1 fH, ' i I 'i;!:lMd 114 TREATY WITH HAWAIIAN ISLANDS. more than a hundred million of dollars yearly. In 1872, the amount paid to foreign steamships for freiglit and passage money waw $1.34,742,441. When we consider thiit such sums are paid annually, and that our ship-owners, sailors, and others formerly enjoyed the pre-eminence and chief j)rofits in a trade now so nearly monopolized by foi*- eigners, it is plain that a liberal and comprehensive change is needed in legislation. Upon similar principles, judici- ously applied, a strong stimulus could be given to the ex- ports of many manufactures, and the additional labor employed in tlieir production would increase the demand for agricultural products and tlie home comsumption of those manufactures to which the condition of our country is specially adapted. The theory of protecting and eneoiu'aging industry by high duties, levied, in the main, upon the industrious, has long been tried, while no legislative efforts liave been made to attain the same objeH by the judicious applica- tion of the lowest taxation consistent v.ath the needful rev- enue. While our tariff levies duties on nearly t'wenty-five hundred different and distinctly enumerated articles or classes of articles, the whole British tariff includes only fourteen ; all others are supi)lied to her consumers free of duty. Although we cannot yet attain the same simplicity, it would be wise to take steps in that direction. Whenever a revision of our tariff takes place, as it must at no distant day, whatever diminution of revenue may be caused by the Hawaiian treaty will be unimportant in comparison with the benefits derived by the country at large. While some diminution of our revenue on certain arti- cles may be expected to follow the removal of duties as required by the treaty, I have yet to learn that taxation is the chief purpose of government, which is instituted and maintained for the benefit of our citizens. The money which might be taken by the custom-house officials from the pockets of our citizens will be spent in other articles, many of them yielding revenue to the Government, or be re-invested in industrial pursuits, productive of the pros- perity and wealth which are the surest sources of national income, and enable the people to pay necessary taxes without repining. TREATY WITH ITAWAHAN ISLANDS. 115 Tlie advantages of the treaty are in some degree local. They will accrue primarilv and for the present chiefly to the benefit of our fellow-citizens on the Pacific const. But that is a narrow, unwise, and destructive statesmanship which wouhl, on such grounds, h -id those who live in other parts of the Union to regard the treaty with in- difference or, yet worse, endeavor to prevent its provi- sions from becoming part of the laws of the Union. One of the cardinal principles of our legislation should always he no less to promote the legitimate interests of each part of our country than to })rotect it fi'om attack by foreign foes, and I know of no more pr()l)a})le source of future danger than neglect of this obvious duty. The welfare of the whole Union is intimately connected and bound up with that of every State. If one member suffers, all in fact suffer with it, and apart even from all ties of sentiment and their very im])ortant results, each has a material profit from the prosperity of the others. The manufactured, agricultural, and mineral j^roduc- tions to be admitted under the treaty free of duty into the Hawaiian Islands will, to a very considerable extent, be brought from the Atlantic coast and all other parts of the Union. Yet even this view of the subject is not that which is most important to the nation at large. Placed as our continent is, midway between the leading commercial nations on the European side of the Atlantic and those oriental realms whose trade has always en- riched those who have obtained it, and is now one of the chief objects of solicitude and competition among the different states of Europe, it is to what has been usually termed " the East," but is to us the West — the region on the other great continent fronting our Pacific coast — and to South America that we must look for the natural openings for our manufacturing ingenuity and enter- prise. The purchase of a preponderating interest in the Suez Canal has justly been regarded as a masterpiece of states- manship and far-seeing policy on the part of Great Bri- tain. Its object is to maintain for that country its supremacy in oriental trade. I regard the treaty with the Hawaiian Islands as scarcely less important to our H r tit 116 TREATY WITH HAWAIIAN ISLANDS. people than the control of the Suez Canal is to Brit- ish subjects. China and Japan are among the chief fields for our commercial and manufacturing enterprise, and it is of the utmost importance that we should possess adequate naval stations in the Pacific Ocean. It is also our duty to legislate with due regard to the more remote future. Vast as the difficulties attending the opening of a ship-canal between the Atlantic and Pacific Oceans undoubtedly are, the resources of modern science make the whole question one simply of cost, and the benefits which would demonstrably result from it to the commerce of the world, and especially to that of the United States, prove that the necessary expenditures would be amply renmnerative. By the completion of this great work remote nations would, for all practical purposes, be brought nearer the commercial centres of tne world by thousands of miles, and the trade of the globe would receive a stronger stinmlus than has ever before been given to it. The Suez Canal itself could never compete successfully with such a work, not only for the exchanges of this continent, through part of which it would pass, but for those of many other nations ; the passage by the Mediterranean and Red Seas being too uncertain to be used extensively V>y sailing vessels whenever means of communication through the American isthnms are established. Recent surveys, carefully made by officers of the United States, show that a ship-canal through the American isthmus is practicable, and its completion is only a ques- tion of time. When that period arrives, enormous and unprecedented changes will take place in the commerce of the world, and our maritime interests will acquire an importance incalculably exceeding any they have ever yet attained. Althougn the benefits will affect mankind at large, they must accrue to the people of this country far more extensively than to those of any other. It is in this view of a certain and, historically speaking, not dis- tant future that the real value becomes apparent of such safe and convenient harbors on the track of our commerce in the Pacific as the Hawaiian Islands afford. Hence, the proposed treaty is of far greater concern to us than TREATY WITH HAWAIIAN ISLANDS. 117 Brit- jhief )rise, tlie 3 ant oderii t, and 1 it to of tlie litures lations •er tlie miles, wronger lie Suez ,h sucli itineut, hose of raneaii nsively licatioii I United nerican a ques- )U9 and [mnaerce luire an [ve ever lankind [country It is in 1 not dis- I of sucli jmmerce Hence, I us than in the mere exchange of the commodities specified hy it. His Hawaiian Majesty stipuhites that during tlie continu- ance of the treaty he will not lease or alienate any j)ort, harbor, or other territory in his dominions to any other power or government, nv its adoption the interests of the United States are, as far as is at jn'esent practicable, established in the islands. For these reasons I regard the Hawaiian Islands, although no part of this continent, yet as conmiercially, j)olitically, and in fact as part of its apjmrtenances, and to be properly included in the application of the Monroe doctrine, prohibiting the intervention of European pow- ers in them. Of this it was well said by President Johnson in his message of December 5, 1865, that it has, as law, been "sanctioned by time, and by its good results has approved itself to both continents." We jill remem- ber how Mr. Seward, soon after the civil war had ceased, asserted this doctrine, and urged the evacuation of Mexico by the French in language addressed to our minister in France, and not the less significant because it was duly courteous. " We shall," he said, " be gratified when the Emperor shall, either through the channel of your es- teemed correspondence or otherwise, give definite infor- mation of the time when French military operations may be expected to cease in Mexico." We all know the aus- picious events which followed as the practical result of this national assertion. In my judgment the proposed treaty with the Hawaiian Islands has a similar tendency. If we refuse, it is certain that they will form at least commercial alliances with Great Britain and her colonies, and such an opportunity as now presents itself will be lost to us forever. In a naval and military point of view, many of our highest authorities have repeatedly warned us not to permit the islands to pass into the hands of any foreign power. It appears to me that however just and proper and gratifying to an honorable national pride the Monroe doc- trine m itself may be, it is imperfect and little more than a barren ideality, unless, in an enlightened self-interest, we associate it with a friendly care for the commercial and material prosperity of the states we have so fai* taken 118 TIlEATiT WITH HAWAIIAN ISLANDS. 1 tA mmt I) I '. iiiidcr our protection. If vvii ])ro]nbit tlio iiit(Tf(M*onoe of Kiii'opcan n.'itioiiH vvitli tli(! .stuteH of tliiH continoiit, hIuiU wv stop at that point lUid cultivutd no furtlit!!' incn-uso of friondly relations with tlieni ^ I for one have t)io strong- est possible faith in the manifest destiny oi our j)eo})l(', and that a series of united states wUl e.\ist from the eold regions of the north, so far as they can l»e iidiahiU^d hy civilized man, down to the southern verj^je of the Amer- ican continent, and include the islands adjacent to it. We, with our rai)idly increasing 4(),0()(),00() of peo|)le, Hliall be, so to speak, the key-stone of th(^ aich — no bar- rier in the way of intercourse, but doing all we can to facilitate it, we ourselves necessai'ily [)artaking, at least to as high a degree as any otliers, in the [)rosperity whicii W(ndd thus be inaugurated and (established. The progress of this manifest destiny, however much it may have been ^ ever arise for us to open a mutually beneficial exchange of the products of the industry of our people for many articles now of prime necessity, and which we cannoi; ad- vantageously raise in our own country, but are abundantly produced in Mexico. ^Jnder a good commercial treaty or customs u -Ion with Mexico, many years would not elapse before her territory would be intersected with a network of railways carry- ing prosperity into every part, the amount of our produc- tions taken in exchange for hers would far exceed the enormous sum now paid annually to Cuba, and the diffi- culties arising from the Zona Libre or Free Belt, on our frontier would immediately be settled; while the more remote political results which would arise from the in- creased intercourse of the people of both countries, through the development of their natural commercial union, must be obvious to all thinking men. It should also be remembered that by the adoption of an American commercial system we should not only su- persede the demand upon us for the specie or bills of exchange now paid for tropical productions, but become also the intermediate carriers and factors for the trade which would be iudelinitely extended between our neigh- bors in Canada on the north, and those in Mexico on the south. The Canadians, by their recent proposals for a treaty of trade with the United States, and the Mexicans, through the liberal concessions their government has made, providing for a railroad nearly seven hundred miles in length, from the city of Leon to connect v ith the international railroad of Texas, and thus with the railway system of the United States, prove their appre- ciation of the benefits to be derived from enlarged com- mercial intercourse with our citizens, who, we may be sure, will not transact business if it is not to their profit. Such a treaty with Spain as would insure 'free admis- sion into Cuba for our flour, other provisions, and various ai tides of manufacture, would be worth nore than the fee-simple of the island itself to the fai'mers and manu- facturers and merchants of the United States ; and the commerce createc by a similar arrangement with Mexico would benefit the manufacturers of New England and TKEATy WITH HAWAIIAN ISLANDS. 123 1 i i t •, ':' Pennsylvannifi far more than the conquest or purchase of half the Mexican territory. By these means each country that became a party to the arrangement would he brouglit face to face with the actual interests naturally arising from its condition; prejudices founded on erroneous opinions vv'ould. be de- stroyed. Whatever political relations would really be mutually advantageous would follow as the nntuiT.l re- sults of friendly and beneficial intercourse. The people of the United States would be enabled by practical ex- perience to decide how far peace and pei'fectly reciprocal commerce with adjacent countries are preferable to ad- mitting dissimilar nations to a share of power in govern- ing us, and to the ancient European system of establish- ing jurisdiction over them. The adoption of these prmciples would be the initiation of a favorable revo- lution in our commerce. The change in our foreign relations, and the benefits arising from it, would in every part of our country give an impetus to the industry and spirit of enterprise which abound among us, and develop them to the utmost ; we should no longer see the great prizes of trade with the countries adjacent to us fall into the hands of others, while the character of our people and our unequalled agricultural, mining, manufacturing, and commercial facilities give us the means of grasping and retaining them. The commercial relations of the different countries of this continent being founded not only on the present con- dition of their people, but on their unalterable positions and variations of climate, unlike those topics which are temporarily brought forward for purposes of faction or excittment, and are dropped forever when a vote has bten taken on them, will constantly recur, in various shapes, as sources of debate, irritation, and, perhaps, of embroilment, until they are brought upon the natural level of perfect freedom. Regarding the proposed treaty with the Hawaiian Islands as the precursor of more extended and beneficial measures, I trust it will receive the sanction of the House. h il ^ imm ■i y 1. >L COMMERCIAL RELATIONS WITH CANADA. House ok Rbfkeskntativbb, May 18, 1876. At this time mnch embfirracsraent and distress prevailed in the commercial and manufacturing cities of the United States, Under this pressure unprecedentedly large quantities of o^ir manu- factures had been exported to Canada, and her value as a market was clearly demonstrated, but our importations of wheat had, under the existing duties, become merely nominal. The tariff of Canada was exceedingly libei-al, while ours was oppressive. The result is, that we sell large amounts of many articles to Canada, to be carried over railroads and canals, and exported by her ships, while we divert her exports from ourselves. The highest mercantile and official authorities in Canada had expressed a de- sire for a fair extension of commercial relations with us, and its advantages were fully appreciated in all the northern States. In this speech the extent of Canada, the character of her people, and her natural connections with the United States, are presented as briefly as the subject permits, and discussed with reference to tlie principle of political economy, the facts of the newest statistics, and many demands of public policy. Recognizing these facts, Mr. Ward introduced a joint resolution for the appointment of commissioners by the President to ascertain the best terms on whicli ^ reaty of commerce could be negotiated. ' Mr. Speaker: At the present time, when capital seeks investment, interest is reduced beyond all precedent in this country, wages are lowered, immigration decreases, the value of our exports is diminished, and hundreds of thousands of our people are in search of work by which they may earn a livelihood, it is the duty of wise states- men and sound patriots to do the utmost in their power to promote the return of prosperity by suoh measures as will best extend the sales of our productions, and promote our carrying trade and commerce. Hitherto, intent upon the development of our unparalelled resources, and hav- ing a sparse population, we have paid too little attention to our external trade and the encouragement of foreign I'- ' COMMERCIAL RELATIONS WITH CANADA. 125 markets for our products, especially for those of our man- ufactories, the number of which we have stimulated to an extent far greater than is commensurate with the demands of our own population. There is no moro obvious remedy for this state of af- fairs at present, nor ai^y more sure and stable foundation of our prosperity in all time to come, than the extension of our commercial relations with the adjacent countries on this continent — on the north with Canada, and on the south with Mexico. Yet we seldom appreciate at their great and practical vidue the importance of the vast regions north of the United States on this continent. Stretching f.'om the Atlantic to the Pacific ocean, they contain an area of three millions and a half of square miles ; more than is owned by the United States, exclusive of our newly ac- quired territory in the far northwest, and not much les3 than the whole of Europe with its family of nations. No small proportion of these Territories consists of barren and inhospitable regions in the extreme north ; but, as a recom- pense, the arid plains extending through Texas, and thance northward beyond the limits of the United States, are comparatively insignificant as they enter the British pos- sessions, where the Kocky Mountains, being less elevated, and having a narrower base, afford an easier passage to the clouds from the Pacific Ocean, bearing ample rain with its fertilizing influences into the interior of the con- tinent. By the same cause the climate is tempered. The isothermal line of 60° for summer rises on the northwestern plains as high as the sixty-first parallel, its average position in Europe ; and a favorable comparison may also be traced for winter and the other seasons of the year. Spring opens almost simultaneously for a dis- tance of about twelve hundred miles on the vast plains reaching northerly from St. Paul. Along the valleys of the Red, Assinaboine, Saskatcliewan, and Mackenzie Rivers, for more thru seven hundred miles north of the limit of the United States, wheat has been grown, yield- ing most abundant returns, thus indicating a soil and climate well suited for the crops ordinarily produced in the cooler parts of the teraperivte zone. Barley, the 11- 1 r ' ' f<4 126 COMMERCIAL RELATIONS WITH CANADA. '■i !'■ grasses, and many root crops grow twelve hundred miles north of the same boundary. These facts are significant proofs of the immense oaj)al)ilities of the agricultural areas in the interior of the continent north of the forty-ninth parallel. Westward from these regions— yet scarcely inhabited, but of incal- culable value m the future — are countries of yet milder climate on the Pacific coast, whose relations to California are already important. To the eastward are the rapidlj^ increasing settlements, enjoying the rich lands and plea sant climate of Manitoba, on the Red River of the North, a stream capable of steamboat navigation for four hun- dred miles. It is asserted by those who add personal knowledge of the subject to scientific investigation, that the habitable but undevelo])ed area of the Bi'itish possessions westerly from Lake Superior and Hudson's Bay comprises sufli- cient territory to make twenty-five States equal in size to Illinois. Bold as this assertion .is, it meets with confii'- mation in the isothermal charts of Blodgett, the testimony of Richardson, Simpson, Mackenzie, the maps published by the government of Canada, and recent explorations. North of a line drawn from the northern limit of Lake Superior to the coast at the southern limit of Labrador exists a vast regiouj possessing in its best parts a climate barely enduraljle, and reaching into the Arctic regions. This country, even more cold, desolate, and barren on the Atlantic coast than in the interior latitudes, becoming early known to travellers, has too often given character in public estimation to the whole north. Another line, drawn from the northern limit of Minne- sota to that at Maine, would include nearly all the inhabited portion of Canada, a country extending opposite the Territory of Dakota and States of Minnesota, Wis- consin, Michigan, Ohio, Pennsylvania, New York, Ver- mont, New Hampshire, and Maine, and possessing a climate identical with that of our Northern States. The "maritime provinces " on the Atlantic coast include New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland. Geographically they may be regarded as a noi"theaster]y prolongation of the New England COMMERCIAL RELATIONS WITH CANADA. 127 system. Unitedly they include an area of at least eighty- six thousand square miles, and are capable of supporting a larger population than that at present existing in the United States or Great Britain. Tliey are equal in ex- tent to the united territory of Holland, Greece, Belgium, Portugal, and Switzerland. The natural interests of New Brunswick and the ad- jacent State of Maine are inseparably connected. New Brunswick has an area of twenty-two millions of acres and a sea-coast four hundred miles in extent, and abound- ing in harbors. It had at the census of 1871 a population of nearly three hundred thousand, being nearly equal to that of Nebraska, Nevada, Oi-egon, and Colorado. The chief occupations of its inhabitants are connected with ship-building, the fisheries, and the timber trade. Judging from authentic surveys and records, it is scarcely i)ossible to speak too highly of its climate, soil, and capabilities. Few countries are so well watered and wooded. On its unreclaimed surface are large stocks of timber; beneath are coal-fields. The rivers, lakes, and sea-coast abound with fish. Nova Scotia, a long peninsula, united to the American continent by an isthnuis only fifteen miles wide, is two liundred and eighty miles in length. The numerous indentations on its coast form harbors unsurpassed in any part of the world. Including Cape Breton, it has an area of twelve millions of acres. Wheat and the usual cereals and fruits of the Northern States flourish in many parts of it. Its population in 1871 was declared by the census to be nearly four hundred thousand. Besides possessing productive fisheries and agricultural resources, it is rich ill mineral wealth, having beneath its surface coal, iron, manganese, gypsum, and gold. The province of Prince Edward Island is separated from New Brunswick and Nova Scotia by straits only nine miles in width. It is crescent-shaped, one hundred and thirty miles in length, and at its broadest part is thirty-four miles wide. It is a level region, of a more moderate temperature than that of Lower Canada, and well adapted to agricultural purposes. The island of Newfoundland has a sea-coast of one ' :'''ii'i. '1 '■ '' •I l'"B villi ►«i«itoi 128 COMMERCIAL RELATIONS WITH CANADA. tlionsand miles in extent. It has an area of over twenty- three millions of acres, of which only a small portion is cultivated. Its spring is late, its summer short, but the fi'ost of winter is less severe than in many parts of our own northern States and Territories. It is only sixteen hundred and sixty-five miles distant from Ireland. It possesses a large trade with various countries, including Spain, Portugal, Italy, the West Indies, and the Brazils. The chief wealth of Newfoundland and of the Labra- dor coast is to be found in their extensive and inexhaus- tible fisheries, in which the other provinces also partake. The future products of these, when pro2:)erly develo})ed by human ingenuity and industry, defy calculation. The Gulf Stream is met near the shores of Newfoundland l)y a current from the polar basin, vast deposits are formed by the meeting of the opposing waters, the great sub- marine islands known as " The Banks " are formed, and the rich pastures created in Ireland by the warm and humid influences of the Gulf Stream are compensated by the " rich sea-pastures of Newfoundland." The fishes of warm or tropical waters, inferior in quality and scarcely capable of preservation, cannot form an article of com- merce like those produced in inexhaustible quantities in these cold and shallow seas. The abundance of these marine resources is unequalled in any other portion of the globe, except where similar conditions exist in the North- ern Pacific ocean. The provinces of Ontario and Quebec, "known as Canada before the union with the Dominion, include an area of more than one hundred and eighty-five millions of acres, inde- pendently of the northwestern regions yet scarcely open for settlement. Their territory is three times as large as that of Great Britain and Ireland, and more than three times that of Prussia. It intervenes between the great northwest and the maritime provinces, and consists chiefly of a vast projection into the territory of the United States, although it possesses a coast of nearly one thou- sand miles on the river and gulf of the Saint Lawrence, where fisheries of cod, herring, mackerel, and salmon are carried on successfully. Valuable fisheries exist also in its lakes. It is rich in metallic ore and in the resouices COMMERCIAL RELATIONS WITH CANADA, 129 enty- on is it the f our xteeii 1. It utling raziln. !jabra- diaus- irtake. sloped . The md V)y 'ormed it sub- d, and ■m and ited l)y ishes of carcely )f com- ities in tliese of the North- Janada |of more !8, inde- ly open large as In three |e great chiefly United le thou- [wrence, lon are also in isources of its forests. Large portions of it are peculiarly favor- able to the growth of wlieat, barley, and tlie other cereals of the North. Within thirty -five years, or less than the life-time of nearly all who are now hearing me, the population of Ontario and Quebec has increased about five-fold, or from five hundred and eighty-two thousand to about three millions. The population of the Dominion of Canada and the other possessions now exceeds four millions, being more than that of Arkansas, California, Delaware, l^lorida, Kansas, Louisiana, Maine, Minnesota, Nebraska, Nevada, and New Hampshire, added together, at the last census. Many of their inhabitants are of French extraction, and a few German settlements exist ; but two-thirds of the people of the provinces owe their origin either to the United States or to the British islantls, whose language we speak, and who "people the woi'ld with men industri- ous and free." The identity of language in contiguous countries is a fair exponent of the tendency to amalga- mation. It generally implies great similarity, if not identity, of religion, laws, and habits, the essential ele- ments of thorough fusion. Apart from the artificial regulations by customs duties, the exchanges of the products of labor between the peo- ple of the United States and their neighbors on the north would be as intimate and, in proportion to the popula- tion, at least as various and comprehensive, as those of the States of our Union with each other. In fact the commercial relations of our northern, northwestern, and eastern States with the Dominion of Canada, if left simply and without obstruction to the practical test of benefits or profits given and received by the people of both countries, would be more close and intimate than those between most parts of the Union. The great lakes, which for some thousands of miles politically separate us, are themselves among the cheapest and most useful means of intercommunication for the northwestern and eastern States, and with the majestic river through which their waters flow, have long furnished, by aid of short canals, one of the most important channels of trade and I ; ■ i, ;■ t i: I I- • "7 'I 130 COMMERCIAL RELATIONS WITH CANADA. i IN ', iS-.j •' ■f ^tl i ,1 " If [■iil'- ■;;»1 ! travel, from tlie interior to the ocean, and thence to the chief markets of the worhl. Nearly threefourtlis of tlie people of the Dominion in- habit a territory in latitudes south of our boundaries in Maine and Minnesota. Across tliis region, and especi- ally th(; peninsula between Lakes Huron and Michigan, is the direct line of communication between the States of Maine, New Hampshire, Massachusetts, Rhode Island, Connecticut, and New York on the one side, and Michi- gan, Wisconsin, Minnesota, and all our Territories west of them on the other. Great as the value of transit through Canada is to our people, similar freedom through our territory is perhaps even more important to the Canadians. Excepting tli« maritime provinces, the whoia of the British North American possessions, until they approach the Pacific Ocean, is dependent upon the railroads, canals, rivers, and other means of communication in the United States for the shortest routes to the ocean. Fortunately, what is in this respect almost the necessity of the Canadians is one from which must result the employment of our people and profit to our forwarders on such a scale that it will confer conspicuous national benefit upon us if we do not prevent the natui'al interests of the people from attaining due and harmonious development. More than that, the great natural, permanent system of exchanges is between the North and South ; their productions being necessa- rily distinct, and modern civilization having rendered them practically necessaries of life to the people of each region. Regarding the subject from a broad and national point of view, it is instructive to see how great and varied are the advantages that would result to all parts of our country from free inte^oourse with the neighboring nations. The northern and southern parts of our conti- nent possess special and distinct advantages for pro- ducing commodities with which each can purchase those of other sections. The Northern States, for instance, need fear no competition with Mexico or Cuba in manufactures or agriculture. These countries would purchase, in increased quantities, our manufactures, COMMERCIAL KP^LATIONS WITH CANADA. 131 cereals, meata, and fisli, while we in return should con- sume more of their sugar, coffee, fruits, and other tropi- cal productions. Th(; agricultural productions of Ciuia- (lii are almost identical with those of the Northern States, })iit would be exchanged for our own manufactures, and for the products of warmer climates, in part those of our Southern States, and in part of regions yet farther south, whose products would tluis be l)i'ought throtigh our ter- ritory, and afford employment and profit to our peo])le, with advantages to all tne countries which would l)e par- ties to the arrangement. Our agriculture, manufactures, and carrying trade would alike be benefited, and the natural operation of the laAvs of trade would necessarily confer corresponding benefits on those for whom our work would be done and with v/hom our exchanges would be made. The ti'ade between tlie northern and southern parts of this continent raust attain enormous proportions. It is very desirable for our people that it should as soon as possible be developed to the utmost. Its natural course will be through the central or intermediate States, creat- ing in them commercial interests of a magnitude which it IS almost impossible now to calculate. The mutual benefits thus given and received would be perpetually diffused, and circulate in every vein and artery of com- merce and manufactures throughout the Union, and be accompanied with the gratifying knowledge that they were derived from the prosperity of our neighbors in other countries. As the naturally interdependent commercial relations of the United States and Canada arise from geographical and climatic causes which are permanent and unchange- able, and the cost of labor and the interest on capital in both countries are, reckoning from a series of years, nearly alike, they have from the beginning of our history attracted the attention of our leading statesmen without distinction of party. During the Pi'esidency of General Jackson, Mr. Van Buren, when writing in 1829 to Mr. McLane, then our Minister at the Court of St. James, referring especially to the North American Colonies, said : 'I' [■■li-iMl «; ' . hi • , 1«2 COMMKUCfAL RELATIONS WITH CANADA. The policy of tlio ITiiitod States in reltitioii to their oommer- cifil intoiTom-se witli other nations, is founded on princtiplcH of perfect equnlity and recipnxiity. By the adoption of these prin- ciples they have endeavored to relievo themselves from the dis- cuHsions, discontents, and emharrassments in8eparul)le from the imposition of burdensome discriminations. These i)rinciplos wero avowed while they wore yet strng^linj^ for their independent, are recorded in their tiist treaty, and have been adhered to with the most scrupulous lidelity. The exceptional character of our natural commercial relations with Canada has also been duly observed by some of the most eminent advocates of what is termed " protective " policy. One of the chief arguments in its favor is that against admitting the products of " pauper labor " to compete with those of our own citizens. It has no force in reference to a contiguous country, fi'om which people can pass to the United States in a few moments or ai most a few hours. The other argument of the saiue cliiss of theorists is derived from the impor- tance of a " h >me market." But a " home market is the market nearest home, and this is furnished l)y the re- spective countries to each other at every point of their coterminous territory. Mr. Clay, who was called the father of the " protec- tive " system, duly appreciated these facts, and from his standpoint pdded valuable testimony to the uniformity of opinion ,11 long American statesmen in his time, and his convitt'> (1 as to the policy by which he desired our country to oe guided. The Government of the United States — He said — .a:;^ has always been anxious that the trade between them and the British colonies should be placed on a liberal and equitable basis. There has not been a moment since the adoption of the present Constitution when they have not been wilhng to apply to it principles of fair reciprocity and equal competition. As time has passed and the country on both sides of the frontier has become more closely inhabited, farms, villages, and cities taking the place of the primeval wil- COMMERCIAL RELATIONS WITH CANADA. UM] (lorn.ess, the value of the intercourse of the people has irnnuMiHcly increastid. Wlien Mr. Clay and Mr. Van Biiron deemed it iiii[)ortant the po])ulation of Canada was insignifioant. it is now larger than that of all the six Ne^/ England States added together. Tiie interests involved and the benc^fits each country can confer upon itself by due emancipation of its indus- try are so many and obvious that they will continually demand discussion until they are fully settled on the basis of pei-fect freedom, and our trade with Canada is as uiircistricted as that of our different States among them- selves. It is our duty to regard these questions j)racti- cally, Avoiding alike on one side the inconsiderate haste which might result from political sentimentality, and on the other the influence of the absurd and pernicious dogma which, carried to its logical results, would put an end to all trade, individual as well as national, that whatever is j)rofitable to others must be injurious to our- selves. The modern increase of facilities of communication by canals, railroads, bridges, steamboats, telegra[)lis, and the press, assisting the transfer of merchandise, the travel of passengers, and the free interchange of thoughts be- tween the United States and the Dominion, add to the policy enunciated by Mr. Clay and Mr. Van Buren, a value we cannot estimate too highly. The commercial spirit and resolute enterprise of the Canadians are shown no less by the attractions they have presented to immi- gration, and the consequent increase of their population, than by the fact that with a population small in compar- ison with that of many nations in the Old World they already rank as the fourth power on the globe in the extent of their merchant shipping, taking precedence in its extent and quality of all countries except Great Britain, the United States, and Germany. The aggregate of the foreign trade of Canada in 1872- 73 and 1873-74 was about two hundred and seventeen millions, each year, being considerably more than one- sixth of all the imports and domestic and foreign exports of the United States. The aggregate of our foreign trade in 1875 was $1,219,434,544. If it had been as large as m 134 COMMERCIAL RELATIONS WITH CANADA. Ik ' ' ihat of Canada in proportion to the population of tte two countries, it would have exceeded $2,400,000,000. Notwithstanding the adverse laws in both countries, preventing a free exchange of the products of the indus- try of their people, thus depriving Canada of her natural prosperity, injunng the business of many of our States, and most seriously impeding the progress of those parts of our country which are near the Canadian frontier, our . exports of ai'ticles, the growth, produce, and manufacture of the United States to Canada, according to the report of the Treasury Department, amounted in 1873-74 to no less than $42,505,914, being more than twenty times as large as those to China, whence v/e draw so large a pro- portion of our imports, and larger than our exports of a similar character to any country in the world excepting only Great Britain, Germany, and France. Our exports to Canada of goods of foreign origin in the same year amounted to $4,589,343, and the total trade with her to at least the vast sum of $85,253,168. Taking the official statistics of Canada as the test of our exports to the Dominion, the value of our exports was much larger, those entered for consumption there having amo'iuted to $54,279,749, and our imports to $35,061,117 — the aggregate trade having been $90,524,- 000. In 1874-75 the aggregate of our domestic exports to Canada, as shown in the Report on Commerce and I^avi- gation, including the additions on page 416, was $49,906,- 285, and the trade between the two countries amounted altogether to $86,256,925. An examination of oui* exports to Canada shows that her value as an outlet for our manufactures has long been much underrated. This has, no doubt, arisen in part from the fact that we compute the amount of our ex- ports from our own custom-house statistics. These are the best sources we have of information as to our im- ports, on which accuracy is exacted because they are subject to duty ; but there is no euch urgency as to our exports. They pass from our side of the lines without much attention from our officers. Modern political econ- omists and statisticians have observed the operation of COMMERCIAL RELATIONS WITH CANADA, 135 the same rule in various countries, and regard it as an established axiom that " the amount of export is always less exactly registered than the amount of import, because witli the former duty is but rarely levied." This rule ap- plies with peculiar force to the ordinary data furnished by the official reports of the commerce and navigation of tlie United States so far as they refer to Canada. In 1874 the Chief of the Bureau of Statistics asked the attention of the National Legislature to this subject, and in 187o he repeated his request. He found it imprac- ticable, if not impossible, to obtam full returns of mer- chandise exported to the Provinces of Ontario and Quebec. Our custom-house returns on the Canadian border are necessaril} defective, in part for want of legislation re- quiring persons exporting merchandise by railway-cars or other land-vehicles, which have long been used in the transportation of n»erchandise across the Canadian bor- ders, to file full manifests of such merchandise with the collector of the customs as is required in the case of all exports to foreign countries in vessels. It has been found on close investigation into the facts that in both countries the accoui ts of imports from each into the other are the more accurate.^ V^ecause " the customs-officers of both are constantly on the alert to see that no dutiable merchan- dise crosses the border without paying its prescribed im- J/OSt." Upon the basis thus irrefutably laid down, it is found that the value of articles of domestic production exported from the United States to Canada in 1874 was $11,424,- 566, and in 1875 no less than $15,060,281, in addition to the amounts shown by our own official records. This enormous amount of over $27,000,000 consisted chiefly of the products of the manufacturing industry of our peo- ple, and I desire to direct to it the special attention of those who fancy that an extension of reciprocal trade with Canada would be injurious to the manufacturing population of the United States. One of the most efficient and beneficial means of pro- tecting our manufactures would be to encourage the demand for them in Canada. Including the amounts given ill the statement of the quautit.es and values of our if u Hi- \ •r ■,H - , \sl '*lifl 136 COMMERCIAL RELATIONS WITH CANADA. li ii- L i" domestic exports In the official records of the Bureau of Statistics, and the additions corrected from the reports furnished by the Canadian commissioners of customs, our expoi'ts last year, of our own production, to the Dominion, included books and stationery to the value of $794,846 cotton manufactures, besides raw cotton, $1,591,844 musical instruments, $039,027 ; leather and its manvifae tures, $789,428; tobacco and its manufactures, $1,073, 366 ; refined sugar and molasses, $1,988,733 ; manufaC' tures of iron and steel, $6,833,649, besides other manu factures to the value of many millions. Our imports during the same year from all parts of th( Dv , nion of her staple productions of wheat and flour uiiioaxited only in value to $363,317. If we can export our manufactures in such large quan- tities to Canada when impeded by her present tariff, it cannot be disputed that we should increase our sales of them if they were admitted at lower r^tes of duty, and yet more if they were admitted free of all duty what- ever. The treaty of 1854 provided for a reciprocal trade be- tween the United States and the British North American possessions in certain articles, consisting mainly of the unmanufactured productions oi the farm, forest, mines, and fisheries. It was for several years mutually satis^ tory, but under the p^ressure of debt and the need increased revenue the Canadians raised the dutiti manufactured goods to such an extent as to destroy its natural effects in promoting many branches of the industry of our people. The Legislature of the State of New York passed con- current resolutions complaining of the tariff thus exacted by Canada, and demanding a revision of the treaty, but expressing approval of the principle of reciprocity and a desire for an extension of its application. It was seen that unrestricted trade between the United States and Canada must be mutually beneficial for the same reasons as make it desirable between New York and Pennsylva- nia, or any of the other States in the Union. The resolutions of the State of New York asserted that " free comnuircial intercourse between the United States COMMERCIAL RELATIONS WITH CANADA. 1^7 and the Britlsli North American possessions, developing the natural, geographical, and other advantages of eacH for the good of all, is conducive to the present interests of each, and is the caly proper basis of our intercourse for all time to come ; " and, in pursuance of the request of the State of New York, that its senators and repre- sentatives in Congress should take such steps as would regulate ^he commerce and navigation between the two countries in such manner as to render the same recipro- cally beneficial and satisfactory, I moved in the House of Representatives that the President of the United States should be authorized and required to give notice to the British government that the treaty of commerce then ex- isting, as to the British North American Colonies, would be terminated at the earliest date legally permitted, but that the President should be authorized to appoint three commissioners for the revision of said treaty, and to con- fer with other commissioners duly authorized therefor, whenever it should appear to be the wish of the govern- ment of Great Britain to negotiate a new treaty between the governments and the people of both countries, leased upon the true principles of reciprocity, and for the re- moval of existing difficulties. The preamble declared that inequality and injustice existed in our present intercourse with Canada, subver- sive of the true intent of the treaty, owing to the legislation of Canada, after the treaty had been adop- ted, and that it was desirable that friendly relations should be entertained between the United States and the British North American provinces, and that com- mercial intercourse should be hereafter carried on be- tween them upon principles reciprocally beneficial and satisfactory to both parties. A. motion to lay the preamble and resolution on the table was rejected by a vote of 76 to 73. Thus the House refused to terminate the treaty unconditionally. A notice simply to abrogate the treaty was voted down, and the preamble which asserted that commer- cial intercourse between the United States and the British North American provinces should be hereafter carried on between them upon principles I'eciprocally ii ■ Si' f if fc *i;- ■ 1* W 'h l^^l ■ 'f< Jlj! ■' ' ,, w\ t ^i *!' W I 138 COMMERCIAL RELATIONS WITH CANADA. beneficial and satisfactory, was adopted ; and the reso- lution would also have been carried if a few members who, toj]jether with their constituents, were conspicuously in favor of and especially interested in the utmost possible free'lom of exchanges between the two coun- tries, had not been induced to believe that they would obtain better terms b}' postponement to the next ses- sion of Congress. But the postponement was only adopted by a majority of five out of one huudi'ed and fifty-nine votes. Just before the time for reconsideration arrived the war feeling had attained increased intensity, and the exigencies and temper of the occasion threw all com- mercial considerations temporarily aside. Since that time the Canadian tarifP has undergone great and liberal changes. Very many of the articles on which we charge duties almost prohibitory are ad- mitted free of all duties into Canada, and her old tariff of twenty-five or thirty per cent, has been re- duced to a general rate of seventeen and a half on manufactures, often much less, and can no longer be a subject for complaint for injustice on our part while we charge forty or sixty per cent. We now approach the whole subject under new and favorable auspices. As the exports of Canada consist chiefly of raw productions of the farm and forest, for which we ex- port little for actual consumption in Canada, the ad- mission of these articles free of duty by each country into the territory of the other is not the most just or desirable form of reciprocity. To place our trade with the Dominion on a satisfactory basis, manufactures also should be admitted free of duty from each country into the other. But to effect this it is necessary that no higher duty should be levied in one country than in the other on iron, silk, wool, and the other materials of manufactures. Without this the country admitting them at low duties, or without any, would manifestly be able to undersell the other if it continued such duty as it might deem necessary for Its revenue or prudent for the protection of its labor against the competition of countries under different social and monetary conditions. COMMERCIAL RELATIONS WITH CANADA. 139 The best arrangement of recipi-ocal trade between the two countries must include more or less the manufac- tured as well as the raw productions of each, thus giving mutual encouragement to various and differing industries on both sides of the line, and })ei'mitting labor in each to adjust itself to the most advantageous employments. The United States have never yet made decisive efforts to secure the benefits thus within their grasp. If such a system of recij)rocal exchanges could be extended to manufactured productions, both countries would assuredly profit. The first effect might seem detri- mental to special interests in both, but a natural equi- librium would soon establish itself, producing conditions under which capital and labor would be applied to the best advantage. It would be found what each country can produce better and more cheaply for the other than the latter can for itself, and under such circumstances each would obviously be the ^aine/ by mutual exchanges. It is the nature of trade that it will not long be con- tinued unless all the parties gain liy it. Both as pro- ducers and consumers the people of each country would profit by such an economical adju-stment of affairs. As many manufactures in both countries are made of materials imported from various parts of the world, it would manifestly be impossible to ^^staldish a completely free system of commercial intercourse with Canada, except under duties not only corresponding but also equitably divided on the productions of other countries. This is the chief obstacle to any fair, mutually advantageous, and complete arrangement of reciprocity between us. If, for instance, wearing apparel, of which we formerly sold large quantities to the Canadians, were included in a list of free exchanges between us and them, without any more fundamental and comprehensive change, Canada, by admitting free of duty wool, or, if she chose, cloth and the other aiticles used in making apparel, could undersell us so far as to drive us out of our own markets. The principle thus illustrated is applicable to almost all other manufactures. The materials for manufactures of wood, wool, and iron, are already brought into Canada either free of all imports or under nominal duties for the pur- i ■ * m "St! i- II ' i; 1 140 COMMERCIAL RELATIONS WITH CANADA. i> *> pose of encouraging cheap production. There is nothing to prevent their being admitted wholly free. Under these circumstances the Canadian manufacturers would have an unjust advantage over those of our own country even in our own markets. On our side we might reverse all this by a lower tariff or a system of bounties. But if the materials of manufacture were admitted on the same terms into the United States and the Dominion, and an equitable distribution made of the revenues, the manu- factures of each might safely and profitably be admitted into the other. In fact, with our larger capital and more advanced manufactories we should have an advantage in t^e competition which would also inure to the benefit of the Canadian people. Manufactures are not the only form of industry which is worthy of consideration. The interests of our mer- chants and forwarders, as well as the people of Canada, are seriously injured by the present obstacles to their intercourse. There is a great difference between a bonded system and a system of perfect freedom, as to exports or imports. The annoyances, vexations, and delays necessa- rily attached to any bonded system are often sufficient in this day of easy communication to turn away business from ts natural and best centre. It is also to be remem- bered that hitherto the Government of tlie United States has not thought it expedient to refund the duties on the re-exportation of foreign merchandise in less quantities than the original package, thus creating an obstacle, often amounting to jirohibition, to the jobbing and retail- ing of goods. That the mere adoption of the same rates of duties in the United States and Canada on articles imported from other countries would not be politic, is evident on the ground that customs-revenue is chiefly collected in a few ports, although ultimately paid by the consumers, often in very remote parts of the country. 4 All these difficulties might be solved by adopting the principles embodied in the Zollverein or Prussian con- federacy of the German States, with such modifications as may be found expedient between ourselves and the Canadians. By this course both can obtain all the com- COMMERCIAL RELATIONS WITH CANADA. 141 ''■' i.- raercial advantages of union without political entangle- ment, leaving each country free to practice in its own self-government such rules as it believes to be most in accordance with the genius of its people, and best adapted to promote its own interests. Previous to the adoption of the Zollverein, it had been tlie misfortune of Germary to be divided into a large number of independent states — most of them of petty dimensions and small population — every one having dis- tinct custom-houses, tariff and revenue laws, often differ- ing very widely from those of the neighbors surrounding it. Sometimes one part of a state was separated from its other parts, and was as a commercial island encompassed by states having different laws. The condition was such as would have existed in New York or any other of our States, if each of tlie different counties had been commer- cially divided from the rest, and the inhabitants of one county could not, witliout paying heavy imposts, pass into another with a horse, ox, or load of grain, the pro- duct of their own farms, or take imported goods into any of the counties adjoining their own, and the difficulty continually increased on passing through additional counties. Thus the inland trade of Germany was sub- jected to all the restrictions that are usually laid on the intercourse between distant and independent states. The principle of the Zollverein or customs union is that there shall be entire and unrestricted freedom of imports, exports, and transit among all the states which are its members. The same duties are collected on the outside frontiti* of the states thus united. Within that line all trade is as untrammelled as within our present Union. An equitable distribution of the revenue thus obtained is made among all the states of tlie confederation. The Zollverein is comprehensively defined to be the as- sociation of a number of states for the establishment of a common customs law and customs line with i-egnrd to foreign countries, and for the suppression of both in the intercourse of the States within the border line. There would be no impediment by discriminating duties on the importations for Toronto it made via New York or Bos- ton. If the merchants of Chicago found it to their in- $i ,^. m 142 COMMERCIAL RELATIONS WITH CANADA. terest to purchase at Montreal, they eoulrl do so ; and buyers from the new province of Manitoba might buy and sell at St. Paul, Du Luth, St. Louis, or New Orleans, as freely as at Halifax oi* any other city in the Dominion. The merchants of British Columbia would buy and sell in the markets of San Francisco as freely and with as I'ttle hinderance as in those of their own country. All means of transit would be entirely open to the people of both countries, and those most conducive to the piy'ilic welfare would take the trade. Internal revenue laws could, so far as necessary, be made in conformity with the princinles of the Union, There could be fair and com- plete competition everywhere within the confederation, and full scope could be given to the development of natu- ral advantages wherever they would bring profit to the merchant and save needless labor of the people, or yield I'emunerative employment to them. The German Zollverein began in 1818, considerably more than half a century ago. Its progress is a sufficient proof of the excellence of the principles it embodies and of the mode by which they are carried into effect. The enlightened state of Prussia was the originator and leader in the movement, by forming a commercial union with a few minor states ; the whote population thus included being at first only nineteen millions. The experience of the benefits thus created is so satisfactory, that the best publicists of Europe believe that Prussia thus conferred upon the German people advantages scarcely inferior to those she initiated by the diffusion of education and in- telligence. It not only promoted the industry and pros- perity of the allied states more than any other measure or sets of measures that their governments could have de- vised, but it was found that the increase of wealth and population thus arising created an additional demand for foreign products. Whatever opposition there is to unembarrassed inter- course with Canada proceeds mainly from a fear lest it might revolutionize our tariif or injure our revenue. It is well to remind the alarmists who raise this outcry that such results are no necessary consequence of a-n American Zollverein. So far as the Zollverein of Germany is a iSa58;j*f COMMERCIAL RELATIONS WITH CANADA. 143 precedent, such apprehensions are entirely grmindlegg. As Prussia was the largest and most populous country when the ZoUverein was begun, her tariff was adopted ; and owing to increased prosperity and the consequently increased consumption of tax-paying articles, the revenue of Prussia rose about thirty per cent, in the four years next following the amalgamation of the North German and South German States into one grand union on the Ist of January, 1834. In 1865 the benefits of the Gennan ZoUverein had be- come so well proved and appreciated, that instead of the three original states or duchies it included fourteen, with a population of nearly thirty-six millions. Tlie solidity and cohesive power of the ZoUverein were decisively tested in the war which began between Prussia and Austria in 1866. The governments of the North German States included in the union sided witli Austria, an(^ it was feared that a dissolution of the Zollve; 'n would ensue ; but, says one of the historians of the time, the extraordinary spectacle was presented that while " its component parts were waging open war with each other, its custom-house authorities remained in their functions in the general name and received and divided the revenue moneys in the. general name, a spectacle which surprised nobody in Germany, but caused general astonishment ahroad as something quite incomprehensible. German nationality, and the inner conserving power which ani- mates the ZoUverein received hereby the most glorious confirmation." After the war of 1866, the German States to the south of the river Main, having preserved their independence, were not under any obligation to renew the ZoUverein, hut preferred to continue members of it. In 1867 a new ZoUverein treaty was concluded between the states of the North German Confederation and the North German States, the scope of which extended to the whole of Ger- many except Austria. Even with Austria a liberal and comprehensive treaty was effected in 1868, mutually re- ducing duties on both sides and abolishing all transit duties and nearly all those on exports. 144 COMMERCIAL RELATIONS WITH CANADA. 1 4v ^ 1 4 A truvoller who Ims crossed tlio outer lino is freed from tho vexations of the douanier \\\ every part of Germany, and may proceed without interruption from Belgium to the frontier of Kussia, and from Tyrol to the Baltic, a distance of seven hundrod or eight hundred miles, including a i)opulation of se/enty mil- lions. Until the Canadians are ready for annexation to the United States by their own ap[)reciation of republican institutions, no solution of the commercial questions at issue between us and them can be complete except by means of a customs union. I, for one, am not desirous of incorporating in our political union four millions of peo- ple who desire a form of government essentially distinct fi'om our own. But it by no means follows that we and they should not mutually develop in harmony our mate- rial interests, and regard them and the character of our respective populations as a basis on which such future political arrangements may be made as time may prove to be wise. The quality of grain or lumber and the de- sirability of selling or purchasing manufactures are ut- terly independent of the political prefei'ences of the j)roducers or consumers, and on neither side can natural prosperity be promoted by chronic commercial jealousy. It is evident that the policy I advocate would tend to lessen the hostility of differently instituted governments, while it would not interfere with the political institu- tions of any, and that a strong bias toward the most friendly relations on other points must naturally arise upon the basis of mutual pecuniary interests and intimate social intercourse. Meeting upon their own ground the theorists who re- gard " a balance of trade in our favor " as the chief test of the benefits of commercial exchanges with any single country, I find that, according to the reports of the Sec- retary of the Treasury, there appears to have been during the thirteen years when a treaty for the reciprocal ex- chi, nge of gram, lumber, and many other natural produc- tions existed, a balance in our favor amounting to some $83,000,000, and that ever since the termination of the treaty until 1874, when the pressure on our afEairs tended to forest attention to such enactments as will yield food and work to the suffering masses. Among th(! most obvious of these measures is such an extension of our trade with Canada as will yield us a larger amount of grain and other necessaries of life, increase the u^" of our leading thoroughfares in the North, and eui .ge the outlets already existing in the Dominion for our manufactures. We see that the o})poi'- tunity is open to us in the relative geograjihical positions of the two countries, and that even under th(> present restrictions the exchantre of the products (»f labor between them is enormous. We have also reliable assurances in the settled, firm and stable character of the Canadian government and people, and their frecjuently expressed desire to ascertain by mutual conference with us how far our commercial relations can be emancipated and ex- tended. This desire has been repeatedly shown in the newspapers of Canada, the resolutions passed by her boards of trade, and the authentic and official statements of her government itself. The Dominion Board of Trade at every one of its meetings has expressed an earnest and intelligent desire for an extension of trade with us, and in every instance has coupled the expression of the desire with that of a belief that the first official i)roposal for it should come from the Government of the United States, offers ni;ide by Canada having been regarded with so little attention on this side of the frontier. A leading representative of Canada, at the meeting of our own National Board of Trade in New York last sunmier, reiterated these views, and no doubt uttered the general sentiment of his coun- trymen when he confidently assured his hear(;rs that \i Congress should adopt the resolutions uow before this COMMERCIAL KELATIONS WITH CANADA. 173 ? House for the appointment of poramissionera, the Cana- dian Govern rofnit wouhl "likewise appoint i. I'oin mission, and we should for the lirst time since the ahr'»L,'atioii of tlie old treaty have business men to fiit down togj^ther, tiilk tlie matter over fairly and squarely as a praetical (Hiestion, deal with all its difficulties, and, if possible, hriiig about a treaty which will be mutually satisfactory t(» t)()th countries." The Canadian minister of customs, the privy council, and present governor-general Ini ve at dif- ferent times fully concurred in tliese views, the governor- general himself in council having formally promised "that should the Government of the United States com- )ly with the wishe-^ expressed l)y the National lioard o{ >ade, the subject will receive the fullest consideration of the Govei'nment of Canada." At the time of the abrogation of the old treaty there was much just reason for complaint of the illilx'i-ality and unfairness of the Canadian tarlfE on many of the productions of the United States; but all that has now been reversed. We impose on all kinds of Canadian grain and flour a ?tion with Great Britain, the trade between those two countri'es might become as free and untram- melled aa it is between all the States of our own Union. In this event it v/oidd manifestly })e impossible to check smuggling on an enormous seal ^ *;". the Dominion into the United Bliites. The o P^ rdtjes fll; jidy attending a proper surv^eillance of our nonb.rn fj'c«ni :<-;:' were lately described by the Seer-'! ry of ihf^ Tr '/jUiyas being in some respects insurmountable. J i. :iie contingency to COMMERCIAL RELATIONS WITH CANADA. 181 which I have alluded an addition of several thousands of men to our revenue service, with the accompanying expense, would not suffice to prevent a vast illicit trade, with demoralizing eifects on our people and incalculable injury to our revenue. I look forward to that time in the not distant future when a truly fraternal comity shall prevail throughout this continent from that habitable part of it which is near- est the arctic regions to the tropics, and from the Atlantic to the Pacific Ocean; and when this sentiment shall find its natural expression, not in lawless and desolating fili- bustering expeditions, or hostile inroads of any kind, but be manifested and continually increased by those peace- ful exchanges of the products of human indiLstry which yield profitable employment and make homes happy. Nature herself, in the varieties of climate and resources, has provided for this plan by permanent and beneficial laws against which we make our temporary and destruc- tive statutes. From such a continental and truly Ameri- can system, we who occupy a central position between the North and South should not only satisfy our needs, but by being the merchants and carriers for our neighbors on both sides derive larger profits than any of them. Because in population and power we are the foremost nation of the continent, it becomes our duty to ourselves and to others to take the lead in giving practical develop- ment to the bounties which Providence has placed within our reach. The first step toward its attainment is by ascertaining definitely through inquiries made by efficient and reliable commissioners how far we can extend our commercial relations with Canada, whose people and gov- ernment invite us not less by their stable, intelligent, and progressive character than by the assurances they have already more or less formally given us. Of all affairs of foreign policy this opportunity of cheapening the ma- terials of our manufactures and extending our markets is the most important. Next to integrity in our Govern- ment and the preservation of our liberties, no subject more deeply concerns the interests of the people. My motion is simply for the appointment of a commission of 182 COMMERCIAL RELATIONS WITH CANADA. inquiry. It is, 80 far as I know, unanimously approved by the leading commercial and business men of the coun- try without distinction of party, and should meet with the same just consideration from both parties in this House. THE FINANCIAL CONDITION OF THE NATION. House or Beprbsgmtatives, Januai; 15, 1863. At the time when this speech was delivered, the crude and |)eriiiciou8 errois through which the national debt and taxation eiioniiously increased were advanced and defended by the high- est official authorities. It was maintained that paper money liad not depreciated, but that gold had advanced in value. On be- lialf of the |)roducing and mercantile interests, Mr. Ward pro- tested earnestly against this and simihir sophisms, and tljoioiighly iiiialyzed the financial system adopted by tlie then Secretai-y of the Treasury, testing it by abstract principles and the e.x]H)nenc« of our own country and other nations. Mr. Chairman : The condition of our financial affaire aud the regulation of the circulatintj medium are re- garded with much anxiety by the people of this coun- try, from motives of their own persi»m"> of the last year have enabled us to appreciate this truth more fully. We have, I trust, learned something within that time. For myself, i ^ni free U) confess that »ithough my recoi'd upon thi* (jueMtion re«kftins to-day exactly as 1 wou I have it, / ^sm »m(A^ those «rlM> have be**n iijarniug si 184 FINANCIAL CONDITION OF THE NATION. ! -i I ■ : ^ it .- j wUk -1 ^jm 1 ^i J i ^^^^^H^^^I^^^H i- ^^HH^^^^^B n i '! ! H^HHBB ^H^^^^^^Hf 1 iSl^^H''^' ^iiTirFTr^ ' I have been and yet am desirous of supporting the Government of my country in a vigoroui=i prosecution of the war. If on any subject the North does not present an un))roken front, in perfect unity of feeling, the fault does not rest with myself. My vote has aided in furnish- ing for tlie defence of the tJnion, not only all needful supplies of tliat which faithfully represents tlie products of tlie industry of onr country — money, the sinews of war — but in placing at the disposal of the legally ap- pointed officers of the Government that which is yet more precious, the invaluable lives of the men who con stitute the brave armies of the Union. I could not con- trol the expenditure of the money, or prevent the sacri- fice of tlie men ; nor was my vote, given against the issue of "legal tender," sufficient to prevent the practice of an unsound system of finance. I hoped that another course, more conducive to the interests of the nation, would have been pursued ; but I did not, nor do I now, question the purity of motives in those gentlemen who sustained the views I deemed it my duty to oppose. I believe the issue of this paj)er money was an unfortunate measure ; and now that we have from practical experience a thorout'li knowledge of the influence it exerts, there shoiild be only one opinion as to the expediency of continuing to aug- ment the volume of such a curreiicy. It is for us not to aggravate the evil, but, so far as is possible, to devise measures for its reuioval, that a gradual and perfect cure may be effected. Whnn it was decldefl to adopt the principle of "legal tender," there was no dou])t that the majorities of hoth Houses who voted for it did so because they considered H tlie ]vmi r)})jectionable of iUi* measures under considei- &i\f)% Wei'e, permit me to say that I know of no greater trial for a sf/itesni^n tii- a IfU^Hlator than this to be coin- led to (dioone )iutyyni>u two iiwamiiift when hi« judg- |)elh'd t( limi laid down in the common maxi least of H/jy JiM/nher of evilH. The whoth ; when his only course )h th'i' xUn ttf iih', Id dioose tl» N. FINANCIAL CONDITION OF THE NATION. 185 rting the jution of . present ;lie fault I furnish- 1 needful products inews of Tally ap- ih is yet who con not con- he sacri- the issue ice of an ?r course, )uld have istion the lined the the issue sure ; and tluU'OUL'h d oe only g to aug- US not to to devise rfect cure lof "legal <»f both ouHiderod consider- KJ greater o he com- liJH judff- J iff If)"' niDHi III' nil i-« fui! ■nilllli) I' ' - iln'oriH zens in various parts of the countiy ; but all experience has demonstrated the impossibility of securing lasting prosperity for any country which persistently adheres to the use of a legalized but irredeemable j)aper cuirency. I have heard with the utmost pain and regret, some of the opinions expressed by gentlemen wlio hold high official positions, and who, by long careers of life spent in the legislative service of their country, have honorably won for themselves no small share of confidence from this House and from the people. In the great epoch of this age, I have turned with anxious expectation to the official report of the statesman who, by the desire of the Pi-es- ident of the United Statics and of a large portion of our fellow-citizens, has been chosen to discliarge tlu; grave and arduous duties of the Secretary of the Tieasury, and to the speeches delivered in this House by the Chairman of the Committee of Ways and Means. DifFering, as I do, from the Secretary of the Treasury on that cardinal question of oui' day, the strict applicjiticm of frcse local self-government alike to northern and southern States, so far as it is compatible with the maintenance of the Union, I hoped to have seen him mindful of the distinc- tion between promptitude and procrastination, j'liylng and promising to ])ay real mouey, and mat paper fiction which, in the phrnsofdowy of tlie day, is called "legal tender;'* Hrm and steadlast 111 his uHcgiantHi to those principles of financial economy yet held by IIkj great juirly of whiidi ho was foiniclly ii ineiidxtr, and wiiicill commanded his respect and a])proval through long years of calm reflection, when he waa niibjased l)y the disturb- ing influence of that one (hii'h enigma i|ou' iiliH(irliin|:( so large n share of public attention, and causing the expeii- ditAire of so nii|eh of our national substance, and the sacriflce of so many lives. I shouhl have been dt!e])ly gratified if I had been able, l)y thi; suppoi-t of the um- einment, to win from my political op[)(»nents the rej)nta- tiou 1 deserve, of bei7ig swayed b}"- no partisan motives, find solely by a desire btr the welfare of the Il(ipiibli''. fli tht« liijHirt nf ih(« Heeretary, I fl'i I that wliihi to H< extent apnarently opposing the further hl«/WI/«i« of iirrency throngli tlie issue of mole miiM \tf >Im» ! • !-i' 186 FINANCIAL CONDITION OF THE NATION. United States, he denies that tlie remarkable appreciation in the value of gold — or rather, to speak accurately, tin? decrease in the value of fictitious money as compared with money itself, is wholly, or even for the greater part, owing to the large volume of j)a{)er promises to j)ay. lie doubts if " the aggregate currency of the country, con- sisting of United States notes and notes of coi'poratioiis, is at this moment greatly in excess of legitimate demands for its emplo^Mnent," or if " any actual excess is due to the issues of United States notes already in circulutiower of the ard money at that time was $373,000,000, or $63,000,000 more than in 1861, if, for the sake of argument, I concede more than the truth requires, and assume that the pa})er has not become depreciated. This specie, the only true money of the country, has not been annihilated, become dead capital or " demonet^" ;'.ed," as is said in the report, by one of those novel and mysterious expressions which are often coined and used for the occasion, in preference FINANCIAL CONDITION OF THE NATION. 187 to our own plain Suxon confusion, not simplicity words, wlien u nd cl clctirnoss, complexity and are tlie desired objects. The amount of precious metals in the United States has not even been diminished, l)ut increaseil, during the year i n question. In the sHiUe short sj)a{e of twelve months the cir- culation of the notes of the United States, includ- ing credits to disbursing otliccrs and t" tlu^ Treas- urer of the United States, was swollen from $15,140,- 000 in 1861, to the enormous sum of $'210,104,000, being over $80,000,000 more than the whole amount of the notes of corporate banks throughout the loyal States in 1861. From these facts it follows that the aggregate circula- tion of the loyal States, which at the first date, 1861, was $355,140,000, WIS not, as stated by the Secret! jy, only $377,104,000 in 1862, but nearly $(350,104,000. The increa ^e in the currency of the loyal States in one year alone has been nearly e([ual to the whole amount oi ])aper money in the country at any former period in our exist- ence, when we included in our estimates the \\holc of the United States from Maine to Texas. Starting with his erroneous position that tlie oniy true money of the country is no longer any money at all — • using this as a foundation for subsequent arguments, and assuming that the increase of the National circulation, estimated in " legal tendtir," is only $22,000,000 instead of $355,104,000, the Secretary easily adds other links to the chain of his delusions. If the $22,000,000 were really the only increase in the currency of the loyal States dui ing the year in question, his assertion that it was " legitimately demanded by the changed condition of the country in the year between the two dates " might be permitted to pass unnoticed. He speaks of tlie in- sufficiency of the bank circulation to support the great activity in business resulting from enormous military and naval preparations, and is apparently ignorant of the vast amount of trade formerly enjoyed with the Southern States — but now lost to us — and of the power of the banks tli3mselves, by means of bills of exchange, drafts, checks, and certificates of deposit, to transact any amount IMAGE EVALUATrON TEST TARGET (MT-S) r-. ^ o \ <5 ^ .i % ^jS < ^ % .^4 :A /a L <- LL 1.25 " "'" 2.0 1.8 M. 11 1.6 ^. k. > ''^■ "^^ '^ / r Photographic Sciences Corporation ^ W '^ -\ <^ 23 WEST MAIN STPEET WEBSTEI? N.Y. 14580 (7:6) 873-4503 :y " making money abundant," and depreciating its value, to make men invest in national stocks. The notes of an in- dividual are in good esteem when he is chary of his credit and uses it seldom ; when he issues them in unlimited number, people become suspicious. In the same way the immense issues of paper money, injuring tlie credit of the Government, have tended to prevent capitalists, who are proverbially tknid, from purchasing. Government securi- ties. The same rule^ ^PP^y ^o individuals and nations alike ; and yet the gentlemen to whom I refer would spurn in their personal affairs the plan they have forced upon the country, of enlarging purchases and thus driv- ing creditors into a com.promise. There is no real dis- tinction between the two cases. If those who are now in power had applied to the affairs of state the sound principles of common sense they know to be correct in private life, the nation would have been safe ; but, bewildered by the magnitude of the subject, and intoxicated by the p3Ssession o^ new-born power, they rushed into f\nanci«\l schemes at which the the world wonders. Who does not know that when the debts of an individual aj'e overdue, and he refuses to pay them except by giving his notes, and persists indefinitely upon this method of transacting business, his creditors take whatever they can get in ready pay, rather than his bonds at long date ? Yet considering the boundless re- fiources of the nation, and the large sums accunmlated by f avoi ites of the Government, the public may be surprised to learn that the plan should have failed so signally as was stated by my honorable colleague who addressed the House on Monday. He told us that — " The Secretary has paid out nearly $250,000,000 loi^al tender notes, being all that he was authorized to issue ; and notwith- Btanding he has had authority for the last ten mouths to sell $500,000,000 of five-twenty-six per cent, bonds at the market price, he has OTi'y disposed of about $25,000,000 and has still au- thority to sell $475,000,000 at the market price, and take his pay for them in legal tender notes." We have arrived at this stage of embarrassment. Money has been made as " abundant " as the advocates of the ■i''^;fj.', FINANCIAL CONDITION OF THE NATION. 201 scheme aalved, hut men are daily buying real estate and personal property of nearly all kinds in preference to na- tional securities at the })i'oposed rate of interest. Many of those who have already invested in national stocks, are anxious t< sell them and prefer holding other property. Nearly all kinds of bond and share securities have risen in )»rlce, following the course of gold, with the ominous and pi'ominent exception of Treasury paper and Govern- ment stocks, which are sold lower for " legal tender " than when gold was at a premium of one hundred and thirty or oHv* hundred and thirty-two per cent. Yet those whose ei'roi's have brought this trouble upon us hold tho poisoned chalice to our lips, and ask the nation to drink its con- tents to the dregs. The Administration, having in its control the vast re- sources of the riroperty and credit of the United States, possessed ampL power to maintain public confidence and raise ail needful sums, if, instead of authorizinir the first 7 7 O i«suH of Treasury notes, it had boldly entered i;iie money market, and adopted prom[)t measures of taxation, which, however odious, would have been cheerfully borne In the hope of vindicatmgthe great principle of self-government by the people. Unfortunately there has been a grave and important departure from this financial course, in- volving a loss of unity of opinion as to the best means of +^ed the North would yield to its demands. The battle of Bull Run, when the capita] itself was endangered, in part dissolved the illusion on both sides ; but the financial errors which had taken root were destined to be worked out to their logical results, which have now swept over the country and can only slowly be overcome. The policy of deluding by makeshift expedients, in- stead of following the standard of the real and perma- nent good of the public as fixed by immutable natural laws, was too conducive to the personal and partisan in- terests of those in power to be readily abandoned. At an extra session of Congress, in July, 1861, it was simply indicated that, in view of the expected brief duration of the war, the Government would make a loan of a hundred and fifty millions in gold from the banks of New York, Boston, and Philadelphia. Before the 17th of November, in the same year, they had actually advanced one hun- dred and forty-six millions in this form, and their system was so strong that after the last part of the loan had been nearly or quite paid, the gold and silver in the THE FINANCIAL PROBLEM. 207 banlvs, which had at the beginning^ been less than fifty millions, was forty-two millions. The specie for a long time returned to the banks in tlie ordinary course of busi- ness. The Treasury continued to demand " thirty mil- lions a month," and insisted that this should be paid only in coin. The banks yet had more than sufficient specie for the transaction of their own business, but further steps were taken to destroy the State banks. The Government, which should have guarded the banks carefully, so that they might have kept up the value of the currency by a kno\sdedge of their strength, scattered the gold, and it could neither be lent ov^er again in suffi- cient quantities or made availal)le as a reserve for the banks. Suspension followed on the 31st of December, soon after the meeting of Congress at its next regular session. Even in the beginning of January, 1802, specie and paper money remained of equal value. At that date due sagacity and prudence M'"ould have prompted the instant adoption of a system of adequate taxation and other well considered and suitable measures of providing for the ex- ])enditures of the war. The Government, having by its, own action forced the banks into suspension, authorized, on the 25th of February, 1 8(52, a large issue of " legal tender," receivable " for all debts except duties on im- ports and interest on the public debt." In those notes the distinction was, for the first time in history, made by a government between specie and its own paper. Thus the door was opened wide to the enormous overissue of paper money, which led to the inflation of prices, and but for our natural wealth and sti'ongly national spirit would have been fatal to the Government and immediately dis- astrous to the business of the people. It was deemed more creditable to create fictitious and exaggerated prices of labor and commodities and an artificial appearance of prosperity, than to enforce prompt taxation. The Administration having created an unfailing de- mand for gold, and fanned the fire of speculation l)y the terms of the original notes which were exchangeaV)le for United States 6 per cent, bonds, withdrew even this right of redemption after July 1, 18G3, and more anxious to m-: .ik 208 THE FINANCIAL PROBLEM. \i i produce a soeniingly low interest than to protect the peo- ple against an actual depreciation of the national securi- ties, which reached the low rate of thirty-five cents on tlie dollar, made an inglorious and suicidal effort to raise loans at 5 per cent. The continuance of the right to ex- change the " legal-tender notes " for 6 per cent, bonds might have effectually prevented the currency from be- coming redundant, and it might have been continually checked by investments in the bonds for the^ sake of interest. The 6 per cent, bonds were sold at the rate of 11,500,000 to $2,000,000 a day— amounts nearly equal to the daily expenses of the Government. Of the loan at the lower rate, little was taken except by bankers, who used the bonds in the organization of national banks. The funding was substantially ai'rested for several months. Many tin:jes the sum of the interest sought to be saved were lost in the enhanced rates of purchase for the Army and Navy, and, under a needlessly inflated currency, a war debt of over $2,800,000,000 was incurred, although the value received, reckoned in gold, was probably not more than forty cents on the dollar on all the expenditures of the war. The currency continued to be further inflated, without any provision for converting it into interest-bearing bonds, until, by the 30th of June, 18(1 i, the natural fruits of the mistaken policy became palpable to its advocates. The currency and other temporaiy loans amounted to over $1,125,877,034. The Administration having created a market for gold, with a constant supply and demand, through paying interest on bonds in gold and refusing to receive its own notes in payment of duties on imports, the congressional majority, by joint resolution, increased the previously ex- travagant duties to the amount of 50 per cent, on all ar- ticles indiscriminately for sixty-three days, ending with the 30th of June, 1864. The necessary consequence was that gold rose rapidly and enormously, or rather that the currency correspondingly depreciated. Congress, alarm- ed and anxious to stem the tide it had thus set in motion, passed a "gold bill," approved June 17, 1864, with the vain hope of checking the depreciation of the currency i4J ■^j^'fcaje-: ■ THE FINANCIAT. PROBLEM. 200 b the pen- al securi- cents on t to raise rht to ex- nt. bonds from be- intinually ;^ sake of lie I'ate of f equal to e loan at kers, who al banks, al months, be saved the Army Lirrency, a , although )bably not benditures for gold, 1 paying re its own nrressional lously ex- on all ar- diug with lence was that the ss, alarm- ^n motion, with the currency by prohibiting time contracts for the sale of gold. Vio- lations of the act were to be punished by fines and im- piisonment. The ill-advised ste}) only added fuel to the tlanie. Its result was a temi)orary closing of the gold- loom, leaving purchasers at the m. -cy of individual dealers, and, next, a mania of speculation, during which gold reached its maximum of 285, the actual j)remium having more than doubled within al)out two montlis. The pernicious efEects of these glaring violations of the laws of common sense and i)oliticHl economy were so im- mediately obvious that both acts were short-lived, the "gold bill " being repealed in fifteen days after its pas- sage, The protracted duration of the war, so widely at vari- ance from the early and rose-colored assurances of the administration, added to the excessive issue of paper money and its great depreciation, induced distrust and discredit of the Union. Instead of wantonly diluting the currency and wilfully diminishing its value, so as to tempt purchasers of bonds, or, in the phraseology of the day, to " float the debt " nominally at par, but really far below it, a strong specie reserve sliould have been main- tained, and the paper dollar kept as nearly as possible at its par value. This would have given confidence, and the people or Government would have received a full or fair equivalent for the money they are compelled to pay. Throughout her recent great calamities France, in pur- suance of a policy well worthy of profound attention, never permitted her currency to reach a discount of over 2^ per cent., and yet one dollar of hard money would have bought nearly three dollars of ours, and our bonds were depreciated to a corresponding extent. No other nation has ever, during war or any other great exigency, made such distinctions, discrediting her own currency by persistently recognizing and enacting its inferiority to the precious metals. It is little to the credit of the party which for the last fifteen years has been intrusted with the management of our financial affairs that, although France maintained her paper money practically at par during the misfor- tunes which ended in a loss of some of her best territory, '■■' I 11^^ 210 THE FINANCIAL PROBLEM. m I ! througliout a terrific civil war, and although alio pjild a rariHoin of $1,000,000,000 im'\ interest, our " legal-teiidcr," or()rovernme;nt paper money, is yet at a discount, varyiin^' from 12 to l.'{ per cent, and gold onc(! reached a preniiuiii of at least 185. The public debt of France is more tlmn twice as large as our own. Her area is more than one- third less than that of the State of Texas alone and only about one-twentieth part of that of the Union. Ilcr po[)ulation, long nearly stationary, and recently dimin- ished, was, in 1872, little more than thirty-six millions, while ours is novv alxnit forty-three millions, and is proh- al)ly increasing at the rate ot nearly a million and a half yearly. Judging from the past, our national wealth M'ill double in about eight years, a rate of prosperity three or four times greater than that of France. Yet, with her far inferior resources, and throughout the pressure of almost unequalled misfortunes, the outstanding issues of the Bank of France not redeemable in specie never ex- ceeded $()40,000,000, and were lately $480,000,000, against which it holds $300,000,000 in the precious metals, but insists, as a preliminary to the resumption of specie payments on the 1st of January, 1878, on a further reduction to the amount of nearly a imndred millions of the issues lent to the government. Our basis of credit being, as we have seen, far superior to that of France, the contrast between her financial man- agement and that of the administration of tliis country, deeply condemns the latter. Acting without forethought, and in one of those blunders which are sometimes said truly to be worse than crimes, it borrowed and dissijvated the specie held by the banks, and paid away its own, in- stead of encouraging and keeping a reserve, which would have made the currency nearly at a par with coin, and thus have retained, at nearly the same standard, the cur- rent value of its bonds and the articles needed in the war, enormously diminishing the burdens of the people, who, through the shameless waste of their credit, now pay, in the common standard of the world, debts contracted un- der the fictitious valuations of an irredeemable currency, which the administration, by its example and its laws, taught the people and the world to distrust. THE FINANCIAL PROBLEM. 211 Our Government took no efficient or well-calculat<'(l Bteps to keep up tlie value of our note circulation. Hut thisol)ject was the first aim of France. Our administra- tion fed speculation, wilfully i)rodu('in^ an artificial state of things and an apj)earanct' of pros])erity which deceived many, riie Secretary of the Treasury, with the hope of reducing interest, caused an inim(!ns(! depreciation of the currency and l^rought upon us thiilong train of disasters from which we have not yet recovered. His was the policy of selling notes at half or one-third of their face for the sake of saving one per cent, in interest. France, on the contrary', ari'ested speculation by advancing the rate of interest through her bank and kept down prices, thus encourai'ing exports and enabling her governme.it to buy at fan* prices. Her financial j)olicy was the re- verse of ours and the result was more propitious. The chief practical example she now gives as an aj)])ropriate lesson for the condition in which we are placed is that, by means of an enlightened and moderately liberal com- mercial policy for the benefit of the people at large, and not the favoritism of the few, and by maintaining a large reserve of specie in her bank, she circulates free of dis- count a nominally inconvertible paper curi-ency to the amount of over $500,000,000. Although, owing to the unparalleled natural wealth of our country, the results of defying the positive laws of political economy were long delayed, the time necessarily came when the speculations thus set afloat were subjected to the inevital)le test of realizing money from them ; and it was found they rested on no adequate foundation. The Administration had transferred its financial agencies to men who had been foremost in advocating its sophis- tries and strenuously striven to delude the people by promulgating the doctrines that " a national debt is a national blessing," and that " debt is wealth." The lead- ing and most trusted advisers and co-operators of the Government in its financial affairs became the most con- spicuous speculators. The system significantly culminated in the failure of the houses which had been most highly favored and trusted by the Administration. A run for deposits almost immediately followed. The sixty banks 212 THE FINANCIAL PROBLEM. II '} it - ■ —-7".— 'fSi^iiii* ■■ of New York were lia>)le for $200,000,000 to tlieir depo- sitor.s. Speculation luul Ix^oojue so rife because the cur- rency was fai' in excess of lej^itiinate commercial (hmiHiKls that, to meet the (imerj-ency, the hanks had (le})en(le waste of time and money misspent by an individual. The violent and well-remembered panic of 1837 followed ail increase of $54,79t',,32()— or from $94,380,570 to |141>,185,000 — in the circulation, within the brief perioc' of three years, while during the same period the loans and discounts, which practically are for many purposes a part of the currency, increased $198,91)0,261, or from 1326,119,441 on the Ist of January, 1834, to $525,115,702 on the corresponding day in 1837. Until seventeen years afterwards the aggregates of the loans and discounts of the banks never were so great as in 1837. In 1857, the year of the next great panic, they had increased to $084,456,887, and in the two preceding years the currency had increased fi'om $186,952,223 to $214,778,822. In 1860 the paper currency was $207,100,000, but' in 1866, under the republican regime, the outstanding ci)*culation had increased to $648,866,000, and on July 1, 1875, to 11 i 214 THE FINANCIAL PROBLEM. 1727,640,588, exclusive of over forty-one millions of frac- tional currency. The notion of many of the advocates of expansion is vaguely that it would be substantially a distribution of money among the masses at large ; but It is in fact one of the most seductive methods of depriving those who depend on their labor and industry of their just reward, placing colossal fortunes in. the hands cf a few, to Avhoni it gives a lion's share of the little the people individually possess, taxing their labor and that of their descendants, and thus endangering even the Kepublic and the liberties of the people. This has been the uniform experience of mankind, and it is aptly illustrated by the history of our country in the last fifteen years, during which we have had an irred( inable circulation, and when, while wealth slipped more rapidly than ever into the hands of specu- lators, the number of bankruptcies exceeded those of any former tei'm, and poverty, distress, and crime have made alarming progress unprecedented in the history of our country. It may be freely admitted that, at first sight, the theory that paper promises to pay are capital is not without some show of plausibility. Currency is the symbol of wealth, and the shadow is frequently mistaken for the substance. It is, in fact, when inflated, nothing more than so much " watered stock." The value is nominally increased, but the actual property remains the same. Sooner or later the fraud is exposed, but from time to time this is again forgotten, and a new era of inflation and delusion begins, to end in the same way as its predecessors. The experiment has often been made, and as often attended by the same bitter lessons. Yet, with new men, the old errors are repeated. Happily for man- kind, nations are long-lived, seldom dying, and in some degree the wisdom gained by one generation filters down the course of time to its successors. As on some points the laws of finance are as positive as those of physical nature, the experience of other countries is instructive. In 1797 the Bank of England began, "nder authority of Parliament, to issue excessive amounts of notes, which the London merchants agreed to receive at par. Even THE FINANCIAL PROBLEM. 215 this could not prevent their depreciation. Parliament seconded the ineffectual efforts and in 1811 passed the celebrated resolution that "the price of gold had advanced, but the value of bank-notes was not depreciated " — a complete counterpart to the declaration of one of our own Seci'etaries of the Treasury, who claimed to be the author of the legal-tender system, that gold had increased in value but that his paper money had not depre'^.iated. In 1814 a British "gold-bill" was passed, enacting that "the taking of gold coin at more than its value or bank- notes at less shall be deemed a misdemeanor." It was as ineffectual as our own. The trade in the precious metals was conducted as openly as ever and the depreciation of the notes continued. No effort was made to enforce the impotent law. The notes remained below par for nineteen years. At last the celebrated " bullion-committee," appointed by Parliament to investigate the calamitous condition of British financial affairs and their inconsistency with the theories too generally believed, recognized the actual depreciation and declared that this was the cause of the general advance in prices. Its main conclusion was that " the Country ought to be brought back with as much speed as is compatible with a wise caution to the original principle of cash payments at the option of the holdei's of bank-notes." The highest ofiicials of the time, the London bankers, and the nation at large, with the exception of a few thinking men, lon^ continued to re-assert that the large volume of the currency had nothing to do with the rise in prices ; that the bank-notes liad lost nothing of their value, and that no restriction of the circulation was needed. It was not until eight years afterward that the public had been instructed by the logic of events, and, with few exceptions — which, however, included the directors of the Bank of England — the truth of the doc- trines held by the committee was universally admitted. The following axioms were regarded as incontroverti- bly established : If gold is at a premiiim in paper, the paper is redundant and depreciated, the premium measures tlie depreciation. ^:'i I' h ! ,"*! 1'- 216 THE FINANCIAL PROBLEM. If the inferior currency be removed, the exchanges will be turned, the overflow will stop, and, if any vacuu»n is created, gold will flow in to supply it. A better and a woree currency cannot circulate together. The worse will drive out the better. The views of the committee have long continued to be, in substance, the laws of finance in Great Britain ; and for more than thirty years the use of bank checks and other modern means of facilitating payments has been so great that there has been no material increase in her paper currency, although daring the same time her commercial transactions have been multiplied fourfold. The depreciation of the currency of France, under the regency of Louis XV., has become proverbial. At its origin it had its advocates, but although France prohib- ited the use of coin and decreed even the penalty of death for those who refused to receive the paper at par, it fell until the nominal equivalent of one hundred dollars would buy only a single pound of butter. At last it be- came utterly worthless ; the people, by common consent, returned to a specie currency ; and the author of the scheme only escaped from the country at the peril of his life. Austria has been slower to learn, and lier disasters have been prolonged to a much more recent date. Sixty- five years ago her currency was so far reduced in value that she issued " redemption notes," in which it was to be " redeemed" at the rate of three to one. This having failed, she over and over again, under new names, such as "Viennese legal-tender" and ''anticipation notes," vainly sought to provide substitutes for a metallic stand- ard. In 1873 she sufEered from a panic bearing a close resemblance to our own. After her war of 1866 large issues of paper money were made, which led to a belief in the abundance of capital and to speculations of all kinds. The government itself gave aid by guaranteeing dividends on various railroads. The market was glutted with an immense quantity of so-called securities, in which it was for the time impracticable to distinguish between the good and the bad. The inevitable crash ensued. As in this country, the leading speculators were THE FINANCIAL PROBLEM. 2ir thv^ first to suspend. Tlieir example was soon followed by a multitude of smaller operators. Even the strong houses were shaken. Tlie bourse was closed to prevent violence among its more adventurous members, some of whom committed suicide. In the yet brief history of the United States and Canada the same lesson has been no less imperatively taught. I pass over the examples to be found in the records of the individual States and colonies. Franklin himself, early in the revolutionary war, warmly approved the issue of bills " on the faith of th,e continent." One member of the Congress, wlio seems to hr.ve been alone in his views, or in the' courage needed to avow them, urged taxation, but was bluffed by one of the almost unanimous majority, who, in a spirit of v/hich we have conspicuous examples in our own time, asked " if he was to help to tax the people when they could go to the printer's office and get a cart-load of money." The cur- rency decreased in value until monstrous sums were needed to buy a cow or procure a frugal meal. It be- came exchangeable only at the rate of a thousand dollars for one sound dollar. This, too, in spite of penal laws to enforce the impracticable wishes of Congress. The historian of the time says : Wealth was accumulated by the dishonest multitiideg of con- tractors and the many defrauders of that unhappy period, while more deserving men felt that it had been plundered from their own coffers for the aggrandizement of such people. No thoughtful statesman ever overlooks the precedents establishing the positive conclusion that wherever legisla- tors have attempted by penalties to compel the people to take irredeemable paper at par with coin the laws of the strongest alike with the weakest governments have sig- nally failed in enforcing their wishes. Stripped of the sophistries with which it is- frequently surrounded, the necessity of a fixed standard of value in all the commercial and monetary affairs of the nation is 80 clear that he who runs may read it. Paper money may be freely used ; checks or bills of exchange, aided by th'e railroad, telegraph, and post-office, may transact f: 'if I 218 THE FINANCIAL PROBLEM. nearly all such business of tlie country as is on a large scale, and tend to prevent any exorbitant rate of interest ; but it is essential that all these means should simply rep- resent one universal and uniform stanaard. Without this guard, they become uncontrollable and unsound — ex- tortionate taskmasters instead of good and faithful ser- vants. In the minds of many men affairs of state are sur- rounded with a confusing mystery, as if the principles of ordinary facts and common sense could not be applied to them. Yet it is plain that trade in grain of any kind would be placed under such enormous disadvantages as to render it almost impossible if the bushel measure of to-day might be larger or smaller to-morrow from causes the farmer or merchant could not foresee and altogether independent of their control. The dealers in textile fa- brics, and in land itself, would be in strange predicaments if the yard and the foot were subject to great and frequent variations, and might represent at one time little more than a third of their measure at another. Yet the obsta- cle which has been thi'own in the way of the trade and prosperity of the country is almost exactly of the same nature. The " legal- tender " dollar at one time was worth little more than a third of the true dollar, and continually changes from day to day, making trade uncertain and values of all kinds doubtful. No man knows when he rises w1 it they may be that morning, or when he goes to his place of business what they may be before the sun sets. It is an established fact that the greatest possible certainty of value is attainable only by enforcing the standard of the precious metals ; they become the prop- erty of whatever nation or individual will give most for them. Their portability and the universal recognition of their value throughout the world make them the natural and least fluctuatmg medium of exchange, and arbitrary legislation has been and seemingly always will be unsuc- cessful in discovering or enforcing any stable substitute for them. Gold, by the Constitution of the United States, is a legal tender, and, as a necessary consequence, the standard of value. That instrument gives no authority or power to THE FINANCIAL PROBLEM. 219 3 are aur- •om causes any department of the Governraeut to issue legal-tender paper, or a currency payable on denuuul. The only ground upon which it wa.s issued during the civil war was that of seeming necessity, it being supposed that the existence and supremacy of the Government were invol- ved. Without entering into the conlllcting decisions of the Supreme Court of tlie United States, it is sufficient to know that they endorsed the issue of legal tender, but only as a war necessity. It necessarily follows that it could not otherwise be legally issued. Under a proper construction of the Constitution this is inipossil)le ; and as democrats adhere i-o that instrument, they cannot for a moment contend for such a proposition. When the legal tender issued by the Government is withdrawn, it must cease to issue more or any paper cur- rency whatever. The right to control the financial affairs of the country by increasing the circulating medium at his own will ia too dangerous a power to be lodged in the hands of the Secretary of the Treasury, That high official is seldom chosen for his adaptation to the special duties devolved upon him. He may be one who has attained political rank, yet be profoundly ignorant of the simplest facts and principles in modern science, and become a mere par- tisan intriguer. At another time the holder of that of- fice may be a man of sterling pr'nciples, sound doctrines, and pure character ; but in the change of parties there can be no certainty of this. We know the common weak- nesses of human nature, and should guard against them by making the temptations to do wrong as few and slight as possible. Hence the aim of all good citizens should be to separate the Government from the business of banking. It cannot remain in the hands of the Government without creating such centralization and influences as are hostile to the spirit and perpetuity of republican institutions. Upon the withdrawal or redemption of the legal tender and the resumption of specie payment, the issue of new currency should be practically f^ee to the banks to any extent en the deposit of national bonds as security for the circulation. Under these conditions there would be free trade in money. The law of supply and demand would sol v^ 220 THE FINANCIAL PROBLEM. i i tlie question of the currency, and the largest practicable amount of benefit the banks can render would be attained, while the circulation would be kept within moderate limits and gradually attain the true and honest standard of the world. As one of the ultimate results, the time may come when their notes, amply secured by Government bonds, in a proportion which will assuredly command specie, may be accepted by the Grovernment in payment of its dues and re-issued for its current expenses. I do not know any more striking instance of the for- getfulness of yet recent history and the superficial con- sideration, too often with the most deplorable results, given to the affairs which concern us all, than the impres- sion on the minds of some candid men, and the loud and reiterated assertions of others, that the democrats are the party of inflation, and the republicans are the most reliable supporters of a sound currency and a return to specie payment. The traditional policy of the democrats is that of a currency redeemable in hard money, and will be so to the end. Individuals are to be found who ou other points agree with them, but believe in the pernicious doctrine of an iri-edeemable currency. They are not the party, and misrepresent its well-known and hitherto uni- versally admitted tenets. On the other hand, the repub- licans, fiom the beginning of their possession of power to the present time, have uniformly practiced the fraud, and attempted to justify it, until their efforts were no longer availing. They took from the banks the power of paying in specie, are responsible for the whole existing system of paper money, and in the height of their delu- sions took from it the redemption in national bonds which would certainly have led the country safely to specie pay- ments many years ago. Some, although holding general allegiance to the re- publican party, were so far patriotic and wise as to warn it against the cause from which most of our financial evils sprang, and have since wrung from it spasmodic promises of reform which have been as often broken. There are mau}'^ conspicuous instances of this practical deception. One of them was the first act of Congress approved by President Grant after his inauguration. In THE FINANCIAL PROBLEM. clear and terse words it explicitly declared that " the faith of the United States is solemnly pledged to the pay- ment in coin or its equivalent of the United States notes," and that Congress " pledges its faith to make provision at the earliest practicable period for the redera[)tion of the United States notes in coin." The hopes thus given were fallacious. Tlie congi'essional majority arrested the contraction begun by McCulloch when Secretary of the Treasury, and were supported by the illegal inflation by Boutwell and his successor. Six years ago, in 1870, the premium on gold fell to 8.^ percent., and yet it was not long ago 17^, and is now about 13. During the last six years, under republican control, paper money has receded farther from ap[)roac!iing to an equality with gold. The people are vitally interested in a return to a specie ' asis. The paper they now receive for services, daily toil, and general business purposes is worth only eighty- seven cents on the dollar, through its depreciation to that extent below gold value, which they pay for nearly all the articles required for daily use. No sophistry can long continue to delude them, while a vigilant press pene- trates the remotest parts of the country, into a belief that such depreciated and inconvertible paper money is the best currency. The expediency of a retuni to specie payments may now be taken for granted. The present time is the most op- portune we have had since inflation began for making vigor- ous preparations for specie payments. The premium on gold has been reduced by commsrcial causes, apart from legislation, from 185^ to 12 or 13 per cent, thus indicating that the remaining steps to gold at a par rate with notes can gradually be safely retraced by no extraordinary amount of statesmanship, provided it is sincere and per- severing. Since the war began the circulating medium has increased three times as fast ao the population. In New York the accumulation of money and the low rate at which it may be had are unprecedented ; but a few borrowei's whom the capitalists will trust are to be found. Low as the rate of interest throughout the world has long been, money was, for several months, cheaper in New York than in the great cosmopolitan market of London, the diflScul- I i 222 THE FINANCIAL PROBLEM. 1. f 'ill ty of our capitalists having heen to find profitable employ ment for tlioir currentry at home. A similar state of affairs prevails, though in a minor degree, at Chicago, Cincinnati, and the other great financial centres of the Union. Even the bill passed June 20, 1874, with tlie intention of increasing the currency, has proved, as clearly as the tliermometer snows temperature, that more is not needed, and that there is a redundancy above the wants of the people. Under its operations, and after allowing for the new circulation, there has been a net contraction of the paper currency to the amount of over twenty mil- lions within a year. Banks are unable to employ their money at fair profits. The legal-tender and other reserves held by the banks of the countiy at this time are largely in excess of the requirements of the law. The abundance of money throughout the civilized world affords peculiarly favorable opportunities for fund- ing or obtaining specie and foreign credits, which, to a certain extent, are identical with each other. The futility of expanding the currency was signally demonstrated by the Secretary of the Treasury, during the panic of 18715, who issued, without authority of law, $26,0()0,00() of notes, in the vain hope of relieving the money market. These notes did not enter at all into the general circulation, but were hoarded by saving-banks and trust companies, as were those whicli had been already ^vithdrawn from the banks of discount and deposit. Large exportations of grain to Europe from this side of the Atlantic are expected. Our imports have enormously shrunk. The people them- selves are more than usually tree from debt ; and last, but not least, is the encouraging fact that their minds have been long and carefully prepared by an increasingly intelligent press, never before so sound and well informed on finan- cial topics, to take more than superficial views and look beyond the delusions of what is merely immediate and temporary to that which, though slightly more remote, is permanent and real. The Government, at present unable to redeem its promises to pay, may never again have so good an opportunity of beginning the process of exchang- ing its bonds at a low rate of interest, or the national banks oi laying up the reserves of specie, on which, in TI E FINANCIAL PROBLEM. 223 I '! their hands, under the wholesome law of free competition, the restoration of prosperity dfspends. On the other hand, if the policy of the expansionists could be followed, the retura to specie payments and the successful funding of the debt, long ago due on demand, but yet unpaid, will become more and more difficult, until, as we have seen has repeatedly been the case in other countries and our own, the control of legislation will be lost, broken promises will.be renewed only by making more of them, and widespread disaster, misery, repudiation, and national dishonor will ensue. We have reached a point where any exj)ansion of an irredeemable currtmcy means its indefinite increase, and are apj)roach- ing that crisis against which the united wisdom of many generations warns us, in the maxim that the descent to (lestruction is easy, but the labor and work of retracing our steps is difficult, if not ]m})ossible. We have now arrived at the period when inflation no longer inflates. In the body political and financial, as in the human body, there is a point where the power of stimulants ceases and can no longer prevent collapse. This is the law of all serious panics and their results. There is a great shrinkage in business, and no important revival can be expected until a new financial system which will deserve and receive public confidence is fairly begun. In proportion as there is a cry for inflation, capital, prover- bially timid, seeks for safety, withdraws from enterprise, and refuses to employ labor. Until the future policy of the Government is permanently settled, there can be no real renewal of the commercial and general prosperity of the country. The act of January 14, 18 ^o, passed by the last repub- lican Congress under the previous question, cutting off all debate, has done more than any other single measure to produce expansionists. It has created alarm in busi- ness circles and given to inflation an importance it could not otherwise have attained. The impression is that if the act be rigidly enforced the contraction of the currency will of necessity be so rap'd as to produce again wide- spread disaster, and such undoubtedly would be the case ii resumption were really enforced at the date named for 224 THE FINANCIAL PROBLEM. ■I I it, Januar}' 1, 1879. While tlie majority of the House is not responsible for tliis act or its consequences, it should not be re})eale(l unconditionally and without sub- stituting for it some better measure having for its object the resumption of specie jiayments at the proper time. A modification of tlie law, one more in accordance with Ihe true interest of the country, will be no doubt effected. So long as the Government coatinues practically to insist that its own notes are of an inferior value to the precious metals, a most serious financial error is committed, and a policy in opposition to the resumption act, and far- reaching in its effect, is perpetuated. I express only the general opinion of the most sagacious financiers when I say that so long as this barrier remains specie payments cannot be attained for many yeai.-'. I regard a moderate contraction of legal-tender as in- dispensable and vital to the resura])tion of specie pay- ments. It is the necessary guarantee to be given by the national legislators to the people tliat they may confi- dentl}' rely on the sure aj)proach of a sound currency, but so far as it is enforced it should be so gradual as not to distui'b too violently the various existing interests of the production, commerce, and property of the country. This should Ije done by funding legal-tender j)aper into bonds at the lowest practicable rate of interest. This simple process, fairly carried out, would probably turn the foreign exchanges in favor 6i this country to such a degree that we should not only retain the immense pro- duct of our own mines, but that there would be returned to us a sufficient amount of the precious metals, now driven away to other lands by excessive paper issues, to enable us to resume specie payments. All this would be done by a process perfectly natural and in strict har- mony with the well-settled principles of trade and finance. The time to resume will be when we are pre- pared to do so, and is not within the ken of legislators, be they ever so wise, to fix it definitely by statute. At the same time there should l)e some definite and absolute provision for moderate but steady contraction. Among the possibilities of the future is such a demand for money as would make it unprofitable for the banka THE FINANCIAL mOBLEM. 09 "» <2 Jl) loiTfil-tender tliev hold into bonds at the nder as in- specie pay- v^en by the may conii- i currency, idiidl as not interests of he country. [• paper into trest. This pbably turn to such a mense pro- De returned netals, now ;r issues, to lis would be strict har- trade and e are pre- legislators, ,tute. efinite and ;ontraction. a demand the banka to convert the legal-tender they Hold lowest rate of interest. I would, therefore, suggest as a means of gradual contraction, and with a view to render- ing more certain the resumption of specie payments, that if the Government should authorize the purchase and cancellation of some moderate amount, say $1,000,000 per month, of the legal-tender notes, and authorize the Secretary of the Treasury to sell 5 per cent, bonds — if bonds at a lower rate of interest cainiot ))e negotiated — • of the United States to provide funds for that object, the first great step would be taken towards resumj)tion, without injury to the financial and business interests of the country. Under the recommendations of Mr. McCulloch, when Secretary of the Ti'easury, contraction on a larger scale was begun, but Congress, fearful of the effect, withdrew its assent. I propose that the rate and method of contraction shall be so gradual that Congress can have no excuse for again intervening. Rigid ad- herence to such a course would indicate a determination to return to a sound foundation; the absence of the inferior currency would be gradually supplied by the superior ; the problem as to the method of resumption would be solved, and the system work itself out by a natural process, while individuals and the banks would have ample time to prepare for a new condition of affairs. Business being thus adjusted upon the new basis, confi- dence would return, and with it prosperity prevail. The country is disposed to look to the democratic party for a return to the economy and integrity in the administration of public affairs and for the introduction and adoption of measures well calculated to restore to a safe and harmonious basis the financial, commercial, and material interests of the nation. It yet remains to be seen whether the leaders fully recognize the exigencies of the occasion and realize the necessities and hopeful expectations of the people. DISTRIBUTION OF THE GENEVA AWARD. HocsB OF Rkprkhkntativks, May 23, 1876. ni '9 ' A hill ignoring the legal rights of parties on whoso holiult" the Government of the United States ohtained the award by the tribunal of arbitration at Geneva and (U)lle('.ted the money from (ireat Hritaii', or postponing its payment until eertain invalid and improperly preferred claims, rejected by the tril)unal and indefinite in amount, have been satisfieil, having be(Mi reported from the Judiciary Committee, a renujiistrance was addrebsed to both houses of Congress by several of the chief insurance companies, and presented in '^he House of Representatives by Mr. Ward, and at his request read by the Clei-k. Mr. Ward then said : Mk. CIIATRMA^ : At the request of many of my con- stituents, who are deeply interested, and in accordance with my own sense of vis^ht and duty, I present to the House, as briefly and distinctly as I can, my views on the important subject of the disti-ibution of the funds awarded by the tribunal of arbitration at Geneva. In my opinion the length of the discussion regarding it is to be attributed rather to the n.a^nitude of the amount involved than to any intrinsic .!;rficulty in understanding or determining the principles of law and justice so far as they are appli- cable to this case. During the war various insurance companies and pri- vate claimants sent memorials to the Department of State, setting forth their demands against Great Britain for losses growing out of the destruction of vessels and their cai'goes by the cruisers of the insurgents, and requested the interposition of the Government of the United States in their behalf. The underwriters, confidently relying on the ultimate protection of their rights by their country, fi'om time to time, as they paid for vessels and cargoes destroyed by the cruisers, communicated to the State Da- jtartment full, formal proofs of the facts and of the value ^ DISTRIBUTION OF THE GENEVA AWARD. 227 of the losses. The Department, tlirough the Hon. William IT. Sfnvard, then Secretary of State, punctiliously, as was his duty, rej)lie(l to each of the statements thus made, and transmit':ed the claim "to the United States Minister at London, with a view to such reparation as may be justly due." Afterwards, when the war was over, the Government, through the Department of State, issued an official notice, dated September 22, 1805, calling upon "citizens of the United States having claims against loreign governments, not founded on contracts," to forward them to that De- partment, urgently asking compliance " without delay," and accompanied the notice with rules for the guidance of applicants, directing the insei'tion in each claim of a request "for the interposition of this Government with the foi'ei^n government a^jainst which the claim is pre- sented." In accordance with the trust thus confided to our Government by the sufferers, the claims were duly pre- sented to the Government of Great Britain and subse- quently to the tribunal at G ^neva. In pursuance of the same line of manifest duty, re- quiring every government to affoi'd due protection to its citizens or subjects, Mr. Fish, as Secretary of State, re- plied to letters enclosing claims of the class already described, promised that his Department would " present to the tribunal at Geneva, to be taken into account in estimating the sum to be paid to the United States, all claims growing out of the acts of the several vessels which have given rise to the claims generally known as the Alabama claims," and requested that they might be piesented in due time. The claims were duly presented by our Government to the tribunal at Geneva, in accordance with the treaty of Washington. Throughout all the proceedings they were uniformly treated as the claims of private parties, who on their part placed implicit, unquestioning trust and confidence in the due protection and good faith and in- tegrity of the Government. All doubt or question as to their rights or the disposal of the funds is an after- thought, having no origin in the tribunal and contrary to its intentions and conclusions. 228 DISTRIBUTION OF THE GENEVA AWARD. . !i In formally submitting its case to the tribunal, the Government of the United States placed first in the gen- eral statement of the claims for which it asked repara- tion " the direct losses growing out of the destruction of vessels and their cargoes by the insurgent cruisers." The other injuries for which compensation was sought were — The nationd expenditure in the pursuit of those cruisersi ; The loss in the transfer of the American commercial marine to the British flag ; The enhanced payments of insurance ; The prolongation of the war, and the addition of a large sum to the cost of the war and the suppression of the rebellion. Great Britain objected to the presentation of the three latter classes of claims, and refused to proceed with the arbitration unless they were withdrawn. The United States refused to withdraw them. A failure of the ar- bitration wai='j imminent. At this crisis, the president ol the tribunal, on behalf of all the arbitrators, announced that they, after the most careful perusal of all that had been said on the part of the Government of the United States in respect to these classes of claims, had " ai'rived individually and collectively at the conclusion that these claims do not constitute, upon the principles of interna- tional law applicable to such cases, good foundation for an award ot compensation or computation of damages between nations, and should, upon such principles, l)e wholly excluded from the consideration of the tribunal in making its award." The United States authorized their agent to state that they accepted this declaration as determinative of the judgment of the arbitrators on the important question of public la^y involv^ed, and that these classes of claims might be excluded from considera- tion in any award that might be made. Subsequently, by protocol 27, dated August 29, 1872, a majority of the tribunal decided to reject the claims for expenditures incurred in pursuit of the cruisers, on the ground that they were comprised in the cost of the war. Thenceforth there remained only for consideration by the tribunal the claims for dii'cct losses growing out of DISTRIBUTION OF THE GENEVA AWARD. 229 the destruction of vessels and their cargoes by the insur- gent cruisers. The basis of the award was furtlier and distinctly narrowed down by the tribunal to the private losses growing out of the destruction of vessels and their cargoes by the acts of the Alabama, tlie Florida, and their tenders, and the Shenandoah after she left the port of Melbourne. In accordance wilh this decision tlie arbi trators requested the Governraeit of the United States to furnish them M'^ith definite information as to the amount of such losses, and, complying with the request, on the 19th of August, 1872, a schedule was presented in behalf of our Government enumerating specifically the vessels destroyed by the cruisers for whose acts Great Britain was held to be liable, showing the value of each vessel so destroyed and of her cargo, as proved by the claims filed for it, including those of the insurance companies. The judgment of the tribunal was that there had been a violation of the obligations of neutrality on the part of Great Britain ; that she was consequently " responsible for the American ships which were destroyed by the ves- sels in question." In view of tliis decision, the only remaining duty of the tribunal was either to ascertain and award to the United States such a sum in gross as was deemed sufficient to cover those private losses, as it was empowered to do by the seventh articie of the treaty, or to remit the duty of auditing each claim for the losses to a board of assessors, as provided in article 10. The former was deemed the most satisfactory course. Its adoption was requested on the part of this country, and the gross sum of $15,500,000 was accordingly awarded to the United States. The majority was four to one. The a'.vard, of course, included alike such of the destroyed vesoels as were insured and those which were uninsured. In determining what sum in gross should be awarded, the tribunal considered the claims on the proofs submitted to it, those of the insurance companies being the most con- spicuous among the claims thus submitted. The United States have now received the money, have admitted that it is not their own, and established a special court for its distribution; but have closed its doors against every insurance company which cannot show that its whole 230 DISTRIBUTION OF THE GENEVA AWARD. business during the four years of the war, so far as the war risks were concerned, was unprofitalr)le. At this point it becomes necessary to consider the principles on which marine insurance is conducted among commercial nations. It has always been regarded as a proposition thoroughly established, that whatever is re- covered of the ship or cargo insured is the property of the insurer who has paid the original owner the value of it. It would be supei^fluous to spend time in proving this undeniable proposition. Daniel Webster said of it : There is no more universal maxim of law and j .■■i.i Lufough- out the civilized and commercial world than that an underwriter, who has paid a loss on ship or merchandise to the owner, is enti- tled to whatever may be received from the property. His right accrues by the very act of payment. And if the property or its proceeds be afterwards recovered iu whole or in Tiart, whether the recovery be from the sea, from captors, or from the justice of foreign states, such recovery is for the benefit of the under- writer. It was upon this principle that the claims of our people to reparation for the British violations of the laws of neutrals were advanced by our Government. On the part of Great Britain, the justice of our case thus urge^^ was distinctly admitted in the words — The American insurance companies who have paid the owi'eit- as for a total loss are, in our opinion, entitled to be subrogated to the rights of the latter, according to the well-known principle, that an underwriter who has paid as for a total less, acquires the rights of the assured in respect of the subject-matter of insur- ance. The principle of marine insui'ance requiring that the parties who have paid the owners in full for their losess shall have whatever may be afterwards recovered is seen, even on slight reflection, to be founded on morality and justice. It resembles that involved where payment of a note is guaranteed for a pecuniary consideration, and, the maker refusing to pay, the note is paid by the guarantor, ,but afterwards collected from the maker. Obviously the guarantor, who has paid the owner in full, is entitled to all that is recovered. Or, to take an illustration yet more DISTRIBUTION OF THE GENEVA AWARD. 2.11 closely analogous to tlie case in point, a vessel fully in- sured does not arrive at the port when she is expected. The parties who have agreed to pay for her in case of loss honorably fulfill tlieir engagement, and fully indem- nify the owners. Ultimately the vessel, having been de- tained by unforeseen causes, comes to port. To whom does she belong ? Manifestly not to the original owners. They have been paid, and in law and justice have trans- ferred their claim to those who paid them. The risk has been run, but there has been no loss. Yet further from all right would it be for any third party, even the United States, to step in and, by the power of force, give the vessel to other parties. We are not approaching the subject of the disposal of the amount paid to us as if the money were our own, to be given as we choose. Two-thirds of it remain undis- tributed. It was awarded for specific purposes and for no others, and the money was paid to the Government of our country for parties whose claims were admitted to be just, and who had confided them to the Government as their best and truest trustee. The bill reported bv the majority of the Judiciary Committee makes provision for three classes of claims. It provides : That the first class shall be for claims directly resulting from damage done on the high seas by Confederate cruisei-s during the late rebellion, hicluding vessels and cargoes attacked on the high seas, although destroyed within four miles of the shore, except as provided for in section 11 of said chapter 459. The second class ohall be for claims for the payment of premiums for war risks, whether paid to corporations, agents, or individnals, after the Bailing of any Confederate cruiser. The third class shall be for claims for sums actually paid for insured property destroyed on the h^gh seas by such Confederate cruisei"s, except sums for which judgments have been entered nnder section 12 of said chapter. That judgments entered in the first class shall be paid before judgments of the second class are paid ; and judgments of the se- cond class shall be paid before judgments of the third class are paid. If the sum of money so unappropriated shall be insuffi- cient to pay the judgments of the first class, they shall be paid according to the proportions which they severally bear to the whole amount of such unappropriated sum. If such sum shall be sufficient to pay the judgments of the first class, and not suffi- II 232 DISTRIBUTION OF THE GENEVA AWARD. nil ! - 1 li !!!!: If;; :j ^'i :■' : .'1.: iMi:^- 6 ,■■ I'TW cient to pay the judgments of the second chxss, the latter judg- ments shall be paid according to the proportion which they sev- erally bear to the residue of snch unappropriated sum. If such Bum shall be sufficient to pay the j augments of the first and second classes, and not sufticient to pay the judgments of the third class, they sha'l be paid "ccording to the proportions which they severally bear to the residue of such unappropriated sum after the payment of the judgments of the first and second classes. The Geneva tribunal adjusted only the liability of Great Britain for the admitted depredations committed by the Florida, Alabama, and Shenandoah after leaving Melbourne, and their tenders, the Tuscaloosa, Clarence, Tacony, and the Archer, and excluded from consideration, in the award of damages, the Georgia, Sumter, Nashville, and other exculpated cruisers. In opposition to this de- cision, the bill allows to be presented claims resulting from damages done on the high seas by all " Confederate cruisers during the late rebellion," without the limitation imposed by the arbitrators and in direct conflict with the intent and decision of the chosen tribunal. In equally bad faith is the provision allowing claims for the payment of the premiums on war risks which were distinctly ruled out by the tribunal. This ruling was re- cognized and accepted by the agent and counsel who re- presented our Government at Geneva ; and to make yet more glaring the enormity of the proposed bill, the claims of the insurance companies, which seem to come clearly within the award, are placed in the last class, without possibility of payment after the wrongful demands, ex- cluded by the tribunal bi !: placed by the bill in the first and second classes, have been satisfied. • The majority of the Committee say, with an evident desire to palliate the transparent injustice they suggest inflicting on the insurance companies, that the first class of claims for which provision is made in this bill will not, they think, exceed 81,500,000, and the second class $5,000,000, leaving $4,000,000 for the insurers. A sig- nificant commentary on these estimates is that the chair- man of the Judiciary Committee in the last House, who urged the same interests as have priority in the report made by the majority of the present committee, in answer DISTRIBUTION OF THE GENEVA AWARD. 233 to a question by another honorable member, replied that the bill then under consideration, and whicli is now a law, would require only $3,000,000 to satisfy the claims for which it provided. As matter of fact it has taken between eight and nine millions. The probability is that the first two claims for which provision is made in the bill reported by the committee would swell in larger proportions. It would be difficult to find in the whole history of pernicious legislation a precedent more dangerous to public and private integrity than the perversion of the funds our country has obtained from Great Britain for specific purposes, which were admitted to be just, to other purposes for which they were not and nevei* would have been awarded. There is no doubt how the courts would decide, and I regret that a knowledge that no court in equity would reject the doctrine of subrogation as applied to the insurance companies, should be assigned as a reason why Congress ought to tako the matter into its own hands and make its own will the law. It is bad enough that Congress should disregard settled principles and rules as to the rights of property, but that such a doctrine as this is avowed in open debate in this House is deeply to be deplored. Having called to our aid in settling the claims of our citizens against the British gov- ernment, men of the most profound legal knowledge and the highest character among other leading nations of the world, the attention of civilized mankind is directed towards us. The reputation as well as the honor and honesty of our country is at stake, and if we fail in our duty, we shall be deemed now and through future his- tory to have added publicly and as a nation a portentous illustration to the already long catalogue of the too prev- alent characteristics of the times. While the facts I have presented are beyond doubt or cavil, the considerations which should regulate our decisions as to the Alabama claims are so unquestionable as to be out of the region of debate. I repeat that the Government of our country obtained the money through the award of a great international court appointed by the leading civilized nations, with the hope not only of 23:1 DISTRIBUTION OF THE GENEVA AWARD. ^r t ' s- 1 * ■ll' i'" solving the difficulties whicli then existed, but of estab- lishing a precedent which would tend to promote hunmu progress by substituting just and honorable arbitrament tor settlements through brute force and the horrors of war. We are bound to respect the rulings of the court ; and those whose good opinion is best worth deserving will judge us by the disposal we make of the funds com- mitted to our charge. Our Government obtained the award as damages for destruction of the private property, and on proofs sup- plied by its owners. As the Government itself never owned the property, it cannot possibly be the rightful owner of the damages or have any right to confiscate them. In presenting the claims before the court as grounds for damages, the Government insisted upon their validity. If it has now discovered that they were invalid and that it was an error to present them, only one alternative re- mains. The plain and common rules of honesty and fair dealing are as obligatory in arbitraments between nations as between individuals ; and if, after recovery of dam- ages, the plaintiff nation ascertains or becomes convinced that the recovery was founded on wrong or error, it is bound in honor and good faith to return the sum improp- erly collected. While Great Britain would doubtless be unwilling to receive again any part of the sum she has paid to the Government of the United States under the award, she cannot be expected to regard without interest an alienation of the money and its application to objects for which, by so high a tribunal, it has been decided that she is not responsible. The duty of the Government, apart from this alterna- tive, is plam and simple. Having received the money as the value of private property, it is bailee or trustee for the owners. Repudiation of the trust or bailment by any individual under the same circumstances would be iieverely punished in a court of justice. The nation cannot be sued, but it is therefore so much the more firmly bound by higher considerations of right and policy to render no less justice than the private trustee would be constrained to do. All fair consideration of this subject leads to the DISTRIBUTION OF THE GENEVA AWARD. 235 same conclu&iona. The only just claim on the part of the Government is the one per cent, interest, the differ- ence between what it has paid and received. This is fairly its right, and should be covered into the Treasury. The Government ought freely and promptly to submit all claims upon which tlie aw?vd was leased to proper audit before the distril>uting tril)unal, where they can be heard upon their merits and decided in accordance with the principles of legal right. No other course will afford substantial or valid protection to the national Treasury, and any indirect or arbitrary procedure cannot fail to disgrace our country in the estimation of the whole civi- lized world. 1 I >- • : ' ■', 1 Ni*.TIONALITY OF THE DEMOCRATIC PARTY AND ITS IMPORTANCE TO THE UNION. HoDBB OF REPBK8ENTATIVE8, March 31, 1858. u ii ii iiiii4i'.., -n'l^ At this time the bond of fraternity between the Northern and Southern States had been weakened by agitating the questioti of slavery in Kansas. Mr. Ward foresaw that the result might be a forcible disturbance of the harmony of the Union. He believed that no prophetic spirit was required to foretell the disastrous consequences that might ensue, and hoped to avert them and dis- miss the discussion from the halls of Contjress, bv admittinjr Kaii- Bas as a State, when her people would have the usual power to make such changes as they may think proper in their government, subject to the Constitution of the United States. Mr. Chairman: The subject of admitting Kansas as a State under the Lecompton Constitution has been so fully and ably discussed by the distinguished members of this honorable body, that no new view can be presented of the immediate points in issue. It has occupied the attention of Congress until, I am sure, the whole country must be wearied of the discussion. It is a matter of deep regret that so large a portion of the time of this Congress has been thus absorbed. The nation, has just passed through one of those periodical financial revulsions which result from inflated issues of bank paper, overtrading, and speculation, leaving thousands in hopeless bankruptcy, all branches of industry arrested, and commerce paralyzed ; and yet nearly four months of the session are gone and not one effort has been made, one word of hope or consolation uttered, or any measure of relief brought forward in Congress that exhibits an interest, or sympathy even, with those upon whom calamity has fallen so heavily. A sectional and political excitement has been engendered, NATIONALITY OF THE DEMOCRATIC PARTY. 237 which, while it may not precipitate a dissolution of the Union, weakens that bond of fraternal intercourse which should always exist between different sections of our connuon country. My position was early taken from a deep conviction of duty to the nation and my party ; my constituents have left me free to take su(rh a course as my judgment dictated ; and whether I meet with their aj)pro- l)ation or not, I know they will accord to me an honesty of intention and a rectitude of piu'pose. While my own immediate constituents have confided in my judgment, I have not been unmindful that the united democracy of the city of New York, of which my district is a part, and the local organizations, have cordially approved of the action of theii- liepresentatives who sustain the admission of Kansas under the Lecompton Constitution ; that the democratic press, the democratic members of the Legis lature, and the leading men of their party present an un- broken iront in support of the Administration, and ex- hibit a unity of action that has not been witnessed in our State for many years upon any other prominent public question. In addition to this concentration of public opinion, I have not been insensible to other influences. The city of New York is the largest commercial city in the Union. In 1856-57, five-eighths of the total imports into the United States were imported into that city ; one-third of the exports, one-third of the domestic produce, and over one-half of the foreign produce, were exported therefrom ; and thei'e were collected at the custom-house there within the same time, forty-three and a half millions of dcdlars upon dutiable imports ; its banking capital, exclusive of that of private bankers, in 1857, amounted to sixty-five and a half millions, and it also has many more invested in other corporations, and in domestic manufacture and trade. These, too, are but a part of the vast interests that centre there, These sources of wealth, power, and greatness cannot but suffer by the continued agitation of this Kansas question, ending as it may in disturbing the harmony of the Union, without resulting in any practical good to the persons the slavery agitators desire to benefit. It is not to be denied that we are a commercial people. ' .ii i ■ ■■ ! j :i i ' ■ ■ 238 NATIONALITY OF THE DEMOCRATIC PARTY. and that to commerce we are indebted for our advance- ment, growth, and prosperity as a nation. Tlie majestic vessels which carry our products to other climes, penfi- trating eveiy sea-port, bear with them civilization, and instruct other nations that a power here exists that can- not be disregarded. The commercial prosperity of my city, the whole country, the onward progress of conuneice, and the agricultural and the otlier departments of indus- try, are involved in the public; questions which from time to time agitate the country. Impressed with the valuie and importance of the Union to my cimstituents, I find reasons, in addition to party considerations, for pursuing' the course best calculated to end the present agitation, and once more restore amity and good feeling. No one who has observed closely the events in Kansas for the last few years can fail to trace to its proper source the present excitement, and perceive the urgent necessity of investing the people of that Territory with the rights of sovereignty, so that they may exercise the functions of a State government, and relieve Congress from further in- terference. No analogy can be drawn between the griev- ances of the American colonies prior to the Revolution, as attempted by my colleague [Mr. IIaskin], and the al- leged complaints of a part of the people in Kansas. In the former case, Great Britain persisted in controlling local affairs ; and in the latter. Congress desires, in the most speedy way, to confer all power upon the citizens of that Territory to manage their own affairs in their own way, subject to the Constitution of the United States. Mr. Chairman, from the course the debate has taken, an apprehension would prevail with those not cognizant of the facts that a foul and deep wrong was about to be perpetrated upon the people of Kansas ; that the provi- sions of the Kansas-Nebraska act were to be violated, and the platform adopted at the Cincinnati Convention relat- ing to the question of slavery ignored. To demonstrate that this is mere clamor, it is proper that I should briefly refer to a few antecedent events. The act referred to, passed in 1854, has this provision : " When adiiiitted as a State, the said Territory or any portion of the same, shall be received into the Union, with or without NATIONALITY OF THE DEMOCRATIC PARTY. 2^9 slaveiy, as their oonfltitiition may proacribo at tlio tiruo of their afhnJHsion ; it beinff the true intent and mcaninj]^ of this act not to loijislate slavery into any State or Territory, nor to exclude it tliercfrom, but to leave the people thereof perfectly free to form and regulate their domestic institutionfl in their own way, sult- ject only to the Constitution of the United States." The teri'itorial goveriinient of Kansas was organized under the act containing tljis section. The resolutions of the Cincinnati Convention, relating to slavery and territo- rial organization, were as follows : " And that we may more distinctly meet the issue on whicih a sectional party, 8ui)aistin<); exclusively on slavery agitation, now relies to test the lidelity of the people, North and South, to the Constitution and the Union — " 1. ReHohu'd, That (^aiming fellowship with, and desiring the (■,0-oj.eration of, all who regard the preservation of the Union un- der the (yonatitution as the naramount issue — and repudiating all sectional ])artio8 and platforms concerning domestic slavery, which seek to embroil the States, and incite to treason and armed resistance to law in the Territories ; and whose avowed purposf.s, if consummated, must end in civil war and disunion— tlio Amer- ican democracy recognize and adopt the principles contained in die organic laws establishing the Territories of Kansas and Ne- braska as embodying the only sound and safe solution of the slav- ery question upon which tlie great national idea of the people of this whole country can repose in its determined conservatism of the Union — non-intkrfkkknce by Congress with slavery in State and Territory, or in the Distriot of Columbia. " 2. That this was the basis of the compromises of 1850, con- firmed by both the democratic and whig parties in national con- ventions, ratified by the people in tlie election of 18.52, and right- ly applied to the organization of Territories in 1854. " 3, That by the uniform application (jf this democratic prin- ciple to the organization of rerritories, and to the admission of new States, with or without domestic slavery, as they may elect, the equal rights of all the States will be preserved intact, the origi- nal compacts of the Constitution maintained inviolate, and the perpetuity and expansion of this Union insured to its utmost ca- pacity of embracing, in peace and harmony, every future Ameri- can State tliat may be constituted or annexed with a republican form of government. " Resolved^ That we recoo;nize the rights of the people of all the Territories, including Kansas and Nebraska, acting through the legally and fairly expressed will of a majority of actual resi- dents, and whenever the number of their inhabitants justifies it, to 240 NATIONALITY OF THE DEMOCRATIC rAIlTY. form IV (M)ii3titiition, witli or without domestic slavery, and ho ad- mittofl into the Uiiioii upon torniu of perfect equally with the other States." It will be ob.serv(((l that neither the act nor resolution contemplated that the constitution of Kansas should he submitted to the people. They inttmded, un(piestion!il>ly, that the people should have f)ower to " rcigulate their domestic mstitutions," but whether through a submission or a convention wan left undetermined. A sentiment and feeling, however, grew up duririg the canvass tliat the slavery clause should be submitted, and was acquiesced in, which would have been a full compliance with the act and the platform, leaving the constitution otherwise to be formed in such manner as the people judiiOii nun uvtm tue uiiiiunu practice, I believe, relating to the territorial action for the admission of n(nv States, except when controlled by legislative action. I mention this because my colleague [Mr. Haskin] has sought to create the impression that the question of submission of the whole constitution en- tered into the last presidential campaign as a distinct issue. Whatever individuals may have done, I assert that it was not then made a part of the democratic creed. In confirmation of this position I cite the follow- ing passage from the address of acting-Governor Stanton, under date of April 17, 1857 : " The government especially recognizes the territorial act which provides for assemblinjij a convention to form a constitution with a view to making application to Congress for admission as a State into the Union. That act is regarded as presenting the only test of the qualification of voters for delegates to the convention, and all preceding repugnant restrictions are thereby repealed. In this light the act nnust oe allowed to have provided for a full and fair expression of the will of the people, through the delegates who may be chosen to represent them in the constitutional convention. I do not doubt, however, that, in order to avoid all pretext for re- sistance to the peaceful operation of this law, the convention itself NATIONALITY OF THE DEMOCRATIC PARTY. 241 irill, in some forviy jn'ovide for HuhmUtimj the great dhtraeting qitcntion rrgnrdiiuj their socidl institution, which has ho h'lifjf Hijitatcd the pcoplt! of Kaimas, to a fair voto of all tho u(!tiial bona fide rcHicleiits of tho Territory, with every |)OH8ihlo security against fraud atid violeiute. If the eonstitutiou ho thus fraiTUid, and the qinstion of difference thus Huhniilted to the decimioii of the people, I holieve that KatiHas will bo admitted hy Coiigresa without delay as one of tho sovereign States of tho Aiiiorieaii Union, and the territorial authorities will bo immediately withdrawn." This question of submission has recently arisen, and has been seized upon since the commencement of this Congress, and made the basis for assailing the President of the United States for an honest and patriotic discharge of his high duties. The President in his instructions to Governor Walker, neither inteuiud nor expected that any other question tlian that of slavery was to })e sub- mitted. In his message transmitting the Lecompton Con- stitution to Congress, he says : "Nr* pcrsv.n lliuuguD of any other question. For my own part, when I instructed (iovernor Walker, in general terms, in lavor of submitting tho constitution to tho people, I had no object in view except the all-absorbing question of slavery. In what man- ner the people of Kansas might regulate their other (loncerna was not a siibject which attracted my attention. In fact, the general provisions of our recent State constitutions, after an ex- perience of eiglity yeare, are so similar and so excellent that it would bo difHcult to go far wrong at the present day in framing a new constitution* "I then believed, and still believe, that, under the organic act, the Kansas Convention were bound to submit this all-important question of slavery to the people. It was never, however, my opinion that, independently of this act, they would have, been boinid to submit any portion of tho constitution to a popular vote, in order to give it validity. Had I entertained such an opinion, tiiis would have been in opposition to many precedents in our history, commencing in the very best age of the Republic. It would have been in opposition to the principle which pervades our constitutions, and which is every day carried out into prac- tice, that the people have the right to delegate to representatives, chosen by themselves, their sovei'oigu power to frame constitu- tions, enact laws, and perform many other important acts, without requiring that these should be subjected to their subsequent a^)- probatiou. It would be a most inconvenient limitation of their own power, imposed by the people upon themselves, to exclude 16 I n '^ V a! i yrr:f,if 242 NATIONALITY OF THE DEMOCRATIC PARTY. them from exercisinoj their sovereignty in any lawful manner tliey tliink proper. It is true that the people of Kansas mi3 tion are goinc^ to their political graves " (T do not quote the <\\act language, not liaving his remarks before nie), pays ua a high compliment, for which, as one, I thank liim. It shows his conviction that we have been guided by higher motives than selfish considerations. Sir, I have lieard it stated on tliis floor, and held m terrorem over the Northern Lecompton menil)era, that the Kansas-Nebraska act republicanizinl the last Congress. Without desiring to refer in detail, I desire to state a fact not generally understo(i't to chastise the perpetrators of so great a crime. I have not approved of all that has been done under the sanction of the war power. I have deemed it proper to protest, in the name of the loyal and law-abiding coii- fatituency I have the honor to represent on this floor, mm THE TRESERVATION OF THE UNION. 257 against cortaia acts of the Executive and Congress, which, in my opinion, liave been the means of prolonging this sanguinary war; but I am settled in tlie conviction that secesrion is treason, and that as such it must be put down at all hazards and at any cost. If secession succeed, republican liberties are lost forever, and the Government, failing to vindicate its power, would forfeit the consider- ation and respect of every civilized nation on earth. If the heresy of secession were to be recognized as a canon of our political faith, there would be an end to our Gov- ernment. Let Louisiana secede unhindered, and then, when that act has been accomplished, what is to prevent her from handing that State over to England, or any other Power, commanding as she does the mouth of the great Mississippi ? This she most assuredly has a i*ight to do if she has a right to secede, thus closing up the "Father of Waters," and excluding all the States on its borders from a market. The same i)rinciples would apply to other States. Hence the duty of every American patriot, whatever his station or condition, to uphold the Government in its efforts to compel the seceded States to respect the Constitution and the laws of the country. Upon this conviction of duty I have ever acted since the first insult to our flag was offered. The same abiding sense of the responsibility which rests upon me as a Kep- resentative of the people in Congress will, I trust, carry me unflinchingly through whatever phase may yet remain undeveloped in the fearful drama which has been so long in process of action. If the conduct of th^ war had not been marked by some of the most startling usurpations of power that ever made a free people tremble for their liberties, my voice should never have been raised except in the way of encouragement and sympathy. Much wonder has frequently been expressed that in this fearful crisis through which our V)lee(ling country is now passing, in the awful presence of the grand and sublime uprising of the people of this nation, no master spirit has yet risen in the midst of our assemblage capable to stay the uplifted hand, and gifted with that peculiar sagacity which employs the acquired light of yesterday in the se- lection of a path for to-morrow. "^A^ hatever may be the 17 r <^:i. !': ■■ W ;!' ' : I I I'M 258 THE PRESERVATION OF THE UNION. M, cause, it cannot be denied that the present crisis has most Hignally failed in the production of those towering intel- lectualities whose impress never fails to mark itself deeply upon the mould of time«, and which during all our former trials as a nation have been wont to dii'ect the destinies of the Republic triimiphantly through the fier)- paths of sedition and ctmspiracy. Hence the blunders and mis- manaijements wnich have characterized the conduct of this war. The spirit which was wont to kindle the voices of former statesmen as if with a coal from tlie altar is no longei' manifest in the places of power. Under these cir- cumstances, and in view of the obstacles which we may yet have to contend with liefore the blessings of peace can be restored to our distracted country, it behooves every man in the position I have the honor to occupy, however humble his pretensions or capacity, fearlessly to present his views on the great questions now at issue, in order that out of the very multitude of counsels some good and practical result mty V)e attained. I have observed that the more entirely the objects which stand in the way of the execution of any purpose are ig- noretl, the more easy it becomes to lay down plans for the perfect managetnent of the affairs of the country, military and financial. Overlook the rivers and the mountains, the distance and the atmosj)heric phenomena, the reluct- ance upon one side, and the resistance upon the othei', and to construct the most infallible programme for the sup- pression of the rebellion is one of the easiest of un- the sternest requirements of the demo- cratic creed. How much the democratic party, acting as a party, through its organization, may do to bring back peace to the country, it is impossible to predict. That will depend upon the steadiness with which it adheres to what are admitted to be democi'atic principles. To expect to return to sound practices in the Government, through the medium of a party which, from any sugges- tions of expediency, however plausible, departs from its principles, is, of all expectations, the most irrational. l*eace will return ; the war fury is a passion which exhausts itself. But, however desirable peace may be, we ought to be united in the determination that when it comes it should bring with it the Union of the States under the Federal Constitution. Those who fail to recognize this national exigency are not imbued with the true spirit of democracy ; they have read the signs of the times to very little purpose. The democratic party is essentially a party of progress, and those who aspire to be its leaders ought, at least, to have sense enough to know that we are in the midst of a great revolution, and that revolution is progress. ' ' THE PRESERVATION OP THE UNION. 265 The only issue before the people at this time is tlie is- sue of union or disintegration. I admit that the country- needs peace, and I am anxious to secure it ; but I do not want to get it by indirection. In my judgment, the only feasible plan of re?pose all tii(!se collateral is.svies, such as arbitrary arrests, (M)nliMcatioii, susj)eiisi(»ii of the writ of habeas CirrpuH^ and the freedom of the preHS in loyal States, and emancipation, as having a tendency to retard a successful issue to tills most d('j)lorable war. Many honorable members of this House for whom I have great resj>ect, 8U})po8ed that these measures, great in themselves, and esj)ecially that of arbitrary arrests, were paramount in the public mind, and would over- shadow all other questions. I concede tii(^ gravity of the point involved, but still, great as that and the other collateral issues are, the people regarded the life of the nation and the problem of self-government as paramount, and desired these issues first settled before permitting others to engross their attention. The Union I'estored or separation accomplished, these grave questions will then become subjects of serious inijuiry, and the culj)able parties V)e held resj)on8ilde for the inroads made upon personal rights and liberty. In addition to the series of measures to which I have referred, we are now called upon to sanction a joint resolution to amend the Constitution so that all persons shall be e<|ual under the law, without regard to color, and so that no person shall hereafter be held in bondage. I might object to this amendment, sir, upon the ground that to prohibit the establishment or continuance of slavery as a legal relation would be virtually to admit that it may exist as such legal relation, and that such an admission in the Constitution would leave that instru- ment, in respect to human liberty, in a worse state than it is at present. Upon this point, however, I do not intend to enlarge ; for, as 1 understand it, the fact of servitude among a people will be little affected by any provi^lon which their constitution may or may not embody. Sir, it would seem to me that the sum total of the wisdom of the ruling party is contained in the dogma that the negro is exactly like the white man. To some . I : 2C8 THE PRESERVATION OF THE UNION. it may seem that this is not very much, hardly enough to constitute the foun(hiti()n of a political system and an adn'-nistrative policy for a great nation and a nuinorous people; but this is a matter of opinion. Some may 8up[)ose that the basis of a political system ought — observing the uses of sciences in general — to be laid upon some fact, the existence of which is capable of demonstra- tion; but, sir, we, the j)eople of the United States, are trying great and sublime experiments in politics, and if we; can succeed in makinj; sometliinjj stand upon nothinir, will it not show that we are justl) entitled to the i'ej)uta- tion for political sngacity and adroitness which we have been considerably more ready to claim than the benighted statesmen of Lurope have been willing to accord 'i So far as I can see, Mr. Speaker, in any form of civilization resembling our own, servitude will always exist; and servitude rendered necessary by circumstances which the servile party cannot control, is Ixmdage. Bondage will differ in form, as it is modified by the character of the parties between whom it exists, and it will differ in in- tensity as it is affected more or less by external conditions. The relation of master and servant in the South is natui'al to this extent : it is the relation into which the white and black races, being bi'ought together, natui"ally fell under the influences of mutual necessities for personal security, social tramj^uillity, and subsistence. The relation of master and servant in Great Britain is affected by the pressure of a costly Government, which draws from labor, through capital, the means to defray its annual expenses. Servitudes differ in degree and they differ in kind, but the most important difference of the two — the one that is at once the most significant and the least changeable^ is the difference in degree ; a man may be nominally free, but if he is a w')rkman without caj)ital, and lives in a state of society of which it may be said "once a peasant, always a peasant ; once a factory operative, always a factory opei'ative;" if the constant labor of his body when in health is only just sufficient to provide him with food and clothing, and if old age, or a few days of illness, inevitably reduce him tt) pauperism or starvation, he has little to boast of his freedom, and would find it hard to THE PREriKRVATION OF THE UNION. 209 discover wherein it ministers to his elevation or his hap* piriess. 'I'lio fre(!(h)ni of a British working man consists in a limited liberty to chanj'e! his timployer. lie is (1('sc'(M1(1(mI from ancestors who toded, as lie toils, all their days for food, clotluiig, and shelter, and these scanty in s, and eiiher abolished < :■ prohibited it in all but nine of the new States since admitted. This Government is one of delegate ' owers, and those not conferred are reserved to the S'r .' respectively or to the people. In regard to slavery uhe Constituticm is silent, and therefore no power exists to amend it in the respect indicated ; and in addition, in my judgment, that instru- ment contemplated that all the States sliouhi participate in any amendment thereof. Sir, 1 do not stand here as the apologist of slavery, but merely to insist that we liave no right to incorporate the proposed amenchnent, and that even if the right exi.;t it is a most injudicious time for the exercise of the power when we should desire t<^ bring »;uek the seceded States to loyalty and obedirnice. Our action in tliis respect cannot fail to add fuel to tlie llame, widen the breach already existing, further embitter the South, and jirolong the sanguinary contest. I do not regard this question as having been decided by the late election. The issue there invc Ived was the victorious ])rosecution of the war for the restf)ration of the Union. Entertain- ing these ideas, I cannot vote for the proposed amendment. Such are some of my views, Mr. Speaker, on some of the most important questions which agitate the public mind at this moment. If the war be brought tc a close within a reasonable time, and a united country l)e the result, this great Republic, with its immense resources, will spring into new life, and under the blessed reign of j)eace will ultimately shake off its burdens and repose queen-like among the nations of the earth. We must be prepared to make still greater sacrifices than any that have gone before, if necessary, to save the Union ; but the considerations to which I have adverted admonish us, as I have observed already, not to ])rolong the war a tnoment longer than is necessary to effect the legitimate object. Let us be careful lest in seeking to If'' 272- THE PRT<:SERVATION OF THE UNION. obtain a fancied benefit for others we do not destroy our- selves. It has ])een justly said, sir, that to most men ex- ])erie;ice is like the stern-lights of a ship, which illumine only the track it has passed. It will be a sad thing for the Republic if those who havu it in their power to con- trol its destinies are recorded by history in such a categoiy. On the use to be made hereafter of the light of experi- ence depends our whole future destiny. It is to decide whether we take the iirst fatal step of disintegration which will lead us to the position of those petty States whose weight in the world's council is represented by a cipher, and whose little quarrels only pxovoke a smile, or whether we remain a great people — homogeneous, united, and porverful. THE BEST POLICY TOWARD THE SOUTHERN STATES. Letter to the New York World, Sept. 6, 1875. w ^ In the snininer of 1875 Mr. Ward, beinpj desirous of promoting the impartial and temperate dibenssion of sound political priiiei})le8 as applied to the living issues of the times and ol indicating such a course as should be supported alik: by just and thoughtful men of both parties, addressed to tiie New 1 ork Worl// a letter on the "Principles and Pclicy of the Democratic Party." He advo- cated such reforms as would best secure integrity in public affaire, a safe and gradual return to a i-edeeinable currency, thorough re- vision and reform of the tarifP, extension of our trade with Can- ada, Cuba, and Mexico, and the obliteration of the political " color line " in the South, together with the maintenance of free gov- erinnent and constitutional liberty. The latter subjects are treated in the followinor extracts from liis letter : The rule that "honesty is the best policy" is, perhaps, even more obviously true in its application to the treat- ment of the South than to affairs of the tariff and tinancc. The manufacture of false reports of Southern out- I'ages has run its course, been detected and exposed, and is no longer profitable to the seekers of Northern favor. The misgovernment of our Southern fellow-citizens has become so pal})able that not a few of the Repu])lican9 themselves see it is not so much tlie Southern people as the party in power tliat needs reformation. One of their chief leaders acknowled<^'es tliat " it is not the disease but the doctors that we ought to examine — it is not the ill- ness but the medicine that does the harm." Tlie Admin- istration has steadfastly followed the course of tliose dis- reputable practitioners who administer drugs to drive a patient into madness, and keep him in confinement under 18 274 BEST rOLICY TOWARD THE SOUTH. false certificates, knowing that their occupation and fees will be at an end when his actual condition is known. Considered only as a matter of self-interest, the pros- perity of the South is of incalculable importance to tlie Northern people. One of the great causes of stagnation in the Northern manufactories is the impoverished con- dition of the South. According to the census of the Uni- ted States, the production of the great staple of cotton, so important for home use and in oui* foreign exchanges, slirank from nearly five millions and a half of bales in 1860, to little over three millions in 1870. The produc- tion of tobacco decreased in far larger proportions. These losses are not counterbalanced by any inci-ease in other articles- The production T the cereals decreased forty -four per cent., and the "'ut of live stock twenty-six per cent. All this is in strong contrast to the prosperity of the previous decade. Part of the evil influence of the unscrupulous adven- turers who have been aided by the civil power of the ad- ministration and the army itself, and have imited witli the managers of their party elsewhei'e to use the colored vote, first to control and rob the South, next to aid in govern- ing and despoiling the people of the North, is clearly shown by an examination of the debts and liabilities in- curred in the Southern States since the close of the war. At that time, the amount in Georgia and Texas was merely nominal, but on January 1, 1872, as shown in the Ku-Klux Report of that year, it was over fifty rail- lions in the former and twenty millions in the latter State. Since the war ended, up to January, 1870, the debts and liabilities of the various Southern States grew from eighty seven millions to three hundred and sixty- two millions — a net increase of over two hundred and seventy-five millioaiJ- This vast sum has mainly been squandered or stolen, not fairly invested for the benefit of the people to whom it belonged, a ■ ,l;;' i'-ne value of whose property during the ten y',.!j bttwee^i J 860 and 1870 was diminished to the amount o: cvevtvro tLousand millions of dollars, as showi. ! y the pa; ■=!;) s c i ca. (Jnited ^States. The indignation of the Southern whiiA.- against the BEST POLICY TOWARD THE SOUTH. 275 spoliation to which they were thus subjected, by the aid of tlie Administration and Congressional majority, was further aroused by the federal office-holders, who, with their adherents and the support of their party at Wash- ington, controlled elections, and tampered with the courts and usurped their power. Legislatures were seized, need- less and obnoxious acts passed, and nothing was neglected to foster and perpetuate enmity and strife between the two races. A regard for the real interests of the colored men, which could only be promoted by advancing his sense of political justice, in harmony with the interests of the whites, was no part of the schemes. The old pro- verbial game of oppressors, to divide the people against each other, so as to conquer and rob them all, was never more recklessly pursued than in the two successful efEorts to set race against race, and the North and South against each other. The beneficial restoration of concord and the LFnion can only be effected by fair dealing and con- stitutional liberty. Directly injurious as the impoverished and dishonestly taxed condition of the South is to the Northern people, its dangers are secondary in importance to the results which must follow to the people of the whole Union if the contirmation of military interference and despotism, such as have been conspicuously exemplified in Georgia, Louisiana, and Arkansas, is permitted. All simply local and domestic matters must, under the Constitution, be left to the people of the States. At last, the practices of the Republican party are echoed in the speeches of its leaders, who attempt to justify the progress of centralization — a system absolutely contrary to all free and especially to all really republican government. One of the first objects in the Democratic; Southern policy should be to destroy the political " color-line," which it has been the constant aim of those who had no desire for the welfare either of tl.'.e white or colored race to intensify to the utmost. If it should be perpetuated, and the colored peoj)le continue to be made the tools of those who maintain corrupt government both at the South and North, the ultimate result will be especially against the ■ disastrous to those who, in comparison with the rest of and fees own. bhe pros- !e to the agnation ihed con- the Uni- if cotton, xchanges, i bales in le produc- aportions. icrease in decreased bwenty-six prosperity )us adven- ■ of the ad- id with the )lored vote, ill govern- is clearly abilities in- - the war. 'ex as was shown in fifty rail- the latter 1870, the jites grew and sixty- .ndred and ainly been lie benefit of ne value of J 860 and vo UiOUsaiid uv United 276 BEST POLICY TOWARD THE SOUTH. the population of the Union, are in a small minority. Their practical welfare can best be promoted by such a general prosperity of the South as will give them a fair day's wages for a fair day's work, and improve their ed'ication and sound intelligence on public affairs, so that by their own free and honest efforts they may earn the respect of all men, and, judging for themselves on political questions, may be independent of dictation by sordid and selfish intriguers. When the Federal Government ceases to interfere in the affairs of separate States, and is repre- sented in the South by office-holders whose character will commr ad re oect and esteem, a complete and harmonious settlement ot the political questions in those States will soon be attained. Attachment to the LFnion will be in- creased when an Administration fulfils the duty of making union a blessing." THE SHIPPING ACT— RELATING TO MER- CHANT SEAMEN. House of Representatives, June 1, 1876. Under the original statute relating to merchant seamen much good had been effected for sailors and ship-owners ; bnt it wan novel legislation and many unforeseen abuses arose, chiefly from want of needful responsibility on the part of the commission ere entrusted with the chief duties prescribed. To remedy these de- fects Ml'. Ward, on behalf of tne Committee on Conmierr'e, r(j- portcd a series of amendments and made the following speech in their support. Tlie House adopted them by a large majority. Mr. Speaker : The act known as the " Shipping Act of 1872," relating to mercliant searnen, and being title 53 of the Ilevised Statutes, has, in many important respects, fulfilled the intentions of its framers, but has been found practically deficient in some of its provisions, and t) uh the benefits expected from its operations have been ma- terially a]»ridged and serious abuses have been called into existence. It has been in operation from August, 1872, to the present time, and there has been ample opportuni- ty to judge fairly of its merits and defects. The w ell-known character of the sailor and his enmtn- tially peculiar mode of life have long ago led, in the leadmg maritime nations, to the enactment of Jaws for his protection, especially as to his shipment and discharge from service. His or^upation i^; jv^irsued remotely fr'^>tn sitrary. Released from k'a^ cus- tomary restraints, ^'^''^ his pay in h].!' po^^ket and a »rtf an- ger amofi^i^t strange^'', he naturally 'f>'/X)me8 li»r>Ie to tonptatiof^ »tt«^ impowl^i/zrjx ; and tne opj>ortunitieH thus afforded attiract a claa* ^ters were victims. When men wcf-e abund/mf n. large proportion id Mie sailoi'n w/iges was take// from hini lor sciiring his shipment. Thecofi- Be(ji(jeijces of thiM \nfnuinu» iionflnimt am 'if his b/^ingfie- ([iU'Wily Hhlpj)ed while UfU'iiU^i>\iHin of vvhaf- fit* was (f/iin*/. were that he Avorked gi'udglngly lun] i/nr)er a sense nf injury on bo.ird ^^hip, the captain fonnd (liflfi'idty in iimu- af^ing liim, and he freqi«'/»ijy dcMerLed nl Ihe f\i>4\ po/f where he landed, t/jtkinghis ch mi f.' fu ff f^hippiny^ '^'Mii^ unde/ some different tmlHii: Wh<>W there wum a scarcity //f miW- ors similar extortion was iitiwiimn on the shipowz/ern, RELATING TO MERCHANT SEAMEN. 2ru hut frLMjiiently tlusre was a combinution nmoniif tlu^ more powerful jiarties to the bargains, the sailor himself being the (^liief sufferer, not only from the condition to which he was reduced, but be;cause, from the natui-e of his voch- tion, he was only a transient stranger. It could only be expected that in such a state of affairs between officers and crew, se})arated by a wide expanse of waters and long intervals of time from ordinary society and its laws, dis- cipline might often degenerate into tyranny and > ruelty on one side, and that, on the other, insubordination and even mutiny might arise. The well-known existence of these evils long attracted the attention of philanthropic persons, whose exertions led to the passage of the act now under ^#. 1.0 I.I Hi til 12.5 MAO lU L25 ill 1.4 2.0 JA 16 Photographic Sciences Corporation 23 WEST MAIK STREET WEBSTER, N.Y. 14580 (716) 872-4503 ^^ iV Q \\ % .V ^ •<•>. ^ A" Ko f 'IS 28 r2 RELATING TO MERCHANT SEAMEN. into his liands as commissioner, and not, as j)rovi(1ed hy law, out of his own salary. The rent paid by him as commissioner t(^ the association of which he is president is not far from ten times the actually fair rental of such premises as are required, he jjaying S5,:" 00, while rooms more conveniently located for tlie performance of the du- ties with which he is charged coukl be had from $jOO to $700. At Philadelphia the rent jmid for such an office was $S')0. The office for whlcOi tiie exorbitant rent of SojOOO is paid, for the use of the commissioner, is at a ve.y inconvenient distance from the custom-house. Thus mucii vexatioa and loss has arisen, and in many instances the delay has be'.'U so great thai: the departure of vessels for a whole day has been postponed simply for the neces- sity that captains should visit the office and return to the custom-house. It rs regarded as a defect in the act that there is no specific provision l)y whic!i j/arties who are ag- grieved can present their cases on points re(|uirini?a strict construction of the law. All cases at New Y'orkin which such construction was asked have been presented by the commissioner himself ex parte. In San Francisco, Boston, Philadelphia, and other sea ports the same violation as exists at New York o:"^ the provisions of the act, so far as regards the expenditure of the fees which are paid to the commissioners, has pre- vailed. In Philadelphia numerous complaints have also been made in other particulars, indicating the expediency of a change in the appointing power. Apj^licatlons have been made for a total rej^eal of tlie act, as well as for amendments to it. It is deeuied more desirable U) remedy its defects than to destroy it. The primary and essential reform most imperatively demanded in the law is that the power of appointing the shlnplng commissioners shall cease to l)e given to the United States courts which have jurisdiction in maritime cases, and, to take the most pleasant view of the matter, wliose judges, having selected their appointees from con- fidence in them, cannot be regarded as impartial judicial authority in matters to which the appointees are parties. It is obviously inexpedient to blend the judicial and executive or appointing power. The office of tlie com- RELATING TO MERCHANT SEAMEN. 28.3 missloner i'^ created and held under the law of the United; States. Under these circumstances, the proposed bill j)rovides that tlie power of appointing the commissioners sliall 1)6 vested in the Secretary of tlie Treasur}' of the United Slates, and that, under certain restrictions, he shall regulate tlie amounts of their salaries, their modes of conducting business, and the numl)er and salaries of the clerks and other persons in their employ. More than enough has been brought before the Committee on Com- merce to prove the abuses existing under the present irresponsible and arbitrary system. It is believed that if thesefa!.da:nental chanffes and such other amendments as are herewith submitted are made, the law will be justly and efficiently administered, and become deserv- edly popular among those whom it chiefly intended to benefit. I will endeavor to present separately, and as briefly as possible, the various reasons for the several amendments no\v proposed. Section 45(U : The change i-emoving the appointing power from the several cii-cuit coui'ts to ihf Secretary oi the Treasury is the main iv^form proposed in this amend- ment. It is contrary to sound public policy to blend to- gether the creative and judicial functions. This may be regarded as an axiom in leg^islation. The interests of justice demand compliance with the rule. The couits, however desirous of being impartial, can scarcely be fair judges between strangers and those appointees whom they have selected either from friendship or from confi- dence in their character. In fact, the greater the confi- dence of the courts the less impartial are they likely to be. Experience in the various ports has amply confirmed this view, and the amendment is almost universally desired by the people who are most deeply interested in the success of the title. They deem it essential that this alteration should be made in order to insure them a due measure of justice. Under the present law some commissioners have discharged their duty with fidelit}', but in other instances their conduct has been arl)itrary and unjust to the sailors, and public interests and money have been sacrificed to personal gain. The law as it now is 111 iiii 284 RELATING TO MERCHANT SEAMEN. 8'"' ^^ ' ^ left them irresponsible and practically "laws unto them- selves." After reading and explaining the various amendments, Mr. Ward coirtimied : The amendments are in the main very simple, although it has taken some time to read and explain them. I am expressing the unanimous sentiment of the Committee on Commerce in saying that these amendments are cer- tainly needed. The only objection that I have heard I'aised to this bill (except in the case of one or two charitable bodies in New York City) comes from those who hold places as commissioners. We have received from different sections of the country many petitions and letters of the most urgent character in favor of these changes in the law. I wish to say, for the Committee on Commerce and for myself, that wc have no other object in proposing these changes tlian to remove the imperfections of the existing law and render it more efficient. It is believed that some central power is essential to give effect to the law. It was but the other day that I was constrained to ask this House to pass a law in order that the commissioners may be checked in libelling vessels in direct conflict with the act. They have acted in entire disregard of any authority except themselves ; and their conduct has been the means of making the law very odious and very unpopular. If the House should now pass this bill, the law may hereafter require further amendment before it shall be fully perfected. When the occasion for such amendments become manifest, they can be made. I now move the previous question. A COINAGE DEPARTMENT IN THE ASSAY OFFICE IN NEW YORK; ITS UTILITY TO COMMERCE AND IMPORTANCE ON GROUNDS OF LOCAL AND NATIONAL JUSTICE AND ECONOMY. HonsK OF Eepuesentativeh, February 1, 1877. During the last thirty or forty years the Hon. Robert J. Wal- .ker, Hon. Thomas Corwin, Hon. William II. Seward, and many others, without distinction of section or party, have urged the ex- pediency of coinage in New York as the commercial metropolis of the iJnion. On the 10th of October, 1854, an assay office, at which bars of the precious metals are prepared and issued, was established. The results are most decibive proofs of the tendency to bring gold and silver to New York rather than to any other place east of the Rocky Mountains. In 1876 for instance, the value of the bars issued at New York was nearly nine millions, and at Philadelphia and Boist^ added together less than two hun- dred thousand. At New Yoi-k there is for payment of duties and other purposes a greater need of specie than in any other city of the Union. Hence Mr. Ward thought it expedient to lay before Congress and the country an epitome of arguments and facta proving the expediency of conferring the privilege of coinage upon the Assay Office in New York. gress Mr. Speaker : Having in the preceding session of Con- introduced a bill providing for coinage in New York, and as the committee to whom it was referred have omitted to report thereon, and the bill now under consideration is the one through which appropriations for coinage are made, I deem tne present opportunity suitable for calling the attention of the House to a sub- ject of much importance, not only to the city and State 286 A COINAGE DEPARTMENT IN NEW YORK. i 1 have in part the honor of representing, but also to the country at large. The signs of the times unequivocally demonstrate that inflation can no longer inflate, and that, by a natural re- action, a most favorable time to prepare for specie pay- ments is near at hand. Gold has lately been at a pre- mium of less than five per cent. Our exportations of it are large ; our mines are producing vast quantities of the precious metals ; and currency is yet abundant at low rates of interest, although during the year ended on the 1st day of November, 1876, there had been a decrease of nearly $25,000,000 in the amount of national bank notes. Since the act of Julie 20, 1874, came into operation, the outstanding amount of these notes has been reduced $32,- 300,000. Between January 14, 1875, and January 1, 1877, the reduction in the amount of legal-tender notes was $15,900,000, and the amount of legaRender notes lately deposited in tlie Treasury to provide for further withdrawals of bank-notes was $18,900,000. The three items indicate a contraction amounting to $67,100,000 in the circulation of the two classes of notes between June 20, 1874, and January 1, 1877. This is about nine per cent, of the whole paper currency. The natural laws of finance are asserting their power. Arbitrary and doubt- ful measures for the restoration of a sound currency re- deemable in the metallic standard of the world are no longer necessary. It seems impossible that those to whom the legislation of our country in monetary as ■well as in other affairs is intrusted should not patrioti- cally take advantage of so golden an opportunity to con- fer incalculable l)enefits upon the people. My purpose at present is simply to urge the adoption of one of the most important means of aiding in the restoration of specie payments by rojoving unnecessary, expensive, and un- just obstacles to their essential precursor, conversion of the precious metals into the coin of our own country. While I am desirous of applying the principles of jus- tice and good will in the fullest measure to all other parts of our country, I deem it my duty to state what is strictly due as regards coinage to the city I have in part the honor of representing. In one year alone there were sent from A COINAGE DEPARTMENT IN NEW YORK. 287 the assay office in New York to Philadelpliia for coinage no less than $()L>,480,508 in gold and $2,008,04(5 in silver. That certainly was an exceptional year, but during the tweTity-one years which have elaj)sed between tiie time when the assay office in New York was organized, and December, 187o, the amount of bullion thus ti-ansniitted was no less than $172,221,40.'?, at a cost of $182,2,Sl, a waste of money and labor as complete as any ever typi- fied in modern proverbs or ancient mythology. As \v(i seem to ap])r()ach nearer to specie payments the amount of the bullion thus transmitted increases. In the three years ended with 1875 it was two and a half times as large as in the three preceding years. In these calcula- tions the amount of the silver purchased for coinage un- der the provisions of the law of 187.3 and subsequent acts now in operation is not included. Its amount, passing from and through New York to the Mint at Philadelphia during the last two years, may be computed at millions. During the two years and a half ended on the 80th of last Deceml)er, the amount of gold and silver bullion trans- mitted from the assay office in New York to the Mint at Philadelphia was no less than $22,487,803, and the char- ger, of the transmission were $22,080.05. The amount thus transmitted is no fair criterion of that which would have been coined in New York if the needed facilities for that purj3ose had existed there and the loss of time as well as the cost of transpoitation had been avoided. The means thus wasted would undoubtedly have been much larger if for the last sixteen years the ordinary and natu- ral demand for specie had not been checked by legisla- tion. Yet under these circumstances the direct and need- less expense thus actually incurred for transportation of bullion since the establishment of the assay office was over $200,000. I do not believe there has ever existed under our Government any more flagrant instance of the power of habit and established patronage in resisting a most just and needful conformity to the requirements of the times. For at least thirty or forty years the justice and expe- diency of converting bullion and the gold and silver cur- rency of other countries into our national coin at New 288 A COINAGE DEPARTMENT IN NEW YORK. h York have been urged by leading statesmen, irrespective of party or the locality of their residences. Tiie Hon. llobert J. Walker, iji four successive annual I'eports, with arguments which it is impossible to controvert, earnestly directed public attention to the subject, and the same re- commendations were made by the lion. Thomas Corwin, Hon. William 11. Sew^ard, and many others. The riglit was not sougiit for New York or for the benefit of its commerce only, but for the benefit of the whole Union. No unjust or exclusive advantage was asked for that city, but simply that the great centre of our foreign and home trade should have equal facilities with other cities of less commercial importance for coinage and recoinage. Apart from the^ commercial emporium to which the precious metals are first brought from the places of their production on the other side of the continent, it is evi- dent that where the chief market of commerce is there also the precious metals will centre, audit is no less clear that in the same place there should be every opportunity for increasing their value and bringing them into active use. While this is true at all times it is especially so at present, when the people are desirous of a safe and eco- nomical return to a currency at par with the commercial standard of the world. It may be argued that the impediments to coinage by compelling the citizens of the centre of the exchanges of the Union to carry their specie to and fro, for hundreds of miles, are to some extent removed by modern facili- ties for rapid transit; but, whatever the cost thus in- curred for freightage may be, it is to that extent a tax, primarily upon New York, but ultimately upon the nation and an obstacle to its foreign and domestic trade. In our commercial system, bullion and coin, che represent- atives of value and current circulation among all na- tions, pass and repass to and from New York as the blood in the human system tends toward the heart and is thence distributed again. The risk, expense, and delay of sending the precious metals from their natural emporium to be coined else- where, must, so long as they are continued, be hindran- ces to the production of the coins of the United States, A COINAGE DEPARTMENT IN NEW YORK. 289 pective 3 Hon. trt, with ,riiestly aiue re- ^orwin, e right b of its Union, lat city, id home 3 of less lich the of their t is evi- ls tliere ess clear ortunity to active ly so at and eco- niercial |nage by .nges o£ undreds •n facili" thus in- [t a tax, lon the .0 trade, present- all na* as the ■t and is )recioua ted else- Ihindran* States, and tend to keep the precious metals out of common use. Millions of dolhirs are thus as uvterly lost to the industry and business of the country as if they were thrown into the sea. Coinage of a metallic currency is prohibited at the place where the Goveriunent collects its chief reve- nue in coin. Needless and artificial oV>stacl(!S created l)y law are kept in the way of an al)undant supply of the stable currency most needed for a return of general pros- perity. As gold and silver are articles of commerce, they naturally gravitate from all quarters to the com- mercial centre ot our country. They are brought there not only from our own mines, but from Mexico, Peru, Chili, Central America, Europe, and all other regions of the world, as part of the exchanges. A large amount of them is also brought, chiefly in tlie coins of other coun- tries, which it is desirable to convert into our own, by hundreds of thousands of immigrants. The imports and exports of New York in 1874, if com- pared with those of all other ports of the United States added together, were almost exactly in the proportion of seven to five, tlie precise value of them at New York having been $750,127,354 and at all other ports in the aggi'egate $573,1)77,352. This was no exception to the rule. In 1875 the proportion of these imports and ex- ports received or shipped at New York was somewhat larger. At that port alone they amounted to $713, 341,- 549, while at all other ports in this country they were of the value of $506,092,995. The difference in the value of foreign imports alone is yet more striking ; and as the Government depends on them for that part of the revenue which is collected in coin, the comparison is especially important and sugges- tive. In 1874 the imports at New York were almost twice as large as their aggregate at all other ports in the Union. In New York they were $395,133,622 and all other ports of the United States $200,727,626. In 1875 the proportions were nearly the same, having been $368,- 637,580 at New York, and $185,268,573 at all the other ports added together. The laws of the United States require that the duties on imports must be paid in coin. A far larger propor- 19 200 A COINAGE DEPARTMENT IN NEW YORX. tioii of these duties is collected at New York than at any- other port and than at all other ports added togi^tlier. For the ten years ended with 1875, the amount of duties thus collectted at New York has betm more than twice as l'drg(! as tiiose at all other ports of the Union ; the* agj^'re- gate at all the ports, including New York, added togeth- er, having been $1,800,650,207, while it was $1,2.'5U,015,- 311 at New York alone. As this city is also the chief de[)ot and market on the Atlantic coast for the precious metals, it is most manifestly inexpedient and unjust, on grounds of obvious jirinciples of public policy and right, to refuse to her the })ower of coinage. As New York is the commercial so also is she the mo- netary centre of the Union. The capital em})loye(l in banking in the State is more than twice as large as that of any other State except Massachusetts. The average ex- changes of the clearmg house in the city every day on the average of the last twenty-three years were ove judL,'ed ))y a different standard, as tliey depend on the production of the precious metals in the mountains })etvveen the great plains of the continent and the Pacific Ocean, nearly all the bars manufactured at the mints ar 1 assay oilices of the United States in 1875-76 were manufactured in New York. In 1875, at Philadelj)hia, they amoiintearating the streams which flow into Lake Ontario and the St. Lawrence from tliose flow- ing into the Hudson, and, with the foresight of a true statffsman, dcurlared that through the dtjpression lie thus examined would be the chief thoroughfare of the com- merce of the interior with the Athiutic coast and the nations on the other side of the ocean. On the east(U*n side of the river the mountains resume their course, and, under various names, continue to the northern extremity of Gaspe, preventing the St. Law- rence from flowing southward, and driving the waters from the Great Lakes so far to the north, that exit and entrance for vessels by way of Montreal and Quel)ec are inij^ossible for half the year. The vast plain comprised between the two great moun- tain ranofes has an averaije breadth of more than one thousand four hundred miles, and arithmetical calcula- tions fail to give us an adequate idea of its area from the Gulf of Mexico on the south to its extremity on the north. Rivers of large size flow into the Arctic Ocean, but there the severity of the climate is such as to pre- vent the formation of ports accessible to shipping, and thus these rivers may be dismissed from consideration as channels of conimerce, except so far as they will contrib- ute to the trade which will concentrate on Lake Supe- rior. The remainder of the natural system of commer- cial arteries is of wonderful simplicity, and consists of only two great rivers — the Mississippi and the St. Law- rence. The Mississippi is navigable for nearly two thousand miles from the Gulf of Mexico, and, but for the injury done to grain and other perishable articles by passing through a climate so hot as that of New Orleans, this river would be used for freightage to a much greater extent. Its course leads away from Europe, but toward the tropical countries of the West Indies and South 20 no6 A FREE CANAL TOLTCY. Amt'i'icji. Tlie ncccHsitics implied l)y tlioHo facts have been ho fiilly a})[)reciHt(!(l hy the p(M)|)lo of tlio Missis- flippi Vpllcy, that they have; alreauy connected its vast inland navi;^'ation with the Great Lakes by four lines of canal and iiunKM'ons raili'oads, so as to obtain an outh^t for tludr products by Atlantic ports instead of by their own river. Thus the great course of the inland trade of this con- tinent is to and fro Ix^twet^n the East and the West. Before the Erie Canal was openc^d, the dlllkulties of car- ria«^e bcitween these two portions of tlie Union were so great as almost to constitute an embargo ; but no sooner was this jMiblic work in o])ei'ation than the cost of trans- !)ortation from Buffalo to Albany was reduced from one lundred dollars to t(^n, and afterwards t<^ three dollars a tuld not be guilty of the folly of ignoring the fact that the St. Lawrence leads almost in a direct line from the great grain-growing regions of the West to those nations ci Euroj)e whose {»('o])le are and will b(^ the chief consumers of the grain exported from the United States, and that the British and other foreign vessels used to take cargo(!s from our other seaports, or Mon- treal to Europe, will be likely to bring back return freight, tliUM doubly injuring our trade. By a libeivil and progressive policy as to the canal, we shall not only arrest the departure of trade from us, but greatly increase its volume by restoring the traffic in many importart articles which had been (liverted to some extent to other channels, sometimes, of late, charging less for transit. Nature herself seems to have intended to aid man in connecting Lake Michigan with the Mississippi River. So nearly do the Fox and Wisconsin Rivers meet, that on the map they seem to be the same river. Already, by the aid of a few short canals and locks, 8teaml)oats of light draught pass, during the period of high water, from " the Family of Lakes to the Father of Waters." Iowa, Minnesota, and Wisconsin are eagerly looking for- ward to the enlargement of this channel. Reliable en- gineers who have investigated the subject give assurances that, by connecting various fivers, communication by water can, at ver}' moderate cost, be continued into the interior of the continent for hundreds of miles beyond the Mississippi. 308 A FREE CANAL TOLICY. The first link in this vast and U'loqualled series of wat(a' channels is the canal leading westward from Albany ; and tliat its enlargement at the earliest j)<».ssible time is one of the mosc desirable events for the nation at large, and especially for our own city and State, cannot be doubted by any who examine tlie 8ul)ject with candid and unbiased minds. The question arises — by whom shall it be done ? It is yet in our power to make such i eductions in the cost of transportation to New York as will secure this trade to us, by (iuhirging the canal so as to permit the passage of large boats, then introducing the use of steam as a propelling power, and adopting, to the fullest extent, that ruhj whicli istlie best policy toward ourselves and is due from us to every other State of the Union, and from^ eveiy State of the Union to us — the freest possi})le tran- sit of passengers and ti'ade tlirough our territory. We should as soon as possil)le reduce tlie tcdls on our public works to the minimum cost of their current expenses, aUowing a moiU^'ate amount annually for interest on the sum expended and to discharge the principal. A measure has becui introduced nito Congress j?sking for aid to comj)lete a canal from Buffalo and Oswego to tide-water, cai)al)le of tloating vessels of six hundred tons burtlien. Ai)art from the difficulties, delays, and doubts which beset the passage of such a measure at tlu^ present time, when tlie public mind is looking forward to national retrenchment, the plan is liable to most serious objections. It is desirable that we should keep the canal entirely under our own control and unfettered by conditions. At the time of the last census the population of the State of New York outnumbered that of at least a dozen other States. In accumulatv^fi capital the disproportion * . yet more conspicuous. Ours is pre-eminently the commer- cial State, and is not only amply able itst^lf to do the work, 1)ut is especially interested in maintaining the great thoroughfare for trade from the West, Looking at the authentic statistics of the Erie Canal, apart from thelat(!i'al branches, w. find that the returns oi income from it some years ago exceeded the aggregate ex- penditure for its original cost, the interest, maintenance, A FREE CANAL POLICY. 309 [!ries of (1 from pcsis'ible iition at , cannot L candid r wliom a in the lire this init the ;)f steam b extent, is and is nd from )le tran- ly. We r pu])lic ixpens(is, it on the a nskinej ^vvego to red tons doubts presenu nativ/nal jections. entirely nditions. he State II other )u ' . yet commer- do the tlie a;reat ie Canal, (sturns 01 •eijate ex- titenance, 'A repairs, and all other items— and are precisely $140,430,- 958.40, while the tolls derived from it nave been over $87,- 000,000, and the interest on them exceeds $94,000,000 \ the total income being $181,828,003.8.'{, ormoretlian $41,- 000,000 over all its other expenditures from the bei^inning to 18G7, whiKi since that time, a large addition has been annually made to this Hur[)lua. Taking a morc^ extensive but no leas truthful view of the case, the mind glances at the farms, manufactories, villages, and cities it has created along and near its line, and the additions it has made to commerce, wealth, and pojHilation at its terminus. I speak fai- \vithin the boun- dari(!sof accuracy when I say that in its indirtjct results to the p(H)ple of this State the canal has been beneficial to an extent greater by vei'y many times than all the direct revenues or profit drawn from it. We are to esti- mate this part of the subject by the increase of individ- ual wealth throughout the community, tlie rise in real estate, both in city projxii'ty and in fai'ius, and by the nuilti[)lication and prosperity of our people. It would not be difHcult to show that by opening out the West to settlement, the canal contributed more than any other single cause to Hie preponderance of the power of the North. The fifteenth of last month is memorable for the cele- bration of the bei^inniiiff of work on an undertaking of stupendous imforta.ice to maid^ind, not onl^*^ in its(df, but as a forerunner of many others y(^t to be accomplished. 1 allude to the railroad known as the Northern Pacific, by which St. Paul and the Mississi])pi will be connected with Lake Superior, and a new line of rail, running con- tinuously through the most fertile belt of the Western half of this continent, will be established froiu the great- est of all our inland seas to the Pacific. It has for us a special significance and interest. Partly through difficulty of access, and partly through the machinations of that " Last Great Monopoly " — the Hudson's Pay Company — the public has only recently known that West and Northwest from Lake Superior is a vast area of fertile land, much of it equal .n fertility to thi2.t of Illinois, while it surpasses that far-famed 310 A FREE CANAL POLICE. State by many times in extent. Acre for acre, a portion of it, equal in size to more than five such States, will pro!)ably not be inferior to Illinois in the value of its productions. It includes not only nuich of our territory, but also tlie rich wheat plains of the F'>d River of the Nortli, and those of the yet greater V.'uley of the Sas- katchewan, well named the Mississippi of the North, which are ready to pour miUions of tons of grain into the cars of the railroad, as soon as its passenger trains aiford an opportunity for the industrial army of settlers to make war upon the yet primeval wilderness. The soil, like that oi Minnesota, can be brought under culti- vation with remarkable ease, and is so peculiarly adapted to the growth of wheat, that, probably in a few years, the portion of the United States and the British Posses- sions, that will seek shipment for its grain on Lake Supe- rior, will be the great wheat granary for us and the people of Western Eui'ope. The prospect thus oj^ened is stimulating the Canadians to a completion and vast enlargement of their rival works, and affords vi:lid reasons why we should strenuously piepare to receive a trade which it is in our power to secure, but which, if once lost, we may never be able to regain. That part of Lake Superior to which the products of this vast area will soon be brought by the Northern Pacific and other railroads is, by water — the cheapest of all methods of transportation — almost as near the western part of our State at the terminus of the canal at Buffalo, as it is to Chicago. From Duluth, the depot of the road on Lake Superioi-, the cost of carrying freight by water to Buffalo, or Oswego, will not be more than one-third of the cost by rail. This brings the subject closely home to us of New York. At various other points along the lower lakes are rail- roads, carrying grain to other Atlantic ports. This State alone lu.s the advantage of cheap water carriage from the lakes to the ocean, and this city is the only place on the Atlantic to which trade can thus be brought. A. large increase of trade will also take place from Chicago and Milwaukee, and the regions tributary to them ; but this part of the subject is more generally A FREE CANAL POLICY. 811 rs. understood than that I have endeavored as briefly as pos- sible to describe. Fcr many years this State has ceased to meet its obvi- ous interests and necessities with its former foresight and vigor. I rejoice that under the influence of many leading men of both political parties there is reason for lioping a wiser policy may be adopted, in view of the fact that, while the receipts of grain and flour at the u})i)er lake ports and Montreal have enormously increased during the last ten years, those of our own city have dijiiinlshed. They were less in 18G7 than in 1860, and less by more than nineteen millions of bushels in the last two years than they were in 1861 and i862. The amount of tonnage of the trade we are permitting to leave us, or are driving away by the joint influence of high tolls and a shallow or neglected canal, was no less than 6,442,225 tons in 1868. The tonnage of all tho American and foreign vessels entered and cleared in this city, to and from foreign ports, in the same year, was 5,109,722. In making the comparison, the figures as to the canal represent the actual number of tons of freight, while those of the foreign trade denote, not the cargoes, but the size of the vessels. It is shown in an official document, recently prepared by Mr. Nimmo, Chief of the Tonnage Division of the Treasury Department, that the total tonnage of all the vessels entered last year at New York, Boston, Philadel- phia, Baltimore, New Orleans, and San Francisco, the six principal ports in the United States, was, in the year just ended, only 5,224,578, being, by much more than a mil- lion tons, less than the actual amount of the commodities carried on the Erie Canal in the same year and exclu- sively by the vessels of our own country. I am credibly informed that if the, canal should be enlarged so as to pass vessels of 600 tons, and permit tae substitution of the illimitable power of iron and steam for that of the comparatively A^eak muscles of horses, freight might, exclusive of tolls, be carried at a living profit over the canal and Hudson from the lakes to New York for considerably less than half a cent a ton for each mile, and that the total cost of bringing a ton of grain 312 A FREE CANAI, POLICY. from Chicago to New York need not exceed $3.75. Thus we should give the grain producers of our country unprecedented facilities for successful competition in for- eign markets. The benefits created would extend to purchaser and consumer everywhere. There can be no doubt that by attracting trade through a judicious and liberal system of low tolls, the revenue directly derived by the State Treasury itself from the canal would be far greater than if we continue the absurd and unbusiness- like policy of gradually driving trade away by exorbi- tant charges. By the better policy now proposed the commodities brought to our city v\'ould be incalculably increased. Their transshipment and the profit in buying and selling them would appertain to our forwarders and merchants, and give employment to many thousands of our people. Where the productions were sold, other articles would be bought in exchange ; and there is no branch of industry that would not be benefited. i I rejoice to know that the interests of our city are those of the Union at large, and that, in finding or mak- ing a way to develop the natural advantages of our po- sition, we not only benefit ourselves and the North- west, but, by increasing profitable shipments of our pro ductions to other countries, enable our people more easily to pay interest on the large and increasing amount of our national and other securities held in Europe. The canal is, both locally and in a cosmopolitan sense, an important division of that yet more comprehensive sub- ject, the commercial intercourse which is materially the main-spring of modern triumphs over the forces of nature, of the advancement of civilization, and the increase of human welfare. In a familiar photogi'aph of the travel- ling and carrying system of his time, Shakespeare pleas- antly suggests how recent is the progress of our race on these points. We remember how the company of eight or ten persons assembled at Gad's Hill and travelled to- gether for protection against common danger, and how, of the two strictly professional carriers, one had, on his soli- tary horse, " a gammon of bacon and two razes of ginger," and the other " had turkeys in his panniers." Having thirty miles to travel, the members of the cavalcade rose A FREE CANAL POLICY. 313 at two in the morning that they might perform the jour- ney before night. In those clays not only was there no railway and no canal, but even good wagon roads had no existence. When estimating what the future will be, we properly compare the past with the present, as it is not only in Great Britain and throughout Europe, but in this country, a wilderness in Shakespeare's time. Instead of a couple of carriers owning two horses, laden with one piece of bacon, two " razes " of ginger, and half a dozen turkeys, the modern substitutes in the United States alone have a capital measured by thousands of millions of dollars, and their traffic is estimated to be worth ten thousand millions of dollars annually. Such facts as these indicate the tendencies of an era that has yet by no means arrived at its climax. Equally instructive is the lesson taught by the various great nations of antiquity, such as Egypt, Assyria, Greece and Rome, which arrived at a high degree of civilization, but fell, mainly because they transferred to the oppression and plunder of other nations the energy Avhich would have insured their prosperity if it had been applied to the development of their own productiveness. The United States, to a greater extent than any other country, either of ancient or modern times, possess alike the unprecedented appliances of modern science to the production of all fhat is desirable for the material welfare of man, and unlimited natural resources ; and no limits can be assigned to our progress, if to a sound and decisive policy on subjects directly financial, commercial, and educational, we add due attention to the material advan- tages obviously within our reach. THE END. - INDEX. Agricultural productions, how prices in are chiefly regulated, 148, 189 ; trade with Canada in, 93 ; large exports from United States to Canada, 146, 148. Alabamr. claims, the fund awarded should be distributed in good faith, ^'37. Amnesty bill, at variance with self-gov- ernment, 261, 263. Annexation, true policy of the United States as to, 16'.). Arbitrament, international, a substitute for brute force and the horrors of war, 234. Armaments on the Great Lakes, 89. Arrests, sometimes arbitrary during the war, 267. Assay office in New York, should have right of coinage, 285 ; amount sent by it to Philadelphia for coinage, 387 ; work done by, 291 ; could be fitted for coinage at small cost, 291. Atrato sbip-canal, its great importance to the commerce of the United States and other nations, 11, 132 ; early surveys for, 13 ; saving in time and distance, 14, 29. Austria, financial experiments of, " Vien- nese tiender," 216. Balacne of trade with Canada, 67, 69, 93 ; " balance of trade " illustrated, 93, 95, 146, 147; witli Canada for several years after repeal of treaty was against the United States,^^ ; old theory of balance of trade exploaed, 179. | Banks, how forced to suspend in 1861 , 306, 207. Banking, on resumption of specie payments should be free, 319. Bankruptcies unprecedented in number, 214. Bankrupt law, its importance as a perma- nent act, ;34, 54 ; should be uniform, 34 ; encourages integrity, 37 ; is in accordance with American mstitutions, 39 ; properly regulated, is a necessary part of every commercial system, 40 ; specially needed in the United States, 48; is no untried theory, 57 ; benefits creditors, 47 ; former laws in the United States, 49; found benefloial in England, France, etc., 39. Boston Board of Trade, recommends nego- tiations for free trade with Canada, 151. Bright, Hon. John, on legitimate develop- ment of the Monroe doctrine, 119 ; his wishes and hopes as to the future of America, 176. British Islands, value of their real and personal property, 103; levy duties on few articles. 110, 114. British Nortn American Provinces, our commercial relations with, .59 ; impor- tance of trade with, 60, 68 ; territorial extent of, 64, 65 ; balance of trade with, 67 ; relations of the provinces tu each other and their separate taritTs in 1864, 70 ; population of each province, 137, 138 ; free exchange with, would benefit both countries, 73, 81 ; statistics of trade with, 74. BuU Run, battle of, dissolved many delu- sions, 306. Canada, population of, its number and character, 139 ; trade with tropical coun- tries, 131 ; extent of her commercial ma- rine, 133, 159; means of communicution, 129 ; obstacles to trade with, 1138 ; govern- ment and people anxious to negotiate in a friendly spirit, ]31,1.*)6, 172; extent of, compared with that of our own states, 158; commercial isolation of, injurious, 158 ; rate of wages in, 159 ; chiefly a forest and farming country, 160 ; contrasted with the Hawaiian Islands, 164 ; importance ivs a military power, 168 ; trade with, in 1874 and 187.5, 170; a just treaty with, would promote the best principles of in- ternational goodwill, 176; the sound policy towards her people, 177, 178; as a province in 1804, 70 ; now oliarges same duties on manufactures from all coun- tries, 83 ; trade with the United States greater than with all other countries added together, 94 ; extent, area, and cli- mate, 13.1 ; extent of North-western Canada, 13.5, 126; Canadian Government promises fullest con- sideration to proposals for closer com- mercial relations with ohe United States, 173 ; tarifl' now admits free of duty near- ly all so admitted under the former treaty, 173; general moderation of pres- ent tariff, 138. Canals, ancient and modem, 13 ; magni- tude of the Erie Canal (see Erie Canal), 18 ; projected across the Isthmus of Da- rien (see Darien), 14,303; canals and nat- ural water-courses, their value for car- riage of heavy freight, 303. Carrying interests of the United States re- quire mutually free transit with Canada, 140. 316 INDEX. Centralizaticn contrary to truly republican Kovornmtnt, 215. Ci^ntral America, cxtenBion of trade with, 11». Central States, tlielr interest in trade be- tween (^atiiida and Mexico, UU. Chase, IIuu. Salmon P., reply to wiien Sec- retary of the Treasury, l.-if), 18(i, 188, VM. Chamber of Commerce of New York de- sires removal of hindrances to trade with Canada. U>0. Chicago, her board of trade desires nego- tiona for closer business relations with Canada, ]'>l ; her interest ic trade with Canada and Mexico, Itili. China, small amount of our exports to, 134. Chipo route aiTuss the ihthmus, 18. Cincinnati (Convention, resolutions as to slavery, 2'o'J. Circulation, monetary, alarming increase of, I'.IU; of the banks, 1*.>8; disastrous re- sults of sudden expansion of, l'.)8. Circulating medium, changes in, 44. Clay, Henry, on reciprocal trade with Can- ada, Ilia. Coal, free exchanges of with Canada would save both countries the cost of carrying for hundred of miles, 78, ',(7; labor-sav- ing and should be free of duty, St7 ; mu- tual exchanges with Canada, 148. Cobden Richard, hia initiation of a treaty with France, Uii*. Coinag-i in New York, demanded by jus- tice and economy, 28.5, 2',):.J ; would aid in restoring specie payments, 280, 288 ; urged by leading statesmen from various states, 288 ; reasons why delayed, 201. Colonial privileges in Great Britain an- nulled, 83, 8'.t ; rights compromised, 04 ; restrictions p.".sHed away, ll'ii. Color-line, political, must be destroyed, 275. Commercial union and mutual rights of transit important to the United States and Canada, 140 ; isolation, one party may suffer more than another, but both are injured, 8'! ; intercourse, beneficial political results of, VM ; relations, natu- ral, in the main immutable, 12;5. Commerce through the Union gives life to industry in every state, 35 ; its hazards, 40 ; as a source of strength in war and peace, 114; views of errly American statesmen as to, 166 ; has long been ne- glected by our legislators, 296. Commissioners to negotiate a commercial treaty with Canada, 1:37 ; appointment of recommended, 59, 86, 98, '.K); recom- mended by the Legislature of New York, 136, 161 ; and by chief commercial bodies throughout the United States and Cana- da, 151, 154, 160, 173. Commission of bankers and merchants, to devise a financial plan during the war, re- commended, 204. " Conduct of the war, true policy of the . government as to, 256. Connecticut money, how it became worth- less, 195. ■ Contraction of currency indiBpensablo, 334 ; should be so gradual as not to nroyoke reaction, 224, 225. Continental or American system of trade, 130 ; our duty to lead, tlie way is open, 183; continental money, its decline, 195. Convention of 1818 with (ireat Britain, 61 ; opinions of Daniel Webster on, 62. Cotton manufactures, sales to Canada, 136, 167. Corn laws, British, their repeal a triumph of public liberty, 79. Cuba, extension of trade with desirable, 120, 130; present unsatisfactory condi- tion of trade with, 180; icrmer arrange- ments for extended trade, 120; wishes of her people for freer intercourse with the United States, 121. Darien, canal across isthmus of, 16 ; sur- veys by different governments, 18; in- terest taken by ditierent nations, 20, 22 ; canal across would aid in maintaining supremacy of the United States, 23: tables showing savings to the United States, 23 ; showing how soon the cost would be repaid, 33, 27 ; cosmopolitan as to its results, and should be international in character, 32; cost repaid by France and England, 23, 24 ; value to New i ng- laiid and coasting vessels, 30; how gov- ernment should aid, 26. Debtors, ancient treatment of, 41 ; if up- right, should be permitted to begin the world anew, 39, 51 ; how demoralized by oppressive laws, 47. Debasement of the currency, a favorite resort of short-sighted statesmen, 196. Democrats, their traditional policy is for sound money, 220. Destitution prevalent and disregarded, 171. De Tocqueville, the first notion is that of violence, that of persuasion is derived from experience, 83. '~>'.vide and conquer, the favorite game of oppressors, 275. Dominion, Governor-Geftral and other official authorities promise the fullest consideration to proposals for commer- cial treaty with the United States, 151 ; Board of Trade is anxious to deal liber- ally, etc., 151; but thinks exteusion of trade should be first proposed by the United States, 173. Embarrassments of Trade in 1876, 184. England, commercial treaty with France, its origin and beneficial results, 169, 170; Bank of England, its financial experi- ence, 214, 21.5. Erie Canal, its importance to New York and the nation, 12, 303 ; injurious and un- I justifiable neglect of, 304 ; it reduced cost of freight marvelously, 806 ; its enlarge- ment desirable. 308, 311 ; expenditures, income, and results of, 309 ; a cause of preponderance of northern i)ower, 309 ; a free canal policy essential, 302, 812. Error, the great financial, of the govern- ment, 208. INDEX. 317 Everett, ITon. Edward, nothing is to be gained by a war of turifl's, tSU. Exoliango of products of inilustry, 118. Exports to Cunuda, increase under former treaty, (18, U-' ; from tlio United Wtatos, larger than to any other country, except Great liiitam, Ijerinaiiy, and France, |:U; are much underrated, I'M; in 187(1, 1(17; amounts of are insufficiently re- ported, 187. Experience teaches suocesBive generations, etc., ^14, ^7:^. flxtension and freedom of trade over the American Continent, 1^0. Failures, number in various years, 38, 52, .15, 58, 3i)5 ; liability to, 40. Favoritism, needless increase of employees, iilMl. Financial condition of the nation, 18.T; problem — how shall it be solved? ^05; history of thi; United States since the war began, l.'()5, 2J(5 ; errors from mistaken views of tlie war, 2W ; policy of delusion of the people adopted, 21X1. Finance, its laws as sure as those of arith- metic or gravitation, 11)1, 214 ; estab- lished axioms of, HIS. 21(5 ; experience of the United States and Canada, ^17. Fire, losses by, in Uoston and Ctiicago, 213. Fisheries, value of Canadian to New Eng- land and the natior\, (ID; their extent, 61 ; prospect of war as to, 62. Flattery of the people injures a just cause, 205. Food and fuel should bo supplied at lowest practicable cost and not taxed, 1 61. France, her occupation of Mexico, 117 ; her c(>mmeroial treaty with England, its origin and beneficial results, KiU, 170 ; recent financial course sketched and re- commended, 209, 210 ; her course the re- verse of ours, 211 ; wise policy of the Bank of France, 210; former deprecia- tion of currency in Prance, 216. Free ports in Canada in 18(!4, 98 ; canal policy, the best guarantee for the pre- servation and increase of our inland commerce (see Erie Canal), 302. French assignats, how they were refused in making new bargains, 194 ; became worthless, 195. Frontier, northern, its commercial in- terests, C4. Geneva award, distribution of, 226 ; claims of insurance companies as to award, 2:^0, 227 ; confidence officially invited aud in- terposition promised, 227; decisions of the tribunal, 229 ; receipt of money by the United States, 230 ; judiciary commit- tee advises improperly, 231 ; perversion of funds a dangerous precedent, 2S'S ; duty of the government, 335. Gladstone, Hon.W. E., on the fate of trans- atlantic possessions, 177. Gold bill, its bad efTeots and quick repeal, lo8; repealed in fifteen days after its passage, 209 ; the rise of gold illastrated, 197 ; gold the standard of value, 218. Grant, President, pledges himself and Con- gress to specie payments, 221. Grain trade with Canada one of re-exporta- tion, 146 ; how prices are controlled, 146. Great Lakes, as means of cuniniunieation, 129. Great Britain, her bankrupt laws, 41 ; pro- gress in liberty, 78; mo(U!rn colonial i)olicy of, 173 ; former oppressive policy, 74 ; views of the Alabama claims, 22*i ; on tho rights of underwriters, 230. Hawaiian Islands, treaty with, 112; impor- tant as harbors and naval stations, 116; shoulil not pass into the hands of any foreign power, 117; treaty with, a pre- cursor of more extended measiucs, 123, 169. Heating power of the political and social body, 87. Homo markets, value of, 132. Honduras, route across the isthmn i, 16. Hudson river, its scenery and associations, 249. Humboldt, Baron, on the intcr-oceanio canal, 19. Immigration, serious diminution of, 171. Imports from Canada, 66 ; increase under former treaty, 68 ; the simplest n*- pes- saries of liio, 92. India, great value of trade with, 14. Industrial army, on it the existence of the army and navy and all classes of society depends, 93. Independence, Canadian, assertion of, 174 ; of the United States, its eflPect on Great Britain, 175; colonial, 98. Inflation, injurious results v/f, 188; example of the Ciovernment followed by the banks, 191 ; painfully felt in the homeof the lubor- or, 192 ; increased enormously the national debt, 192; may benefit the spec ilator, but despoils the masses, I'.'S ; continued until its fruita were palpable, 208; in- duces speculation and panics, 213 ; creates delusive hopes, 214 ; futility of, 2i2 ; vo longer inflates, 223. Insolvency, unexpected and political causes of, 45 ; average among bu.siness men, 40 ; laws in various states, 51. International law, the greatest is that of the mutual interest of mankind, 82. Interest, unpreceJentedly low rate of, 223. Iron and steel manufactures, large sales of to Canada, 136, 167. JefTerson, Thomas, on hard money, 105. Kansas, her admission as a ;tato, 230, 233 ; organization as a territory, 23il. Kelley, Frederick M., on canal across the Isthmus, 19. Lobor, often in vain through obstructive laws, 97 ; how to r^dieve present condition of, 124. Labrador, resources and climate, 128. Land grants, enormous extent of, under Republican administration, 295. 318 INDEX. Lecompton ConBtitnkion, 244 ; confirmed power to change form of Bovornnicnt, 245. Lpgat tender, an iinnonnd Hystem of finance. ]H-i ; aljHurditieH of itHndvocatoB exi)08oil, IS'.I; depieoiated national Booiiri- titH, and forced the gov(!rnment to pay high prices, I'.'S, )'.''.(; arl)itrnrily changed relationn of debtor and creditor, IM ; leH8i?ned the vigilance which prevents fraudn, 20;i ; when and wliy initiated, 'Ml ; unprecedented diKtiuction made l/ctween it and specie by government, 2(»7 ; strange and fatal error as to, ~()8; nn- stable, 218; when withdrawn, no more must bo issued, 21'.*. Lincoln, President, in his first mrsHage tendered sound advice, JOL' ; why his proclamation of amnesty was unsatisfac- tory, 2(10; assurances given tlirough (Jov- ernor Stanley, 20.') ; Lincoln desired peace, 2tYJ. Loans and discount, fluctuations in, 43. Local self-government and the constituti'in, 275. Making money abundant, fallacy of, 19(t. Manitoba, its climate and resources, 180, 15i). Manifest destiny, how to be consummated, 118. Manufactures, sales of, to Canado, 1S4, l.'?.^, 11)7 ; might be largely increased, liiO ; few imported from Canada, 73. Markets, needed extension of, for our pro- ductions, l.'J6. Marino insurance, some settled principles of, 230, 231. Maritime provinces, population in 1874, 70 ; their extent and resources, etc., 12.5. Maryland, interested in Canadian trade, 1(12, 167. Material interests, long neglected by the Government, 171. Mexico, French occupation of, 117 ; exten- sion of trade with, 1!0, 125; population and trade of, 121 , 122 , value of a com- mercial treaty with, 122, 130; railroads j in, 121, 122 ; our relations with, C9. I Military despotism iA the South must in- ! jure the whole Union, 298. j Mmt, the director of, on coinage in New ! York, 2<,)2. i Monroe doctrine, implies duties as well as rights, 169; has approved itself to both continents, 117 ; a barren ideality imless associated with friendly care for other American states, 118; creates obliga- tions, 118. Municipal matters, local right to deter- mine, 251. National Board of Trade, petitioned Con- gress in favor of trade with Canada, 1.50, 103. National debt, needlessly increased, 208 ; injuries, few greater than the persistent assertion of delusive statements, 92. Nationality of the Democratic party, 236, 254. Nature, the gratuities of, 06. Neglect of commerce by the party in power, 101. New nrunswiok, its area and population. 127, 159. New England, views as to trade with Canada, 1(11, 102; benefit to bo gained by a ooinnKircia! treaty with Mexico, 122. Newfoundland, area, climate, trade, etc., New York, resolutions of State on trade with Canada, 30, .59, 136 ; the commer- cial centre of the Union, 180, 289; the chief commercial city, 237 ; change in constitution of the State, 247 ; necessity of coinage in, 287 ; shipping commission of, 281 ; assay office in, 285; imp)rt» and exports of same, 289 ; natural depot of the i)recioii8 metals 291 ; and the national shipping trade, 290 ; the mone- tary centre uf tlie Union, 290 ; natural causes of its greatness, 302, 304 ; traxle with the West must be maintained by a free cane' policy, 302. North and South, permanent system of ex- changes between, 130. North-west, its climate, extent, and re- sources, 12.5, 310. Nova Scotia, its area, population, etc., 197, 159. ... Ontario and Quebec, formerly known as Canada, 128 ; area ond resources, 128. Panama route from ocean to ocean, 18. Paper money, the spectral doctrine of, 100 ; injurious ofTectoti the national debt, 101 ; dollar should have been kept as near par as possible, 209. Parliament, British, passed a gold bill in 1814, 215 ; investigated financial prin- ciples, 216. Parties, comparison of the Democratic and llepublican, 2!»7 ; integrity in public af- fairs the leading question, 293. Peel, Sir Robert, on severing his party ties, 79. Pennsylvania, interested in extension of trade with Mexico and Cuba, 123 ; her interests as to Canada, 102, 103. Policy, the best, ti. the South, 273, 275, 298. Preferential duties in favor of colonies, re- pealed by Great Britain, 03. Preservation of the Union essential, 256. Principles and policy of the Democratic party, 273. Prince Edward's Island, area and climate. 127. Prosperity, cannot be secure with legalized but irredeemable currency, 19(5. Protection to home industry, by permitting it to obtain its best results, 82 ; in Canada, 72, 81^ ; so called sometimes in- jurious and pernicious, lid. Protectionists, earnestly advocate recipro- city with Canada, 103. Prussia, the commercial policy it success- fully pursued, 140. Public money, influence of those interested in its ezpendituies, 201. INDEX. 319 Qiiedtioni of the timcii in 1870, 200, 301. Ilailrnadu, their value and hliitory, 13; mania for conHtruction of, 212 ; intorciit of tlioHo in the Stato of Now York, .'1(<4. Reaction, financial, and conieqiient Uia- trcHH, 2IU. Ileal entato, how affeotcd in panics, 50. Kubcllion, muHt l)0 Hubditcd, :t.5 ; has its victinm in tlic ranks of comnH-rco, 'M ; was iinexpeuteil and miHiindorHtood, iJO.''* ; falne pruphecies as to, UH.'). KcoeiptH and diBbiirncmcntH of the govern- ment, motion for frutiiiont BtutuniuntH of, '201. lleciprocity with liritiah North American Provinces, .'ill ; naturally benelicial ef- fect of, 00 ; complication of, with the liBhery question, (i4 ; to 1)0 rei^arded na- tionally, not locally, 04 ; as to the lish- erics, 0;{ ; operations of, (iO ; character of imports from (Canada, 0(i, 78; increase of trade nnder (he treaty, 08; ojunions of American stitc-imen in favor of, S.5 ; illustrated, 80, H7 ; discuRsed in Congress, 138. Reduction of taxation by the Democrats, 207. Reformation necesnary in the government, 273, Rcpulilican party — its broken pledges, 205. ResolutionH of the State of New York on trade with Canada, 5',), 05 80, 130. Retaliation alone, never tr.o policy of a trne statesman, 82. Revulsion, commercial, in 1837 and 1857, 87. San Miguel, route from ocean to ocean, 18. Secession must be put down at any cost, 257 ; implies perpetual disintegration, 114, 207. Sectional excitement, full of danger, 237, 254. Self-government on trial in the war, 207. Ship-canal between Atlantic and Paoifio oceans, 110. Shipping ol the United States, how reduced, 114; act relating to merchant seamen. 277 ; its objects and results, 277 ; needed reform of abuses, 277, 2>5l ; commission- ers should be appointed by central power, 283. Simplification of tariff, 110. Slavery in Kansas, unnatural and tempo- rary, 247 ; prohibited by the laws of soil and climate, 2.")1 ; swept away throughout the Union as the armies progress, 201. Smuggling, how regarded and prevented, 98 ; how to diminish, 155 ; from Canada, 181. South, best policy towards. 273 ; impor- tance of its prosperity, 274 ; increase in its debts, 274; should be treated justly and constitutionally, 275. Southern States, indebtedness at beginning of the war, 38 ; indebtedness in January, 1870, 874 ; impoverishment in ten years, 274 ; people misrepresented in Congress, 298. ^pain, arrangements for extensive trade hetwoon the United fltnteii and Cuba, 120; value of a treaty for tradi) with Cuba, 122. Specie payments, should b« approached gradually, so as to avoid reaction, 299. Speculation disastrously stimidated by oz- paiision of the currency, 199. StandanI of value, necessity of, 217; flno- tuations pernicious, 217. Stanley, (iovornor, officially asserted the administration wanted only peace, 20.'!. Statistics, Hiircau of, showing returns of our exports to (Canada, 135. St. Lawrence River, impassable nearly half the year, 70 ; as a route for shipping, 95 ; circuitous route for tropical productionH, 97; its value to the United States, 79, 8(1, 95, 97, 147, 103, 305, 307. St. liouis, a commercial centre under a con- tinental system of trade. It*!. Tariff, former, in Canada, 71 ; injurious in- tlnenco on im()orcations from the United States, 71 ; coin|)arcd with tariO' of Uni- ted States, 72; a practical discrimination against our Atlantic cities, 74 ; colonial tariff made by t'le colonists tliemselves, 94 ; former mcrease in Canadian, 96 : tariff of the United States, 100; should yield the largest revenue with the least inconvenience to the purple, 101, 103; proper objects of. 111; the sixty day taritf, 105; fairiff of (Jreat Britain, 110; effects of Unit/cd States tariff illustrated, 114; our own laws drive trade from us, 140, 102; Canadian, some effects of, 145, 180; many of its duties on our manufac- tures nearly nominal, 152 ; moderate duties on silk, etc., 1.53. Taxation, if injudicious, impoverishes the people ond diminishes revenue, 90 ; the principles of, 100, 101, 110; arbitrary, 107; further taxation for the benefit of few should be discontinued, llo; cannot be shifted to other people, 149 ; national, of the banksj impolitic, 203 ; injuriously deferred durmg the war, 201 ; prompt taxatioi" evaded and Bjiecious flattery substituted, 207 ; pressure on the labor- ing classes, 270, 298. Tehuantepcc, route for a ship-canal, 16. Thiers, M., on the fate of false financiering, 202. Timber, should be admitted free of duty, 70 ; our exports of it, 70 ; oijpressive duties cause spendthrift exhaustion of the supply, 149 ; rapid destruction of our forests, 150; importance of abundant supply, 1.50. Topeka, constitiition framed at, 244. Transit, main natural lines in North Amer- ica, 305 ; by water, can be extended far inland, 307 ; what it was in the olden time,3i3. Treaty, commercial, with Hawaiian Islands, 112 ; the advantages it confers yield also advantages to ourselves, 113 ; may reduce revenue on certain articles, but tend to promote it on others, 114 ; less important than treaty with Canada, 119. 820 INDEX. Unitnd Rtat«i, interput in canal between Atlantic atid Patutio ncounn, 10, 21); ■ lioiild Houk commercial luthcr tlinn political uniioxatioiiH, Kill; commercial rclatiuni witli Jirilish North Ancricnn provinncH, 50 ; naturully nt to ('anadu nini'ty timnii an lar^o as to tho Hawaiian Inlands, 15'i; HniallcxportH to China, I'M; interest in a continental nyHtem of trade, 140; expected to lead tho way, 18^; tho great financial error of the (iovcrnmcnt, \H)H ; financial hiMtory Hinuo tho war bc- faii, 205, ™0(l; treaty with Hawaiian iilands, 1 1~' ; local solf-government and tho conatitution, 275 ; thould discharge duties implied in Monroo doctrine, IfiO; tho lJni(m eHRcntial, !i50 ; ratio of increaso in population, <'!Oil ; nu limits can bo as- signod U' their progress, 'Mii. Value, commercial, is mainly the price in tho markets of the world, Ibil. Van Huron, Martin, on commercial policy of the United States, i:W. Virginian paper money, itB doolino and fall, IWi. Wages and salarica, how reduced by legal tender*!, IW. War, magnitude of tho late war in the Uni- ted Htates, 102 ; its efTcct on tho laboring popu'ation, 104; tho stupeiiUous errors an to its duration, etc., 20*1; nia^na- niiiiity HomotiniOH tho truest wisihim, 2*10 ; proper ohjeets of tho war, 201 ; passion for war soon oxliaiists itHelf, 2(14. Washington, he foresaw uiid foretold the greatnoH" of New York, •W!>. Webster, Daniel, on fishing rights of the United States, 02; on the rights of untlerwritcrH, 2!t0. Wheat and Hloiir trade, with Canada, one rather of transportation than consump- tion, 74 ; how far north wheat may be grown, 120; onr trade in, with Canada, 170. Whig party, was a worthy foe, S58. Zollveroin, or German customs- union, 140; origin and history of, 141, 142 ; principloe and j^ -ogresr of, 141, 148, 154; modified form applicable to trade between United States and Canada, 144; siiggosted be- tween Great Britain and Canada, 154. by legal ihe Uni- luhorlng UM orroM nia^na- l(im,5«t); ; piiHsion jtold the n of the ighta of lada, one lonmimp- i may be Canada, 3. ion, 140; irinciplos nioditicd n United !sted be- k,154.