HE GREAT SPEECH -%F.- W-IU
LI AM WIN DOM ON lRANSPORTAr'
TION AND MONEY, DELIVERED
BEFORE THE BOARD OF TRADE
AND TRANSPORTATION AT DEL-
MONICO'S, JANUARY 29th, 1891.
?
The Tribune: New York.
PRICE, 5 CENTS.
HE GREAT SPEECH .OF WIL¬
LIAM WINDOM OH TRANSPORTA¬
TION AND MONEY, DELIVERED
BEFORE THE BOARD OF TRADE
AND TRANSPORTATION AT DEL-
MONICO'S, JANUARY 29th, 1891.
€
The Tribune: New York.
ILLIAM WINDOM, Secre¬
tary of the Treasury, re¬
sponded to the toast "Our
Country's Prosperity De¬
pendent upon its Instru¬
ments of Commerce," at
the Annual Dinner of the New York Board of
Trade and Transportation, at Delmonico's, Thurs¬
day evening, January 29th. At the close of it, all
present arose and gave him three cheers and there
was great enthusiasm. The Secretary lay back in
his chair and began to listen to the chairman's in¬
troduction of the next speaker. Before the chair¬
man had finished his introductory words, Mr.
Windom fell to the floor. It was supposed that he
had taken a fit from which he would soon recover,
but after a few minutes the guests were informed
of his death, from heart disease. Following is
the full text of his speech:
EARLY association with the charter members ot your
Board, and full sympathy with the objects and pur¬
poses of its organization, mate this an occasion of
peculiar interest, to me. The country owes you a debt
of gratitude for what you have done in the interests
of better and cheaper transportation. Fifteen years
ago, when your Board was organized and entered upon
its worlt, our facilities for the interchange of products
were quite Inadequate, and freight charges were more
than double what they are now. Improvements made
by the transportation companies themselves have been
very satisfactory, but though much has been accom¬
plished in the cheapening of rates, much more remains
to be done. If I might be allowed to suggest,
parenthetically, another very desirable improvement,
it would be that more water be put into our harbors
and canals, and less into our railroad stocks.
I am to speak briefly of the instruments of com¬
merce, in their relation to the wealth and prosperity
of our country. The subject is very broad, and my
time very limited. I shall therefore confine my re¬
marks to the two chief instrumentalities of commerce
—transportation and money. By the former, com¬
modities change places, and by the latter they ex¬
change owners. Even as to these I must content
myself with the bare statement of a few facts and
deductions. A nation's wealth and prosperity are
usually in proportion to the extent and success of its
commerce, and commerce ttself is dependent upon the
adequacy and adaptation of these two essential In¬
struments. The history of all civilized countries at-
4
tests the fact that the nation best equipped in these
respects rapidly becomes the most powerful, the
richest and the most prosperous.
DOMESTIC COMMERCE.
Our own country is no exception to this rule. No
nation has ever fostered more liberally or protected
more carefully its internal and coastwise trade than
we have done, a.nd the resultant magnitude and pros¬
perity of our domestic commerce is, I believe, without
a parallel in the history of the wbrld. For the ac¬
commodation and development of our home trade, we
have built 45 per cent of all the railroads of the world.
We have more miles of railroad than all Europe, Asia
and Africa combined. The floating tonnage of the
United States, engaged In coastwise commerce, and
on our lakes and rivers, is very far in excess of that
of any other nation. One or two comparisons will
convey some idea of this stupendous commerce. The
tonnage which passed through the Detroit River alone
during the 234 days of navigation in 1889 exceeded by
2,468,127 tons the entire British and foreign tonnage
which entered and cleared at London and Liverpool
that year in the foreign and coástwise trade.
The freight which passed through the St. Mary's
Falls Canal in 1890 exceeded by 2,257,876 tons the
entire tonnage of all nations which passed through the
Suez Canal in 1889. The freight carried on railroads
of the United States in 1890 exceeded by over 36,000,'-
000 tons the aggregate carried oil all the railroads of
the United Kingdom, Germany, France and Russia in
1889. Commodities are interchanged among our own
people with greater facility and at cheaper rates (dis¬
tance being considered) than in any other country on
earth.
The increase of National wealth and prosperity,
largely due to this system of protection to our home
markets and domestic trade, and to the generous de¬
velopment 0f these instrumentalities of commerce, has
become the marvel of the world. Take a few com¬
parisons, based upon the United States census of 1880
and upon figures furnished by Mr. Mulhall, the English
5
statistician. In manufactures we exceeded Great
Britain in 1880 by 81,579,570,191, France by $2,115,-
000,000, and Germany by $2,305,000,000. In producto
of agriculture we excelled Great Britain by $1,425,-
000,000, France by $625,000,000, and Germany by
$925,000,000.
Our earnings or income for 1880 from commerce,
agriculture, mining, manufactures, the carrying trade
and banking exceeded those of Great Britain from the
same sources by $1,250,000,000, France by $2,395,-
000,000, and Germany by $2,775,000,000. Our in¬
crease of wealth from 1870 to 1880 as compared with,
that of other nations was : United States, $13,573,-
481,403; Great Britain, $3,250,000,000; France,
$1,475,000,000; Germany, $3,625,000,000.
In 1880 our home markets consumed about
$10,000,000,000 worth of our own products, an amount
equal to the entire accumulated wealth of Spain, three
times the Increase of wealth in Great Britain for ten
years, and seven times the increase of France for the
same period. Our home markets that year absorbed
Ave times as much of our manufactured products as
Great Britain exported of hers to all the markets of
the world. Of course, I do not claim that all this
marvellous development of wealth is due to railroads
and ships, but without them it would certainly have
been impossible. But for these instrumentalities of
commerce, the rich farms of the West and South, and
even of the Middle States, would have slumbered in
primeval silence, and the myriads of shops and fact¬
ories would never have existed. Were the ship and;
the railroad 'withdrawn, business would be paralyzed
and desolation would reign supreme over more than
half of our broad domain.
FOKEIGN COMMERCE.
Contrast these grand results of our liberally de¬
veloped domestic commerce, operating upon our pro¬
tected industries, with the present shameful condition
of our foreign carrying trade, which has not only been
sadly neglected, but sometimes treated with actual
hostility by the Government. There was a time when
6
we stood first among the nations in shipbuilding, and
Great Britain alone excelled us in ocean tonnage.
Once ninety-five per cent of our imports and eighty-
nine per cent of our exports were carried in American
bottoms, and our merchant marine became the boast
of every citizen and the envy of the world.
Now, so far as foreign trade is concerned, our ship¬
yards are comparatively silent, and our flag has al¬
most disappeared from the high seas. The relative
decline in our foreign shipping has been constant and
alarming, until in 1889 only twelve and a quarter per
cent of our imports and exports was carried in Amer¬
ican bottoms, being the smallest percentage in any year
since the formation of the Government. Time will not
permit me to trace the rise and fall of this industry,
or to point out in detail the causes which have resulted
in our present humiliating and unprofitable condition.
Suffice it to say that the fault was not with the
founders of our Government. They fully appreciated
the value and the necessity of a strong and healthy
merchant marine, and left on record no doubt of their
purpose to protect the interests of the Republic, on the
water as well as on the land. The second act passed
by the 1st Congress—July 4, 1789—provided for the
protection of American shipping by the imposition of a
discriminating duty in favor of teas brought In Amer¬
ican vessels, thereby signalizing the first Fourth of July
under the Constitution by a declaration of commercial
independence as a supplement to the declaration of
political independence made thirteen years before.
The third act of Congress, passed sixteen days later,
imposed tonnage duties as follows :
Cents.
American vessels, per ton 06
American-built vessels belonging to foreigners,per ton 30
All other vessels, per ton 50
On the 1st of September, the same year, Congress
prohibited any but American vessels from carrying the
American flag. By the Tariff act of 1794 an addi¬
tional discriminating duty of 10 per cent, was levied
on all goods imported In vessels not of the United
States. And in all changes of the tariff prior to the
war of 1812 tills discriminating duty of 10 per cent
7
was re-enacted. So great was tlie development oí our
shipbuilding and shipping interests under the lostering
influence of these acts that we sold ships amounting
to hundreds of thousands of tons to foreigners, and
soon tool! front rant among maritime nations.
Voicing the national pride in 1825, Daniel Webster
said : " We have a commerce which leaves no sea un¬
explored ; navies which take no law from superior
force." How like bitter irony these words would
sound In 1891 ! The brilliancy of our achievements on
the ocean begat over-confidence, and listening to the
siren voice of free trade, we gradually yielded to the
seductive phrase, "reciprocal liberty of commerce,"
wliich at that time became very popular, until, in 1828,
Congress swept away all protection to our foreign
shipping interest, and opened our ports to the ships of
all nations on the same terms as to our own. So
strong had our position become under the protective
policy of the first twenty-five years of national life
that our merchant marine continued to be prosperous
so long as wooden vessels were the only vehicles of
ocean commerce and other nations refrained from
heavy subsidies to their ships. But when wooden ves¬
sels began to be supplanted by iron steamers and
European governments poured their contributions into
the treasuries of their steamship companies, the de¬
cadence of American shipping began, and has con¬
tinued ever since. How could it be otherwise ? The
American people ask no odds against any in the world.
Give them an even chance and they will distance all
competitors, but how can they be expected to compete
unaided against foreign shipyards and sidpowners,
backed by the power and the treasuries of them govern¬
ments t The amount which has been thus contributed
to sweep our commerce from the seas cannot be ac¬
curately stated, but it is known to have reached hun¬
dreds of millions of dollars.
The mischief and its cause are both apparent. What
is the remedy ? It cannot he found in the re-enacment
of the legislation of 1789, because treaties stand in the
way, and it would not now bo expedient even if there
were no treaties on the subject. In my judgment,
8
tlie remedy is plain and easily applied. If we would
regain our lost prestige, reinstate our flag upon the
ocean, and open the markets of the world t-o American
producers, we must make the contest with the same
weapons which have proved so successful in the hands
of our rivals. No nation can better afford this kind
of contest than ourselves. Surely no object Is of
greater Importance than the enlargement of our for¬
eign markets, and nothing will contribute so much to
that end as the command of direct and ample facilities
for reaching them. The folly and the danger of de¬
pending upon our competitors for the means of reach¬
ing competitive markets cannot be expressed. Aid
to our merchant marine is not aid to a class, but to
the whole people—to the farmer, the merchant and the
manufacturer quite as much as to the shipbuilder
and the shipowner.
WILL GOVERNMENT AID PAT?
But it will cost money. Will it pay ? Yes, a hun¬
dred fold. The aggregate of our foreign carrying trade
for the last twenty-five years, while not more than one-
tenth our domestic trade, has, nevertheless, reached
the enormous sum of $29,465,124,920. Estimating the
cost of transportation at 10 per cent of the value of
the goods, we have an expenditure of about $3,000,-
000,000, at least 80 per cent of which—$2,400,000,000
—has been paid to foreign shipowners. If we add to
this $20,000,000 a year paid for passage money, we
have a grand total of $2,900,000,000 paid to foreign
labor and capital during the last quarter of a century,
a sum larger by nearly two hundred millions than the
maximum of our bonded debt growing out of the late
war. Are not the benefits which would accrue from
paying these sums to our own people worth saving?
During that period we have exported of gold and silver,
to pay balances of trade against us, an excess of
$607,000,000 more than we have imported. Had
we carried a fair share of our own foreign commerce In
American ships, owned by American citizens and
manned by American seamen, this vast sum, and much
more, might have been retained at home to enrich our
9
own people. Suppose that for twenty-five (years we
had given $5,000,000 a year in aid of our foreign
shipping, and reduced by that amount the prepay¬
ments of our bonded debt, should we not have been far
better off than we are now ? Is it not high time these
vast interests receive attention? Have we not tried
the do-nothing policy long enough? Shall we give
that protection and support to our foreign merchant
marine that other nations give to theirs, and which we
freely give to all our other great interests, or shall we
accept as inevitable our present shameful position ?
I regret to say that the uniform record of indifference,
if not actual hostility, during the last fifty years,
affords little reason for encouragement. In fact, the
tendency of late has been to surrender to foreigners
even our domestic commerce, rather than to assert
ourselves upon the ocean. Discriminations of the
most astonishing character have been made, both by
Oongress and by Treasury regulations, in favor of
Canadian railroad lines and steamships against our
own. One instance of tins hind may serve to illus¬
trate the nature and extent of many other discrimina¬
tions of lilce character.
Asiatic merchandise destined for New-York, if
brought in American vessels to San Francisco, must
undergo all the forms and delays of entry, under the
strict scrutiny of customs officers, and be then placed
in cars heavily bonded, for transportation through our
own country to New-York, while the .same merchandise,
if brought in Canadian or British steamships to Van¬
couver, is transferred at once, and without any sub¬
stantial surveillance, to Canadian railways, which are
not required to give bond, but are permitted to pass our
frontier and proceed to New-York or other Eastern
ports unvexed by any of the disagreeable attentions
of customs officers. The same discrimination has ex¬
isted for years in favor of European goods landed at
Montreal ahd transferred to Canadian railroads for
Western American ports, against goods landed at New-
York. Boston and other Eastern ports, to be transported
wholly through our own country to their Western
destination. The result of these unfair and unjust
10
discriminations against our own people and oui' own
transportation lines lias been, not only seriously to
jeopardize the revenues, but also to build up foreign
transportation interests at the expense of our own.
" Reciprocal liberty of commerce" is a high-sound¬
ing, seductive phrase, but the kind of liberty our
foreign shipping interest has enjoyed, for the last fifty
years, is the liberty to die under unjust discrimina¬
tions of the London Lloyds Register Association, the
crushing power of European treasuries, and the utter
neglect and indifference of our own Government.
Reciprocity itself is a most valuable thing, if kept
within the lines of protection, but reciprocity by which
we surrender our merchant marine to our rivals, or
give away a home market, worth ten times more to us
than all the other markets of the world, in the vain
attempt to grasp an uncertain market abroad, is a
policy freighted with immeasurable disaster.
Presidents of the United States have repeatedly
expressed the National humiliation and appealed
to Congress for action in behalf of our rapidly
vanishing merchant marine, but thus far their words
have fallen upon deaf ears. Let us hope that the
urgent appeals of President Harrison on this sub¬
ject may bear fruit in some well-devised measure of
protection and encouragement.
WHAT IS SOUND FINANCE?
Pardon a few words with reference to the instrument
by which commodities exchange ownership. It is as
essential to commerce that the currency with which
it is conducted be adapted, both in quantity and qual¬
ity, to the wants of trade as that the vehicles of
transportation should be adapted to their purposes.
If the circulation be deficient, trade is crippled, prices
fall, obligations are dishonored, distrust is created,
and commercial panic and disaster ensue. If, on the
other hand, circulation be redundant, prices become
temporarily inflated, wild speculations are stimulated,
debts are recklessly contracted, credit is dangerously
expanded, and for a time trade seems to float upon
the high tide of success, when suddenly the failure
11
of some large firm or banking-house discloses tlio
true situation, and the entire fabric of fictitious pros¬
perity falls with a crash even more disastrous than can
be produced by a deficient circulation.
The ideal financial system would be one that should
furnish just enough of absolutely sound currency to
meet the legitimate wants of trade and no more;
and that should have enough elasticity of volume to
adjust itself to the varying necessities of the people.
I linow this seems difficult of attainment, but I be¬
lieve it is substantially possible. Could such a
circulating medium be secured the gravest commercial
disasters which threaten our future might be avoided.
These disasters have always come when unusual ac¬
tivity in business has caused an abnormal demand
for money, as in the autumn, for the movement of
our immense crops. There will always be great
danger at those times under any cast-iron system of
currency, such as we now have. Had it not been for
the peculiar conditions which enabled the United
States Treasury to disburse over $75,000,000 in about
two and a half months last autumn, I am firmly
convinced that the stringency in August and Septem¬
ber would have resulted in widespread financial ruin.
Like commercial conditions will frequently occur, but
It is not at all probable that they can be en¬
countered and their consequences averted by like action
of the Government ; nor is it desirable that ,sucli power
should be lodged with the Secretary of the Treasury.
I am thoroughly convinced that a better method can
be devised, which will, in a large degree, place the
power of expansion and contraction in the hands of the
people themselves. The opportunity for securing such
a currency may be found in our bonded debt, which
should, in my judgment, be in part exchanged for inter¬
convertible bonds, bearing a low rate of interest, and
always interchangeable for money at the will of the
holder. Of course, I cannot now enter upon an argu¬
ment on this subject, but I may be excused for briefly
mentioning the only objection I have ever heard to
the plan which has any apparent weight, viz, that it
would cause an outflow of money from the Treasury
12
when spéculations run high and an inflow In times-
of threatened panic, and would therefore tend to '- in¬
flate inflation and contract contraction." This ob¬
jection was conclusively answered and the policy
triumphantly vindicated in 1862 and 1863, under the
administration of Salmon P. Chase, who was one of
the ablest Secretaries of the Treasury we have ever
had. Mr. Chase had urged and Congress had author¬
ized what he called the "Savings Panic of the People,"
whereby they could deposit in the Treasury up to the
limit of $100,000,000, and receive an interconvertible
bond, drawing not more than 5 per cent interest, which
bond was again convertible into cash at the will of the-
holder, on ten days' notice. It is well known that the
year 1862 and the lirst half of 1863 was a period
of most active speculation, and yet those deposits con¬
tinually increased, until on June 30, 1863, they had
overrun the limit, and amounted to $101,934,102.
In August and September of 1863 the unusual ac¬
tivity of business had placed the country in the same
condition as it was last autumn. A severe stringency
set in, and panic was threatened. Did this vast de¬
posit of over $100,000,000 remain in safe hiding, and
thereby intensify the stringency ? Exactly the reverse
occurred. At the time when it is argued that every¬
body who could would avail himself of this safe and
convenient place for hoarding money, and draw 4 and
ü per cent interest on it until the storm should
pass, the money actually flowed out at the rate of
millions a day, until on December 1, 1863, $59,-
427,000 had come out to the relief of business, and a
commercial crisis had been thereby averted. I com¬
mend this item of history as of more value than any
theory.
The quality of circulation is even more important
than the quantity. Numerous devices for enlarging
credit may, and ofteif do, avert the evils of a deficient
circulation ; and a redundancy may sometimes modify
its own evils before their results become universal, but
for the baleful effects of a debased and fluctuating
currency there is no remedy, except by the costly and
difficult return to sound money. As poison in the
13
Hood permeates arteries, veins, nerves, brain and
heart, and speedily brings paralysis or death, so
■does a debased or fluctuating currency permeate
all t' e arteries oí trade, paralyze all hinds of business
and bring disaster to all classes of people. It is as
impossible for commerce to flourish with such an in¬
strument as it is for the human body to grow strong
and vigorous with a deadly poison lurking in the
blood. Such a currency is bad enough in domestic
trade, but it is absolutely fatal to the prosperity of
foreign commerce. The nation that attempts to con¬
duct its foreign trade with a currency of uncertain
value, or of inferior quality, is placed at a fearful dis¬
advantage. It would seem superfluous to impress
this universal and well-known experience were it not
too apparent that this Nation has heen in danger of
repeating the costly experiment witli just such a cur¬
rency. The tendency of events has recently been in
that direction, and the apprehension of danger created
thereby has caused the loss since December l of over
$24.000,000 of gold from the Treasury, and of prob¬
ably a much larger amount from the circulation. I
am happy to say, however, that this peril seems now
to have passed, and it is to be hoped its evil
■effects will soon disappear. The " sober second
thought" of the people is asserting itself as usual,
and signal lights of safety are here and there becoming
visible.
NOT ENOUGH GOLD OR SILVER.
Let me speak very plainly on this most important
subject. Believing that there is not enough of either
gold or silver in the world to meet the necessities of
business, I am an earnest bimetalist, and concede to
no one a stronger desire than I feel for the free and
unlimited coinage of silver, as soon as conditions can
be reached through international agreement or other¬
wise by which such coinage shall be safe. But it is
my firm conviction that for this country to enter upon
that experiment now and under existing conditions
would be extremely disastrous, and that it would re¬
sult, not in bi-metalism, but in silver mono-metalism.
Such an experiment would, in my Judgment, prove a
14
greater disappointment to its advocates than to any
one else. They insist that it would expand the cir¬
culation and permanently enhance the value ot silver.
I believe it would produce a swift and severe con¬
traction and eventually reduce the market value of
silver. Let me briefly suggest some of my reasons for
this belief :
Free and unlimited coinage of silver by the United
States, while the other great nations pursue an opposite
policy, would invite all the owners of that metal
throughout the world to exchange 371 1-4 grains of
pure silver, worth about 83 cents, for 23.22 grains of
pure gold, worth everywhere 100 cents. Nearly all
the nations of Europe are anxious to exchange their
silver for gold, and they would at once accept so
tempting an offer. The mint statistics of the Treasury
Department show that the stock of full legal-tender
silver in Europe amounts to $1,101,400,000, and that
of this amount the banks of France, Germany, Austro-
llungary, the Netlieilands and Belgium hold $428,866,-
065. A large part of these vast stocks of silver would
be ready for transfer to us at once, and the swiftest
.steamers would be employed to deliver it to the Treas¬
ury, in order that with the proceeds the owners might
buy gold exchange on Europe before our stock of gold
should be exhausted.
Would our own people await the arrival of these
silver argosies from Europe before acting! Not unless
the Yankee has lost his quick scent of danger and for¬
gotten his cunning. Bank depositors, trust com¬
panies, the holders of United States notes and gold
certificates would instantly lock up all the gold at
command and then Join the panic-inspired procession
to the Treasury, each and all anxious to be in time
to grasp the golden prize before it is too late. Prob¬
ably before the swiftest ocean greyhound could land
its silver cargo at New-York the last gold dollar within
reach would be safely hidden away in private boxes
and in the vaults of safe-deposit companies, to be
brought out only by a high premium for exportation.
This sudden retirement of $600,000,000 of gold, with
the accompanying panic, would cause contraction and
15
commercial disaster unparalleled in human experience,
and our country would at once step down to the silver
basis, when there would be no longer any Inducement
tor coinage, and silver dollars would sink to their
bullion value.
When the silver dollar ceases to have more value
than the bullion it contains there will be little induce¬
ment to coin our own silver, and the cost ol trans¬
portation will prevent its coming from abroad. How
then will unlimited coinage either expand the circula¬
tion or enhance the value of silver ? As if determined
to omit nothing which might accelerate these results,
the advocates of present free coinage insist that it
shall not await the slow process of mint operations, but
that tile printing press shall be set to work providing
certificates to be issued for silver bullion at $1 for
371 1-4 grains. When tills consummation sht'l be
reached, as surely it will be if unlimited coinage be
adopted under existing conditions, the too ardent and
Impetuous lovers of silver will sadly realize the truth
uttered by the wise King of Israel—"He that loveth
Bilver shall not be satisfied with silver."
Mr. President and gentlemen, my subject has
tempted me to impose upon your patience, r will
close by merely calling your attention to one other thing
which I deem very Important, both to our commercial
and financial interest, viz., the passage oí the bill now
pending in Congress for the establislunent of an inter¬
national banlc to facilitate our exchanges with Mexico
and Central and South America. New-York is destined
at no distant day to become the financial as well as
the commercial centre of the world, and such an in¬
stitution would, in my judgment, be a long step toward
that end, as well as a most valuable instrumentality
for the promotion of commerce with those countries.
Give us direct and ample transportation facilities under
the American flag, and controlled by American citizens ;
a currency sound in duality and adequate in quantity ;
an international bank to facilitate exchanges, and a
system of reciprocity carefully adjusted within the
lines of protection ; and not only will our foreign com¬
merce again invade every sea, but every' American in¬
dustry will be quickened and our whole people feel
the impulse of a new and enduring prosperity.
16