People's Pilot, Volume 4, Number 34, Rensselaer, Jasper County, 16 February 1895 — A DOUBLE GAME. [ARTICLE]

A DOUBLE GAME.

An Open Letter to Senator John Sherman. BY GEO. W. PEPPERELL IN FEBRUARY ARENA. Hon. John Sherman, U. S. S. Sir: It is impossible for a prominent man who has played r active part in the public affairs ofa great nation to escape history. During the past thirty years, few men have been more prominent and active in the public affairssjof the United States than yourself. You have helped to make much of the most im portant history that this country has witnessed in that period. You have not been pre-eminent-ly active with that great war power known as “the sword,” which overcomes an enemy in the field, but you have been an adept with that other greater war power known as “the purse.” You have not slain very many thousands through the formality of battle lines, yet by your quiet movements on the financial chess board you have paralyzed the energies and murdered the activities of a great nation. You have been in my judgment, more than any other man, the author of the enforced idleness and consequent destitution, beggary, starvation and death, of millions of innocent people. And, sir, I am sorry to add that, judged from your own utterances, I an forced to the conclusion that you did all this with a full and malicious knowledge of the inevitable results of such a policy as you have advocated and forced. In the light of your own utterances at various stages of your political career, there but is too little doubt that you wrought all this misery with “malice afore-thought,” or, as did Judas, when for gain, he betrayed the innocent man who trusted him. I have before me a little volume written in 1880, by Rev. S. A. Bronson, D. D., entitled, “Life and Public Services of Hon. John Sherman.” The writer is ardentlj’ your friend, and the book seems to have been intended to advance your boom for the presidency. The author says the book was written by your “consent, with the caution that there should be no exaggeration.” Hence, I infer that it will not do you a wrong, and that I may safely use it as authority in your favor. On page 147 of this book I find the following statements: “The grand and crowning work of Mr. Sherman, in popu-, lar estimation, has been the resumption of specie payments. . . . Mr. Sherman may be said to have been shaping his course

unconsciously, to this very end, from his first entrance into congress. It seemed to be instinctive with him.”

Chapter IX., beginning on page 147, is entitled, “Resumption Contemplated.” Chapter X. is entitled, “Preparing for Resumption.” Chapter XIII. is entitled, VTheßesum ption Act,” and Chapter XV. contains your defence ofliite*Resumption, Act against efforts for its repeal. Your defence of your life work is earnest and able, and confirms the statement of the author, as well as the public impression among the people of the country, that specie resumption by means of currency contraction was your special work.

Now, sir, this fact being established, I desire to call your attention to some of your public utterances which condemn you as a cruel, heartless man, acting a double part, apparently to deceive the people while you crushed and ruined them. In your speech in the United States senate, Jan. 27,1869, you discuss very fully the subject of the appreciation of the currency by specie resumption, showing most conclusively that it would be a cruel wrong, and that you were then opposed to it; and to most minds it would appear that only a devil incarnate would attempt, with his eyes open, such a crime against humanity. I quote from that speech somewhat freely as follows: x

“But the distress caused by in appreciation of the currency falls mainly on the debtor; others suffer only by reason of his inability to pay. What does specie resumption mean to a debtor? It means the payment of one hundred and thirty-five dollars where he has agreed to pay one hundred, or which is the same thing, the payment of one hundred dollars where he has agreed to pay seventy-four. Where he has purchased property and paid for one-fourth of it, it means the loss of the amount paid; it means the addition of one-fourth to all currency debts in the United States. A measure to require a debtor now to pay his debt in gold or currency equivalent to gold requires him to pay one hundred thirtyfive bushels of wheat when he agreed to pay one hundred; and if this appreciation is extended through a period of three years, it requires him to pay an interest of twelve per cent in addition to the rate he has agreed to pay. When we consider the enormous indebtedness of a new country like ours, where capital is scarce, and where credit has been substituted for capital, it presents a difficulty which way well cause us to pause. We wey

see that the chasm must be crossed, but it will make us wary of our footsteps. Good faith and public policy demand that we appreciate our currency to gold; but in the process we must be careful that bankruptcy, distress and want do not result. The debtors of this country include the active, enterprising, energetic men in all the various employments of life. It is a serious proposition to their contracts so as in effect to require them to pay one-third more than they agreed to pay. They have not paused in their business to study questions of political economy. They have based their operations upon this money, which has been declared to be lawful money. Its relative value may be changed, but a reasonable opportunity should be given them to change their contracts so as to adapt them to the new standards of value. ...

“If senators wish other examples of the severe process of passing from a depreciated currency to a gold currency, or to a paper currency convertible into gold, let them read the story of the times after the Revolution and the War of 1812, and after the revulsion of 1837, all of which were periods of transition from a depreciated paper currency to a convertible paper currency. Sir, it is not possible to take this Voyage without sore distress. To every person but a capitalist out of debt, or to the salaried officer or annuitant, it is a period of loss, danger, prostration of trade, fall of wages, suspension of enterprise, bankruptcy and disaster. To every railroad it is an addition of at least one-third to the burden of its debt; and more than that, deduction from the value of its stock. To every bank it means the necessity of paying one hundred fifty dollars for one hundred of its notes and deposits, except so far as the bank may transfer this to its debtors. It means the ruin of all dealers whose debts are twice their capital, though one-third less than their property. It means the fall of all agricultural productions without any very great reduction of taxes. To attempt this task suddenly, by a surprise upon our people, by at once paralyzing their industry, by arresting them in the midst of lawful business and applying a new standard of value to their property, without any reduction of their debt or giving them an opportunity to compound with their creditors or distribute their loss, would be an act of folly without example in modern times. ; It is sometimes said that we

did this in the passage of the legal-tender act; that we inflicted the same loss on the creditor that we now deprecate for the debtor. This is not true. The effect of the legal tender act was, undoubtedly; to depreciate our notes, but the process was very slow and gradual. For more than a year it scarcely operated as a depreciation, and during all that time the capital paid off by depreciated notes was invested in bonds, bank stocks, railroads and manufacturing pursuits created by the war, which yielded as much in gold as the capital produced before the war. Capital lost nothing by the war even when paid in greenbacks, for the demands for capital during the war made ample amends for the loss by the depreciation in greenbacks. It is estimated that the interest bearing capital of this country now is, upon the gold basis, more than double that of 1860. And if it were true that appreciation now would only work the same injury to the debtor that depreciation did to the creditor we should not be justified in inflicting in peace the injuries which were justified by war; and the creditor, who is usually the holder of property, is better able to bear a loss of a portion of the money due him than the debtor is to bear an addition to his burden. Our power over the creditor is unlimited. We may levy taxes on him to any amount; but we have no power to vary a contract or add to the burden of an existing debt.”

From these statements it would seem that you, Senator Sherman, could never be guilty of the evils and cruelties which you have so truthfully and fully described. And yet this is the crime of crimes which your chosen biographer says was “the grand and crowning work” of your life. You did it too. sir. by the cruel process of currency contraction, through the funding of the legal tender notes “into interest bearing bonds of the United States.” You adopted that plan in spite of the fact that in a former speech (April 9, 1866) you had shown that a reduction of the volume of currency was not necessary in order to increase its value. In that speech you said: “In regard to going back to specie payments, when did ever a nation travel toward specie •payment aS’rapidly as this country has done without a reduction of the currency? Here is a significant fact, that when gold was 280 our currency was $550,000,000; and now, when our currency is oviej $700,000,000 gold is 130, and giving .down and down, and no power i£ this world can pre-

vent its going down. This fact shows that the mere amount of legal tender outstanding does not fix the rate of gold. That is the result of the restored confidence of the people of this country and of all nations in the credit of the United States. I believe that if the secretary of the treasury will keep out of the stock market, will just remain is his seat in the treasury department, and pay the debts as tlwy become due| the people of the United States will take of the currency of the country and of the credit of the government; and it will not be necessary to buy bonds before they mature or do anything else except simply to meet the current indebtedness in order to bring us back to specie payments, and I do not believe any power can prevent it.”

That plan of reaching specie payments so truthfully stated could hurt nobody. It would have a natural growth and transfer into a normal condition of the currency without any reduction of its volume or fluctuation of prices. Yet it was not adopted, but the turniquet plan, placing the country and the people beneath the feet of the money kings, was ultimately considered as operating- “least injuriously (?) to the varied business interests of our constituents.” You describe the decision of your committee in your speech of 1869 as follows:

“The question then remains, What mode of appreciation of the value of greenbacks will operate least injuriously to the various business interests of our constituents? And upon this point your committee, after the most careful consideration have come to the conclusion that the only and best plan is to allow the legal tender notes to be funded at the pleasure of the holder into interest bearing bonds of the United States.”

Evidently, sir, in the light of yourjown explanations, the words “our constituents” meant the creditor and fund holding class. Surely the debt and tax paying class was not referred to as your “constituents” who were to be benefited by currency contraction. It is a common remark that you entered congress a poor man, and that you are now rich. Perhaps your change of front in the interest of the rich fund holders may throw light on this matter. You probably remember that General Logan, in a public speech on the floor of the senate, March 17,1874, taunted you with your change of front on the contraction subject, and that you

*|kve him no satisfactory explanation. Another item in your course of action must not be neglected. At first you merely _aime& at “specie resumption;” that is, coin redemption, using both gold and silver coin as the money of ultimate payments. _ But, as if in the very wantonness of cruelty, prompted by the greed of your land bolding “constituents,”] ycu joined in the war on silver, resulting in its depreciation as a money meta'. You determined on gold redemption at, all hazards, and did not cease your efforts till that unheard of scheme of financial cruelty had been accomplished, in 1873 tie bullion value of the silver dollar was three cents more than that of tliH gold dollar, and silver] was one of the inumys olfiiuli redemption in al! the world ex-; cept England. The warlareof' yourself and your party has] changed this, making “specie resumption” wit.i a single gold standard twice as burdensome to the people, and twice, as profitable io the bond holders as with the doable standard of gold and ’ silver. As an indication of what • lue people ol this country suf-i sered under your manipulations, J I quote the following from one! of your ablest partisan leaders | ami co-workers in your null »iy i seneme. ' Col. R. J. Ingeisoll < -.. rioed the sufferings of the | people from the time ol the de I monetizatiofi of silver in l -, 73l tin its partial restoration in 1878, as loiloWs:

“No man c: n. imagine; all the languages of me world cannot cxrress. what the people of the United States suffered from Uud to 1879. Men who considered themselves millionaires found i I vm»eive.'> beggars; men living i.i p.liases, supposing they had t-uuiuu vj give sunshine to the their age, supposing they had enough to leave all trey loved in ■ ffiueuce and c.onii’ori, suddenly found that they were mendicants, with bonds, s >c,k», moriguges, ah turn* d to asnus in their aged, tremblin'.' bauds. Toe chimneys grew cuid, me fires in furnaces went the poor families were turned adrift, and the highways ol the Uneed Stales were crowded will) tramp-.’’ Prior to the beginning of your eifor.s for specie resumption, when the people had plenty ol money to do business with, the same able writer described the condition of the peop.e of the United States as follows: ••On every hand fortunes were being made, a wave of wealth swept over the United Slates, huts became houses, houses be came palaces, tatters became garments.and rags became robes, walls were covered with pic lures, floors with carpets, and for the first time in the history ml the world the poor tasted o: tue luxuries of wealth. We be gan to wonder how our father.endured life. Every kii d of business was pressed to the verj sky-line.” That was the condition of this country at the close of the Wai of tue Rebellion, before the s. moon of specie resumption struck it. Since then the sufferings of the people have been greater than human tongue can tell. Senator Ingalls, another leading Republican, described the situation in 1891 os follows: “A financial system under which more than one-half of ihe enormous wealth of tue country, derived from the bounty of ua lure and the labor of-all. is own ed. bj a little more'than tnirl.. thousand peop.v, .whde one mhl on American citizens, able an willing to toil, are homeless tramps, starving for bread, re quires readjustment. A social system whicn offers to lender, virtuous and dependent women the alternative between prostitution and suicide as an escape from beggary is organized crime, lor which some day unrelenting justice will demand atonemen and expiation. . . . So it hap pens. Mr. President, that on society is becoming stratified, almost hopelessly >tratified, mic a condition of superfluously rich and helplessly poor. We are accustomed to sneak of this as the land of the free and the home of the brave. It will soon be the home of the rich and the land of the" slave.” There, my dear sir, is the result of your “grand and crowning” life w’ork, as described by one your wisest and ablest po litical fr’ertcls. and as' known by every intelligent man to be true. And in ordfer to-maintain the present states—in order to pre■’vent matters going wois-y still faster—it is now necessary to

continue to load the American people with new issues of goldbearing bonds; and the general of the army recommends an increase of the regular army in order to hold in check the suffering thousands of “organized hunger.” Sir, these are the results of your own “grand and crowning work.” To show, still further that you have entirely changed front as to the personnel of your “constituents,” I now desire to prove that in the seventies you were jin favor of an income tax to be levied on men of wealth. In the nineties you are not. In your speech .of Jan. 13, 1871. you ar-’ gued ably and earnestly in favof of an income tax. You said, “It is the only tax levied by the United States that falls upon property;” and you argued most justly that such a tax should not be repealed. As to objections ] against this tax, you said: “What objection can be made ;to the income tax that does not ! ipply to any tax, except one, laud that is, that the income tax is from its nature a tax of espionage, while the tax on tea, coffee and sugar is not? But the tax on tea, coffee and sugar takes from (he little lump of su- ' gar dealt out in charity, or to penury, as we.l ns from the conj sections of the rich. There is no I argument of injustice or hardship that .can be mentioned I against the income lax to be com- ! pared to the tax upon tea. coffee I and sugar. Take also, the tux lon salt, an aiticle of prime neIcessity; and yet we levy on that Hiriic'e *2,009,000. So upon luni- | ber. So on the stamps which reach every man’s business transactions, and yet nobody proposes to repeal the stamp tax ”

?is to the inquisitorial nature of the income tux your arguments in defence were unanswerable. The espionage into a man’s business required by this tux, you conclusively showed is nothing to that required in collecting the lax on whiskey or in collecting duties on imports. On the lat ter subject you said: "On lauding at the city of Xew York, as I have done once or twice, what is the first thing you meet? A custom house of--11 ;er. What do s he demand? Lie wants to look at your trunks; he wants to spy into your baggage The first feeling is one of resentment. I think no man. can ai rive at a port from a foreign country where he first meqts ihe custom house officers without feeling angry that the law authorizes a private inspection of his coats and and pantaloons. But no customhouse laws can be enforced unless this espionage is allowed. It is not allowed for ihe purpose of interfering with men or women engaged in ordinary travel, but the espionage •oust extend to them in order to reach the fraudulent importer or >i.i uggler. Further arguing this point you said: “There is not a state in this Union which does not authorize m »re espionage into a man’s pri vate affairs than the income tax law of the United States.” Respecting the claim that the income tax is odious aud unpopular, you very properly replied: “I never knew a tax that was not odious and unpopular with the people who paid it.”. As to the equality of the income tax, because it falls only upon men of wealth, you replied most truly: "If you leave your system of taxation to rest wholly upon iconsumption, without any tax upon property or income, you do make an unequal and unjust Isv.s'.em.”

It was claimed that the income tax was a war measure,, and heuce.should continue only dur iug the war. To this you replied to Very fully by saying: "This income tax is just as : i t h a war tax uow as' when 1; ’.•;is during .tfie wai, be a.ise it is now .levied to pay ex, penses incurred during. . t.hc a tr. J’hat sialpment being true, the -.ame lax is just as union. <1 war ax in 1894 as .in 1871, as the ciiarees for .pensions, for'war claims of various sorts, and to pay mterestv. xm the War debt, siill continue. • .-■ . Now, sir, in contrast with your position in .1871, I desire 4« call attention to your position in 1894. In 1894 you still lav,or an incom • tax, but not to be' levied by the general government. You say, “This tax ought to be left to the people of the states.”* And lurtber along in the argument you add the following statements: “I shall vote against this incmre tax -simply because it is unnecessary. . . . Then, besides, to levy an income tax is

an invasion of the rights of the states. . . . But there is another thing. The terms and conditions of this income tax provision, it seems to me, are utterly indefensible. Why should we levy a tax upon the incomes above $4,000 a year, and not levy upon the great mass of the incomes from SI,OOO up to $4,000? . . . Mr. President, this making a line of demarcation on incomes of $4,000 or $3,000, is a low, mean form of socialism. Why should a man who has been prosperous, who is a property holder, be aimed at, struck at for special taxation? ... In a republic like ours, where all men ate equal, this attempt to array the rich against the poor, or the poor against the rich, is socialism, communism, devilism; it is the foundation of all the fears that now disturb many of the European governments. I have no sympathy with it whatever.” That, sir, was your opinion of the income tax, June 22. 1894. How changed since 1871! Then you were not so rich as now, perhaps. On June 23, 1894. you renewed your fight, and, among many other things which I have no room here to quote, you say: “A tax of two mills on a pound of sugar would yield more revenue than this boasted income tax. It will be looked upon as a discrimination against the few, as a blow aimed against people who have been industrious, vigilant and careful, who have husbanded their resources, and it will not yield you the revenue you demand. In my judgment it will be the most unpopular and the most unproductive tax that has ever been levied in the United States of America.”

And are you the same John Si erman, who, in 1871, replied to that view of the case by saying, “I never knew a tax that was not odious and unpopular with the people who paid it.” Tell it not in Gath, publish it not in the effete monarchies of Europe, that our most famous American statesman would rather tax the poor man’s moiety of sugar ihan the rich man’s surplus income! And this is modern republicanism! How unlike the •good old Lincoln variety! In closing, sir, I beg to suggest that great men who cannot escape history should be careful of their actions, that posterity may recount their deeds with pleasure and not with pa’n; and .that their h a Is may swell with .grateful joy, rather than their cheeks be fevered with the blush of shame.