19. Sound Money, Crooked Whiskey
In lieu of an abstract, here is a brief excerpt of the content:

481 ★ ★ ★ ★ ★ 19 SOUND MONEY, CROOKED WHISKEY In addition to the southern question, President Grant highlighted two other important issues in his annual message in December 1874: civil service reform and economic policy. The latter question had grown ever more urgent as the country remained crippled by depression. In the wake of the November election losses, press rumors had cast Grant as ready to back away from his conservative money views, but he “very indignantly repelled this idea.” He authorized Fish and Bristow to say that, on the contrary, he felt “strengthened in the opinions expressed in his Veto message.” Conservatives were “glad to know,” as one told Bristow, “that the President still stands by the ‘Hard money’ part of his record.”1 Yet, in preparing his annual message, Grant did consider a spending proposal that alarmed Bristow and other orthodox Republicans. In an early draft, he endorsed an extensive program of transportation projects that would “serve directly to give employment to many thousands of hands, and indirectly to the employment of other tens of thouVDQG >V@µ ,Q WKH SUHYLRXV VHVVLRQ D 6HQDWH FRPPLWWHH KDG DGYRFDWHG such a program, consisting primarily of dredging rivers and building canals to counteract price gouging by railroads. In the summer the Republican campaign committee had endorsed the idea. But the propoVLWLRQ VKRFNHGÀVFDOFRQVHUYDWLYHVZKRVDZ´HFRQRP\DQGUHWUHQFKment ” as “the true remedy” for the economy’s woes. Bristow and House CHAPTER 19 482 $SSURSULDWLRQVFKDLUPDQ-DPHV$*DUÀHOGZRUNHGWRNHHSWKHSUHVLdent from adopting the “foolish notion that it was necessary to make large appropriations on public works to give employment to laborers.” ,QWKHÀQDOYHUVLRQRIKLVPHVVDJH*UDQWFLWHG&RQJUHVV·VLQYHVWLJDWLRQ of “cheap transportation” but made only an indirect reference to théPDQ\LQWHUHVWVWKDWPLJKWEHIRVWHUHGWRWKHJUHDWSURÀWRIERWKODERU and capital.” In his Treasury report, Bristow called for “rigid economy in the public expenditures” and warned that “lavish outlay of money by the Government leads to corresponding habits of extravagance among the people.” Later generations of economists, of course, would regard Grant’s original prescription for a stimulus as more suited to the counWU \·VQHHGVWKDQWKHSLQFKHGQRWLRQVRIWKHÀVFDOKDUGOLQHUV2 On the currency issue, however, Grant readily said what conservatives wanted to hear. He told Congress that until it passed legislation for a return to specie payments, the country could expect “no prosperous and permanent revival of business and industries.” To ensure the policy ’s success, Congress should repeal the greenback legal-tender clause as it applied to future debts, empower the Treasury to borrow gold to UHGHHPQRWHVDQGSURYLGHVX΀FLHQWUHYHQXHWR´VXVWDLQSHUPDQHQWUHGHPSWLRQ µ2QWKHODVWSRLQWKHIDYRUHGWKHUHVWRUDWLRQRIDWDULͿRQWHD DQGFRͿHHDQGDFHQWSHUJDOORQLQFUHDVHLQWKHLQWHUQDOZKLVNH\WD[ +HFDOOHGIRUDJHQHUDODGMXVWPHQWRIWKHWDULͿWRLQFUHDVHWKHUHYHQXH but he also wanted to eliminate duties on raw materials not produced in the United States. To address fears of contraction, he argued that with resumption, Congress could safely authorize free banking—that is, remove limits on banknote issues, a step that was “essential” to “give proper elasticity to the currency.” In his report, Bristow elaborated the president’s proposals, although he said little about “elasticity” and instead emphasized “stability,” a quality that “attaches only to coin.”3 'HVSLWHGHHSGLͿHUHQFHV5HSXEOLFDQVLQ&RQJUHVVVDZWKHQHHG WRFRDOHVFHEHKLQGVRPHÀQDQFLDOSROLF\EHIRUHWKHFORVHRIWKHODPH duck session and the loss of power to the Democrats in the House. Hard-money Republicans such as Henry Dawes welcomed the adminLVWUDWLRQ ·VSURQRXQFHPHQWVDV´DQXQPLVWDNDEOHYRLFHFRP>LQJ@WRRXU DLGIURPKLJKDXWKRULW\GHPDQGLQJDQD΀UPDWLYHDQGDQDJJUHVVLYH policy toward these Treasury notes.” Soft-money Republicans in the House sought to steal attention from the president’s recommendations by bringing up an expansionist interconvertible bond bill left over from the previous session. But Democrat S. S. Cox stated what most Republicans already understood: “You know that the President will veto it if SOUND MONEY, CROOKED WHISKEY 483 you pass it.” The bond bill sank out of sight, and the scene of operations shifted to the Senate, where a movement for compromise was fast taking hold.4 In the upper chamber the Republican caucus appointed an elevenmember committee to draft an acceptable measure. Headed by John Sherman, the committee represented all points on...


pdf