made necessary by the war, few will venture to deny. It is also undeniable that the heavy internal taxes imposed upon manufacturing industries neutralized the effect of protective duties, and made an increase of the tariff necessary as a measure of compensating protection. But, as I have already shown, the heaviest burdens of internal taxes have been removed from manufactures, and a demand that some corresponding reduction in the tariff rates shall be made is coming up from all quarters of the country. The signs are unmistakable that a strong reaction is setting in against the prevailing rates, and he is not a wise legislator who shuts his eyes to the facts of the situation.

The historical review that I have given strongly exhibits the fact that the industry of the country during the last half-century has been repeatedly tossed up and down between two extremes of policy, and the country has suffered great loss by each violent change.

The great want of industry is a stable policy; and it is a significant comment on the character of our legislation, that Congress has become a terror to the business men of the country. This very day the great industries of the nation are standing still, half paralyzed at the uncertainty which hangs over our proceedings here. A distinguished citizen of my own district has lately written me this significant sentence: "If the laws of God and nature were as vacillating and uncertain as the laws of Congress in regard to the business of its people, the universe would soon fall into chaos."

Mr. Chairman, I have already said that we see in many parts of the country a desire to reduce our tariff rates. Turning aside from the merits of the question itself, I ask the attention of the committee to the possibilities of the case. Consider the forces and elements now operating upon the question, and ask yourselves what is likely to be the result. In this House there are about sixty Democrats, a great majority of whom are declared free-traders.

MR. WOOD. I beg the gentleman's pardon; I do not know a single free-trader, as such, on this side of the House.

MR. Cox. Here is one.

MR. MUNGEN. Here is another.

"Ex pede Herculem."

MR. WOOD. I am in favor of a tariff for revenue, and not for absolute free trade, and I believe that is the position occupied by a majority of the members on this side of the House.

If the gentlemen on the other side are not nearly all freetraders, they have misrepresented themselves; for of the score that have made speeches on this subject almost every one has denounced the tariff as robbery or fraud.

So much for that side of the House. How is it on this? West of Ohio, north of Arkansas, and east of the Rocky Mountains, there are nine States represented here, all of them Republican, some of them overwhelmingly Republican in politics. Yet, if I understand correctly the opinions of the fifty-seven Democratic and Republican Representatives in this House from those nine States, there are at least fifty of them who are in favor of some reduction in the present rates of our tariff.

I do not think there is any agreement among these gentlemen what they will reduce or how much they will reduce, and I say nothing now about the justice or injustice, the wisdom or folly, of their opinions. Many of them from the Northwest, like the gentleman from Minnesota,1 affirm that the duties as at present adjusted are oppressive to the farming community, and give great and undue advantage to those engaged in manufactures. Many of them tell us there is a feeling of deep discontent and growing hostility to the tariff among agriculturists. Many of them, like the gentleman from Minnesota, disavow any sympathy whatever with free trade or free-traders, and have no more sympathy with the Democratic party now than they had during the war. Many of them tell us that, unless we submit to a reasonable reduction of tariff duties, the reaction now in progress will soon seriously shatter our whole protective system. I invoke the earnest attention of the House to these facts showing our situation.

I will not indulge in crimination or recrimination. I will take no part in the violent denunciation which we have heard in the progress of this debate. I do not believe, on the one hand, that the manufacturers are corruptly striving for their own gain as against the public good; nor, on the other, that the free-traders have been bought with British gold, and are wilfully and knowingly the enemies of their country. I stand now where I have always stood since I have been a member of this House. I take

1 Mr. Wilkinson.

the liberty of quoting from the Congressional Globe of 1866 the following remarks which I then made on the subject of the tariff.

"We have seen that one extreme school of economists would place the price of all manufactured articles in the hands of foreign producers, by rendering it impossible for our manufacturers to compete with them; while the other extreme school, by making it impossible for the foreigner to sell his competing wares in our market, would leave no check upon the prices which our manufacturers might fix upon their products. I hold, therefore, that a properly adjusted competition between home and foreign products is the best gauge by which to regulate international trade. Duties should be so high that our manufacturers can fairly compete with the foreign product, but not so high as to enable them to drive out the foreign article, enjoy a monopoly of the trade, and regulate the price as they please. To this extent I am a protectionist. If our government pursues this line of policy steadily, we shall, year by year, approach more nearly to the basis of free trade, because we shall be more nearly able to compete with other nations on equal terms. I am for a protection which leads to ultimate free trade. I am for that free trade which can be achieved only through protection." 1

Mr. Chairman, examining thus the possibilities of the situation, I believe that the true course for the friends of protection to pursue is to reduce the rates on imports wherever we can justly and safely do so, and, accepting neither of the extreme doctrines urged on this floor, endeavor to establish a stable policy that will commend itself to all patriotic and thoughtful people.

I know that my colleague 2 thinks that general debate on this subject is of little consequence, but that the true discussion is on the details of the bill. I grant it; and I know that, when we come to consider the separate items of the bill, he will find that men declaring themselves free-traders will vote for a high rate of duty on some articles in which their districts are interested, and for a very low duty for other things in which their districts are not interested. This was my own experience on the Committee of Ways and Means. But I have expressed in this general and desultory way the views which I shall carry into the discussion; and I believe that they are the views which will best subserve both the interests of the Treasury and the general interests of American industry.

1 See ante, p. 208.

2 Mr. Schenck.

CURRENCY AND THE BANKS.

SPEECH DELIVERED IN THE HOUSE OF REPRESENTATIVES, JUNE 7, 1870.

FROM 1868 to 1870, as from 1866 to 1868, the new financial heresies continued to make headway. In its national convention for 1868 the Democratic party declared that, when the obligations of the government did not expressly state upon their face, or the law under which they were issued did not provide, that they should be paid in coin, they ought to be paid in the lawful money of the United States, that is, in greenbacks; and it also demanded the taxation of government bonds and other securities at their face value. The same year the Republican party did, indeed, denounce all forms of repudiation, and declare that the public indebtedness should be paid in the utmost good faith to all creditors according to the spirit as well as the letter of the law; but the platform was silent upon resumption, and a great many Republicans were as crazy upon financial subjects as Democrats could be. A demand for "money enough to meet the demands of trade" sprung up, and grew louder and louder. Inflation of the currency became a mania, and was happily characterized by Mr. Garfield in some remarks made in the House, February 28, 1867:

"Mr. Speaker, in one hour this House will dispose of one of the most important measures of the session next to reconstruction, and I wish to say to the distinguished and venerable gentleman from Pennsylvania,1 that I am willing to go to his school and learn of him, but I appeal from his teachings of to-day to his teachings of three years ago.

"When the bill was brought forward in the House, in 1862, the gentleman is recorded in the Globe as opening his speech as follows: 'Mr. Speaker, this bill is a matter of necessity, and not of choice. I hope this issue of $150,000,000 will be the last. I should be grieved to see any further expansion of the currency.'

"That was in the early spring of 1862, when but $60,000,000 of United States notes had been issued, and when he was proposing to issue

1 Mr. Stevens.

$150,000,000 more. That $150,000,000 was issued, and $100,000,000 more, and $400,000,000 more, deluge on deluge, until the enormous total has swelled to $1,100,000,000! It is now nearly $900,000,000, and yet the gentleman talks of wanting more. I know of nothing which better illustrates the mania for paper money than 'Rum's Maniac' as portrayed by Dr. Nott. The poor victim, whom rum had ruined in family and property, was in the mad-house, and in his insane ravings called on all the friends of his early years to save him; but the refrain of every prayer was,

'Will no one pity, no one come?

O give me rum! O give me rum!'

"The vast volume of irredeemable paper money now afloat has played the chief part in disturbing all the normal relations of business. Business men and legislators have taken paper money in such overwhelming doses that they are crazed, and, like the lotus-eaters, wish to return no more to solid values. Forgetting the past, forgetting their own teachings, their votes, and their records of a year ago, they join in the crazy cry, 'Paper money! Oh, give us more paper money!'

"Why, sir, at the last session but six members of the House were found to vote against a resolution that we ought to return to specie payments, and to do it we must contract the currency. That was the almost unanimous opinion of this House at the beginning of the last session. We commenced the work of contraction cautiously and slowly, but when these gentlemen found it pressed them only a little, they cry out, like the maniac, Press us no more; give us more paper money!'.A man's hand is hopelessly shattered; it must be amputated or he dies; but the moment the surgeon's knife touches the skin he blubbers like a boy, and cries, 'Don't cut it! take away the knife! the natural laws of circulation will amputate it by and by.' Yes, gangrene and death will soon settle the difficulty, and save him from the pain of the knife."

For the time men of sound views abandoned an immediate return to coin payments, as well as all measures of direct preparation for it, and hoped for nothing more than to hold the rising tides of financial folly and dishonor in check. The House of Representatives, which responded more fully than the Senate to popular feeling, adopted this resolution, February 21, 1870: "Resolved, That, in the opinion of the House, the business interests of the country require an increase in the volume of circulating currency, and the Committee on Banking and Currency are instructed to report to the House, at as early a day as practicable, a bill increasing the currency to the amount of at least $50,000,000."

At the opening of the Forty-first Congress, Mr. Garfield was made Chairman of the Committee on Banking and Currency. His aim now was to use the full power of his position, as well as his personal force and influence, to prevent the enactment of measures that would impair the