Democratic Sentinel, Volume 1, Number 29, Rensselaer, Jasper County, 31 August 1877 — THE OHIO CAMPAIGN. [ARTICLE]

THE OHIO CAMPAIGN.

I t \ t V ii. * Speech of Son. Thomas Ewing, at Cdlnmbns. The Resumption Law Dissected, and John Sherman Answered. Fsllow-Citizbns : We are met, after one of th# most eventful years in the history of the American people. A long political strife has happily ended in the triumph of the Democratic principle of local self-government; and another equally protracted and momentous struggle is now nearing its decisive day. For ten years past, in violation of the constitution and of the pledges on which, the war was fought, the Republican party held several great States in,’military subjection; fastened on them a rple of ignorance and I vice ; robbed them by intolerable debt and taxation ; fomented race and sectional hatred, and prevented the restoration of tbht free government and fraternal feeling without which the war were vain and its fruits but ashes. And for ten years past, in violation of its duty to the great people who bore the heat and burden of the war, instead of keeping our vast debt at home as a currency debt, and leaving our then prosperous industries undisturbed by contraction and forced resumption, it has doubled the public burden by fraudulently making the greenback debt a coin debt; sold the bonds abroad and made America, as a borrower, the servant of Europe, the lender ; demonetized silver at the demand of foreign Shylocks; and, to crown its blunders and crimes, paralyzed the abounding energies of our people by a scheme 'f gold resumption, which is filling the land with bankruptcy, and the lieartsljpf thedaboring nfosses with despair. So that this great, Resourceful people, smitten oni the one side with local misgovernment and race feuds, and on the other with industrial distress and paralysis, crouched down, like the strong ass Issachar, between the two burdens which the carpet-baggers and the usurers loaded on them.

The Gold Resumption law towers above all others as the issue of this canvass. The Republican party is solely responsible for it, and irrevocably committed to its enforcement. It enacted that law by a strict party vote; it stood by it throughout the last Congress in solid phalanx; its President declared against any repeal or amendment, and put its author in the treasury to execute it; and now sends him to Ohio—illustrating by exception the vaunted rule of civil-service reform—to hide the hideous features of the law from the people whose happiness and industries it is destroying. Mr. Sherman boldly says, at Maasfield, that the law “can, should, andtoillbe executed;" while the silence of the Cleveland platform on this Republican measure only adds the vice of cowardice to the crime of its enactment and execution. On tho other hand, the Democratic party is clearly and fully committed against tho law. Repeatedly, in the last Congress, it voted for its unconditional repeal; it passed through the House a bill striking out the most pernicious section, which bill Mr. Sherman smothered in the Senate. And our Ohio platform this year, as last, declared for the repeal of the whole law —not its amendment, but its utter and absolute repeat

This law, involving as it does the early and total destruction of the greenback currency, and the larger part of the national-bank currency, is the sole cause of the unparalleled distress which afflicts all—employers and employed alike—who are engaged in industrial pursuits. To no other adequate cause can tho trouble be attributed. Our people have been blessed with health and peace—have had good crops, and, certainly, for four years past, have practiced a rigid economy—our exports have steadily increased, and our imports steadily diminished. Why should each successive month bring fresh and greater disaster? What other adequate cause is operating with accelerating power to drive millions of wage laborers into idleness and pauperism, and to drag , into bankruptcy the most of those whose means are engaged, in industrial pursuits, leaving none to stand but the wealthiest and strongest? We axe told that the panic of 1873 is partially the cause of our trouble* I answer that it long since ceased to aff&t us.’ Unlike all other revulsions, it had no origin in the character of the currency, which was increased in value in public estimation by the panic, instead of being impaired or destroyed by it. Its effect was brief, and was limited to a few great insolvent corporations and firms, and to a comparatively small number of individuals in volved in their affairs. Former panics, Bn the ol her hand, affecting as they did the current money of the people, were far more general and protracted in their bad effects. The country was rapidly and obviously recovering from the panic of 1873, when, on the 14th of January, 1875, the Resumption law was enacted. If the panic were the cause of our present industrial distress, the year 1874 would have shown more business failures than the years following. But the record of commercial failures—that barometer of the nation’s business—shows a falling off of bankruptcies from $228,000,000 in 1873, the year of the panic, to $155,000,000 in 1874, rising again to $200,000.000 in the year following the passage of the Resumption law, and keeping up the enormous rate ever since. And the number of bankruptcies rose from 5,830 in 1874 to 7,740 in 1875, and to 9,092 hi 1876, and to the rate of 9,498 for the first half of 1877—showing that it is the poison of the Resumption act, and not the panic, which is operating with increasing power, and reaching deeper into the hives of industry. But,, fellow-citizens, whoever would seek the cause of the troubles of to-day need only examine the Resumption law itself in the light of indisputable facts which control its operation and effect. In the campaign of 1875, before the law was dry on the statute books, I predicted its effects, and warned the people of Ohio that by indorsing the Republican party, with its fixed policy of resumption, they would plunge into utter ruin every interest worth preserving. That prediction was denounced and ridiculed then by the Republican press and leaders, but, unhappily for tho people, is now being rapidly fulfilled. Let me beg my Republican friends to hear again a statement of tho design and character of the law, the mischief it has alrcaay done, and tne tenfold greater mischief wliich will surely attend its complete execution. All of you, no doubt, understand that when the business of the country is adjusted to a given volume of currency, no large contraction can occur without great injury to the mass of the people. A decrease of the volume of the currency benefits all who have fixed incomes, whether from rents, interest or salaries, or whose wealth is in money or money securities, for it increases the purchasing power of every dollar they control, while it injures all debtors and taxpayers by compelling them togive for each dollar of debts or taxes paid so XuUch more of labor or products in payment. ' Now, who are the debtors who suffer by lowering of the prices of labor and its prodttets, and increasing the purchasing power of money? To the extent of his taxes everybody is a debtor. But who are the “ debtor class,” so-called ? I answer, almost every business man in the land. Nine-tenths of the business of the country is conducted, in whole or in part, on borrowed capital; nine-tenths of the vigorous, energetic men, seeking to rise from poverty to competence, are debtors; and nine-tenths of the wage-laborers are dependent for employment on individuals and corporations who conduct their business, in whole or in part, on borrowed money. Now there is paid each year as taxes, national, State and local, about $750,000,000; and any appreciable increase in the value of the dollar, and consequent decrease in the price of labor or its products, operates as an enormous incubus on the mass of the people considered only as taxpayers. Then, too, the currency debts of individuals and private corporations amount to not less than $8,000,000,000; and any large increase of the value of the dollar and decrease of the price of labor and products, with which such debts are paid, is a vast addition to these debts. If the change of values be large it must result in general bankruptcy—bankruptcy of the nation, States, counties and cities—because the people cannot bear the increasing burden of taxes ; bankruptcy of railways, manufacturers, merchants, tradesmen, and wage-men, accompanied by forced idleness and starvation of those who look to daily wages for daily bread. Now the present unhappy condition of our industrial classes is precisely that which inevitably follows sudden and large contraction of the currency. The symptoms all point to that cause as the extreme depression, vomiting, and burning pain in a patient points to the dose of

arsenic in his stomach. And I will show that the fatal draught of resumption has caused contraction enough to account for all the woes we suffer, and involves a further contraction large enough to utterly kill our industries. When the Resumption law passed we had about $766,000,000 of paper currency, which, added to our coin (though that was not iu circulation), gave us per capita $15.36, excluding bank reserves. France has $35 of actual circulation, exclusive of such reserves ; England, $24.28, and Germany $26.80 before demonetization of her silver, and $23.62 after that demonetization. It is preposterous to say that our circulation was excessive in view of the condition of those conservative nations, over whose petty areas, covered by nets of railways and telegraphs, exchanges are effected with ten times greater average speed than over our widely-extended and largely-undeveloped domain. Our currency was certainly not -beyond the then-existing wants of trade. President Grant, with the sanction of his Cabinet, in his message in December, 1873, represented it as insufficient; and both houses of a Republican Congress, Gen. Garfield leading off in the House, passed a bill to increase it, which Grant, having meantime succumbed to the bullionists, vetoed.

The Resumption law was passed with the general belief that it would result iuan increase of the paper currency. But how has it operated so far ? It has already caused an actual and permanent contraction, as follows : 1. By destruction of greenbacks Jan. 14, 1875, to Aug. 1, 1877 $22,811,182.00 2. By cancellation of bank notes, Jan. 14, 1875, to Aug. 1. 1877 86,624,612.(0 3. Greenbacks surrendered to redeem and cancel bank notes not yet actually canceled 14,425,026.00 Total $73,800,820.00 These figures are those of Mr. .Sherman’s Mansfield speech, except the last item, which he omits, doubtless because the cancellation is not yet actually accomplished. To this may be added $57,170,000 held, as private deposits' almost all of which will probably be kept hoarded in the treasury awaiting payment and cancellation. Thus we have an effectual contraction, as shown bu the books ofthe treasury, ot $131,030,820. This is exclusive of any part of the $44,000,000 of “coin and currency” which Mr. Sherman intimates he has accumulated in execution of the Resumption law. He does not tell what part of it is legal-tenders, nor explain by what authority of law ho is hoarding paper currency for resumption. .-Add to this large sum the $100,000,000 which is estimated by the Cincinnati Gazette to be elsewhere hoarded—hoarded solely because business is paralyzed, credit stopped and enterprise become pernicious under the accumulating disasters threatened or accomplished by forced contraction—and wo have, as the work of the first nineteen months of preparation for resumption, an actual destruction of one-tenth of our currency, and a withdrawal from business of nearly one-third of-it. “If these things be done in the green tree, what will be done in the dry ?” Au equal destruction and hoarding will give us by resumption day an actual destruefion of a fifth of our currency, and leave in actual circulation but little over one-third of the currency we had afloat when the contraction screw was put in operation.

But Mr. Sherman says the bank surrenders of circulation were not made under the Resumption law, but under a former law. True, but it is the threat of resumption, and that only which is driving in the bank circulation. Mr. Sherman, in his speech in the Senate on the 14th of December, 1868, in opposition to Morton’s bill for resumption of specie payments, said : “All historical precedents show that fixing the day for resumption inevitably led to a contraction of the currency by the banks, * * * an( i flie process of contraction produced the sorest distress.” Our banks know that after resumption day they can’t keep one-4|iird of the present volume of bank paper afloat redeemable in gold. Hence The banks, especially those remote from the centers where gold accumulates, are foreseeing the danger and hiding themselves. They would all wait until near the resumption day to withdraw their currency ; but many of them have further motives for early withdrawal in the desire to realize the premium on their bonds, and to increase their cash assets in this time of money stringency throughout the West. I And wliat further destruction of our paper curreccymust we expeot after resumption day? On this momentous question the Becretarv of the Treasury, the author of the law, the’ acknowledged dictator of the finance policy of the Republican party, ought to be able to speak with confidence. He got a “ dispensation ” ffom Hayes to come to Ohio and open the campaign for the Republican party on this resumption question. He knows that the business, the property, the comfort and happiness of the masses depend on the question whether the execution of that law will involve a further large contraction of the currency. But here is all he could say last Friday at Mansfield to calm theirj fears aud reanimate their hope : “ A certain! amount of United. States notescan be, and ouoht to bp, maintained at par with coin." Bit at what does he estimate’lhat cer. tain amount ? At tea millions —fifty—an hundred—three hundred ? He does not say. I’rudent Mr. Sherman! to leave your ‘ ‘ certain amount” so very uncertain. The obvious fact is, that each legal-tender note, after Jan. 1, 1879, is an order on the treasury for gold. Whoever wants gold to pay duties, to ship abroad, to hoard, to collect as reserve for redemption of bank notes, has only to send greenbacks to the treasury aud get it. The greenbacks will then be destroyed, and the gold sent abroad or hoarded in banks for redemption and for customs. Every dollar of greenbacks, to redeem which the treasury can rake and scrape enough gold, will be forthwith redeemed and destroyed; and within a year after resumption, I venture to predict, Mr. Sherman’s “certain amount” of greenbacks maintained in circulation will be but little less than what has been loot or destroyed in the fifteen years since their issue began. We will then have lost our greenback currency and have only a gold bonded debt abroad to represent it. Recollect, fellow-citizens, that “redeem," in this law, means to pay and destroy, as the Government destroys a bond when redeemed, and it every day destroys fractional currency “ redeemed ” .under tlje same language of the same law. A reissue of a greenback redeemed under this law is clearly not permitted, as Mr. Sherman intimated in dt bate when the law passed, and as he intimates in his Mansfield speech in complaining that he is not allowed to fund the greenbacks directly in bonds—so that every greenback “redeemed” goes forever out of existence as money. “But we shall then have a gold currency instead of greenbacks,” say the resumptionists. Not at all. None of the gold will be in general circulation. The banks must have it to redeem their notes, even if they buy it at a premium. The importers must have it to pay duties; and, above all, Europe must have it in payment of interest on the debts we owe her.

I do not understand how any sensible man, who knows how small is our supply of coin, and how great our debt and expenditure abroad, can believe for a moment that we can keep gold in general circulation here, or can even hoard and hold enough out of circulation, as a redemption fund, sufficient to float a fourth of our present paper currency. Look at the facts : We pay abroad, as interest on Government and other bonds, fully $110,000,000 annually. We pay to foreign ships, which carry more than two-thirds of our foreign commerce, about $70,000,000, of wliich at least two-thirds is expended abroad ; and our wealthy people traveling in Europe ex?end there not less than $50,000,000 annually. take the average of several estimates which show thus an annual drain for debts and expenditures abroad of not less than $235,000,000 annually ; and, making due allowance for coin received by us from foreign travel and immigration, there is still left the sum of over $200,000,000 going abroad on an inexorable annual demand. It is as though we owed a debt of $5,000,000,000 in Europe, with interest at 4 per cent., payable annually there in gold. Now, the ignoring of this fact is the fatal blunder or wrong of the resumptionists. The balance of trade in our favor has never, in any one year, equaled this foreign drain, and for the past six years has averaged only one-tenth of it, or about $20,000,000 annually. There has never been a year since this debt and expenditure abroad was established when it was not paid in whole or in part by coin shipments, and by increasing the debt by sales of new bonds abroad, thus making the foreign demand larger and more permanent. In meeting this annual drain we have, since the war, exported of gold and silver largely more than the whole coined product of our mines, added all our imports of those metals; and so reduced our supply of the precious metals that we are now estimated to have in this country only about $150,000,000 to $175,000,000 of gold and silver combined, against $285,000,000 m 1860. Before the war, when we were not enslaved by foreign debt, and were yearly adding to our stock of the precious metals, we never could keep out over $225,000,000 of bank paper, even nominally redeemable in coin. How can the banks ajnd Government do it

now, with less gold and silver in the country, and a foreign demand for it which is incessant, increasing, and which cannot be ignored without national insolvency ? The great money-power—the worst legacy of the war—intend, by this scheme of forced resumption, to make gold the sole measure and payer of debts, public and private: to increase the bonded debt by funding the greenbacks; to concentrate in a few great banks in the moneycenters absolute control over the volume and movements of the cdrrency, so as to make hard times and good times at their pleasure, aud fatten on the unwary multitude at every turn of the tide; to contract the currency for the next few years to the smallest possible measure, so that the .<512,000,000,000 the people now owe will buy $24,000,000,000 or $36,000,000,000 in former values of the people’s labor and products; to crush ont the myriad of smaller industries heretofore successfully maintained by combining the energy and talent of men of small means with money borrowed of non-producers; to confiscate the real property of debtors, and bring it into fewer ana stronger hands; to pauperize labor so that the money-power will enslave, and own, and use it, with no further cost than enough wages to keep the machine of laborer’s body in good working order; and finally, by means of the immense concentration of wealth and power in the hands of a few, to realize the policy of the early Federalists, which is stronger since the war than ever before, of making this Government a strong, centralized aristocracy. Whoever hugs the hope that we can pass thj-opgh the furnace of forced resumption, and fare no worse than England did, is wofully mistaken. We are incomparably less prepared for resumption than she was. The paper to which her business was adjusted, when her Resumption law passed, was but $232,000,000 ; oyrs $766,000,000. The premium of gold in England then was per cent.; with us it was 8 per cent Her debt was all held at home ; half of ours is held abroad. All the world paid tribute to her manufactories and her commerce; .we pay an annual tribute to foreign shipping, to foreign work-shops, to foreign bond-holders and to foreign shows equal in the aggregate to one-fourth of the net annual Increase of our wealth. She was as rich in gold and silver as was ancient Tyre—“ by the reason of the multitude of the" wares of her making ;” we have next to none of the precious metals. Ricardo assured her business men as Mr. Sherman assured us, that the gold premium which was but 3% per cent, would be the measure of the contraction of the paper currency and reduction of values caused by resumption. Yet, to reach resumption, her currency was contracted over 40 per cent., business credits 87 per cent., and eveyy value on the island, whether of land, labor or product, was reduced in price about one-half. If our resumption has, in fact, caused the 2bj per cent, reduction on gold, it has also caused a reduction by cancellation and by Ijparding of at least a third of our paper currency, and a shrinkage of from 20 to 60 per cent, in the value of land, labor and products. How much greater reduction in currency and in all values may we expect to overcome the remaining two-thirds of the gold premium ? If we were as well prepared for resumption as England was, we might learn from the pages of Allison, Doubleday, Martineau and other chroniclers of that most calamitous period of British history what to expect. But, in our state of utter unpreparedness, we can only know that the selfinflicted calamities will be immeasurable.

The moneyed men, who are driving this car of Juggernaut over the people, seem struck with judicial blindness. They hold $3,000,000,000 or $4,000,000,000 of our national, State, county and city securities—all dependent on the will and the resources of the people. We now pay, and for a long time have paid, about $750,000,000 a year in taxes. That is $17.50 for each man, woman and child in the United States—nearly twice as much as is paid by any other nation. The British pay $11.09 per head in taxes ; the French; $11.41 ; the Germans, $9.24; the Austrians, $7.22. It is perfectly obvious that our people cannot bear this great burden unless general prosperity be soon restored. But, if our industries are to be still further crippled and destroyed—if past accumulations must be eaten up in enforced idleness—if men must be driven to “borrow money for the King’s tribute on their lands and thenvineyards, and send their sons and daughters to be servants,” a large part of these burdens will be violently cast off. And, if that unhappy day should come, then remember, Messrs. Bondholders and Gold Resumptionists, that it was your arrogance and greed which led to repudiation, just as the pride of the slave power abolished slavery.