811Z E95 CORNELL UNIVERSITY LIBRARY GIFT OF Thomas Ewing •i~Ar.-'}Kt^.JSand>iJiMmM LETTBH '. THOS. EWING, 'i'O THE FII^ICE' COMMITTEE OP THE SENATE, war THIS hMU §thi mi €munq. Cornell University Library HJ8112 .E95 Letter of Hon. Thos Ewi^^^ olin 3 1924 030 228 369 *A6>rMX«TON, 1). c. ; J-DDD & DfttWEILBR, :?BI3!irTKRS. 18B9. Pi Cornell University S Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/cletails/cu31924030228369 LETTER HON. THOS. EWING, OIF OHIO, TO THE FINANCE COMMITTEE OF THE SENATE, f ttMit geW m\i ^wmmi. WASHINGTON, D. C. : JUDD & DBTWEILER, PRTlsfTERS. 1869. ;gfe^v.H1" T?S^ ■'V PUBLIC DEBT AND CURRENCY. To the Committee on Finance of the United States Senate : Gentlemen : Understanding that you have the subjects of Finance, the National Debt, and the Currency now under consideration in your honorable body, I take the liberty of presenting you some views which, though they by no means attempt to com- pass these most intricate questions, yet, as they are founded on some reading and much careful consideration, may be found useful as suggestions in the progress of your investigation. It has been, in my opinion, from the first exceedingly desira- ble to separate all questions of national debt and currency and finance from general politics, as there is great danger, when these become party questioris, that heated controversy, which is always more or less unreasoning and unjust, should lead the party dominant for the time, into acts subversive of ,the public faith, or injurious to the public welfare. Unfortunately, how- ever, they have to some extent become an element of party strife, and there is danger that in the vicissitude of events in- justice may be done by one party to the people — the tax-payers — who are the debtor class, and as a consequent reaction, at some future day, perhaps not far distant, to the creditor. If the creditor be adjudged now more than he is equitably and fairly entitled to, that very fact is likely to produce a change of popular feeling, and with it of political power, which will give him less. My hope and desire is, that all open questions now ripe for settlement may be settled fairly and justly, by the pres- ent Congress, even as they would be settled in a court of equity between man and man, with this saving only : Whatever is distinctly written down in the bond of the United States, is a contract, which must be strictly complied witb, although as be- tween individuals it might be considered as tainted with exor- bitant usury— for it is not meet that a sovereign should set up that defence to mitig-ate the hardship of his own contracts. In the case of our iive-twenty bonds of 1862, which are now paya- ble—and this is the proper time to consider these and adjust them—we contracted to pay, and have thus far paid six dollars a ^-ear in gold, on a sum which, when loaned to us, was equiva- lent in value to less than §8t) in gold ; that is to say, we have for seven years paid on the 5.20's of 1862, and are still paying seven and' a half per cent, interest on the gold actually invested by the creditor, and actually received by the United States. This loan, now jDayable, amounts in the aggregate to the sum of $500,(100,000. If we offer now to pay the creditor interest at the rate of six per cent, on these bonds up to the first day of May, 1869, and to then pay him in the funds which we received of him, and undertook to pay him, or in some other security whicli he will prefer, we do him ample justice ; but if we give him an ads-antage beyond this, we are generous to him, but un- just to the people who are the debtor. We are not bound in faith or morals to make the fund which we pay to the creditor for his principal —be it what it may, gold or legal-tender notes — worth more at the time of payment than it was worth when it was borrowed. This appears to me strictly just — the view which a righteous arbitrator or judge would take of the subject if submitted to him for decision ; and it were bet- ter for the creditor than an exuberant generosity which would promise him more than he is entitled to, when the debtor is but just able to comply with his actual contract, fairly interpreted. Looked at in this j)oiut of view, names are nothing. If you borrow a piece of coin called a dollar, having in it one hundred cents' worth of pure metal, and by virtue of your sovereign power so debase your coin that the dollar contains but seventy- five cents' worth, it is repudiation, or its equivalent act of injus- tice. If you, in behalf of the nation, borrow coin having in it but seventy-five cents' worth of pure metal and call it a dollar, and afterwards improve your coin and put in it one hundred cents' worth of pure metal to make the dollar, and pay this improved dollar to discharge the loan of the baser coin, it is generosity to the lender, and injustice to the nation — it h taking from the tax-payer M'ithout reason, and giving to the capitalist without consideration. The same is the case whether the fund loaned and borrowed be adulterated coin or depreciated cur- rency. Having found the true measure of justice you may safely do it, without fear of being chargeable with undue partiality to the paying over the receicing class. They are all alike your con- stituents. You are the representatives, and may safely make yourselves the impartial representatives of all. A distinction may be suggested as to the foreign creditor, but if you do justice to the domestic, you do justice also to the foreign creditor : and personally, your two bodies have much more than your due pro- portion of creditors, as compared with the outside masses of community, who are producers and tax-payers; so that your members, as a body, are personally interested ou the side of the bondholders, rather than the tax-payers, and when it comes to the question of the sudden or hasty resumption of specie pay- ment, you may meet it with a conclusive, an overwhelming argument, in proof of your disinterestedness. You have not only a larger proportion of creditors than debtors in your two bodies, but your salaries will be to each worth $1,700 a year more in gold than it is now worth, while paid in legal-tender currency. It is clear that as individuals and as a party you are safe in doing simple justice The question, then, at once arises — What can you do, and what ought you to do, at once, to lighten the enormous burdens resting on the productive industry — the labor — of the country ? We are paying now an excessive interest ; such as no nation worthy of credit ever yet paid for a long period of time — such as no nation can long continue to pay, and enjoy credit at home or abroad ; and we must continue to pay it until our bonds be paid or funded on reasonable terms. There is some talk of borrowing to pay our debt ! We cannot borrow with this enor- mous load of annual interest upon us, except on terms of like extravagance. We may, perhaps, buy our six per cent. 5.20's 6 M-ith bonds at a fraction less interest, having a longer term to run, and with princijxd and interest expressly payable in gold; but this would not much relieve our burdens or at all remove the doubt which hangs over our ability, and which depresses our securities in foreign markets. It is thought by many advisable to hasten by legislative action the resumption of specie payments— that is to say, the restora- tion of specie currency, and making gold and silver the only legal tender in payment of debts. Those who propose this have not, it seems to me, avcII considered it. A general provision of the kind would be productive of much hardship and injustice to the debtor class of our community — the class made up of our active young business men, merchants, manufacturers, shippers, iu short, the producing class — those who combine their own personal energies with borrowed capital, and thus build up gradually an independence for themselves, while they give pros- perity to the country. Now, if we resume Specie payments at once, and make gold and silver the only legal tender, we ruin this whole class of business men at once and drive them to bank- ruptcy. If their debts now amount to six thousand millions — repeal the legal-tender act, or otherwise force an immediate resumption of specie currency, you add by a stroke of the pen two thousand millions to their debts ; and the mischief does not end here — you disturb the business relations of the country, close manufactories, deprive laborers of employment for a time, until the business of the country can shift hands and be read- justed and rearranged. If you pass an act postponing resump- tion for two years and then making it absolute, you produce the same result in a very slightly mitigated degree. Make the green- backs payable in gold in two years, and they will be at once bought up and hoarded by capitalists. To all who understand their value they would be worth, at once, as much as gold, less two years' discount upon them — not quite twelve per cent. The debtor class then instantly suffer a loss of about twenty-two per cent, on six thousand millions of indebtment ^ a loss of $1,420,000,000 taken from the debtor and given to the creditor class, for which it will be difficult to find a reason other than the true kingly sic volo. The same act, when it should produce its full effect, would make our national debt, now equivalent to $1,850,000,000, in gold, rise at once in value to $2,500,000,000 ; making an increased gold indebtment of $650,000,000 ; and it would at once involve the payment of interest on an amount of additional debt nearly equal to our present greenback currency, adding nearly $18,000,000 to our annual interest. This looks like sinking the ship, and I am afraid of it. It is certainly better to let the law of trade regu- late the currency than to hasten measures fraught with such consequences; and yet for a time " Rather bear the ills we have Than fly to others"— of which we know quite too much to meet, if we can avoid them. The evil must be very great that Avill justify so harsh a rem- edy. It would operate most severely on men below middle age, the relics of our hard-fought battles. The energy of our people would in time rise above it, but it would, as its first effect, bring ruin into many humble but industrious and happy families. Business would begin to revive when the broken and ruined men, driven to bankruptcy by the stern pressure of your legislation, should be replaced by another generation of business men and not till then. The object of this proposed, most dangerous, measure is to remove the evils of a depreciated currency — the end is good, but not worth the sacrifice it must involve. It would enrich the cap- italist — generally a non-producer, one who has inherited or acquired by his thrift and sagacity wealth already created to his hand • a worthy and meritorious class of citizens, but not a class which should be singled out from all other classes and made the objects of especial favor. The burden of the war, which almost crushed the nation, has not borne heavily on them. They loaned the United States a very large amount of money, each hundred dollars of which ranged in value from a little less than forty to about eighty dollars, at six dollars a year interest, in gold, for every nominal one hundred— making the aggregate interest on the whole debt when reduced to aver- age value about twelve per cent. This debt, if we compound the interest, which is the legitimate mode of estimating it, where paid punctually, (for the interest may be at once rein- vested and made to produce interest,) doubles every six years. Thus the purchaser of our 5.20's who purchased when currency was worth fifty cents on the dollar, will, when they become due, at the end of twenty years, have received something more than four times the amount of his original investment in interest and twice its amount in principal — six times the amount of his investment in twenty years. Thus long, I understand, it is proposed in your Committee to let the present bonds run, and in the meantime resume specie payment ; that the question of specie payments may be put out of the \vay as a disturbing element before you proceed to fund the debt. Do this, and there will be no longer a middle course between repudiation and a condition of usury at which just men will revolt. You put the nation at once in the power of the creditor ; you can no longer hope to fund at a less rate than six per cent, in gold our present bonds that cost fifty cents in gold for every nominal dollar ; so that in ninety-six years the people will pay on every million of actual dollars borrowed, sixteen thousand three hun- dred and eighty-four million dollars, ($16,384,000,000,) and on our whole debt nearly one thousand times that sum — an array of numbers which, like the figures representing stellar spaces, makes the head swim. The mind cannot compass it ; but being translated into plain intelligible English, it signifies national bankruptcy and ruin. The result of this large accumu- lation of interest in long periods of time has given rise to frequent outbreaks of popular feeling against usurers and those suspected of fiivoring them, and nations have enacted laws, and courts have been astute to construe law so as to guard against it. The Year of Jubilee in Israel was instituted to guard against this tendency to accumulation, and the Jews, for their habit of growing rich on the profits of capital invested and reinvested were for centuries perse- cuted and plundered by every people in Europe. This of course was the wild impulse of a barbarous age ; but the other extreme ought to be avoided, and while the capitalist is protected in all his rights, he is evidently, in the corrected opinion of mankind, not entitled to special legislative favor. Give him simple jus- tice, and he will take care of himself, and steer his way safely through all financial vicissitudes ; and this is all that an intelli- gent public will allow you to give him. In Europe, though the accumulation of interest is comparatively sloAv, families and firms who pursue it sagaciously and persistently for a generation or two, become autocrats — they decide questions of peace and war, and in effect rule the world. Plere, in the rapid accumu- lation of interest — especially if the specie proposition prevail— it will take but- a few brief years to make the money power supreme, and place our free Republic under the control of a moneyed aristocracy — ^Presidents and Senates will be in their hands but as toys. The debtor class — those who create the capital which must pay the debts, public and private, are, as I have already said, the laboring men, and the farmers and manufacturers, their immediate employers. Many of these are the soldiers who fought our battles, who have returned to their homes broken in health, broken in fortune, rich only in military glory, and who M'ill not be willing to have imjjosed on them a heavy addi- tional burden of taxation by way of a gratuitous compliment to the wealthy bondholder who staid at home and lent money at an enormous interest. It is proposed to encounter all these evils — being bankruptcy and ruin on a large and meritorious class of our citizens, Avho occupy the post of danger like a forlorn hope in battle, in order to escape from the present evil of a depreciated currency. I have already expressed the ojjinion that the object to be gained — though a worthy object — is not worth the sacrifice. Let us look at it more closely and test its value more accurately. A depreciated currency — one below the standard of the civil- ized world — -is an evil, but by no means so great as has been assumed without proof — loosely thought and as loosely repre- sented. A careful analysis will show that most of its alledged mischiefs carry with them their own compensatory remedies, 2 10 Without discussiug the question fully, a ihw of these I will consider : First, as between the United Stat( s and foreign nations. The lower standard of our currency has, I think, no positive cifect. As to our exports, a pound of cotton or a bushel of wheat brings just as much coin or goods in England as it would bring if gold Avere our home currency, and such foreign goods, when imported, at once assume the value in currency due to the article exported and exchanged, with the addition of freight, commissions, and duty, also changed from gold to currency: and though our wealthy men who travel in Europe mnst pay large exchange tor gold, yet, if they are bondholders and exchange our 5.20's for coin, they grt at present rates of exchange about seventy-five cents on the dollar^ ust what our currency is worth at home in gold, with a small excess for accruing interest, being considerably more than they paid in gold for them Avhen they purchased. So that in our trade and intercourse with foreign nations nobody suffers greatly by the present condition of our currenc_7. And how is it at home, in the ordinary transactions between man and man? I can hardly thinit of any branch of business or any occupation, which has not pretty well adjusted itself to the existing standard. The importing merchant sells higher; he retail merchant and tlie manufacturer, and the farmer, all sell higher, and the laborer receives higher wages — all in pretty fair proportion to the changed value of the currency. An im- mediate resumption of specie payment would unsettle the pres- ent relations of the various branches of business to each other, and give the far-seeing and sagacious speculator a most decided advantage over the ordinary, industrious, million. It would not embarrass the creditor — the capitalist — he knows how to adapt his business to every revulsion — ^monetary or commercial. He never makes a mistake, but if you make one, he well knows how to turn it promptly to his advantage. Immediate resump- tion would, as I have shown above, inci-ease the debts of the debtor class about $2,000,000,000, and add that much effective capital to the creditor class, provided the debtors remain able 11 to pay. It would also, if our solvency under such inconsiderate legislation be relied on, make our debt at once about $650,000,- 000 larger than it now is. If 1,600,000,000 bushels of wheat will now pay the debt, resume specie payment at once and make gold the only legal tender, wheat must fall as the cur- rency rises in value, and it will take 2,200,000,000 bushels to pay it — making a sacriiice of 600,000,000 bushels of our great staple at once, and, as far as I can perceive, to no good pur- pose. It would not improve our national credit. A debtor who owes as much as he can pay, by strictly limiting his lia- bilities and husbanding all his resources, will have better credit if he calculate closely and cavil for a single hair, than by heap- ing Ossa on Pelion in his unbounded liberality. Shy lock, nig- gard as he was, had doubtless better credit on the Rialto than Bassanio, with all his chivalrous generosity. The principal objection to a national legal-tender paper cur- rency is its tendency to fluctuation ; but this is much less than is generally supposed. The British consols, Avhich are the national currency in nearly all large transactions, fluctuate but little. Our 10.40's,- which in some degree assume their place here, are very stable in value, as also are our greenbacks, when undisturbed by Treasury operations in gold. Still all fluctuate in value, and so, indeed, does gold, compared with everything which supplies the wants of civilized man. I am not quite sure that a paper currency, resting on a solvent nation's faith, will fluctuate more, or be more sensitive to commercial vicissitudes than •gold. Improvident legislation would doubtless make it so, as it is much more fully in the power and under the control of a;overnment. It is not the depreciated cm'rency, but the heavy annual in- terest on the debt, that presses with such enormous Aveight on the productive industry of the country. We — the people — want to reduce this burden of interest and bring it within a manageable compass. This can be done only by funding that portion of the debt which is payable, and as it shall become payable, at a reasonable rate of interest: and it is now in your power to take an important and decisive step in that direction. 12 There is $500,000,000 of the 5.20's of 1862 now payable, at the pleasure of the Government, in legal-tender currency, or whatever else the creditor and the Government may, by mutual agreement, prefer to legal tenders— say bonds redeemable in forty years, bearing an intsrest oi four per eenif.— perhaps three and a half were better. But here we are met with what may be called the previous question. The currency is depreciated— let us, say some, make that equivalent to gold, and then— this disturbing clement being removed— proceed to fund. This, I take it, is the bondholder's proposition, for it would place the nation in his power and enable him to dictate terms. In behalf of the people, and in furtherance of justice, I submit that the funding of the debt and the reduction of interest which is most immediately press- ing, should be first disposed of^-removed out of the way as "a disturbing element" — and afterwards that the resumption of specie payments be considered, or that that question be left where it belongs, to be settled by the law of trade. Whenever our currency under the operation of that law becomes equiva- lent to gold, the question is settled. The act of February 25, 1862, which provides for the issue of the $500,000,000 of 5.20's, provides expressly that Treasury notes which it also authorizes " sliall be receivable in payment of all taxes, internal duties, excises, debts, and demands of every kind due to the United States, except duties on imports, and of all claims and demands of every kind whatsoever against the United States, except for interest upon bonds and notes, which sliall be paid in coin ; and shall also be kmvful money and a legal- tender in, paymnd of oil debts public and private within the Uni- ted States, except duties on imports and interest as aforesaid." This law is the authority of the Secretary of the Treasury to borrow the money. Having defined his powers in this, it gives him instructions as to the management of the finances; but these instructions have nothing to do with the loan or the contract with the creditor, no more than the economical resolution of the ordinary debtor has do with his contract with his creditor. The creditor in either case has much interest in the general good 13 financial management of his debtor, but a departure by the debtor from his expressed purposes is no breacli of tlie contract unless it be distinctly inserted and expressed as a pledge. In this case the United States borrows its own legal-tender notes, and stipulates that the interest on the bonds which it exchanges for them shall be paid in gold ; but the creditor is at the same time told, and it is made part of the contract, that when the principal becomes payable at the end of five years, he must re- ceive in payment legal-tender notes — precisely the character of funds M'hich he lent, unless by a new arrangement the creditor may give him something which he prefers — and there is no pledge contained in the law or in the contract, unless raised by forced implication, that the United States will not provide, in due time, in the way deemed most expedient, legal-tender notes to make the payment . What is said of promises made by the Secretary of the Treas- ury and his agents, that the bonds would be redeemed in specie, is so far absurd that no respectable lawyer would venture to urge it in a court of justice. The act of Congress, which was the Secre- tary's power of attorney, was in the hands of the whole reading public, especially of the capitalist and his counsel, who could not fail to know that the Secretary had no power to pledge the Government by parole, or in any manner not written down in the law. He doubtless, entertained and expressed a strong opinion that specie payments would be resumed before the bonds became payable, but the nation is certainly under no obligation now to bankrupt itself, and add its whole wealth for ages to the already enormous profits of the capitalists, in order to make good the prediction. This settles the question, as to the right of the United States to pay these bonds in legal-tender notes, if nothing more accept- able to the debtor and creditor can be agreed on. I would then propose that the Secretary of the Treasury be directed to prepare, and hold ready for delivery, one thousand million dollars in bonds, payable at the option of the United States at any time after the expiration of forty years, bearing an annual interest of four per cent, payable semi-annually both principal and interest 14 in gold— continue by law the payment of gold for the customs xluties and pledge their proceeds for the payment of interest on the bonds, until they be paid and retired— and by a present act appropriate the proceeds of those duties to the payment of such interest during the continuance of the bonds, and authorize and require the Secretary of the Treasury, without any further act of ap])ropriation, to pay such interest, as it shall accrue— and ex- empt the bonds from taxation by the United States and all States and Territories, and all municipal corporations in any State or Territory or district within the United States. I would make the pledge of the customs and appropriation absolute and enduring, so that no further legislation would be necessary to pay the interest on the bonds until the time when they should be finally paid and retired — so that there could be no ncf/liffcnt repudiation by the failure of one house to pass or of the President to sign an appropriation bill, and no acUve repudia- tion, unless the President and both Houses of Congress should concur in making themselves parties to the national dishonor — a degradation which we may safely pronounce impossible. The semi-annual payment of the interest would thus be made abso- lutely certain, until the priucij^al should be paid ; and the more remote that day, tlie mofe valuable would be the bonds. They M'ould be the best money securities in the markets of the world — safer and ex]X)sed to fewer risks than the British consols, and better l>y their one per cent, excess of interest. And I would direct the Secretary of the Treasury to retain or issue the requisite amount of legal-tender notes — give notice that he is ready to redeem the whole issue of 18G2, at the Treasury, on the first of ]\Iay, 1869, in legal-tender notes, or in four per cent, forty-year bonds secured as above, at the option of the creditor; and to exchange at some convenient business points in Europe, the forty-year bonds for the 5.20's whether the latter be payable or not, making allowance for the excess of interest on the 5.2(.)'s where they are not yet payable; and leave the bonds \\\nc\\ become payable at a future day, and which are not thus exchanged, to be authoritatively dealt with by a future Congress. Avoid the absurdity of a sinking-fund — the wild unreasoned 15 scheme of an ingenious visionary, which always has resulted and always will result in nothing. If there be at any time a surplus in the Treasury, after paying interest on the debt and meeting the wants of Government, it can he made to sink the debt by the purchase in market of just so much in bonds as the spare fund will buy ; and the interest thus saved is quite as avaiUible as the interest that would hemade by loaning it out as a sinking- fund, and generally it would be in better hands. I would make the loan long, for it will add greatly to the value of the bonds, making them desirable as permanent investments, and if at any time in the spring tide of our prosperity we wish to pay part of the principal, we can, .as already suggested, go into the market and purchase. But that state of things will not arise. The present generation has enough of burden to keep down tlio interest, and leave it to our children and grand-children, who will be much richer than we, to pay the principal. In the arrangement proposed, a law hastening the resumption of specie payment would indeed he " a disturbing element." It would probably render success impossible, by at once raising the market value of the 5.20's above the value of the bonds we would offer in exchange for them, and Ave could not command the means, in gold, to retire them, without boi-rowing at a heavy sacrifice. I would let the law of trade regulate this for the present; as it is much more likely to be well considered and well adapted to the condition of the country, than a law of Con- gress. In the natural course of things it will gradually reduce the difference between currency and gold, so that specie pay- ment will resume itself without a violent revulsion. You cannot make our legal-tender notes equivalent to gold by merely enacting that they shall be so, or that gold shall bo given in exchange for them. You must provide the gold with which to redeem them. This you cannot do at present at less than six per cent, on long bonds, so low is our credit, owing to our unsettled financial condition. It is vainly supposed that if you pass a law for the immediate payment in gold of our legal-tender notes, the commercial world will at once consider them as good as gold, and that they 16 will continue to (drculate, without being ottered for redemption. It certainly were not safe to rest on this assumption, as it is possible that the holders of notes may not have full confidence in the continuing ability of the Treasury, and that large holders will hasten to present their notes, each anxious lest the stock of gold be exhausted before his notes reach the Treasury. If such should prove to be the case, and I think it will, express trains ivill bring them in very rapidly. No one ought to be surprised if an hundred millions be presented in the first three days after the bill becomes a law. In 1816, Great Britain, through her Bank of England, after twenty-five years' suspension, being tlush in gokl, tried the experiment in the like vain hope, and with much more favorable prospects ; but the run for gold was so sudden and so heavy that Parliament had to interfere hastily, and to save the credit of the bank, forbid it to redeem its notes. On this occasion Mr. Peel, who had advocated the resumption, had the manliness to acknowledge his error, and bring in the bill which forbid the bank to make payment, and which held it suspended for the next six years; until the law of trade, more potent than a law of Parliament or of Congress, interposed and commanded resumption. If you adopt this mode of adjustment there is no danger whatsoever of an excessive increase of the currency. You will not have to pay in currency the half of $50,000,000, for the simple reason that your four per cent, bonds will be worth more than currency, and will be taken in preference by a saga- cious public ; and, the c/'cdifor portion of the public is always sagacious. They will know too that the issue of a large amount of currency will tend to reduce its value, and if they rely on that in part for the payment of their 5.20 bonds, they will take care not to compel an emission that will much reduce it. The only question in my mind is whether four per cent, be not too large a rate of interest — it is more than justice requires and is certainly large enough to allow you to levy an income tax of five per cent, on the annually accruing interest — making the net interest, free from all taxes, o.80 per cent. It is more than money will net in Ohio, loaned at six per cent, on bond and 17 mortgage. On this subject I cau speak understandingly — 1 lent out some money at six per cent., and receive the interest punctually ; my bonds are worth par, and I so return them for taxation, and they are assessed for State, county, town, and school tax, $2.63 per cent, on the principal sum, leaving me $3.37 per cent, interest. From this deduct 16.85 income tax to the United States, and it leaves $3.21 per cent, in greenbacks, worth now, in gold, $2.42 per cent, per annum nett — making the four per cent. United States bonds $1.37 per cent, per an- num better, as an investment, than bonds and mortgages at six per cent, in currency in Ohio. On these premises . I feel safe in saying that no sane capitalist would take a dollar in green- backs if offered four per cent, bonds in their stead. In the earnest hope that your action in this matter may be wise and just — promotive of the well being of the great people wh.'ji you represent, and that it may merit and receive their (■|jprobation, I am, with great respect, Your obedient .servant, T. EWIiXG. Capitol Hii.l, Jantian/ 6, 1869. "Tw.v>«a evj.n4 LETTER FRsOM! , HON. THOMAS EWTI^G. '•' ' ' CoLTJMBUS, 0., August '2, 1869. Son.. Tkos. Moing, Lancaster, Ohio-: ' De-^k Sir :^"W"e think th^t we ,P3,iinpt) .Ije ni,i8itaken: in supposing that the counsel of tbe best raeq of the country is needed. at this time. W.hither are we tending— what is. likely to-be the effect qf • the forces now in operation upon our rnaterial welfare, and upon our institu- tions ? What is the duty of the citizep in a state of affair's soj novel, uncertain and alarming? and how can he b^st 'discharge that duty when the. landmarks, that once engaged his affection, commanded his respect, and guided his footsteps, are almost obliberated ? are ques- tions th^t every candidlLlk.aud reflating man asks hinisplf every day. Under these circumstances we take the liberty of asking from you a public expression of your opinions, in such mpde as may be . most agreeable to you. It is na,tiiral that we should ,make this request of one, whose great ability, large experience, and, independen,t character afford the aniplest guaranty that his advice vyould be worthy of the serious consideration, of his countrymen, and hay^ an important and salutary effect. Trusting that, you vyill gratify our desire, we are sir, with OUT best wishes for yftpr continued health and happiness, your friends and obedient servants, , Wm. S. SuLLIVANT, B. G^WYNlfE, J; F. Baetlit, ■■■ ' S. S. ErcKLEY, W. A. McCoy, ' ' Wm. STEiNBARGEti, Isaac Ebekly, E. L. HinmAn, P. HaYDEN, ' ' JaS. KlLBOUENB, John ia. Jambs,' H. Mithofp. , . Lancaster, August 20, 1869. Gentlemen— In your letter of >tlQfe 2d instant, which isnow befdre me, you ask my views asi to, the present 'disturbed condition of our conntry-r-whither itvtends, and what can best be done to restore the ancient iandmarks of our liberties j the .Gonstitution to its supremacy, the several departments of the Government to their appropriate func- tions, jand^ the people of the whole nation to their constitutional rights«i ; ., , ,, . I give my opinion freely, and it is proper for me to say thfet I stand in a situation, favorable to the formation of an impartial judgment. Of a past„ generation, I am .quite coilteat that the present should govern its,elf, while I look with anxious solicitude ou all that is pass- ing which may tend to secure or mar the, success of our free institu- tiong_-the rich gift,x)f our fathers, which I have ^aarneatly ihoped-. to transmit unimpaired to posterity. • _ ' -In the beginningiof our national troubka, thipre was in the North and. West a union of: the once hostile parties.' .-i ■ " : Responsiveto the call of our Common donnteyyr^iii^^ and Dema- crats,. generally, united to.idiefepd.the Unioa^andJthelgiHtiime J orally 2 addressed the public in Ohio on political questions, was with Judge Eanney, at the request of Gov. Tod, both well-known Democrats, to prevail upon the young men of our State to volunteer in defense of the Union, and upon the aged and rich to contributa^^ouCTi^a^up- port those dependent on our volunteers while the^ m.^uH B?m the Held. At one of our meetings the Hon. William Allen presided, and headed a large subscription for the common object. It was a union of parties for the sake of the Union. This union of parties in the season of our nation's trial, involved concurrence in the once contested doctrine of State Bights and Nation- al Supremacy. The leading Democrats in the northern and central States, with very rare exceptions, joined in rejection of the assumed power of the several Stat€!8 to secede from the. Union or nullify its laws, and 1 hey suited the action to the word by taking up arms in defense of the Union'; and, in Congress, with, I think, but one ex- ception from Ohio,' by voting appropriations to support our armies in the field ; and all parties united in passing tha Orittenden resolutions, which pledge the nation, with the maintenai!^* of the Union, to sup- port the States in their then acknowledged rights. This solemn pledge, which allayed' sectional jealousy, gave us the adhesion of three border slave State's. But, during "the long and arduous strug- gle, difterences arose on mingled questions of power and policy ; the ancient doctrine that laws are silent amid arms, was, in the opinion of many wise and patfidtic statesmen, pt-essed beyond the limits which necessity warranted, and beyond what was consistent with the safety of the institutions which it Was invoked mt to maintain. And thferft arose out of the disturbed condition of things a closely Compacted, dominant party, styling themselves Republicans, which a,cknowledged no limits to their war power while the war continued, and no end to it when the war was ended. In the incipient stages of this power — after it became strong, l)ut before it became arbitrary and despotic — it was difficult to know what course to pursue. I acquiesced, not without remonstrance, in some of its measures, which I deemed wrong ; and much that I considered as -mistaken, excused, though not justi- fied, by the exigencies of the times. Deeming this, in the main, the party of the nation, I wished it success in all things, so far as its policy comported with the preservation of our free institutions, and I suffered myself to be severed from it, in opinion and feeling, not until its departure from what I deemed political rectitude and constitution- al observance, became so wide that it was impossible for me to remain longer its silent supporter, much less its open advocate. In former papers, when the measures which I object to were enacting, I solemn- ly protested against them; but in vain, and it soon came to this, that in party measures they habitually disregarded the Constitution, and, as their ablest leader avowed, acted "outside of it," pleading, in. jus- tification, that they must violate it in order to preserve it; Space allows me to name but a few of their objectionable acts. They ex- cluded States from representation on ■ the mere assertion that they were not States, and held them subject to military government, and where that could not reach them, to the wildest anarchy. Under pre- tense of the. war power, years after the rebels submitted, and peace wais restored, thef prescribed in ten of the States all men of intelli- gence, education, intellect and influence, denied them the right to vote or hold office, and made sovereign rulers of ignorant emancipa- ted slaves, ttius rendering a governmedt of law impossible, rendering also impossible, except by armed resistance, the protection of person or pro^rty, or- the punishment of crime. They excluded from seats in the House of Eepresentatives, nlembers duly elected, because they were not acceptable, and admitted in their place men whom the qual- ified electors had rejected. And worst of all, a large majority, nearly the, whole party in the Senate, notwithstanding their judicial oaths, voted impeachment of the President for acts strictly l^gal, and in the line of his official duty, because opposed to their arbitrary system of reconstruction, and tending to relieve the Southern States from the lawless anarchy in which that .reconstruction involved them. In this they failed — and no casuist of thi^ party has since been found bold enough to excuse the attempt. The scene in this sad drama which most deeply shocked the moral sense of the legal pro- fession, was the open public attempt i of' a Republican committee, headed by a once honorable member of the bar, to get up a popular opinion, and by bringing it to bear upon a member of the high court of impeachment, to therebj'^ compel him to pronounce a judgment, well known to be false — an attempt in our ordinary courts of justice to bribe a judge or embrace a juror — an act which would rtequire ex- pulsion from the bar — were a trivial oflense compared with this — and this was the act of the party, through their constituted organs, which we sanction and make our own if we give that party our sup- port. These multiplied abuses indicated an utter abandonment of moral principle and constitutional restraint, and reminded me forcibly of the political morality ot the petty; sovereigns of Italy, as immortalized by the genius of their historian, Machiavelli, save only that our rulers dealt with the rights only, not generally with the lives of the people ; but the demoralization in the two cases is equally complete, and the argument in support of them the same. I recognize Mr. Morton as the ablest living exponent of Republican morality, and consider him as speaking for the party. He argues that the only mode of saving the Constitution was not by acting out- side of it — he rejects the term, as ancient Pistol rejected the word gteal and substitutes an expression of his own, which, to ordinary apprehension, means the same thing ; he saves it by finding in it new and heretofore undiscovered powers, and calling them into exercise. He gives us the further comforting assurance that there are other powers latent in that instrument, which even he has not yet discov- ered sufficient, no doubt, to' meet every possible party emergency, and 'he treats as obsolete, "abandoned highways," all restrictions which militate against these newly discovered, or hereafter to be die- covered, powers. He pronolinees right the violation of the pledges contained in the Crittenden resolutions, as their breach was, as he says essential to: the preservation of the nation. This assutnption I most emphatically deny. Nations are more often ruined than saved, by. fraudiiand faJsehobdvi and ours suftered heavily bv this breach of faith. It alienated thousands in the border states; divided the JTorth ; .tinited the. South ; renderM confidence and cor- dial reunion impossible, and cost the nation many thousand lives and many millions of treasure. It actiords, however, well with Italian political morality of the fourteenth and fifteenth centuries -as, for ex- ample, Machiayellus, Prince Ceesar Borgia made peace with a large number of his leading adversaries, invited them to a fdast of recon- cihation, and, amid the hilarity of the banquet, called in a body of soldiers who' massacred them in their seats. This was not excep^- tional ; the example • was set or followed by Gastruccio Castracani, (I do not remember vthichhad precedence^) audi Machiavelli gives as jus- tification the certainty that a reconciliation could not be relied on as permanent, and that their destruction was essential to the safety of the. State ; that if suffered to live then, they ;must b4 put to dfeath at last, on the scaffold, aifter a revolt, or in the field of battle, where there would fall with thetn a host of their innbcent followers, and many of the Prince's own loyal adherents. It was, therefore, an act Of hu- manity to slay them in the banqueting hall, whereby the State audits Prince would be saved and none but enemies 'sacrificedt Many centuries have elapsed since these deeds were .done, and these reasons offered in their justification ; but they haye hitherto failed to re- ceive the sanction of the civilized world. Indeed, I have met with no repetition of the argument of the Florentine mora,lists to justify an admitted breach of national faith, in matters great or small, till I found it in Mr. Morton's speech, justifying this violation of the pledges con- tained in the Crittenden resolutions.; In my opinion, the patty in power have little regard for the Con- stitution. They have for three years past habitually violated it, whenever it stood in the way of a favorite- measure. Nor does there appear as yet any manifest improvement. They persist in holding several of the States in anarchy by their prospective reconstruction, which, in effect, forbids the holding of even the smallest offices by, men who can read and write, unless they subscribe to an oath which not one in a hundred can take without perjury. All this in contettipt of the Constitution, which expressly requires that each. State shall be guaranteed a republican form of government; In a like spirit, and a like disregard of constitutional Testrictions, they have created, ahd still maintain, military commissibnsi to supercede courts of law in the trial of civil offenses in time of peace. ^ This is, indeed, a necessary part of their system of reconstruction, which renders the administra- tion of justice by the courts impossible. ■ ' : Such are the past acts, and such the preseht ruling spirit of the party now in power, which' the people are called upon at the ap- proaching election to sanction or condemn. In my opinion they tend largely to political, and, with it, to social demoralization, and ought not to be approved and adopted by a law-abiding, a moral, and an intel- ligent people. ,■ ' . -- One of the issues distinctly presented in the coming canvass, is an amendment to the Constitution of the United States, limiting the power of regulation and control over the elective frjlnchise heretofore held by the States, and esteemed an essential element in their repub- lican form of government. Such is the Tifteenth amended article, once already passed upon by the people of Ohio, and rejected by an overwhelming vote, but now again pressed upon them by the force of party organization, in the confident < expectation that its potent influ- ence will wring from them their aisfent. The avowed object is to place the negro on a political equality with the white man. To this, 5 its ena and aim, purpose and effect, I am opposed ; and, having once expressed my dissent from it at the polls, I will never suffer myself [no new reason being offered for its adoption) to be bnllied or coerced into a compliance. We have never since we were a people recognized the negro as apolitical or social equal. We havcnevdr aliowed him to vote or to hold office in our State. But we have given him, in this respect, tne same protection which we give to the alien domiciled with ns, ana to our sons,, before they arrive at the age of manhood. This, m my judgment, is Enough, and neither our .political or social condi- tion would be improved by altfering the fraine-work of our General government so as to compel our State and other reluctant States to admit him to equality. But that amendment is not, and never has been, constitutionally betore the Legislature of any State. For this : purpose the .Constitu- tion requires a vbte of two-thirds of " both Houses of Congress," (Art. 4,) and it guards against false and fictitious Houses by providing how each shall be composed. The Houfee of Representatives shall be com. posed of members chosen " by thepeople of the several States,'' (Art. 1, Sec. 2.) The Senate " shall be composed of two Senators from eacU State," (Art. 1, See. 3.) The two " Houses of Congress " which might pass the inceptive resolutipn for the amendment of the Constitution must be full houses, composed of Members and Senatori?, chosen and sent from all the States which chose to send, -and all members who attend claiming their seats^t were a miserable evasion to shut out one-fourth of the Members or Senators, and pass the inceptive resolu- tion by two-thirds, of those that remained. That which we have is no more a constitutional submission than would have been a resolution of a Republican caucus. But there is now also an attempt to; force this irregular resolution upon us, without the consent of tbe Legislatures of a constitutional majority of the States. The Southern States not yet reconstructed are to be denied readmission as States until thej' adopt this amend- ment. They are to be thus forced to. give their free consent to it. Besides, if the unreconstructed States ratify the amendment pursuant to the resolutiori, what will it avail? - The whole action of Congress is founded on the assumption that th6y are not now States in the Union, bntlsomfe kind of qnddity, no one knows what — territories, conquered 'provinces, military proconsulates— and^^i not States, until again admitted. Nowj if they adopt the resolution, in obedience to this mandate, their action is nugatory. ]!i5"one but States of the Union can participate in amending, the Constitution of the Union, and the whole RadicaF system of reconstruction rests upon the assumption that they are not now Stetes. Btit the party having determined to carry the measure, constitutional objections are, I am well aware, un- availing' — ^impertinent, perhaps, since caucus resolutions have become the paramount law. I am, however, opposed to the measure, totally and entirely, and to all the jugglery and thimble-rigging by which it is to be brought about. , lan^.unwirlling tO' change the Constitution of the United States for a trivial cause, even if some possible good might follow it — but here 1 can see none. The proposed amendment is not in accord with the opinions and feelings ot our people, and I would not have th&m lured or forced unwillingly to adopt it. There is no more reason fof extending to the negro political than social equality. a Indeed, both are proposed by ultra Kepublican reformers, and both supported by the same arguments. The experiment of negro suprem- acy, where now in full operation, has not generally produced results which impress men favorably. In Washington City, at the spring election, a mob of about a hundred negroes pursued and threatened to murder an unfortunate darkey who was guilty of voting the white man's ticket. He was rescued by the police and hid himself, when the mob attacked the police, overpowered them for a time, and some of them but just escaped with their lives. The negroes held that part of the city in terror for several hours, when the Marshal, with a posse, suc- ceeded in dispersing them., This riot has been hardly heard of here, and when mentioned, treated as a trifle. The negroes have been gent- ly admonished by our Eepublican press, but excused because, just re- leased from bondage, they knew no better. And this is so far just. The negroes are not responsible for doing very ill, what they are un- fit to do ; but the party is, who, for their own purposes, gave them power which they knew not how to exercise; and especially Radical speakers who, on the eve of the election, excited • their wild and un- governed passions to fury. A similar scene occurred a short time ago in Charleston, South Carolina, where a band of colored musicians were attacked by a mob of negroes, on suspicion of being friendly to white men. This mob was too strong for the police, but the United States troops were called out and dispersed them. Butthese disorders constantly recurring, are seldom heard of by us, but passed over in silence. Generally in the South there is no legal protection for a white man's property. If a steer is missing from a farmer's herd, he knows it has been taken to feed his hungry rulers, and aware of the dangers of complaint, he passes it by in silence. Men hide their .provisions where they can, and bury what they have of value, to preserve it. White brigands also abound, as they always do where laws operate feebly or not at all ; and the very effect of this lawless condition into which Radical reconstruction has forced this people, is imputed as their crime, and made the pretext for denying them indefinitely the protection of law. Take any of our neighboring States; take, for example, Indiana, and. deny to every man who can read and write the privilege of holding any State, township or county office, the ex- ecution of law wouild even there be irppossible, and the power would be divided between the Renos and Judge Lynch. The effect of negro suffrage in Ohio, unattended with pt-oscription, would be small, but as far as it goesyevil, and not good. It is sought mainly as a solemn approval of the anarchy which we* are inflicting on the unreconstructed States. This I am unable to approve. I would prefer to afford the people of the South' constitutional means to shake oft" the incubus which has been imposed, and now presses upon them, restore to them a government which will protect person and property, and — " Give to their tables bread, sleep to their nights." Some, doubtless, suppose that negro habits and negro government will improve by time, but I can find no assurance of this ; the libera- ted slaves that have come amongst us have been, as farj know, in- dustrious ; the children whom they raised, ignorant and idle. And the pure negro comrannity in Hayti does not recommend itself to the civilized world as an example of good government 'or national iadus- li 1 + •"°*' ^'^^'■^fore, think it tvell that any State should be com- pelled to give the negro a share of its t)oUticaI power, or elevate him to a condition of social equality. ine repeal of the LegaUtender Act and the consequent making all debts _oP the IJnitedStates, all taxes and all private debts, payable in ^^^°' \'^^^ ^^ ^^^ ™ost important party issues which will be present- ®^ *o tfie people at the approaching election. The declared policy of the liepublican party is to pay or assume to pay thte priaeipal as well as the interest of all our bonds incoin', including those which we promised to pay in legal 'tender' notes, and in order to do this with the less embarrassment postpone the adjustment or funding of our debt until the Legal-tender Act be repealed, specie payment fully re- sumed and coin becomes the only tender in payment of debts. This distinct policy or any modification of it immediately pursued, would m my opinion involve disastrous consequences. It were safer to al- low the course of trade and business to settle the time when currency shall be worth as much as coin, and thus bring 'about the necessary change, without violence to' the business of the country, and at once, or as early as practicable, to pay off" in legal-tendei' notes, according to contract, that large portion of our pnblic debt on which we pay an fxhorbitant interest ; or that we fund it at the option of the creditor in bonds bearing a moderate interest, hkving a long time to run. As early as January last I expressed ray opinion on this complex question in a letter to- the Comniittee on Finance of the Senate, pre- senting somewhat in detail my views and reasons in favor of the meas- ure, some portions of which I here in substancfe repeat, suggesting, however, that before the next session of Congress the five-twenties of 1864 become payable', and that these were purchased at an average of something less than fifty cents on the dolkr. Between individuals equity would scale the debt, and give to the creditor no more than he lent, whatever might be the fictitious value put tpon it by the par- ties. : But we, ae a nation, m&y not do this. We promised to pay the principal of our five-tweutiesini currency which should be a legal ten- der in all contracts, public and private, and in all debts due to or from the United States, except intefest on our bonds and custom duties, and good faith require that we should so' pay it^ though the fund in which we pay be worth mudh more than the fund received ; and we must pay the interest in boin, although it be 80 enormous that, as be- tween individuals, a court of equity would set it aside for exhorbi- tant usury. Good taith requires that we, as a nation, abide by our contract and pay the debt as we agreed to pay' it, and it is high time that we take measures for its adjustment in legal-tender notes, or fund- ing it in bonds on long time and moderate interest, at the option of our creditors.' Those who propose to repeal the Legal-tender Act, and thus at once make coin the only legal tend-er in payment of debts, have not, I think, well considered the effects>of the measure. A^getaeral provis- ion of this kind would be productive of much hardship and injustice to the debtor class, '{his class- is made up of our active young busi- ness men,-mechaniOs, manufacturers and shippers, the producing class, nioet of whom combine their own personal industry and ©ner^y with 8 borrowed capita,], and thus build ug.an independence for themselves, while they give employment to labor and prosperity to the country. ]S"ow,if we repeal the Legal-tender Act, and make gold and silver the only legal currency, we ruin this class of men and drive them by thou- sands to bankruptcy. The man, whatever his vocation, who owes $1,000, owes it in legal tender notes; but repeal the act and his debt is at once increased, by the difference between gold and greenbacks. What was $1,000 be- fore the repeal, is increased in value to about $1,300— i-so much taken from the, debtor and given to. the creditor without auyi-eason or 'eqiv- alent, except. that theione is rich and, the other po.or. The same re- peal, when it should iproduce its full efffect, would make our national debt, including legal tender notes, now equivalent to- |2,200,000,000 in gold, rise at once in value to $2,965,QO'0,OOiO,; dnd it would at once involve the payment of interest on gold borrowed to take up our greenback currency, amounting on ai reasonable estimate, to $18,000,- 000 a year. This looks like sinking the ship, and I am afraid of it. It were certainly better to let the laws of trade regulate the currency than to hasten measures fraught with such corisequences. I dare not state the^rate of accumulation by compounding the in- terest now paid on our bonds, as it would seem incredible ; it would involve an array of numbers which, like the figures representing stel- ler spaces, makes the. head swim — the mind can not compass it; but being translated into intelligible English, it signifies bankruptcy and ruin. This accumulation of interest in long periods of time has given rise to frequent outbreaks of popular feeling against usurers and those suspected of favoring them; and Rations have enacted laws, and courts have been astute to construe laws so as to guard against its ex- cesses.- The year of Jubilee in Israel was instituted to guard agai'ust excessive, accumula,tion; and the Jews, for their habit of becoming rich on the profits of capital invested and reinvested, were for centu- ries persecuted, and in their turn plundered by every nation in Europe. This was the wild impulse of a barbarous age, but the other extreme ought to be avoided ; and, while the capitalist is protected in all his rights, he is not, in the corrected opinion of mankind, entitled to special legislative favor. Give him simple justice, and he will take care of himself, an(J steer his :way safely through all financial vicissi- tudes ; and this is all that an intelligent public will allow him; In Europe, though the accumulation of interest, ia comparatively slow, families and firms who pursue it sagaciously and persistently fbr a generation or two, become autocratsr^r-they decide questions of peace and war, and in effect rule the world. Here, in the rapid accumula^ tion of interest] — especially if the specie proposition prevail — ^it will take but a few brief years to make the money power supreme, and place our free Republic under the control of a moneyed aristocracy. It is -proposed to encounter these serious evils, political and social ; take largely from the poor and give, to the rich, in order to escapie at once and suddenly from the evil of a depreciated national currency. The object to be gained, though a worthy; object, ip not worth the sac- rifi'ce. Let i;is look at,'it;Eaope closely^ and endeavor to test its, value. A depreciated cijrrencyr^Qne. below the standard of the civilized world — is an evil, but by no- means so great as hasbeen assumed with- out proof— looselythoujght 9